SUNTRUST BANKS INC - FORM 8-K - EX-99.1

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8-K - 8-K - SUNTRUST BANKS INC	d627496d8k.htm

Bank of America Merrill Lynch 2013 Banking & Financial Services Conference

Brad Dinsmore, Consumer Banking and Private Wealth Management Executive

November 13, 2013

Exhibit 99.1

Important Cautionary Statement About Forward-Looking Statements

The following should be read in conjunction with the financial statements, notes and other information contained in the Company’s 2012 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current

Reports on Form 8-K.

This presentation 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 of this presentation. In

this presentation, net interest income and net interest margin are presented on a fully taxable-equivalent (“FTE”) basis, and ratios are presented 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 presentation may contain 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,” “potential” or “potentially,” “probably,” “projects,” “outlook” or similar expressions or future conditional verbs such as

“may,” “will,” “should,” “would,” and “could.” Such statements are based upon the current beliefs and expectations of management and on information currently available to management. Such 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 2012 Annual

Report on Form 10-K and include risks discussed in other periodic reports that we file with the SEC. The estimated financial impact of legal and regulatory matters depends upon (1) the successful negotiation,

execution, and delivery of definitive agreements in several matters, (2) the ultimate resolution of certain legal matters which are not yet complete, (3) management’s assumptions about the extent to which such

amounts may be deducted for tax purposes, (4) the agreement of other necessary parties, and (5) our assumptions about the extent to which we can provide consumer relief to satisfy our financial obligations as

contemplated by the agreements in principle with regulators. Additional factors include: our framework for managing risks may not be effective in mitigating risk and loss to us; as one of the largest lenders in the

Southeast and Mid-Atlantic U.S. and a provider of financial products and services to consumers and businesses across the U.S., our financial results have been, and may continue to be, materially affected by

general economic conditions, particularly unemployment levels and home prices in the U.S., and a deterioration of economic conditions or of the financial markets may materially adversely affect our lending and

other businesses and our financial results and condition; legislation and regulation, including the Dodd-Frank Act, as well as future legislation and/or regulation, could require us to change certain of our business

practices, reduce our revenue, impose additional costs on us, or otherwise adversely affect our business operations and/or competitive position; we are subject to capital adequacy and liquidity guidelines and, if

we fail to meet these guidelines, our financial condition would be adversely affected; loss of customer deposits and market illiquidity could increase our funding costs; we rely on the mortgage secondary market

and GSEs for some of our liquidity; we are subject to credit risk; our ALLL may not be adequate to cover our eventual losses; we may have more credit risk and higher credit losses to the extent our loans are

concentrated by loan type, industry segment, borrower type, or location of the borrower or collateral; we will realize future losses if the proceeds we receive upon liquidation of non-performing assets are less than

the carrying value of such assets; a downgrade in the U.S. government's sovereign credit rating, or in the credit ratings of instruments issued, insured or guaranteed by related institutions, agencies or

instrumentalities, could result in risks to us and general economic conditions that we are not able to predict; the failure of the European Union to stabilize the fiscal condition and creditworthiness of its weaker

member economies could have international implications potentially impacting global financial institutions, the financial markets, and the economic recovery underway in the U.S.; weakness in the real estate

market, including the secondary residential mortgage loan markets, has adversely affected us and may continue to adversely affect us; we are subject to certain risks related to originating and selling mortgages,

and may be required to repurchase mortgage loans or indemnify mortgage loan purchasers as a result of breaches of representations and warranties, borrower fraud, or as a result of certain breaches of our

servicing agreements, and this could harm our liquidity, results of operations, and financial condition; financial difficulties or credit downgrades of mortgage and bond insurers may adversely affect our servicing

and investment portfolios; we may face certain risks as a servicer of loans, or also may be terminated as a servicer or master servicer, be required to repurchase a mortgage loan or reimburse investors for credit

losses on a mortgage loan, or incur costs, liabilities, fines and other sanctions if we fail to satisfy our servicing obligations, including our obligations with respect to mortgage loan foreclosure actions; we are

subject to risks related to delays in the foreclosure process; we may continue to suffer increased losses in our loan portfolio despite enhancement of our underwriting policies and practices; our mortgage

production and servicing revenue can be volatile; as a financial services company, changes in general business or economic conditions could have a material adverse effect on our financial condition and results of

