FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarterly Period Ended March 31, 1998
Commission File Number 1-8918
SUNTRUST BANKS, INC.
(Exact name of registrant as specified in its charter)
Georgia 58-1575035
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
303 Peachtree Street, N.E., Atlanta, Georgia 30308
(Address of principal executive offices) (Zip Code)
(404) 588-7711
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes __X__ No _____
At April 30, 1998, 211,107,402 shares of the Registrant's Common Stock,
$1.00 par value were outstanding.
Page 1
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION Page
Item 1. Financial Statements (Unaudited)
Consolidated Statements of Income 3
Consolidated Balance Sheets 4
Consolidated Statements of Cash Flows 5
Consolidated Statements of Stockholders' Equity 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10-21
PART II OTHER INFORMATION
Item 1. Legal Proceedings 22
Item 2. Changes in Securities 22
Item 3. Defaults Upon Senior Securities 22
Item 4. Submission of Matters to a Vote of Security Holders 22
Item 5. Other Information 22
Item 6. Exhibits and Reports on Form 8-K 22
SIGNATURES 22
PART I - FINANCIAL INFORMATION
The following unaudited financial statements have been prepared in accordance
with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X, and
accordingly do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial statements.
However, in the opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the three months ended
March 31, 1998 are not necessarily indicative of the results that may
be expected for the full year 1998.
Page 2
CONSOLIDATED STATEMENTS OF INCOME
Three Months
Ended March 31
(Dollars in thousands except per share data)(Unaudited)<F1> 1998 1997
Interest Income
Interest and fees on loans $ 804,347 $ 716,152
Interest and dividends on investment securities
Taxable interest 117,528 110,690
Tax-exempt interest 8,644 10,650
Dividends (1) 10,845 9,205
Interest on funds sold 15,609 14,048
Interest on deposits in other banks 163 274
Other interest 2,260 2,064
Total interest income 959,396 863,083
Interest Expense
Interest on deposits 284,512 276,964
Interest on funds purchased 100,555 77,707
Interest on other short-term borrowings 23,517 18,438
Interest on long-term debt 61,392 27,498
Total interest expense 469,976 400,607
Net Interest Income 489,420 462,476
Provision for loan losses 28,626 26,190
Net interest income after provision for loan losses 460,794 436,286
Noninterest Income
Trust income 93,099 78,370
Service charges on deposit accounts 62,140 59,742
Other charges and fees 71,359 51,139
Credit card fees 20,461 18,805
Securities gains (losses) 910 1,391
Other noninterest income 38,348 16,355
Total noninterest income 286,317 225,802
Noninterest Expense
Salaries and other compensation 235,058 202,408
Employee benefits 34,375 32,382
Net occupancy expense 33,072 32,530
Equipment expense 32,007 30,147
Operating supplies 8,967 9,601
Marketing and customer development 17,259 16,802
Postage and delivery 10,795 11,338
Outside processing and software 21,957 14,888
Other noninterest expense 77,574 63,908
Total noninterest expense 471,064 414,004
Income before income taxes 276,047 248,084
Provision for income taxes 95,173 87,028
Net Income $ 180,874 $ 161,056
Average common shares - diluted 211,693,568 218,226,968
Average common shares - basic 208,441,847 214,939,509
Net income per average common share - diluted $ 0.85 $ 0.74
Net income per average common share - basic 0.87 0.75
Dividends declared per common share 0.250 0.225
(1) Includes dividends on common stock of
The Coca-Cola Company 7,240 6,757
<FN>
<F1>See notes to consolidated financial statements
Page 3
CONSOLIDATED BALANCE SHEETS
March 31 December 31 March 31
(Dollars in thousands)(Unaudited)<F1> 1998 1997 1997
Assets
Cash and due from banks $ 2,550,594 $ 2,991,263 $ 2,755,113
Interest-bearing deposits in other banks 11,053 15,417 58,522
Trading account 127,734 178,434 346,819
Investment securities (1) 12,003,611 11,729,298 10,747,319
Funds sold 1,017,059 996,583 1,310,143
Loans 41,264,007 40,135,505 36,428,048
Reserve for loan losses (758,488) (751,830) (734,501)
Net loans 40,505,519 39,383,675 35,693,547
Premises and equipment 969,490 964,169 944,314
Intangible assets 429,727 292,370 277,216
Customers' acceptance liability 358,938 488,632 488,917
Other assets 1,916,507 942,895 1,111,369
Total assets $ 59,890,232 $ 57,982,736 $ 53,733,279
Liabilities & Shareholders' Equity
Noninterest-bearing deposits $ 8,524,404 $ 8,927,796 $ 8,176,616
Interest-bearing deposits 28,220,179 29,269,732 28,484,693
Total deposits 36,744,583 38,197,528 36,661,309
Funds purchased 7,757,380 6,483,055 6,285,390
Other short-term borrowings 1,573,718 1,989,415 1,765,397
Long-term debt 4,189,360 3,171,832 1,721,319
Acceptances outstanding 358,938 488,632 488,917
Other liabilities 3,513,023 2,452,892 1,995,097
Total liabilities 54,137,002 52,783,354 48,917,429
Preferred stock, no par value; 50,000,000 shares
authorized; none issued - - -
Common stock, $1.00 par value; 350,000,000
shares authorized 213,108 211,608 225,608
Additional paid in capital 396,726 296,751 302,749
Retained earnings 2,879,944 2,751,645 3,085,532
Treasury stock and other (107,619) (109,503) (465,914)
Realized shareholders' equity 3,382,159 3,150,501 3,147,975
Accumulated other comprehensive income 2,371,071 2,048,881 1,667,875
Total shareholders' equity 5,753,230 5,199,382 4,815,850
Total liabilities and shareholders' equity $ 59,890,232 $ 57,982,736 $ 53,733,279
Common shares outstanding 211,521,440 209,909,204 215,889,057
Treasury shares of common stock 1,586,617 1,698,853 9,719,000
(1) Includes unrealized gains (losses) on
investment securities $ 3,832,666 $ 3,311,979 $ 2,695,129
<FN>
<F1>See notes to consolidated financial statements.
