Exhibit 99.1

Third Quarter 2011 Financial Highlights

Income Statement

 

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Net income available to common shareholders was $0.39 per average common share, compared to earnings of $0.33 per average common share for the prior quarter and $0.17 per average common share for the third quarter of 2010.

 

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Earnings per share was $0.81 for the first nine months of 2011 compared to a net loss of $(0.41) per average common share in 2010. The growth was driven by higher net interest income, a lower provision for credit losses, and the elimination of the TARP preferred dividends at the end of the first quarter of 2011.

 

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Revenue, excluding net gains on the sale of investment securities, was relatively stable compared to the prior quarter and the third quarter of 2010, up 1% and down 2%, respectively.

 

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Net interest income increased modestly compared to the prior quarter and 2% compared to the third quarter of 2010. Growth from the prior year was primarily due to lower rates on deposits, a continued shift in deposit mix toward lower-cost deposits, and a reduction in higher-cost funding.

 

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The net interest margin was 3.49%, a decline of four basis points from the prior quarter due to lower earning asset yields, partially offset by lower rates on interest-bearing liabilities. The margin increased eight basis points over the third quarter of 2010 due to favorable deposit mix and pricing trends.

 

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Noninterest income declined 1% from the prior quarter. Higher mortgage production income and debt valuation gains were offset by lower gains on the sale of investment securities and lower investment banking revenue. Noninterest income decreased 14% compared to the third quarter of 2010, primarily due to lower mortgage-related revenue and lower gains on the sale of investment securities.

 

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Noninterest expense increased 1% compared to the prior quarter due to higher mortgage-related expenses. Expenses increased 4% over the third quarter of 2010, attributable to higher mortgage-related expenses, as well as increased employee compensation due to improved revenue in certain businesses and an increase in personnel.

 

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Credit Quality

 

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Credit quality improved with net charge-offs, nonperforming loans, nonperforming assets, and early stage delinquencies all declining.

 

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Net charge-offs declined 3% compared to the prior quarter and 29% compared to the third quarter of 2010.

 

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Nonperforming loans declined 10% from the prior quarter, the ninth consecutive quarterly decline. Nonperforming loans were down $1.1 billion, or 26%, from a year ago.

 

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Provision for credit losses declined due to lower net charge-offs and a reduction in the allowance for loan losses due to the continued improvement in credit quality. The allowance for loan losses was $2.6 billion, or 2.22% of total loans, as of September 30, 2011.

Balance Sheet

 

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Average loans increased 1% compared to the prior quarter. Targeted commercial and consumer portfolios grew, while certain higher-risk portions of the portfolio continued to be managed down.

 

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Average client deposits grew to another record level, increasing $1.1 billion, or 1%, compared to the prior quarter. The favorable trend in the deposit mix toward lower-cost accounts continued.

 

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Estimated capital ratios continue to be well above current regulatory requirements, as well as the Basel III proposed guidance. The Tier 1 capital and Tier 1 common ratios were estimated to be 11.05% and 9.25%, respectively, as of the end of the quarter.

 

		Three Months Ended September 30,
		2010				2011
Income Statement
(presented on a fully taxable-equivalent basis)
(Dollars in millions, except per share data)
Net income		$	153			$	215
Net income available to common shareholders			84				211
Earnings per average common diluted share			0.17				0.39
Total revenue			2,313				2,196
Total revenue, excluding net securities gains/losses			2,244				2,194
Net interest income			1,266				1,293
Provision for credit losses			615				347
Noninterest income			1,047				903
Noninterest expense			1,499				1,560
Net interest margin			3.41	%			3.49	%
Balance Sheet
(Dollars in billions)
Average loans		$	113.3			$	115.6
Average consumer and commercial deposits			117.2				123.0
Capital
Tier 1 capital ratio (1)			13.58	%			11.05	%
Tier 1 common equity ratio (1)			8.02	%			9.25	%
Total average shareholders’ equity to total average assets			13.42	%			11.62	%
Asset Quality
Net charge-offs to average loans (annualized)			2.42	%			1.69	%
Allowance for loan losses to period end loans			2.69	%			2.22	%
Nonperforming loans to total loans			3.80	%			2.76	%

 

(1)	Current period Tier 1 capital and Tier 1 common equity ratios are estimated as of October 21, 2011.

 

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Consolidated Financial Performance

(Presented on a fully taxable-equivalent basis unless otherwise noted)

Revenue

Total revenue was $2.2 billion for the third quarter of 2011, essentially unchanged from the prior quarter and lower by $117 million from the third quarter of 2010. Net gains from the sales of securities were $2 million for the third quarter of 2011 compared to $32 million for the second quarter of 2011 and $69 million for the third quarter of 2010. Excluding these gains, total revenue increased 1% compared to the prior quarter, primarily due to increased mortgage production income, and declined 2% compared to the third quarter of 2010, primarily due to lower mortgage-related revenue.

For the nine months ended September 30, 2011, total revenue was $6.6 billion, up $180 million, or 3%, compared to 2010. The increase was due to higher net interest income, higher valuation gains on the Company’s fair value debt and index-linked CDs, and growth in most consumer and commercial fee categories. This growth was partially offset by lower service charges, lower mortgage-related revenue, and lower net gains from the sales of investment securities.

Net Interest Income

For the third quarter of 2011, net interest income was $1,293 million compared with $1,286 million for the prior quarter and $1,266 million for the third quarter of 2010. The 1% increase on a sequential quarter basis was primarily related to one more day in the current quarter. The 2% increase over the third quarter of 2010 was driven by lower rates on deposits, a continued shift in deposit mix toward lower-cost deposits, and a reduction in higher-cost funding.

Net interest margin in the third quarter of 2011 was 3.49%, a decline of four basis points from the prior quarter and an increase of eight basis points from the third quarter of 2010. On a sequential quarter basis, yields on earning assets declined nine basis points, driven by lower loan yields, and rates on interest-bearing liabilities declined five basis points due to lower rates on deposits and long-term debt. Compared to the third quarter of 2010, the favorable shift in the deposit mix, lower rates paid, and reduced long-term debt contributed to a decline in interest-bearing liabilities of 29 basis points, more than offsetting the 17 basis point decline in earning asset yields.

For the nine months ended September 30, 2011, net interest income increased 5% to $3,855 million compared to $3,676 million for 2010. Net interest margin was 3.52% for 2011, up 17 basis points from the prior year due to the decline in rates on deposit accounts more than offsetting the lower yield on earning assets.

Noninterest Income

Total noninterest income was $903 million for the third quarter of 2011 compared with $912 million for the prior quarter and $1,047 million for the third quarter of 2010. The $9 million decline compared to the prior quarter was due to a $30 million decline in net gains on the sale of investment securities and lower investment banking income, partially offset by higher mortgage production income and valuation gains on the Company’s debt carried at fair value. Compared with the third quarter of 2010, noninterest income declined $144 million, or 14%, due to lower net gains on the sale of investment securities, a decline in investment banking income, and lower mortgage-related income. This was partially offset by growth in trust income, retail investment services, and card fees, as well as higher valuation gains on the Company’s index-linked CDs and public debt carried at fair value.

Investment banking income was $68 million for the third quarter of 2011 compared with $95 million for the prior quarter and $96 million for the third quarter of 2010. The decline in the current quarter was partially due to strong prior quarter results, coupled with challenging market conditions during the current quarter.

Trading account profits and commissions were $66 million for the third quarter of 2011 compared with $53 million for the prior quarter and a trading loss of $22 million for the third quarter of 2010. The $13 million sequential quarter increase was driven by a $53 million increase in valuation gains on the Company’s fair value debt and index-linked CDs due to the widened credit spreads of financial institutions during the current quarter. Offsetting these valuation gains was a $24 million increase in valuation losses related to illiquid securities and previously securitized loans. In addition, core trading income was negatively impacted by the volatile markets

 

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during the current quarter. The $88 million increase in trading account profits and commissions compared to the third quarter of 2010 was mainly attributable to $78 million in valuation gains for the current quarter on the Company’s fair value debt and index-linked CDs, in comparison to $81 million in valuation losses for the third quarter of 2010. This was partially offset by lower fair market value adjustments on illiquid securities and previously securitized loans, as well as a decline in core trading income.

