EXHIBIT 99.1
MERGER OF NATIONAL COMMERCE FINANCIAL CORPORATION WITH AND INTO SUNTRUST BANKS,
INC. ("SUNTRUST BANKS") AND MERGER OF NATIONAL BANK OF COMMERCE, NBC BANK, FSB
AND SUNTRUST BANKCARD, N.A., WITH AND INTO SUNTRUST BANK (THE "BANK")
Effective October 1, 2004, National Commerce Financial Corporation, a Tennessee
corporation and a registered bank holding company ("NCF"), merged with and into
SunTrust Banks, pursuant to the Agreement and Plan of Merger, dated as of May 7,
2004, between NCF and SunTrust Banks (the "Holding Company Merger"). As of June
30, 2004, NCF had total assets of $24.0 billion, total liabilities of $21.3
billion and total shareholders' equity of $2.8 billion. As a result of the
Holding Company Merger, SunTrust Banks issued approximately 76.4 million shares
of common stock and paid an aggregate of $1.8 billion to the former shareholders
of NCF.
Effective April 22, 2005, SunTrust Banks merged National Bank of Commerce
("NBC"), which was the primary banking subsidiary of NCF, NBC Bank, FSB
("NBCFSB"), which was a thrift institution subsidiary of NCF, and SunTrust
BankCard, N.A. ("BankCard"), which was SunTrust Banks' credit card bank
subsidiary, with and into the Bank (the "Bank Mergers"). NBC was a national
banking association with its main office in Memphis, Tennessee and had its
operations headquarters in Durham, North Carolina. In certain markets, NBC
operated under the name "Central Carolina Bank", or CCB, and "Wal-Mart Money
Center by National Bank of Commerce". As of March 31, 2005, NBC offered
commercial and retail banking, savings and trust services through 255 CCB
offices located in North Carolina and South Carolina, 28 Wal-Mart Money Centers
in Georgia and Tennessee, 179 NBC offices located in Tennessee, Mississippi,
Arkansas, Georgia, Virginia and West Virginia and 12 El Banco branches located
in Georgia. As of March 31, 2005, NBC had total assets of $27.8 billion, total
liabilities of $20.6 billion and total equity capital of $7.2 billion. NBCFSB
was a federal savings bank with its main office in DeSoto County, Mississippi,
and with its operations headquartered in Memphis, Tennessee. As of March 31,
2005, NBCFSB offered primarily retail consumer banking services through three
offices located in DeSoto County, Mississippi and two Wal-Mart Money Centers
located in Florida. As of March 31, 2005, NBCFSB had total assets of $46.7
million, total liabilities of $35.8 million and total equity capital of $10.9
million. BankCard was a national bank with its main office in Orlando, Florida.
BankCard was a limited purpose credit card bank that issued credit cards to
small and middle market businesses. As of March 31, 2005, BankCard had total
assets of $220 million, total liabilities of $187.3 million and total equity
capital of $32.7 million.
Each of NBC and BankCard filed Call Reports, and NBCFSB filed Thrift Financial
Reports, with its primary federal regulator, ending with the Call Reports for
the quarterly period ended March 31, 2005. Such Call Reports and Thrift
Financial Reports are on file with, and publicly available upon written request
to, the FDIC, 801 17th Street, N.W.,
Washington, D.C. 20434, Attention: Public Information Center or by calling the
FDIC at 1-202-416-6940.
SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
The following unaudited pro forma condensed combined financial information has
been prepared to reflect the Bank Mergers. The unaudited pro forma condensed
combined balance sheet presents how the combined balance sheets of NBC, NBCFSB,
BankCard and the Bank (the "Merged Banks") may have appeared had the businesses
actually been combined as of March 31, 2005. The unaudited pro forma condensed
combined income statements present how the combined income statements of the
Merged Banks may have appeared had the businesses actually been combined as of
January 1, 2004.
