News Release
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Contact: | | | | | | | | |
Investors | | Media | | | | | | |
Greg Ketron | | Barry Koling | | | | | | |
(404) 827-6714 | | (404) 230-5268 | | | | | | |
For Immediate Release
January 19, 2007
SunTrust Reports Record Earnings For 2006, Up 7% From 2005
Company Announces Plan to Realize $400 Million in Cost Savings through E2 Initiative,
Designed to Achieve Greater Efficiency and Productivity
ATLANTA— SunTrust Banks, Inc. (NYSE: STI) today reported record earnings for 2006. For the full-year of 2006, net income available to common shareholders was a record $2,134.8 million, up 7% from $1,987.2 million in 2005, and net income per average common diluted share was $5.88, up 7% from $5.47 in 2005. Net income available to common shareholders for the fourth quarter of 2006 was $523.6 million, up 1% from $518.5 million in the fourth quarter of 2005. Net income per average common diluted share was $1.46, up 2% from $1.43 in the fourth quarter of 2005.
“Despite the challenging operating environment in 2006 and in particular the second-half of the year we were able to grow our earnings per share by 7% over 2005. Loans, deposits and our customer base continued to grow in 2006, reflective of our intense focus on sales and client service. As the year progressed and market conditions became increasingly difficult, we were able to offset the negative impact this had on net interest income with strong fee income growth and by ratcheting up expense control. We also instituted our efficiency and productivity program in the second half of 2006, which will yield significant benefits over the next several years. The efficiency and productivity initiatives, coupled with our sales and service focus and strong credit culture, should provide momentum going into 2007 and beyond,” James M. Wells III, President and Chief Executive Officer of SunTrust noted. Mr. Wells became the Chief Executive Officer effective January 1, 2007, succeeding L. Phillip Humann, who remains the Executive Chairman of the Company.
In connection with reporting its 2006 earnings, SunTrust detailed its company-wide efficiency and productivity initiative, named “E2 (pronounced E-squared) – Excellence in Execution.” The E2 initiative, which encompasses both existing and planned efforts, involves identifying and realizing efficiency and productivity opportunities related to corporate real estate, supplier management, offshoring and outsourcing, process reengineering and a structured organizational review. SunTrust’s estimate of cost saves attributable to the E2 initiative is $400 million by the end of 2009. The goal for cost saves in 2007 is $135 million.
“The E2 program complements our well-established focus on sales, cross-sales and the optimal client experience. We are confident that SunTrust will emerge from the program as a more efficient and productive organization and that our sales and client experience successes coupled with enhanced efficiency and productivity will create powerful operating leverage for the future,” Mr. Wells said.
Fourth Quarter and Full-Year 2006 Consolidated Highlights
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| | | 4th Quarter | | | 4th Quarter | | | % | | | Full Year | | | Full Year | | | % | |
| | | 2006 | | | 2005 | | | Change | | | 2006 | | | 2005 | | | Change | |
Income Statement | | | | | | | | | | | | | | | | | | | | | | |
(Dollars in millions, except per share data) | | | | | | | | | | | | | | | | | | | | | | |
Net income available to common shareholders | | $ | 523.6 | | | $ | 518.5 | | | 1 | % | | $ | 2,134.8 | | | $ | 1,987.2 | | | 7 | % |
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Net income per average common diluted share | | | 1.46 | | | | 1.43 | | | 2 | % | | | 5.88 | | | | 5.47 | | | 7 | % |
Revenue – fully taxable-equivalent | | | 2,067.7 | | | | 2,005.0 | | | 3 | % | | | 8,216.8 | | | | 7,809.5 | | | 5 | % |
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Noninterest income | | | 882.6 | | | | 797.9 | | | 11 | % | | | 3,468.4 | | | | 3,155.0 | | | 10 | % |
Noninterest income before net gains/losses on securities, sale of RCM assets and corporate Bond Trustee business | | | 847.2 | | | | 797.3 | | | 6 | % | | | 3,406.1 | | | | 3,138.8 | | | 9 | % |
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Noninterest expense | | | 1,233.8 | | | | 1,206.9 | | | 2 | % | | | 4,879.9 | | | | 4,690.7 | | | 4 | % |
Noninterest expense before loss on extinguishment of debt and merger expense | | | 1,222.1 | | | | 1,200.4 | | | 2 | % | | | 4,868.2 | | | | 4,592.1 | | | 6 | % |
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Balance Sheet | | | | | | | | | | | | | | | | | | | | | | |
(Dollars in billions) | | | | | | | | | | | | | | | | | | | | | | |
Average loans | | $ | 121.4 | | | $ | 113.8 | | | 7 | % | | $ | 119.6 | | | $ | 108.7 | | | 10 | % |
Average consumer and commercial deposits | | | 98.6 | | | | 95.3 | | | 3 | % | | | 97.2 | | | | 93.4 | | | 4 | % |
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Capital | | | | | | | | | | | | | | | | | | | | | | |
Tier 1 capital ratio(1) | | | 7.65 | % | | | 7.01 | % | | | | | | | | | | | | | | |
Total average shareholders’ equity to total average assets | | | 9.96 | % | | | 9.60 | % | | | | | | | | | | | | | | |
Tangible equity to tangible assets | | | 6.05 | % | | | 5.56 | % | | | | | | | | | | | | | | |
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Asset Quality | | | | | | | | | | | | | | | | | | | | | | |
Net charge-offs to average loans (annualized) | | | 0.29 | % | | | 0.17 | % | | | | | | 0.15 | % | | | 0.18 | % | | | |
Nonperforming loans to total loans | | | 0.55 | % | | | 0.26 | % | | | | | | | | | | | | | | |
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(1)Current period tier 1 capital ratio is estimated as of the earnings release date. | |
| | • | | Net income available to common shareholders increased 1% and net income per average common diluted share increased 2% from the fourth quarter of 2005, due mainly to noninterest income growth and effective expense control. Full-year net income available to common shareholders increased 7% and net income per average common diluted share increased 7% from 2005, driven by strong noninterest income growth and increasingly effective expense control in the second-half of 2006. |
| | • | | Fully taxable-equivalent revenue increased 3% from the fourth quarter of 2005. Excluding net securities gains and losses the increase was 1%. Full-year revenue growth was 5% from 2005. |
| | • | | Noninterest income growth was 11% from the fourth quarter of 2005. Excluding net securities gains and losses the growth was 6%. Strong growth in mortgage production-related, retail investment services, investment banking, and card fee income drove the increase. Full-year noninterest income growth was 10% from 2005. Excluding net securities gains and losses and the gains on sale of RCM assets and the corporate Bond Trustee business the growth was 9%. A number of areas drove the growth on a full-year basis, with mortgage production and servicing-related fees leading the way. |
| | • | | Noninterest expense increased 2% from the fourth quarter of 2005 resulting primarily from effective expense control initiatives implemented in the second-half of 2006. On a full-year basis, noninterest expense before the loss on extinguishment of debt and merger expense increased 6% from 2005. The expense control initiatives slowed expense growth in the second-half of 2006. Noninterest expense before the loss on extinguishment of debt and merger expense grew 10% in the first six months of 2006 from the same period in 2005 and only 3% in the last six months of 2006 from the same period of 2005. |
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| | • | | Total average loans increased 7% and total average consumer and commercial deposits increased 3% from the fourth quarter of 2005. For the full-year, total average loans increased 10% and total average consumer and commercial deposits increased 4% from 2005. Loan growth was driven mainly by residential real estate and construction lending. Deposit growth was driven mainly by consumer and other time deposit growth. |
| | • | | The tier 1 capital and tangible equity to tangible asset ratios improved as the Company took steps to increase these ratios in 2006, the most significant of which was the capital restructuring program executed in the second-half of 2006. The tier 1 capital ratio improved an estimated 64 basis points from December 31, 2005 to approximately 7.65% as of December 31, 2006, and the tangible equity to tangible asset ratio improved 49 basis points to 6.05% over the same period. |
| | • | | Annualized net charge-offs were 0.29% of average loans in the fourth quarter of 2006, up from 0.17% of average loans in the fourth quarter of 2005, largely due to a charge-off taken in the fourth quarter of 2006 associated with the previously disclosed large commercial loan that was placed on nonperforming status in the third quarter of 2006. Full-year net charge-offs as a percent of average loans improved to 0.15% in 2006 compared to 0.18% in 2005. |
| | • | | Nonperforming loans to total loans increased from 0.26% as of December 31, 2005 to 0.55% as of December 31, 2006, mainly due to the large commercial loan placed on nonperforming status in the third quarter of 2006 and an increase in residential mortgage nonperforming loans. The increase in residential mortgage nonperforming loans was driven mainly by maturation of this portfolio, and more specifically, in well-collateralized conforming and Alternative A product (“Alt-A”) first mortgage loans. |
CONSOLIDATED FINANCIAL PERFORMANCE
Revenue
Fully taxable-equivalent revenue was $2,067.7 million for the fourth quarter of 2006, up 3% from the fourth quarter of 2005. Excluding net securities gains and losses, the increase was 1%. On a sequential annualized basis, fully taxable-equivalent revenue increased 7% from the third quarter of 2006. Excluding net securities gains and losses and the net gain on the sale of the corporate Bond Trustee business in the third quarter of 2006, the increase was 4%.
For the twelve months ended December 31, 2006, fully taxable-equivalent revenue was $8,216.8 million, up 5% from the same period in 2005. Excluding net securities gains and losses and the net gain on the sale of RCM assets and the corporate Bond Trustee business, the increase was also 5%.
Net Interest Income
Fully taxable-equivalent net interest income was $1,185.2 million in the fourth quarter of 2006, down 2% from the fourth quarter of 2005. The lack of growth was mainly the result of the flat to inverted yield curve that has persisted over this timeframe, as well as the continued shift in deposit mix away from lower-cost deposit products to consumer and other time deposits. On a sequential annualized basis, fully taxable-equivalent net interest income increased 4% from the third quarter of 2006. Net interest margin increased one basis point from the third quarter of 2006 to 2.94%. These increases were mainly a result of the $3 billion investment portfolio restructuring that occurred in the third quarter and strong growth in NOW accounts during the fourth quarter at rates that were advantageous compared to the wholesale funding rates they replaced. Partially offsetting these increases was the continued shift in deposit mix towards higher cost products, mainly consumer and other time deposits, and the negative impact the flat to inverted yield curve has had on the spread between incremental earning asset growth and the cost of funding the growth.
For the twelve months ended December 31, 2006, fully taxable-equivalent net interest income was $4,748.4 million, up 2% from the same period in 2005. In addition to the aforementioned factors, loan growth also contributed to the increase.
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Noninterest Income
Total noninterest income was $882.6 million for the fourth quarter of 2006, up 11% from the fourth quarter of 2005. Excluding net securities gains and losses, the increase was 6%. The increase primarily resulted from double-digit growth in mortgage production-related income, retail investment services income, investment banking income and card fees. These increases were offset primarily by declines in trading account profits and commissions and mortgage servicing-related income. On a sequential annualized basis, noninterest income increased 11% from the third quarter of 2006. Excluding net securities gains and losses and the net gain on the sale of the corporate Bond Trustee business in the third quarter of 2006, the increase was 4%. The increase was driven mainly by growth in investment banking and retail investment services income as well as other charges and fees, partially offset primarily by decreases in mortgage servicing-related income and trading account profit and commissions.
For the twelve months ended December 31, 2006, noninterest income was $3,468.4 million, up 10% from the same period in 2005. Excluding net securities gains and losses and the net gain on the sale of RCM assets and the corporate Bond Trustee business, the increase was 9%. The growth was driven mainly by mortgage production and servicing-related income, card fees, retail investment services income, investment banking income and trust and investment management income offset by decreases in trading account profit and commissions and service charges on deposit accounts.
Noninterest Expense
Total noninterest expense in the fourth quarter of 2006 was $1,233.8 million, up 2% from the fourth quarter of 2005. This included an $11.7 million loss on the extinguishment of debt related to trust preferred debt that was called during the fourth quarter of 2006. The increase in expense reflects certain investments in revenue producing divisions of the Company, including the addition of offices and employees and investment in the infrastructure of the organization to gain greater efficiencies in the future. These increases were offset by decreased marketing and customer development expenses, lower amortization of intangible assets and the absence of merger expense in the fourth quarter of 2006. On a sequential annualized basis, noninterest expense increased 9% from the third quarter of 2006. Excluding the loss on the extinguishment of debt, the increase was 6%. The increase was mainly due to a seasonal increase in marketing and customer development expense and divestiture-related expenses associated with affordable housing properties in the fourth quarter.
For the twelve months ended December 31, 2006, total noninterest expense was $4,879.9 million, up 4% from the same period of 2005. Excluding the loss on extinguishment of debt and merger expense, the increase was 6%. The factors driving the increase were similar to those noted for the fourth quarter of 2006 increase over the fourth quarter of 2005. Increasingly effective expense control slowed the rate of expense growth during 2006. For the first six months of 2006 compared to the same period of 2005, noninterest expense excluding merger expense grew 10%, and for the last six months of 2006 compared to the same period of 2005, noninterest expense excluding the loss on extinguishment of debt and merger expense grew only 3%.
Balance Sheet
As of December 31, 2006, SunTrust had total assets of $182.2 billion. Shareholders’ equity of $17.8 billion as of December 31, 2006 represented 10% of total assets. Book value per common share was $48.85 as of December 31, 2006.
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Loans
Average loans for the fourth quarter of 2006 were $121.4 billion, up 7% from the fourth quarter of 2005. Areas driving the growth were residential real estate and construction lending. On a sequential annualized basis, average loans grew 2% from the third quarter of 2006. Residential real estate and construction lending were the primary drivers of the growth, although to a lesser degree than in previous quarters. This is the result of an intentional reduction in the amount of mortgage production committed to the loan portfolio as well as the effect of slowing market trends that have developed in the construction sector. Despite slowing conditions that have affected the residential real estate market, the Company posted record mortgage production and application volumes in the fourth quarter.
On a full-year basis, average loans grew 10% over the same period in 2005, driven by strong double-digit growth in residential real estate, home equity, and construction lending, as well as commercial and commercial real estate lending to a lesser degree.
Deposits
Average consumer and commercial deposits for the fourth quarter of 2006 were $98.6 billion, up 3% from the fourth quarter of 2005. On a sequential annualized basis, average consumer and commercial deposits grew 4% from the third quarter of 2006. The full-year average consumer and commercial deposit growth was also 4% over the same period of 2005. The growth in deposits both year-over-year and on a sequential annualized basis was driven by growth in consumer time and other deposits. Given market conditions and the higher-rate environment, customer preference is for higher-yielding products. This is driving the continuation of the deposit mix shift away from lower-rate products, such as demand deposits, toward higher-rate products, such as time deposits or other alternative investment products that pay higher-rates. Such products include securities sold under agreement to repurchase and off-balance sheet products, such as money market mutual funds.
The Company continues to pursue deposit growth initiatives aimed at product promotions, as well as increasing our presence in specific markets within our footprint.
Capital
The Company completed a capital restructuring program in the second-half of 2006 that involved replacing higher-cost capital with more efficient and cost-effective hybrid capital structures, as well as calling higher-cost, capital inefficient trust preferred securities and replacing them with lower-cost, more efficient enhanced trust preferred securities. The proceeds from the hybrid capital issuances, totaling approximately $1 billion, were used to repurchase $1 billion in common stock, with $871 million repurchased through an accelerated share repurchase initiated in October and the other $126 million through in-market purchases in the third quarter of 2006.
These initiatives have contributed to higher tier 1 capital and tangible equity to tangible asset ratios. The tier 1 capital ratio improved an estimated 64 basis points from December 31, 2005 to approximately 7.65% as of December 31, 2006, and the tangible equity to tangible asset ratio improved 49 basis points to 6.05% over the same period.
Asset Quality
Annualized net charge-offs in the fourth quarter of 2006 were 0.29% of average loans, up from 0.12% in the third quarter of 2006 and 0.17% in the fourth quarter of 2005. Net charge-offs were $89.8 million in the fourth quarter of 2006 compared to $36.1 million in the third quarter of 2006 and $49.9 million in the fourth quarter of 2005. The increase in net charge-offs was largely due to a charge-off taken in the fourth quarter of 2006 associated with the previously disclosed large commercial loan placed on nonperforming status in the third quarter of 2006. Net charge-offs were 0.15% for the full-year of 2006, an improvement from the 2005 level of 0.18%.
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Nonperforming loans were $662.3 million, or 0.55% of total loans as of December 31, 2006 compared to $585.4 million, or 0.48% of total loans as of September 30, 2006 and $296.4 million, or 0.26% of total loans as of December 31, 2005. The increase in nonperforming loans from the fourth quarter of 2005 was mainly due to the previously disclosed large commercial loan placed on nonperforming status in the third quarter of 2006 and an increase in residential mortgage nonperforming loans. The increase from the third quarter of 2006 was mainly due to the increase in residential mortgage nonperforming loans. The increase in residential mortgage nonperforming loans was driven mainly by maturation of this portfolio, and more specifically in well-collateralized conforming and Alt-A first mortgage loans. A significant portion of the remaining growth in nonperforming loans was attributable to insured second-lien products.
The allowance for loan and lease losses decreased $14.0 million to $1,073.3 million as of December 31, 2006 from $1,087.3 million as of September 30, 2006 due in part to the reduction in the specific reserve that resulted from the charge-off taken in the fourth quarter associated with the previously disclosed large commercial loan placed on nonperforming status in the third quarter of 2006. Provision expense increased from $61.6 million in the third quarter of 2006 to $75.8 million in the fourth quarter of 2006. The allowance for loan and lease losses as of December 31, 2006 represented 0.88% of period-end loans, down two basis points from 0.90% of period-end loans as of September 30, 2006. The allowance for loan and lease losses as of December 31, 2006 represented 162% of period-end nonperforming loans.
The allowance for loan and lease losses increased $45.2 million from December 31, 2005 as a result of the strong loan growth in 2006 in addition to the impact of the establishment of a specific reserve related to the previously disclosed large commercial loan placed on nonperforming status in the third quarter of 2006.
LINE OF BUSINESS FINANCIAL PERFORMANCE
Retail
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| preliminary data | | 4th Quarter 2006 | | 4th Quarter 2005 | | % Change | | | Full Year 2006 | | Full Year 2005 | | % Change | |
(in millions) | | | | | | |
Net income | | $ | 166.3 | | $ | 167.2 | | (1 | )% | | $ | 750.5 | | $ | 645.3 | | 16 | % |
Revenue - fully taxable-equivalent | | | 839.7 | | | 845.8 | | (1 | ) | | | 3,423.7 | | | 3,218.9 | | 6 | |
Average total loans | | | 31,028.4 | | | 31,270.6 | | (1 | ) | | | 30,885.4 | | | 30,411.6 | | 2 | |
Average total deposits | | | 69,541.6 | | | 66,443.3 | | 5 | | | | 68,997.6 | | | 65,238.8 | | 6 | |
Three Months Ended December 31, 2006 vs. 2005
Retail’s net income for the fourth quarter of 2006 was $166.3 million, a decrease of $0.9 million, or 1%. The decrease was primarily the result of lower noninterest income partially offset by higher net interest income and lower noninterest expense.
Fully taxable-equivalent net interest income increased $4.6 million, or 1%. The increase was attributable to widening loan spreads due to a favorable change in loan mix. Average loans decreased $242.2 million, or 1%. The loan decrease was driven primarily by student loan sales and securitizations, which totaled approximately $3.1 billion throughout 2006. Further, a decline in consumer indirect was partially offset by growth in the higher-spread home equity products. Average deposits increased $3.1 billion, or 5%, driven primarily by consumer time deposits.
Total noninterest income decreased $10.7 million, or 4%, driven primarily by a decrease in service charges on deposit accounts due to the continued growth of free checking account products and a decrease in consumer NSF fees.
Total noninterest expense decreased $6.7 million, or 1%. The decrease was driven primarily by declines in intangible amortization and operations expense.
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Twelve Months Ended December 31, 2006 vs. 2005
Retail’s net income for the twelve months ended December 31, 2006 was $750.5 million, an increase of $105.2 million, or 16%. The increase was primarily the result of loan and deposit growth, wider deposit spreads, and lower provision for loan losses, partially offset by higher noninterest expense.
Fully taxable-equivalent net interest income increased $178.0 million, or 8%. Part of the increase was attributable to loan and deposit growth and a favorable change in the loan mix. Average loans increased $473.8 million, or 2%, primarily driven by growth in home equity products offset by a decline in student loans due to sales and securitizations during 2006. Average deposits increased $3.8 billion, or 6%, driven primarily by consumer time deposits. Wider deposit spreads also contributed to the increase in net interest income. Deposit spreads widened due to deposit rate increases that have been slower relative to market rate increases, as well as the increasing value of lower-cost deposits in a higher rate environment.
Provision for loan losses, which represents net charge-offs for the lines of business, decreased $32.3 million, or 23%, primarily due to a decline in consumer indirect net charge-offs.
Total noninterest income increased $26.8 million, or 3%. The increase was driven primarily by interchange income due to increased volumes, as well as gains on student loan sales.
Total noninterest expense increased $80.4 million, or 4%. The increase was driven by increases in interchange expense due to increased volume, as well as personnel and operations expense related to investments in the branch distribution network and technology. Forty-four net new branches were added during 2006.
Commercial
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| preliminary data | | 4th Quarter 2006 | | 4th Quarter 2005 | | % Change | | | Full Year 2006 | | Full Year 2005 | | % Change | |
(in millions) | | | | | | |
Net income | | $ | 107.0 | | $ | 98.7 | | 8 | % | | $ | 432.9 | | $ | 380.9 | | 14 | % |
Revenue - fully taxable-equivalent | | | 309.8 | | | 302.5 | | 2 | | | | 1,221.0 | | | 1,152.2 | | 6 | |
Average total loans | | | 32,617.0 | | | 30,988.4 | | 5 | | | | 32,438.6 | | | 30,760.3 | | 5 | |
Average total deposits | | | 14,230.5 | | | 13,808.3 | | 3 | | | | 13,787.5 | | | 13,409.0 | | 3 | |
Three Months Ended December 31, 2006 vs. 2005
Commercial’s net income for the fourth quarter of 2006 was $107.0 million, an increase of $8.3 million, or 8%. The increase was driven primarily by an increase in noninterest income and lower provision for loan losses.
Fully taxable-equivalent net interest income was nearly unchanged, as an increase in net interest income on loans was offset by a shift to higher-cost deposits. Average loans increased $1.6 billion, or 5%, with the strongest growth in construction lending. Average deposits increased $422.2 million, or 3%, driven by an increase in institutional and government deposits, partially offset by decreases in demand deposits and money market accounts.
Provision for loan losses, which represents net charge-offs for the lines of business, decreased $4.6 million, or 65%. The decrease was driven primarily by lower net charge-offs in the Core Commercial sub-line of business.
Total noninterest income increased $7.2 million, or 10%. The increase was due mainly to higher revenue from capital markets activities, deposit sweep income and service charges on deposits.
Total noninterest expense increased $1.1 million, or 1%. An increase in personnel expense was partially offset by a decrease in operations expense.
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Twelve Months Ended December 31, 2006 vs. 2005
Commercial’s net income for the twelve months ended December 31, 2006 was $432.9 million, an increase of $52.0 million, or 14%. The increase was primarily driven by net interest and noninterest income growth and lower provision for loan losses, partially offset by higher noninterest expenses.
Fully taxable-equivalent net interest income increased $44.8 million, or 5%. The increase was driven by loan and deposit growth, as well as wider deposit spreads. Average loans increased $1.7 billion, or 5%, with the strongest growth in construction lending. Average deposits increased $378.5 million, or 3%, driven by an increase in institutional and government deposits and partially offset by decreases in demand deposits and money market accounts. Deposit spreads increased due to the increasing value of lower-cost deposits in a higher rate environment.
Provision for loan losses, which represents net charge-offs for the lines of business, decreased $15.7 million, or 62%. The decrease was driven primarily by lower net charge-offs in the Core Commercial and the Real Estate Finance Group (“REFG”) sub-lines of business.
Total noninterest income increased $23.9 million, or 9%. The increase resulted from higher Affordable Housing revenues, deposit sweep income, as well as increased revenue from capital markets and card products.
Total noninterest expense increased $18.5 million, or 3%. Increases in personnel and operations expense were partially offset by a decrease in Affordable Housing expense.
Corporate and Investment Banking
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| preliminary data | | 4th Quarter 2006 | | 4th Quarter 2005 | | % Change | | | Full Year 2006 | | Full Year 2005 | | % Change | |
(in millions) | | | | | | |
Net income | | $ | 69.1 | | $ | 65.5 | | 6 | % | | $ | 256.2 | | $ | 270.8 | | (5 | )% |
Revenue - fully taxable-equivalent | | | 260.9 | | | 212.4 | | 23 | | | | 903.9 | | | 904.9 | | — | |
Average total loans | | | 16,630.7 | | | 16,339.7 | | 2 | | | | 16,506.5 | | | 15,286.0 | | 8 | |
Average total deposits | | | 2,869.0 | | | 3,614.2 | | (21 | ) | | | 3,116.8 | | | 3,289.0 | | (5 | ) |
Three Months Ended December 31, 2006 vs. 2005
Corporate and Investment Banking’s net income for the fourth quarter of 2006 was $69.1 million, an increase of $3.6 million, or 6%. Strong growth in Debt Capital Markets income was offset by a decrease in loan spreads, higher provision for loan losses and noninterest expense.
Fully taxable-equivalent net interest income decreased $18.8 million, or 26%. The decrease is primarily due to a shift in loan mix to loans with narrower spreads within the Corporate Banking portfolio. Average loans increased $290.9 million, or 2%, driven by increased usage of committed facilities. Average deposits decreased $745.2 million, or 21%. The decline in deposits was led by a reduction in certain bid-category products that the line of business elected not to bid on due to their high cost in relation to alternative funding sources.
Provision for loan losses, which represents net charge-offs for the lines of business, increased to $40.2 million from a net recovery of $2.4 million. The increase was largely due to a charge-off taken in the fourth quarter of 2006 associated with the previously disclosed large commercial loan placed on nonperforming status in the third quarter of 2006.
Total noninterest income increased $67.4 million, or 48%, primarily driven by robust Debt Capital Markets revenue growth of $58.7 million, or 150%, mainly related to securitization, derivatives, structured leasing and loan syndication. Strong revenue growth from merchant banking and leasing also contributed to this increase.
Total noninterest expense increased $9.0 million, or 8%. The majority of the increase was due to increased incentive-based compensation related to the increase in capital markets revenue, as well as increased expense related to merchant banking.
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Twelve Months Ended December 31, 2006 vs. 2005
Corporate and Investment Banking’s net income for the year ended December 31, 2006 was $256.2 million, a decrease of $14.6 million, or 5%. Adjusting net income by $16.6 million for the March 2005 divestiture of Receivable Capital Management (“RCM”) factoring assets, net income increased 1%. Strong growth in Debt Capital Markets was primarily offset by increased provision for loan losses, as well as a decrease in loan spreads.
Fully taxable-equivalent net interest income decreased $31.5 million, or 12%. Excluding the RCM divestiture, the decrease was 11%, primarily due to a shift in loan mix to loans with narrower spreads within the Corporate Banking portfolio. Average loans increased $1.2 billion, or 8%, primarily in Financial Institutions, Energy and US Diversified Groups. This increase was due to stronger corporate demand and revolver usage, as well as strong growth in our leasing products. Average deposits decreased $172.2 million, or 5%, led by a reduction in certain bid-category products that the line of business elected not to bid on due to their high cost in relation to alternative funding sources.
Provision for loan losses, which represents net charge-offs for the lines of business, increased $30.3 million to $45.1 million. The increase was largely due to a charge-off taken in the fourth quarter of 2006 associated with the previously disclosed large commercial loan placed on nonperforming status in the third quarter of 2006.
Total noninterest income increased $30.5 million, or 5%. Adjusting for the divestiture of RCM, noninterest income grew 10%. Debt Capital Markets revenue increased $64.2 million, or 28%, mainly related to securitization, derivatives and structured leasing, as well as strong revenue performance in merchant banking and leasing.
Total noninterest expense increased $3.4 million, or 1%, primarily driven by increased compensation related to increased capital markets revenue, as well as increased expense related to merchant banking.
Mortgage
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| preliminary data | | 4th Quarter 2006 | | 4th Quarter 2005 | | % Change | | | Full Year 2006 | | Full Year 2005 | | % Change | |
(in millions) | | | | | | |
Net income | | $ | 40.8 | | $ | 43.3 | | (6 | )% | | $ | 248.4 | | $ | 171.9 | | 45 | % |
Revenue - fully taxable-equivalent | | | 210.4 | | | 211.8 | | (1 | ) | | | 982.8 | | | 787.0 | | 25 | |
Average total loans | | | 32,330.8 | | | 26,920.6 | | 20 | | | | 31,233.0 | | | 24,205.7 | | 29 | |
Average total deposits | | | 1,949.3 | | | 1,776.1 | | 10 | | | | 1,810.7 | | | 1,653.9 | | 9 | |
Three Months Ended December 31, 2006 vs. 2005
Mortgage’s net income for the fourth quarter of 2006 was $40.8 million, a decrease of $2.5 million, or 6%. Higher origination and servicing fees, net of increased expenses, only partially offset higher mortgage servicing rights amortization and reduced net secondary marketing performance.