Mortgage production income was $54 million for the third quarter of 2011, compared with $4 million for the prior quarter and $133 million for the third quarter of 2010. The $50 million sequential quarter increase was driven by higher loan production and margins resulting from the decline in mortgage rates during the third quarter of 2011, partially offset by higher mortgage repurchase costs. During the quarter, the mortgage repurchase cost was $117 million, an increase of $27 million over the prior quarter due to higher agency-related repurchase requests. As of September 30, 2011, reserves for mortgage repurchases totaled $282 million, a decline of $17 million from the prior quarter, reflective of the increase in resolutions during the third quarter of 2011. Compared to the third quarter of 2010, mortgage production income declined $79 million, primarily due to a decrease in refinance volume.

Mortgage servicing income was $58 million for the third quarter of 2011, compared to $72 million for the prior quarter and $132 million for the third quarter of 2010. A decline in the net hedge performance was the primary driver of the $14 million sequential quarter decline and the $74 million decline compared to the third quarter of 2010. The mortgage servicing portfolio was $161 billion at the end of the third quarter of 2011.

Service charges on deposit accounts increased $6 million, or 4%, on a sequential quarter basis while all other noninterest income categories were relatively stable. Compared to the third quarter of 2010, trust income, retail investment income, and card fees all increased.

For the nine months ended September 30, noninterest income of $2.7 billion for 2011 was essentially equal to the same period in 2010. Increases in trust income, retail investment income, investment banking income, card fees, and higher valuation gains on the Company’s fair value debt and index-linked CDs were offset by lower mortgage-related income, reduced net gains on the sale of investment securities, and lower service charges on deposit accounts.

Noninterest Expense

Noninterest expense was $1,560 million for the current quarter compared with $1,542 million for the prior quarter and $1,499 million for the third quarter of 2010. The 1% increase on a sequential quarter basis was primarily due to a $18 million increase in mortgage-related expenses, including higher operating losses related to mortgage servicing. All other noninterest expenses were essentially flat on a sequential quarter basis.

The 4% increase in noninterest expense over the third quarter of 2010 was primarily due to a $45 million increase in operating losses related to mortgage servicing, a $41 million increase in employee compensation, and a $13 million increase in FDIC insurance premiums due to the change in assessment methodology. This was partially offset by a $15 million decline in other real estate expenses and a $13 million decrease in debt extinguishment costs. The increase in employee compensation was driven by a 3% increase in full-time equivalent employees, primarily in client interfacing and mortgage loss mitigation and servicing positions, as well as higher revenue-related compensation due to improved performance in certain businesses.

For the nine months ended September 30, noninterest expense was $4,567 million for 2011 and $4,362 million for 2010. The 5% increase in the current year was attributable to higher personnel-related expenses, mortgage-related expenses, and FDIC insurance premiums, partially offset by lower losses on the extinguishment of debt.

 

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Income Taxes

For the third quarter of 2011, the Company recorded a provision for income taxes of $45 million compared with $58 million for the prior quarter and $14 million for the third quarter of 2010. The effective tax rate of 17.3% for the third quarter of 2011 compares to 24.5% for the prior quarter, which was impacted by the recognition of specific discrete items, and 8.3% for the third quarter of 2010.

U.S. Treasury Preferred Dividends

The Company formerly paid dividends to the U.S. Treasury on its $4.85 billion of TARP preferred securities. The Company redeemed these shares at the end of the first quarter of 2011, and, therefore, did not pay such dividends in the second or third quarters of 2011. The first quarter of 2011 included $66 million of preferred dividends paid to the U.S. Treasury, as well as a $74 million non-cash charge associated with the redemption of the TARP preferred shares. The third quarter of 2010 included $67 million of preferred dividends paid to the U.S. Treasury.

Balance Sheet

As of September 30, 2011, SunTrust had total assets of $172.6 billion and shareholders’ equity of $20.2 billion, representing 11.7% of total assets. Book value and tangible book value per common share were $37.29 and $25.60, respectively, as of September 30, 2011, up 3% and 4%, respectively, from the second quarter.

Loans

Average loans for the third quarter of 2011 were $115.6 billion, compared with average balances of $114.9 billion and $113.3 billion during the second quarter of 2011 and the third quarter of 2010, respectively. On a sequential quarter basis, average loans increased $0.7 billion, or 1%. Growth was concentrated in commercial & industrial loans which increased $1.1 billion, or 2%, while higher-risk loan categories such as home equity, commercial real estate, and construction loans continued to decline. Average loans increased $2.3 billion, or 2%, over the third quarter of 2010. Growth from the prior year was driven by targeted loan categories, including commercial & industrial, indirect auto, and government-guaranteed student loans, which increased by approximately $6 billion combined, while residential real estate categories were managed down. The risk profile of the loan portfolio continued to improve during the year; in addition to higher-risk loan categories declining meaningfully, approximately 8% of the Company’s loan portfolio was comprised of government-guaranteed loans as of September 30, 2011.

Deposits

Average consumer and commercial deposits for the third quarter of 2011 were $123.0 billion, compared to average balances of $121.9 billion and $117.2 billion for the second quarter of 2011 and third quarter of 2010, respectively. The favorable shift in the deposit mix continued during the quarter. The $1.1 billion sequential quarter growth in average deposits was driven by a $2.1 billion, or 7%, increase in demand deposits, partially offset by a decline in interest bearing demand and time deposits.

Compared to the third quarter of 2010, average consumer and commercial deposits increased $5.7 billion, or 5%. Average lower-cost deposit products increased a combined $9.7 billion, or 10%, while time deposits declined $4.0 billion, or 17%. While changing client preferences and the economic environment have contributed to this favorable shift in deposit mix, SunTrust also attributes the lower-cost deposit growth to its investments in enhancing the client experience and its marketing initiatives.

Capital and Liquidity

The Company’s estimated capital ratios are well above regulatory requirements, as well as the proposed guidelines recently published by the Basel Committee and endorsed by U.S. regulatory agencies. The Tier 1 capital and Tier 1 common ratios were estimated at 11.05% and 9.25%, respectively, and the tangible equity to tangible assets ratio increased to 8.38% as of September 30, 2011.

 

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During the quarter, the U.S. Treasury conducted an auction of the Company’s warrants which were previously issued to the U.S. Treasury under the Capital Purchase Program. The Company purchased approximately four million of these warrants in the auction, resulting in an $11 million decline in equity. Also during the quarter, the Company announced an increase to its quarterly common dividend to $0.05 per share from $0.01 per share. The Company continues to have substantial available liquidity provided in the form of its client deposit base, other available funding resources, and the retention of cash and high-quality government-backed securities.

Asset Quality

Asset quality improved during the quarter, with declining net charge-offs, nonperforming loans, and early stage delinquencies.

Nonperforming loans totaled $3.2 billion as of September 30, 2011, a decline of $371 million, or 10%, from the prior quarter, marking the ninth consecutive quarterly decline. The percentage of nonperforming loans to total loans declined to 2.76%, down 38 basis points from the prior quarter. The sequential quarter decline was primarily driven by reductions in commercial construction, commercial real estate, and commercial & industrial loans. Compared to September 30, 2010, nonperforming loans declined $1.1 billion, or 26%, with the most significant reductions in commercial construction and, to a lesser extent, residential mortgages, commercial & industrial, and residential construction loans. Other real estate owned totaled $509 million at the end of the quarter, up 5% on a sequential quarter basis; however, it was down $136 million, or 21%, since September 30, 2010.

Net charge-offs were $492 million compared to $505 million in the prior quarter and $690 million in the third quarter of 2010. The $13 million sequential quarter decline was concentrated in residential mortgage loans. Compared to the third quarter of 2010, net charge-offs decreased $198 million, or 29%, with declines across all loan categories. The ratio of annualized net charge-offs to total average loans was 1.69%, a decline of 7 basis points and 73 basis points from the second quarter of 2011 and the third quarter of 2010, respectively. The provision for credit losses was $347 million, a decline of $45 million and $268 million from the second quarter of 2011 and the third quarter of 2010, respectively.

As of September 30, 2011, the allowance for loan losses was $2.6 billion and represented 2.22% of total loans, down 18 basis points from June 30, 2011. The $144 million decline in allowance for loan losses during the third quarter of 2011 was reflective of the continued improvement in asset quality.

