SunTrust Reports Third Quarter 2012 Results Results Driven by Favorable Trends in Core Performance and Previously Announced Actions to Improve Risk Profile and Strengthen Balance Sheet

ATLANTA, Oct. 22, 2012 /PRNewswire/ -- SunTrust Banks, Inc. (NYSE: STI) today reported net income available to common shareholders of $1.1 billion, or $1.98 per average common diluted share, for the third quarter of 2012.  Third quarter results include the impact of previously announced actions to improve the Company's risk profile and strengthen its balance sheet.  Including these transactions, which are outlined below, earnings per average common diluted share increased $1.48 from the second quarter of 2012 and $1.59 from the third quarter of 2011.  For the first nine months of 2012, SunTrust earned $2.94 per share compared to $0.81 per share earned in the same period last year.

Third Quarter Impact of Previously Announced Actions to Improve Risk Profile and Strengthen the Balance Sheet

  • The acceleration of the termination of agreements regarding shares owned in The Coca-Cola Company ("KO") resulted in a pre-tax securities gain of $1.9 billion.  In addition, SunTrust donated one million shares of KO, valued at $38 million, to the SunTrust Foundation which increased noninterest expense. 
  • The mortgage repurchase provision of $371 million increased the mortgage repurchase reserve to a level that is expected to cover the estimated losses on loans sold to Government Sponsored Enterprises ("GSEs") prior to 2009 and negatively affected noninterest income. 
  • The sale of $0.5 billion of nonperforming mortgage and commercial real estate loans increased charge-offs and the loan loss provision by $172 million.
  • The movement of $1.4 billion of delinquent and current student loans and $0.5 billion of delinquent Ginnie Mae loans to loans held for sale decreased noninterest income by $92 million.        
  • Additionally, valuation losses related to the planned sale of $0.2 billion of affordable housing investments resulted in a $96 million increase in noninterest expense. 
  • Collectively, these actions contributed $753 million to net income available to common shareholders, or $1.40 per average common share, in the third quarter. 

"This quarter's actions more favorably position the Company for the future.  In addition, we demonstrated another quarter of improved core performance," said William H. Rogers, Jr., chairman and chief executive officer of SunTrust Banks, Inc. "As we manage through the challenging revenue environment, we remain intensely focused on deepening client relationships and improving efficiency."  Mr. Rogers noted that favorable core performance trends include strong mortgage production income, continued commercial and industrial loan growth, solid noninterest bearing deposit account gains, and a marked decrease in nonperforming loans. 

Third Quarter 2012 Financial Highlights

Income Statement

  • The aforementioned actions to reduce risk and strengthen the balance sheet, in addition to continued improvement in core business fundamentals, drove net income to common shareholders of $1.1 billion, or $1.98 per average common diluted share. 
  • Revenue increased $1.6 billion from the prior quarter and the third quarter of last year.
    • Noninterest income increased $1.6 billion from the prior quarter and the third quarter of last year, primarily driven by the aforementioned actions to improve the risk profile and strengthen the balance sheet.  Core noninterest income growth was driven by higher mortgage production and investment banking income. 
    • Net interest income decreased $5 million, or 0.4%, from the prior quarter primarily due to the lost dividend income from the KO transaction. Net interest margin declined one basis point, primarily due to the lower dividend income and loan yields, offset by lower deposit rates paid and the redemption of higher cost trust preferred securities.  Net interest income increased $8 million, or 1%, from the third quarter of last year due to higher average loan balances and favorable deposit trends. 
  • Noninterest expense increased $180 million from the prior quarter and $166 million from the third quarter of last year primarily due to the loss related to the expected sale of affordable housing investments and the charitable contribution to the SunTrust Foundation.

Balance Sheet

  • Average performing loans increased $0.9 billion over the prior quarter and $9.5 billion over the third quarter of last year as targeted loan growth, particularly commercial and industrial loans, more than offset declines in certain real estate-related loan portfolios.    
  • Average client deposits declined $0.5 billion, or 0.4%, from the prior quarter, while the favorable shift in the deposit mix toward lower cost accounts continued with a $1.2 billion, or 3%, increase in demand deposits.  Average client deposits were up $2.4 billion over the same quarter last year. 

Capital

  • Estimated capital ratios continue to be well above current regulatory requirements.  The Tier 1 common equity ratio increased to an estimated 9.80%, up from 9.40% at the end of the prior quarter.  

Asset Quality

  • The overall risk profile of the balance sheet improved due to the disposition of nonperforming and delinquent loans.
  • Nonperforming loans declined 30% sequentially and were 1.42% of total loans as of quarter end compared to 2.76% a year ago. 
  • Provision for credit losses increased $150 million and $103 million compared to the prior quarter and third quarter of 2011, respectively.  Increases in both periods were a result of incremental charge-offs related to the sale of nonperforming loans and a credit policy change regarding junior lien loans during the third quarter.

 

 







Income Statement (presented on a fully taxable-equivalent basis)

3Q 2011


2Q 2012


3Q 2012

(Dollars in millions, except per share data)






Net income

$215


$275


$1,077

Net income available to common shareholders

211


270


1,066

Earnings per average common diluted share

0.39


0.50


1.98

Total revenue

2,196


2,246


3,843

Total revenue, excluding net securities gains/losses

2,194


2,232


1,902

Net interest income

1,293


1,306


1,301

Provision for credit losses

347


300


450

Noninterest income

903


940


2,542

Noninterest expense

1,560


1,546


1,726

Net interest margin

3.49%


3.39%


3.38%







Balance Sheet






(Dollars in billions)






Average loans

$115.6


$123.4


$124.1

Average consumer and commercial deposits

123.0


125.9


125.4







Capital






Tier 1 capital ratio(1)

11.10%


10.15%


10.60%

Tier 1 common equity ratio(1)

9.31%


9.40%


9.80%

Total average shareholders' equity to total average assets

11.62%


11.51%


11.76%







Asset Quality






Net charge-offs to average loans (annualized)

1.69%


1.14%


1.64%

Allowance for loan losses to period end loans

2.22%


1.85%


1.84%

Nonperforming loans to total loans

2.76%


1.97%


1.42%

 (1)  Current period Tier 1 capital and Tier 1 common equity ratios are estimated as of the date of this news release.