Fully taxable-equivalent net interest income decreased $2.0 million, or 1%, due to loan and deposit growth more than offset by lower income on loans held for sale. Growth in residential mortgage and residential construction loans drove a $5.4 billion, or 20%, increase in total loans, which contributed $12.7 million to the change in net interest income. Average loans held for sale increased $0.4 billion, or 4%. However, compressed spreads resulting from increased short-term interest rates reduced income on loans held for sale by $16.3 million. Average deposits were up $0.2 billion, or 10%, due to higher escrow balances associated with higher servicing balances along with a higher credit for funds rate, and contributed $5.7 million to the change.
Provision for loan losses, which represents net charge-offs for the lines of business, increased $4.2 million. During the fourth quarter of 2005, Mortgage realized net recoveries of $1.2 million compared to net charge-offs of $3.0 million in the fourth quarter of 2006. Net charge-offs increased due to the maturation of the mortgage portfolio.
9
Total noninterest income was up $0.5 million, or 1%. Production income was up $12.2 million due to higher volumes. Record loan production of $15.1 billion was up $2.0 billion, or 15%. Loan sales to investors were a record $11.6 billion, up $4.2 billion, or 57%. Servicing income was down $4.4 million due to higher mortgage servicing rights amortization that was partially offset by higher fee income from increased servicing balances. At December 31, 2006, total loans serviced were $130.0 billion, up $24.4 billion, or 23%, from $105.6 billion at prior year-end. Other noninterest income was down $7.2 million due to increased secondary marketing reserves, partially offset by higher insurance income due to increased volumes.
Total noninterest expense increased $2.1 million, or 1%. Increased volumes and investments in production and servicing capabilities were the primary drivers of the slightly higher expense level.
Twelve Months Ended December 31, 2006 vs. 2005
Mortgage’s net income for the year ended December 31, 2006 was $248.4 million, an increase of $76.5 million, or 45%. Income from sales of servicing assets, higher income from loans and deposits, better net secondary marketing performance, and higher origination and servicing fees, net of increased expense, were partially offset by increased mortgage servicing rights amortization.
Fully taxable-equivalent net interest income increased $55.7 million, or 10%, principally due to loan and deposit growth partially offset by lower spreads on loans held for sale. Average loans, principally residential mortgage and residential construction loans, increased $7.0 billion, or 29%, contributing $85.0 million to the higher net interest income. Average loans held for sale increased $1.7 billion, or 23%. However, due to compressed spreads resulting from higher short-term interest rates, net interest income on loans held for sale declined $43.6 million. Average deposits were up $0.2 billion, or 10%, due to escrow balances associated with higher servicing balances along with a higher credit for funds rate, and contributed $24.5 million to the change.
Provision for loan losses, which represents net charge-offs for the lines of business, increased $3.1 million, or 56%, due to the maturation of the mortgage portfolio.
Total noninterest income increased $140.1 million, or 59%. Production income was up $70.5 million driven by higher volumes. Production of $55.4 billion was up $7.7 billion, or 16%. Loan sales to investors were $40.9 billion, an increase of $13.2 billion, or 48%. Servicing income was up $80.0 million due to gains from the sale of mortgage servicing assets of $66.3 million and increased fees from higher servicing balances. Higher mortgage servicing rights amortization partially offset these increases. Other noninterest income was down $10.4 million due to higher secondary marketing reserves, partially offset by higher insurance income.
Total noninterest expense increased $75.6 million, or 15%. Increased volume and investments in production and servicing capabilities were the primary drivers of the higher expense level.
Wealth and Investment Management
| | | | | | | | | | | | | | | | | | |
| preliminary data | | 4th Quarter 2006 | | 4th Quarter 2005 | | % Change | | | Full Year 2006 | | Full Year 2005 | | % Change | |
(in millions) | | | | | | |
Net income | | $ | 51.1 | | $ | 42.5 | | 20 | % | | $ | 267.3 | | $ | 187.2 | | 43 | % |
Revenue - fully taxable-equivalent | | | 343.7 | | | 335.4 | | 2 | | | | 1,466.0 | | | 1,286.9 | | 14 | |
Average total loans | | | 8,200.2 | | | 8,079.7 | | 1 | | | | 8,135.4 | | | 7,809.6 | | 4 | |
Average total deposits | | | 10,047.1 | | | 9,480.0 | | 6 | | | | 9,477.3 | | | 9,528.4 | | (1 | ) |
Three Months Ended December 31, 2006 vs. 2005
Wealth and Investment Management’s net income for the fourth quarter of 2006 was $51.1 million, an increase of $8.6 million, or 20%. The growth was primarily driven by growth in noninterest income partially offset by growth in noninterest expense and the forgone income that resulted from the sale of the corporate Bond Trustee business at the end of the third quarter of 2006.
10
Fully taxable-equivalent net interest income decreased $4.3 million, or 5%, due primarily to a shift in deposit mix to higher-cost products. Average loans increased $0.1 billion, or 1%, driven by modest growth in most categories, with the exception of consumer mortgages. Average deposits increased $0.6 billion, or 6%, due to increased NOW account balances and customer time deposits, partially offset by declines in demand and money market deposits.
Provision for loan losses, which represents net charge-offs for the lines of business, decreased $3.8 million, or 65%.
Total noninterest income increased $12.6 million, or 5%, due to strong retail investment services income driven by revenue from managed accounts, 12b-1 fees and annuities. Conversely, trust income decreased primarily as a result of lost revenue from the sale of the corporate Bond Trustee business and a decline in non-recurring revenue. End of period assets under management were approximately $141.1 billion compared to $135.3 billion end of period last year. Assets under management include individually managed assets, the STI Classic Funds, institutional assets managed by Trusco Capital Management and participant-directed retirement accounts. SunTrust’s total assets under advisement were approximately $245.3 billion, which includes $141.1 billion in assets under management, $57.7 billion in non-managed trust assets, $38.7 billion in retail brokerage assets and $7.8 billion in non-managed corporate trust assets. Approximately $21.2 billion in corporate trust non-managed assets were transferred as part of the corporate Bond Trustee transaction.
Total noninterest expense increased $2.0 million, or 1%. The growth was primarily driven by increased fees paid to third parties and partially offset by reduced operations and staff expenses, which are partially attributable to efficiency initiatives within the line of business.
Twelve Months Ended December 31, 2006 vs. 2005
Wealth and Investment Management’s net income for the twelve months ended December 31, 2006 was $267.3 million, an increase of $80.1 million, or 43%. Excluding the net gain on the sale of the corporate Bond Trustee business, net income increased 5%. Increases in both net interest income and non-interest income were partially offset by higher expenses.
Fully taxable-equivalent net interest income increased $24.3 million, or 7%, attributable to a combination of increased loan volumes and wider deposit spreads. Average loans increased $0.3 billion, or 4%, primarily due to growth in commercial real estate and commercial loans. Average deposits decreased $0.1 billion, or 1%, due to declines in demand deposits and money market accounts, partially offset by increases in consumer time deposits. Deposit spreads widened due to deposit rate increases that have been slower relative to market rate increases, as well as the increasing value of lower-cost deposits in a higher rate environment.
Provision for loan losses, which represents net charge-offs for the lines of business, decreased $5.2 million, or 58%.
Total noninterest income increased $154.9 million, or 16%, primarily due to the $112.8 million pre-tax gain on the sale of the corporate Bond Trustee business. Noninterest income excluding the net gain of $112.8 million increased $42.1 million to $986.1 million, or 4%, driven by growth in trust and retail investment services income. Trust income increased due to growth in assets under management from improved sales and market conditions. Retail investment services income increased due to growth in variable annuities, managed account and new business revenue.
Total noninterest expense increased $60.1 million, or 6%. Growth was primarily driven by higher structural and staff expense.
11
Corporate Other and Treasury
| | | | | | | | | | | | | | | | | | |
| preliminary data | | 4th Quarter 2006 | | 4th Quarter 2005 | | % Change | | | Full Year 2006 | | Full Year 2005 | | % Change | |
(in millions) | | | | | | |
Net income | | $ | 51.1 | | $ | 42.5 | | 20 | % | | $ | 267.3 | | $ | 187.2 | | 43 | % |
Revenue - fully taxable-equivalent | | | 343.7 | | | 335.4 | | 2 | | | | 1,466.0 | | | 1,286.9 | | 14 | |
Average total loans | | | 8,200.2 | | | 8,079.7 | | 1 | | | | 8,135.4 | | | 7,809.6 | | 4 | |
Average total deposits | | | 10,047.1 | | | 9,480.0 | | 6 | | | | 9,477.3 | | | 9,528.4 | | (1 | ) |
Three Months Ended December 31, 2006 vs. 2005
Corporate Other and Treasury’s net income for the fourth quarter of 2006 was $97.0 million, a decrease of $4.2 million, or 4%, mainly due to an increase in noninterest expense, partially offset by a decrease in provision for loan losses and an increase in noninterest income.
Fully taxable-equivalent net interest income was nearly unchanged, decreasing $1.4 million, or 2%.
Provision for loan losses, which represents the difference between net charge-offs for the lines of business and total provision for loan losses, decreased $12.1 million.
Total average assets decreased $2.1 billion, or 6%, mainly due to a reduction in the size of the investment portfolio of $1.7 billion that resulted from the investment portfolio restructuring in the third quarter. Total average deposits increased $4.9 billion, or 23%, mainly due to growth in brokered and foreign deposits.
Total noninterest income increased $7.6 million, or 32%. This was mainly due to an increase in net securities gains of $31.7 million recognized in the fourth quarter, partially offset by a $13.5 million decrease in derivative income on economic hedges and an increase in intercompany credits to the lines of business of $5.7 million.
Total noninterest expense increased $19.2 million due mainly to the loss on extinguishment of debt totaling $11.7 million.
Twelve Months Ended December 31, 2006 vs. 2005
Corporate Other and Treasury’s net income for the year ended December 31, 2006 was $187.2 million, a decrease of $144.0 million, or 43%, mainly due to a decline in net interest income, an increase in provision for loan losses, and increased net securities losses partially offset by a decrease in merger-related expenses.
Fully taxable-equivalent net interest income decreased $177.3 million, or 44%. The main drivers were a $1.9 billion decrease in average securities available for sale, a decrease in income on receive fixed/pay floating interest rate swaps used to extend the duration of the commercial loan portfolio resulting from narrower spreads between the receive fixed/pay floating rates, an increase in short-term borrowing costs due to an increase in the size of these borrowings needed to fund earning asset growth, as well as a significant rise in short-term interest rates over the past year.
Total average deposits increased $9.2 billion, or 53%, mainly due to growth in brokered and foreign deposits.
Provision for loan losses, which represents the difference between net charge-offs for the lines of business and total provision for loan losses, increased $65.4 million due to additional provision expense necessary to support the Company’s strong loan growth in 2006 and the impact of the establishment of a specific reserve related to the previously disclosed large commercial loan placed on nonperforming status in the third quarter of 2006.
Total noninterest income decreased $62.9 million, mainly due to an increase in net securities losses of $44.8 million related to the portfolio restructuring in the third quarter of 2006 and a $14.0 million decrease in derivative income on economic hedges.
Total noninterest expense decreased $48.9 million mainly due to a reduction in merger-related expenses.
12
Corresponding Financial Tables and Information
This news release contains certain non-US GAAP financial measures to describe our Company’s performance. The reconciliation of those measures to the most directly comparable US GAAP financial measures, and the reasons why SunTrust believes such financial measures may be useful to investors, can be found in the financial information contained in the appendices of this news release.
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 available on our Web site at www.suntrust.com in the Investor Relations section located under “About SunTrust”. This information is also included in a current report on Form 8-K filed with the SEC today.
Conference Call
SunTrust management will host a conference call on January 19, 2007 at 8:00 a.m. (Eastern Time) to discuss the earnings results and business trends. Individuals are encouraged to call in beginning at 7:45 a.m. (Eastern Time) by dialing 1-888-972-7805 (Passcode: 4Q06; Leader: Greg Ketron). Individuals calling from outside the United States should dial 1-517-308-9091 (Passcode: 4Q06; Leader: Greg Ketron). A replay of the call will be available beginning January 19, 2007 and ending February 2, 2007 by dialing 1-800-679-9640 (domestic) or 1-402-220-0275 (international).
Alternatively, individuals may listen to the live webcast of the presentation by visiting the SunTrust Web site at www.suntrust.com. The webcast will be hosted under “Investor Relations” located under “About SunTrust” or may be accessed directly from the SunTrust home page by clicking on the earnings-related link, “4th Quarter Earnings Release.” Beginning the afternoon of January 19, 2007, listeners may access an archived version of the webcast in the “Webcasts and Presentations” subsection found under “Investor Relations.” 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 high-growth Southeast and Mid-Atlantic states and a full array of technology-based, 24-hour delivery channels. The Company also serves customers in selected markets nationally. Its primary businesses include deposit, credit, trust and investment services. Through various subsidiaries the Company provides credit cards, mortgage banking, insurance, brokerage, equipment leasing and capital markets services. SunTrust’s Internet address is www.suntrust.com.
Forward Looking Statements
This news release may contain forward-looking statements, including statements about future prospects of the Company and credit quality. Statements that do not describe historical or current facts, including statements about beliefs and expectations, are forward-looking statements. These statements often include the words “may,” “could,” “would,” “should,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “targets,” “potentially,” “probably,” “projects,” “outlook” or similar expressions. Such statements are based upon the current beliefs and expectations of SunTrust’s management and 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 SunTrust’s results to differ materially from those described in the forward-looking statements can be found in the Company’s 2005 Annual Report on Form 10-K, in the Quarterly Reports on Form 10-Q and in the Current Reports filed on Form 8-K with the Securities and Exchange Commission and available at the Securities and Exchange Commission’s internet site (http://www.sec.gov). Those factors include: changes in interest rates; changes in general business or
13
economic conditions or the competitive banking environment; changes in credit conditions including customers’ ability to repay debt obligations; competitive pressures among local, regional, national, and international banks, thrifts credit unions, and other financial institutions; increases in the cost of funds resulting from customers pursuing alternatives to bank deposits or shifting from demand deposits to higher-cost products; significant changes in legislation or regulatory requirements, or the fiscal and monetary policies of the federal government and its agencies; significant changes in securities markets or markets for commercial or residential real estate; the Company’s success in managing its costs, including costs associated with the expansion of distribution channels and developing new ones; the potential that the Company may acquire other institutions or may be acquired by other institutions; the potential that the Company may divest certain portions of its business; hurricanes and other natural disasters; litigation; and changes in accounting principles, policies, or guidelines. The forward-looking statements in this news release speak only as of this date, and SunTrust does not assume any obligation to update such statements or to update the reasons why actual results could differ from those contained in such statements.
###
14
SunTrust Banks, Inc. and Subsidiaries
FINANCIAL HIGHLIGHTS
(Dollars in millions, except per share data) (Unaudited)
| | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended
December 31 | | | % Change | | | Twelve Months Ended
December 31 | | | % Change | |
| | | 2006 | | | 2005 | | | | 2006 | | | 2005 | | |
EARNINGS & DIVIDENDS | | | | | | | | | | | | | | | | | | | | | | |
Net income | | $ | 531.4 | | | $ | 518.5 | | | 2.5 | % | | $ | 2,142.5 | | | $ | 1,987.2 | | | 7.8 | % |
Net income available to common shareholders | | | 523.6 | | | | 518.5 | | | 1.0 | | | | 2,134.8 | | | | 1,987.2 | | | 7.4 | |
Total revenue - FTE2 | | | 2,067.7 | | | | 2,005.0 | | | 3.1 | | | | 8,216.8 | | | | 7,809.5 | | | 5.2 | |
Total revenue - FTE excluding net securities gains and losses, net gain on sale of RCM assets and net gain on sale of Bond Trustee business1 | | | 2,032.4 | | | | 2,004.4 | | | 1.4 | | | | 8,154.5 | | | | 7,793.3 | | | 4.6 | |
Net income per average common share | | | | | | | | | | | | | | | | | | | | | | |
Diluted | | | 1.46 | | | | 1.43 | | | 2.1 | | | | 5.88 | | | | 5.47 | | | 7.5 | |
Basic | | | 1.48 | | | | 1.44 | | | 2.8 | | | | 5.94 | | | | 5.53 | | | 7.4 | |
Dividends paid per average common share | | | 0.61 | | | | 0.55 | | | 10.9 | | | | 2.44 | | | | 2.20 | | | 10.9 | |
CONDENSED BALANCE SHEETS | | | | | | | | | | | | | | | | | | | | | | |
Selected Average Balances | | | | | | | | | | | | | | | | | | | | | | |
Total assets | | $ | 182,343 | | | $ | 175,769 | | | 3.7 | % | | $ | 180,315 | | | $ | 168,089 | | | 7.3 | % |
Earning assets | | | 160,115 | | | | 153,490 | | | 4.3 | | | | 158,429 | | | | 146,640 | | | 8.0 | |
Loans | | | 121,364 | | | | 113,828 | | | 6.6 | | | | 119,645 | | | | 108,742 | | | 10.0 | |
Consumer and commercial deposits | | | 98,553 | | | | 95,257 | | | 3.5 | | | | 97,175 | | | | 93,355 | | | 4.1 | |
Brokered and foreign deposits | | | 26,124 | | | | 21,010 | | | 24.3 | | | | 26,490 | | | | 17,052 | | | 55.3 | |
Total shareholders’ equity | | | 18,155 | | | | 16,876 | | | 7.6 | | | | 17,547 | | | | 16,526 | | | 6.2 | |
As of | | | | | | | | | | | | | | | | | | | | | | |
Total assets | | | 182,202 | | | | 179,713 | | | 1.4 | | | | | | | | | | | | |
Earning assets | | | 159,133 | | | | 156,641 | | | 1.6 | | | | | | | | | | | | |
Loans | | | 121,523 | | | | 114,555 | | | 6.1 | | | | | | | | | | | | |
Allowance for loan and lease losses | | | 1,073 | | | | 1,028 | | | 4.4 | | | | | | | | | | | | |
Consumer and commercial deposits | | | 99,776 | | | | 97,572 | | | 2.3 | | | | | | | | | | | | |
Brokered and foreign deposits | | | 24,246 | | | | 24,481 | | | (1.0 | ) | | | | | | | | | | | |
Total shareholders’ equity | | | 17,839 | | | | 16,887 | | | 5.6 | | | | | | | | | | | | |
FINANCIAL RATIOS & OTHER DATA | | | | | | | | | | | | | | | | | | | | | | |
Return on average total assets | | | 1.16 | % | | | 1.17 | % | | (0.9 | )% | | | 1.19 | % | | | 1.18 | % | | 0.8 | % |
Return on average assets less net unrealized securities gains1 | | | 1.09 | | | | 1.15 | | | (5.2 | ) | | | 1.19 | | | | 1.17 | | | 1.7 | |
Return on average common shareholders’ equity | | | 11.77 | | | | 12.19 | | | (3.4 | ) | | | 12.27 | | | | 12.02 | | | 2.1 | |
Return on average realized common shareholders’ equity1 | | | 11.78 | | | | 12.75 | | | (7.6 | ) | | | 12.87 | | | | 12.70 | | | 1.3 | |
Net interest margin2 | | | 2.94 | | | | 3.12 | | | (5.8 | ) | | | 3.00 | | | | 3.17 | | | (5.4 | ) |
Efficiency ratio2 | | | 59.67 | | | | 60.20 | | | (0.9 | ) | | | 59.39 | | | | 60.06 | | | (1.1 | ) |
Tangible efficiency ratio1 | | | 58.49 | | | | 58.79 | | | (0.5 | ) | | | 58.13 | | | | 58.54 | | | (0.7 | ) |
Effective tax rate | | | 27.63 | | | | 28.97 | | | (4.6 | ) | | | 29.21 | | | | 30.67 | | | (4.8 | ) |
Full-time equivalent employees | | | 33,599 | | | | 33,406 | | | 0.6 | | | | | | | | | | | | |
Number of ATMs | | | 2,569 | | | | 2,782 | | | (7.7 | ) | | | | | | | | | | | |
Full service banking offices | | | 1,701 | | | | 1,657 | | | 2.7 | | | | | | | | | | | | |
Traditional | | | 1,349 | | | | 1,325 | | | 1.8 | | | | | | | | | | | | |
In-store | | | 352 | | | | 332 | | | 6.0 | | | | | | | | | | | | |
Tier 1 capital ratio | | | 7.65 | %3 | | | 7.01 | % | | 9.1 | % | | | | | | | | | | | |
Total capital ratio | | | 11.00 | 3 | | | 10.57 | | | 4.1 | | | | | | | | | | | | |
Tier 1 leverage ratio | | | 7.25 | 3 | | | 6.65 | | | 9.0 | | | | | | | | | | | | |
Total average shareholders’ equity to total average assets | | | 9.96 | | | | 9.60 | | | 3.7 | | | | 9.73 | | | | 9.83 | | | (1.0 | ) |
Tangible equity to tangible assets1 | | | 6.05 | | | | 5.56 | | | 8.8 | | | | | | | | | | | | |
Book value per common share | | | 48.85 | | | | 46.65 | | | 4.7 | | | | | | | | | | | | |
Market price: | | | | | | | | | | | | | | | | | | | | | | |
High | | | 85.64 | | | | 75.46 | | | 13.5 | | | | 85.64 | | | | 75.77 | | | 13.0 | |
Low | | | 76.76 | | | | 65.32 | | | 17.5 | | | | 69.68 | | | | 65.32 | | | 6.7 | |
Close | | | 84.45 | | | | 72.76 | | | 16.1 | | | | 84.45 | | | | 72.76 | | | 16.1 | |
Market capitalization | | | 29,972 | | | | 26,338 | | | 13.8 | | | | | | | | | | | | |
Average common shares outstanding (000s) | | | | | | | | | | | | | | | | | | | | | | |
Diluted | | | 358,292 | | | | 363,175 | | | (1.3 | ) | | | 362,802 | | | | 363,454 | | | (0.2 | ) |
Basic | | | 354,677 | | | | 359,203 | | | (1.3 | ) | | | 359,413 | | | | 359,066 | | | 0.1 | |
| 1 | See Appendix A for a reconcilement of non-GAAP performance measures. “RCM” refers to Receivables Capital Management. |
| 2 | 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. |
| 3 | Current period tier 1 capital, total capital and tier 1 leverage ratios are estimated as of the earnings release date. |
Page 1
SunTrust Banks, Inc. and Subsidiaries
FIVE QUARTER FINANCIAL HIGHLIGHTS
(Dollars in millions, except per share data) (Unaudited)
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | |
| | | December 31
2006 | | | September 30
2006 | | | June 30
2006 | | | March 31
2006 | | | December 31
2005 | |
EARNINGS & DIVIDENDS | | | | | | | | | | | | | | | | | | | | |
Net income | | $ | 531.4 | | | $ | 535.6 | | | $ | 544.0 | | | $ | 531.5 | | | $ | 518.5 | |
Net income available to common shareholders | | | 523.6 | | | | 535.6 | | | | 544.0 | | | | 531.5 | | | | 518.5 | |
Total revenue - FTE2 | | | 2,067.7 | | | | 2,032.8 | | | | 2,065.4 | | | | 2,050.9 | | | | 2,005.0 | |
Total revenue - FTE excluding net securities gains and losses, net gain on sale of RCM assets and net gain on sale of Bond Trustee business1 | | | 2,032.4 | | | | 2,011.8 | | | | 2,059.5 | | | | 2,050.8 | | | | 2,004.4 | |
Net income per average common share | | | | | | | | | | | | | | | | | | | | |
Diluted | | | 1.46 | | | | 1.47 | | | | 1.49 | | | | 1.46 | | | | 1.43 | |
Basic | | | 1.48 | | | | 1.48 | | | | 1.51 | | | | 1.48 | | | | 1.44 | |
Dividends paid per average common share | | | 0.61 | | | | 0.61 | | | | 0.61 | | | | 0.61 | | | | 0.55 | |
CONDENSED BALANCE SHEETS | | | | | | | | | | | | | | | | | | | | |
Selected Average Balances | | | | | | | | | | | | | | | | | | | | |
Total assets | | $ | 182,343 | | | $ | 180,501 | | | $ | 180,744 | | | $ | 177,618 | | | $ | 175,769 | |