operations; changes in market interest rates or capital markets could adversely affect our revenue and expense, the value of assets and obligations, and the availability and cost of capital and liquidity; changes in

interest rates could also reduce the value of our MSRs and mortgages held for sale, reducing our earnings; changes which are being considered in the method for determining LIBOR may affect the value of debt

securities and other financial obligations held or issued by SunTrust that are linked to LIBOR, or may affect the Company's financial condition or results of operations; the fiscal and monetary policies of the federal

government and its agencies could have a material adverse effect on our earnings; depressed market values for our stock may require us to write down goodwill; clients could pursue alternatives to bank deposits,

causing us to lose a relatively inexpensive source of funding; consumers may decide not to use banks to complete their financial transactions, which could affect net income; we have businesses other than banking

which subject us to a variety of risks; hurricanes and other disasters may adversely affect loan portfolios and operations and increase the cost of doing business; negative public opinion could damage our reputation

and adversely impact business and revenues; we rely on other companies to provide key components of our business infrastructure; a failure in or breach of our operational or security systems or infrastructure, or

those of our third party vendors and other service providers, including as a result of cyber attacks, could disrupt our businesses, result in the disclosure or misuse of confidential or proprietary information, damage

our reputation, increase our costs and cause losses; the soundness of other financial institutions could adversely affect us; we depend on the accuracy and completeness of information about clients and

counterparties; regulation by federal and state agencies could adversely affect the business, revenue, and profit margins; competition in the financial services industry is intense and could result in losing business

or margin declines; maintaining or increasing market share depends on market acceptance and regulatory approval of new products and services; we might not pay dividends on your common stock; our ability to

receive dividends from our subsidiaries could affect our liquidity and ability to pay dividends; disruptions in our ability to access global capital markets may adversely affect our capital resources and liquidity; any

reduction in our credit rating could increase the cost of our funding from the capital markets; we have in the past and may in the future pursue acquisitions, which could affect costs and from which we may not be

able to realize anticipated benefits; we are subject to certain litigation, and our expenses related to this litigation may adversely affect our results; we may incur fines, penalties and other negative consequences

from regulatory violations, possibly even from inadvertent or unintentional violations; we depend on the expertise of key personnel, and if these individuals leave or change their roles without effective

replacements, operations may suffer; we may not be able to hire or retain additional qualified personnel and recruiting and compensation costs may increase as a result of turnover, both of which may increase

costs and reduce profitability and may adversely impact our ability to implement our business strategies; our accounting policies and processes are critical to how we report our financial condition and results of

operations, and they require management to make estimates about matters that are uncertain; changes in our accounting policies or in accounting standards could materially affect how we report our financial

results and condition; our stock price can be volatile; our 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.

13.7%

8.6%

4.6%

3.1%

Projected Population

Growth

Footprint

SunTrust Overview

•

Leading financial institution focused on

meeting clients’

needs and improving their

financial well-being

•

Differentiators:

—

A “Client First”

culture that has generated

high loyalty

—

Being the right size—large enough to

compete with anyone while still being

nimble

—

Diversity—a strong regional bank,

augmented with key national businesses

—

Leading market shares in high growth and

densely populated markets in the

Southeast and Mid-Atlantic

—

A new management team with increased

intensity on capitalizing upon SunTrust’s

strengths

Leading Market Shares in Growth Markets

Deposit Market Share in

Respective

Top

MSAs

Based on 2013 YTD FTE Revenue. Other includes Corporate, institutional asset management, equipment finance group, insurance premium financing and

certain Treasury & Payment Solutions standalone client sub-segments

Source:

SNL

Financial,

6/30/2013

based

top

MSAs

(by

deposits)

for

each

institution.

Numerator

company’s

total

deposits

its

Top

MSAs

and denominator is total deposits in those 10 MSAs

Source: SNL Financial, at 10/25/2013, based on five-year projected change, 2012-2017. Weighted average by deposits in MSAs and counties not in any

MSA

Note: Peers include: BBT, COF, CMA, FITB, KEY, MTB, PNC, RF, USB, and WFC. Numbers may not foot due to rounding

#3 of 11

#2 of 11

Diverse Business Mix

Consumer

Banking and

Private Wealth

Management

=50%

STI

Peers

Retail

32%

Private

Wealth

Management

11%

Consumer

Lending

CIB

18%

Commercial

and Business

Banking

12%

CRE

Mortgage

12%

Other

Who is SunTrust?