The mergers of NBC and NBCFSB with and into the Bank were accounted for using
the purchase method of accounting; accordingly, SunTrust Banks' cost to acquire
NBC was allocated to the assets (including identifiable intangible assets such
as core deposit intangibles) and liabilities at their respective fair values on
the date the Holding Company Merger was consummated (October 1, 2004). The
merger of BankCard with and into the Bank was accounted for on a pooling-like
basis due to both entities being under common control.
The unaudited pro forma condensed combined financial information is presented
for informational purposes only. Certain amounts in the historical consolidated
financial statements of NBC have been reclassified to conform with the Bank's
historical financial information presentation. The unaudited pro forma condensed
combined financial information presented in this document does not necessarily
indicate the results of operations or the combined financial position that would
have resulted had the merger been completed at the beginning of the applicable
periods presented, nor is it indicative of the results of operations in future
periods or the future financial position of the combined bank.
The unaudited pro forma condensed combined financial information under the bank
headings is based on the Call Reports of the Bank, BankCard and NBC and, with
respect to NBCFSB, on its Thrift Financial Reports. The Call Reports of each of
the Bank and NBC include the financial information of the Bank and its
consolidated subsidiaries, and NBC and its consolidated subsidiaries,
respectively.
The unaudited pro forma condensed combined income statements do not reflect (a)
anticipated expenses and nonrecurring charges that may result from the Holding
Company Merger and the Bank Mergers, (b) estimated expense savings and revenue
enhancements anticipated to result from the Holding Company Merger and the Bank
Mergers and (c) any changes required or which may be required by any regulatory
authority. The unaudited pro forma condensed combined financial information does
not reflect the issuance of $200 million of 4.55% Fixed Rate Senior Global Bank
Notes of the Bank due 2009 and $400 million of Floating Rate Senior Global Bank
Notes of the Bank due 2009, which were both issued on May 25, 2005.
2
SUNTRUST BANK
PRO FORMA CONDENSED COMBINED BALANCE SHEET
MARCH 31, 2005
(in thousands)
<TABLE>
SUNTRUST NATIONAL
BALANCE SHEET DATA: SUNTRUST BANKCARD, BANK OF NBC PRO FORMA
BANK N.A. COMMERCE BANK, FSB COMBINED
------------ ---------- ----------- ---------- -------------
ASSETS
Cash and balances due from banks $ 4,014,162 $ 692 $ 456,290 $2,568 $ 4,473,712
Funds sold and securities
purchased under agreement to
resell 5,924,686 - 13,235 14,500 5,952,421
Trading assets 1,364,169 - - - 1,364,169
Securities available for sale 21,024,250 144 5,612,188 11,378 26,647,960
Loans held for sale 6,888,845 - 66,693 - 6,955,538
Loans 89,951,995 187,140 14,765,325 7,147 104,911,607
Allowance for loan and lease
losses (849,668) (4,185) (168,266) (103) (1,022,222)
------------ ---------- ----------- -------- -------------
Net loans 89,102,327 182,955 14,597,059 7,044 103,889,385
Other real estate owned 14,138 - 16,916 - 31,054
Premises and equipment 1,431,061 313 182,495 505 1,614,374
Goodwill 890,754 - 5,515,316 5,848 6,411,918
Other intangible assets 621,476 - 325,339 - 946,815
Other assets 4,887,204 35,870 1,020,412 4,856 5,948,342
------------ ---------- ----------- -------- -------------
Total assets
$136,163,072 $219,974 $27,805,943 $46,699 $164,235,688
============ ========== =========== ======== ============
LIABILITIES
Deposits
$92,781,526 $14,643 $15,479,906 $27,490 $108,303,565
Funds purchased and securities
sold under agreement to