Consolidated Financial Performance Details
(Presented on a fully taxable-equivalent basis unless otherwise noted)

Revenue

Total revenue was $3.8 billion for the third quarter of 2012, an increase of $1.6 billion from both the prior quarter and the third quarter of 2011.  Net gains from the sales of securities were $1.9 billion for the third quarter of 2012, substantially all from the sale of KO shares, compared to $14 million for the second quarter of 2012 and $2 million for the third quarter of 2011.  Excluding net securities gains, total revenue declined $330 million and $292 million compared to the second quarter of 2012 and third quarter of 2011, respectively.  The decline was primarily related to the actions taken in the third quarter of 2012, which included a higher provision for mortgage repurchases and losses related to the transfer to held for sale of student and mortgage loans.

 For the nine months ended September 30, 2012, total revenue, excluding securities gains and losses, was $6.3 billion, down $121 million compared to the first nine months of 2011.  The decline was driven by the same factors described in the quarterly comparison, as well as a decline in card fees of $126 million.

Net Interest Income

For the third quarter of 2012, net interest income was $1,301 million compared to $1,306 million for the prior quarter and $1,293 million for the third quarter of 2011.  The slight decline from the second quarter of 2012 was largely driven by the $15 million of foregone dividend income as a result of the sale of the KO shares, partially offset by one additional day and reduced funding costs in the current quarter.  The 1% increase in net interest income compared to the third quarter of 2011 was due to higher average loan balances and the favorable shift in deposit mix.  

Net interest margin for the third quarter of 2012 was 3.38%, a decline of 1 basis point from the second quarter of 2012 and a decline of 11 basis points from the third quarter of 2011.  On a sequential quarter basis, the decline was primarily driven by the aforementioned decline in KO dividend income and lower loan yields resulting in a 13 basis point decline in earning asset yields.  This decline was largely offset by a 14 basis point reduction in interest-bearing liabilities, due to lower deposit rates and the benefit from redeeming $1.2 billion of higher cost trust preferred securities early in the third quarter. Compared to the third quarter of 2011, the net interest margin decline was primarily due to a 42 basis point decline in loan yields, the result of the continued low interest rate environment, and a decline in commercial loan-related swap income.  This was partially offset by a 33 basis point decline in rates paid on interest-bearing liabilities due to lower rates paid on deposits, primarily due to the shift towards lower-cost accounts, lower long-term debt rates, and a reduction in long-term debt.

For the nine months ended September 30, 2012, net interest income was $3,949 million compared to $3,855 million in 2011, an increase of $94 million, or 2%.  Net interest margin was 3.42% in 2012 compared to 3.52% in 2011.  The primary drivers of the increase in net interest income were growth in average earning assets and a favorable shift in the deposit mix, partially offset by lower yields on earning assets.  The decline in net interest margin was due to lower yields on average earning assets.

Noninterest Income

Total noninterest income was $2,542 million for the third quarter of 2012 compared to $940 million for the second quarter of 2012 and $903 million for the third quarter of 2011.  The $1.6 billion increases from both the prior quarter and prior year quarter were primarily driven by $1.9 billion in securities gains, partially offset by a higher mortgage repurchase provision and losses related to the transfer to held for sale of certain student and mortgage loans.

Mortgage production income for the third quarter of 2012 was a loss of $64 million compared to income of $103 million for the second quarter of 2012 and income of $54 million for the third quarter of 2011.  The $167 million sequential quarter decrease was driven by a $216 million increase in the mortgage repurchase provision.  Excluding the third quarter and second quarter 2012 mortgage repurchase provisions of $371 million and $155 million, respectively, mortgage production income increased sequentially by $49 million, driven by strong mortgage production volume and improved margins.  As of September 30, 2012, the reserve for mortgage repurchases totaled $694 million, an increase of $260 million from the prior quarter.  The increase was recorded as a result of recent information received from the GSEs, as well as the Company's recent experience related to full file requests and repurchase demands, which enhanced its ability to estimate losses attributable to the remaining expected demands from defaulted or currently delinquent loans sold to the GSEs prior to 2009.  These vintage loans have comprised the vast majority of mortgage repurchase losses to date; as such, future mortgage repurchase provisions are expected to decline substantially from levels experienced in recent quarters.  Compared to the third quarter of 2011, mortgage production income declined $118 million, due to the $254 million increase in the mortgage repurchase provision, partially offset by higher loan production and increased margins.    

Mortgage servicing income was $64 million for the third quarter of 2012 compared to $70 million for the prior quarter and $58 million for the third quarter of 2011.  The $6 million sequential quarter decline was due to lower servicing fee income.  The $6 million increase from the third quarter of 2011 was due to better hedge performance, partially offset by a decline in servicing fee income, as the mortgage servicing portfolio declined to $150 billion at the end of the third quarter of 2012 compared to $161 billion at September 30, 2011.

Other noninterest income for the third quarter of 2012 was a loss of $31 million versus income of $53 million in both the prior quarter and the third quarter of 2011.  The $84 million declines from the previous quarters were attributable to the aforementioned $92 million loss recognized in the current quarter upon moving certain student and mortgage loans to loans held for sale.

Card fees were $55 million for the third quarter of 2012 compared to $66 million for the prior quarter and $104 million for the third quarter of 2011.  The $11 million sequential quarter decrease was due to the reclassification of credit card rewards costs; these costs were previously recorded as a noninterest expense, but beginning in the third quarter of 2012 they are reflected as a contra-revenue item within card fees. The $49 million, or 47%, decline from the prior year quarter was primarily the result of regulations on debit card interchange fees that became effective at the beginning of the fourth quarter of 2011, as well as the aforementioned reclassification of rewards costs.

Investment banking income was $83 million for the third quarter of 2012 compared to $75 million for the prior quarter and $68 million for the third quarter of 2011.  The sequential quarter increase was due to higher syndicated finance fees.  The increase relative to the third quarter of 2011 was primarily attributable to higher syndicated finance and bond origination fee income.

Trading income was $19 million for the third quarter of 2012 compared to $70 million for the prior quarter and $66 million for the third quarter of 2011.  The $51 million sequential quarter decrease was primarily attributable to a $45 million increase in mark-to-market losses on the Company's fair value debt and index-linked CDs during the current quarter as credit spreads improved.  The $47 million decline in trading income compared to the third quarter of 2011 was largely driven by the increase in mark-to-market losses on the Company's fair value debt and index-linked CDs compared to gains in 2011, partially offset by higher core trading income and a decline in losses related to previously securitized loans.

For the nine months ended September 30, 2012, noninterest income was $4.4 billion compared to $2.7 billion in the same period in 2011.  The $1.7 billion, or 62%, increase was primarily driven by higher securities gains partially offset by lower card fees and losses from the transfer to held for sale of student and mortgage loans described above. 