Earning assets | | | 160,115 | | | | 158,915 | | | | 158,889 | | | | 155,743 | | | | 153,490 | |
Loans | | | 121,364 | | | | 120,742 | | | | 120,145 | | | | 116,263 | | | | 113,828 | |
Consumer and commercial deposits | | | 98,553 | | | | 97,643 | | | | 97,172 | | | | 95,292 | | | | 95,257 | |
Brokered and foreign deposits | | | 26,124 | | | | 27,958 | | | | 27,194 | | | | 24,652 | | | | 21,010 | |
Total shareholders’ equity | | | 18,155 | | | | 17,662 | | | | 17,304 | | | | 17,052 | | | | 16,876 | |
As of | | | | | | | | | | | | | | | | | | | | |
Total assets | | | 182,202 | | | | 183,105 | | | | 181,143 | | | | 178,876 | | | | 179,713 | |
Earning assets | | | 159,133 | | | | 160,288 | | | | 158,845 | | | | 156,439 | | | | 156,641 | |
Loans | | | 121,523 | | | | 121,237 | | | | 120,243 | | | | 118,130 | | | | 114,555 | |
Allowance for loan and lease losses | | | 1,073 | | | | 1,087 | | | | 1,062 | | | | 1,039 | | | | 1,028 | |
Consumer and commercial deposits | | | 99,776 | | | | 98,684 | | | | 99,042 | | | | 97,940 | | | | 97,572 | |
Brokered and foreign deposits | | | 24,246 | | | | 25,709 | | | | 25,811 | | | | 23,836 | | | | 24,481 | |
Total shareholders’ equity | | | 17,839 | | | | 18,589 | | | | 17,424 | | | | 17,157 | | | | 16,887 | |
FINANCIAL RATIOS & OTHER DATA | | | | | | | | | | | | | | | | | | | | |
Return on average total assets | | | 1.16 | % | | | 1.18 | % | | | 1.21 | % | | | 1.21 | % | | | 1.17 | % |
Return on average assets less net unrealized securities gains1 | | | 1.09 | | | | 1.28 | | | | 1.18 | | | | 1.19 | | | | 1.15 | |
Return on average common shareholders’ equity | | | 11.77 | | | | 12.10 | | | | 12.61 | | | | 12.64 | | | | 12.19 | |
Return on average realized common shareholders’ equity1 | | | 11.78 | | | | 13.73 | | | | 12.90 | | | | 13.06 | | | | 12.75 | |
Net interest margin2 | | | 2.94 | | | | 2.93 | | | | 3.00 | | | | 3.12 | | | | 3.12 | |
Efficiency ratio2 | | | 59.67 | | | | 59.30 | | | | 58.78 | | | | 59.80 | | | | 60.20 | |
Tangible efficiency ratio1 | | | 58.49 | | | | 58.03 | | | | 57.53 | | | | 58.47 | | | | 58.79 | |
Effective tax rate | | | 27.63 | | | | 27.94 | | | | 30.10 | | | | 31.03 | | | | 28.97 | |
Full-time equivalent employees | | | 33,599 | | | | 34,293 | | | | 34,155 | | | | 33,697 | | | | 33,406 | |
Number of ATMs | | | 2,569 | | | | 2,568 | | | | 2,564 | | | | 2,786 | | | | 2,782 | |
Full service banking offices | | | 1,701 | | | | 1,699 | | | | 1,695 | | | | 1,677 | | | | 1,657 | |
Traditional | | | 1,349 | | | | 1,347 | | | | 1,342 | | | | 1,332 | | | | 1,325 | |
In-store | | | 352 | | | | 352 | | | | 353 | | | | 345 | | | | 332 | |
Tier 1 capital ratio | | | 7.65 | %3 | | | 7.70 | % | | | 7.31 | % | | | 7.26 | % | | | 7.01 | % |
Total capital ratio | | | 11.00 | 3 | | | 11.07 | | | | 10.70 | | | | 10.88 | | | | 10.57 | |
Tier 1 leverage ratio | | | 7.25 | 3 | | | 7.27 | | | | 6.82 | | | | 6.71 | | | | 6.65 | |
Total average shareholders’ equity to total average assets | | | 9.96 | | | | 9.78 | | | | 9.57 | | | | 9.60 | | | | 9.60 | |
Tangible equity to tangible assets1 | | | 6.05 | | | | 6.42 | | | | 5.81 | | | | 5.72 | | | | 5.56 | |
Book value per common share | | | 48.85 | | | | 49.71 | | | | 47.85 | | | | 47.22 | | | | 46.65 | |
Market price: | | | | | | | | | | | | | | | | | | | | |
High | | | 85.64 | | | | 81.59 | | | | 78.33 | | | | 76.75 | | | | 75.46 | |
Low | | | 76.76 | | | | 75.11 | | | | 72.56 | | | | 69.68 | | | | 65.32 | |
Close | | | 84.45 | | | | 77.28 | | | | 76.26 | | | | 72.76 | | | | 72.76 | |
Market capitalization | | | 29,972 | | | | 28,120 | | | | 27,768 | | | | 26,437 | | | | 26,338 | |
Average common shares outstanding (000s) | | | | | | | | | | | | | | | | | | | | |
Diluted | | | 358,292 | | | | 365,121 | | | | 364,391 | | | | 363,437 | | | | 363,175 | |
Basic | | | 354,677 | | | | 361,805 | | | | 361,267 | | | | 359,934 | | | | 359,203 | |
| 1 | See Appendix A for a reconcilement of non-GAAP performance measures. “RCM” refers to Receivables Capital Management. |
| 2 | 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. |
| 3 | Current period tier 1 capital, total capital and tier 1 leverage ratios are estimated as of the earnings release date. |
Page 2
SunTrust Banks, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands) (Unaudited)
| | | | | | | | | | | | | | | |
| | | As of December 31 | | | Increase/(Decrease) | |
| | | 2006 | | | 2005 | | | Amount | | | % | |
ASSETS | | | | | | | | | | | | | | | |
Cash and due from banks | | $ | 4,235,889 | | | $ | 4,659,664 | | | ($ | 423,775 | ) | | (9.1 | )% |
Interest-bearing deposits in other banks | | | 21,810 | | | | 332,444 | | | | (310,634 | ) | | (93.4 | ) |
Funds sold and securities purchased under agreements to resell | | | 1,050,046 | | | | 1,313,498 | | | | (263,452 | ) | | (20.1 | ) |
Trading assets | | | 2,777,629 | | | | 2,811,225 | | | | (33,596 | ) | | (1.2 | ) |
Securities available for sale1 | | | 25,101,715 | | | | 26,525,821 | | | | (1,424,106 | ) | | (5.4 | ) |
Loans held for sale | | | 11,790,122 | | | | 13,695,613 | | | | (1,905,491 | ) | | (13.9 | ) |
Loans: | | | | | | | | | | | | | | | |
Commercial | | | 34,682,682 | | | | 33,764,183 | | | | 918,499 | | | 2.7 | |
Real estate: | | | | | | | | | | | | | | | |
Home equity lines | | | 14,102,655 | | | | 13,635,705 | | | | 466,950 | | | 3.4 | |
Construction | | | 13,892,988 | | | | 11,046,903 | | | | 2,846,085 | | | 25.8 | |
Residential mortgages | | | 33,830,101 | | | | 29,877,312 | | | | 3,952,789 | | | 13.2 | |
Commercial real estate | | | 12,567,824 | | | | 12,516,035 | | | | 51,789 | | | 0.4 | |
Consumer: | | | | | | | | | | | | | | | |
Direct | | | 4,160,091 | | | | 5,060,844 | | | | (900,753 | ) | | (17.8 | ) |
Indirect | | | 7,936,102 | | | | 8,389,401 | | | | (453,299 | ) | | (5.4 | ) |
Business credit card | | | 350,690 | | | | 264,512 | | | | 86,178 | | | 32.6 | |
| | | | | | | | | | | | | | | |
Total loans | | | 121,523,133 | | | | 114,554,895 | | | | 6,968,238 | | | 6.1 | |
Allowance for loan and lease losses | | | (1,073,321 | ) | | | (1,028,128 | ) | | | (45,193 | ) | | 4.4 | |
| | | | | | | | | | | | | | | |
Net loans | | | 120,449,812 | | | | 113,526,767 | | | | 6,923,045 | | | 6.1 | |
Goodwill | | | 6,889,860 | | | | 6,835,168 | | | | 54,692 | | | 0.8 | |
Other intangible assets | | | 1,181,984 | | | | 1,122,967 | | | | 59,017 | | | 5.3 | |
Other assets | | | 8,702,742 | | | | 8,889,674 | | | | (186,932 | ) | | (2.1 | ) |
| | | | | | | | | | | | | | | |
Total assets2 | | $ | 182,201,609 | | | $ | 179,712,841 | | | $ | 2,488,768 | | | 1.4 | |
| | | | | | | | | | | | | | | |
LIABILITIES | | | | | | | | | | | | | | | |
Noninterest-bearing consumer and commercial deposits | | $ | 22,887,176 | | | $ | 26,327,663 | | | ($ | 3,440,487 | ) | | (13.1 | )% |
Interest-bearing consumer and commercial deposits: | | | | | | | | | | | | | | | |
NOW accounts | | | 20,230,763 | | | | 17,781,451 | | | | 2,449,312 | | | 13.8 | |
Money market accounts | | | 22,371,828 | | | | 25,484,016 | | | | (3,112,188 | ) | | (12.2 | ) |
Savings | | | 5,198,980 | | | | 5,423,878 | | | | (224,898 | ) | | (4.1 | ) |
Consumer time | | | 16,824,239 | | | | 13,436,072 | | | | 3,388,167 | | | 25.2 | |
Other time | | | 12,262,902 | | | | 9,119,302 | | | | 3,143,600 | | | 34.5 | |
| | | | | | | | | | | | | | | |
Total consumer and commercial deposits | | | 99,775,888 | | | | 97,572,382 | | | | 2,203,506 | | | 2.3 | |
Brokered deposits | | | 18,150,059 | | | | 15,644,932 | | | | 2,505,127 | | | 16.0 | |
Foreign deposits | | | 6,095,682 | | | | 8,835,864 | | | | (2,740,182 | ) | | (31.0 | ) |
| | | | | | | | | | | | | | | |
Total deposits | | | 124,021,629 | | | | 122,053,178 | | | | 1,968,451 | | | 1.6 | |
Funds purchased | | | 4,867,591 | | | | 4,258,013 | | | | 609,578 | | | 14.3 | |
Securities sold under agreements to repurchase | | | 6,950,426 | | | | 6,116,520 | | | | 833,906 | | | 13.6 | |
Other short-term borrowings | | | 2,062,636 | | | | 1,937,624 | | | | 125,012 | | | 6.5 | |
Long-term debt | | | 18,992,905 | | | | 20,779,249 | | | | (1,786,344 | ) | | (8.6 | ) |
Trading liabilities | | | 1,634,097 | | | | 1,529,325 | | | | 104,772 | | | 6.9 | |
Other liabilities | | | 5,833,707 | | | | 6,151,537 | | | | (317,830 | ) | | (5.2 | ) |
| | | | | | | | | | | | | | | |
Total liabilities | | | 164,362,991 | | | | 162,825,446 | | | | 1,537,545 | | | 0.9 | |
| | | | | | | | | | | | | | | |
SHAREHOLDERS’ EQUITY | | | | | | | | | | | | | | | |
Preferred stock, no par value | | | 500,000 | | | | — | | | | 500,000 | | | 100.0 | |
Common stock, $1.00 par value | | | 370,578 | | | | 370,578 | | | | — | | | — | |
Additional paid in capital | | | 6,627,196 | | | | 6,761,684 | | | | (134,488 | ) | | (2.0 | ) |
Retained earnings | | | 10,566,164 | | | | 9,310,978 | | | | 1,255,186 | | | 13.5 | |
Treasury stock, at cost, and other | | | (1,151,269 | ) | | | (493,936 | ) | | | (657,333 | ) | | 133.1 | |
Accumulated other comprehensive income | | | 925,949 | | | | 938,091 | | | | (12,142 | ) | | (1.3 | ) |
| | | | | | | | | | | | | | | |
Total shareholders’ equity | | | 17,838,618 | | | | 16,887,395 | | | | 951,223 | | | 5.6 | |
| | | | | | | | | | | | | | | |
Total liabilities and shareholders’ equity | | $ | 182,201,609 | | | $ | 179,712,841 | | | $ | 2,488,768 | | | 1.4 | |
| | | | | | | | | | | | | | | |
Common shares outstanding | | | 354,902,566 | | | | 361,984,193 | | | | (7,081,627 | ) | | (2.0 | ) |
Common shares authorized | | | 750,000,000 | | | | 750,000,000 | | | | — | | | — | |
Preferred shares outstanding | | | 5,000 | | | | — | | | | 5,000 | | | 100.0 | |
Preferred shares authorized | | | 50,000,000 | | | | 50,000,000 | | | | — | | | — | |
Treasury shares of common stock | | | 15,675,832 | | | | 8,594,205 | | | | 7,081,627 | | | 82.4 | |
| | | | | | | | | | | | | | | |
1 Includes net unrealized gains of | | $ | 2,103,362 | | | $ | 1,572,033 | | | $ | 531,329 | | | 33.8 | % |
2 Includes earning assets of | | | 159,132,634 | | | | 156,640,894 | | | | 2,491,740 | | | 1.6 | |
Page 3
SunTrust Banks, Inc. and Subsidiaries
FIVE QUARTER CONSOLIDATED BALANCE SHEETS
(Dollars in thousands) (Unaudited)
| | | | | | | | | | | | | | | | | | | | |
| | | As of | |
| | | December 31
2006 | | | September 30
2006 | | | June 30 2006 | | | March 31 2006 | | | December 31
2005 | |
ASSETS | | | | | | | | | | | | | | | | | | | | |
Cash and due from banks | | $ | 4,235,889 | | | $ | 4,066,173 | | | $ | 4,214,076 | | | $ | 4,158,082 | | | $ | 4,659,664 | |
Interest-bearing deposits in other banks | | | 21,810 | | | | 39,982 | | | | 29,733 | | | | 81,857 | | | | 332,444 | |
Funds sold and securities purchased under agreements to resell | | | 1,050,046 | | | | 1,147,423 | | | | 942,983 | | | | 1,108,841 | | | | 1,313,498 | |
Trading assets | | | 2,777,629 | | | | 3,675,917 | | | | 2,621,940 | | | | 2,937,137 | | | | 2,811,225 | |
Securities available for sale1 | | | 25,101,715 | | | | 25,553,320 | | | | 26,542,900 | | | | 27,335,487 | | | | 26,525,821 | |
Loans held for sale | | | 11,790,122 | | | | 11,501,646 | | | | 10,819,967 | | | | 9,351,662 | | | | 13,695,613 | |
Loans: | | | | | | | | | | | | | | | | | | | | |
Commercial | | | 34,682,682 | | | | 35,018,715 | | | | 35,159,832 | | | | 33,496,827 | | | | 33,764,183 | |
Real estate: | | | | | | | | | | | | | | | | | | | | |
Home equity lines | | | 14,102,655 | | | | 14,014,617 | | | | 13,894,177 | | | | 13,791,702 | | | | 13,635,705 | |
Construction | | | 13,892,988 | | | | 13,595,924 | | | | 13,099,808 | | | | 12,068,483 | | | | 11,046,903 | |
Residential mortgages | | | 33,830,101 | | | | 33,711,399 | | | | 32,844,670 | | | | 32,366,617 | | | | 29,877,312 | |
Commercial real estate | | | 12,567,824 | | | | 12,459,023 | | | | 12,575,092 | | | | 12,571,041 | | | | 12,516,035 | |
Consumer: | | | | | | | | | | | | | | | | | | | | |
Direct | | | 4,160,091 | | | | 4,082,257 | | | | 4,237,332 | | | | 5,421,722 | | | | 5,060,844 | |
Indirect | | | 7,936,102 | | | | 8,022,512 | | | | 8,113,741 | | | | 8,130,463 | | | | 8,389,401 | |
Business credit card | | | 350,690 | | | | 332,947 | | | | 318,493 | | | | 283,390 | | | | 264,512 | |
| | | | | | | | | | | | | | | | | | | | |
Total loans | | | 121,523,133 | | | | 121,237,394 | | | | 120,243,145 | | | | 118,130,245 | | | | 114,554,895 | |
Allowance for loan and lease losses | | | (1,073,321 | ) | | | (1,087,316 | ) | | | (1,061,862 | ) | | | (1,039,247 | ) | | | (1,028,128 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net loans | | | 120,449,812 | | | | 120,150,078 | | | | 119,181,283 | | | | 117,090,998 | | | | 113,526,767 | |
Goodwill | | | 6,889,860 | | | | 6,903,001 | | | | 6,900,222 | | | | 6,897,105 | | | | 6,835,168 | |
Other intangible assets | | | 1,181,984 | | | | 1,120,102 | | | | 1,141,346 | | | | 1,123,463 | | | | 1,122,967 | |
Other assets | | | 8,702,742 | | | | 8,946,911 | | | | 8,748,994 | | | | 8,791,844 | | | | 8,889,674 | |
| | | | | | | | | | | | | | | | | | | | |
Total assets2 | | $ | 182,201,609 | | | $ | 183,104,553 | | | $ | 181,143,444 | | | $ | 178,876,476 | | | $ | 179,712,841 | |
| | | | | | | | | | | | | | | | | | | | |
LIABILITIES | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing consumer and commercial deposits | | $ | 22,887,176 | | | $ | 22,813,455 | | | $ | 24,243,088 | | | $ | 24,649,242 | | | $ | 26,327,663 | |
Interest-bearing consumer and commercial deposits: | | | | | | | | | | | | | | | | | | | | |
NOW accounts | | | 20,230,763 | | | | 17,508,754 | | | | 17,194,199 | | | | 17,514,277 | | | | 17,781,451 | |
Money market accounts | | | 22,371,828 | | | | 23,803,496 | | | | 24,627,018 | | | | 26,144,180 | | | | 25,484,016 | |
Savings | | | 5,198,980 | | | | 5,699,545 | | | | 5,556,847 | | | | 5,283,632 | | | | 5,423,878 | |
Consumer time | | | 16,824,239 | | | | 16,615,445 | | | | 16,134,694 | | | | 14,397,034 | | | | 13,436,072 | |
Other time | | | 12,262,902 | | | | 12,243,372 | | | | 11,285,875 | | | | 9,951,523 | | | | 9,119,302 | |
| | | | | | | | | | | | | | | | | | | | |
Total consumer and commercial deposits | | | 99,775,888 | | | | 98,684,067 | | | | 99,041,721 | | | | 97,939,888 | | | | 97,572,382 | |
Brokered deposits | | | 18,150,059 | | | | 18,264,554 | | | | 18,425,635 | | | | 16,965,675 | | | | 15,644,932 | |
Foreign deposits | | | 6,095,682 | | | | 7,444,329 | | | | 7,385,081 | | | | 6,870,179 | | | | 8,835,864 | |
| | | | | | | | | | | | | | | | | | | | |
Total deposits | | | 124,021,629 | | | | 124,392,950 | | | | 124,852,437 | | | | 121,775,742 | | | | 122,053,178 | |
Funds purchased | | | 4,867,591 | | | | 5,926,570 | | | | 4,527,339 | | | | 4,346,238 | | | | 4,258,013 | |
Securities sold under agreements to repurchase | | | 6,950,426 | | | | 7,362,480 | | | | 7,158,914 | | | | 6,970,317 | | | | 6,116,520 | |
Other short-term borrowings | | | 2,062,636 | | | | 1,744,479 | | | | 1,438,891 | | | | 1,494,384 | | | | 1,937,624 | |
Long-term debt | | | 18,992,905 | | | | 17,477,276 | | | | 18,222,162 | | | | 18,919,961 | | | | 20,779,249 | |
Trading liabilities | | | 1,634,097 | | | | 1,611,648 | | | | 1,574,107 | | | | 1,734,328 | | | | 1,529,325 | |
Other liabilities | | | 5,833,707 | | | | 5,999,843 | | | | 5,945,674 | | | | 6,478,058 | | | | 6,151,537 | |
| | | | | | | | | | | | | | | | | | | | |
Total liabilities | | | 164,362,991 | | | | 164,515,246 | | | | 163,719,524 | | | | 161,719,028 | | | | 162,825,446 | |
| | | | | | | | | | | | | | | | | | | | |
SHAREHOLDERS’ EQUITY | | | | | | | | | | | | | | | | | | | | |
Preferred stock, no par value | | | 500,000 | | | | 500,000 | | | | — | | | | — | | | | — | |
Common stock, $1.00 par value | | | 370,578 | | | | 370,578 | | | | 370,578 | | | | 370,578 | | | | 370,578 | |
Additional paid in capital | | | 6,627,196 | | | | 6,735,458 | | | | 6,751,929 | | | | 6,743,418 | | | | 6,761,684 | |
Retained earnings | | | 10,566,164 | | | | 10,258,441 | | | | 9,943,155 | | | | 9,621,597 | | | | 9,310,978 | |
Treasury stock, at cost, and other | | | (1,151,269 | ) | | | (453,934 | ) | | | (418,262 | ) | | | (472,505 | ) | | | (493,936 | ) |
Accumulated other comprehensive income | | | 925,949 | | | | 1,178,764 | | | | 776,520 | | | | 894,360 | | | | 938,091 | |
| | | | | | | | | | | | | | | | | | | | |
Total shareholders’ equity | | | 17,838,618 | | | | 18,589,307 | | | | 17,423,920 | | | | 17,157,448 | | | | 16,887,395 | |
| | | | | | | | | | | | | | | | | | | | |
Total liabilities and shareholders’ equity | | $ | 182,201,609 | | | $ | 183,104,553 | | | $ | 181,143,444 | | | $ | 178,876,476 | | | $ | 179,712,841 | |
| | | | | | | | | | | | | | | | | | | | |
Common shares outstanding | | | 354,902,566 | | | | 363,868,470 | | | | 364,129,209 | | | | 363,338,615 | | | | 361,984,193 | |
Common shares authorized | | | 750,000,000 | | | | 750,000,000 | | | | 750,000,000 | | | | 750,000,000 | | | | 750,000,000 | |
Preferred shares outstanding | | | 5,000 | | | | 5,000 | | | | — | | | | — | | | | — | |
Preferred shares authorized | | | 50,000,000 | | | | 50,000,000 | | | | 50,000,000 | | | | 50,000,000 | | | | 50,000,000 | |
Treasury shares of common stock | | | 15,675,832 | | | | 6,709,928 | | | | 6,449,189 | | | | 7,239,783 | | | | 8,594,205 | |
| | | | | | | | | | | | | | | | | | | | |
1 Includes net unrealized gains of | | $ | 2,103,362 | | | $ | 1,915,277 | | | $ | 1,309,753 | | | $ | 1,497,176 | | | $ | 1,572,033 | |
2 Includes earning assets of | | | 159,132,634 | | | | 160,287,584 | | | | 158,845,216 | | | | 156,439,347 | | | | 156,640,894 | |
Page 4
SunTrust Banks, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data) (Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Twelve Months Ended | |
| | | December 31 | | Increase/(Decrease)2 | | | December 31 | | | Increase/(Decrease)2 | |
| | | 2006 | | 2005 | | Amount | | | % | | | 2006 | | | 2005 | | | Amount | | | % | |
Interest income | | $ | 2,564,731 | | $ | 2,175,340 | | $ | 389,391 | | | 17.9 | % | | $ | 9,792,020 | | | $ | 7,731,309 | | | $ | 2,060,711 | | | 26.7 | % |
Interest expense | | | 1,403,442 | | | 988,304 | | | 415,138 | | | 42.0 | | | | 5,131,555 | | | | 3,152,343 | | | | 1,979,212 | | | 62.8 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NET INTEREST INCOME | | | 1,161,289 | | | 1,187,036 | | | (25,747 | ) | | (2.2 | ) | | | 4,660,465 | | | | 4,578,966 | | | | 81,499 | | | 1.8 | |
Provision for loan losses | | | 75,806 | | | 48,126 | | | 27,680 | | | 57.5 | | | | 222,536 | | | | 176,886 | | | | 45,650 | | | 25.8 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | | | 1,085,483 | | | 1,138,910 | | | (53,427 | ) | | (4.7 | ) | | | 4,437,929 | | | | 4,402,080 | | | | 35,849 | | | 0.8 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NONINTEREST INCOME | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Service charges on deposit accounts | | | 191,628 | | | 196,792 | | | (5,164 | ) | | (2.6 | ) | | | 763,720 | | | | 772,519 | | | | (8,799 | ) | | (1.1 | ) |
Trust and investment management income | | | 169,248 | | | 172,900 | | | (3,652 | ) | | (2.1 | ) | | | 686,865 | | | | 673,720 | | | | 13,145 | | | 2.0 | |
Retail investment services | | | 65,000 | | | 53,250 | | | 11,750 | | | 22.1 | | | | 233,974 | | | | 213,274 | | | | 20,700 | | | 9.7 | |
Other charges and fees | | | 122,386 | | | 115,507 | | | 6,879 | | | 6.0 | | | | 462,063 | | | | 456,481 | | | | 5,582 | | | 1.2 | |
Investment banking income | | | 71,211 | | | 59,727 | | | 11,484 | | | 19.2 | | | | 230,553 | | | | 216,530 | | | | 14,023 | | | 6.5 | |
Trading account profits and commissions | | | 9,586 | | | 27,418 | | | (17,832 | ) | | (65.0 | ) | | | 113,047 | | | | 145,120 | | | | (32,073 | ) | | (22.1 | ) |
Card fees | | | 64,187 | | | 57,688 | | | 6,499 | | | 11.3 | | | | 247,647 | | | | 210,779 | | | | 36,868 | | | 17.5 | |
Mortgage production related income | | | 47,476 | | | 34,817 | | | 12,659 | | | 36.4 | | | | 217,428 | | | | 144,885 | | | | 72,543 | | | 50.1 | |
Mortgage servicing related income | | | 8,994 | | | 13,519 | | | (4,525 | ) | | (33.5 | ) | | | 121,738 | | | | 41,856 | | | | 79,882 | | | NM | |
Net gain on sale of Bond Trustee business | | | — | | | — | | | — | | | — | | | | 112,759 | | | | — | | | | 112,759 | | | 100.0 | |
Net gain on sale of RCM assets | | | — | | | — | | | — | | | — | | | | — | | | | 23,382 | | | | (23,382 | ) | | (100.0 | ) |
Other noninterest income | | | 97,473 | | | 65,705 | | | 31,768 | | | 48.3 | | | | 329,055 | | | | 263,653 | | | | 65,402 | | | 24.8 | |
Securities gains/(losses), net | | | 35,377 | | | 600 | | | 34,777 | | | NM | | | | (50,477 | ) | | | (7,155 | ) | | | (43,322 | ) | | NM | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total noninterest income | | | 882,566 | | | 797,923 | | | 84,643 | | | 10.6 | | | | 3,468,372 | | | | 3,155,044 | | | | 313,328 | | | 9.9 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NONINTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Employee compensation and benefits | | | 657,093 | | | 643,801 | | | 13,292 | | | 2.1 | | | | 2,725,453 | | | | 2,534,211 | | | | 191,242 | | | 7.5 | |
Net occupancy expense | | | 85,846 | | | 83,217 | | | 2,629 | | | 3.2 | | | | 334,213 | | | | 312,070 | | | | 22,143 | | | 7.1 | |
Outside processing and software | | | 101,538 | | | 92,305 | | | 9,233 | | | 10.0 | | | | 393,576 | | | | 357,387 | | | | 36,189 | | | 10.1 | |
Equipment expense | | | 49,234 | | | 49,494 | | | (260 | ) | | (0.5 | ) | | | 197,038 | | | | 204,038 | | | | (7,000 | ) | | (3.4 | ) |
Marketing and customer development | | | 45,249 | | | 50,133 | | | (4,884 | ) | | (9.7 | ) | | | 173,205 | | | | 156,711 | | | | 16,494 | | | 10.5 | |
Amortization of intangible assets | | | 24,304 | | | 28,192 | | | (3,888 | ) | | (13.8 | ) | | | 103,226 | | | | 118,964 | | | | (15,738 | ) | | (13.2 | ) |
Merger expense | | | — | | | 6,538 | | | (6,538 | ) | | (100.0 | ) | | | — | | | | 98,642 | | | | (98,642 | ) | | (100.0 | ) |
Loss on extinguishment of debt | | | 11,665 | | | — | | | 11,665 | | | 100.0 | | | | 11,665 | | | | — | | | | 11,665 | | | 100.0 | |
Other noninterest expense | | | 258,848 | | | 253,247 | | | 5,601 | | | 2.2 | | | | 941,484 | | | | 908,706 | | | | 32,778 | | | 3.6 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total noninterest expense | | | 1,233,777 | | | 1,206,927 | | | 26,850 | | | 2.2 | | | | 4,879,860 | | | | 4,690,729 | | | | 189,131 | | | 4.0 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
INCOME BEFORE PROVISION FOR INCOME TAXES | | | 734,272 | | | 729,906 | | | 4,366 | | | 0.6 | | | | 3,026,441 | | | | 2,866,395 | | | | 160,046 | | | 5.6 | |
Provision for income taxes | | | 202,906 | | | 211,435 | | | (8,529 | ) | | (4.0 | ) | | | 883,958 | | | | 879,156 | | | | 4,802 | | | 0.5 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income | | | 531,366 | | | 518,471 | | | 12,895 | | | 2.5 | | | | 2,142,483 | | | | 1,987,239 | | | | 155,244 | | | 7.8 | |
Preferred dividends | | | 7,729 | | | — | | | 7,729 | | | 100.0 | | | | 7,729 | | | | — | | | | 7,729 | | | 100.0 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS | | $ | 523,637 | | $ | 518,471 | | $ | 5,166 | | | 1.0 | | | $ | 2,134,754 | | | $ | 1,987,239 | | | $ | 147,515 | | | 7.4 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net interest income - FTE1 | | $ | 1,185,166 | | $ | 1,207,061 | | ($ | 21,895 | ) | | (1.8 | ) | | $ | 4,748,431 | | | $ | 4,654,458 | | | $ | 93,973 | | | 2.0 | |
Net income per average common share | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Diluted | | | 1.46 | | | 1.43 | | | 0.03 | | | 2.1 | | | | 5.88 | | | | 5.47 | | | | 0.41 | | | 7.5 | |
Basic | | | 1.48 | | | 1.44 | | | 0.04 | | | 2.8 | | | | 5.94 | | | | 5.53 | | | | 0.41 | | | 7.4 | |
Cash dividends paid per common share | | | 0.61 | | | 0.55 | | | 0.06 | | | 10.9 | | | | 2.44 | | | | 2.20 | | | | 0.24 | | | 10.9 | |
Average common shares outstanding (000s) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Diluted | | | 358,292 | | | 363,175 | | | (4,883 | ) | | (1.3 | ) | | | 362,802 | | | | 363,454 | | | | (652 | ) | | (0.2 | ) |
Basic | | | 354,677 | | | 359,203 | | | (4,526 | ) | | (1.3 | ) | | | 359,413 | | | | 359,066 | | | | 347 | | | 0.1 | |
| 1 | Net interest income includes the effects of FTE adjustments using a federal tax rate of 35% and state income taxes where applicable to increase tax-exempt interest income to a taxable-equivalent basis. |
| 2 | ”NM” - Not meaningful. Those changes over 100 percent were not considered to be meaningful. |
Page 5
SunTrust Banks, Inc. and Subsidiaries
FIVE QUARTER CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data) (Unaudited)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended |
| | | December 31
2006 | | September 30
2006 | | | June 30 2006 | | March 31
2006 | | December 31
2005 |
Interest income | | $ | 2,564,731 | | $ | 2,525,489 | | | $ | 2,423,087 | | $ | 2,278,713 | | $ | 2,175,340 |