repurchase 11,962,112 166,300 2,059,390 - 14,187,802
Trading liabilities 660,992 - - - 660,992
Other borrowed money 14,134,976 1,654 2,665,077 - 16,801,707
Subordinated debt 2,849,494 - 150,000 - 2,999,494
Other liabilities 3,367,099 4,647 254,834 8,287 3,634,867
------------ ---------- ----------- -------- -------------
Total liabilities 125,756,199 187,244 20,609,207 35,777 146,588,427
SHAREHOLDER'S EQUITY
Common stock 21,600 1,150 7,000 150 29,900
Additional paid in capital 3,745,215 21,840 7,256,089 10,835 11,033,979
Retained earnings 6,095,959 9,738 (6,548) (25) 6,099,124
Accumulated other comprehensive
income (loss) 544,099 2 (59,805) (38) 484,258
------------ ---------- ----------- -------- -------------
Total shareholder's equity 10,406,873 32,730 7,196,736 10,922 17,647,261
------------ ---------- ----------- -------- -------------
Total liabilities and
shareholder's equity $136,163,072 $219,974 $27,805,943 $46,699 $164,235,688
============ ========== =========== ======== ============
</TABLE>
3
SUNTRUST BANK
PRO FORMA CONDENSED COMBINED INCOME STATEMENT
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2004
(in thousands)
<TABLE>
SUNTRUST NATIONAL
INCOME STATEMENT DATA: SUNTRUST BANKCARD, BANK OF NBC ADJUSTMENTS/ PRO FORMA
BANK N.A. COMMERCE BANK, FSB ELIMINATIONS(1) COMBINED
----------- --------- --------- --------- ------------ -----------
Net interest income $3,579,344 $ 7,803 $775,732 $828 $ 697 (A) $4,364,404
Provision for loan and lease
losses 121,116 1,910 56,320 207 -- 179,553
----------- --------- --------- ------ ---------- -----------
Net interest income after
provision for loan and
lease losses 3,458,228 5,893 719,412 621 697 4,184,851
Noninterest income 2,212,653 41,270 382,787 883 -- 2,637,593
Noninterest expense 3,527,426 39,053 614,627 1,175 3,006 (B) 4,185,287
----------- --------- --------- ------ ---------- -----------
Income from continuing
operations before provision for
income taxes 2,143,455 8,110 487,572 329 (2,309) 2,637,157
Provision for income taxes 637,055 2,871 164,181 137 (878) (C) 803,366
----------- --------- --------- ------ ---------- ------------
Net income $1,506,400 $ 5,239 $323,391 $ 192 $(1,431) $1,833,791
========== ========= ========= ====== ========== ============
</TABLE>
(1) See notes to Unaudited Pro Forma Condensed Combined Financial Information
SUNTRUST BANK
PRO FORMA CONDENSED COMBINED INCOME STATEMENT
FOR THE THREE MONTHS ENDED MARCH 31, 2005
(in thousands)
<TABLE>
SUNTRUST NATIONAL
INCOME STATEMENT DATA: SUNTRUST BANKCARD, BANK OF NBC PRO FORMA
BANK N.A. COMMERCE BANK, FSB COMBINED
------------ ---------- ----------- -------- ------------
Net interest income $943,044 $ 1,876 $200,801 $244 $1,145,965
Provision for loan and lease
losses 257 1,196 9,104 - 10,557
------------ ---------- ----------- ------- ------------
Net interest income after
provision for loan and lease
losses 942,787 680 191,697 244 1,135,408
Noninterest income 560,910 11,083 65,796 205 637,994
Noninterest expense 897,190 7,773 131,635 343 1,036,941
------------ ---------- ----------- ------- ------------
Income from continuing
operations before provision
for income taxes 606,507 3,990 125,858 106 736,461
Provision for income taxes 186,642 1,444 43,846 40 231,972
------------ ---------- ----------- ------- -----------
Net income $419,865 $ 2,546 $82,012 $66 $ 504,489
============ ========= =========== ====== ==========
</TABLE>
4
SUNTRUST BANK
UNAUDITED PRO FORMA FINANCIAL AND OPERATING DATA
(dollars in thousands)
<TABLE>
SUNTRUST BANK SUNTRUST BANK PRO
ACTUAL FORMA
------------- ------------------
AS OF DECEMBER 31, 2004
Allowance for loan and lease losses at period end $873,107 $1,048,379
Allowance for loan and lease losses to period end loans 1.01% 1.03%
Nonaccrual loans at period end $299,781 $ 354,428