YTD 2013

Consumer Banking and PWM Financial Trends

($ in millions)

Consumer Banking and PWM

% of SunTrust (YTD 2013

)

Total Revenue: 50%

Adjusted Pre-Tax Income: 41%

Average Loans: 33%

Average Consumer and

Commercial Deposits: 66%

YTD 2012

Change

Net Interest Income

$2,057

$1,950

(5%)

Adjusted Noninterest Income

$1,129

$1,107

(2%)

Adjusted Total Revenue

$3,186

$3,057

(4%)

Noninterest Expense

$2,285

$2,082

(9%)

Adjusted Pre-Provision Net Revenue

$901

$975

Adjusted Provision Expense

$421

$286

(32%)

Adjusted Pre-Tax Income

$480

$689

44%

Average Loans

$42,180

$40,316

(4%)

Average Deposits

$84,002

$84,157

Adjusted Tangible Efficiency Ratio

68.4%

65.7%

-270bps

YTD 2012 and YTD 2013 represent nine months ended September 30, 2012 and 2013, respectively

YTD 2012 GAAP noninterest income was $1,115 million. Adjusted noninterest income excludes $14 million of losses associated with moving $1.4 billion

delinquent and current student loans to LHFS in 3Q 12. Please refer to the appendix for reconciliation of non-GAAP items

YTD 2012 GAAP provision expense was $464 million. Adjusted provision expense excludes $43 million associated with the credit policy change

regarding junior lien net charge-offs in 3Q 12. Please refer to the appendix for reconciliation of non-GAAP items

YTD 2012 adjusted tangible efficiency ratio excludes $14 million of losses associated with moving $1.4 billion delinquent and current student loans to

LHFS in 3Q 12. Please refer to the appendix for reconciliation of adjusted tangible efficiency ratio

Lines of Business

Description

Client Segments

Geographic Markets

% Contribution to

Consumer Banking

and Private Wealth

Management¹

Provides services to consumers

and small businesses via

branches, ATMs, internet,

mobile banking, and telephone

Provides wealth management

products and services including

brokerage, professional

investment management, and

trust services

Provides home equity lines and

loans, indirect auto, credit

cards, student lending, and

other lending products

Revenue: 22%

Net Income: 36%

Mass Market: <$100M

Mass Affluent: $100M -

$1MM

Small Businesses: Revenue<$1MM

Regional (SE / Mid-Atlantic)

Retail and PWM Clients

Other National Clients

Nationwide

Revenue: 64%

Net Income: 48%

Revenue: 14%

Net Income: 16%

Retail

Private Wealth

Management

Consumer Lending

Based on YTD 2013 (as of 9/30/13). Excludes immaterial negative contribution associated with support functions

High Net Worth: $1MM - $25MM

Ultra High Net Worth: >$25MM

Institutions: Trusts, Endowments

Regional

(SE / Mid-Atlantic for Core PWM)

Select Markets Nationwide

(Specialty PWM Niches)

Organizational structure allows for one-team approach in seamlessly meeting client needs

and Foundations

Strategic Priorities

Improving Efficiency

Optimizing Balance Sheet and Business Mix

Deepen Client Relationships

•

Invest in digital channels

•

Optimize branch network / staffing model

•

Improve sales productivity

•

Grow Consumer Lending

•

Increase focus on Wealth Management business

•

Execute one-team approach via enhanced

collaboration across lines of business

•

Deliver more wealth and investment

management products and services to existing

clients

SunTrust Strategic Priority

Consumer Banking and PWM Role

Fewer Branch Transactions Have Enabled

Branch Count and Staffing Reductions

Retail Banking

Improve Efficiency and Increase Productivity

Growth in Total Self Service

Transactions

Continues

Digital Investment Growth

Core

Sales

FTE

Day

Core sales represent the # of units from key product categories, including checking, savings, credit card, consumer loans/lines, investment referrals, and

mortgage referrals. FTEs includes Managers, Personal Bankers, In-store Financial Services Representatives and In-store Assistant Managers