Noninterest Expense

Noninterest expense was $1,726 million for the third quarter of 2012 compared to $1,546 million for the second quarter of 2012 and $1,560 million for the third quarter of 2011.  The sequential quarter increase of $180 million was primarily due to the $96 million loss related to the expected sale of affordable housing investments, the $38 million charitable contribution of the KO shares to the SunTrust Foundation, and $29 million in severance expense.   Compared to the third quarter of 2011, the $166 million increase was due to the aforementioned third quarter of 2012 items and higher personnel expenses, partially offset by declines in FDIC assessment premiums.  During the third quarter of 2012, the Company eliminated additional expenses through its Playbook for Profitable Growth ("PPG") program; the total annualized PPG savings now exceed the $300 million goal for the program. 

Employee compensation and benefits expense increased $18 million from the prior quarter, primarily attributable to the accelerated vesting of deferred compensation associated with organizational changes, as well as higher contract labor costs.  The $30 million, or 4%, increase in employee compensation and benefits expense compared to the third quarter of 2011 was also due to the same factors discussed above, as well as higher incentive compensation from improved business performance.  As of September 30, 2012, the Company's total full-time equivalent employees were 28,000, which was 324 employees lower than the prior quarter and 1,483 employees lower than the same quarter last year.

Other noninterest expense was $402 million in the current quarter, an increase of $117 million from the second quarter of 2012 and $93 million from the third quarter of last year.  The increases from the prior periods were primarily due to specific third quarter 2012 actions, including the $96 million loss related to the affordable housing investments,  $29 million in severance expense, and $17 million in real estate charges as the Company reassessed some of its corporate real estate leases and holdings.  This was partially offset by the reclassification of credit card rewards costs.  Additionally, credit-related expenses, which are comprised of other real estate expenses and credit and collection costs, also declined.  Such expenses fell $18 million and $38 million compared to the second quarter of 2012 and the third quarter of 2011, respectively, primarily due to a decline in losses recognized on OREO.

FDIC premiums and regulatory assessments increased $7 million on a sequential quarter basis and declined $13 million compared to the third quarter of 2011 due to fluctuations in the Company's assessment rate.  Outside processing and software declined $9 million on a sequential quarter basis due to a decline in transaction processing expenses and lower software amortization.  Amortization of intangible assets increased $6 million from both the prior quarter and prior year due to the recognition of goodwill impairment associated with a wealth management business.  Losses on debt extinguishment declined by $11 million sequentially, due to the $13 million second quarter 2012 charge related to the redemption of higher cost trust preferred securities.     

For the nine months ended September 30, 2012, noninterest expense was $4,813 million compared to $4,567 million in 2011.  The $246 million, or 5%, increase was primarily due to the third quarter 2012 actions as described in the quarterly comparisons above.  Additionally, higher employee compensation, outside processing and software, and operating losses were partially offset by declines in OREO expenses and FDIC insurance premiums and regulatory assessments.

Income Taxes

For the third quarter of 2012, the Company recorded an income tax provision of $551 million compared to $91 million for the second quarter of 2012 and $45 million in the third quarter of 2011.  The effective tax rate was 34% for the third quarter of 2012 compared to 25% for the second quarter of 2012 and 17% for the third quarter of 2011.  The increase in the effective tax rate for the third quarter of 2012 was primarily due to higher pre-tax earnings. 

U.S. Treasury Preferred Dividends

The Company formerly paid dividends to the U.S. Treasury on its $4.85 billion of TARP preferred securities through the first quarter of 2011.  The Company redeemed these shares at the end of the first quarter of 2011 and, therefore, did not pay such dividends during 2012 or the last three quarters of 2011.  The nine months ended September 30, 2011 included $66 million of preferred dividends paid to the U.S. Treasury and a $74 million, or $0.14 per common share, non-cash charge related to the unamortized discount that was recognized upon the redemption of the TARP preferred shares.


Balance Sheet

As of September 30, 2012, the Company had total assets of $173.2 billion and shareholders' equity of $20.4 billion, representing 12% of total assets.  Both book value and tangible book value per common share remained relatively stable to the prior quarter and were $37.35 and $25.72, respectively, as of September 30, 2012.

Loans

Average loans for the third quarter of 2012 were $124.1 billion compared to average loans of $123.4 billion and $115.6 billion during the second quarter of 2012 and third quarter of 2011, respectively.  On a sequential quarter basis, the $0.7 billion, or 1%, growth was concentrated in commercial and industrial loans, which increased $1.1 billion, and consumer indirect loans, which increased $0.3 billion.  Partially offsetting the growth were decreases of $0.4 billion in government-guaranteed mortgage loans, primarily due to the sale of approximately $0.5 billion of such loans during the second quarter, $0.2 billion in home equity loans, and $0.2 billion in nonaccrual loans. 

Average loans increased $8.4 billion, or 7%, over the third quarter of 2011.  Growth was primarily driven by commercial and industrial, which increased $5.7 billion, or 12%, as well as government-guaranteed student and residential mortgage loans, up a combined $3.5 billion.  Additionally, high credit-quality nonguaranteed residential loans and indirect loans increased by $1.0 billion and $0.8 billion, respectively.  Partially offsetting these areas of loan growth were declines in certain real estate-related loan categories that were actively managed down.  The reduction in certain real estate-related loans, together with an increase in government-guaranteed loans, has resulted in an improvement in the risk profile of the loan portfolio compared to a year ago.

Loan balances at quarter end for the third quarter of 2012 were $121.8 billion, as compared to $124.6 billion in the prior quarter and $117.5 billion last year.  The sequential quarter decline of $2.7 billion was attributable to the aforementioned sales, or transfers to loans held for sale, during the third quarter of 2012 of:

  • $1.4 billion of guaranteed student loans, which were a combination of current and delinquent loans.  These loans were included in loans held for sale at quarter end, but $1.0 billion have since been sold, and the remainder is expected to be sold in the fourth quarter.
  • $0.5 billion of delinquent guaranteed mortgage loans.  These loans were included in held for sale at quarter end, and the sale is expected to be completed during the fourth quarter.
  • $0.5 billion of nonperforming mortgage and CRE loans.  Most of the $447 million of nonperforming mortgage sales were completed during the third quarter, and the residual portion is expected to be completed in the fourth quarter.  Approximately half of the $97 million in nonperforming CRE loans were sold during the quarter, and the remainder is expected to be sold during the fourth quarter.

These declines were partially offset by growth in commercial and industrial loans and consumer direct and indirect loans.  The $4.3 billion of period end loan growth as compared to the prior year was attributable to the same factors as noted in the average balance comparisons above. 