Page 4
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months
Ended March 31
(Dollars in thousands)(Unaudited)<F1> 1998 1997
Cash flows from operating activities:
Net income $ 180,874 $ 161,056
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 41,683 36,878
Provision for loan losses 28,626 26,190
Provision for losses on other real estate 478 536
Amortization of compensation element of
restricted stock 2,354 2,330
Securities (gains) and losses, net (910) (1,391)
(Gains) and losses on sale of equipment, other
real estate and repossessed assets, net (22,543) (5,856)
Recognition of unearned loan income (21,272) (58,310)
Originations of loans for sale (776,188) (675,643)
Proceeds from sale of loans 777,183 661,772
Change in period-end balances of:
Trading account 50,700 (266,442)
Interest receivable (18,296) (3,743)
Prepaid expenses (41,578) (22,647)
Other assets (891,608) (254,489)
Taxes payable 87,005 79,310
Interest payable 1,057 (9,377)
Other liabilities 775,991 182,456
Net cash provided by (used in) operating activities 173,556 (147,370)
Cash flows from investing activities:
Proceeds from maturities of investment securities 758,082 326,174
Proceeds from sales of investment securities 147,780 320,484
Purchases of investment securities (644,154) (734,382)
Net decrease (increase) in loans (1,121,844) (965,931)
Capital expenditures (35,819) (204,434)
Proceeds from sale of equipment, other real estate
and repossessed assets 10,562 2,369
Net funds received in acquisitions 13,420 -
Other (20,638) (7,503)
Net cash used in investing activities (892,611) (1,263,223)
Cash flows from financing activities:
Net decrease in deposits (1,452,945) (229,080)
Net increase in funds purchased and
other short-term borrowings 847,025 1,135,134
Proceeds from the issuance of long-term debt 1,274,131 240,798
Repayment of long-term debt (256,603) (84,820)
Proceeds from the exercise of stock options 1,029 2,722
Payments to acquire treasury stock (65,564) (254,574)
Dividends paid (52,575) (48,424)
Net cash provided by financing activities 294,498 761,756
Net decrease in cash and cash equivalents (424,557) (648,837)
Cash and cash equivalents at beginning of period 4,003,263 4,772,615
Cash and cash equivalents at end of period $ 3,578,706 $ 4,123,778
Supplemental Disclosure
Interest paid $ 471,033 $ 391,230
Taxes paid 9,142 7,286
<FN>
<F1>See notes to consolidated financial statements
Page 5
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Accumulated
Additional Treasury Other
Common Paid in Retained Stock and Comprehensive
(Dollars in thousands)(Unaudited)<F1> Stock Capital Earnings Other<F2> Income Total
Balance, January 1, 1997 $ 225,608 $ 310,612 $2,972,900 $(230,918) $1,601,778 $4,879,980
Net income - - 161,056 - - 161,056
Cash dividends declared on common
stock, $0.225 per share - - (48,424) - - (48,424)
Proceeds from exercise of stock options - (8,973) - 11,695 - 2,722
Acquisition of treasury stock - - - (254,574) - (254,574)
Issuance of treasury stock for 401(k) - 1,110 - 5,553 - 6,663
Issuance, net of forfeitures, of treasury
stock as restricted stock - - - (1,017) - (1,017)
Compensation element of restricted stock - - - 1,017 - 1,017
Amortization of compensation element
of restricted stock - - - 2,330 - 2,330
Change in unrealized gains (losses)
on securities, net of taxes - - - - 66,097 66,097
Balance, March 31, 1997 $ 225,608 $ 302,749 $3,085,532 $(465,914) $1,667,875 $4,815,850
Comprehensive Income - March 31, 1997 $ 227,153
Balance, January 1, 1998 $ 211,608 $ 296,751 $2,751,645 $(109,503) $2,048,881 $5,199,382
Net income - - 180,874 - - 180,874
Cash dividends declared on common
stock, $0.25 per share - - (52,575) - - (52,575)
Proceeds from exercise of stock options - (9,794) - 10,823 - 1,029
Issuance of common stock for acquisitions 1,500 - - - - 1,500
Issuance of treasury stock for acquisition - 109,268 - 47,257 - 156,525
Acquisition of treasury stock - - - (65,564) - (65,564)
Issuance of treasury stock for 401(k) - 280 - 7,235 - 7,515
Issuance, net of forfeitures, of treasury
stock as restricted stock - 221 - 8,927 - 9,148
Compensation element of restricted stock - - - (9,148) - (9,148)
Amortization of compensation element
of restricted stock - - - 2,354 - 2,354
Change in unrealized gains (losses)
on securities, net of taxes - - - - 322,190 322,190
Balance, March 31, 1998 $ 213,108 $ 396,726 $2,879,944 $(107,619) $2,371,071 $5,753,230
Comprehensive Income - March 31, 1998 $ 503,064
<FN>
<F1>See notes to consolidated financial statements.
<F2>Balance at March 31, 1997 includes $419,796 for Treasury Stock and $46,118 for Deferred Compensation.
Balance at March 31, 1998 includes $42,785 for Treasury Stock and $64,834 for Deferred Compensation.
Page 6
Notes to Consolidated Financial Statements (Unaudited)
Note 1 - Accounting Policies
The consolidated interim financial statements of SunTrust Banks, Inc.
("SunTrust" or "The Company") are unaudited. All significant intercompany
accounts and transactions have been eliminated. These financial statements
should be read in conjunction with the Annual Report on Form 10-K for the
year ended December 31, 1997.
Note 2 - Recent Accounting Developments
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131, Disclosures about Segments of an
Enterprise and Related Information, which is effective for annual and interim
periods beginning after December 15, 1997. However, this statement is not
required in interim financial statements in the initial year of its
application. This statement establishes standards for the method that public
entities use to report information about operating segments in annual
financial statements and requires those enterprises to report selected
information about operating segments in interim financial reports issued to
shareholders. It also establishes standards for related disclosures about
products and services, geographical areas and major customers. The
anticipated disclosure, when fully implemented, will provide required
information by reportable operating segment using the current internal
management reporting system which is prepared on a geographic basis.
During the first quarter of 1998, the American Institute to Certified Public
Accountants issued Statement of Position (SOP) 98-1, "Accounting for Costs of
Computer Software Developed or Obtained for Internal Use". SOP 98-1 requires
capitalization of computer software costs that meet certain criteria. The
statement is effective for fiscal years beginning after December 15, 1998.
Adoption of SOP 98-1 is not expected to have a material effect on the
Company's financial position or results of operations.
Note 3 - Derivative Financial Instruments
Derivatives are used to hedge interest rate exposures by modifying the
interest rate characteristics of related balance sheet instruments. The
specific criteria required for derivatives used for such purposes are
described below. Derivatives that do not meet these criteria are carried at
market value with changes in value recognized currently in earnings in the
current period. It is not the Company's policy to hold derivatives that do
not qualify as hedges. There has not been a material change in derivative
related market risk this quarter.
Derivatives used as hedges must be effective at reducing the risk associated
with the exposure being hedged and must be designated as a hedge at the
inception of the derivative contract. Derivatives used for hedging purposes
include swaps, forwards, futures, and purchased options. The fair values of
derivative contracts are carried off-balance sheet and the unrealized gains
and losses on these contracts are generally deferred. The interest component
is recognized over the life of the contract in net interest income for
derivatives used as hedges or those used to modify the interest rate
characteristics of assets and liabilities. Upon contract settlement or
termination, the cumulative change in the market value of such derivatives is
recorded as an adjustment to the carrying value of the underlying asset or
liability and recognized in net interest income over the expected remaining
life of the related asset or liability. If the underlying instrument is sold,
the cumulative change in the value of the associated derivative is recognized
immediately in the earnings of the underlying instrument.