Early stage delinquencies declined to 1.04%, an improvement of five basis points from the end of the second quarter of 2011. Excluding government-guaranteed student loans and Ginnie Mae insured repurchased mortgage loans, early stage delinquencies were 0.70%, a decline of three basis points from June 30, 2011.

Accruing restructured loans totaled $2.8 billion, and nonaccruing restructured loans totaled $883 million as of September 30, 2011. Accruing restructured loans increased $105 million, while nonaccruing restructured loans declined $40 million. $3.2 billion of restructured loans related to residential loans, while $0.5 billion were commercial loans.

LINE OF BUSINESS FINANCIAL PERFORMANCE

Line of Business Results

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

 

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Corresponding Financial Tables and Information

Investors are encouraged to review the foregoing summary and discussion of SunTrust’s earnings and financial condition in conjunction with the detailed financial tables and information which SunTrust has also published and SunTrust’s forthcoming quarterly report on Form 10-Q. Detailed financial tables and other information are also available on the Investor Relations portion of the Company’s website at www.suntrust.com/investorrelations.

Important Cautionary Statement About Forward-Looking Statements

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

This financial information contains forward-looking statements. Any statement that does not describe historical or current facts, is a forward-looking statement. These statements often include the words “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “goals,” “targets,” “initiatives,” “potentially,” “probably,” “projects,” “outlook” or similar expressions or future conditional verbs such as “may,” “will,” “should,” “would,” and “could.” Forward-looking statements are based upon the current beliefs and expectations of management and on information currently available to management. Our statements speak as of the date hereof, and we do not assume any obligation to update these statements or to update the reasons why actual results could differ from those contained in such statements in light of new information or future events.

Forward-looking statements are subject to significant risks and uncertainties. Investors are cautioned against placing undue reliance on such statements. Actual results may differ materially from those set forth in the forward-looking statements. Factors that could cause actual results to differ materially from those described in the forward-looking statements can be found in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2010, and in Part II, “Item 1A. Risk Factors” in our Quarterly Report on Form 10-Q for the periods ended June 30, 2011 and March 31, 2011, and in other periodic reports that we file with the SEC. Those factors include: difficult market conditions have adversely affected our industry; concerns over market volatility continue; the Dodd-Frank Act makes fundamental changes in the regulation of the financial services industry, some

 

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of which may adversely affect our business; we are subject to capital adequacy and liquidity guidelines and, if we fail to meet these guidelines, our financial condition would be adversely affected; emergency measures designed to stabilize the U.S. banking system are beginning to wind down; we are subject to credit risk; our ALLL may not be adequate to cover our eventual losses; we will realize future losses if the proceeds we receive upon liquidation of nonperforming assets are less than the carrying value of such assets; weakness in the economy and in the real estate market, including specific weakness within our geographic footprint, has adversely affected us and may continue to adversely affect us; weakness in the real estate market, including the secondary residential mortgage loan markets, has adversely affected us and may continue to adversely affect us; we are subject to certain risks related to originating and selling mortgages. We may be required to repurchase mortgage loans or indemnify mortgage loan purchasers as a result of breaches of representations and warranties, borrower fraud, or certain borrower defaults, which could harm our liquidity, results of operations, and financial condition; we are subject to risks related to delays in the foreclosure process; we may continue to suffer increased losses in our loan portfolio despite enhancement of our underwriting policies; as a financial services company, adverse changes in general business or economic conditions could have a material adverse effect on our financial condition and results of operations; changes in market interest rates or capital markets could adversely affect our revenue and expense, the value of assets and obligations, and the availability and cost of capital or liquidity; the fiscal and monetary policies of the federal government and its agencies could have a material adverse effect on our earnings; depressed market values for our stock may require us to write down goodwill; clients could pursue alternatives to bank deposits, causing us to lose a relatively inexpensive source of funding; consumers may decide not to use banks to complete their financial transactions, which could affect net income; we have businesses other than banking which subject us to a variety of risks; hurricanes and other natural or man-made disasters may adversely affect loan portfolios and operations and increase the cost of doing business; negative public opinion could damage our reputation and adversely impact business and revenues; the soundness of other financial institutions could adversely affect us; we rely on other companies to provide key components of our business infrastructure; we rely on our systems, employees, and certain counterparties, and certain failures could materially adversely affect our operations; we depend on the accuracy and completeness of information about clients and counterparties; regulation by federal and state agencies could adversely affect the business, revenue, and profit margins; competition in the financial services industry is intense and could result in losing business or margin declines; maintaining or increasing market share depends on market acceptance and regulatory approval of new products and services; we may not pay dividends on your common stock; disruptions in our ability to access global capital markets may negatively affect our capital resources and liquidity; any reduction in our credit rating could increase the cost of our funding from the capital markets; we have in the past and may in the future pursue acquisitions, which could affect costs and from which we may not be able to realize anticipated benefits; we are subject to certain litigation, and our expenses related to this litigation may adversely affect our results; we depend on the expertise of key personnel, and if these individuals leave or change their roles without effective replacements, then our operations may suffer; we may not be able to hire or retain additional qualified personnel and recruiting and compensation costs may increase as a result of turnover, both of which may increase costs and reduce profitability and may adversely impact our ability to implement our business strategies; our accounting policies and processes are critical to how we report our financial condition and results of operations, and they require management to make estimates about matters that are uncertain; changes in our accounting policies or in accounting standards could materially affect how we report our financial results and condition; our stock price can be volatile; our disclosure controls and procedures may not prevent or detect all errors or acts of fraud; our financial instruments carried at fair value expose us to certain market risks; our revenues derived from our investment securities may be volatile and subject to a variety of risks; and we may enter into transactions with off-balance sheet affiliates or our subsidiaries.

 

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SunTrust Banks, Inc. and Subsidiaries

FINANCIAL HIGHLIGHTS

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

 

		Three Months Ended September 30								Nine Months Ended September 30
		2011				2010				2011				2010
EARNINGS & DIVIDENDS
Net income			$215				$153				$573				$5
Net income/(loss) available to common shareholders			211				84				424				(201)
Total revenue - FTE 1, 2			2,196				2,313				6,553				6,373
Total revenue - FTE excluding securities gains, net 1, 2			2,194				2,244				6,455				6,245
Net income/(loss) per average common share
Diluted 4			0.39				0.17				0.81				(0.41)
Diluted excluding effect of accelerated accretion associated with repurchase of preferred stock issued to the U.S. Treasury 1, 4			0.39				0.17				0.95				(0.41)
Basic			0.40				0.17				0.81				(0.41)
Dividends paid per common share			0.05				0.01				0.07				0.03
CONDENSED BALANCE SHEETS
Selected Average Balances
Total assets			$172,076				$171,999				$171,886				$171,569
Earning assets			146,836				147,249				146,536				146,538
Loans			115,638				113,322				115,242				113,587
Consumer and commercial deposits			122,974				117,233				121,863				116,267
Brokered and foreign deposits			2,312				2,740				2,418				2,945
Total shareholders’ equity			20,000				23,091				20,861				22,583
As of
Total assets			172,553				174,703
Earning assets			148,991				149,994
Loans			117,475				115,055
Allowance for loan and lease losses			2,600				3,086
Consumer and commercial deposits			123,933				117,494
Brokered and foreign deposits			2,318				2,850
Total shareholders’ equity			20,200				23,438
FINANCIAL RATIOS & OTHER DATA
Return on average total assets			0.50	%			0.35	%			0.45	%			-	%
Return on average common shareholders’ equity			4.23				1.83				2.96				(1.53)
Net interest margin 2			3.49				3.41				3.52				3.35
Efficiency ratio 2			71.05				64.80				69.69				68.45
Tangible efficiency ratio 1, 2			70.55				64.24				69.18				67.83
Effective tax rate/(benefit)			17.33				8.25				19.15				(102.05)
Tier 1 common equity 3			9.25				8.02
Tier 1 capital 3			11.05				13.58
Total capital 3			13.85				16.42
Tier 1 leverage 3			8.85				11.03
Total average shareholders’ equity to total average assets			11.62				13.42				12.14				13.16
Tangible equity to tangible assets 1			8.38				10.19
Book value per common share			$37.29				$37.01
Tangible book value per common share 1			25.60				24.42
Market price:
High			26.52				27.05				33.14				31.92
Low			16.51				21.79				16.51				20.16
Close			17.95				25.83				17.95				25.83
Market capitalization			9,639				12,914
Average common shares outstanding (000s)
Diluted			535,395				498,802				524,888				498,515
Basic			531,928				495,501				521,248				495,243
Full-time equivalent employees			29,483				28,599
Number of ATMs			2,889				2,928
Full service banking offices			1,658				1,670

 

 

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

2

Total 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 common equity, tier 1 capital, total capital and tier 1 leverage ratios are estimated as of October 21, 2011.