Securities Available for Sale

As of September 30, 2012, the Company's securities available for sale portfolio was $21.5 billion, down $2.9 billion, or 12%, from June 30, 2012 and $6.0 billion, or 22%, from September 30, 2011.  The sequential quarter decline was primarily related to the sale of the KO shares in September.  Additionally, the Company's holdings of mortgage backed securities declined during the quarter as a result of the repayment of principal.  The decline from September 30, 2011 was for the same reasons noted above along with the repositioning of the investment portfolio, which included selling certain low coupon agency mortgage-backed securities.  The yield on the securities portfolio declined 38 basis points sequentially, from 3.16% in the prior quarter to 2.78% in the third quarter of 2012; approximately 30 basis points of the decline was due to the forgone dividend income associated with the KO transaction. 

Deposits

Average consumer and commercial deposits for the third quarter of 2012 were $125.4 billion compared to $125.9 billion and $123.0 billion for the second quarter of 2012 and third quarter of 2011, respectively.  The favorable shift in the deposit mix toward lower cost accounts continued during the quarter, with a $1.2 billion, or 3%, increase in demand deposits.  However, this was offset by a $1.2 billion, or 7%, decline in time deposits and a $433 million, or 1%, decline in money market accounts. 

Compared to the third quarter of 2011, average consumer and commercial deposits increased $2.4 billion, or 2%. Average demand deposits increased $5.9 billion, or 19%, interest bearing transaction accounts increased $0.8 billion, or 3%, and savings accounts increased $0.6 billion, or 12%.  Time deposits declined $3.4 billion, or 17%, and money market accounts declined $1.6 billion, or 4%. 

Capital and Liquidity

The Company's estimated capital ratios are well above current regulatory requirements with Tier 1 capital and Tier 1 common ratios increasing to an estimated 10.60% and 9.80%, respectively.  The ratios of total average equity to total average assets and tangible equity to tangible assets were 11.76% and 8.48%, respectively, as of September 30, 2012.  The Company continues to have substantial available liquidity provided in the form of its client deposit base and other available funding resources, as well as its portfolio of cash and high-quality government-backed securities. 

Asset Quality

Asset quality continued to improve during the quarter, with declines in nonperforming loans and nonperforming assets.  Nonperforming loans totaled $1.7 billion as of September 30, 2012, down $727 million, or 30%, relative to the prior quarter.  The primary driver of the decline in nonperforming loans was the sale of certain mortgage and commercial real estate loans.  Specifically, the Company transferred $544 million of nonperforming loans to held for sale during the third quarter.  The majority of the loans were sold during the quarter, and as of September 30, 2012, $40 million of nonperforming loans remain classified as held for sale.  Partially offsetting this decline in nonperforming loans was an $81 million increase in nonperforming junior lien loans that were current but subordinate to a first lien loan that was seriously delinquent.  The decision to transfer these current junior liens to nonperforming loans was driven by regulatory guidance issued during 2012.

Compared to September 30, 2011, nonperforming loans declined $1.5 billion, or 47%, with declines across all loan categories, most significantly in commercial real estate and residential loans.  At the end of the third quarter of 2012, the percentage of nonperforming loans to total loans was 1.42%, down from 1.97% and 2.76% at the end of the second quarter of 2012 and third quarter of 2011, respectively.  Other real estate owned totaled $304 million at the end of the current quarter, down 8% on a sequential quarter basis and down 40% since September 30, 2011. 

Net charge-offs were $511 million in the current quarter compared to $350 million for the prior quarter and $492 million for the third quarter of 2011.  The sequential quarter increase of $161 million was largely driven by $172 million in charge-offs associated with the aforementioned sales of nonperforming loans.  Additionally, during the third quarter the Company elected to revise its credit policy related to the timing of recognizing charge-offs on junior lien loans. The Company previously charged-off junior lien loans at 180 days past due.  However, with the newly implemented credit policy change, the Company is recognizing the charge-off at 120 days past due, as its analysis indicated that when junior lien loans become 120 days past due the vast majority ultimately experience a charge-off.  The change in credit policy resulted in $65 million of incremental charge-offs.  Excluding the impacts from the nonperforming loan sales and the junior lien credit policy change, current quarter net charge-offs were $274 million, a decline of $76 million from the prior quarter, driven by lower losses across several loan categories, as well as a $27 million increase in recoveries from the prior quarter.  The ratio of annualized net charge-offs to total average loans was 1.64% for the current quarter, with the charge-offs resulting from the sales of nonperforming loans and the credit policy change adding 76 basis points to the ratio.  The provision for credit losses was $450 million, an increase of $150 million and $103 million from the prior quarter and the third quarter of 2011, respectively.  The increase was primarily driven by incremental charge-offs associated with the sales of nonperforming loans and the junior lien credit policy change.

As of September 30, 2012, the allowance for loan losses was $2.2 billion and represented 1.84% of total loans, down 1 basis point from June 30, 2012.  The $61 million decline in the allowance for loan losses during the third quarter of 2012 was reflective of the continued improvement in asset quality.

Early stage delinquencies decreased two basis points from the end of the second quarter of 2012 to 0.95%.  The decline was primarily due to the sale of government guaranteed loans.  Excluding government-guaranteed loans, early stage delinquencies were 0.53%, an increase of two basis points from June 30, 2012.

Accruing restructured loans totaled $2.6 billion, and nonaccruing restructured loans totaled $0.5 billion as of September 30, 2012, both declining modestly from the prior quarter.  $2.8 billion of restructured loans related to residential loans, $0.2 billion were commercial loans, and $0.1 billion related to consumer loans.


LINE OF BUSINESS FINANCIAL PERFORMANCE

Line of Business Results

The Company has included line of business financial tables as part of this release on the Investor Relations portion of its website at www.suntrust.com/investorrelations. The Company's business segments include: Consumer Banking and Private Wealth Management, Wholesale Banking, and Mortgage Banking. All revenue in the line of business tables is reported on a fully taxable-equivalent basis. For the lines of business, results include net interest income, which is computed using matched-maturity funds transfer pricing. Further, provision for loan losses is represented by net charge-offs. SunTrust also reports results for Corporate Other, which includes the Treasury department as well as the residual expense associated with operational and support expense allocations. The Corporate Other segment also includes differences created between internal management accounting practices and generally accepted accounting principles, certain matched-maturity funds transfer pricing credits and charges, differences in provision for loan losses compared to net charge-offs, as well as equity and its related impact. A detailed discussion of the line of business results will be included in the Company's forthcoming quarterly report on Form 10-Q.