Page 7
Notes to Consolidated Financial Statements (Unaudited) - continued
Note 4 - Acquisitions
On September 26, 1997, the Company signed a definitive agreement to acquire
Equitable Securities Corporation, a Nashville, Tennessee-based investment
banking, securities brokerage and investment advisory firm. The merger,
which was accounted for as a purchase, was completed on January 2, 1998, and
the new subsidiary was renamed SunTrust Equitable Securities Corporation
(SESC). Consideration tendered, including contingently returnable shares,
aggregated 2.3 million shares of the Company's common stock.
Note 5 - Comprehensive Income
Under Statement of Financial Accounting Standards No. 130, "Reporting
Comprehensive Income", certain transactions and other economic events that
bypass the income statement must be displayed as other comprehensive
income. The Company's comprehensive income consists of net income and
unrealized gains and losses on securities available-for-sale, net of income
taxes.
Comprehensive income for the first quarter of 1998 and 1997 is calculated
as follows:
COMPREHENSIVE INCOME
Before Income Net of
(Dollars in thousands) Tax Tax Tax
Unrealized gains (net) recognized in other
comprehensive income:
Quarter ended March 31, 1998 $527,316 $205,126 $322,190
Quarter ended March 31, 1997 $108,178 $ 42,081 $ 66,097
(Dollars in thousands) 1998 1997
Amounts reported in net income:
Gain on sale of securities $ 910 $ 1,391
Net amortization (accretion) (280) (400)
Reclassification adjustment 630 991
Income tax expense (245) (385)
Reclassification adjustment, net of tax 385 606
Amounts reported in other comprehensive income:
Unrealized gain arising during period, net of tax 322,575 66,703
Reclassification adjustment, net of tax (385) (606)
Unrealized gains (net) recognized in
other comprehensive income 322,190 66,097
Net income 180,874 161,056
Total comprehensive income $503,064 $227,153
Page 8
Notes to Consolidated Financial Statements (Unaudited) - continued
Note 6 - Earnings Per Share Reconciliation
In the calculation for basic and diluted EPS, net income is identical.
Below is a reconciliation for the quarters ended March 31, 1998 and
March 31, 1997 of the difference between average basic common shares
outstanding and average diluted common shares outstanding.
Statement re: Computation of Per Share Earnings
(In thousands, except per share data)
Three Months
Ended March 31
1998 1997
Basic
Net income $180,874 $161,056
Average common shares 208,442 214,940
Earnings per common share - basic $ 0.87 $ 0.75
Diluted
Net income $180,874 $161,056
Average common shares outstanding 208,442 214,940
Incremental shares outstanding <F1>: 3,252 3,287
Average diluted common shares 211,694 218,227
Earnings per common share - diluted $ 0.85 $ 0.74
<FN>
<F1>Includes the incremental effect of stock options and restricted
stock outstanding computed under the treasury stock method.
Three Months
Ended March 31
(In thousands) 1998 1997
Average common shares - basic 208,442 214,940
Effect of dilutive securities:
Stock options 1,635 1,510
Performance restricted stock 1,617 1,777
Average common shares - diluted 211,694 218,227
Page 9
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
OVERVIEW
SunTrust Banks, Inc. is a multi-state bank holding company with its
headquarters in Atlanta, Georgia. The Company's principal banking
subsidiaries are SunTrust Banks of Florida, Inc., SunTrust Banks,
of Georgia, Inc. and SunTrust Banks of Tennessee, Inc., all of which are bank
holding companies in their respective states. Credit card services are
provided through SunTrust BankCard, N.A. of Orlando, Florida.
SunTrust has several wholly owned nonbanking subsidiaries that are engaged in
various businesses. They include SunTrust Mortgage, Inc., which originates
and services mortgage loans on both residential and income property,
principally throughout Florida, Georgia and Tennessee. SunTrust Insurance
Company operates as a reinsurer for credit life, accident and health insurance
sold to loan customers of SunTrust. SunTrust Securities, Inc. engages in
securities brokerage services and conducts incidental activities such as
offering custodial and cash management services. SunTrust Equitable Securities
Corporation, which conducts various business activities including investment
banking, securities brokerage, investment advisory services, raising equity
capital, underwriting of debt issues and selling investment securities to
corporations, institutions and government entities. SunTrust Personal Loans,
Inc. operates as a consumer finance company. STI Credit Corporation operates
as a leasing subsidiary, primarily for commercial customers. Other nonbank
subsidiaries primarily support the Company's banking operations, providing data
processing and other services.
SunTrust continues to believe that its plans for dealing with the Year 2000
issue will result in timely and adequate modifications of its systems and
technology. There have not been any material changes since the annual report
was filed.
SunTrust has made, and may continue to make, various forward-looking statements
with respect to financial and business matters. These forward-looking
statements are subject to numerous assumptions, risks and uncertainties, all of
which may change over time. The actual results that are achieved could differ
significantly from the forward-looking statements contained in this document.
The following analysis of the financial performance of SunTrust for the first
quarter of 1998 should be read in conjunction with the financial statements,
notes and other information contained in this document. The results of
operations for the three months ended March 31, 1998 are not indicative of the
results that may be attained for any other period. In this discussion, net
interest income and the net interest margin are presented on a taxable-
equivalent basis and the ratios are presented on an annualized basis.
EARNINGS ANALYSIS
SunTrust reported record net income of $180.9 million for the first quarter of
1998, an increase of 12.3% compared with $161.1 million in the first quarter of
1997. Diluted earnings per share grew 14.9% to $0.85 from $0.74 in the same
periods. The growth in net income resulted from increases in noninterest
income and continued strong loan demand.