Nonaccrual loans as a percent of period end loans 0.35% 0.35%
Accruing loans past due 90 days or more $164,973 $ 186,726
AS OF MARCH 31, 2005
Allowance for loan and lease losses at period end $849,668 $1,022,222
Allowance for loan and lease losses to period end loans 0.94% 0.97%
Nonaccrual loans at period end $278,376 $ 371,912
Nonaccrual loans as a percent of period end loans 0.31% 0.35%
Accruing loans past due 90 days or more $160,321 $ 182,502
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2004
Net charge-offs $182,851 $ 239,257
Earnings to Fixed Charges:
Including interest on deposits 2.56 x 2.56 x
Excluding interest on deposits 4.26 x 4.47 x
FOR THE THREE MONTHS ENDED MARCH 31, 2005
Net charge-offs $ 23,696 $ 36,713
Earnings to Fixed Charges:
Including interest on deposits 2.22 x 2.25 x
Excluding interest on deposits 3.68 x 3.79 x
</TABLE>
5
SUNTRUST BANK
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
(A) Adjustment consists of amortization for the period January 1, 2004
through September 30, 2004 of the fair-value adjustments made to loans,
securities, deposits, and long-term debt, as well as interest expense
on $800.0 million in brokered certificates of deposit which were issued
in connection with the Holding Company Merger.
(B) Includes adjustment to write-off NBC intangible asset amortization and
record identifiable intangible asset amortization resulting from the
Holding Company Merger for the period January 1, 2004 through September
30, 2004. The Bank estimates the core deposit intangibles will be
amortized over ten years using the sum of the years digit method and
the other intangibles will be amortized over an estimated weighted
average of 7.3 years using the straight line method.
(C) Adjustment to record the tax effect of the pro forma adjustments using
the Bank's statutory tax rate of 38.0%.
CAPITALIZATION OF THE BANK
The following table sets forth the actual unaudited consolidated capitalization
of the Bank as of March 31, 2005, pro forma capitalization giving effect to the
Bank Mergers and pro forma capitalization as adjusted to give effect both to the
Bank Mergers and the issuance of $200 million of 4.55% Fixed Rate Senior Global
Bank Notes of the Bank due 2009 and $400 million of Floating Rate Senior Global
Bank Notes of the Bank due 2009, which were both issued on May 25, 2005 (dollars
in thousands):
<TABLE>
SUNTRUST BANK
SUNTRUST BANK SUNTRUST BANK PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED (1)
-------------- -------------- --------------
LONG TERM DEBT:
Subordinated notes and debentures $2,849,494 $2,999,494 $2,999,494
Other long-term debt 12,335,211 14,995,707 15,595,707
----------- ----------- -----------
Total long-term debt 15,184,705 17,995,201 18,595,201
SHAREHOLDER'S EQUITY:
Preferred stock $1,000 par value, 100,000 shares authorized; none - - -
issued
Common stock $5 par value, 4,750,000 authorized; 4,320,000
outstanding 21,600 29,900 29,900
Additional paid in capital 3,745,215 11,033,979 11,033,979
Retained earnings 6,095,959 6,099,124 6,099,124
Accumulated other comprehensive income 544,099 484,258 484,258
Total shareholder's equity 10,406,873 17,647,261 17,647,261
----------- ----------- -----------
Total long-term debt and shareholder's equity $25,591,578 $35,642,462 $36,242,462
=========== =========== ===========
CAPITAL RATIOS:
Risk-based Tier 1 capital ratio 7.60% 7.80% 7.80%
Risk-based total capital ratio 10.71 10.76 10.76
Tier 1 leverage ratio 7.15 7.12 7.12
</TABLE>
6
1 The pro forma balance includes $600 million related to the issuance of $200
million of 4.55% Fixed Rate Senior Global Bank Notes of the Bank due 2009 and
$400 million of Floating Rate Senior Global Bank Notes of the Bank due 2009,
which were both issued on May 25, 2005