Corresponding Financial Tables and Information

Investors are encouraged to review the foregoing summary and discussion of SunTrust's earnings and financial condition in conjunction with the detailed financial tables and information which SunTrust has also published today and SunTrust's forthcoming quarterly report on Form 10-Q. Detailed financial tables and other information are also available on the Investor Relations portion of the Company's website at www.suntrust.com/investorrelations. This information is also included in a current report on Form 8-K furnished with the Securities and Exchange Commission today.

Conference Call

SunTrust management will host a conference call on October 22, 2012, at 8:00 a.m. (Eastern Time) to discuss the earnings results and business trends. Individuals may call in beginning at 7:45 a.m. (Eastern Time) by dialing 1-888-972-7805 (Passcode: 3Q12). Individuals calling from outside the United States should dial 1-517-308-9091 (Passcode: 3Q12). A replay of the call will be available approximately one hour after the call ends on October 22, 2012, and will remain available until November 22, 2012, by dialing 1-866-454-9166 (domestic) or 1-203-369-1250 (international).  Alternatively, individuals may listen to the live webcast of the presentation by visiting the SunTrust investor relations website at www.suntrust.com/investorrelations. Beginning the afternoon of October 22, 2012, listeners may access an archived version of the webcast in the "Recent Earnings and Conference Presentations" subsection found on the investor relations webpage. This webcast will be archived and available for one year. A link to the Investor Relations page is also found in the footer of the SunTrust home page.

SunTrust Banks, Inc., headquartered in Atlanta, is one of the nation's largest banking organizations, serving a broad range of consumer, commercial, corporate and institutional clients. The Company operates an extensive branch and ATM network throughout the Southeast and Mid-Atlantic States and a full array of technology-based, 24-hour delivery channels. The Company also serves clients in selected markets nationally. Its primary businesses include deposit, credit, and trust and investment management services. Through various subsidiaries, the Company provides mortgage banking, insurance, brokerage, equipment leasing, and capital markets services. SunTrust's Internet address is www.suntrust.com.

Important Cautionary Statement About Forward-Looking Statements

This news release includes non-GAAP financial measures to describe SunTrust's performance. The reconciliations of those measures to GAAP measures are provided within or in the appendix to this news release. In this news release, the Company presents net interest income and net interest margin on a fully taxable-equivalent ("FTE") basis, and ratios on an annualized basis. The FTE basis adjusts for the tax-favored status of income from certain loans and investments. The Company believes this measure to be the preferred industry measurement of net interest income and provides relevant comparison between taxable and non-taxable amounts.

This news release contains forward-looking statements. Statements regarding current expectations that the mortgage repurchase reserve will be adequate to cover the remaining incurred losses on loans sold to GSEs prior to 2009 are forward-looking statements.  Also, any statement that does not describe historical or current facts, is a forward-looking statement. These statements often include the words "believes," "expects," "anticipates," "estimates," "intends," "plans," "goals," "targets," "initiatives," "potentially," "probably," "projects," "outlook" or similar expressions or future conditional verbs such as "may," "will," "should," "would," and "could." Forward-looking statements are based upon the current beliefs and expectations of management and on information currently available to management. Our statements speak as of the date hereof, and we do not assume any obligation to update these statements or to update the reasons why actual results could differ from those contained in such statements in light of new information or future events.

Forward-looking statements are subject to significant risks and uncertainties. Investors are cautioned against placing undue reliance on such statements. Actual results may differ materially from those set forth in the forward-looking statements. Factors that could cause actual results to differ materially from those described in the forward-looking statements can be found in Part I, "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2011 and in other periodic reports that we file with the SEC. Those factors include: as one of the largest lenders in the Southeast and Mid-Atlantic U.S. and a provider of financial products and services to consumers and businesses across the U.S., our financial results have been, and may continue to be, materially affected by general economic conditions, particularly unemployment levels and home prices in the U.S., and a deterioration of economic conditions or of the financial markets may materially adversely affect our lending and other businesses and our financial results and condition; legislation and regulation, including the Dodd-Frank Act, as well as future legislation and/or regulation, could require us to change certain of our business practices, reduce our revenue, impose additional costs on us or otherwise adversely affect our business operations and/or competitive position; we are subject to capital adequacy and liquidity guidelines and, if we fail to meet these guidelines, our financial condition would be adversely affected; loss of customer deposits and market illiquidity could increase our funding costs; we rely on the mortgage secondary market and GSEs for some of our liquidity; we are subject to credit risk; our ALLL may not be adequate to cover our eventual losses; we may have more credit risk and higher credit losses to the extent our loans are concentrated by loan type, industry segment, borrower type, or location of the borrower or collateral; we will realize future losses if the proceeds we receive upon liquidation of nonperforming assets are less than the carrying value of such assets; a downgrade in the U.S. government's sovereign credit rating, or in the credit ratings of instruments issued, insured or guaranteed by related institutions, agencies or instrumentalities, could result in risks to us and general economic conditions that we are not able to predict; the failure of the European Union to stabilize the fiscal condition and creditworthiness of its weaker member economies, such as Greece, Portugal, Spain, Hungary, Ireland, and Italy, could have international implications potentially impacting global financial institutions, the financial markets, and the economic recovery underway in the U.S.; weakness in the real estate market, including the secondary residential mortgage loan markets, has adversely affected us and may continue to adversely affect us; we are subject to certain risks related to originating and selling mortgages, and may be required to repurchase mortgage loans or indemnify mortgage loan purchasers as a result of breaches of representations and warranties, borrower fraud, or as a result of certain breaches of our servicing agreements, and this could harm our liquidity, results of operations, and financial condition; financial difficulties or credit downgrades of mortgage and bond insurers may adversely affect our servicing and investment portfolios; we may be terminated as a servicer or master servicer, be required to repurchase a mortgage loan or reimburse investors for credit losses on a mortgage loan, or incur costs, liabilities, fines and other sanctions if we fail to satisfy our servicing obligations, including our obligations with respect to mortgage loan foreclosure actions; we are subject to risks related to delays in the foreclosure process; we may continue to suffer increased losses in our loan portfolio despite enhancement of our underwriting policies and practices; our mortgage production and servicing revenue can be volatile; as a financial services company, adverse changes in general business or economic conditions could have a material adverse effect on our financial condition and results of operations; changes in market interest rates or capital markets could adversely affect our revenue and expense, the value of assets and obligations, and the availability and cost of capital and liquidity; changes in interest rates could also reduce the value of our MSRs and mortgages held for sale, reducing our earnings; the fiscal and monetary policies of the federal government and its agencies could have a material adverse effect on our earnings; depressed market values for our stock may require us to write down goodwill; clients could pursue alternatives to bank deposits, causing us to lose a relatively inexpensive source of funding; consumers may decide not to use banks to complete their financial transactions, which could affect net income; we have businesses other than banking which subject us to a variety of risks; hurricanes and other disasters may adversely affect loan portfolios and operations and increase the cost of doing business; negative public opinion could damage our reputation and adversely impact business and revenues; a failure in or breach of our operational or security systems or infrastructure, or those of our third party vendors and other service providers, including as a result of cyber attacks, could disrupt our businesses, result in the disclosure or misuse of confidential or proprietary information, damage our reputation, increase our costs and cause losses; we rely on other companies to provide key components of our business infrastructure; the soundness of other financial institutions could adversely affect us; we depend on the accuracy and completeness of information about clients and counterparties; regulation by federal and state agencies could adversely affect the business, revenue, and profit margins; competition in the financial services industry is intense and could result in losing business or margin declines; maintaining or increasing market share depends on market acceptance and regulatory approval of new products and services; we might not pay dividends on your common stock; our ability to receive dividends from our subsidiaries could affect our liquidity and ability to pay dividends; disruptions in our ability to access global capital markets may adversely affect our capital resources and liquidity; any reduction in our credit rating could increase the cost of our funding from the capital markets; we have in the past and may in the future pursue acquisitions, which could affect costs and from which we may not be able to realize anticipated benefits; we are subject to certain litigation, and our expenses related to this litigation may adversely affect our results; we may incur fines, penalties and other negative consequences from regulatory violations, possibly even from inadvertent or unintentional violations; we depend on the expertise of key personnel, and if these individuals leave or change their roles without effective replacements, operations may suffer; we may not be able to hire or retain additional qualified personnel and recruiting and compensation costs may increase as a result of turnover, both of which may increase costs and reduce profitability and may adversely impact our ability to implement our business strategies; our accounting policies and processes are critical to how we report our financial condition and results of operations, and they require management to make estimates about matters that are uncertain; changes in our accounting policies or in accounting standards could materially affect how we report our financial results and condition; our stock price can be volatile; our framework for managing risks may not be effective in mitigating risk and loss to us; our disclosure controls and procedures may not prevent or detect all errors or acts of fraud; our financial instruments carried at fair value expose us to certain market risks; our revenues derived from our investment securities may be volatile and subject to a variety of risks; and we may enter into transactions with off-balance sheet affiliates or our subsidiaries.