Page 10
TABLE 1 - SELECTED QUARTERLY FINANCIAL DATA
(Dollars in millions except per share data)
Quarters
1998 1997
1 4 3 2 1
Summary of Operations
Interest and dividend income $ 959.5 $ 954.4 $ 934.9 $ 898.4 $ 863.1
Interest expense 470.0 469.0 458.1 428.7 400.6
Net interest income 489.5 485.4 476.8 469.7 462.5
Provision for loan losses 28.6 32.6 29.0 29.2 26.2
Net interest income after provision for loan losses 460.9 452.8 447.8 440.5 436.3
Noninterest income 286.3 247.4 232.9 228.1 225.8
Noninterest expense 471.1 433.9 424.4 413.3 414.0
Income before provision for income taxes 276.1 266.3 256.3 255.3 248.1
Provision for income taxes 95.2 94.1 87.7 89.9 87.0
Net income $ 180.9 $ 172.2 $ 168.6 $ 165.4 $ 161.1
Net interest income (taxable equivalent) $ 497.5 $ 494.1 $ 485.7 $ 479.2 $ 472.0
Per common share
Net income - diluted $ 0.85 $ 0.82 $ 0.80 $ 0.77 $ 0.74
Net income - basic 0.87 0.83 0.81 0.78 0.75
Dividends declared 0.250 0.250 0.225 0.225 0.225
Book value 27.20 24.77 23.63 24.21 22.31
Common stock market price
High 77.44 75.25 70.44 59.00 54.75
Low 65.25 61.13 54.75 44.13 46.13
Close 75.38 71.38 67.94 55.06 46.38
Selected Average Balances
Total assets $58,368.4 $56,563.4 $55,060.2 $53,498.3 $51,906.5
Earning assets 50,089.7 48,970.5 47,672.1 46,238.1 45,054.0
Loans 40,526.4 39,230.1 37,898.9 37,000.9 35,894.2
Total deposits 36,316.3 35,940.2 36,115.7 36,078.8 35,519.5
Realized shareholders' equity 3,356.6 3,150.0 3,127.6 3,128.2 3,229.2
Total shareholders' equity 5,410.8 5,006.0 5,090.4 5,007.8 4,966.6
Common shares - diluted (thousands) 211,694 210,554 211,671 213,572 218,227
Common shares - basic (thousands) 208,442 207,138 208,391 210,608 214,940
Financial Ratios
ROA<F1> 1.33 % 1.28 % 1.29 % 1.31 % 1.33 %
ROE<F1> 21.85 21.69 21.38 21.21 20.23
Net interest margin<F1> 4.03 4.00 4.04 4.16 4.25
<FN>
<F1>ROA, ROE and net interest margin are calculated excluding unrealized gains
on investment securities because the unrealized gains are not included in
income.
Page 11
TABLE 2A - CONSOLIDATED DAILY AVERAGE BALANCES, INCOME/EXPENSE AND AVERAGE
YIELDS EARNED AND RATES PAID
(Dollars in millions; yields on a taxable-equivalent basis)
Quarter Ended
March 31, 1998 December 31, 1997 September 30, 1997
Average Income/ Yields/ Average Income/ Yields/ Average Income/ Yields/
Balances Expense Rates Balances Expense Rates Balances Expense Rates
Assets
Loans<F1>
Taxable $39,835.4 $795.0 8.09 % $38,531.7 $787.5 8.11 % $37,205.4 $766.1 8.17 %
Tax-exempt<F2> 691.0 13.4 7.85 698.4 13.8 7.83 693.5 13.5 7.75
Total loans 40,526.4 808.4 8.09 39,230.1 801.3 8.10 37,898.9 779.6 8.16
Investment securities:
Taxable 7,643.8 128.4 6.81 7,681.3 129.6 6.69 7,679.8 128.8 6.66
Tax-exempt<F2> 607.4 12.6 8.46 653.1 13.8 8.37 689.3 14.7 8.46
Total investment securities 8,251.2 141.0 6.93 8,334.4 143.4 6.82 8,369.1 143.5 6.80
Funds sold 1,106.4 15.6 5.72 1,166.1 17.0 5.82 1,139.9 16.6 5.75
Other short-term investments<F2> 205.7 2.5 4.90 239.9 1.4 2.33 264.2 4.1 6.18
Total earning assets 50,089.7 967.5 7.83 48,970.5 963.1 7.80 47,672.1 943.8 7.85
Reserve for loan losses (750.9) (745.1) (741.6)
Cash and due from banks 2,356.1 2,395.4 2,238.7
Premises and equipment 965.5 958.0 949.4
Other assets 2,385.4 1,985.6 1,766.9
Unrealized gains(losses) on
investment securities 3,322.6 2,999.0 3,174.7
Total assets $58,368.4 $56,563.4 $55,060.2
Liabilities and Shareholders' Equity
Interest-bearing deposits:
NOW/Money market accounts $10,908.5 $ 74.0 2.75 % $10,603.1 $ 72.9 2.73 % $10,424.8 $ 71.6 2.73 %
Savings 5,239.9 46.8 3.62 5,184.4 47.2 3.61 5,202.2 47.1 3.59
Consumer time 6,877.9 88.9 5.24 6,976.0 92.1 5.24 6,946.6 91.2 5.21
Other time<F3> 5,388.3 74.8 5.63 5,374.8 76.2 5.62 6,084.9 86.0 5.61
Total interest-bearing deposits 28,414.6 284.5 4.06 28,138.3 288.4 4.07 28,658.5 295.9 4.10
Funds purchased 7,655.0 100.6 5.33 7,593.4 102.7 5.36 6,440.0 86.9 5.36
Other short-term borrowings 1,671.2 23.5 5.71 1,935.4 20.6 4.23 1,906.4 27.7 5.75
Long-term debt 3,898.8 61.4 6.39 3,073.2 57.3 7.40 2,826.0 47.6 6.68
Total interest-bearing liabilities 41,639.6 470.0 4.58 40,740.3 469.0 4.57 39,830.9 458.1 4.56
Noninterest-bearing deposits 7,901.7 7,801.9 7,457.2
Other liabilities 3,416.3 3,015.2 2,681.7
Realized shareholders' equity 3,356.6 3,150.0 3,127.6
Accumulated other
comprehensive income 2,054.2 1,856.0 1,962.8
Total liabilities and
shareholders' equity $58,368.4 $56,563.4 $55,060.2
Interest rate spread 3.25 % 3.23 % 3.29 %
Net Interest Income $497.5 $494.1 $485.7
Net Interest Margin 4.03 % 4.00 % 4.04 %
<FN>
<F1>Interest income includes loan fees of $25.8, $26.2, $26.5, $24.1 and $23.2
in the quarters ended March 31, 1998, and December 31, September 30, June
30, and March 31, 1997. Nonaccrual loans are included in average balances
and income on such loans, if recognized, is recorded on a cash basis.
<F2>Interest income includes the effects of taxable-equivalent adjustments
(reduced by the nondeductible portion of interest expense) using a federal
income tax rate of 35%, and, where applicable, state income taxes, to
increase tax-exempt interest income to a taxable-equivalent basis. The net
taxable-equivalent adjustment amounts included in the above table
aggregated $8.0, $8.7, $8.9, $9.5 and $9.5 in the quarters ended March 31,
1998, and December 31, September 30, June 30, and March 31, 1997.