Interest expense | | | 1,403,442 | | | 1,374,097 | | | | 1,254,344 | | | 1,099,672 | | | 988,304 |
| | | | | | | | | | | | | | | | |
NET INTEREST INCOME | | | 1,161,289 | | | 1,151,392 | | | | 1,168,743 | | | 1,179,041 | | | 1,187,036 |
Provision for loan losses | | | 75,806 | | | 61,568 | | | | 51,759 | | | 33,403 | | | 48,126 |
| | | | | | | | | | | | | | | | |
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | | | 1,085,483 | | | 1,089,824 | | | | 1,116,984 | | | 1,145,638 | | | 1,138,910 |
| | | | | | | | | | | | | | | | |
NONINTEREST INCOME | | | | | | | | | | | | | | | | |
Service charges on deposit accounts | | | 191,628 | | | 194,262 | | | | 191,645 | | | 186,185 | | | 196,792 |
Trust and investment management income | | | 169,248 | | | 173,717 | | | | 175,811 | | | 168,089 | | | 172,900 |
Retail investment services | | | 65,000 | | | 55,544 | | | | 58,441 | | | 54,989 | | | 53,250 |
Other charges and fees | | | 122,386 | | | 113,347 | | | | 113,948 | | | 112,382 | | | 115,507 |
Investment banking income | | | 71,211 | | | 47,046 | | | | 60,481 | | | 51,815 | | | 59,727 |
Trading account profits and commissions | | | 9,586 | | | 20,404 | | | | 46,182 | | | 36,875 | | | 27,418 |
Card fees | | | 64,187 | | | 64,916 | | | | 61,941 | | | 56,603 | | | 57,688 |
Mortgage production related income | | | 47,476 | | | 50,336 | | | | 56,579 | | | 63,037 | | | 34,817 |
Mortgage servicing related income | | | 8,994 | | | 36,633 | | | | 31,401 | | | 44,710 | | | 13,519 |
Net gain on sale of Bond Trustee business | | | — | | | 112,759 | | | | — | | | — | | | — |
Other noninterest income | | | 97,473 | | | 81,783 | | | | 73,082 | | | 76,717 | | | 65,705 |
Securities gains/(losses), net | | | 35,377 | | | (91,816 | ) | | | 5,858 | | | 104 | | | 600 |
| | | | | | | | | | | | | | | | |
Total noninterest income | | | 882,566 | | | 858,931 | | | | 875,369 | | | 851,506 | | | 797,923 |
| | | | | | | | | | | | | | | | |
NONINTEREST EXPENSE | | | | | | | | | | | | | | | | |
Employee compensation and benefits | | | 657,093 | | | 674,322 | | | | 689,073 | | | 704,965 | | | 643,801 |
Net occupancy expense | | | 85,846 | | | 85,613 | | | | 81,710 | | | 81,044 | | | 83,217 |
Outside processing and software | | | 101,538 | | | 98,699 | | | | 98,447 | | | 94,892 | | | 92,305 |
Equipment expense | | | 49,234 | | | 50,249 | | | | 48,107 | | | 49,448 | | | 49,494 |
Marketing and customer development | | | 45,249 | | | 35,932 | | | | 49,378 | | | 42,646 | | | 50,133 |
Amortization of intangible assets | | | 24,304 | | | 25,792 | | | | 25,885 | | | 27,245 | | | 28,192 |
Merger expense | | | — | | | — | | | | — | | | — | | | 6,538 |
Loss on extinguishment of debt | | | 11,665 | | | — | | | | — | | | — | | | — |
Other noninterest expense | | | 258,848 | | | 234,892 | | | | 221,493 | | | 226,251 | | | 253,247 |
| | | | | | | | | | | | | | | | |
Total noninterest expense | | | 1,233,777 | | | 1,205,499 | | | | 1,214,093 | | | 1,226,491 | | | 1,206,927 |
| | | | | | | | | | | | | | | | |
INCOME BEFORE PROVISION FOR INCOME TAXES | | | 734,272 | | | 743,256 | | | | 778,260 | | | 770,653 | | | 729,906 |
Provision for income taxes | | | 202,906 | | | 207,668 | | | | 234,258 | | | 239,126 | | | 211,435 |
| | | | | | | | | | | | | | | | |
Net income | | | 531,366 | | | 535,588 | | | | 544,002 | | | 531,527 | | | 518,471 |
Preferred dividends | | | 7,729 | | | — | | | | — | | | — | | | — |
| | | | | | | | | | | | | | | | |
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS | | $ | 523,637 | | $ | 535,588 | | | $ | 544,002 | | $ | 531,527 | | $ | 518,471 |
| | | | | | | | | | | | | | | | |
Net interest income - FTE1 | | $ | 1,185,166 | | $ | 1,173,860 | | | $ | 1,190,026 | | $ | 1,199,379 | | $ | 1,207,061 |
Net income per average common share | | | | | | | | | | | | | | | | |
Diluted | | | 1.46 | | | 1.47 | | | | 1.49 | | | 1.46 | | | 1.43 |
Basic | | | 1.48 | | | 1.48 | | | | 1.51 | | | 1.48 | | | 1.44 |
Cash dividends paid per common share | | | 0.61 | | | 0.61 | | | | 0.61 | | | 0.61 | | | 0.55 |
Average common shares outstanding (000s) | | | | | | | | | | | | | | | | |
Diluted | | | 358,292 | | | 365,121 | | | | 364,391 | | | 363,437 | | | 363,175 |
Basic | | | 354,677 | | | 361,805 | | | | 361,267 | | | 359,934 | | | 359,203 |
| 1 | Net interest income includes the effects of FTE adjustments using a federal tax rate of 35% and state income taxes where applicable to increase tax-exempt interest income to a taxable-equivalent basis. |
Page 6
SunTrust Banks, Inc. and Subsidiaries
CONSOLIDATED DAILY AVERAGE BALANCES,
AVERAGE YIELDS EARNED AND RATES PAID
(Dollars in millions; yields on taxable-equivalent basis) (Unaudited)
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | |
| | | December 31, 2006 | | | September 30, 2006 | |
| | | Average
Balances | | | Interest
Income/
Expense | | Yields/
Rates | | | Average
Balances | | | Interest
Income/
Expense | | Yields/
Rates | |
ASSETS | | | | | | | | | | | | | | | | | | | | |
Loans: | | | | | | | | | | | | | | | | | | | | |
Real estate 1-4 family | | $ | 34,345.4 | | | $ | 531.8 | | 6.19 | % | | $ | 33,875.7 | | | $ | 519.4 | | 6.13 | % |
Real estate construction | | | 13,204.0 | | | | 254.3 | | 7.64 | | | | 12,805.6 | | | | 247.5 | | 7.67 | |
Real estate home equity lines | | | 13,722.9 | | | | 273.4 | | 7.90 | | | | 13,626.3 | | | | 270.2 | | 7.87 | |
Real estate commercial | | | 12,784.8 | | | | 223.1 | | 6.93 | | | | 12,808.6 | | | | 223.4 | | 6.92 | |
Commercial - FTE1 | | | 33,965.1 | | | | 545.8 | | 6.37 | | | | 34,306.9 | | | | 542.1 | | 6.27 | |
Business credit card | | | 351.4 | | | | 5.3 | | 5.99 | | | | 323.8 | | | | 5.0 | | 6.14 | |
Consumer - direct | | | 4,116.3 | | | | 76.8 | | 7.40 | | | | 4,206.9 | | | | 76.7 | | 7.23 | |
Consumer - indirect | | | 8,231.8 | | | | 123.8 | | 5.97 | | | | 8,339.1 | | | | 121.5 | | 5.78 | |
Nonaccrual and restructured | | | 642.1 | | | | 5.0 | | 3.06 | | | | 449.1 | | | | 4.4 | | 3.87 | |
| | | | | | | | | | | | | | | | | | | | |
Total loans | | | 121,363.8 | | | | 2,039.3 | | 6.67 | | | | 120,742.0 | | | | 2,010.2 | | 6.61 | |
Securities available for sale: | | | | | | | | | | | | | | | | | | | | |
Taxable | | | 22,170.4 | | | | 282.0 | | 5.09 | | | | 23,027.9 | | | | 286.9 | | 4.98 | |
Tax-exempt - FTE1 | | | 998.0 | | | | 14.6 | | 5.85 | | | | 968.7 | | | | 14.1 | | 5.84 | |
| | | | | | | | | | | | | | | | | | | | |
Total securities available for sale - FTE1 | | | 23,168.4 | | | | 296.6 | | 5.12 | | | | 23,996.6 | | | | 301.0 | | 5.02 | |
Funds sold and securities purchased under agreements to resell | | | 1,176.3 | | | | 15.4 | | 5.15 | | | | 1,084.1 | | | | 14.3 | | 5.16 | |
Loans held for sale | | | 12,009.3 | | | | 198.4 | | 6.61 | | | | 11,026.4 | | | | 188.0 | | 6.82 | |
Interest-bearing deposits | | | 31.2 | | | | 0.3 | | 3.76 | | | | 25.8 | | | | 0.3 | | 5.04 | |
Interest earning trading assets2 | | | 2,365.8 | | | | 38.6 | | 6.46 | | | | 2,039.8 | | | | 34.2 | | 6.64 | |
| | | | | | | | | | | | | | | | | | | | |
Total earning assets | | | 160,114.8 | | | | 2,588.6 | | 6.41 | | | | 158,914.7 | | | | 2,548.0 | | 6.36 | |
Allowance for loan and lease losses | | | (1,086.1 | ) | | | | | | | | | (1,070.8 | ) | | | | | | |
Cash and due from banks | | | 3,683.1 | | | | | | | | | | 3,705.8 | | | | | | | |
Premises and equipment | | | 1,957.4 | | | | | | | | | | 1,925.7 | | | | | | | |
Other assets | | | 14,708.2 | | | | | | | | | | 14,702.1 | | | | | | | |
Noninterest earning trading assets2 | | | 1,000.5 | | | | | | | | | | 948.8 | | | | | | | |
Unrealized gains on securities available for sale, net | | | 1,965.4 | | | | | | | | | | 1,374.6 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total assets | | $ | 182,343.3 | | | | | | | | | $ | 180,500.9 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits: | | | | | | | | | | | | | | | | | | | | |
NOW accounts | | $ | 18,441.1 | | | $ | 102.2 | | 2.20 | % | | $ | 16,596.2 | | | $ | 78.1 | | 1.87 | % |
Money market accounts | | | 23,075.7 | | | | 153.1 | | 2.63 | | | | 24,267.0 | | | | 171.4 | | 2.80 | |
Savings | | | 5,437.0 | | | | 23.6 | | 1.73 | | | | 5,591.2 | | | | 24.1 | | 1.71 | |
Consumer time | | | 16,682.8 | | | | 180.8 | | 4.30 | | | | 16,402.5 | | | | 169.8 | | 4.11 | |
Other time | | | 12,338.6 | | | | 148.3 | | 4.77 | | | | 11,852.2 | | | | 138.1 | | 4.62 | |
| | | | | | | | | | | | | | | | | | | | |
Total interest-bearing consumer and commercial deposits | | | 75,975.2 | | | | 608.0 | | 3.18 | | | | 74,709.1 | | | | 581.5 | | 3.09 | |
Brokered deposits | | | 18,102.0 | | | | 243.1 | | 5.25 | | | | 18,420.7 | | | | 246.1 | | 5.23 | |
Foreign deposits | | | 8,022.2 | | | | 107.6 | | 5.25 | | | | 9,537.6 | | | | 128.5 | | 5.27 | |
| | | | | | | | | | | | | | | | | | | | |
Total interest-bearing deposits | | | 102,099.4 | | | | 958.7 | | 3.73 | | | | 102,667.4 | | | | 956.1 | | 3.69 | |
Funds purchased | | | 5,163.4 | | | | 68.8 | | 5.21 | | | | 4,206.7 | | | | 56.2 | | 5.23 | |
Securities sold under agreements to repurchase | | | 7,148.8 | | | | 86.3 | | 4.72 | | | | 7,146.3 | | | | 86.0 | | 4.71 | |
Other short-term borrowings | | | 1,913.3 | | | | 29.7 | | 6.17 | | | | 1,001.3 | | | | 16.9 | | 6.70 | |
Long-term debt | | | 17,854.2 | | | | 259.9 | | 5.78 | | | | 17,735.2 | | | | 258.9 | | 5.79 | |
| | | | | | | | | | | | | | | | | | | | |
Total interest-bearing liabilities | | | 134,179.1 | | | | 1,403.4 | | 4.15 | | | | 132,756.9 | | | | 1,374.1 | | 4.11 | |
Noninterest-bearing deposits | | | 22,577.7 | | | | | | | | | | 22,933.4 | | | | | | | |
Other liabilities | | | 7,431.0 | | | | | | | | | | 7,148.8 | | | | | | | |
Shareholders’ equity | | | 18,155.5 | | | | | | | | | | 17,661.8 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total liabilities and shareholders’ equity | | $ | 182,343.3 | | | | | | | | | $ | 180,500.9 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Interest Rate Spread | | | | | | | | | 2.26 | % | | | | | | | | | 2.25 | % |
| | | | | | | | | | | | | | | | | | | | |
Net Interest Income - FTE1 | | | | | | $ | 1,185.2 | | | | | | | | | $ | 1,173.9 | | | |
| | | | | | | | | | | | | | | | | | | | |
Net Interest Margin2 | | | | | | | | | 2.94 | % | | | | | | | | | 2.93 | % |
| | | | | | | | | | | | | | | | | | | | |
| 1 | The fully taxable-equivalent (“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. |
| 2 | The net interest margin is calculated by dividing annualized net interest income-FTE by average total earning assets. During the second quarter of 2006, the net interest margin calculation was revised as a result of the Company segregating certain noninterest earning trading assets that had previously been included with interest earning trading assets. All prior periods presented were restated to reflect this refinement. Management believes this refined method to be a more reflective measure of net interest margin due to the interest earning nature of these assets. |
Page 7
SunTrust Banks, Inc. and Subsidiaries
CONSOLIDATED DAILY AVERAGE BALANCES,
AVERAGE YIELDS EARNED AND RATES PAID
(Dollars in millions; yields on taxable-equivalent basis) (Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | |
| | | June 30, 2006 | | | March 31, 2006 | | | December 31, 2005 | |
| | | Average
Balances | | | Interest
Income/
Expense | | Yields/ Rates | | | Average
Balances | | | Interest
Income/
Expense | | Yields/ Rates | | | Average
Balances | | | Interest
Income/
Expense | | Yields/ Rates | |
ASSETS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate 1-4 family | | $ | 34,348.0 | | | $ | 515.1 | | 6.00 | % | | $ | 31,489.6 | | | $ | 456.4 | | 5.80 | % | | $ | 29,893.4 | | | $ | 422.7 | | 5.66 | % |
Real estate construction | | | 12,180.6 | | | | 226.4 | | 7.45 | | | | 11,117.5 | | | | 195.6 | | 7.14 | | | | 10,147.9 | | | | 173.9 | | 6.80 | |
Real estate home equity lines | | | 13,517.5 | | | | 253.6 | | 7.52 | | | | 13,389.9 | | | | 235.1 | | 7.12 | | | | 13,067.7 | | | | 218.2 | | 6.62 | |
Real estate commercial | | | 12,840.8 | | | | 215.5 | | 6.73 | | | | 12,780.4 | | | | 204.4 | | 6.49 | | | | 12,792.1 | | | | 201.7 | | 6.26 | |
Commercial - FTE1 | | | 33,993.0 | | | | 516.7 | | 6.10 | | | | 33,064.5 | | | | 482.8 | | 5.92 | | | | 32,997.2 | | | | 466.5 | | 5.61 | |
Business credit card | | | 307.0 | | | | 4.6 | | 5.96 | | | | 278.1 | | | | 4.4 | | 6.30 | | | | 271.8 | | | | 4.2 | | 6.21 | |
Consumer - direct | | | 4,251.1 | | | | 75.9 | | 7.16 | | | | 5,284.8 | | | | 84.2 | | 6.46 | | | | 5,438.2 | | | | 83.8 | | 6.11 | |
Consumer - indirect | | | 8,385.8 | | | | 117.0 | | 5.60 | | | | 8,553.0 | | | | 115.2 | | 5.46 | | | | 8,899.1 | | | | 122.0 | | 5.44 | |
Nonaccrual and restructured | | | 320.7 | | | | 3.1 | | 3.88 | | | | 304.5 | | | | 4.1 | | 5.52 | | | | 320.2 | | | | 3.5 | | 4.31 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total loans | | | 120,144.5 | | | | 1,927.9 | | 6.44 | | | | 116,262.3 | | | | 1,782.2 | | 6.22 | | | | 113,827.6 | | | | 1,696.5 | | 5.91 | |
Securities available for sale: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Taxable | | | 24,621.2 | | | | 294.8 | | 4.79 | | | | 23,927.9 | | | | 283.1 | | 4.73 | | | | 24,005.4 | | | | 273.8 | | 4.56 | |
Tax-exempt - FTE1 | | | 933.6 | | | | 13.7 | | 5.85 | | | | 916.5 | | | | 13.4 | | 5.85 | | | | 908.1 | | | | 13.3 | | 5.87 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total securities available for sale - FTE1 | | | 25,554.8 | | | | 308.5 | | 4.83 | | | | 24,844.4 | | | | 296.5 | | 4.77 | | | | 24,913.5 | | | | 287.1 | | 4.61 | |
Funds sold and securities purchased under agreements to resell | | | 1,244.1 | | | | 15.2 | | 4.83 | | | | 1,130.1 | | | | 12.0 | | 4.23 | | | | 1,068.4 | | | | 10.4 | | 3.82 | |
Loans held for sale | | | 9,929.3 | | | | 163.7 | | 6.59 | | | | 11,359.6 | | | | 177.9 | | 6.26 | | | | 11,980.8 | | | | 180.9 | | 6.04 | |
Interest-bearing deposits | | | 27.0 | | | | 0.3 | | 4.73 | | | | 293.6 | | | | 2.4 | | 3.34 | | | | 31.9 | | | | 0.3 | | 3.96 | |
Interest earning trading assets2 | | | 1,989.1 | | | | 28.7 | | 5.78 | | | | 1,853.0 | | | | 28.1 | | 6.16 | | | | 1,667.6 | | | | 20.2 | | 4.80 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total earning assets | | | 158,888.8 | | | | 2,444.3 | | 6.17 | | | | 155,743.0 | | | | 2,299.1 | | 5.99 | | | | 153,489.8 | | | | 2,195.4 | | 5.67 | |
Allowance for loan and lease losses | | | (1,050.1 | ) | | | | | | | | | (1,037.8 | ) | | | | | | | | | (1,034.8 | ) | | | | | | |
Cash and due from banks | | | 3,899.6 | | | | | | | | | | 4,056.0 | | | | | | | | | | 4,349.2 | | | | | | | |
Premises and equipment | | | 1,908.0 | | | | | | | | | | 1,871.1 | | | | | | | | | | 1,833.5 | | | | | | | |
Other assets | | | 14,660.1 | | | | | | | | | | 14,402.6 | | | | | | | | | | 14,370.1 | | | | | | | |
Noninterest earning trading assets2 | | | 909.7 | | | | | | | | | | 970.6 | | | | | | | | | | 890.1 | | | | | | | |
Unrealized gains on securities available for sale, net | | | 1,528.0 | | | | | | | | | | 1,612.8 | | | | | | | | | | 1,871.2 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total assets | | $ | 180,744.1 | | | | | | | | | $ | 177,618.3 | | | | | | | | | $ | 175,769.1 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NOW accounts | | $ | 16,811.2 | | | $ | 67.0 | | 1.60 | % | | $ | 17,000.0 | | | $ | 60.5 | | 1.44 | % | | $ | 17,011.3 | | | $ | 52.2 | | 1.22 | % |
Money market accounts | | | 25,091.3 | | | | 163.4 | | 2.61 | | | | 25,628.4 | | | | 146.6 | | 2.32 | | | | 25,797.6 | | | | 128.6 | | 1.98 | |
Savings | | | 5,161.0 | | | | 16.2 | | 1.26 | | | | 5,291.2 | | | | 15.0 | | 1.15 | | | | 5,472.9 | | | | 13.7 | | 0.99 | |
Consumer time | | | 15,471.7 | | | | 146.7 | | 3.80 | | | | 13,894.6 | | | | 117.3 | | 3.42 | | | | 13,231.5 | | | | 106.8 | | 3.20 | |
Other time | | | 10,779.1 | | | | 114.8 | | 4.27 | | | | 9,579.6 | | | | 91.7 | | 3.88 | | | | 9,050.8 | | | | 82.2 | | 3.60 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total interest-bearing consumer and commercial deposits | | | 73,314.3 | | | | 508.1 | | 2.78 | | | | 71,393.8 | | | | 431.1 | | 2.45 | | | | 70,564.1 | | | | 383.5 | | 2.16 | |
Brokered deposits | | | 17,692.0 | | | | 218.6 | | 4.89 | | | | 15,447.9 | | | | 172.7 | | 4.47 | | | | 13,658.6 | | | | 142.8 | | 4.09 | |
Foreign deposits | | | 9,502.3 | | | | 117.5 | | 4.89 | | | | 9,203.8 | | | | 101.8 | | 4.42 | | | | 7,351.3 | | | | 74.9 | | 3.99 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total interest-bearing deposits | | | 100,508.6 | | | | 844.2 | | 3.37 | | | | 96,045.5 | | | | 705.6 | | 2.98 | | | | 91,574.0 | | | | 601.2 | | 2.60 | |
Funds purchased | | | 4,402.3 | | | | 54.2 | | 4.87 | | | | 3,974.9 | | | | 43.8 | | 4.40 | | | | 4,742.3 | | | | 47.9 | | 3.95 | |
Securities sold under agreements to repurchase | | | 7,184.1 | | | | 79.4 | | 4.37 | | | | 6,865.1 | | | | 68.4 | | 3.99 | | | | 6,452.1 | | | | 58.1 | | 3.53 | |
Other short-term borrowings | | | 1,252.4 | | | | 18.0 | | 5.78 | | | | 1,866.6 | | | | 25.2 | | 5.47 | | | | 2,800.6 | | | | 30.7 | | 4.35 | |
Long-term debt | | | 18,438.0 | | | | 258.5 | | 5.62 | | | | 20,413.0 | | | | 256.7 | | 5.10 | | | | 21,189.9 | | | | 250.4 | | 4.69 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total interest-bearing liabilities | | | 131,785.4 | | | | 1,254.3 | | 3.82 | | | | 129,165.1 | | | | 1,099.7 | | 3.45 | | | | 126,758.9 | | | | 988.3 | | 3.09 | |
Noninterest-bearing deposits | | | 23,858.0 | | | | | | | | | | 23,898.6 | | | | | | | | | | 24,693.0 | | | | | | | |
Other liabilities | | | 7,796.3 | | | | | | | | | | 7,502.8 | | | | | | | | | | 7,441.6 | | | | | | | |
Shareholders’ equity | | | 17,304.4 | | | | | | | | | | 17,051.8 | | | | | | | | | | 16,875.6 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total liabilities and shareholders’ equity | | $ | 180,744.1 | | | | | | | | | $ | 177,618.3 | | | | | | | | | $ | 175,769.1 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest Rate Spread | | | | | | | | | 2.35 | % | | | | | | | | | 2.54 | % | | | | | | | | | 2.58 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net Interest Income - FTE1 | | | | | | $ | 1,190.0 | | | | | | | | | $ | 1,199.4 | | | | | | | | | $ | 1,207.1 | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net Interest Margin2 | | | | | | | | | 3.00 | % | | | | | | | | | 3.12 | % | | | | | | | | | 3.12 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 1 | The fully taxable-equivalent (“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. |
| 2 | The net interest margin is calculated by dividing annualized net interest income - FTE by average total earning assets. During the second quarter of 2006, the net interest margin calculation was revised as a result of the Company segregating certain noninterest earning trading assets that had previously been included with interest earning trading assets. All prior periods presented were restated to reflect this refinement. Management believes this refined method to be a more reflective measure of net interest margin due to the interest earning nature of these assets. |
Page 8
SunTrust Banks, Inc. and Subsidiaries
CONSOLIDATED DAILY AVERAGE BALANCES,
AVERAGE YIELDS EARNED AND RATES PAID
(Dollars in millions; yields on taxable-equivalent basis) (Unaudited)
| | | | | | | | | | | | | | | | | | | | |
| | | Twelve Months Ended | |
| | | December 31, 2006 | | | December 31, 2005 | |
| | | Average
Balances | | | Interest
Income/
Expense | | Yields/
Rates | | | Average
Balances | | | Interest
Income/
Expense | | Yields/
Rates | |
ASSETS | | | | | | | | | | | | | | | | | | | | |
Loans: | | | | | | | | | | | | | | | | | | | | |
Real estate 1-4 family | | $ | 33,523.5 | | | $ | 2,022.6 | | 6.03 | % | | $ | 26,972.2 | | | $ | 1,459.4 | | 5.41 | % |
Real estate construction | | | 12,333.9 | | | | 923.8 | | 7.49 | | | | 9,621.6 | | | | 598.9 | | 6.22 | |
Real estate home equity lines | | | 13,565.2 | | | | 1,032.3 | | 7.61 | | | | 12,361.1 | | | | 740.4 | | 5.99 | |
Real estate commercial | | | 12,803.7 | | | | 866.6 | | 6.77 | | | | 11,865.6 | | | | 691.4 | | 5.83 | |
Commercial - FTE1 | | | 33,836.1 | | | | 2,087.4 | | 6.17 | | | | 32,852.2 | | | | 1,688.7 | | 5.14 | |
Business credit card | | | 315.3 | | | | 19.1 | | 6.09 | | | | 226.7 | | | | 14.9 | | 6.58 | |
Consumer - direct | | | 4,460.8 | | | | 313.6 | | 7.03 | | | | 5,690.7 | | | | 336.3 | | 5.91 | |
Consumer - indirect | | | 8,376.6 | | | | 477.6 | | 5.70 | | | | 8,833.4 | | | | 476.7 | | 5.40 | |
Nonaccrual and restructured | | | 430.1 | | | | 16.6 | | 3.85 | | | | 318.5 | | | | 13.2 | | 4.14 | |
| | | | | | | | | | | | | | | | | | | | |
Total loans | | | 119,645.2 | | | | 7,759.6 | | 6.49 | | | | 108,742.0 | | | | 6,019.9 | | 5.54 | |
Securities available for sale: | | | | | | | | | | | | | | | | | | | | |
Taxable | | | 23,430.9 | | | | 1,146.8 | | 4.89 | | | | 25,557.9 | | | | 1,137.0 | | 4.45 | |
Tax-exempt - FTE1 | | | 954.5 | | | | 55.8 | | 5.85 | | | | 868.7 | | | | 51.7 | | 5.95 | |
| | | | | | | | | | | | | | | | | | | | |
Total securities available for sale - FTE1 | | | 24,385.4 | | | | 1,202.6 | | 4.93 | | | | 26,426.6 | | | | 1,188.7 | | 4.50 | |
Funds sold and securities purchased under agreement to resell | | | 1,158.6 | | | | 57.0 | | 4.92 | | | | 1,404.8 | | | | 43.2 | | 3.08 | |
Loans held for sale | | | 11,082.8 | | | | 728.0 | | 6.57 | | | | 8,447.8 | | | | 485.7 | | 5.75 | |
Interest-bearing deposits | | | 93.4 | | | | 3.3 | | 3.59 | | | | 25.0 | | | | 0.9 | | 3.47 | |
Interest earning trading assets2 | | | 2,063.3 | | | | 129.5 | | 6.28 | | | | 1,593.6 | | | | 68.4 | | 4.29 | |
| | | | | | | | | | | | | | | | | | | | |
Total earning assets | | | 158,428.7 | | | | 9,880.0 | | 6.24 | | | | 146,639.8 | | | | 7,806.8 | | 5.32 | |
Allowance for loan and lease losses | | | (1,061.3 | ) | | | | | | | | | (1,041.8 | ) | | | | | | |
Cash and due from banks | | | 3,834.8 | | | | | | | | | | 4,313.4 | | | | | | | |
Premises and equipment | | | 1,915.8 | | | | | | | | | | 1,846.6 | | | | | | | |
Other assets | | | 14,619.1 | | | | | | | | | | 13,585.9 | | | | | | | |
Noninterest earning trading assets2 | | | 957.5 | | | | | | | | | | 795.5 | | | | | | | |
Unrealized gains on securities available for sale, net | | | 1,620.5 | | | | | | | | | | 1,949.4 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total assets | | $ | 180,315.1 | | | | | | | | | $ | 168,088.8 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits: | | | | | | | | | | | | | | | | | | | | |
NOW accounts | | $ | 17,214.4 | | | $ | 307.8 | | 1.79 | % | | $ | 17,213.7 | | | $ | 168.9 | | 0.98 | % |
Money market accounts | | | 24,507.9 | | | | 634.5 | | 2.59 | | | | 25,589.2 | | | | 438.9 | | 1.72 | |
Savings | | | 5,371.1 | | | | 79.1 | | 1.47 | | | | 6,320.0 | | | | 57.1 | | 0.90 | |
Consumer time | | | 15,622.7 | | | | 614.6 | | 3.93 | | | | 12,526.4 | | | | 354.8 | | 2.83 | |
Other time | | | 11,146.9 | | | | 492.9 | | 4.42 | | | | 7,390.7 | | | | 238.7 | | 3.23 | |
| | | | | | | | | | | | | | | | | | | | |
Total interest-bearing consumer and commercial deposits | | | 73,863.0 | | | | 2,128.9 | | 2.88 | | | | 69,040.0 | | | | 1,258.4 | | 1.82 | |
Brokered deposits | | | 17,425.7 | | | | 880.5 | | 5.05 | | | | 10,182.2 | | | | 354.5 | | 3.48 | |
Foreign deposits | | | 9,064.5 | | | | 455.3 | | 5.02 | | | | 6,869.3 | | | | 220.1 | | 3.20 | |
| | | | | | | | | | | | | | | | | | | | |
Total interest-bearing deposits | | | 100,353.2 | | | | 3,464.7 | | 3.45 | | | | 86,091.5 | | | | 1,833.0 | | 2.13 | |
Funds purchased | | | 4,439.5 | | | | 222.9 | | 5.02 | | | | 3,888.3 | | | | 128.5 | | 3.31 | |
Securities sold under agreements to repurchase | | | 7,087.0 | | | | 320.1 | | 4.52 | | | | 6,443.0 | | | | 183.7 | | 2.85 | |
Other short-term borrowings | | | 1,507.1 | | | | 90.0 | | 5.96 | | | | 2,663.5 | | | | 94.9 | | 3.57 | |
Long-term debt | | | 18,600.7 | | | | 1,033.9 | | 5.56 | | | | 21,713.9 | | | | 912.2 | | 4.20 | |
| | | | | | | | | | | | | | | | | | | | |
Total interest-bearing liabilities | | | 131,987.5 | | | | 5,131.6 | | 3.89 | | | | 120,800.2 | | | | 3,152.3 | | 2.61 | |
Noninterest-bearing deposits | | | 23,312.3 | | | | | | | | | | 24,315.0 | | | | | | | |
Other liabilities | | | 7,468.6 | | | | | | | | | | 6,447.3 | | | | | | | |
Shareholders’ equity | | | 17,546.7 | | | | | | | | | | 16,526.3 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total liabilities and shareholders’ equity | | $ | 180,315.1 | | | | | | | | | $ | 168,088.8 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Interest Rate Spread | | | | | | | | | 2.35 | % | | | | | | | | | 2.71 | % |
| | | | | | | | | | | | | | | | | | | | |
Net Interest Income - FTE1 | | | | | | $ | 4,748.4 | | | | | | | | | $ | 4,654.5 | | | |
| | | | | | | | | | | | | | | | | | | | |
Net Interest Margin2 | | | | | | | | | 3.00 | % | | | | | | | | | 3.17 | % |
| | | | | | | | | | | | | | | | | | | | |