 

SunTrust Banks, Inc. and Subsidiaries







FINANCIAL HIGHLIGHTS







(Dollars in millions, except per share data) (Unaudited)


Three Months Ended


Nine Months Ended



September 30

%

September 30

%


2012


2011

Change 4

2012


2011

Change 4

EARNINGS & DIVIDENDS









Net income

$1,077


$215

NM

$1,602


$573

NM

Net income available to common shareholders

1,066


211

NM

1,581


424

NM

Total revenue - FTE 1, 2                              

3,843


2,196

75%

8,307


6,553

27%

Total revenue - FTE excluding securities gains, net 1, 2

1,902


2,194

-13%

6,334


6,455

-2%

Net income per average common share               









     Diluted 

1.98


0.39

NM

2.94


0.81

NM

     Diluted excluding effect of accelerated accretion associated with repurchase of
preferred stock issued to the U.S. Treasury 1

1.98


0.39

NM

2.94


0.95

NM

     Basic

1.99


0.40

NM

2.96


0.81

NM

Dividends paid per common share           

0.05


0.05

0%

0.15


0.07

NM

CONDENSED BALANCE SHEETS 









Selected Average Balances









Total assets

$175,282


$172,076

2%

$176,679


$171,886

3%

Earning assets

153,207


146,836

4%

154,236


146,536

5%

Loans

124,080


115,638

7%

123,332


115,242

7%

Consumer and commercial deposits

125,353


122,974

2%

125,692


121,863

3%

Brokered time and foreign deposits

2,237


2,312

-3%

2,252


2,418

-7%

Total shareholders' equity

20,619


20,000

3%

20,450


20,861

-2%

As of









Total assets

173,181


172,553

0%





Earning assets

152,472


148,991

2%





Loans

121,817


117,475

4%





Allowance for loan and lease losses

2,239


2,600

-14%





Consumer and commercial deposits

124,898


123,933

1%





Brokered time and foreign deposits

2,328


2,318

0%





Total shareholders' equity

20,399


20,200

1%





FINANCIAL RATIOS & OTHER DATA









Return on average total assets

2.45%


0.50%

NM

1.21%


0.45%

NM

Return on average common shareholders' equity

20.84


4.23

NM

10.47


2.96

NM

Net interest margin 2

3.38


3.49

-3%

3.42


3.52

-3%

Efficiency ratio 2

44.90


71.05

-37%

57.94


69.69

-17%

Tangible efficiency ratio 1, 2                    

44.47


70.55

-37%

57.48


69.18

-17%

Effective tax rate 

33.82


17.33

95%

30.71


19.15

60%

Tier 1 common equity 3

9.80


9.31

5%





Tier 1 capital 3

10.60


11.10

-5%





Total capital 3

12.95


13.91

-7%





Tier 1 leverage 3

8.49


8.90

-5%





Total average shareholders' equity to total average assets

11.76


11.62

1%

11.57


12.14

-5%

Tangible equity to tangible assets                             

8.48


8.38

1%














Book value per common share

$37.35


$37.29

0%





Tangible book value per common share 1

25.72


25.60

0%





Market price:









     High

30.79


26.52

16%

30.79


33.14

-7%

     Low

22.34


16.51

35%

18.07


16.51

9%

     Close

28.27


17.95

57%

28.27


17.95

57%

Market capitalization

15,232


9,639

58%





Average common shares outstanding (000s)









     Diluted 

538,699


535,395

1%

537,538


524,888

2%

     Basic

534,506


531,928

0%

533,859


521,248

2%

Full-time equivalent employees

28,000


29,483

-5%





Number of ATMs

2,914


2,889

1%





Full service banking offices

1,633


1,658

-2%























1See Appendix A for reconcilements of non-GAAP performance measures.                  




2Total revenue, net interest margin, and efficiency ratios are presented on a fully taxable-equivalent ("FTE") basis.  The FTE basis adjusts for the tax-favored status of net interest income from certain loans and investments.  The Company believes this measure to be the preferred industry measurement of net interest income and it enhances comparability of net interest income arising from taxable and tax-exempt sources.  Total revenue - FTE equals net interest income on a FTE basis plus noninterest income.            