<F3>Interest rate swap transactions used to help balance the Company's
interest-sensitivity position increased interest expense by $0.8 in the
quarter ended March 31, 1998, and $1.3, $1.2, $0.8 and $0.4 in the quarters
ended December 31, September 30, June 30, and March 31, 1997. Without
these swaps, the rate on other time deposits and the net interest margin
would have been 5.57% and 4.03%, 5.52% and 4.01%, 5.53% and 4.05%, 5.52%
and 4.16%, and 5.38% and 4.25%, respectively.
Page 12
TABLE 2b - CONSOLIDATED DAILY AVERAGE BALANCES, INCOME/EXPENSE AND AVERAGE
YIELDS EARNED AND RATES PAID
(Dollars in millions; yields on a taxable-equivalent basis)
June 30, 1997 March 31, 1997
Average Income/ Yields/ Average Income/ Yields/
Balances Expense Rates Balances Expense Rates
Assets
Loans<F1>
Taxable $36,296.5 $738.0 8.16 % $35,193.9 $707.2 8.15 %
Tax-exempt<F2> 704.4 14.0 7.95 700.3 13.4 7.77
Total loans 37,000.9 752.0 8.15 35,894.2 720.6 8.14
Investment securities:
Taxable 7,412.5 123.7 6.69 7,275.6 119.9 6.68
Tax-exempt<F2> 708.5 15.1 8.57 731.1 15.7 8.70
Total investment securities 8,121.0 138.8 6.85 8,006.7 135.6 6.87
Funds sold 845.5 13.3 6.27 969.4 14.0 5.88
Other short-term investments<F2> 270.7 3.8 5.69 183.7 2.4 5.24
Total earning assets 46,238.1 907.9 7.88 45,054.0 872.6 7.85
Reserve for loan losses (733.5) (728.1)
Cash and due from banks 2,197.8 2,259.8
Premises and equipment 945.0 885.4
Other assets 1,813.8 1,629.2
Unrealized gains(losses) on
investment securities 3,037.1 2,806.2
Total assets $53,498.3 $51,906.5
Liabilities and Shareholders' Equity
Interest-bearing deposits:
NOW/Money market accounts $10,494.5 $ 71.2 2.72 % $10,489.4 $ 71.0 2.75 %
Savings 5,297.6 47.4 3.59 5,403.2 47.8 3.59
Consumer time 7,016.1 90.6 5.18 7,050.2 89.5 5.15
Other time<F3> 5,808.1 80.7 5.58 5,142.7 68.7 5.41
Total interest-bearing deposits 28,616.3 289.9 4.06 28,085.5 277.0 4.00
Funds purchased 5,827.0 77.8 5.35 6,108.1 77.7 5.16
Other short-term borrowings 1,762.1 24.9 5.66 1,358.9 18.4 5.50
Long-term debt 2,191.7 36.1 6.61 1,659.0 27.5 6.72
Total interest-bearing liabilities 38,397.1 428.7 4.48 37,211.5 400.6 4.37
Noninterest-bearing deposits 7,462.5 7,434.0
Other liabilities 2,630.9 2,294.4
Realized shareholders' equity 3,128.2 3,229.2
Accumulated other
comprehensive income 1,879.6 1,737.4
Total liabilities and
shareholders' equity $53,498.3 $51,906.5
Interest rate spread 3.40 % 3.48 %
Net Interest Income $479.2 $472.0
Net Interest Margin 4.16 % 4.25 %
<FN>
<F1>See note <F1> on table 2A.
<F2>See note <F2> on table 2A.
<F3>See note <F3> on table 2A.
Page 13
Net Interest Income/Margins. The Company's net interest margin of 4.03% for
the first quarter of 1998 was 22 basis points lower than the first quarter of
last year. The rate on earning assets was 7.83% in the first quarter of
1998 and 7.85% in the first quarter of 1997. At the same time, the rate on
interest bearing liabilities increased 21 basis points due to the increased
use of purchased funds.
Interest income which the Company was unable to recognize on
nonperforming loans in the first three months of 1998 had a negative
impact of 1 basis point on the net interest margin as compared to 3 basis
points in the first three months 1997. Table 2 contains more detailed
information concerning average balances and interest yields earned and
rates paid.
Noninterest Income. Noninterest income in the first three months of 1998,
adjusted to exclude the effect of securities gains (losses), increased $61.0
million, or 27.2%, from the comparable period a year ago. SunTrust Equitable
Securities Corporation (SESC), which was acquired on January 2, 1998, accounted
for $16.1 million of the increase. Trust income, the Company's largest source
of noninterest income, increased $14.7 million, or 18.8%, over the same period.
Mortgage fees increased $8.3 million, or 89.8% over the same period due to
higher volume in our mortgage banking business. The increase in loan volume is
due to the increase in new home sales and refinancing activity as long term
interest rates have declined in the past year.
TABLE 3 - NONINTEREST INCOME
(In millions)
Quarters
1998 1997
1 4 3 2 1
Trust income $ 93.1 $ 82.5 $ 79.0 $ 78.7 $ 78.4
Service charges on deposit accounts 62.1 63.8 62.4 61.9 59.7
Corporate and institutional investment income 10.9 6.4 8.6 4.6 5.0
Retail investment income 10.4 8.4 8.3 8.5 8.0
Credit card fees 20.5 18.9 17.5 18.4 18.8
Mortgage fees 17.5 13.6 12.2 10.9 9.2
Other charges and fees 32.6 28.0 27.2 29.5 29.0
Securities gains (losses) 0.9 0.4 0.1 (0.4) 1.4
Trading account profits and commissions 11.0 5.2 4.0 4.8 4.0
Other income 27.3 20.2 13.6 11.2 12.3
Total noninterest income $286.3 $247.4 $232.9 $228.1 $225.8
Page 14
Noninterest Expense. Noninterest expense increased $57.1 million, or 13.8% in
the first quarter of 1998 compared to the same period last year. Personnel
expense, consisting of salaries, other compensation and employee benefits,
increased $34.6 million, or 14.8% over the earlier period. The SESC
acquisition accounted for $13.6 million, or 23.8% of the total increase in
noninterest expense. The increase in other noninterest expense of $9.3
million, or 23.1% is due to expenditures made in connection with various
projects to stimulate business growth and development. The efficiency ratio
increased from 59.3% in the first quarter of 1997 to 60.1% in the first
quarter of 1998. Various growth projects accounted for the increase with most
of the change due to the acquisition of SESC. After adjusting for the purchase
of SESC, the efficiency ratio for the first quarter would have been 59.6%.