| 1 | The fully taxable-equivalent (“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. |
| 2 | The net interest margin is calculated by dividing annualized net interest income - FTE by average total earning assets. During the second quarter of 2006, the net interest margin calculation was revised as a result of the Company segregating certain noninterest earning trading assets that had previously been included with interest earning trading assets. All prior periods presented were restated to reflect this refinement. Management believes this refined method to be a more reflective measure of net interest margin due to the interest earning nature of these assets. |
Page 9
SunTrust Banks, Inc. and Subsidiaries
OTHER FINANCIAL DATA
(Dollars in thousands) (Unaudited)
| | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Twelve Months Ended | |
| | | December 31 | | | % Change1 | | | December 31 | | | % Change1 | |
| | | 2006 | | | 2005 | | | | 2006 | | | 2005 | | |
CREDIT DATA | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan and lease losses - beginning | | $ | 1,087,316 | | | $ | 1,029,855 | | | 5.6 | % | | $ | 1,028,128 | | | $ | 1,050,024 | | | (2.1 | )% |
Provision for loan losses | | | 75,806 | | | | 48,126 | | | 57.5 | | | | 222,536 | | | | 176,886 | | | 25.8 | |
Charge-offs | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | (59,031 | ) | | | (23,157 | ) | | NM | | | | (114,701 | ) | | | (111,996 | ) | | 2.4 | |
Real estate: | | | | | | | | | | | | | | | | | | | | | | |
Home equity lines | | | (11,038 | ) | | | (7,930 | ) | | 39.2 | | | | (28,816 | ) | | | (24,548 | ) | | 17.4 | |
Construction | | | (1,230 | ) | | | (3,265 | ) | | (62.3 | ) | | | (2,281 | ) | | | (6,001 | ) | | (62.0 | ) |
Residential mortgages | | | (7,806 | ) | | | (5,984 | ) | | 30.4 | | | | (29,596 | ) | | | (22,793 | ) | | 29.8 | |
Commercial real estate | | | (4,256 | ) | | | (1,551 | ) | | NM | | | | (8,050 | ) | | | (3,097 | ) | | NM | |
Consumer: | | | | | | | | | | | | | | | | | | | | | | |
Direct | | | (5,924 | ) | | | (9,714 | ) | | (39.0 | ) | | | (22,010 | ) | | | (37,199 | ) | | (40.8 | ) |
Indirect | | | (25,450 | ) | | | (28,136 | ) | | (9.5 | ) | | | (82,315 | ) | | | (109,611 | ) | | (24.9 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
Total charge-offs | | | (114,735 | ) | | | (79,737 | ) | | 43.9 | | | | (287,769 | ) | | | (315,245 | ) | | (8.7 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
Recoveries | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | 6,657 | | | | 9,561 | | | (30.4 | ) | | | 29,971 | | | | 36,308 | | | (17.5 | ) |
Real estate: | | | | | | | | | | | | | | | | | | | | | | |
Home equity lines | | | 1,529 | | | | 1,877 | | | (18.5 | ) | | | 6,840 | | | | 6,163 | | | 11.0 | |
Construction | | | 755 | | | | 90 | | | NM | | | | 2,040 | | | | 798 | | | NM | |
Residential mortgages | | | 1,686 | | | | 2,409 | | | (30.0 | ) | | | 7,909 | | | | 8,124 | | | (2.6 | ) |
Commercial real estate | | | 1,748 | | | | 369 | | | NM | | | | 6,212 | | | | 2,678 | | | NM | |
Consumer: | | | | | | | | | | | | | | | | | | | | | | |
Direct | | | 2,805 | | | | 3,559 | | | (21.2 | ) | | | 12,126 | | | | 13,509 | | | (10.2 | ) |
Indirect | | | 9,754 | | | | 12,019 | | | (18.8 | ) | | | 45,328 | | | | 48,883 | | | (7.3 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
Total recoveries | | | 24,934 | | | | 29,884 | | | (16.6 | ) | | | 110,426 | | | | 116,463 | | | (5.2 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
Net charge-offs | | | (89,801 | ) | | | (49,853 | ) | | 80.1 | | | | (177,343 | ) | | | (198,782 | ) | | (10.8 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan and lease losses - ending | | $ | 1,073,321 | | | $ | 1,028,128 | | | 4.4 | | | $ | 1,073,321 | | | $ | 1,028,128 | | | 4.4 | |
| | | | | | | | | | | | | | | | | | | | | | |
Net charge-offs to average loans (annualized) | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | 0.60 | % | | | 0.16 | % | | NM | % | | | 0.25 | % | | | 0.23 | % | | 8.4 | % |
Real estate: | | | | | | | | | | | | | | | | | | | | | | |
Home equity lines | | | 0.27 | | | | 0.18 | | | 52.7 | | | | 0.16 | | | | 0.15 | | | 8.0 | |
Construction | | | 0.01 | | | | 0.12 | | | (88.1 | ) | | | — | | | | 0.05 | | | (100.0 | ) |
Residential mortgages | | | 0.07 | | | | 0.05 | | | 40.2 | | | | 0.06 | | | | 0.05 | | | 28.6 | |
Commercial real estate | | | 0.08 | | | | 0.04 | | | NM | | | | 0.01 | | | | — | | | 100.0 | |
Consumer: | | | | | | | | | | | | | | | | | | | | | | |
Direct | | | 0.30 | | | | 0.45 | | | (33.1 | ) | | | 0.22 | | | | 0.42 | | | (47.2 | ) |
Indirect | | | 0.75 | | | | 0.72 | | | 4.8 | | | | 0.44 | | | | 0.68 | | | (35.2 | ) |
Total net charge-offs to total average loans | | | 0.29 | % | | | 0.17 | % | | 70.6 | % | | | 0.15 | % | | | 0.18 | % | | (16.7 | )% |
Period Ended | | | | | | | | | | | | | | | | | | | | | | |
Nonaccrual loans | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | $ | 237,269 | | | $ | 70,880 | | | NM | % | | | | | | | | | | | |
Real estate: | | | | | | | | | | | | | | | | | | | | | | |
Construction | | | 38,646 | | | | 24,442 | | | 58.1 | | | | | | | | | | | | |
Residential mortgages | | | 286,676 | | | | 103,317 | | | NM | | | | | | | | | | | | |
Commercial real estate | | | 55,365 | | | | 44,603 | | | 24.1 | | | | | | | | | | | | |
Consumer loans | | | 16,302 | | | | 28,732 | | | (43.3 | ) | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Total nonaccrual loans | | | 634,258 | | | | 271,974 | | | NM | | | | | | | | | | | | |
Restructured loans | | | 27,993 | | | | 24,399 | | | 14.7 | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Total nonperforming loans | | | 662,251 | | | | 296,373 | | | NM | | | | | | | | | | | | |
Other real estate owned (OREO) | | | 55,460 | | | | 30,682 | | | 80.8 | | | | | | | | | | | | |
Other repossessed assets | | | 6,617 | | | | 7,160 | | | (7.6 | ) | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Total nonperforming assets | | $ | 724,328 | | | $ | 334,215 | | | NM | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Total accruing loans past due 90 days or more | | $ | 351,515 | | | $ | 371,491 | | | (5.4 | )% | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Total nonperforming loans to total loans | | | 0.55 | % | | | 0.26 | % | | NM | % | | | | | | | | | | | |
Total nonperforming assets to total loans plus OREO and other repossessed assets | | | 0.60 | | | | 0.29 | | | NM | | | | | | | | | | | | |
Allowance to period-end loans | | | 0.88 | | | | 0.90 | | | (2.2 | ) | | | | | | | | | | | |
Allowance to nonperforming loans | | | 162.1 | | | | 346.9 | | | (53.4 | ) | | | | | | | | | | | |
| 1 | “NM” - Not meaningful. Those changes over 100 percent were not considered to be meaningful. |
Page 10
SunTrust Banks, Inc. and Subsidiaries
FIVE QUARTER OTHER FINANCIAL DATA
(Dollars in thousands) (Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | |
| | | December 31 2006 | | | September 30 2006 | | | % Change 1 | | | June 30 2006 | | | March 31 2006 | | | December 31 2005 | |
CREDIT DATA | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan and lease losses - beginning | | $ | 1,087,316 | | | $ | 1,061,862 | | | 2.4 | % | | $ | 1,039,247 | | | $ | 1,028,128 | | | $ | 1,029,855 | |
Provision for loan losses | | | 75,806 | | | | 61,568 | | | 23.1 | | | | 51,759 | | | | 33,403 | | | | 48,126 | |
Charge-offs | | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | (59,031 | ) | | | (23,062 | ) | | NM | | | | (19,155 | ) | | | (13,453 | ) | | | (23,157 | ) |
Real estate: | | | | | | | | | | | | | | | | | | | | | | | |
Home equity lines | | | (11,038 | ) | | | (6,460 | ) | | 70.9 | | | | (5,534 | ) | | | (5,784 | ) | | | (7,930 | ) |
Construction | | | (1,230 | ) | | | (814 | ) | | 51.1 | | | | (109 | ) | | | (128 | ) | | | (3,265 | ) |
Residential mortgages | | | (7,806 | ) | | | (9,113 | ) | | (14.3 | ) | | | (6,373 | ) | | | (6,304 | ) | | | (5,984 | ) |
Commercial real estate | | | (4,256 | ) | | | (487 | ) | | NM | | | | (2,346 | ) | | | (961 | ) | | | (1,551 | ) |
Consumer: | | | | | | | | | | | | | | | | | | | | | | | |
Direct | | | (5,924 | ) | | | (4,544 | ) | | 30.4 | | | | (5,408 | ) | | | (6,134 | ) | | | (9,714 | ) |
Indirect | | | (25,450 | ) | | | (18,639 | ) | | 36.5 | | | | (16,724 | ) | | | (21,502 | ) | | | (28,136 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
Total charge-offs | | | (114,735 | ) | | | (63,119 | ) | | 81.8 | | | | (55,649 | ) | | | (54,266 | ) | | | (79,737 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
Recoveries | | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | 6,657 | | | | 9,636 | | | (30.9 | ) | | | 6,595 | | | | 7,083 | | | | 9,561 | |
Real estate: | | | | | | | | | | | | | | | | | | | | | | | |
Home equity lines | | | 1,529 | | | | 1,618 | | | (5.5 | ) | | | 1,743 | | | | 1,950 | | | | 1,877 | |
Construction | | | 755 | | | | 520 | | | 45.2 | | | | 711 | | | | 54 | | | | 90 | |
Residential mortgages | | | 1,686 | | | | 1,831 | | | (7.9 | ) | | | 2,123 | | | | 2,269 | | | | 2,409 | |
Commercial real estate | | | 1,748 | | | | 475 | | | NM | | | | 595 | | | | 3,394 | | | | 369 | |
Consumer: | | | | | | | | | | | | | | | | | | | | | | | |
Direct | | | 2,805 | | | | 2,713 | | | 3.4 | | | | 3,014 | | | | 3,594 | | | | 3,559 | |
Indirect | | | 9,754 | | | | 10,212 | | | (4.5 | ) | | | 11,724 | | | | 13,638 | | | | 12,019 | |
| | | | | | | | | | | | | | | | | | | | | | | |
Total recoveries | | | 24,934 | | | | 27,005 | | | (7.7 | ) | | | 26,505 | | | | 31,982 | | | | 29,884 | |
| | | | | | | | | | | | | | | | | | | | | | | |
Net charge-offs | | | (89,801 | ) | | | (36,114 | ) | | NM | | | | (29,144 | ) | | | (22,284 | ) | | | (49,853 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan and lease losses - ending | | $ | 1,073,321 | | | $ | 1,087,316 | | | (1.3 | ) | | $ | 1,061,862 | | | $ | 1,039,247 | | | $ | 1,028,128 | |
| | | | | | | | | | | | | | | | | | | | | | | |
Net charge-offs to average loans (annualized) | | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | 0.60 | % | | | 0.15 | % | | NM | % | | | 0.15 | % | | | 0.08 | % | | | 0.16 | % |
Real estate: | | | | | | | | | | | | | | | | | | | | | | | |
Home equity lines | | | 0.27 | | | | 0.14 | | | 96.4 | | | | 0.11 | | | | 0.12 | | | | 0.18 | |
Construction | | | 0.01 | | | | 0.01 | | | — | | | | (0.02 | ) | | | — | | | | 0.12 | |
Residential mortgages | | | 0.07 | | | | 0.08 | | | (12.4 | ) | | | 0.05 | | | | 0.05 | | | | 0.05 | |
Commercial real estate | | | 0.08 | | | | — | | | 100.0 | | | | 0.05 | | | | (0.08 | ) | | | 0.04 | |
Consumer: | | | | | | | | | | | | | | | | | | | | | | | |
Direct | | | 0.30 | | | | 0.17 | | | 76.8 | | | | 0.23 | | | | 0.19 | | | | 0.45 | |
Indirect | | | 0.75 | | | | 0.40 | | | 88.7 | | | | 0.24 | | | | 0.37 | | | | 0.72 | |
Total net charge-offs to total average loans | | | 0.29 | % | | | 0.12 | % | | NM | % | | | 0.10 | % | | | 0.08 | % | | | 0.17 | % |
| | | | | | |
Period Ended | | | | | | | | | | | | | | | | | | | | | | | |
Nonaccrual loans | | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | $ | 237,269 | | | $ | 263,684 | | | (10.0 | )% | | $ | 69,184 | | | $ | 52,911 | | | $ | 70,880 | |
Real estate: | | | | | | | | | | | | | | | | | | | | | | | |
Construction | | | 38,646 | | | | 26,508 | | | 45.8 | | | | 21,743 | | | | 28,130 | | | | 24,442 | |
Residential mortgages | | | 286,676 | | | | 189,218 | | | 51.5 | | | | 136,101 | | | | 115,800 | | | | 103,317 | |
Commercial real estate | | | 55,365 | | | | 54,394 | | | 1.8 | | | | 53,081 | | | | 45,626 | | | | 44,603 | |
Consumer loans | | | 16,302 | | | | 22,685 | | | (28.1 | ) | | | 18,861 | | | | 20,327 | | | | 28,732 | |
| | | | | | | | | | | | | | | | | | | | | | | |
Total nonaccrual loans | | | 634,258 | | | | 556,489 | | | 14.0 | | | | 298,970 | | | | 262,794 | | | | 271,974 | |
Restructured loans | | | 27,993 | | | | 28,934 | | | (3.3 | ) | | | 28,292 | | | | 26,949 | | | | 24,399 | |
| | | | | | | | | | | | | | | | | | | | | | | |
Total nonperforming loans | | | 662,251 | | | | 585,423 | | | 13.1 | | | | 327,262 | | | | 289,743 | | | | 296,373 | |
Other real estate owned (OREO) | | | 55,460 | | | | 41,690 | | | 33.0 | | | | 35,576 | | | | 38,920 | | | | 30,682 | |
Other repossessed assets | | | 6,617 | | | | 6,670 | | | (0.8 | ) | | | 6,953 | | | | 5,652 | | | | 7,160 | |
| | | | | | | | | | | | | | | | | | | | | | | |
Total nonperforming assets | | $ | 724,328 | | | $ | 633,783 | | | 14.3 | | | $ | 369,791 | | | $ | 334,315 | | | $ | 334,215 | |
| | | | | | | | | | | | | | | | | | | | | | | |
Total accruing loans past due 90 days or more | | $ | 351,515 | | | $ | 301,878 | | | 16.4 | % | | $ | 284,938 | | | $ | 399,462 | | | $ | 371,491 | |
| | | | | | | | | | | | | | | | | | | | | | | |
Total nonperforming loans to total loans | | | 0.55 | % | | | 0.48 | % | | 14.6 | % | | | 0.27 | % | | | 0.25 | % | | | 0.26 | % |
Total nonperforming assets to total loans plus OREO and other repossessed assets | | | 0.60 | | | | 0.52 | | | 15.4 | | | | 0.31 | | | | 0.28 | | | | 0.29 | |
Allowance to period-end loans | | | 0.88 | | | | 0.90 | | | (2.2 | ) | | | 0.88 | | | | 0.88 | | | | 0.90 | |
Allowance to nonperforming loans | | | 162.1 | | | | 185.7 | | | (12.7 | ) | | | 324.5 | | | | 358.7 | | | | 346.9 | |
| 1 | “NM” - Not meaningful. Those changes over 100 percent were not considered to be meaningful. |
Page 11
SunTrust Banks, Inc. and Subsidiaries
OTHER FINANCIAL DATA (continued)
(Dollars and shares in thousands, except per share data) (Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended December 31 | | | Twelve Months Ended December 31 | |
| | | Core Deposit Intangible | | | Mortgage Servicing Rights | | | Other | | | Total | | | Core Deposit Intangible | | | Mortgage Servicing Rights | | | Other | | | Total | |
OTHER INTANGIBLE ASSET ROLLFORWARD | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance, beginning of period | | $ | 348,018 | | | $ | 613,467 | | | $ | 151,388 | | | $ | 1,112,873 | | | $ | 424,143 | | | $ | 482,392 | | | $ | 154,916 | | | $ | 1,061,451 | |
Amortization | | | (23,275 | ) | | | (42,643 | ) | | | (4,918 | ) | | | (70,836 | ) | | | (99,400 | ) | | | (166,482 | ) | | | (19,565 | ) | | | (285,447 | ) |
Servicing rights originated | | | — | | | | 86,780 | | | | — | | | | 86,780 | | | | — | | | | 341,694 | | | | — | | | | 341,694 | |
Lighthouse Partners client relationships and noncompete agreements | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 11,119 | | | | 11,119 | |
Sale of Carswell of Carolina, Inc. | | | — | | | | — | | | | (5,850 | ) | | | (5,850 | ) | | | — | | | | — | | | | (5,850 | ) | | | (5,850 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance, December 31, 2005 | | $ | 324,743 | | | $ | 657,604 | | | $ | 140,620 | | | $ | 1,122,967 | | | $ | 324,743 | | | $ | 657,604 | | | $ | 140,620 | | | $ | 1,122,967 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance, beginning of period | | $ | 261,161 | | | $ | 724,323 | | | $ | 134,618 | | | $ | 1,120,102 | | | $ | 324,743 | | | $ | 657,604 | | | $ | 140,620 | | | $ | 1,122,967 | |
Amortization | | | (19,547 | ) | | | (55,652 | ) | | | (4,757 | ) | | | (79,956 | ) | | | (84,214 | ) | | | (195,627 | ) | | | (19,012 | ) | | | (298,853 | ) |
Servicing rights originated | | | — | | | | 141,897 | | | | — | | | | 141,897 | | | | — | | | | 503,801 | | | | — | | | | 503,801 | |
Community Bank of Florida branch acquisition | | | — | | | | — | | | | — | | | | — | | | | 1,085 | | | | — | | | | — | | | | 1,085 | |
Reclass to trading assets | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (1,050 | ) | | | (1,050 | ) |
Purchase of AMA, LLC minority shares | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 5,072 | | | | 5,072 | |
Sale/securitization of mortgage servicing rights | | | — | | | | (59 | ) | | | — | | | | (59 | ) | | | — | | | | (155,269 | ) | | | — | | | | (155,269 | ) |
Issuance of noncompete agreement | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 4,231 | | | | 4,231 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance, December 31, 2006 | | $ | 241,614 | | | $ | 810,509 | | | $ | 129,861 | | | $ | 1,181,984 | | | $ | 241,614 | | | $ | 810,509 | | | $ | 129,861 | | | $ | 1,181,984 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | Three Months Ended |
| | | December 31 2006 | | | September 30 2006 | | | June 30 2006 | | March 31 2006 | | | December 31 2005 |
COMMON SHARE ROLLFORWARD | | | | | | | | | | | | | | | | | | |
Beginning balance | | | 363,868 | | | | 364,129 | | | | 363,339 | | | 361,984 | | | | 361,248 |
Acquisition and contingent consideration | | | — | | | | — | | | | — | | | 203 | | | | — |
Common shares issued/exchanged for employee benefit plans, stock option, performance stock and restricted stock activity | | | 961 | | | | 1,379 | | | | 790 | | | 2,687 | | | | 736 |
Acquisition of treasury stock | | | (9,926 | ) | | | (1,640 | ) | | | — | | | (1,535 | ) | | | — |
| | | | | | | | | | | | | | | | | | |
Ending balance | | | 354,903 | | | | 363,868 | | | | 364,129 | | | 363,339 | | | | 361,984 |
| | | | | | | | | | | | | | | | | | |
COMMON STOCK REPURCHASE ACTIVITY | | | | | | | | | | | | | | | | | | |
Number of common shares repurchased1 | | | 9,962 | | | | 1,660 | | | | 29 | | | 1,564 | | | | 18 |
Average price per share of repurchased common shares | | $ | 77.76 | | | $ | 76.69 | | | $ | 75.73 | | $ | 70.82 | | | $ | 73.67 |
Total cost to acquire treasury shares | | $ | 870,669 | | | $ | 125,752 | | | $ | — | | $ | 108,622 | | | $ | — |
Maximum number of common shares that may yet be purchased under plans or programs2 | | | 8,360 | | | | 8,360 | | | | 10,000 | | | 10,000 | | | | 3,253 |
| 1 | This figure includes shares repurchased pursuant to SunTrust’s employee stock option plans, pursuant to which participants may pay the exercise price upon exercise of SunTrust stock options by surrendering shares of SunTrust common stock which the participant already owns. |
| 2 | This figure does not include a Board authorization in August 2006 to purchase the greater of $1,000,000,000 or 13,333,334 shares of the Company’s common stock, of which authority the Company has used $870,669,000 to repurchase 9,962,000 shares. |
Page 12
SunTrust Banks, Inc. and Subsidiaries
RECONCILEMENT OF NON-GAAP MEASURES
APPENDIX A TO THE EARNINGS RELEASE
(Dollars in thousands) (Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Twelve Months Ended | |
| | | December 31 2006 | | | September 30 2006 | | | June 30 2006 | | | March 31 2006 | | | December 31 2005 | | | December 31 2006 | | | December 31 2005 | |
NON-GAAP MEASURES PRESENTED IN THE EARNINGS RELEASE | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income | | $ | 531,366 | | | $ | 535,588 | | | $ | 544,002 | | | $ | 531,527 | | | $ | 518,471 | | | $ | 2,142,483 | | | $ | 1,987,239 | |
Securities (gains)/losses, net of tax | | | (21,934 | ) | | | 56,926 | | | | (3,632 | ) | | | (64 | ) | | | (372 | ) | | | 31,296 | | | | 4,436 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income excluding net securities gains and losses | | | 509,432 | | | | 592,514 | | | | 540,370 | | | | 531,463 | | | | 518,099 | | | | 2,173,779 | | | | 1,991,675 | |
The Coca-Cola Company dividend, net of tax | | | (13,316 | ) | | | (13,317 | ) | | | (13,316 | ) | | | (13,317 | ) | | | (12,027 | ) | | | (53,267 | ) | | | (48,112 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income excluding net securities (gains)/losses and The Coca-Cola Company dividend | | | 496,116 | | | | 579,197 | | | | 527,054 | | | | 518,146 | | | | 506,072 | | | | 2,120,512 | | | | 1,943,563 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Preferred dividends | | | 7,729 | | | | — | | | | — | | | | — | | | | — | | | | 7,729 | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income available to common shareholders excluding net securities (gains)/losses and The Coca-Cola Company dividend | | $ | 488,387 | | | $ | 579,197 | | | $ | 527,054 | | | $ | 518,146 | | | $ | 506,072 | | | $ | 2,112,783 | | | $ | 1,943,563 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total average assets | | $ | 182,343,274 | | | $ | 180,500,921 | | | $ | 180,744,146 | | | $ | 177,618,283 | | | $ | 175,769,140 | | | $ | 180,315,146 | | | $ | 168,088,771 | |
Average net unrealized securities gains | | | (1,965,367 | ) | | | (1,374,648 | ) | | | (1,528,041 | ) | | | (1,612,808 | ) | | | (1,871,230 | ) | | | (1,620,509 | ) | | | (1,949,436 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Average assets less net unrealized securities gains | | $ | 180,377,907 | | | $ | 179,126,273 | | | $ | 179,216,105 | | | $ | 176,005,475 | | | $ | 173,897,910 | | | $ | 178,694,637 | | | $ | 166,139,335 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total average common shareholders’ equity | | | 17,655,469 | | | | 17,558,581 | | | | 17,304,451 | | | | 17,051,805 | | | | 16,875,645 | | | $ | 17,394,685 | | | | 16,526,282 | |
Average accumulated other comprehensive income | | | (1,202,004 | ) | | | (821,317 | ) | | | (915,885 | ) | | | (963,683 | ) | | | (1,126,701 | ) | | | (975,952 | ) | | | (1,220,508 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total average realized common shareholders’ equity | | $ | 16,453,465 | | | $ | 16,737,264 | | | $ | 16,388,566 | | | $ | 16,088,122 | | | $ | 15,748,944 | | | $ | 16,418,733 | | | | 15,305,774 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Return on average total assets | | | 1.16 | % | | | 1.18 | % | | | 1.21 | % | | | 1.21 | % | | | 1.17 | % | | | 1.19 | % | | | 1.18 | % |
Impact of excluding net realized and unrealized securities (gains)/losses and The Coca-Cola Company dividend | | | (0.07 | ) | | | 0.10 | | | | (0.03 | ) | | | (0.02 | ) | | | (0.02 | ) | | | 0.00 | | | | (0.01 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Return on average total assets less net unrealized securities gains 1 | | | 1.09 | % | | | 1.28 | % | | | 1.18 | % | | | 1.19 | % | | | 1.15 | % | | | 1.19 | % | | | 1.17 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Return on average common shareholders’ equity | | | 11.77 | % | | | 12.10 | % | | | 12.61 | % | | | 12.64 | % | | | 12.19 | % | | | 12.27 | % | | | 12.02 | % |
Impact of excluding net realized and unrealized securities (gains)/ losses and The Coca-Cola Company dividend | | | 0.01 | | | | 1.63 | | | | 0.29 | | | | 0.42 | | | | 0.56 | | | | 0.60 | | | | 0.68 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Return on average realized common shareholders’ equity2 | | | 11.78 | % | | | 13.73 | % | | | 12.90 | % | | | 13.06 | % | | | 12.75 | % | | | 12.87 | % | | | 12.70 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Efficiency ratio3 | | | 59.67 | % | | | 59.30 | % | | | 58.78 | % | | | 59.80 | % | | | 60.20 | % | | | 59.39 | % | | | 60.06 | % |
Impact of excluding amortization of intangible assets | | | (1.18 | ) | | | (1.27 | ) | | | (1.25 | ) | | | (1.33 | ) | | | (1.41 | ) | | | (1.26 | ) | | | (1.52 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Tangible efficiency ratio4 | | | 58.49 | % | | | 58.03 | % | | | 57.53 | % | | | 58.47 | % | | | 58.79 | % | | | 58.13 | % | | | 58.54 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total shareholders’ equity | | $ | 17,838,618 | | | $ | 18,589,307 | | | $ | 17,423,920 | | | $ | 17,157,448 | | | $ | 16,887,395 | | | | | | | | | |
Goodwill | | | (6,889,860 | ) | | | (6,903,001 | ) | | | (6,900,222 | ) | | | (6,897,105 | ) | | | (6,835,168 | ) | | | | | | | | |
Other intangible assets including mortgage servicing rights (“MSRs”) | | | (1,181,984 | ) | | | (1,120,102 | ) | | | (1,141,346 | ) | | | (1,123,463 | ) | | | (1,122,967 | ) | | | | | | | | |
Mortgage servicing rights | | | 810,510 | | | | 724,323 | | | | 720,374 | | | | 680,837 | | | | 657,604 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Tangible equity | | $ | 10,577,284 | | | $ | 11,290,527 | | | $ | 10,102,726 | | | $ | 9,817,717 | | | $ | 9,586,864 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total assets | | $ | 182,201,609 | | | $ | 183,104,553 | | | $ | 181,143,444 | | | $ | 178,876,476 | | | $ | 179,712,841 | | | | | | | | | |
Goodwill | | | (6,889,860 | ) | | | (6,903,001 | ) | | | (6,900,222 | ) | | | (6,897,105 | ) | | | (6,835,168 | ) | | | | | | | | |
Other intangible assets including MSRs | | | (1,181,984 | ) | | | (1,120,102 | ) | | | (1,141,346 | ) | | | (1,123,463 | ) | | | (1,122,967 | ) | | | | | | | | |
Mortgage servicing rights | | | 810,510 | | | | 724,323 | | | | 720,374 | | | | 680,837 | | | | 657,604 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Tangible assets | | $ | 174,940,275 | | | $ | 175,805,773 | | | $ | 173,822,250 | | | $ | 171,536,745 | | | $ | 172,412,310 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Tangible equity to tangible assets 5 | | | 6.05 | % | | | 6.42 | % | | | 5.81 | % | | | 5.72 | % | | | 5.56 | % | | | | | | | | |