4	For earnings per share calculation purposes, the impact of dilutive securities are excluded from the diluted share count during periods that the Company has recognized a net loss available to common shareholders because the impact would be antidilutive.

 

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SunTrust Banks, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME

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

 

 

		Three Months Ended								Nine Months Ended
		September 30								September 30
		2011				2010				2011				2010
Interest income			$1,538				$1,604				$4,638				$4,747
Interest expense			275				366				867				1,160
NET INTEREST INCOME			1,263				1,238				3,771				3,587
Provision for credit losses			347				615				1,186				2,138
NET INTEREST INCOME AFTER  PROVISION FOR CREDIT LOSSES			916				623				2,585				1,449
NONINTEREST INCOME
Service charges on deposit accounts			176				184				509				588
Trust and investment management income			134				124				404				373
Retail investment services			58				52				175				147
Other charges and fees			130				137				386				399
Investment banking income			68				96				231				210
Trading account profits/(losses) and commissions			66				(22)				171				80
Card fees			104				96				309				277
Mortgage production related income			54				133				56				86
Mortgage servicing related income			58				132				202				290
Other noninterest income			53				46				157				119
Securities gains, net			2				69				98				128
Total noninterest income			903				1,047				2,698				2,697
NONINTEREST EXPENSE
Employee compensation and benefits			750				709				2,252				2,083
Net occupancy expense			90				92				268				273
Outside processing and software			164				157				484				463
Equipment expense			44				45				132				128
Marketing and customer development			41				43				125				121
Amortization of intangible assets			11				13				34				39
Net (gain)/loss on extinguishment of debt			(1)				12				(3)				67
Operating losses			72				27				161				57
FDIC premium/regulatory exams			80				67				232				197
Other noninterest expense			309				334				882				934
Total noninterest expense			1,560				1,499				4,567				4,362
INCOME/(LOSS) BEFORE PROVISION/(BENEFIT) FOR INCOME TAXES			259				171				716				(216)
Provision/(benefit) for income taxes			45				14				136				(230)
INCOME INCLUDING INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST			214				157				580				14
Net income/(loss) attributable to noncontrolling interest			(1)				4				7				9
NET INCOME			$215				$153				$573				$5
NET INCOME/(LOSS) AVAILABLE TO COMMON SHAREHOLDERS			$211				$84				$424				($201)
Net interest income - FTE 1			1,293				1,266				3,855				3,676
Net income/(loss) per average common share
Diluted 2			0.39				0.17				0.81				(0.41)
Basic			0.40				0.17				0.81				(0.41)
Cash dividends paid per common share			0.05				0.01				0.07				0.03
Average common shares outstanding (000s)
Diluted			535,395				498,802				524,888				498,515
Basic			531,928				495,501				521,248				495,243

 

 

¹Net 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. See Appendix A for a reconcilement of this non-GAAP measure to the related GAAP measure.

²For earnings per share calculation purposes, the impact of dilutive securities are excluded from the diluted share count during periods that the Company has recognized a net loss available to common shareholders because the impact would be antidilutive.

 

10

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SunTrust Banks, Inc. and Subsidiaries CONSOLIDATED BALANCE SHEETS (Dollars in millions and shares in thousands) (Unaudited)
		As of
		September 30				December 31
		2011				2010
ASSETS
Cash and due from banks			$4,637				$4,296
Interest-bearing deposits in other banks			21				24
Funds sold and securities purchased under agreements to resell			842				1,058
Trading assets			6,288				6,175
Securities available for sale			27,502				26,895
Loans held for sale			2,243				3,501
Loans held for investment:
Commercial & industrial			47,985				44,753
Commercial real estate			5,330				6,167
Commercial construction			1,390				2,568
Residential mortgages - guaranteed			4,449				4,520
Residential mortgages - nonguaranteed			23,517				23,959
Residential home equity products			15,980				16,751
Residential construction			1,046				1,291
Consumer student loans - guaranteed			5,333				4,260
Consumer other direct			1,945				1,722
Consumer indirect			10,003				9,499
Consumer credit cards			497				485
Total loans held for investment			117,475				115,975
Allowance for loan and lease losses			(2,600)				(2,974)
Net loans held for investment			114,875				113,001
Goodwill			6,344				6,323
Other intangible assets			1,138				1,571
Other real estate owned			509				596
Other assets			8,154				9,434
Total assets1			$172,553				$172,874
LIABILITIES
Deposits:
Noninterest-bearing consumer and commercial deposits			$32,447				$27,290
Interest-bearing consumer and commercial deposits:
NOW accounts			24,670				26,115
Money market accounts			43,236				42,005
Savings			4,644				4,094
Consumer time			12,177				12,879
Other time			6,759				7,642
Total consumer and commercial deposits			123,933				120,025
Brokered deposits			2,283				2,365
Foreign deposits			35				654
Total deposits			126,251				123,044
Funds purchased			998				951
Securities sold under agreements to repurchase			2,016				2,180
Other short-term borrowings			3,218				2,690
Long-term debt			13,544				13,648
Trading liabilities			1,735				2,678
Other liabilities			4,591				4,553
Total liabilities			152,353				149,744
SHAREHOLDERS’ EQUITY
Preferred stock, no par value			172				4,942
Common stock, $1.00 par value			550				515
Additional paid in capital			9,314				8,403
Retained earnings			8,933				8,542
Treasury stock, at cost, and other			(795)				(888)
Accumulated other comprehensive income			2,026				1,616
Total shareholders’ equity			20,200				23,130
Total liabilities and shareholders’ equity			$172,553				$172,874
Common shares outstanding			537,001				500,436
Common shares authorized			750,000				750,000
Preferred shares outstanding			2				50
Preferred shares authorized			50,000				50,000
Treasury shares of common stock			12,919				14,231
1Includes earning assets of			$148,991				$148,473

 

11

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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
		September 30, 2011
		Average   Balances				Interest Income/   Expense				Yields/   Rates
ASSETS
Loans (Post-Adoption):1
Commercial and industrial - FTE 2			$46,261				$595				5.11	%
Commercial real estate			5,192				49				3.72
Commercial construction			1,043				10				3.90
Residential mortgages - guaranteed			4,349				39				3.59
Residential mortgages -non guaranteed			21,888				266				4.87
Home equity products			15,718				148				3.74
Residential construction			826				11				5.10
Guaranteed student loans			4,765				52				4.35
Other direct			1,906				23				4.67
Indirect			9,761				109				4.44
Credit cards			522				15				11.31
Nonaccrual			3,407				7				0.79
Total loans			115,638				1,324				4.54
Securities available for sale:
Taxable			23,768				195				3.29
Tax-exempt - FTE 2			485				7				5.44
Total securities available for sale			24,253				202				3.33
Funds sold and securities purchased under agreements to resell			977				-				-
Loans held for sale			2,032				21				4.11
Interest-bearing deposits			21				-				0.15
Interest earning trading assets			3,915				21				2.09
Total earning assets			146,836				1,568				4.23
Allowance for loan and lease losses			(2,682)
Cash and due from banks			5,567
Other assets			16,676
Noninterest earning trading assets			2,897
Unrealized gains on securities available for sale, net			2,782
Total assets			$172,076
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing deposits:
NOW accounts			$23,979				$8				0.13	%
Money market accounts			43,095				39				0.36
Savings			4,622				2				0.15
Consumer time			12,404				49				1.59
Other time			6,940				30				1.70
Total interest-bearing consumer and commercial deposits			91,040				128				0.56
Brokered deposits			2,303				26				4.34
Foreign deposits			9				-				0.13
Total interest-bearing deposits			93,352				154				0.65
Funds purchased			1,069				-				0.11
Securities sold under agreements to repurchase			2,170				1				0.15
Interest-bearing trading liabilities			878				7				2.95
Other short-term borrowings			3,063				3				0.40
Long-term debt			13,667				110				3.19
Total interest-bearing liabilities			114,199				275				0.95
Noninterest-bearing deposits			31,934
Other liabilities			4,069
Noninterest-bearing trading liabilities			1,874
Shareholders’ equity			20,000
Total liabilities and shareholders’ equity			$172,076
Interest Rate Spread											3.28	%
Net Interest Income - FTE 2							$1,293
Net Interest Margin 3											3.49	%

 

 

¹ Average balances, interest income, and yields are presented using the new loan classifications as initially adopted in the Company’s 2010 Annual Report on Form 10-K. Due to the inability of the Company to present 2010 periods using the new classifications, the 2011 amounts have also been presented using prior loan classifications on the next page.