TABLE 4 - NONINTEREST EXPENSE
(In millions)
Quarters
1998 1997
1 4 3 2 1
Salaries $183.8 $178.7 $175.2 $169.8 $167.0
Other compensation 51.2 42.9 39.2 36.0 35.4
Employee benefits 34.4 22.0 27.5 29.5 32.4
Net occupancy expense 33.1 30.9 30.9 32.5 32.5
Equipment expense 32.0 29.6 30.7 30.3 30.1
FDIC premiums 1.3 1.3 1.3 1.4 1.8
Marketing and customer development 17.3 19.2 15.9 16.9 16.8
Postage and delivery 10.8 10.7 10.1 10.5 11.3
Operating supplies 9.0 9.8 8.7 9.1 9.6
Other real estate expense (2.4) (5.8) (3.1) (1.3) (1.2)
Communications 9.9 8.7 8.9 8.6 9.1
Consulting and legal 7.3 9.3 8.1 5.4 5.7
Amortization of intangible assets 11.2 10.0 8.3 8.0 7.7
Outside processing and software 22.0 19.4 18.0 16.1 14.9
Other expense 50.2 47.2 44.7 40.5 40.9
Total noninterest expense $471.1 $433.9 $424.4 $413.3 $414.0
Efficiency ratio 60.1 % 58.5 % 59.1 % 58.4 % 59.3 %
Provision for Loan Losses. The Company increased the provision for loan losses
in the first quarter of 1998 to $28.6 million from $26.2 million in the same
period last year, the provision exceeded net charge-offs by $6.7 million. Net
loan charge-offs were $21.9 million in the first three months of this year,
representing 0.22% of average loans. The comparable net charge-off amount in
1997 was $17.5 million or 0.20% of average loans. The Company's reserve for
loan losses totaled $758.5 million at March 31, 1998, which was 1.84% of
quarter-end loans and 580% of total nonperforming loans. These ratios at
December 31, 1997 were 1.87% and 587% and at March 31, 1997 were 2.02%
and 385%.
Page 15
TABLE 5 - SUMMARY OF LOAN LOSS EXPERIENCE
(Dollars in millions)
Quarters
1998 1997
1 4 3 2 1
Reserve for Loan Losses
Balances - beginning of quarter $ 751.8 $ 747.1 $ 739.8 $ 734.5 $ 725.8
Provision for loan losses 28.6 32.6 29.0 29.2 26.2
Charge-offs:
Commercial (4.8) (7.2) (6.8) (4.7) (4.8)
Real estate:
Construction (0.1) (0.4) (1.3) (0.5) (0.1)
Residential mortgages (1.6) (2.6) (2.0) (1.5) (1.1)
Other (0.9) (2.5) (1.3) (1.8) (1.4)
Lease financing (1.1) (0.6) (0.4) (0.3) (0.3)
Credit card (15.1) (13.4) (13.2) (12.5) (11.6)
Other consumer loans (12.3) (14.8) (12.4) (14.0) (12.7)
Total charge-offs (35.9) (41.5) (37.4) (35.3) (32.0)
Recoveries:
Commercial 3.9 4.9 4.3 2.5 4.6
Real estate:
Construction 0.1 0.7 1.0 - 0.1
Residential mortgages 0.3 0.4 0.2 0.4 0.6
Other 2.2 1.0 2.6 1.1 1.3
Lease financing 0.2 0.1 0.2 0.1 0.1
Credit card 1.8 1.6 2.0 1.8 2.4
Other consumer loans 5.5 4.9 5.4 5.5 5.4
Total recoveries 14.0 13.6 15.7 11.4 14.5
Net charge-offs (21.9) (27.9) (21.7) (23.9) (17.5)
Balance - end of quarter $ 758.5 $ 751.8 $ 747.1 $ 739.8 $ 734.5
Quarter-end loans outstanding:
Domestic $41,001.9 $39,875.7 $38,185.3 $37,382.9 $36,148.1
International 262.1 259.8 290.2 301.4 279.9
Total $41,264.0 $40,135.5 $38,475.5 $37,684.3 $36,428.0
Ratio of reserve to quarter-end loans 1.84 % 1.87 % 1.94 % 1.96 % 2.02 %
Average loans $40,526.4 $39,230.1 $37,898.9 $37,000.9 $35,894.2
Ratio of net charge-offs (annualized)
to average loans 0.22 % 0.28 % 0.23 % 0.26 % 0.20 %
Page 16
TABLE 6 - NONPERFORMING ASSETS
(Dollars in millions)
1998 1997
March 31 December 31 September 30 June 30 March 31
Nonperforming Assets
Nonaccrual loans:
Commercial $ 20.6 $ 20.9 $ 35.2 $ 29.1 $ 36.5
Real Estate:
Construction 2.9 1.8 2.8 12.6 13.6
Residential mortgages 52.0 49.7 57.8 54.8 59.5
Other 42.6 41.2 47.1 55.0 59.9
Lease financing 2.3 3.0 0.7 1.0 1.3
Consumer loans 7.6 8.8 8.7 8.5 10.2
Total nonaccrual loans 128.0 125.4 152.3 161.0 181.0
Restructured loans 2.7 2.7 2.7 11.0 9.9
Total nonperforming loans 130.7 128.1 155.0 172.0 190.9
Other real estate owned 31.4 22.5 35.7 41.9 43.9
Total Nonperforming Assets $162.1 $150.6 $190.7 $213.9 $234.8
Ratios:
Nonperforming loans to total loans 0.32 % 0.32 % 0.40 % 0.46 % 0.52 %
Nonperforming assets to total loans
plus other real estate owned 0.39 0.37 0.50 0.57 0.64
Reserve to nonperforming loans 580.4 586.9 482.0 430.1 384.7
Accruing Loans Past Due 90 Days or More $ 43.3 $ 40.8 $ 41.4 $ 25.9 $ 33.9
Nonperforming Assets. Nonperforming assets consist of nonaccrual loans,
restructured loans and other real estate owned. Nonperforming assets have
increased 7.6%, or $11.5 million since December 31, 1997 and decreased 31.0%,
or $72.7 million since March 31, 1997. Included in nonperforming loans at
March 31, 1998 are loans aggregating $14.2 million which are current as to the
payment of principal and interest but have been placed in nonperforming status
because of uncertainty over the borrowers' ability to make future payments. In
management's opinion, all known material potential problem loans are included
in Table 6.
Interest income on nonaccrual loans, if recognized, is recorded on a
cash basis. During the first three months of 1998, the gross amount of
interest income that would have been recorded on nonaccrual loans and
restructured loans at March 31, 1998, if all such loans had been accruing
interest at the original contractual rate, was $3.1 million. Interest income
recognized in the three months ended March 31, 1998 on all such nonperforming
loans at March 31, 1998, was $1.8 million.