Noninterest income | | $ | 882,566 | | | $ | 858,931 | | | $ | 875,369 | | | $ | 851,506 | | | $ | 797,923 | | | $ | 3,468,372 | | | $ | 3,155,044 | |
Net securities (gains)/losses | | | (35,377 | ) | | | 91,816 | | | | (5,858 | ) | | | (104 | ) | | | (600 | ) | | | 50,477 | | | | 7,155 | |
Net gain on sale of RCM assets | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (23,382 | ) |
Net gain on sale of Bond Trustee business | | | — | | | | (112,759 | ) | | | — | | | | — | | | | — | | | | (112,759 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total noninterest income excluding net securities (gains)/losses, net gain on sale of RCM assets and net gain on sale of Bond Trustee business6 | | $ | 847,189 | | | $ | 837,988 | | | $ | 869,511 | | | $ | 851,402 | | | $ | 797,323 | | | $ | 3,406,090 | | | $ | 3,138,817 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net interest income | | $ | 1,161,289 | | | $ | 1,151,392 | | | $ | 1,168,743 | | | $ | 1,179,041 | | | $ | 1,187,036 | | | $ | 4,660,465 | | | $ | 4,578,966 | |
Taxable-equivalent adjustment | | | 23,877 | | | | 22,468 | | | | 21,283 | | | | 20,338 | | | | 20,025 | | | | 87,966 | | | | 75,492 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net interest income - FTE | | | 1,185,166 | | | | 1,173,860 | | | | 1,190,026 | | | | 1,199,379 | | | | 1,207,061 | | | | 4,748,431 | | | | 4,654,458 | |
Noninterest income | | | 882,566 | | | | 858,931 | | | | 875,369 | | | | 851,506 | | | | 797,923 | | | | 3,468,372 | | | | 3,155,044 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total revenue - FTE | | | 2,067,732 | | | | 2,032,791 | | | | 2,065,395 | | | | 2,050,885 | | | | 2,004,984 | | | | 8,216,803 | | | | 7,809,502 | |
Net securities (gains)/losses | | | (35,377 | ) | | | 91,816 | | | | (5,858 | ) | | | (104 | ) | | | (600 | ) | | | 50,477 | | | | 7,155 | |
Net gain on sale of RCM assets | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (23,382 | ) |
Net gain on sale of Bond Trustee business | | | — | | | | (112,759 | ) | | | — | | | | — | | | | — | | | | (112,759 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total revenue - FTE excluding net securities (gains)/losses, net gain on sale of RCM assets and net gain on sale of Bond Trustee business6 | | $ | 2,032,355 | | | $ | 2,011,848 | | | $ | 2,059,537 | | | $ | 2,050,781 | | | $ | 2,004,384 | | | $ | 8,154,521 | | | $ | 7,793,275 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 1 | SunTrust presents a return on average assets less net unrealized gains on securities. The foregoing numbers reflect primarily adjustments to remove the effects of the Company’s securities portfolio which includes the ownership by the Company of 48.2 million shares of The Coca-Cola Company. The Company uses this information internally to gauge its actual performance in the industry. The Company believes that the return on average assets less the net unrealized securities gains is more indicative of the Company’s return on assets because it more accurately reflects the return on the assets that are related to the Company’s core businesses which are primarily customer relationship and customer transaction driven. The return on average assets less net unrealized gains on securities is computed by dividing annualized net income, excluding securities gains/losses and The Coca-Cola Company dividend, by average assets less net unrealized securities gains. |
| 2 | The Company believes that the return on average realized common shareholders’ equity is more indicative of the Company’s return on equity because the excluded equity relates primarily to the long term holding of a specific security. The return on average realized common shareholders’ equity is computed by dividing annualized net income available to common shareholders, excluding securities gains/losses and The Coca -Cola Company dividend, by average realized common shareholders’ equity. |
| 3 | Computed by dividing noninterest expense by total revenue - FTE. The efficiency ratios are presented on an 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. |
| 4 | SunTrust presents a tangible efficiency ratio which excludes the cost of intangible assets. The Company believes this measure is useful to investors because, by removing the effect of 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. |
| 5 | SunTrust presents a tangible equity to tangible assets ratio that excludes the 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. |
| 6 | SunTrust presents total noninterest income and total revenue-FTE excluding realized net securities gains/losses, the net gain on the sale of RCM assets and the net gain on the sale of the Bond Trustee business. The Company believes total noninterest income and total revenue-FTE without net securities gains/losses is more indicative of the Company’s performance because it isolates income that is primarily customer relationship and customer transaction driven. SunTrust further excludes the net gain on the sale of RCM assets and the net gain on the sale of the Bond Trustee business because the Company believes the exclusion of the net gains are more indicative of normalized operations. |
Page 13
SunTrust Banks, Inc. and Subsidiaries
RECONCILEMENT OF NON-GAAP MEASURES
APPENDIX A TO THE EARNINGS RELEASE, continued
(Dollars in thousands) (Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Twelve Months Ended | |
| | | December 31 2006 | | | September 30 2006 | | | June 30 2006 | | | March 31 2006 | | | December 31 2005 | | | December 31 2006 | | | December 31 2005 | |
SELECTED NON-GAAP MEASURES PRESENTED IN THE EARNINGS RELEASE1 | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest expense | | $ | 1,233,777 | | | $ | 1,205,499 | | | $ | 1,214,093 | | | $ | 1,226,491 | | | $ | 1,206,927 | | | $ | 4,879,860 | | | $ | 4,690,729 | |
Merger expense | | | — | | | | — | | | | — | | | | — | | | | (6,538 | ) | | | — | | | | (98,642 | ) |
Loss on extinguishment of debt | | | (11,665 | ) | | | — | | | | — | | | | — | | | | — | | | | (11,665 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest expense excluding merger expense and loss on extinguishment of debt | | | 1,222,112 | | | | 1,205,499 | | | | 1,214,093 | | | | 1,226,491 | | | | 1,200,389 | | | | 4,868,195 | | | | 4,592,087 | |
Amortization of intangible assets | | | (24,304 | ) | | | (25,792 | ) | | | (25,885 | ) | | | (27,245 | ) | | | (28,192 | ) | | | (103,226 | ) | | | (118,964 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest expense excluding merger expense, loss on extinguishment of debt and amortization of intangible assets | | $ | 1,197,808 | | | $ | 1,179,707 | | | $ | 1,188,208 | | | $ | 1,199,246 | | | $ | 1,172,197 | | | $ | 4,764,969 | | | $ | 4,473,123 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Return on average total assets | | | 1.16 | % | | | 1.18 | % | | | 1.21 | % | | | 1.21 | % | | | 1.17 | % | | | 1.19 | % | | | 1.18 | % |
Impact of excluding merger expense | | | — | | | | — | | | | — | | | | — | | | | 0.01 | | | | — | | | | 0.04 | |
Impact of excluding loss on extinguishment of debt | | | 0.02 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Return on average total assets excluding merger expense and loss on extinguishment of debt2 | | | 1.18 | % | | | 1.18 | % | | | 1.21 | % | | | 1.21 | % | | | 1.18 | % | | | 1.19 | % | | | 1.22 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Return on average common shareholders’ equity | | | 11.77 | % | | | 12.10 | % | | | 12.61 | % | | | 12.64 | % | | | 12.19 | % | | | 12.27 | % | | | 12.02 | % |
Impact of excluding merger expense | | | — | | | | — | | | | — | | | | — | | | | 0.09 | | | | — | | | | 0.37 | |
Impact of excluding loss on extinguishment of debt | | | 0.26 | | | | — | | | | — | | | | — | | | | — | | | | 0.07 | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Return on average common shareholders’ equity excluding merger expense and loss on extinguishment of debt3 | | | 12.03 | % | | | 12.10 | % | | | 12.61 | % | | | 12.64 | % | | | 12.28 | % | | | 12.34 | % | | | 12.39 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Efficiency ratio4 | | | 59.67 | % | | | 59.30 | % | | | 58.78 | % | | | 59.80 | % | | | 60.20 | % | | | 59.39 | % | | | 60.06 | % |
Impact of excluding merger expense | | | — | | | | — | | | | — | | | | — | | | | (0.33 | ) | | | — | | | | (1.26 | ) |
Impact of excluding loss on extinguishment of debt | | | (1.75 | ) | | | — | | | | — | | | | — | | | | — | | | | (1.40 | ) | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Efficiency ratio excluding merger expense and loss on extinguishment of debt | | | 57.93 | % | | | 59.30 | % | | | 58.78 | % | | | 59.80 | % | | | 59.87 | % | | | 57.99 | % | | | 58.80 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Tangible efficiency ratio5 | | | 58.49 | % | | | 58.03 | % | | | 57.53 | % | | | 58.47 | % | | | 58.79 | % | | | 58.13 | % | | | 58.54 | % |
Impact of excluding merger expense | | | — | | | | — | | | | — | | | | — | | | | (0.33 | ) | | | — | | | | (1.26 | ) |
Impact of excluding loss on extinguishment of debt | | | (0.56 | ) | | | — | | | | — | | | | — | | | | — | | | | (0.14 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Tangible efficiency ratio excluding merger expense and loss on extinguishment of debt | | | 57.93 | % | | | 58.03 | % | | | 57.53 | % | | | 58.47 | % | | | 58.79 | % | | | 57.99 | % | | | 57.28 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
First six months compared to last six months
| | | | | | | | | | | | | | | | | |
| | | First Six Months Ended June 30 | | | % Change | | | Last Six Months Ended December 31 | | | % Change | |
| | | 2006 | | 2005 | | | | 2006 | | | 2005 | | |
Noninterest expense | | 2,440,584 | | 2,306,731 | | | 5.80 | | | 2,439,276 | | | 2,383,998 | | | 2.32 | |
Merger expense | | — | | (80,000 | ) | | (100.00 | ) | | — | | | (18,642 | ) | | (100.00 | ) |
Loss on extinguishment of debt | | — | | — | | | — | | | (11,665 | ) | | — | | | 100.00 | |
| | | | | | | | | | | | | | | | | |
Noninterest expense before merger expense and loss on extinguishment of debt | | 2,440,584 | | 2,226,731 | | | 9.60 | | | 2,427,611 | | | 2,365,356 | | | 2.63 | |
| | | | | | | | | | | | | | | | | |
| 1 | SunTrust presents selected financial data on a basis that excludes merger expense, which represents incremental costs to integrate the operations of National Commerce Financial (“NCF”). The Company also presents selected financial data that further excludes the loss on extinguishment of debt and amortization of intangible assets. The Company believes the exclusion of these measures is more reflective of normalized operations. Management believes it is more indicative of the Company’s performance because it isolates income that is primarily customer relationship and customer transaction driven. |
| 2 | Computed by dividing annualized net income excluding merger expense and loss on extinguishment of debt by average total assets. |
| 3 | Computed by dividing annualized net income available to common shareholders excluding merger expense and loss on extinguishment of debt by average common shareholders’ equity. |
| 4 | Computed by dividing noninterest expense by total revenue - FTE. The efficiency ratios are presented on an 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. |
| 5 | SunTrust presents a tangible efficiency ratio which excludes the cost of intangible assets. The Company believes this measure is useful to investors because, by removing the effect of 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. |
Page 14
SunTrust Banks, Inc. and Subsidiaries
QUARTER-TO-QUARTER COMPARISON - ACTUAL
APPENDIX B TO THE EARNINGS RELEASE (UNAUDITED)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | |
| | | December 31 2006 | | | September 30 2006 | | | Increase/(Decrease) | | | Sequential Annualized 2 % | | | December 31 2006 | | | December 31 2005 | | | Increase/(Decrease) | |
| | | | Amount | | | % | | | | | | Amount | | | % | |
STATEMENTS OF INCOME (Dollars in thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NET INTEREST INCOME | | $ | 1,161,289 | | | $ | 1,151,392 | | | $ | 9,897 | | | 0.9 | % | | 3.4 | % | | $ | 1,161,289 | | | $ | 1,187,036 | | | $ | (25,747 | ) | | (2.2 | )% |
Provision for loan losses | | | 75,806 | | | | 61,568 | | | | 14,238 | | | 23.1 | | | 92.5 | | | | 75,806 | | | | 48,126 | | | | 27,680 | | | 57.5 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | | | 1,085,483 | | | | 1,089,824 | | | | (4,341 | ) | | (0.4 | ) | | (1.6 | ) | | | 1,085,483 | | | | 1,138,910 | | | | (53,427 | ) | | (4.7 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NONINTEREST INCOME | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Service charges on deposit accounts | | | 191,628 | | | | 194,262 | | | | (2,634 | ) | | (1.4 | ) | | (5.4 | ) | | | 191,628 | | | | 196,792 | | | | (5,164 | ) | | (2.6 | ) |
Trust and investment management income | | | 169,248 | | | | 173,717 | | | | (4,469 | ) | | (2.6 | ) | | (10.3 | ) | | | 169,248 | | | | 172,900 | | | | (3,652 | ) | | (2.1 | ) |
Retail investment services | | | 65,000 | | | | 55,544 | | | | 9,456 | | | 17.0 | | | 68.1 | | | | 65,000 | | | | 53,250 | | | | 11,750 | | | 22.1 | |
Other charges and fees | | | 122,386 | | | | 113,347 | | | | 9,039 | | | 8.0 | | | 31.9 | | | | 122,386 | | | | 115,507 | | | | 6,879 | | | 6.0 | |
Investment banking income | | | 71,211 | | | | 47,046 | | | | 24,165 | | | 51.4 | | | NM | | | | 71,211 | | | | 59,727 | | | | 11,484 | | | 19.2 | |
Trading account profits and commissions | | | 9,586 | | | | 20,404 | | | | (10,818 | ) | | (53.0 | ) | | NM | | | | 9,586 | | | | 27,418 | | | | (17,832 | ) | | (65.0 | ) |
Card fees | | | 64,187 | | | | 64,916 | | | | (729 | ) | | (1.1 | ) | | (4.5 | ) | | | 64,187 | | | | 57,688 | | | | 6,499 | | | 11.3 | |
Mortgage production related income | | | 47,476 | | | | 50,336 | | | | (2,860 | ) | | (5.7 | ) | | (22.7 | ) | | | 47,476 | | | | 34,817 | | | | 12,659 | | | 36.4 | |
Mortgage servicing related income | | | 8,994 | | | | 36,633 | | | | (27,639 | ) | | (75.4 | ) | | NM | | | | 8,994 | | | | 13,519 | | | | (4,525 | ) | | (33.5 | ) |
Other noninterest income | | | 97,473 | | | | 81,783 | | | | 15,690 | | | 19.2 | | | 76.7 | | | | 97,473 | | | | 65,705 | | | | 31,768 | | | 48.3 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest income before net securities gains/(losses) and net gain on sale of Bond Trustee business1 | | | 847,189 | | | | 837,988 | | | | 9,201 | | | 1.1 | | | 4.4 | | | | 847,189 | | | | 797,323 | | | | 49,866 | | | 6.3 | |
Net gain on sale of Bond Trustee business | | | — | | | | 112,759 | | | | (112,759 | ) | | (100.0 | ) | | NM | | | | — | | | | — | | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest income before net securities gains/(losses)1 | | | 847,189 | | | | 950,747 | | | | (103,558 | ) | | (10.9 | ) | | (43.6 | ) | | | 847,189 | | | | 797,323 | | | | 49,866 | | | 6.3 | |
Net securities gains/(losses) | | | 35,377 | | | | (91,816 | ) | | | 127,193 | | | NM | | | NM | | | | 35,377 | | | | 600 | | | | 34,777 | | | NM | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total noninterest income | | | 882,566 | | | | 858,931 | | | | 23,635 | | | 2.8 | | | 11.0 | | | | 882,566 | | | | 797,923 | | | | 84,643 | | | 10.6 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NONINTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Employee compensation and benefits | | | 657,093 | | | | 674,322 | | | | (17,229 | ) | | (2.6 | ) | | (10.2 | ) | | | 657,093 | | | | 643,801 | | | | 13,292 | | | 2.1 | |
Net occupancy expense | | | 85,846 | | | | 85,613 | | | | 233 | | | 0.3 | | | 1.1 | | | | 85,846 | | | | 83,217 | | | | 2,629 | | | 3.2 | |
Outside processing and software | | | 101,538 | | | | 98,699 | | | | 2,839 | | | 2.9 | | | 11.5 | | | | 101,538 | | | | 92,305 | | | | 9,233 | | | 10.0 | |
Equipment expense | | | 49,234 | | | | 50,249 | | | | (1,015 | ) | | (2.0 | ) | | (8.1 | ) | | | 49,234 | | | | 49,494 | | | | (260 | ) | | (0.5 | ) |
Marketing and customer development | | | 45,249 | | | | 35,932 | | | | 9,317 | | | 25.9 | | | NM | | | | 45,249 | | | | 50,133 | | | | (4,884 | ) | | (9.7 | ) |
Amortization of intangible assets | | | 24,304 | | | | 25,792 | | | | (1,488 | ) | | (5.8 | ) | | (23.1 | ) | | | 24,304 | | | | 28,192 | | | | (3,888 | ) | | (13.8 | ) |
Other noninterest expense | | | 258,848 | | | | 234,892 | | | | 23,956 | | | 10.2 | | | 40.8 | | | | 258,848 | | | | 253,247 | | | | 5,601 | | | 2.2 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest expense before merger expense and loss on extinguishment of debt | | | 1,222,112 | | | | 1,205,499 | | | | 16,613 | | | 1.4 | | | 5.5 | | | | 1,222,112 | | | | 1,200,389 | | | | 21,723 | | | 1.8 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Merger expense | | | — | | | | — | | | | — | | | — | | | — | | | | — | | | | 6,538 | | | | (6,538 | ) | | (100.0 | ) |
Loss on extinguishment of debt | | | 11,665 | | | | — | | | | 11,665 | | | 100.0 | | | NM | | | | 11,665 | | | | — | | | | 11,665 | | | 100.0 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total noninterest expense | | | 1,233,777 | | | | 1,205,499 | | | | 28,278 | | | 2.3 | | | 9.4 | | | | 1,233,777 | | | | 1,206,927 | | | | 26,850 | | | 2.2 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
INCOME BEFORE INCOME TAXES | | | 734,272 | | | | 743,256 | | | | (8,984 | ) | | (1.2 | ) | | (4.8 | ) | | | 734,272 | | | | 729,906 | | | | 4,366 | | | 0.6 | |
Provision for income taxes | | | 202,906 | | | | 207,668 | | | | (4,762 | ) | | (2.3 | ) | | (9.2 | ) | | | 202,906 | | | | 211,435 | | | | (8,529 | ) | | (4.0 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NET INCOME | | | 531,366 | | | | 535,588 | | | | (4,222 | ) | | (0.8 | ) | | (3.2 | ) | | | 531,366 | | | | 518,471 | | | | 12,895 | | | 2.5 | |
Preferred dividends | | | 7,729 | | | | — | | | | 7,729 | | | 100.0 | | | NM | | | | 7,729 | | | | — | | | | 7,729 | | | 100.0 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS | | | 523,637 | | | | 535,588 | | | | (11,951 | ) | | (2.2 | ) | | (8.9 | ) | | | 523,637 | | | | 518,471 | | | | 5,166 | | | 1.0 | |
Merger expense, net of tax | | | — | | | | — | | | | — | | | — | | | — | | | | — | | | | 4,053 | | | | (4,053 | ) | | (100.0 | ) |
Net securities (gains)/losses, net of tax | | | (21,934 | ) | | | 56,926 | | | | (78,860 | ) | | NM | | | NM | | | | (21,934 | ) | | | (372 | ) | | | (21,562 | ) | | NM | |
Net gain on sale of Bond Trustee business, net of tax | | | — | | | | (69,911 | ) | | | 69,911 | | | 100.0 | | | NM | | | | — | | | | — | | | | — | | | — | |
Loss on extinguishment of debt, net of tax | | | 7,232 | | | | — | | | | 7,232 | | | 100.0 | | | NM | | | | 7,232 | | | | — | | | | 7,232 | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS EXCLUDING MERGER EXPENSE, NET SECURITIES (GAINS)/LOSSES, NET GAIN ON SALE OF BOND TRUSTEE BUSINESS AND LOSS ON EXTINGUISHMENT OF DEBT 1 | | $ | 508,935 | | | $ | 522,603 | | | $ | (13,668 | ) | | (2.6 | )% | | (10.5 | )% | | $ | 508,935 | | | $ | 522,152 | | | $ | (13,217 | ) | | (2.5 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
REVENUE (Dollars in thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net interest income | | $ | 1,161,289 | | | $ | 1,151,392 | | | $ | 9,897 | | | 0.9 | % | | 3.4 | % | | $ | 1,161,289 | | | $ | 1,187,036 | | | $ | (25,747 | ) | | (2.2 | )% |
Taxable-equivalent adjustment | | | 23,877 | | | | 22,468 | | | | 1,409 | | | 6.3 | | | 25.1 | | | | 23,877 | | | | 20,025 | | | | 3,852 | | | 19.2 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net interest income - FTE | | | 1,185,166 | | | | 1,173,860 | | | | 11,306 | | | 1.0 | | | 3.9 | | | | 1,185,166 | | | | 1,207,061 | | | | (21,895 | ) | | (1.8 | ) |
Noninterest income | | | 882,566 | | | | 858,931 | | | | 23,635 | | | 2.8 | | | 11.0 | | | | 882,566 | | | | 797,923 | | | | 84,643 | | | 10.6 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total revenue - FTE | | | 2,067,732 | | | | 2,032,791 | | | | 34,941 | | | 1.7 | | | 6.9 | | | | 2,067,732 | | | | 2,004,984 | | | | 62,748 | | | 3.1 | |
Net securities (gains)/losses | | | (35,377 | ) | | | 91,816 | | | | (127,193 | ) | | NM | | | NM | | | | (35,377 | ) | | | (600 | ) | | | (34,777 | ) | | NM | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total revenue - FTE excluding net securities (gains)/losses | | | 2,032,355 | | | | 2,124,607 | | | | (92,252 | ) | | (4.3 | ) | | (17.4 | ) | | | 2,032,355 | | | | 2,004,384 | | | | 27,971 | | | 1.4 | |
Net gain on sale of Bond Trustee business | | | — | | | | (112,759 | ) | | | 112,759 | | | 100.0 | | | NM | | | | — | | | | — | | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total revenue - FTE excluding net securities (gains)/losses and net gain on sale of Bond Trustee business | | $ | 2,032,355 | | | $ | 2,011,848 | | | $ | 20,507 | | | 1.0 | % | | 4.1 | % | | $ | 2,032,355 | | | $ | 2,004,384 | | | $ | 27,971 | | | 1.4 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
SELECTED AVERAGE BALANCES (Dollars in millions) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Average loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | $ | 33,965 | | | $ | 34,307 | | | $ | (342 | ) | | (1.0 | )% | | (4.0 | )% | | $ | 33,965 | | | $ | 32,997 | | | $ | 968 | | | 2.9 | % |
Real estate home equity lines | | | 13,723 | | | | 13,626 | | | | 97 | | | 0.7 | | | 2.8 | | | | 13,723 | | | | 13,068 | | | | 655 | | | 5.0 | |
Real estate construction | | | 13,204 | | | | 12,806 | | | | 398 | | | 3.1 | | | 12.4 | | | | 13,204 | | | | 10,148 | | | | 3,056 | | | 30.1 | |
Real estate 1-4 family | | | 34,345 | | | | 33,876 | | | | 469 | | | 1.4 | | | 5.5 | | | | 34,345 | | | | 29,894 | | | | 4,451 | | | 14.9 | |
Real estate commercial | | | 12,785 | | | | 12,808 | | | | (23 | ) | | (0.2 | ) | | (0.7 | ) | | | 12,785 | | | | 12,792 | | | | (7 | ) | | (0.1 | ) |
Business credit card | | | 352 | | | | 324 | | | | 28 | | | 8.5 | | | 34.4 | | | | 352 | | | | 272 | | | | 80 | | | 29.1 | |
Consumer - direct | | | 4,116 | | | | 4,207 | | | | (91 | ) | | (2.2 | ) | | (8.5 | ) | | | 4,116 | | | | 5,438 | | | | (1,322 | ) | | (24.3 | ) |
Consumer - indirect | | | 8,232 | | | | 8,339 | | | | (107 | ) | | (1.3 | ) | | (5.1 | ) | | | 8,232 | | | | 8,899 | | | | (667 | ) | | (7.5 | ) |
Nonaccrual and restructured | | | 642 | | | | 449 | | | | 193 | | | 42.8 | | | NM | | | | 642 | | | | 320 | | | | 322 | | | NM | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total loans | | $ | 121,364 | | | $ | 120,742 | | | $ | 622 | | | 0.5 | % | | 2.1 | % | | $ | 121,364 | | | $ | 113,828 | | | $ | 7,536 | | | 6.6 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Average deposits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest bearing deposits | | $ | 22,578 | | | $ | 22,934 | | | $ | (356 | ) | | (1.6 | )% | | (6.2 | )% | | $ | 22,578 | | | $ | 24,693 | | | $ | (2,115 | ) | | (8.6 | )% |
NOW accounts | | | 18,441 | | | | 16,596 | | | | 1,845 | | | 11.1 | | | 44.5 | | | | 18,441 | | | | 17,011 | | | | 1,430 | | | 8.4 | |
Money market accounts | | | 23,076 | | | | 24,267 | | | | (1,191 | ) | | (4.9 | ) | | (19.6 | ) | | | 23,076 | | | | 25,798 | | | | (2,722 | ) | | (10.6 | ) |
Savings | | | 5,437 | | | | 5,591 | | | | (154 | ) | | (2.8 | ) | | (11.0 | ) | | | 5,437 | | | | 5,473 | | | | (36 | ) | | (0.7 | ) |
Consumer and other time | | | 29,021 | | | | 28,255 | | | | 766 | | | 2.7 | | | 10.8 | | | | 29,021 | | | | 22,282 | | | | 6,739 | | | 30.2 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total consumer and commercial deposits | | | 98,553 | | | | 97,643 | | | | 910 | | | 0.9 | | | 3.7 | | | | 98,553 | | | | 95,257 | | | | 3,296 | | | 3.5 | |
Brokered and foreign deposits | | | 26,124 | | | | 27,958 | | | | (1,834 | ) | | (6.6 | ) | | (26.2 | ) | | | 26,124 | | | | 21,010 | | | | 5,114 | | | 24.3 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total deposits | | $ | 124,677 | | | $ | 125,601 | | | $ | (924 | ) | | (0.7 | )% | | (2.9 | )% | | $ | 124,677 | | | $ | 116,267 | | | $ | 8,410 | | | 7.2 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
SELECTED CREDIT DATA (Dollars in thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nonaccrual loans | | $ | 634,258 | | | $ | 556,489 | | | $ | 77,769 | | | 14.0 | % | | 55.9 | % | | $ | 634,258 | | | $ | 271,974 | | | $ | 362,284 | | | NM | % |
Restructured loans | | | 27,993 | | | | 28,934 | | | | (941 | ) | | (3.3 | ) | | (13.0 | ) | | | 27,993 | | | | 24,399 | | | | 3,594 | | | 14.7 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total nonperforming loans | | | 662,251 | | | | 585,423 | | | | 76,828 | | | 13.1 | | | NM | | | | 662,251 | | | | 296,373 | | | | 365,878 | | | NM | |
Other real estate owned (OREO) | | | 55,460 | | | | 41,690 | | | | 13,770 | | | 33.0 | | | NM | | | | 55,460 | | | | 30,682 | | | | 24,778 | | | 80.8 | |