² 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.

³ The net interest margin is calculated by dividing annualized net interest income - FTE by average total earning assets.

 

12

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SunTrust Banks, Inc. and Subsidiaries

CONSOLIDATED DAILY AVERAGE BALANCES,

AVERAGE YIELDS EARNED AND RATES PAID, continued

(Dollars in millions; yields on taxable-equivalent basis) (Unaudited)

 

		Three Months Ended
		September 30, 2011
		Average   Balances				Interest      Income/     Expense				Yields/      Rates
ASSETS
Loans (Pre-Adoption): 1
Real estate residential mortgage 1-4 family			$28,870				$347				4.81	%
Real estate construction			1,969				20				3.96
Real estate home equity lines			14,210				121				3.37
Real estate commercial			12,620				128				4.03
Commercial - FTE 2			36,686				491				5.31
Credit card			1,026				21				8.08
Consumer - direct			7,089				80				4.49
Consumer - indirect			9,761				109				4.44
Nonaccrual			3,407				7				0.79
Total loans			115,638				1,324				4.54
Securities available for sale:
Taxable			23,768				195				3.29
Tax-exempt - FTE 2			485				7				5.44
Total securities available for sale			24,253				202				3.33
Funds sold and securities purchased under agreements to resell			977				-				-
Loans held for sale			2,032				21				4.11
Interest-bearing deposits			21				-				0.15
Interest earning trading assets			3,915				21				2.09
Total earning assets			146,836				1,568				4.23
Allowance for loan and lease losses			(2,682)
Cash and due from banks			5,567
Other assets			16,676
Noninterest earning trading assets			2,897
Unrealized gains on securities available for sale, net			2,782
Total assets			$172,076
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing deposits:
NOW accounts			$23,979				$8				0.13	%
Money market accounts			43,095				39				0.36
Savings			4,622				2				0.15
Consumer time			12,404				49				1.59
Other time			6,940				30				1.70
Total interest-bearing consumer and commercial deposits			91,040				128				0.56
Brokered deposits			2,303				26				4.34
Foreign deposits			9				-				0.13
Total interest-bearing deposits			93,352				154				0.65
Funds purchased			1,069				-				0.11
Securities sold under agreements to repurchase			2,170				1				0.15
Interest-bearing trading liabilities			878				7				2.95
Other short-term borrowings			3,063				3				0.40
Long-term debt			13,667				110				3.19
Total interest-bearing liabilities			114,199				275				0.95
Noninterest-bearing deposits			31,934
Other liabilities			4,069
Noninterest-bearing trading liabilities			1,874
Shareholders’ equity			20,000
Total liabilities and shareholders’ equity			$172,076
Interest Rate Spread											3.28	%
Net Interest Income-FTE 2							$1,293
Net Interest Margin 3											3.49	%

 

¹ For comparability to prior periods, the Company has presented loans in this table using the prior period loan classifications. The previous page presents average balances, interest income, and yields for loans under the new classification that aligns with the new loan class presentation in the Company’s 2010 Annual Report on Form 10-K.

² 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.

³ The net interest margin is calculated by dividing annualized net interest income - FTE by average total earning assets.

 

13

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SunTrust Banks, Inc. and Subsidiaries CONSOLIDATED DAILY AVERAGE BALANCES, AVERAGE YIELDS EARNED AND RATES PAID, continued (Dollars in millions; yields on taxable-equivalent basis) (Unaudited)
		Three Months Ended
		September 30, 2010
		Average      Balances				Interest      Income/     Expense				Yields/      Rates
ASSETS
Loans:
Real estate residential mortgage 1-4 family			$29,252				$386				5.27	%
Real estate construction			3,431				33				3.78
Real estate home equity lines			14,785				127				3.40
Real estate commercial			14,166				146				4.08
Commercial - FTE 1			32,491				459				5.60
Credit card			1,049				22				8.37
Consumer - direct			5,872				66				4.45
Consumer - indirect			7,770				108				5.50
Nonaccrual 2			4,506				8				0.88
Total loans			113,322				1,355				4.74
Securities available for sale:
Taxable			25,502				208				3.26
Tax-exempt-FTE 1			732				10				5.26
Total securities available for sale			26,234				218				3.32
Funds sold and securities purchased under agreements to resell			1,021				-				0.08
Loans held for sale			3,276				35				4.33
Interest - bearing deposits			25				-				0.10
Interest earning trading assets			3,371				24				2.75
Total earning assets			147,249				1,632				4.40
Allowance for loan and lease losses			(3,035)
Cash and due from banks			4,200
Other assets			18,019
Noninterest earning trading assets			3,171
Unrealized gains on securities available for sale, net			2,395
Total assets			$171,999
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing deposits:
NOW accounts			$23,514				$13				0.23	%
Money market accounts			39,839				57				0.57
Savings			4,074				3				0.22
Consumer time			14,381				68				1.87
Other time			8,914				45				2.02
Total interest-bearing consumer and commercial deposits			90,722				186				0.81
Brokered deposits			2,418				28				4.53
Foreign deposits			322				-				0.15
Total interest-bearing deposits			93,462				214				0.91
Funds purchased			1,176				1				0.20
Securities sold under agreements to repurchase			2,505				1				0.16
Interest-bearing trading liabilities			917				9				3.61
Other short-term borrowings			3,192				3				0.40
Long-term debt			15,396				138				3.56
Total interest-bearing liabilities			116,648				366				1.24
Noninterest-bearing deposits			26,511
Other liabilities			3,891
Noninterest-bearing trading liabilities			1,858
Shareholders’ equity			23,091
Total liabilities and shareholders’ equity			$171,999
Interest Rate Spread											3.16	%
Net Interest Income-FTE 1							$1,266
Net Interest Margin 3											3.41	%

 

 

¹The 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.

²Accruing TDRs were classified in Nonaccrual during prior periods. Due to sustained performance, accruing TDRs have been reclassified to the applicable loan category where   the related interest income is being classified in all periods presented.

³The net interest margin is calculated by dividing annualized net interest income - FTE by average total earning assets.

 

14

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SunTrust Banks, Inc. and Subsidiaries CONSOLIDATED DAILY AVERAGE BALANCES, AVERAGE YIELDS EARNED AND RATES PAID, continued (Dollars in millions; yields on taxable-equivalent basis) (Unaudited)
		Nine Months Ended
		September 30, 2011
		Average    Balances				Interest Income/   Expense				Yields/   Rates
ASSETS
Loans:
Commercial and industrial - FTE 1			$45,208				$1,760				5.21	%
Commercial real estate			5,462				152				3.71
Commercial construction			1,236				35				3.84
Residential mortgages - guaranteed			4,347				113				3.47
Residential mortgages - nonguaranteed			21,950				826				5.02
Home equity products			15,950				449				3.76
Residential construction			891				35				5.18
Guaranteed student loans			4,566				148				4.34
Other direct			1,824				66				4.82
Indirect			9,566				334				4.67
Credit cards			500				45				11.90
Nonaccrual			3,742				25				0.88
Total loans			115,242				3,988				4.63
Securities available for sale:
Taxable			23,728				579				3.25
Tax-exempt - FTE 1			517				21				5.49
Total securities available for sale			24,245				600				3.30
Funds sold and securities purchased under agreements to   resell			1,040				-				-
Loans held for sale			2,285				71				4.14
Interest-bearing deposits			22				-				0.14
Interest earning trading assets			3,702				63				2.28
Total earning assets			146,536				4,722				4.31
Allowance for loan and lease losses			(2,757	)
Cash and due from banks			5,498
Other assets			17,237
Noninterest earning trading assets			2,851
Unrealized gains on securities available for sale, net			2,521
Total assets			$171,886
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing deposits:
NOW accounts			$24,669				$29				0.15	%
Money market accounts			42,856				130				0.41
Savings			4,493				5				0.16
Consumer time			12,629				151				1.60
Other time			7,185				94				1.74
Total interest-bearing consumer and commercial deposits			91,832				409				0.60
Brokered deposits			2,322				77				4.36
Foreign deposits			96				-				0.14
Total interest-bearing deposits			94,250				486				0.69
Funds purchased			1,061				1				0.14
Securities sold under agreements to repurchase			2,245				2				0.15
Interest-bearing trading liabilities			910				22				3.23
Other short-term borrowings			2,920				9				0.40
Long-term debt			13,745				347				3.38
Total interest-bearing liabilities			115,131				867				1.01
Noninterest-bearing deposits			30,031
Other liabilities			3,949
Noninterest-bearing trading liabilities			1,914
Shareholders’ equity			20,861
Total liabilities and shareholders’ equity			$171,886
Interest Rate Spread											3.30	%
Net Interest Income - FTE 1							$3,855
Net Interest Margin 2											3.52	%
1The 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. 2The net interest margin is calculated by dividing annualized net interest income - FTE by average total earning assets.