Page 17
Table 7 - Loan Portfolio by Types of Loans (in millions)
1998 1997
March 31 December 31 September 30 June 30 March 31
Commercial:
Domestic $15,165.7 $14,139.9 $12,968.2 $12,668.3 $12,267.0
International 249.6 247.4 278.0 289.9 268.4
Real estate:
Construction 1,451.8 1,442.6 1,400.7 1,411.2 1,416.5
Residential mortgages 13,195.2 12,992.9 12,726.3 12,326.0 11,839.2
Other 4,820.5 4,778.7 4,766.4 4,751.7 4,656.1
Lease financing 783.1 725.7 663.6 632.3 607.9
Credit card 982.7 1,041.3 1,022.5 993.9 904.9
Other consumer loans 4,615.4 4,767.0 4,649.8 4,611.0 4,468.0
Loans $41,264.0 $40,135.5 $38,475.5 $37,684.3 $36,428.0
Loans. During the first three months of 1998, average loans increased 12.9%
over the same period a year ago. Since the first quarter of 1997, the two loan
categories experiencing significant growth were 1-4 family residential mortgage
loans (most of which are variable rate loans) and domestic commercial loans.
The average loan to deposit ratio was 111.6% in the first quarter of 1998
compared with 101.1% in the same period of 1997.
At March 31, 1998, international outstandings, which include loans,
acceptances, deposits in other banks, foreign guarantees and accrued interest,
net of write-downs totaled $272.4 million, a decrease of 4.9% from $286.4
million at December 31, 1997.
Income Taxes. The provision for income taxes was $95.2 million in the first
quarter of 1998 compared to $87.0 million in the same period last year. This
represented a 34% effective tax rate in the first quarter of 1998 and an
effective tax rate of 35% in the same quarter last year.
Investment Securities. The investment portfolio continues to be managed to
maximize yield over an entire interest rate cycle while providing liquidity and
minimizing risk. The portfolio yield increased from an average of 6.87% in the
first quarter of 1997 to 6.93% in the first quarter of this year. The portfolio
size (measured at amortized cost) decreased by $270 million during the first
quarter to $7.9 billion at quarter end. The average life of the portfolio was
approximately 1.7 years at March 31, 1998. At March 31, 1998, approximately 22%
of the portfolio consisted of U.S. Treasury securities, 8% U.S. government
agency securities, 53% mortgage-backed securities, 9% trust preferred
securities and 8% municipal securities (calculated as a percent of total par
value). All of the Company's holdings in mortgage-backed securities are backed
by U.S. government or federal agency guarantees limiting the credit risk
associated with the mortgage loans. At March 31, 1998, the carrying value of
the securities portfolio was $3.8 billion over its amortized cost, consisting
mostly of a $3.7 billion unrealized gain on the Company's investment in common
stock of The Coca-Cola Company.
Page 18
Liquidity Management. Liquidity is managed to ensure there is sufficient cash
flow to satisfy demand for credit, deposit withdrawals and attractive
investment opportunities. A large, stable core deposit base, strong capital
position and excellent credit ratings are the solid foundation for the
Company's liquidity position. Liquidity is enhanced by an investment portfolio
structured to provide liquidity as needed. It is also strengthened by ready
access to regional and national wholesale funding sources including fed funds
purchased, securities sold under agreements to repurchase, negotiable
certificates of deposit and offshore deposits, as well as an active bank note
program, commercial paper issuance by the Parent Company, and Federal Home Loan
Bank (FHLB) advances for subsidiary banks who are FHLB members.
Average total deposits for the first three months of 1998 increased
$.8 billion, or 2.2%, over the same period a year ago. Interest-bearing
deposits represented 78.2% of average deposits for the first three months of
1998, compared to 79.1% for the same period in 1997. In the first quarter of
1998, average net purchased funds (average funds purchased less average funds
sold) increased $1.4 billion over the same period in 1997. Net purchased funds
were 13.1% of average earning assets for the first three months of 1998 as
compared to 11.4% in the same period a year ago.
Derivatives. The Company enters into various derivatives contracts in a dealer
capacity for customers and in managing its own interest rate risk. Where
contracts have been created for customers, the Company enters into offsetting
positions to eliminate the Company's exposure to interest rate risk. The
principal derivative contract used by the Company is the interest rate swap.
Interest rate swaps are contracts in which a series of interest rate flows,
based on a specific notional amount and a fixed and floating interest rate, are
exchanged over a prescribed period. The Company also monitors its sensitivity
to changes in interest rates and uses interest rate swap contracts to limit the
volatility of net interest income. Table 8 details interest rate swaps as of
March 31, 1998 used for managing interest rate sensitivity.
TABLE 8 - INTEREST RATE SWAPS
Average Average Average
(Dollars in millions) Notional Fair Maturity Rate Rate
At March 31, 1998 Value Value In Months Paid Received
Gain position:
Receive fixed $ 717.1 $38.4 84.2 5.75 % 6.87 %
Pay fixed 99.8 1.3 14.1 5.45 5.43
Basis swaps 250.0 0.6 13.8 5.41 5.68
Total gain position 1,066.9 40.3
Loss position:
Receive fixed 1,173.0 (2.0) 3.4 5.69 5.37
Pay fixed 768.0 (8.7) 43.3 6.32 5.69
Basis swaps 750.0 (3.3) 28.0 5.37 5.62
Total loss position 2,691.0 (14.0)
Total $3,757.9 $26.3
The swaps are designated as hedges on investments, deposits and other interest-
bearing liabilities. During the three months ended March 31, 1998, hedge swaps
decreased net interest income by $0.8 million, compared with a $0.4 million
decrease in the corresponding 1997 period.
Page 19
TABLE 9 - CAPITAL RATIOS
(Dollars in millions)
1998 1997
March 31 December 31 September 30 June 30 March 31
Tier 1 capital:
Realized shareholders' equity $ 3,382.2 $ 3,150.5 $ 3,110.8 $ 3,075.8 $ 3,146.9
Trust preferred securities 850.0 600.0 600.0 600.0 -
Intangible assets other than servicing rights (429.9) (292.4) (285.8) (275.3) (277.2)
Total Tier 1 capital 3,802.3 3,458.1 3,425.0 3,400.5 2,869.7
Tier 2 capital:
Allowable reserve for loan losses 624.3 600.1 567.1 561.0 526.3
Allowable long-term debt 950.0 950.0 1,055.1 958.2 858.2
Regulatory adjustment 1,119.4 965.6 - - -
Total Tier 2 capital 2,693.7 2,515.7 1,622.2 1,519.2 1,384.5
Total capital $ 6,496.0 $ 5,973.8 $ 5,047.2 $ 4,919.7 $ 4,254.2
Risk-weighted assets $49,808.9 $47,856.6 $45,184.8 $44,703.9 $41,900.0
Risk-based ratios:
Tier 1 capital 7.63 % 7.22 % 7.58 % 7.60 % 6.84 %
Total capital 13.04 12.48 11.17 11.00 10.15
Tier 1 leverage ratio 6.94 6.49 6.63 6.77 5.89
Total shareholders' equity to assets 9.61 8.97 9.00 9.27 8.96
Capital Resources. Consistent with the objective of operating a sound
financial organization, SunTrust maintains capital ratios well above regulatory
requirements. The rate of internal capital generation has been more than
adequate to support asset growth. Table 9 presents capital ratios for the five
most recent quarters.