Other repossessed assets | | | 6,617 | | | | 6,670 | | | | (53 | ) | | (0.8 | ) | | (3.2 | ) | | | 6,617 | | | | 7,160 | | | | (543 | ) | | (7.6 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total nonperforming assets | | $ | 724,328 | | | $ | 633,783 | | | $ | 90,545 | | | 14.3 | % | | 57.1 | % | | $ | 724,328 | | | $ | 334,215 | | | $ | 390,113 | | | NM | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan and lease losses | | $ | 1,073,321 | | | $ | 1,087,316 | | | $ | (13,995 | ) | | (1.3 | )% | | (5.1 | )% | | $ | 1,073,321 | | | $ | 1,028,128 | | | $ | 45,193 | | | 4.4 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 1 | SunTrust presents selected financial data on a basis that excludes merger expense, which represents incremental costs to integrate the operations of NCF. The Company believes the exclusion of merger expense is more reflective of normalized operations. SunTrust also presents selected financial data excluding net securities gains/(losses). The Company believes the exclusion of net securities gains/(losses) is more indicative of the Company’s performance because it isolates income that is primarily customer relationship and customer transaction driven. SunTrust further excludes the net gain on the sale of the Bond Trustee business and the loss on extinguishment of debt because the Company believes the exclusion of these items provides better comparability and is more indicative of normalized operations. |
| 2 | Multiply percentage change by 4 to calculate sequential annualized change. Any sequential annualized change over 100 percent is labeled as “NM”. Those changes over 100 percent were not considered to be meaningful. |
Page 15
SunTrust Banks, Inc. and Subsidiaries
YEAR-TO-DATE COMPARISON - ACTUAL
APPENDIX B TO THE EARNINGS RELEASE, continued (UNAUDITED)
| | | | | | | | | | | | | | | |
| | | Twelve Months Ended | |
| | | December 31
2006 | | | December 31
2005 | | | Increase/(Decrease) | |
| | | | | Amount | | | %1 | |
STATEMENTS OF INCOME (Dollars in thousands) | | | | | | | | | | | | | | | |
NET INTEREST INCOME | | $ | 4,660,465 | | | $ | 4,578,966 | | | $ | 81,499 | | | 1.8 | % |
Provision for loan losses | | | 222,536 | | | | 176,886 | | | | 45,650 | | | 25.8 | |
| | | | | | | | | | | | | | | |
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | | | 4,437,929 | | | | 4,402,080 | | | | 35,849 | | | 0.8 | |
| | | | | | | | | | | | | | | |
NONINTEREST INCOME | | | | | | | | | | | | | | | |
Service charges on deposit accounts | | | 763,720 | | | | 772,519 | | | | (8,799 | ) | | (1.1 | ) |
Trust and investment management income | | | 686,865 | | | | 673,720 | | | | 13,145 | | | 2.0 | |
Retail investment services | | | 233,974 | | | | 213,274 | | | | 20,700 | | | 9.7 | |
Other charges and fees | | | 462,063 | | | | 456,481 | | | | 5,582 | | | 1.2 | |
Investment banking income | | | 230,553 | | | | 216,530 | | | | 14,023 | | | 6.5 | |
Trading account profits and commissions | | | 113,047 | | | | 145,120 | | | | (32,073 | ) | | (22.1 | ) |
Card fees | | | 247,647 | | | | 210,779 | | | | 36,868 | | | 17.5 | |
Mortgage production related income | | | 217,428 | | | | 144,885 | | | | 72,543 | | | 50.1 | |
Mortgage servicing related income | | | 121,738 | | | | 41,856 | | | | 79,882 | | | NM | |
Other noninterest income | | | 329,055 | | | | 263,653 | | | | 65,402 | | | 24.8 | |
| | | | | | | | | | | | | | | |
Noninterest income before net securities gains/(losses), net gain on sale of RCM assets and net gain on sale of Bond Trustee business2 | | | 3,406,090 | | | | 3,138,817 | | | | 267,273 | | | 8.5 | |
Net gain on sale of RCM assets | | | — | | | | 23,382 | | | | (23,382 | ) | | (100.0 | ) |
Net gain on sale of Bond Trustee business | | | 112,759 | | | | — | | | | 112,759 | | | 100.0 | |
| | | | | | | | | | | | | | | |
Noninterest income before net securities gains/(losses)2 | | | 3,518,849 | | | | 3,162,199 | | | | 356,650 | | | 11.3 | |
Net securities gains/(losses) | | | (50,477 | ) | | | (7,155 | ) | | | (43,322 | ) | | NM | |
| | | | | | | | | | | | | | | |
Total noninterest income | | | 3,468,372 | | | | 3,155,044 | | | | 313,328 | | | 9.9 | |
| | | | | | | | | | | | | | | |
NONINTEREST EXPENSE | | | | | | | | | | | | | | | |
Employee compensation and benefits | | | 2,725,453 | | | | 2,534,211 | | | | 191,242 | | | 7.5 | |
Net occupancy expense | | | 334,213 | | | | 312,070 | | | | 22,143 | | | 7.1 | |
Outside processing and software | | | 393,576 | | | | 357,387 | | | | 36,189 | | | 10.1 | |
Equipment expense | | | 197,038 | | | | 204,038 | | | | (7,000 | ) | | (3.4 | ) |
Marketing and customer development | | | 173,205 | | | | 156,711 | | | | 16,494 | | | 10.5 | |
Amortization of intangible assets | | | 103,226 | | | | 118,964 | | | | (15,738 | ) | | (13.2 | ) |
Other noninterest expense | | | 941,484 | | | | 908,706 | | | | 32,778 | | | 3.6 | |
| | | | | | | | | | | | | | | |
Noninterest expense before merger expense and loss on extinguishment of debt | | | 4,868,195 | | | | 4,592,087 | | | | 276,108 | | | 6.0 | |
| | | | | | | | | | | | | | | |
Merger expense | | | — | | | | 98,642 | | | | (98,642 | ) | | (100.0 | ) |
Loss on extinguishment of debt | | | 11,665 | | | | — | | | | 11,665 | | | 100.0 | |
| | | | | | | | | | | | | | | |
Total noninterest expense | | | 4,879,860 | | | | 4,690,729 | | | | 189,131 | | | 4.0 | |
| | | | | | | | | | | | | | | |
INCOME BEFORE INCOME TAXES | | | 3,026,441 | | | | 2,866,395 | | | | 160,046 | | | 5.6 | |
Provision for income taxes | | | 883,958 | | | | 879,156 | | | | 4,802 | | | 0.5 | |
| | | | | | | | | | | | | | | |
NET INCOME | | | 2,142,483 | | | | 1,987,239 | | | | 155,244 | | | 7.8 | |
Preferred dividends | | | 7,729 | | | | — | | | | 7,729 | | | 100.0 | |
| | | | | | | | | | | | | | | |
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS | | | 2,134,754 | | | | 1,987,239 | | | | 147,515 | | | 7.4 | |
Merger expense, net of tax | | | — | | | | 61,158 | | | | (61,158 | ) | | (100.0 | ) |
Net gain on sale of RCM assets, net of tax | | | — | | | | (14,497 | ) | | | (14,497 | ) | | (100.0 | ) |
Net securities (gains)/losses, net of tax | | | 31,296 | | | | 4,436 | | | | 26,860 | | | NM | |
Net gain on sale of Bond Trustee business, net of tax | | | (69,911 | ) | | | — | | | | 69,911 | | | (100.0 | ) |
Loss on extinguishment of debt, net of tax | | | 7,232 | | | | — | | | | (7,232 | ) | | 100.0 | |
| | | | | | | | | | | | | | | |
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS EXCLUDING MERGER EXPENSE, NET GAIN ON SALE OF RCM ASSETS, NET SECURITIES (GAINS)/LOSSES, NET GAIN ON SALE OF BOND TRUSTEE BUSINESS AND LOSS ON EXTINGUISHMENT OF DEBT2 | | $ | 2,103,371 | | | | 2,038,336 | | | $ | 65,035 | | | 3.2 | % |
| | | | | | | | | | | | | | | |
REVENUE (Dollars in thousands) | | | | | | | | | | | | | | | |
Net interest income | | $ | 4,660,465 | | | $ | 4,578,966 | | | $ | 81,499 | | | 1.8 | % |
Taxable-equivalent adjustment | | | 87,966 | | | | 75,492 | | | | 12,474 | | | 16.5 | |
| | | | | | | | | | | | | | | |
Net interest income - FTE | | | 4,748,431 | | | | 4,654,458 | | | | 93,973 | | | 2.0 | |
Noninterest income | | | 3,468,372 | | | | 3,155,044 | | | | 313,328 | | | 9.9 | |
| | | | | | | | | | | | | | | |
Total revenue - FTE | | | 8,216,803 | | | | 7,809,502 | | | | 407,301 | | | 5.2 | |
Net securities (gains)/losses | | | 50,477 | | | | 7,155 | | | | (43,322 | ) | | NM | |
| | | | | | | | | | | | | | | |
Total revenue - FTE excluding net securities (gains)/losses | | | 8,267,280 | | | | 7,816,657 | | | | 450,623 | | | 5.8 | |
Net gain on sale of RCM assets | | | — | | | | (23,382 | ) | | | 23,382 | | | 100.0 | |
Net gain on sale of Bond Trustee business | | | (112,759 | ) | | | — | | | | (112,759 | ) | | (100.0 | ) |
| | | | | | | | | | | | | | | |
Total revenue - FTE excluding net securities (gains)/losses, net gain on sale of RCM assets and net gain on sale of Bond Trustee business | | $ | 8,154,521 | | | $ | 7,793,275 | | | $ | 361,246 | | | 4.6 | % |
| | | | | | | | | | | | | | | |
SELECTED AVERAGE BALANCES (Dollars in millions) | | | | | | | | | | | | | | | |
| | | | |
Average loans | | | | | | | | | | | | | | | |
Commercial | | $ | 33,836 | | | $ | 32,852 | | | $ | 984 | | | 3.0 | % |
Real estate home equity lines | | | 13,565 | | | | 12,361 | | | | 1,204 | | | 9.7 | |
Real estate construction | | | 12,334 | | | | 9,622 | | | | 2,712 | | | 28.2 | |
Real estate 1-4 family | | | 33,524 | | | | 26,972 | | | | 6,552 | | | 24.3 | |
Real estate commercial | | | 12,804 | | | | 11,866 | | | | 938 | | | 7.9 | |
Business credit card | | | 315 | | | | 227 | | | | 88 | | | 38.6 | |
Consumer - direct | | | 4,461 | | | | 5,691 | | | | (1,230 | ) | | (21.6 | ) |
Consumer - indirect | | | 8,376 | | | | 8,833 | | | | (457 | ) | | (5.2 | ) |
Nonaccrual and restructured | | | 430 | | | | 318 | | | | 112 | | | 35.0 | |
| | | | | | | | | | | | | | | |
Total loans | | $ | 119,645 | | | $ | 108,742 | | | $ | 10,903 | | | 10.0 | % |
| | | | | | | | | | | | | | | |
Average deposits | | | | | | | | | | | | | | | |
Noninterest bearing deposits | | $ | 23,312 | | | $ | 24,315 | | | $ | (1,003 | ) | | (4.1 | )% |
NOW accounts | | | 17,214 | | | | 17,214 | | | | — | | | — | |
Money market accounts | | | 24,508 | | | | 25,589 | | | | (1,081 | ) | | (4.2 | ) |
Savings | | | 5,371 | | | | 6,320 | | | | (949 | ) | | (15.0 | ) |
Consumer and other time | | | 26,770 | | | | 19,917 | | | | 6,853 | | | 34.4 | |
| | | | | | | | | | | | | | | |
Total consumer and commercial deposits | | | 97,175 | | | | 93,355 | | | | 3,820 | | | 4.1 | |
Brokered and foreign deposits | | | 26,490 | | | | 17,052 | | | | 9,438 | | | 55.3 | |
| | | | | | | | | | | | | | | |
Total deposits | | $ | 123,665 | | | $ | 110,407 | | | $ | 13,258 | | | 12.0 | % |
| | | | | | | | | | | | | | | |
| 1 | Any change over 100 percent is labeled as “NM”. Those changes over 100 percent were not considered to be meaningful. |
| 2 | SunTrust presents selected financial data on a basis that excludes merger expense, which represents incremental costs to integrate the operations of NCF. The Company believes the exclusion of merger expense is more reflective of normalized operations. SunTrust also presents selected financial data excluding net securities gains/(losses). The Company believes the exclusion of net securities gains/(losses) is more indicative of the Company’s performance because it isolates income that is primarily customer relationship and customer transaction driven. SunTrust further excludes the net gain on the sale of RCM assets, the net gain on the sale of the Bond Trustee business, and the loss on extinguishment of debt because the Company believes the exclusion of these items provides better comparability and is more indicative of normalized operations. |
Page 16
PRELIMINARY DATA
Retail Line of Business
(Dollars in thousands) (Unaudited)
| | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | %
Change | | | Twelve Months Ended | | | %
Change | |
| | | December 31
2006 | | | December 31
2005 | | | | December 31
2006 | | | December 31
2005 | | |
Statement of Income | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net interest income | | $ | 585,342 | | | $ | 580,808 | | | 0.8 | % | | $ | 2,373,435 | | | $ | 2,195,449 | | | 8.1 | % |
FTE adjustment | | | 41 | | | | 25 | | | 64.0 | | | | 116 | | | | 83 | | | 39.8 | |
| | | | | | | | | | | | | | | | | | | | | | |
Net interest income - FTE | | | 585,383 | | | | 580,833 | | | 0.8 | | | | 2,373,551 | | | | 2,195,532 | | | 8.1 | |
Provision for loan losses1 | | | 40,944 | | | | 39,640 | | | 3.3 | | | | 105,985 | | | | 138,322 | | | (23.4 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
Net interest income after provision for loan losses - FTE | | | 544,439 | | | | 541,193 | | | 0.6 | | | | 2,267,566 | | | | 2,057,210 | | | 10.2 | |
| | | | | | | | | | | | | | | | | | | | | | |
Noninterest income before securities gains/(losses) | | | 254,277 | | | | 264,938 | | | (4.0 | ) | | | 1,050,190 | | | | 1,023,389 | | | 2.6 | |
Securities gains/(losses), net | | | (3 | ) | | | — | | | (100 | ) | | | (3 | ) | | | (5 | ) | | (40.0 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
Total noninterest income | | | 254,274 | | | | 264,938 | | | (4.0 | ) | | | 1,050,187 | | | | 1,023,384 | | | 2.6 | |
| | | | | | | | | | | | | | | | | | | | | | |
Noninterest expense before amortization of intangible assets | | | 516,044 | | | | 518,971 | | | (0.6 | ) | | | 2,049,744 | | | | 1,954,131 | | | 4.9 | |
Amortization of intangible assets | | | 19,538 | | | | 23,263 | | | (16.0 | ) | | | 84,168 | | | | 99,374 | | | (15.3 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
Total noninterest expense | | | 535,582 | | | | 542,234 | | | (1.2 | ) | | | 2,133,912 | | | | 2,053,505 | | | 3.9 | |
| | | | | | | | | | | | | | | | | | | | | | |
Income before provision for income taxes | | | 263,131 | | | | 263,897 | | | (0.3 | ) | | | 1,183,841 | | | | 1,027,089 | | | 15.3 | |
Provision for income taxes | | | 96,786 | | | | 96,644 | | | 0.1 | | | | 433,254 | | | | 381,744 | | | 13.5 | |
FTE adjustment | | | 41 | | | | 25 | | | 64.0 | | | | 116 | | | | 83 | | | 39.8 | |
| | | | | | | | | | | | | | | | | | | | | | |
Net income | | $ | 166,304 | | | $ | 167,228 | | | (0.6 | ) | | $ | 750,471 | | | $ | 645,262 | | | 16.3 | |
| | | | | | | | | | | | | | | | | | | | | | |
Total revenue - FTE | | $ | 839,657 | | | $ | 845,771 | | | (0.7 | ) | | $ | 3,423,738 | | | $ | 3,218,916 | | | 6.4 | |
| | | | | | |
Average Balance Sheet | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Total loans | | $ | 31,028,373 | | | $ | 31,270,647 | | | (0.8 | )% | | $ | 30,885,412 | | | $ | 30,411,605 | | | 1.6 | % |
Goodwill | | | 4,897,138 | | | | 4,872,777 | | | 0.5 | | | | 4,891,911 | | | | 4,883,103 | | | 0.2 | |
Other intangible assets excluding MSR’s | | | 249,811 | | | | 335,309 | | | (25.5 | ) | | | 280,829 | | | | 372,607 | | | (24.6 | ) |
Total assets | | | 37,516,125 | | | | 38,134,814 | | | (1.6 | ) | | | 37,795,826 | | | | 36,870,411 | | | 2.5 | |
Total deposits | | | 69,541,644 | | | | 66,443,254 | | | 4.7 | | | | 68,997,610 | | | | 65,238,773 | | | 5.8 | |
| | | | | | |
Shareholders’ equity is not allocated at this time2 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Performance Ratios | | | | | | | | | | | | | | | | | | | | | | |
Efficiency ratio | | | 63.79 | % | | | 64.11 | % | | | | | | 62.33 | % | | | 63.79 | % | | | |
Impact of excluding cost of intangible assets | | | (6.20 | ) | | | (6.67 | ) | | | | | | (6.15 | ) | | | (7.32 | ) | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Tangible efficiency ratio | | | 57.59 | % | | | 57.44 | % | | | | | | 56.18 | % | | | 56.47 | % | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| 1 | Provision for loan losses represents net charge-offs for the lines of business. |
| 2 | Shareholders’ equity is not allocated to the lines of business at this time; business line performance does not include the funding benefit that would result from holding shareholders’ equity at the line of business level. |
Page 17
PRELIMINARY DATA
Commercial Line of Business
(Dollars in thousands) (Unaudited)
| | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | %
Change | | | Twelve Months Ended | | | %
Change | |
| | | December 31
2006 | | | December 31
2005 | | | | December 31
2006 | | | December 31
2005 | | |
Statement of Income | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net interest income | | $ | 222,643 | | | $ | 223,265 | | | (0.3 | )% | | $ | 900,519 | | | $ | 858,909 | | | 4.8 | % |
FTE adjustment | | | 10,718 | | | | 9,998 | | | 7.2 | | | | 41,418 | | | | 38,201 | | | 8.4 | |
| | | | | | | | | | | | | | | | | | | | | | |
Net interest income - FTE | | | 233,361 | | | | 233,263 | | | — | | | | 941,937 | | | | 897,110 | | | 5.0 | |
Provision for loan losses1 | | | 2,493 | | | | 7,057 | | | (64.7 | ) | | | 9,701 | | | | 25,360 | | | (61.7 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
Net interest income after provision for loan losses - FTE | | | 230,868 | | | | 226,206 | | | 2.1 | | | | 932,236 | | | | 871,750 | | | 6.9 | |
| | | | | | | | | | | | | | | | | | | | | | |
Noninterest income before securities gains/(losses) | | | 76,435 | | | | 69,263 | | | 10.4 | | | | 279,059 | | | | 255,128 | | | 9.4 | |
Securities gains/(losses), net | | | — | | | | — | | | — | | | | — | | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | |
Total noninterest income | | | 76,435 | | | | 69,263 | | | 10.4 | | | | 279,059 | | | | 255,128 | | | 9.4 | |
| | | | | | | | | | | | | | | | | | | | | | |
Noninterest expense before amortization of intangible assets | | | 172,320 | | | | 171,192 | | | 0.7 | | | | 645,506 | | | | 626,977 | | | 3.0 | |
Amortization of intangible assets | | | — | | | | — | | | — | | | | — | | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | |
Total noninterest expense | | | 172,320 | | | | 171,192 | | | 0.7 | | | | 645,506 | | | | 626,977 | | | 3.0 | |
| | | | | | | | | | | | | | | | | | | | | | |
Income before provision for income taxes | | | 134,983 | | | | 124,277 | | | 8.6 | | | | 565,789 | | | | 499,901 | | | 13.2 | |
Provision for income taxes | | | 17,260 | | | | 15,541 | | | 11.1 | | | | 91,472 | | | | 80,824 | | | 13.2 | |
FTE adjustment | | | 10,718 | | | | 9,998 | | | 7.2 | | | | 41,418 | | | | 38,201 | | | 8.4 | |
| | | | | | | | | | | | | | | | | | | | | | |
Net income | | $ | 107,005 | | | $ | 98,738 | | | 8.4 | | | $ | 432,899 | | | $ | 380,876 | | | 13.7 | |
| | | | | | | | | | | | | | | | | | | | | | |
Total revenue - FTE | | $ | 309,796 | | | $ | 302,526 | | | 2.4 | | | $ | 1,220,996 | | | $ | 1,152,238 | | | 6.0 | |
| | | | | | |
Average Balance Sheet | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Total loans | | $ | 32,617,046 | | | $ | 30,988,353 | | | 5.3 | % | | $ | 32,438,562 | | | $ | 30,760,315 | | | 5.5 | % |
Goodwill | | | 1,263,946 | | | | 1,261,388 | | | 0.2 | | | | 1,263,760 | | | | 1,264,374 | | | — | |
Other intangible assets excluding MSR’s | | | — | | | | — | | | — | | | | — | | | | — | | | — | |
Total assets | | | 35,055,292 | | | | 33,297,908 | | | 5.3 | | | | 34,856,520 | | | | 32,992,104 | | | 5.7 | |
Total deposits | | | 14,230,531 | | | | 13,808,338 | | | 3.1 | | | | 13,787,486 | | | | 13,408,970 | | | 2.8 | |
| | | | | | |
Shareholders’ equity is not allocated at this time2 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Performance Ratios | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Efficiency ratio | | | 55.62 | % | | | 56.59 | % | | | | | | 52.87 | % | | | 54.41 | % | | | |
Impact of excluding cost of intangible assets | | | (2.38 | ) | | | (2.50 | ) | | | | | | (2.28 | ) | | | (2.61 | ) | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Tangible efficiency ratio | | | 53.24 | % | | | 54.09 | % | | | | | | 50.59 | % | | | 51.80 | % | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| 1 | Provision for loan losses represents net charge-offs for the lines of business. |
| 2 | Shareholders’ equity is not allocated to the lines of business at this time; business line performance does not include the funding benefit that would result from holding shareholders’ equity at the line of business level. |
Page 18
PRELIMINARY DATA
Corporate and Investment Banking Line of Business
(Dollars in thousands) (Unaudited)
| | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | %
Change | | | Twelve Months Ended | | | %
Change | |
| | | December 31
2006 | | | December 31
2005 | | | | December 31
2006 | | | December 31
2005 | | |
Statement of Income | | | | | | | | | | | | | | | | | | | | | | |
Net interest income | | $ | 44,813 | | | $ | 66,566 | | | (32.7 | )% | | $ | 202,909 | | | $ | 243,417 | | | (16.6 | )% |
FTE adjustment | | | 9,123 | | | | 6,215 | | | 46.8 | | | | 30,972 | | | | 22,005 | | | 40.7 | |
| | | | | | | | | | | | | | | | | | | | | | |
Net interest income - FTE | | | 53,936 | | | | 72,781 | | | (25.9 | ) | | | 233,881 | | | | 265,422 | | | (11.9 | ) |
Provision for loan losses1 | | | 40,179 | | | | (2,447 | ) | | NM | | | | 45,133 | | | | 14,808 | | | NM | |
| | | | | | | | | | | | | | | | | | | | | | |
Net interest income after provision for loan losses - FTE | | | 13,757 | | | | 75,228 | | | (81.7 | ) | | | 188,748 | | | | 250,614 | | | (24.7 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
Noninterest income before securities gains/(losses) | | | 207,012 | | | | 138,308 | | | 49.7 | | | | 670,396 | | | | 637,982 | | | 5.1 | |
Securities gains/(losses), net | | | — | | | | 1,298 | | | (100.0 | ) | | | (360 | ) | | | 1,543 | | | NM | |
| | | | | | | | | | | | | | | | | | | | | | |
Total noninterest income | | | 207,012 | | | | 139,606 | | | 48.3 | | | | 670,036 | | | | 639,525 | | | 4.8 | |
| | | | | | | | | | | | | | | | | | | | | | |
Noninterest expense before amortization of intangible assets | | | 118,096 | | | | 109,054 | | | 8.3 | | | | 456,976 | | | | 453,551 | | | 0.8 | |
Amortization of intangible assets | | | 122 | | | | 122 | | | — | | | | 488 | | | | 521 | | | (6.3 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
Total noninterest expense | | | 118,218 | | | | 109,176 | | | 8.3 | | | | 457,464 | | | | 454,072 | | | 0.7 | |
| | | | | | | | | | | | | | | | | | | | | | |
Income before provision for income taxes | | | 102,551 | | | | 105,658 | | | (2.9 | ) | | | 401,320 | | | | 436,067 | | | (8.0 | ) |
Provision for income taxes | | | 24,318 | | | | 33,957 | | | (28.4 | ) | | | 114,188 | | | | 143,220 | | | (20.3 | ) |
FTE adjustment | | | 9,123 | | | | 6,215 | | | 46.8 | | | | 30,972 | | | | 22,005 | | | 40.7 | |
| | | | | | | | | | | | | | | | | | | | | | |
Net income | | $ | 69,110 | | | $ | 65,486 | | | 5.5 | | | $ | 256,160 | | | $ | 270,842 | | | (5.4 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
Total revenue - FTE | | $ | 260,948 | | | $ | 212,387 | | | 22.9 | | | $ | 903,917 | | | $ | 904,947 | | | (0.1 | ) |
| | | | | | |
Measures excluding impact of RCM divestiture4 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net interest income - FTE | | | | | | | | | | | | | $ | 233,881 | | | $ | 265,422 | | | (11.9 | )% |
RCM divestiture | | | | | | | | | | | | | | — | | | | (1,851 | ) | | (100.0 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
Net interest income - FTE excluding RCM divestiture | | | | | | | | | | | | | $ | 233,881 | | | $ | 263,571 | | | (11.3 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
Total noninterest income | | | | | | | | | | | | | $ | 670,036 | | | $ | 639,525 | | | 4.8 | |
RCM divestiture | | | | | | | | | | | | | | — | | | | (30,215 | ) | | (100.0 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
Total noninterest income excluding RCM divestiture | | | | | | | | | | | | | $ | 670,036 | | | $ | 609,310 | | | 10.0 | |
| | | | | | | | | | | | | | | | | | | | | | |
Total revenue - FTE | | | | | | | | | | | | | $ | 903,917 | | | $ | 904,947 | | | (0.1 | ) |
RCM divestiture | | | | | | | | | | | | | | — | | | | (32,066 | ) | | (100.0 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
Total revenue - FTE excluding RCM divestiture | | | | | | | | | | | | | $ | 903,917 | | | $ | 872,881 | | | 3.6 | |
| | | | | | | | | | | | | | | | | | | | | | |
Total noninterest expense | | | | | | | | | | | | | | 457,464 | | | | 454,072 | | | 0.7 | |
RCM divestiture | | | | | | | | | | | | | | — | | | | (5,366 | ) | | (100.0 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
Total noninterest expense excluding RCM divestiture | | | | | | | | | | | | | $ | 457,464 | | | $ | 448,706 | | | 2.0 | |
| | | | | | | | | | | | | | | | | | | | | | |
Net income | | | | | | | | | | | | | $ | 256,160 | | | $ | 270,842 | | | (5.4 | ) |
RCM divestiture | | | | | | | | | | | | | | — | | | | (16,567 | ) | | (100.0 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
Net income excluding RCM divestiture | | | | | | | | | | | | | $ | 256,160 | | | $ | 254,275 | | | 0.7 | |
| | | | | | | | | | | | | | | | | | | | | | |
Average Balance Sheet | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Total loans | | $ | 16,630,660 | | | $ | 16,339,727 | | | 1.8 | % | | $ | 16,506,528 | | | $ | 15,286,019 | | | 8.0 | % |
Goodwill | | | 147,552 | | | | 147,485 | | | — | | | | 147,571 | | | | 147,600 | | | — | |
Other intangible assets excluding MSR’s | | | 1,402 | | | | 2,941 | | | (52.3 | ) | | | 1,840 | | | | 3,270 | | | (43.7 | ) |
Total assets | | | 24,485,580 | | | | 23,195,485 | | | 5.6 | | | | 23,967,653 | | | | 21,259,491 | | | 12.7 | |
Total deposits | | | 2,868,987 | | | | 3,614,194 | | | (20.6 | ) | | | 3,116,800 | | | | 3,289,047 | | | (5.2 | ) |
| | | | | | |
Shareholders’ equity is not allocated at this time2 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Performance Ratios | | | | | | | | | | | | | | | | | | | | | | |