3Current period tier 1 common equity, tier 1 capital, total capital and tier 1 leverage ratios are estimated as of the earnings release date.          

4"NM" - Not meaningful. Those changes over 100 percent were not considered to be meaningful.


 

 

SunTrust Banks, Inc. and Subsidiaries










FIVE QUARTER FINANCIAL HIGHLIGHTS










(Dollars in millions, except per share data) (Unaudited)


Three Months Ended


 September 30 


June 30


March 31


December 31


 September 30 


2012


2012


2012


2011


2011

EARNINGS & DIVIDENDS










Net income

$1,077


$275


$250


$74


$215

Net income available to common shareholders

1,066


270


245


71


211

Total revenue - FTE 1, 2                      

3,843


2,246


2,218


2,047


2,196

Total revenue - FTE excluding securities gains, net 1, 2

1,902


2,232


2,200


2,028


2,194

Net income per average common share               










     Diluted 

1.98


0.50


0.46


0.13


0.39

     Basic

1.99


0.51


0.46


0.13


0.40

Dividends paid per common share        

0.05


0.05


0.05


0.05


0.05

CONDENSED BALANCE SHEETS 










Selected Average Balances










Total assets

$175,282


$177,915


$176,855


$174,085


$172,076

Earning assets

153,207


154,890


154,623


151,561


146,836

Loans

124,080


123,365


122,542


119,474


115,638

Consumer and commercial deposits

125,353


125,885


125,843


125,072


122,974

Brokered time and foreign deposits

2,237


2,243


2,274


2,293


2,312

Total shareholders' equity

20,619


20,472


20,256


20,208


20,000

As of










Total assets

173,181


178,257


178,226


176,859


172,553

Earning assets

152,472


153,939


154,950


154,696


148,991

Loans

121,817


124,560


122,691


122,495


117,475

Allowance for loan and lease losses

2,239


2,300


2,348


2,457


2,600

Consumer and commercial deposits

124,898


126,145


127,718


125,611


123,933

Brokered time and foreign deposits

2,328


2,258


2,314


2,311


2,318

Total shareholders' equity

20,399


20,568


20,241


20,066


20,200

FINANCIAL RATIOS & OTHER DATA










Return on average total assets

2.45%


0.62%


0.57%


0.17%


0.50%

Return on average common shareholders' equity

20.84


5.37


4.94


1.41


4.23

Net interest margin2

3.38


3.39


3.49


3.46


3.49

Efficiency ratio 2

44.90


68.83


69.50


81.45


71.05

Tangible efficiency ratio 1, 2               

44.47


68.33


69.02


80.99


70.55

Effective tax rate 4

33.82


24.85


21.55


NM


17.33

Tier 1 common equity 3

9.80


9.40


9.33


9.22


9.31

Tier 1 capital 3

10.60


10.15


11.00


10.90


11.10

Total capital 3

12.95


12.84


13.73


13.67


13.91

Tier 1 leverage 3

8.49


8.15


8.77


8.75


8.90

Total average shareholders' equity to total average assets          

11.76


11.51


11.45


11.61


11.62

Tangible equity to tangible assets 1               

8.48


8.31


8.14


8.10


8.38











Book value per common share

$37.35


$37.69


$37.11


$36.86


$37.29

Tangible book value per common share 1

25.72


26.02


25.49


25.18


25.60

Market price:










     High

30.79


24.83


24.93


21.31


26.52

     Low

22.34


20.96


18.07


15.79


16.51

     Close

28.27


24.23


24.17


17.70


17.95

Market capitalization

15,232


13,045


13,005


9,504


9,639

Average common shares outstanding (000s)










     Diluted 

538,699


537,495


536,407


535,717


535,395

     Basic

534,506


533,964


533,100


532,146


531,928

Full-time equivalent employees

28,000


28,324


28,615


29,182


29,483

Number of ATMs

2,914


2,906


2,914


2,899


2,889

Full service banking offices

1,633


1,641


1,651


1,659


1,658





















1See Appendix A for reconcilements of non-GAAP performance measures.                  

2Total revenue, net interest margin, and efficiency ratios are presented on a fully taxable-equivalent ("FTE") basis.  The FTE basis adjusts for the tax-favored status of net interest income from certain loans  and investments.  The Company believes this measure to be the preferred industry measurement of net interest income and it enhances comparability of net interest income arising from taxable and tax-exempt sources.  Total revenue - FTE equals net interest income on a FTE basis plus noninterest income.  

3Current period tier 1 common equity, tier 1 capital, total capital and tier 1 leverage ratios are estimated as of the earnings release date.          

4"NM" - Not meaningful.  Calculated percentage was not considered to be meaningful.











SunTrust Banks, Inc. and Subsidiaries                                                          












RECONCILEMENT OF NON-GAAP MEASURES                                        












APPENDIX A TO THE EARNINGS RELEASE                                              












(Dollars in millions, except per share data) (Unaudited)                                                                    













Three Months Ended


Nine  Months Ended



September 30


June 30


March 31


December 31


September 30


September 30


September 30



2012


2012


2012


2011


2011


2012


2011


NON-GAAP MEASURES PRESENTED IN THE EARNINGS RELEASE1  















Efficiency ratio2                    

44.90%


68.83%


69.50%


81.45%


71.05%


57.94%


69.69%


Impact of excluding amortization of intangible assets              

-0.43%


-0.50%


-0.48%


-0.46%


-0.50%


-0.46%


-0.51%


Tangible efficiency ratio3                       

44.47%


68.33%


69.02%


80.99%


70.55%


57.48%


69.18%


Total shareholders' equity                

$20,399


$20,568


$20,241


$20,066


$20,200






Goodwill, net of deferred taxes of $159 million, $156 million, $164 million, $154 million, and $149 million, respectively

(6,210)


(6,220)


(6,180)


(6,190)


(6,195)






Other intangible assets, net of deferred taxes of $8 million,  $10 million, $14 million, $16 million, and $18 million, respectively, and MSRs

(888)


(929)


(1,142)


(1,001)


(1,120)






MSRs

831


865


1,070


921


1,033






Tangible equity              

14,132


14,284


13,989


13,796


13,918






Preferred stock

(275)


(275)


(275)


(275)


(172)






Tangible common equity

$13,857


$14,009


$13,714


$13,521


$13,746






Total assets                 

$173,181


$178,257


$178,226


$176,859


$172,553






Goodwill                

(6,369)


(6,376)