 

15

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SunTrust Banks, Inc. and Subsidiaries

OTHER FINANCIAL DATA

(Dollars in millions) (Unaudited)

 

		Three Months Ended September 30								Nine Months Ended September 30
		2011				2010				2011				2010
CREDIT DATA
Allowance for credit losses - beginning			$2,795				$3,216				$3,032				$3,235
Provision/(benefit) for unfunded commitments			(1)				(5)				(8)				(60)
Provision for loan losses
Commercial			86				186				318				671
Residential			236				392				810				1,406
Consumer			26				42				66				122
Total provision for loan losses			348				620				1,194				2,199
Charge-offs
Commercial			(214)				(251)				(619)				(694)
Residential			(282)				(433)				(970)				(1,511)
Consumer			(40)				(41)				(125)				(150)
Total charge-offs			(536)				(725)				(1,714)				(2,355)
Recoveries
Commercial			29				20				99				72
Residential			3				5				14				15
Consumer			12				10				33				35
Total recoveries			44				35				146				122
Net charge-offs			(492)				(690)				(1,568)				(2,233)
Allowance for credit losses - ending			$2,650				$3,141				$2,650				$3,141
Components:
Allowance for loan and lease losses			$2,600				$3,086
Unfunded commitments reserve			50				55
Allowance for credit losses			$2,650				$3,141
Net charge-offs to average loans (annualized)1
Commercial			1.37	%			1.70	%			1.30	%			1.51	%
Residential			2.47				3.68				2.83				4.33
Consumer			0.66				0.91				0.75				1.24
Total net charge-offs to total average loans			1.69	%			2.42	%			1.82	%			2.63	%
Period Ended
Nonaccrual/nonperforming loans
Commercial			$1,205				$2,058
Residential			2,007				2,273
Consumer			27				42
Total nonaccrual/nonperforming loans			3,239				4,373
Other real estate owned (“OREO”)			509				645
Other repossessed assets			15				51
Total nonperforming assets			$3,763				$5,069
Accruing restructured loans			$2,824				$2,516
Nonaccruing restructured loans			883				988
Accruing loans past due > 90 days (guaranteed)			1,708				1,425
Accruing loans past due > 90 days (non-guaranteed)			116				155
Total nonperforming loans to total loans			2.76	%			3.80	%
Total nonperforming assets to total loans plus OREO, other repossessed assets, and nonperforming LHFS			3.19				4.38
Allowance to period-end loans2,3			2.22				2.69
Allowance to nonperforming loans2,3			80.92				71.07
Allowance to annualized net charge-offs2			1.33	x			1.13	x
1 Average loans under the new loan classifications in periods prior to the first quarter of 2011 were computed using monthly averages due to an inability to calculate daily averages for prior periods. The Company believes that monthly averages are representative of its operations and materially approximates daily averages.   2 This ratio is computed using the allowance for loan and lease losses.   3 Loans carried at fair value were excluded from the calculation.

 

16

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SunTrust Banks, Inc. and Subsidiaries OTHER FINANCIAL DATA (Dollars in millions) (Unaudited)
		Three Months Ended September 30																		Nine Months Ended September 30
		Core Deposit   Intangibles				MSRs -   Fair Value				Other				Total						Core Deposit   Intangibles				MSRs -   LOCOM				MSRs -   Fair Value				Other				Total
OTHER INTANGIBLE ASSET ROLLFORWARD
Balance, beginning of period			$85				$1,298				$60				$1,443						$104				$604				$936				$67				$1,711
Designated at fair value (transfers from amortized cost)			-				-				-				-						-				(604)				604				-				-
Amortization			(10)				-				(3)				(13)						(29)				-				-				(10)				(39)
Mortgage Servicing Rights (“MSRs”) originated			-				64				-				64						-				-				198				-				198
Fair value change due to fair value election			-				-				-				-						-				-				145				-				145
Fair value changes due to inputs and assumptions			-				(241)				-				(241)						-				-				(643)				-				(643)
Other changes in fair value			-				(49)				-				(49)						-				-				(168)				-				(168)
Balance, September 30, 2010			$75				$1,072				$57				$1,204						$75				$-				$1,072				$57				$1,204
Balance, beginning of period			$51				$1,423				$65				$1,539						$67				$-				$1,439				$65				$1,571
Amortization			(7)				-				(4)				(11)						(23)				-				-				(11)				(34)
MSRs originated			-				47				-				47						-				-				183				-				183
Sale of MSRs			-				-				-				-						-				-				(7)				-				(7)
Fair value changes due to inputs and assumptions			-				(391)				-				(391)						-				-				(443)				-				(443)
Other changes in fair value			-				(46)				-				(46)						-				-				(139)				-				(139)
Other			-				-				-				-						-				-				-				7				7
Balance, September 30, 2011			$44				$1,033				$61				$1,138						$44				$-				$1,033				$61				$1,138

 

17

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SunTrust Banks, Inc. and Subsidiaries RECONCILEMENT OF NON-GAAP MEASURES APPENDIX A TO THE FINANCIAL INFORMATION (Dollars in millions, except per share data) (Unaudited)
		Three Months Ended								Nine Months Ended
		September 30   2011				September 30   2010				September 30   2011				September 30   2010
NON-GAAP MEASURES PRESENTED IN THE FINANCIAL INFORMATION1
Efficiency ratio2			71.05	%			64.80	%			69.69	%			68.45	%
Impact of excluding amortization of intangible assets			(0.50)				(0.56)				(0.51)				(0.62)
Tangible efficiency ratio3			70.55	%			64.24	%			69.18	%			67.83	%
Total shareholders’ equity			$20,200				$23,438
Goodwill, net of deferred taxes of $149 million, $144 million, $139 million, $134 million, and $131 million, respectively			(6,195)				(6,192)
Other intangible assets, net of deferred taxes of $18 million, $21 million, $24 million, $26 million, and $30 million, respectively, and MSRs			(1,120)				(1,174)
MSRs			1,033				1,072
Tangible equity			13,918				17,144
Preferred stock			(172)				(4,936)
Tangible common equity			$13,746				$12,208
Total assets			$172,553				$174,703
Goodwill			(6,344)				(6,323)
Other intangible assets including MSRs			(1,138)				(1,204)
MSRs			1,033				1,072
Tangible assets			$166,104				$168,248
Tangible equity to tangible assets4			8.38	%			10.19	%
Tangible book value per common share5			$25.60				$24.42
Net interest income			$1,263				$1,238				$3,771				$3,587
Taxable-equivalent adjustment			30				28				84				89
Net interest income - FTE			1,293				1,266				3,855				3,676
Noninterest income			903				1,047				2,698				2,697
Total revenue - FTE			2,196				2,313				6,553				6,373
Securities gains, net			(2)				(69)				(98)				(128)
Total revenue - FTE excluding net securities gains6			$2,194				$2,244				$6,455				$6,245

 

 

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

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

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

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

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

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

 