Self

Service

Full

Service

70%

74%

77%

30%

26%

23%

3Q 11

3Q 12

3Q 13

Self

Service

2011

2013

3Q 12

3Q 13

Branch

Count

1,633

1,508

100

3Q 12

3Q 13

Branch

Count

Indexed

Self service transactions include mobile, tablet, online, ATM, and EIVR (Enhanced Interactive Voice Response). Full service transactions include branch and SunTrust

Online live agent

Consumer Lending

Drive Revenue Growth and Help Optimize SunTrust’s Business Mix

Excludes guaranteed student loans

LightStream

Consumer

Credit Card

Home Equity Loan Production

Other Consumer Lending Production

$29,001

$29,314

3Q 12

3Q 13

$2,663

$3,035

3Q 12

3Q 13

$52

$159

$164

3Q 12

3Q 13

$184

$237

3Q 12

3Q 13

$323

$304

Simple

Home

Refinance

($ in millions)

Consumer Lending Average Balances

Consumer Lending Production

$67

10%

High Net Worth:

PWM Penetration

$84

$87

$59

$67

3Q 12

3Q 13

Trust and Investment Management

Retail Investment Services

Wealth Management

Deepen Client Relationships and Enhance SunTrust’s Return Profile

Wealth Management Growth

$143

($ in millions)

$154

PWM

Investment

Composition

Note: numbers may not foot due to rounding

Mass Affluent:

Investment Penetration

Cash /

Other

16%

Equities

48%

Fixed

Income

27%

Real

Estate/

Other

10%

SunTrust Investment and

Wealth

Management

Penetration

Represents composition of $48 billion of managed (discretionary) assets. Real Estate and Other includes real estate, privately held investments, collections,

and other miscellaneous assets

Left bar represents estimated percentage of SunTrust mass affluent households with a SunTrust investment product. Right bar represents estimated

percentage of SunTrust high net worth households with a SunTrust PWM relationship

Appendix

($ in millions)

Consumer Banking and

Private Wealth Management

Consumer Banking and

Private Wealth Management

SunTrust Banks, Inc.

YTD 2012

YTD 2013

Reported (GAAP) Basis

Total

Revenue

FTE

$3,172

$3,057

$6,134

Total Noninterest Expense

2,285

2,082

4,503

Pre-Provision Net Revenue

887

975

1,631

Amortization of Intangibles / Impairment of Goodwill

Efficiency Ratio

72.1%

68.1%

73.4%

Impact of Excluding Amortization of Intangible Assets

-3.3%

-2.4%

-0.3%

Tangible Efficiency Ratio

68.7%

65.7%

73.1%

Adjusted Basis

Reported Revenue

$3,172

$3,057

$6,134

Adjustment Items:

Securities Gains

3Q-4Q 12 Student Loan Sale (Losses)

(14)

FMV and ARS

Debt and SILC Valuation

(22)

Fair Value Adjustments

(7)

GSE Mortgage Repurchase Settlements

(63)

Adjusted Revenue

$3,186

$3,057

$6,206

Reported Noninterest Expense

$2,285

$2,082

$4,503

Adjustment Items:

Settlement of Certain Legal Matters

323

Mortgage Servicing Advances Allowance Increase

Adjusted Expense

$2,285

$2,082

$4,084

Reported Provision Expense

$464

$286

$453

Adjustment Items:

Credit policy change regarding junior lien NCOs

$43

Adjusted Provision Expense

$421

$286

$453

Adjusted Pre-Provision Net Revenue

$901

$975

$2,122

Adjusted

Pre-Tax

Net

Income

FTE

$480

$689

$1,669

Efficiency

Ratio

Adjusted Basis

71.7%

68.1%

65.8%

Impact of Excluding Amortization of Intangible Assets

-3.3%

-2.4%

-0.3%

Tangible

Efficiency

Ratio

Adjusted Basis

68.4%

65.7%

65.5%

YTD 2012 and YTD 2013 represent nine months ended September 30, 2012 and 2013, respectively

Note: Totals may not foot due to rounding

Reconciliations

Bank

America

Merrill

Lynch

2013

Banking

Financial

Services

Conference

Brad

Dinsmore,

Consumer

Banking

and

Private

Wealth

Management

Executive

November

13,

2013

SUNTRUST BANKS INC - FORM 8-K - EX-99.1 - November 13, 2013

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