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| 8-K - 8-K - SUNTRUST BANKS INC | a02072017creditsuisse8-kdo.htm |
CREDIT SUISSE FINANCIAL
SERVICES FORUM
Aleem Gillani, Chief Financial Officer, SunTrust Banks, Inc.
February 7, 2017
© 2017 SunTrust Banks, Inc. SunTrust is a federally registered trademark of SunTrust Banks, Inc.
2
The following should be read in conjunction with the financial statements, notes and other information contained in the Company’s forthcoming 2016 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. We reconcile those measures to GAAP measures within the presentation or in the appendix. In this
presentation, we present 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. We believe this measure to be the preferred industry measurement of net interest income and provides relevant comparison between
taxable and non-taxable amounts.
This presentation contains forward-looking statements. Statements regarding future levels of the efficiency ratio, future number of branches, and capital return are forward-looking
statements. Also, 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,” “targets,”, “strategies”, “initiatives,” “opportunity,” “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 the statements made herein 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, 2015 and in other periodic reports that we file with the SEC. Those factors include: current and
future legislation and regulation could require us to change our business practices, reduce revenue, impose additional costs, or otherwise adversely affect business operations or
competitiveness; we are subject to increased capital adequacy and liquidity requirements and our failure to meet these would adversely affect our financial condition; the fiscal and monetary
policies of the federal government and its agencies could have a material adverse effect on our earnings; our financial results have been, and may continue to be, materially affected by
general economic conditions, 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; changes in market interest rates or capital markets could adversely affect our revenue and expenses, the value of assets and obligations, and the availability and cost of capital
and liquidity; our earnings may be affected by volatility in mortgage production and servicing revenues, and by changes in carrying values of our MSRs and mortgages held for sale due to
changes in interest rates; disruptions in our ability to access global capital markets may adversely affect our capital resources and liquidity; we are subject to credit risk; we may have more
credit risk and higher credit losses to the extent that our loans are concentrated by loan type, industry segment, borrower type, or location of the borrower or collateral; we rely on the
mortgage secondary market and GSEs for some of our liquidity; loss of customer deposits could increase our funding costs; we are subject to 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 inadvertent or unintentional violations; 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, or borrower fraud, and this could harm our liquidity, results of operations, and financial condition; we face certain risks as a servicer of loans; we are subject
to risks related to delays in the foreclosure process; clients could pursue alternatives to bank deposits, causing us to lose a relatively inexpensive source of funding; consumers and small
businesses 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;
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;
competition in the financial services industry is intense and we could lose business or suffer margin declines as a result; maintaining or increasing market share depends on market acceptance
and regulatory approval of new products and services; our ability to receive dividends from our subsidiaries or other investments could affect our liquidity and ability to pay dividends; 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 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 framework for managing risks may not be effective in mitigating risk and
loss to us; our controls and procedures may not prevent or detect all errors or acts of fraud; we are at risk of increased losses from fraud; 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; our accounting policies and processes are critical to how we report our financial condition and results of operation,
and they require management to make estimates about matters that are uncertain; depressed market values for our stock and adverse economic conditions sustained over a period of time may
require us to write down some portion of our goodwill; our financial instruments measured at fair value expose us to certain market risks; our stock price can be volatile; we might not pay
dividends on our stock; and certain banking laws and certain provisions of our articles of incorporation may have an anti-takeover effect.
IMPORTANT CAUTIONARY STATEMENT
3
Deposit Market Share
in Respective Top 10
MSAs4
14%
6%
SunTrust Peer Median
SUNTRUST OVERVIEW
SunTrust is a leading financial institution focused on meeting clients’ needs and improving
their financial well-being. Our Company is differentiated by:
Size
Large enough to
compete with the
largest banks while still
being able to serve our
clients as “One Team”
Diversity
Strong regional bank
with key national
businesses, full product
capabilities, and a
diverse revenue mix
Footprint
Leading market shares
in high growth markets
(Southeast & Mid-
Atlantic); supplemented
by growing presence
nationally
Culture
“Client First” culture