18

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			September 3				September 3				September 3				September 3
SunTrust Banks, Inc. and Subsidiaries RECONCILEMENT OF NON-GAAP MEASURES APPENDIX A TO THE FINANCIAL INFORMATION, continued (Dollars in millions, except per share data) (Unaudited)
		Three Months Ended								Nine Months Ended
		September 30   2011				September 30 2010				September 30 2011				September 30 2010
NON-GAAP MEASURES PRESENTED IN THE FINANCIAL INFORMATION1
Net income/(loss) available to common shareholders			$211				$84				$424				($201)
Accelerated accretion associated with repurchase of preferred stock issued to the U.S. Treasury			-				-				74				-
Net income/(loss) available to common shareholders excluding accelerated accretion associated with repurchase of preferred stock issued to the U.S. Treasury			$211				$84				$498				($201)
Net income/(loss) per average common share - diluted			$0.39				$0.17				$0.81				($0.41)
Effect of accelerated accretion associated with repurchase of preferred stock issued to the U.S. Treasury			-				-				0.14				-
Net income/(loss) per average common share - diluted, excluding effect of accelerated accretion associated with repurchase of preferred stock issued to the U.S. Treasury			$0.39				$0.17				$0.95				($0.41)
RECONCILIATION OF NET INCOME/(LOSS) AVAILABLE TO COMMON SHAREHOLDERS:
Net income			$215				$153				$573				$5
Preferred dividends, Series A			(2)				(2)				(5)				(6)
U.S. Treasury preferred dividends and accretion of discount			-				(67)				(66)				(200)
Accelerated accretion associated with repurchase of preferred stock issued to the U.S. Treasury			-				-				(74)				-
Dividends and undistributed earnings allocated to unvested shares			(2)				-				(4)				-
Net income/(loss) available to common shareholders			$211				$84				$424				($201)

 

 

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

 

19

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SunTrust Banks, Inc. and Subsidiaries RETAIL BANKING LINE OF BUSINESS (Dollars in millions)    (Unaudited)
		Three Months Ended September 30								Nine Months Ended September 30
		2011				2010				2011				2010
Statements of Income
Net interest income 1			$640				$630				$1,897				$1,870
FTE adjustment			-				-				-				-
Net interest income - FTE			640				630				1,897				1,870
Provision for credit losses 2			181				229				593				765
Net interest income - FTE - after provision for credit losses			459				401				1,304				1,105
Noninterest income before securities gains/(losses)			286				278				830				857
Securities gains/(losses), net			-				-				-				-
Total noninterest income			286				278				830				857
Noninterest expense before amortization of intangible assets			646				613				1,912				1,820
Amortization of intangible assets			8				10				24				30
Total noninterest expense			654				623				1,936				1,850
Income before provision for income taxes			91				56				198				112
Provision for income taxes			33				20				72				39
FTE adjustment			-				-				-				-
Net income including income attributable to noncontrolling interest			58				36				126				73
Less: net income attributable to noncontrolling interest			-				-				-				-
Net income			$58				$36				$126				$73
Total revenue - FTE			$926				$908				$2,727				$2,727
Selected Average Balances
Total loans			$35,397				$33,537				$35,330				$33,053
Goodwill			4,855				4,855				4,855				4,855
Other intangible assets excluding MSRs			53				87				61				97
Total assets			40,821				39,105				40,752				38,856
Consumer and commercial deposits			77,112				75,598				76,848				75,056

 

 

¹ Net interest income does not include the funding benefit that would result from holding shareholders’ equity at the line of business level due to the fact that shareholder’s

    equity is not allocated to the lines of business at this time.

² Provision for credit losses represents net charge-offs for the lines of business.

 

20

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SunTrust Banks, Inc. and Subsidiaries DIVERSIFIED COMMERCIAL BANKING LINE OF BUSINESS (Dollars in millions)    (Unaudited)
		Three Months Ended September 30								Nine Months Ended September 30
		2011				2010				2011				2010
Statements of Income
Net interest income 1			$159				$142				$456				$408
FTE adjustment			26				26				76				80
Net interest income - FTE			185				168				532				488
Provision for credit losses 2			11				23				49				88
Net interest income - FTE - after provision for credit losses			174				145				483				400
Noninterest income before securities gains/(losses)			67				62				191				173
Securities gains/(losses), net			-				-				-				-
Total noninterest income			67				62				191				173
Noninterest expense before amortization of intangible assets			123				107				358				335
Amortization of intangible assets			-				-				-				-
Total noninterest expense			123				107				358				335
Income - FTE - before provision for income taxes			118				100				316				238
Provision for income taxes			16				11				38				7
FTE adjustment			26				26				76				80
Net income including income attributable to noncontrolling interest			76				63				202				151
Less: net income attributable to noncontrolling interest			-				-				-				-
Net income			$76				$63				$202				$151
Total revenue - FTE			$252				$230				$723				$661
Selected Average Balances
Total loans			$23,116				$22,380				$22,985				$22,722
Goodwill			928				928				928				928
Other intangible assets excluding MSRs			-				-				-				-
Total assets			25,242				24,633				25,113				25,039
Consumer and commercial deposits			19,300				17,757				19,210				18,469

 

 

¹ Net interest income does not include the funding benefit that would result from holding shareholders’ equity at the line of business level due to the fact that shareholder’s equity is not allocated to the lines of business at this time.

² Provision for credit losses represents net charge-offs for the lines of business.

 

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SunTrust Banks, Inc. and Subsidiaries COMMERCIAL REAL ESTATE LINE OF BUSINESS (Dollars in millions)     (Unaudited)
		Three Months Ended September 30								Nine Months Ended September 30
		2011				2010				2011				2010
Statements of Income
Net interest income 1			$34				$38				$105				$124
FTE adjustment			-				-				1				-
Net interest income - FTE			34				38				106				124
Provision for credit losses 2			133				156				353				344
Net interest income - FTE - after provision for credit losses			(99)				(118)				(247)				(220)
Noninterest income before securities gains/(losses)			25				21				73				61
Securities gains/(losses), net			-				-				-				-
Total noninterest income			25				21				73				61
Noninterest expense before amortization of intangible assets			100				120				316				324
Amortization of intangible assets			-				-				-				-
Total noninterest expense			100				120				316				324
Loss - FTE - before benefit for income taxes			(174)				(217)				(490)				(483)
Benefit for income taxes			(85)				(103)				(243)				(242)
FTE adjustment			-				-				1				-
Loss including income attributable to noncontrolling interest			(89)				(114)				(248)				(241)
Less: net income attributable to noncontrolling interest			-				-				-				-
Net loss			($89)				($114)				($248)				($241)
Total revenue - FTE			$59				$59				$179				$185
Selected Average Balances
Total loans			$6,658				$9,377				$7,314				$10,111
Goodwill			-				-				-				-
Other intangible assets excluding MSRs			-				-				-				-
Total assets			7,557				10,395				8,230				11,171
Consumer and commercial deposits			1,582				1,446				1,513				1,602

 

 

¹ Net interest income does not include the funding benefit that would result from holding shareholders’ equity at the line of business level due to the fact that shareholder’s equity is not allocated to the lines of business at this time.

² Provision for credit losses represents net charge-offs for the lines of business.

 

22

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SunTrust Banks, Inc. and Subsidiaries CORPORATE AND INVESTMENT BANKING LINE OF BUSINESS (Dollars in millions)      (Unaudited)
		Three Months Ended September 30								Nine Months Ended September 30
		2011				2010				2011				2010
Statements of Income
Net interest income 1			$126				$98				$360				$272
FTE adjustment			1				-				2				1
Net interest income - FTE			127				98				362				273
Provision for credit losses 2			(3)				-				(1)				37
Net interest income - FTE - after provision for credit losses			130				98				363				236
Noninterest income before securities gains/(losses)			109				196				477				449
Securities gains/(losses), net			-				-				-				-
Total noninterest income			109				196				477				449
Noninterest expense before amortization of intangible assets			139				121				433				352
Amortization of intangible assets			-				-				-				-
Total noninterest expense			139				121				433				352
Income - FTE - before provision for income taxes			100				173				407				333
Provision for income taxes			35				64				147				122
FTE adjustment			1				-				2				1
Net income including income attributable to noncontrolling interest			64				109				258				210
Less: net income attributable to noncontrolling interest			-				-				-				-
Net income			$64				$109				$258				$210
Total revenue - FTE			$236				$294				$839				$722
Selected Average Balances
Total loans			$14,302				$10,950				$13,084				$10,713
Goodwill			180				180				180				180
Other intangible assets excluding MSRs			-				-				-				-
Total assets			23,990				20,900				22,651				19,597
Consumer and commercial deposits			8,679				7,021				8,264				6,522

 

 

¹ Net interest income does not include the funding benefit that would result from holding shareholders’ equity at the line of business level due to the fact that shareholder’s equity is not allocated to the lines of business at this time.