Efficiency ratio | | | 45.30 | % | | | 51.40 | % | | | | | | 50.61 | % | | | 50.18 | % | | | |
Impact of excluding cost of intangible assets | | | (0.32 | ) | | | (0.45 | ) | | | | | | (0.41 | ) | | | (0.44 | ) | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Tangible efficiency ratio | | | 44.98 | % | | | 50.95 | % | | | | | | 50.20 | % | | | 49.74 | % | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| 1 | Provision for loan losses represents net charge-offs for the lines of business. |
| 2 | Shareholders’ equity is not allocated to the lines of business at this time; business line performance does not include the funding benefit that would result from holding shareholders’ equity at the line of business level. |
| 3 | “NM” - Not meaningful. Those changes over 100 percent were not considered to be meaningful. |
| 4 | SunTrust presents net interest income - FTE, total revenue - FTE, and net income excluding the RCM divestiture. The Company believes these measures without the impact of the RCM divestiture are more indicative of normalized operations. |
Page 19
PRELIMINARY DATA
Mortgage Line of Business
(Dollars in thousands) (Unaudited)
| | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | %
Change | | | Twelve Months Ended | | | %
Change | |
| | | December 31
2006 | | | December 31
2005 | | | | December 31
2006 | | | December 31
2005 | | |
Statement of Income | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net interest income | | $ | 149,774 | | | $ | 151,727 | | | (1.3 | )% | | $ | 603,393 | | | $ | 547,671 | | | 10.2 | % |
FTE adjustment | | | — | | | | — | | | — | | | | — | | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | |
Net interest income - FTE | | | 149,774 | | | | 151,727 | | | (1.3 | ) | | | 603,393 | | | | 547,671 | | | 10.2 | |
Provision for loan losses1 | | | 3,013 | | | | (1,196 | ) | | NM | | | | 8,748 | | | | 5,614 | | | 55.8 | |
| | | | | | | | | | | | | | | | | | | | | | |
Net interest income after provision for loan losses - FTE | | | 146,761 | | | | 152,923 | | | (4.0 | ) | | | 594,645 | | | | 542,057 | | | 9.7 | |
| | | | | | | | | | | | | | | | | | | | | | |
Noninterest income before securities gains/(losses) | | | 56,220 | | | | 60,046 | | | (6.4 | ) | | | 375,057 | | | | 238,224 | | | 57.4 | |
Securities gains/(losses), net | | | 4,367 | | | | — | | | 100.0 | | | | 4,367 | | | | 1,076 | | | NM | |
| | | | | | | | | | | | | | | | | | | | | | |
Total noninterest income | | | 60,587 | | | | 60,046 | | | 0.9 | | | | 379,424 | | | | 239,300 | | | 58.6 | |
| | | | | | | | | | | | | | | | | | | | | | |
Noninterest expense before amortization of intangible assets | | | 149,604 | | | | 147,383 | | | 1.5 | | | | 594,641 | | | | 518,653 | | | 14.7 | |
Amortization of intangible assets | | | 763 | | | | 867 | | | (12.0 | ) | | | 3,053 | | | | 3,467 | | | (11.9 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
Total noninterest expense | | | 150,367 | | | | 148,250 | | | 1.4 | | | | 597,694 | | | | 522,120 | | | 14.5 | |
| | | | | | | | | | | | | | | | | | | | | | |
Income before provision for income taxes | | | 56,981 | | | | 64,719 | | | (12.0 | ) | | | 376,375 | | | | 259,237 | | | 45.2 | |
Provision for income taxes | | | 16,161 | | | | 21,440 | | | (24.6 | ) | | | 127,983 | | | | 87,378 | | | 46.5 | |
FTE adjustment | | | — | | | | — | | | — | | | | — | | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | |
Net income | | $ | 40,820 | | | $ | 43,279 | | | (5.7 | ) | | $ | 248,392 | | | $ | 171,859 | | | 44.5 | |
| | | | | | | | | | | | | | | | | | | | | | |
Total revenue - FTE | | $ | 210,361 | | | $ | 211,773 | | | (0.7 | ) | | $ | 982,817 | | | $ | 786,971 | | | 24.9 | |
| | | | | | |
Average Balance Sheet | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Total loans | | $ | 32,330,762 | | | $ | 26,920,582 | | | 20.1 | % | | $ | 31,232,994 | | | $ | 24,205,689 | | | 29.0 | % |
Goodwill | | | 275,557 | | | | 248,732 | | | 10.8 | | | | 269,374 | | | | 247,942 | | | 8.6 | |
Other intangible assets excluding MSR’s | | | 5,034 | | | | 8,137 | | | (38.1 | ) | | | 6,173 | | | | 9,431 | | | (34.5 | ) |
Total assets | | | 44,536,300 | | | | 38,432,067 | | | 15.9 | | | | 42,014,951 | | | | 33,031,791 | | | 27.2 | |
Total deposits | | | 1,949,280 | | | | 1,776,076 | | | 9.8 | | | | 1,810,720 | | | | 1,653,931 | | | 9.5 | |
| | | | | | |
Shareholders’ equity is not allocated at this time2 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Performance Ratios | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Efficiency ratio | | | 71.48 | % | | | 70.00 | % | | | | | | 60.81 | % | | | 66.35 | % | | | |
Impact of excluding cost of intangible assets | | | (1.39 | ) | | | (1.33 | ) | | | | | | (1.03 | ) | | | (1.42 | ) | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Tangible efficiency ratio | | | 70.09 | % | | | 68.67 | % | | | | | | 59.78 | % | | | 64.93 | % | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Other Information | | | | | | | | | | | | | | | | | | | | | | |
Production Data | | | | | | | | | | | | | | | | | | | | | | |
Channel mix | | | | | | | | | | | | | | | | | | | | | | |
Retail | | $ | 6,101,389 | | | $ | 5,571,462 | | | 9.5 | % | | $ | 23,894,336 | | | $ | 21,948,190 | | | 8.9 | % |
Wholesale | | | 5,629,254 | | | | 4,268,199 | | | 31.9 | | | | 19,455,346 | | | | 14,024,741 | | | 38.7 | |
Correspondent | | | 3,327,698 | | | | 3,267,244 | | | 1.9 | | | | 12,027,244 | | | | 11,680,775 | | | 3.0 | |
| | | | | | | | | | | | | | | | | | | | | | |
Total production | | $ | 15,058,341 | | | $ | 13,106,905 | | | 14.9 | | | $ | 55,376,926 | | | $ | 47,653,706 | | | 16.2 | |
| | | | | | | | | | | | | | | | | | | | | | |
Channel mix - percent | | | | | | | | | | | | | | | | | | | | | | |
Retail | | | 41 | % | | | 42 | % | | | | | | 43 | % | | | 46 | % | | | |
Wholesale | | | 37 | | | | 33 | | | | | | | 35 | | | | 29 | | | | |
Correspondent | | | 22 | | | | 25 | | | | | | | 22 | | | | 25 | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Total production | | | 100 | % | | | 100 | % | | | | | | 100 | % | | | 100 | % | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Purchase and refinance mix | | | | | | | | | | | | | | | | | | | | | | |
Refinance | | $ | 7,023,225 | | | $ | 5,355,002 | | | 31.2 | | | $ | 21,185,623 | | | $ | 18,933,552 | | | 11.9 | |
Purchase | | | 8,035,116 | | | | 7,751,903 | | | 3.7 | | | | 34,191,303 | | | | 28,720,154 | | | 19.0 | |
| | | | | | | | | | | | | | | | | | | | | | |
Total production | | $ | 15,058,341 | | | $ | 13,106,905 | | | 14.9 | | | $ | 55,376,926 | | | $ | 47,653,706 | | | 16.2 | |
| | | | | | | | | | | | | | | | | | | | | | |
Purchase and refinance mix - percent | | | | | | | | | | | | | | | | | | | | | | |
Refinance | | | 47 | % | | | 41 | % | | | | | | 38 | % | | | 40 | % | | | |
Purchase | | | 53 | | | | 59 | | | | | | | 62 | | | | 60 | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Total production | | | 100 | % | | | 100 | % | | | | | | 100 | % | | | 100 | % | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Applications | | $ | 23,049,540 | | | $ | 16,313,387 | | | 41.3 | | | $ | 86,958,077 | | | $ | 70,604,085 | | | 23.2 | |
| | | | | | |
Mortgage Servicing Data (End of Period) | | | | | | | | | | | | | | | | | | | | | | |
Total loans serviced | | $ | 129,976,337 | | | $ | 105,560,533 | | | 23.1 | % | | | | | | | | | | | |
Total loans serviced for others | | | 91,543,434 | | | | 68,852,189 | | | 33.0 | | | | | | | | | | | | |
Net carrying value of MSR’s | | | 810,509 | | | | 657,472 | | | 23.3 | | | | | | | | | | | | |
Ratio of net carrying value of MSR’s to total loans serviced for others | | | 0.885 | % | | | 0.955 | % | | | | | | | | | | | | | | |
| 1 | Provision for loan losses represents net charge-offs for the lines of business. |
| 2 | Shareholders’ equity is not allocated to the lines of business at this time; business line performance does not include the funding benefit that would result from holding shareholders’ equity at the line of business level. |
| 3 | “NM” - Not meaningful. Those changes over 100 percent were not considered to be meaningful. |
Page 20
PRELIMINARY DATA
Wealth and Investment Management Line of Business
(Dollars in thousands) (Unaudited)
| | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | %
Change | | | Twelve Months Ended | | | %
Change | |
| | | December 31
2006 | | | December 31
2005 | | | | December 31
2006 | | | December 31
2005 | | |
Statement of Income | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net interest income | | $ | 90,750 | | | $ | 95,061 | | | (4.5 | )% | | $ | 367,088 | | | $ | 342,820 | | | 7.1 | % |
FTE adjustment | | | 18 | | | | 16 | | | 12.5 | | | | 71 | | | | 64 | | | 10.9 | |
| | | | | | | | | | | | | | | | | | | | | | |
Net interest income - FTE | | | 90,768 | | | | 95,077 | | | (4.5 | ) | | | 367,159 | | | | 342,884 | | | 7.1 | |
Provision for loan losses1 | | | 2,017 | | | | 5,841 | | | (65.5 | ) | | | 3,696 | | | | 8,880 | | | (58.4 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
Net interest income after provision for loan losses - FTE | | | 88,751 | | | | 89,236 | | | (0.5 | ) | | | 363,463 | | | | 334,004 | | | 8.8 | |
| | | | | | | | | | | | | | | | | | | | | | |
Noninterest income before securities gains/(losses) | | | 252,933 | | | | 240,329 | | | 5.2 | | | | 1,098,925 | | | | 944,178 | | | 16.4 | |
Securities gains/(losses), net | | | (16 | ) | | | — | | | (100.0 | ) | | | (70 | ) | | | (191 | ) | | (63.4 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
Total noninterest income | | | 252,917 | | | | 240,329 | | | 5.2 | | | | 1,098,855 | | | | 943,987 | | | 16.4 | |
| | | | | | | | | | | | | | | | | | | | | | |
Noninterest expense before amortization of intangible assets | | | 257,226 | | | | 255,159 | | | 0.8 | | | | 1,022,234 | | | | 962,039 | | | 6.3 | |
Amortization of intangible assets | | | 3,662 | | | | 3,719 | | | (1.5 | ) | | | 14,630 | | | | 14,709 | | | (0.5 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
Total noninterest expense | | | 260,888 | | | | 258,878 | | | 0.8 | | | | 1,036,864 | | | | 976,748 | | | 6.2 | |
| | | | | | | | | | | | | | | | | | | | | | |
Income before provision for income taxes | | | 80,780 | | | | 70,687 | | | 14.3 | | | | 425,454 | | | | 301,243 | | | 41.2 | |
Provision for income taxes | | | 29,657 | | | | 28,169 | | | 5.3 | | | | 158,056 | | | | 113,976 | | | 38.7 | |
FTE adjustment | | | 18 | | | | 16 | | | 12.5 | | | | 71 | | | | 64 | | | 10.9 | |
| | | | | | | | | | | | | | | | | | | | | | |
Net income | | $ | 51,105 | | | $ | 42,502 | | | 20.2 | | | $ | 267,327 | | | $ | 187,203 | | | 42.8 | |
| | | | | | | | | | | | | | | | | | | | | | |
Total revenue - FTE | | $ | 343,685 | | | $ | 335,406 | | | 2.5 | | | $ | 1,466,014 | | | $ | 1,286,871 | | | 13.9 | |
| | | | | | |
Measures excluding net gain on sale of Bond Trustee business3 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Total noninterest income | | | | | | | | | | | | | $ | 1,098,855 | | | $ | 943,987 | | | 16.4 | % |
Net gain on sale of Bond Trustee business | | | | | | | | | | | | | | (112,759 | ) | | | — | | | (100.0 | ) |
Total noninterest income excluding net gain on sale of Bond | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Trustee business | | | | | | | | | | | | | $ | 986,096 | | | $ | 943,987 | | | 4.5 | |
| | | | | | | | | | | | | | | | | | | | | | |
Total revenue - FTE | | | | | | | | | | | | | $ | 1,466,014 | | | $ | 1,286,871 | | | 13.9 | |
Net gain on sale of Bond Trustee business | | | | | | | | | | | | | | (112,759 | ) | | | — | | | (100.0 | ) |
Total revenue - FTE excluding net gain on sale of Bond | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Trustee business | | | | | | | | | | | | | $ | 1,353,255 | | | $ | 1,286,871 | | | 5.2 | |
| | | | | | | | | | | | | | | | | | | | | | |
Net income | | | | | | | | | | | | | $ | 267,327 | | | $ | 187,203 | | | 42.8 | |
Net gain on sale of Bond Trustee business, net of tax | | | | | | | | | | | | | | (69,911 | ) | | | — | | | (100.0 | ) |
Net income excluding net gain on sale of Bond | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Trustee business | | | | | | | | | | | | | $ | 197,416 | | | $ | 187,203 | | | 5.5 | |
| | | | | | | | | | | | | | | | | | | | | | |
Average Balance Sheet | | | | | | | | | | | | | | | | | | | | | | |
Total loans | | $ | 8,200,195 | | | $ | 8,079,679 | | | 1.5 | % | | $ | 8,135,370 | | | $ | 7,809,599 | | | 4.2 | % |
Goodwill | | | 307,535 | | | | 303,231 | | | 1.4 | | | | 304,497 | | | | 302,211 | | | 0.8 | |
Other intangible assets excluding MSR’s | | | 120,649 | | | | 131,600 | | | (8.3 | ) | | | 122,729 | | | | 134,881 | | | (9.0 | ) |
Total assets | | | 9,037,013 | | | | 8,851,212 | | | 2.1 | | | | 8,936,418 | | | | 8,565,773 | | | 4.3 | |
Total deposits | | | 10,047,149 | | | | 9,479,993 | | | 6.0 | | | | 9,477,307 | | | | 9,528,375 | | | (0.5 | ) |
Shareholders’ equity is not allocated at this time2 | | | | | | | | | | | | | | | | | | | | | | |
Performance Ratios | | | | | | | | | | | | | | | | | | | | | | |
Efficiency ratio | | | 75.91 | % | | | 77.18 | % | | | | | | 70.73 | % | | | 75.90 | % | | | |
Impact of excluding cost of intangible assets | | | (2.07 | ) | | | (2.18 | ) | | | | | | (1.87 | ) | | | (2.29 | ) | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Tangible efficiency ratio | | | 73.84 | % | | | 75.00 | % | | | | | | 68.86 | % | | | 73.61 | % | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Other Information (End of Period) | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Assets under administration | | | | | | | | | | | | | | | | | | | | | | |
Managed (discretionary) assets | | $ | 141,137,117 | | | $ | 135,309,399 | | | 4.3 | | | | | | | | | | | | |
Non-managed assets | | | 57,730,001 | | | | 45,546,612 | | | 26.7 | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Total assets under administration | | | 198,867,118 | | | | 180,856,011 | | | 10.0 | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Brokerage assets | | | 38,733,632 | | | | 33,405,436 | | | 16.0 | | | | | | | | | | | | |
Corporate trust assets | | | 7,819,848 | | | | 28,280,494 | | | (72.3 | ) | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Total assets under advisement | | $ | 245,420,598 | | | $ | 242,541,941 | | | 1.2 | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| 1 | Provision for loan losses represents net charge-offs for the lines of business. |
| 2 | Shareholders’ equity is not allocated to the lines of business at this time; business line performance does not include the funding benefit that would result from holding shareholders’ equity at the line of business level. |
| 3 | SunTrust presents total noninterest income, total revenue - FTE, and net income excluding the net gain on sale of the Bond Trustee business. The Company believes total noninterest income, total revenue - FTE, and net income without the sale of the Bond Trustee business is more indicative of normalized operations. |
Page 21
PRELIMINARY DATA
Corporate Other and Treasury
(Dollars in thousands) (Unaudited)
| | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | %
Change | | | Twelve Months Ended | | | %
Change | |
| | | December 31
2006 | | | December 31
2005 | | | | December 31
2006 | | | December 31
2005 | | |
Statement of Income | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net interest income | | $ | 67,967 | | | $ | 69,609 | | | (2.4 | )% | | $ | 213,121 | | | $ | 390,700 | | | (45.5 | )% |
FTE adjustment | | | 3,977 | | | | 3,771 | | | 5.5 | | | | 15,389 | | | | 15,139 | | | 1.7 | |
| | | | | | | | | | | | | | | | | | | | | | |
Net interest income - FTE | | | 71,944 | | | | 73,380 | | | (2.0 | ) | | | 228,510 | | | | 405,839 | | | (43.7 | ) |
Provision for loan losses1 | | | (12,840 | ) | | | (769 | ) | | NM | | | | 49,273 | | | | (16,098 | ) | | NM | |
| | | | | | | | | | | | | | | | | | | | | | |
Net interest income after provision for loan losses - FTE | | | 84,784 | | | | 74,149 | | | 14.3 | | | | 179,237 | | | | 421,937 | | | (57.5 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
Noninterest income before securities gains/(losses) | | | 312 | | | | 24,439 | | | (98.7 | ) | | | 45,222 | | | | 63,298 | | | (28.6 | ) |
Securities gains/(losses), net | | | 31,029 | | | | (698 | ) | | NM | | | | (54,411 | ) | | | (9,578 | ) | | NM | |
| | | | | | | | | | | | | | | | | | | | | | |
Total noninterest income | | | 31,341 | | | | 23,741 | | | 32.0 | | | | (9,189 | ) | | | 53,720 | | | NM | |
| | | | | | | | | | | | | | | | | | | | | | |
Noninterest expense before amortization of intangible assets | | | (3,817 | ) | | | (23,024 | ) | | 83.4 | | | | 7,533 | | | | 56,414 | | | (86.6 | ) |
Amortization of intangible assets | | | 219 | | | | 221 | | | (0.9 | ) | | | 887 | | | | 893 | | | (0.7 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
Total noninterest expense | | | (3,598 | ) | | | (22,803 | ) | | 84.2 | | | | 8,420 | | | | 57,307 | | | (85.3 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
Income before provision for income taxes | | | 119,723 | | | | 120,693 | | | (0.8 | ) | | | 161,628 | | | | 418,350 | | | (61.4 | ) |
Provision (benefits) for income taxes | | | 18,724 | | | | 15,684 | | | 19.4 | | | | (40,995 | ) | | | 72,014 | | | NM | |
FTE adjustment | | | 3,977 | | | | 3,771 | | | 5.5 | | | | 15,389 | | | | 15,139 | | | 1.7 | |
| | | | | | | | | | | | | | | | | | | | | | |
Net income | | $ | 97,022 | | | $ | 101,238 | | | (4.2 | ) | | $ | 187,234 | | | $ | 331,197 | | | (43.5 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
Total revenue - FTE | | | 103,285 | | | | 97,121 | | | 6.3 | | | | 219,321 | | | | 459,559 | | | (52.3 | ) |
| | | | | | |
Measures excluding securities gains/(losses), net3 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Total revenue - FTE | | $ | 103,285 | | | $ | 97,121 | | | 6.3 | % | | $ | 219,321 | | | $ | 459,559 | | | (52.3 | )% |
Securities (gains)/losses, net | | | (31,029 | ) | | | 698 | | | NM | | | | 54,411 | | | | 9,578 | | | NM | |
| | | | | | | | | | | | | | | | | | | | | | |
Total revenue - FTE excluding net securities (gains)/losses | | $ | 72,256 | | | $ | 97,819 | | | (26.1 | ) | | $ | 273,732 | | | $ | 469,137 | | | (41.7 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
Net income | | $ | 97,022 | | | $ | 101,238 | | | (4.2 | ) | | $ | 187,234 | | | $ | 331,197 | | | (43.5 | ) |
Securities (gains)/losses, net of tax | | | (19,238 | ) | | | 433 | | | NM | | | | 33,735 | | | | 5,938 | | | NM | |
| | | | | | | | | | | | | | | | | | | | | | |
Net income excluding net securities (gains)/losses | | $ | 77,784 | | | $ | 101,671 | | | (23.5 | ) | | $ | 220,969 | | | $ | 337,135 | | | (34.5 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
Average Balance Sheet | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Total loans | | $ | 556,801 | | | $ | 228,567 | | | NM | % | | $ | 446,297 | | | $ | 268,760 | | | 66.1 | % |
Securities available for sale | | | 22,971,501 | | | | 24,739,289 | | | (7.1 | ) | | | 24,253,685 | | | | 26,165,733 | | | (7.3 | ) |
Goodwill | | | 4,771 | | | | 7,481 | | | (36.2 | ) | | | 6,897 | | | | 8,731 | | | (21.0 | ) |
Other intangible assets excluding MSR’s | | | 5,402 | | | | 6,290 | | | (14.1 | ) | | | 5,733 | | | | 6,624 | | | (13.4 | ) |
Total assets | | | 31,712,964 | | | | 33,857,654 | | | (6.3 | ) | | | 32,743,778 | | | | 35,369,201 | | | (7.4 | ) |
| | | | | | |
Total deposits (mainly brokered and foreign) | | | 26,039,508 | | | | 21,145,207 | | | 23.1 | | | | 26,475,571 | | | | 17,287,490 | | | 53.1 | |
| | | | | | |
Other Information | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Duration of investment portfolio | | | 3.5 | % | | | 2.8 | % | | | | | | | | | | | | | | |
| | | | | | |
Net interest income interest rate sensitivity: | | | | | | | | | | | | | | | | | | | | | | |
% Change in net interest income under: | | | | | | | | | | | | | | | | | | | | | | |
Gradual 100 bp increase in rates over next 12 months | | | (0.4 | ) % | | | (0.1 | )% | | | | | | | | | | | | | | |
Gradual 100 bp decrease in rates over next 12 months | | | 0.9 | % | | | 0.7 | % | | | | | | | | | | | | | | |
| 1 | Provision for loan losses represents difference between net charge-offs for the lines of business and consolidated provision for loan losses |
| 2 | “NM” - Not meaningful. Those changes over 100 percent were not considered to be meaningful. |
| 3 | SunTrust presents total revenue and net income excluding net realized securities gains/losses. The Company believes total revenue and net income without the securities gains/losses is more indicative of the Company’s performance because it isolates income that is primarily customer relationship and customer transaction driven. |
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PRELIMINARY DATA
Consolidated - Segment Totals
(Dollars in thousands) (Unaudited)
| | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | %
Change | | | Twelve Months Ended | | | %
Change | |
| | | December 31
2006 | | | December 31
2005 | | | | December 31
2006 | | | December 31
2005 | | |
Statement of Income | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net interest income | | $ | 1,161,289 | | | $ | 1,187,036 | | | (2.2 | )% | | $ | 4,660,465 | | | $ | 4,578,966 | | | 1.8 | % |
FTE adjustment | | | 23,877 | | | | 20,025 | | | 19.2 | | | | 87,966 | | | | 75,492 | | | 16.5 | |
| | | | | | | | | | | | | | | | | | | | | | |
Net interest income - FTE | | | 1,185,166 | | | | 1,207,061 | | | (1.8 | ) | | | 4,748,431 | | | | 4,654,458 | | | 2.0 | |
Provision for loan losses | | | 75,806 | | | | 48,126 | | | 57.5 | | | | 222,536 | | | | 176,886 | | | 25.8 | |
| | | | | | | | | | | | | | | | | | | | | | |
Net interest income after provision for loan losses - FTE | | | 1,109,360 | | | | 1,158,935 | | | (4.3 | ) | | | 4,525,895 | | | | 4,477,572 | | | 1.1 | |
| | | | | | | | | | | | | | | | | | | | | | |
Noninterest income before securities gains/(losses) | | | 847,189 | | | | 797,323 | | | 6.3 | | | | 3,518,849 | | | | 3,162,199 | | | 11.3 | |
Securities gains/(losses), net | | | 35,377 | | | | 600 | | | NM | | | | (50,477 | ) | | | (7,155 | ) | | NM | |
| | | | | | | | | | | | | | | | | | | | | | |
Total noninterest income | | | 882,566 | | | | 797,923 | | | 10.6 | | | | 3,468,372 | | | | 3,155,044 | | | 9.9 | |
| | | | | | | | | | | | | | | | | | | | | | |
Noninterest expense before amortization of intangible assets | | | 1,209,473 | | | | 1,178,735 | | | 2.6 | | | | 4,776,634 | | | | 4,571,765 | | | 4.5 | |
Amortization of intangible assets | | | 24,304 | | | | 28,192 | | | (13.8 | ) | | | 103,226 | | | | 118,964 | | | (13.2 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
Total noninterest expense | | | 1,233,777 | | | | 1,206,927 | | | 2.2 | | | | 4,879,860 | | | | 4,690,729 | | | 4.0 | |
| | | | | | | | | | | | | | | | | | | | | | |
Income before provision for income taxes | | | 758,149 | | | | 749,931 | | | 1.1 | | | | 3,114,407 | | | | 2,941,887 | | | 5.9 | |
Provision for income taxes | | | 202,906 | | | | 211,435 | | | (4.0 | ) | | | 883,958 | | | | 879,156 | | | 0.5 | |
FTE adjustment | | | 23,877 | | | | 20,025 | | | 19.2 | | | | 87,966 | | | | 75,492 | | | 16.5 | |
| | | | | | | | | | | | | | | | | | | | | | |
Net income | | $ | 531,366 | | | $ | 518,471 | | | 2.5 | | | $ | 2,142,483 | | | | 1,987,239 | | | 7.8 | |
| | | | | | | | | | | | | | | | | | | | | | |
Total revenue - FTE | | $ | 2,067,732 | | | $ | 2,004,984 | | | 3.1 | | | $ | 8,216,803 | | | $ | 7,809,502 | | | 5.2 | |
| | | | | | |
Average Balance Sheet | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Total loans | | $ | 121,363,837 | | | $ | 113,827,555 | | | 6.6 | % | | $ | 119,645,163 | | | $ | 108,741,987 | | | 10.0 | % |
Goodwill | | | 6,896,499 | | | | 6,841,094 | | | 0.8 | | | | 6,884,010 | | | | 6,853,961 | | | 0.4 | |
Other intangible assets excluding MSR’s | | | 382,298 | | | | 484,277 | | | (21.1 | ) | | | 417,304 | | | | 526,813 | | | (20.8 | ) |
Total assets | | | 182,343,274 | | | | 175,769,140 | | | 3.7 | | | | 180,315,146 | | | | 168,088,771 | | | 7.3 | |
Total deposits | | | 124,677,099 | | | | 116,267,062 | | | 7.2 | | | | 123,665,494 | | | | 110,406,586 | | | 12.0 | |
| | | | | | |
Performance Ratios | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Efficiency ratio | | | 59.67 | % | | | 60.20 | % | | | | | | 59.39 | % | | | 60.06 | % | | | |
Impact of excluding cost of intangible assets | | | (1.18 | ) | | | (1.41 | ) | | | | | | (1.26 | ) | | | (1.52 | ) | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Tangible efficiency ratio | | | 58.49 | % | | | 58.79 | % | | | | | | 58.13 | % | | | 58.54 | % | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| 1 | “NM” - Not meaningful. Those changes over 100 percent were not considered to be meaningful. |
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