Regulatory agencies measure capital adequacy with a framework that
makes capital requirements sensitive to the risk profiles of individual banking
companies. The guidelines define capital as either Tier 1 (primarily
shareholders' equity) or Tier 2 (certain debt instruments and a portion of the
reserve for loan losses). The Company and its subsidiary banks are subject to
a minimum Tier 1 capital ratio (Tier 1 capital to risk-weighted assets) of 4%,
total capital ratio (Tier 1 plus Tier 2 to risk-weighted assets) of 8% and Tier
1 leverage ratio (Tier 1 to average quarterly assets) of 3%.
The Federal Deposit Insurance Corporation Improvement Act of 1991
(FDICIA) requires the establishment of a capital-based supervisory system of
prompt corrective action for all depository institutions. The Regulator's
implementation of FDICIA defines "well capitalized" institutions as those whose
capital ratios equal or exceed the following minimum ratios: Tier 1 capital
ratio of 6%, total risk-based capital ratio of 10%, and a Tier 1 leverage ratio
of 5%. Under regulations proposed in 1997, a portion of the unrealized gains
on equity securities are included in the Tier 2 capital calculation. At March
31, 1998, the Company's Tier 1 capital, total risk-based capital and Tier 1
leverage ratios were 7.63%, 13.04% and 6.94%, respectively. SunTrust is
committed to maintaining well capitalized banks.
In April 1997, the Board of Directors authorized the Company to
repurchase up to 15,000,000 shares of SunTrust common stock. At March 31, 1998,
the Company had 12,154,894 shares remaining to be repurchased under this
authorization.
Page 20
TABLE 10 - FINANCIAL HIGHLIGHTS - BANKING SUBSIDIARIES
(Dollars in Millions)
SunTrust Banks SunTrust Banks SunTrust Banks
of Florida, Inc. of Georgia, Inc. of Tennessee, Inc.
1998 1997 1998 1997 1998 1997
Summary of Operations<F1>
Net interest income (FTE) $ 256.7 $ 248.3 $ 171.1 $ 157.5 $ 73.9 $ 72.7
Provision for loan losses 8.1 9.6 5.5 4.5 1.7 2.3
Trust income 43.0 38.4 34.6 28.5 11.1 9.7
Other noninterest income 93.1 74.2 54.8 47.0 23.7 19.9
Personnel expense 91.1 85.9 60.1 56.1 28.3 27.5
Other noninterest expense 133.9 123.7 83.5 71.0 34.4 29.9
Net income 99.1 87.1 72.3 65.6 27.3 26.3
Selected Average Balances<F1>
Total assets 27,346 24,755 22,045 20,328 7,941 7,421
Earning assets 25,719 23,254 17,342 15,987 7,612 7,152
Loans 19,629 17,567 14,421 12,607 5,996 5,538
Total deposits 18,831 18,446 11,516 11,376 6,041 5,736
Realized shareholders' equity 2,171 2,044 1,571 1,413 629 584
At March 31
Total assets 27,825 25,319 22,886 20,786 8,059 7,456
Earning assets 25,986 23,403 17,661 16,456 7,711 7,137
Loans 19,819 17,690 14,748 13,007 6,117 5,589
Reserve for loan losses 386 375 202 198 109 114
Total deposits 19,363 18,783 11,365 12,070 6,036 5,879
Realized shareholders' equity 2,217 2,092 1,595 1,473 640 603
Total shareholders' equity 2,238 2,087 3,915 3,136 646 604
Credit Quality
Net loan charge-offs<F1> 2.0 3.7 4.6 2.4 2.0 2.1
Nonperforming loans<F2> 79.2 114.5 39.2 54.3 11.9 21.9
Other real estate owned<F2> 12.2 25.7 2.8 4.9 16.4 13.0
Ratios
ROA<F3> 1.47 % 1.43 % 1.56 % 1.51 % 1.39 % 1.44 %
ROE<F3> 18.51 17.29 18.66 18.82 17.54 18.24
Net interest margin<F3> 4.05 4.33 4.00 4.00 3.93 4.12
Efficiency ratio<F3> 57.26 58.05 55.14 54.56 57.79 56.14
Total shareholders' equity/assets<F2> 8.04 8.24 17.11 15.09 8.02 8.10
Net loan charge-offs to average loans<F3> 0.04 0.09 0.13 0.08 0.14 0.15
Nonperforming loans to total loans<F2> 0.41 0.66 0.27 0.42 0.20 0.40
Nonperforming assets to total loans plus
other real estate owned<F2> 0.47 0.81 0.29 0.46 0.47 0.64
Reserve to loans<F2> 1.99 2.18 1.39 1.54 1.83 2.09
Reserve to nonperforming loans<F2> 486.7 327.7 514.7 364.2 917.7 520.6
<FN>
<F1>For the three month period ended March 31.
<F2>At March 31.
<F3>Annualized for the first three months.
Page 21
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The annual meeting of shareholders of the Registrant was held
on April 21, 1998. At the meeting, the following individuals
were elected directors of the Registrant: Summerfield K.
Johnston, Jr., Larry L. Prince, R. Randall Rollins, James B.
Williams and M. Douglas Ivester. Votes for ranged from
181,064,933 to 181,603,794 and votes withheld ranged from
1,996,464 to 2,535,325. J. Hyatt Brown, Alston D. Correll,
David H. Hughes, Scott L. Probasco, Jr., A.W. Dahlberg, L.
Phillip Humann and Joseph L. Lanier, Jr. will continue as
directors of the Registrant.
The shareholders also approved: (i) the Company's Amendment
to Articles of Incorporation to increase the number of
authorized common shares outstanding from 350 million shares
to 500 million shares. 177,948,161 shares voted for, 4,386,825
voted against and 1,265,272 abstained from approval of the
amendment and (ii) ratification of the selection of Arthur
Andersen LLP as independent auditors to audit the financial
statement of the Company for 1998. 182,292,366 shares voted
for, 583,751 shares voted against and 724,141 abstained from
ratification.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits
Exhibit 3.1 Articles of Incorporation as Amended
B. Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized this 12th day of May, 1998.
SunTrust Banks, Inc.
(Registrant)
/s/ W.P. O'Halloran
William P. O'Halloran
Senior Vice President and Controller
(Chief Accounting Officer)
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