(6,344)


(6,344)


(6,344)






Other intangible assets including MSRs                 

(896)


(939)


(1,155)


(1,017)


(1,138)






MSRs

831


865


1,070


921


1,033






Tangible assets                 

$166,747


$171,807


$171,797


$170,419


$166,104






Tangible equity to tangible assets4           

8.48%


8.31%


8.14%


8.10%


8.38%






Tangible book value per common share5

$25.72


$26.02


$25.49


$25.18


$25.60






Net interest income                    

$1,271


$1,274


$1,311


$1,294


$1,263


$3,856


$3,771


Taxable-equivalent adjustment                  

30


32


31


30


30


93


84


Net interest income - FTE                

1,301


1,306


1,342


1,324


1,293


3,949


3,855


Noninterest income                    

2,542


940


876


723


903


4,358


2,698


Total revenue - FTE              

3,843


2,246


2,218


2,047


2,196


8,307


6,553


Securities gains, net

(1,941)


(14)


(18)


(19)


(2)


(1,973)


(98)


Total revenue - FTE excluding net securities gains 6

$1,902


$2,232


$2,200


$2,028


$2,194


$6,334


$6,455

















Total loans

$121,817


$124,560


$122,691


$122,495


$117,475






Government guaranteed loans

(10,646)


(12,911)


(13,633)


(13,871)


(9,782)






Loans held at fair value

(390)


(406)


(413)


(433)


(452)






Total loans, excluding government guaranteed and fair value loans

$110,781


$111,243


$108,645


$108,191


$107,241






Allowance to total loans, excluding government guaranteed and fair value loans 7

2.02%


2.07%


2.16%


2.27%


2.42%





















1 Certain amounts in this schedule are presented net of applicable income taxes, which are calculated based on each subsidiary's federal and state tax rates and laws.  In general, the federal marginal tax rate is 35%, but the state marginal tax rates range from 1% to 8% in accordance with the subsidiary's income tax filing requirements with various tax authorities.  In addition, the effective tax rate may differ from the federal and state marginal tax rates in certain cases where a permanent difference exists.

2Computed by dividing noninterest expense by total revenue - FTE.  The FTE basis adjusts for the tax-favored status of net interest income from certain loans and investments.  The Company believes this measure to be the preferred industry measurement of net interest income and it enhances comparability of net interest income arising from taxable and tax-exempt sources.

3SunTrust presents a tangible efficiency ratio which excludes the amortization of intangible assets other than MSRs.  The Company believes this measure is useful to investors because, by removing the effect of these intangible asset costs (the level of which may vary from company to company), it allows investors to more easily compare the Company's efficiency to other companies in the industry.  This measure is utilized by management to assess the efficiency of the Company and its lines of business.  

4SunTrust presents a tangible equity to tangible assets ratio that excludes the after-tax impact of purchase accounting intangible assets.   The Company believes this measure is useful to investors because, by removing the effect of intangible assets that result from merger and acquisition activity (the level of which may vary from company to company), it allows investors to more easily compare the Company's capital adequacy to other companies in the industry.  This measure is used by management to analyze capital adequacy. 

5SunTrust presents a tangible book value per common share that excludes the after-tax impact of purchase accounting intangible assets and also excludes preferred stock from tangible equity.  The Company believes this measure is useful to investors because, by removing the effect of intangible assets that result from merger and acquisition activity as well as preferred stock (the level of which may vary from company to company), it allows investors to more easily compare the Company's book value on common stock to other companies in the industry.  

6SunTrust presents total revenue - FTE excluding net securities gains.  The Company believes noninterest income without net securities gains is more indicative of the Company's performance because it isolates income that is primarily client relationship and client transaction driven and is more indicative of normalized operations.

7SunTrust presents a ratio of allowance to total loans, excluding government guaranteed and fair value loans, to exclude loans from the calculation that are held at fair value with no related allowance and loans guaranteed by a government agency that do not have an associated allowance recorded due to nominal risk of principal loss.
















 

SunTrust Banks, Inc. and Subsidiaries                                                          













RECONCILEMENT OF NON-GAAP MEASURES                                        













APPENDIX A TO THE EARNINGS RELEASE, continued                                              













(Dollars in millions, except per share data) (Unaudited)                                                                    














Three Months Ended


Nine  Months Ended




September 30


June 30


March 31


December 31


September 30


September 30


September 30




2012


2012


2012


2011


2011


2012


2011



NON-GAAP MEASURES PRESENTED IN THE EARNINGS RELEASE1
















Net income available to common shareholders  

$1,066


$270


$245


$71


$211


$1,581


$424



Accelerated accretion associated with repurchase of preferred stock
   issued to the U.S. Treasury

-


-


-


-


-


-


74



Net income available to common shareholders excluding
   accelerated accretion associated with repurchase of preferred stock
   issued to the U.S. Treasury

$1,066


$270


$245


$71


$211


$1,581


$498



Net income per average common share - diluted

$1.98


$0.50


$0.46


$0.13


$0.39


$2.94


$0.81



Effect of accelerated accretion associated with repurchase of preferred
   stock issued to the U.S. Treasury

-


-


-


-


-


-


0.14



Net income per average common share - diluted, excluding effect
   of accelerated accretion associated with repurchase of preferred stock
   issued to the U.S. Treasury

$1.98


$0.50


$0.46


$0.13


$0.39


$2.94


$0.95



RECONCILIATION OF NET INCOME AVAILABLE TO COMMON SHAREHOLDERS:
















Net income

$1,077


$275


$250


$74


$215


$1,602


$573



Preferred dividends

(2)


(3)


(3)


(2)


(2)


(8)


(5)



Dividends and accretion of discount on preferred stock issued to the U.S. Treasury

-


-


-


-


-


-


(66)



Accelerated accretion associated with repurchase of preferred stock
   issued to the U.S. Treasury

-


-


-


-


-


-


(74)



Dividends and undistributed earnings allocated to unvested shares

(9)


(2)


(2)


(1)


(2)


(13)


(4)



Net income available to common shareholders  

$1,066


$270


$245


$71


$211


$1,581


$424



















































1Certain amounts in this schedule are presented net of applicable income taxes, which are calculated based on each subsidiary's federal and state tax rates and laws.  In general, the federal marginal tax rate is 35%, but the state marginal tax rates range from 1% to 8% in accordance with the subsidiary's income tax filing requirements with various tax authorities.  In addition, the effective tax rate may differ from the federal and state marginal tax rates in certain cases where a permanent difference exists.


 

SOURCE SunTrust Banks, Inc.



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