² Provision for credit losses represents net charge-offs for the lines of business.

 

23

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SunTrust Banks, Inc. and Subsidiaries MORTGAGE LINE OF BUSINESS (Dollars in millions)      (Unaudited)
		Three Months Ended September 30								Nine Months Ended September 30
		2011				2010				2011				2010
Statements of Income
Net interest income 1			$121				$123				$362				$331
FTE adjustment			-				-				-				-
Net interest income - FTE			121				123				362				331
Provision for credit losses 2			144				265				520				956
Net interest income - FTE - after provision for credit losses			(23)				(142)				(158)				(625)
Noninterest income before securities losses			115				272				272				399
Securities losses, net			-				-				(1)				(2)
Total noninterest income			115				272				271				397
Noninterest expense before amortization of intangible assets			318				296				847				812
Amortization of intangible assets			-				-				-				-
Total noninterest expense			318				296				847				812
Loss before benefit for income taxes			(226)				(166)				(734)				(1,040)
Benefit for income taxes			(88)				(63)				(283)				(395)
FTE adjustment			-				-				-				-
Net loss including income attributable to noncontrolling interest			(138)				(103)				(451)				(645)
Less: net income attributable to noncontrolling interest			-				-				-				1
Net loss			($138)				($103)				($451)				($646)
Total revenue - FTE			$236				$395				$633				$728
Selected Average Balances
Total loans			$28,765				$29,044				$28,966				$28,864
Goodwill			-				-				-				-
Other intangible assets excluding MSRs			-				-				-				-
Total assets			33,159				34,556				33,681				34,627
Consumer and commercial deposits			3,081				3,440				2,920				2,881
Mortgage Servicing Data (End of Period)
Total loans serviced			$161,019				$176,550
Total loans serviced for others			129,427				143,580

 

 

¹ Net interest income does not include the funding benefit that would result from holding shareholders’ equity at the line of business level due to the fact that shareholder’s  equity is not allocated to the lines of business at this time.

² Provision for credit losses represents net charge-offs for the lines of business.

 

24

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SunTrust Banks, Inc. and Subsidiaries WEALTH AND INVESTMENT MANAGEMENT LINE OF BUSINESS (Dollars in millions)    (Unaudited)
		Three Months Ended September 30								Nine Months Ended September 30
		2011				2010				2011				2010
Statements of Income
Net interest income 1			$105				$97				$305				$280
FTE adjustment			-				-				-				-
Net interest income - FTE			105				97				305				280
Provision for credit losses 2			26				15				54				44
Net interest income - FTE - after provision for credit losses			79				82				251				236
Noninterest income before securities gains/(losses)			202				196				624				578
Securities gains/(losses), net			-				-				-				-
Total noninterest income			202				196				624				578
Noninterest expense before amortization of intangible assets			232				230				701				663
Amortization of intangible assets			3				3				9				9
Total noninterest expense			235				233				710				672
Income before provision for income taxes			46				45				165				142
Provision for income taxes			19				16				61				52
FTE adjustment			-				-				-				-
Net income including income attributable to noncontrolling interest			27				29				104				90
Less: net income attributable to noncontrolling interest			(4)				1				-				1
Net income			$31				$28				$104				$89
Total revenue - FTE			$307				$293				$929				$858
Selected Average Balances
Total loans			$7,258				$7,852				$7,377				$7,916
Goodwill			381				361				372				360
Other intangible assets excluding MSRs			55				49				54				52
Total assets			8,370				8,941				8,489				8,974
Consumer and commercial deposits			12,315				11,228				12,177				11,020
Other Information (End of Period)
Assets under administration 3
Managed (discretionary) assets			$96,697				$107,927
Non-managed assets			47,272				44,735
Total assets under administration			143,969				152,662
Brokerage assets			34,159				33,893
Corporate trust assets			9,622				9,118
Total assets under advisement			$187,750				$195,673

 

 

¹ Net interest income does not include the funding benefit that would result from holding shareholders’ equity at the line of business level due to the fact that shareholder’s   equity is not allocated to the lines of business at this time.

² Provision for credit losses represents net charge-offs for the lines of business.

³ September 30, 2010 assets under advisement and assets under administration includes $4 billion in money market fund assets that were previously managed by RidgeWorth.   SunTrust completed the sale of its money market fund business to Federated Investors, Inc. in the fourth quarter of 2010.

 

25

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SunTrust Banks, Inc. and Subsidiaries

CORPORATE OTHER AND TREASURY

(Dollars in millions) (Unaudited)

		Three Months Ended September 30								Nine Months Ended September 30
		2011				2010				2011				2010
Statements of Income
Net interest income			$78				$110				$286				$302
FTE adjustment			3				2				5				8
Net interest income - FTE			81				112				291				310
Provision for credit losses 1			(145)				(73)				(382)				(96)
Net interest income - FTE - after provision for credit losses			226				185				673				406
Noninterest income before securities gains			97				(47)				133				52
Securities gains, net			2				69				99				130
Total noninterest income			99				22				232				182
Noninterest expense before amortization of intangible assets			(9)				(1)				(34)				17
Amortization of intangible assets			-				-				1				-
Total noninterest expense			(9)				(1)				(33)				17
Income - FTE - before provision for income taxes			334				208				938				571
Provision for income taxes			115				69				344				187
FTE adjustment			3				2				5				8
Net income including income attributable to noncontrolling interest			216				137				589				376
Less: net income attributable to noncontrolling interest			3				3				7				7
Net income			$213				$134				$582				$369
Total revenue - FTE			$180				$134				$523				$492
Selected Average Balances
Total loans			$142				$182				$186				$208
Securities available for sale			24,109				26,336				24,157				25,787
Goodwill			(1)				(1)				(1)				(1)
Other intangible assets excluding MSRs			3				3				3				4
Total assets			32,937				33,469				32,970				33,305
Consumer and commercial deposits			905				743				931				717

¹ Provision for credit losses is the difference between net charge-offs recorded by the lines of business and consolidated provision for credit losses.

 

26

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SunTrust Banks, Inc. and Subsidiaries

CONSOLIDATED - SEGMENT TOTALS

(Dollars in millions)    (Unaudited)

 

		Three Months Ended September 30								Nine Months Ended September 30
		2011				2010				2011				2010
Statements of Income
Net interest income			$1,263				$1,238				$3,771				$3,587
FTE adjustment			30				28				84				89
Net interest income - FTE			1,293				1,266				3,855				3,676
Provision for credit losses			347				615				1,186				2,138
Net interest income - FTE - after provision for credit losses			946				651				2,669				1,538
Noninterest income before securities gains			901				978				2,600				2,569
Securities gains, net			2				69				98				128
Total noninterest income			903				1,047				2,698				2,697
Noninterest expense before amortization of intangible assets			1,549				1,486				4,533				4,323
Amortization of intangible assets			11				13				34				39
Total noninterest expense			1,560				1,499				4,567				4,362
Income/(loss) - FTE - before provision/(benefit) for income taxes			289				199				800				(127)
Provision/(benefit) for income taxes			45				14				136				(230)
FTE adjustment			30				28				84				89
Net income including income attributable to noncontrolling interest			214				157				580				14
Less: net income attributable to noncontrolling interest			(1)				4				7				9
Net income			$215				$153				$573				$5
Total revenue - FTE			$2,196				$2,313				$6,553				$6,373
Selected Average Balances
Total loans			$115,638				$113,322				$115,242				$113,587
Goodwill			6,343				6,323				6,334				6,322
Other intangible assets excluding MSRs			111				139				118				153
Total assets			172,076				171,999				171,886				171,569
Consumer and commercial deposits			122,974				117,233				121,863				116,267

 

 

 

27