centered on our
purpose of Lighting the
Way to Financial
Well-Being
Key Statistics (Rank)1,2
$28.5B
Market Cap
~5.6MM
Clients
$205B (11th)
Assets
$160B (10th)
Deposits
$143B (10th)
Loans
24,375
Teammates3
See appendix slide #20 for footnotes
#2 of 11
4
GEOGRAPHIC PRESENCE
Regional Businesses
• Consumer Banking
• Commercial and Business Banking
• Consumer Lending (Home Equity, Credit Card)
• Private Wealth Management
• Retail Mortgage
National Businesses
• Corporate & Investment Banking
• Commercial Real Estate & Pillar Financial
• Consumer Lending (Auto, LightStream, Third Party Relationships)
• Specialty Private Wealth Management
• Correspondent Mortgage
SunTrust has a well-diversified mix of regionally focused businesses (Southeast & Mid-
Atlantic) and more nationally oriented businesses
See appendix slide #20 for footnotes
Note: Map is not representative of all SunTrust locations. Regional locations (Southeast and Mid-Atlantic) are generally cities with a significant retail and commercial presence. Cities outside of Southeast and
Mid-Atlantic generally contain Wholesale Banking (CIB, CRE) offices
Los Angeles
San Francisco
Dallas
Houston
Atlanta
Orlando
Miami
Tampa
Chicago
Nashville
Memphis
Charlotte
Richmond
Baltimore
New York
Boston
Ft. Lauderdale
Raleigh-Durham
Washington, DC
San Diego
Kansas
City
Regional businesses favorably
positioned within higher-
growth markets
- 13 of top 25 fastest job
growth MSAs
- x% of the total US GDP
- Above average historical &
projected population growth
15
of top 25 fastest job
growth MSAs1
20%
of total GDP2
#1
Region for
population growth3
5
8% 11%
26%
48%
62%
73%
2011 2012 2013 2014 2015 2016
INVESTMENT THESIS
Consistent performance against strategic priorities
Strong & Diverse Franchise;
Investing in Growth
Improving Efficiency
& Returns
Strong Capital Position
Supports Growth
(Dividends & share buybacks as a % of net income)
1 3 2
$0.94
$2.19
$2.74
$3.23
$3.58 $3.60
2011 2012 2013 2014 2015 2016
71.5%
66.9%
65.3%
63.3%
62.6% 62.0%
2011 2012 2013 2014 2015 2016
(Adjusted tangible efficiency ratio2) (Earnings per share1)
1. 2012 and 2013 values represent adjusted earnings per share. GAAP earnings per share for 2012 and 2013 were $3.59 and $2.41, respectively. The reconciliation to GAAP can be found on Form 10-K for the year ended
December 31, 2015 (Table 1 beginning on page 27)
2. 2011, 2012, 2013, and 2014 values represent the adjusted tangible efficiency ratio. Adjusted figures are intended to provide management and investors information on trends that are more comparable
across periods and potentially more comparable across institutions. Efficiency ratios (FTE) were 72.0%, 59.3%, 71.2%, 66.7%, 63.1% and 62.6% for 2011, 2012, 2013, 2014, 2015, and 2016 respectively.
Please refer to appendix slide #18 for GAAP reconciliations
3. Source: Bloomberg. Reflects five years ended December 30, 2016. Peers include WFC, USB, PNC, BBT, RF, FITB, KEY, MTB, COF, and CMA. Dividends assumed to be reinvested in security
5 Year Total Shareholder Return: 237%; 2nd Highest Among Peers (Median: 132%)3
STRONG & DIVERSE
FRANCHISE
Investing in Growth
1
7
MAKING INVESTMENTS IN GROWTH
Consumer Banking & PWM
Omni-Channel strategy
→ Enhance and expand mobile, digital, &
online platforms / capabilities (for clients
and teammates)
→ Train and hire advisory personnel within
branches
→ Expand ATM and Teller Connect network
→ Refurbish existing branches
→ Targeted new branch openings
Consumer Lending initiatives
→ LightStream: increase investments to
allow for scale (talent, marketing,
technology)
→ Credit Card: improve product offerings
Private wealth management
→ Train and hire new wealth advisors
→ Grow retail asset management
capabilities
→ Enhance and expand online & digital
capabilities of SummitView
Wholesale Banking
Continued growth of corporate and
investment banking (CIB)
→ Expand sub-industry verticals
→ Grow and invest further in advisory
businesses (M&A / equity)
→ Expand product capabilities
Expand industry expertise outside of CIB
into Commercial & Business Banking (CBB)
and CRE
→ Further build out of industry verticals
→ Acquire and develop top talent in order to
move up market (relationship managers,
corporate finance specialists, industry
specialists)
Technology
→ Ongoing investments in integrated
ecosystem centered around
salesforce.com and nCino
→ Ongoing investments in a more efficient,
user-friendly T&PS platform and overall
product offerings
Integration of Pillar Financial
Mortgage
Continued investments to enable
market share gains across the
mortgage platform
→ Production: meet clients’ increased
purchase needs
→ Servicing: targeted growth to
leverage scale of servicing business
Technology
→ Digital self-serve capabilities &
integration with other SunTrust
platforms
→ Digital originations platform
→ Analytics-based marketing (which
leverages data available throughout
the Company)
Strategic investments will drive future growth & improve profitability
8
$404
$494
2014 20162014 2016
$62.6
$71.6
2014 2016
$43.6
$55.3
2014 2016
WHOLESALE BANKING
Full Product
Capabilities
Industry Vertical
Expertise
Middle Market
Focus
OneTeam
Approach
Balance Sheet
Universal
Banks
Regional
Banks
Boutique
Firms
SunTrust
Wholesale
Banking
Investment banking
income increased
7% in 2016
~30% of this growth
came from non-CIB
clients
(CBB, CRE, PWM)
Continued Long-Term Growth
Left Lead
Relationships
Average
Loans ($B)
Average
Deposits ($B)
Investment
Banking
Income ($MM)
Emphasis on leveraging differentiated business model and working together as OneTeam to
meet the capital markets needs of all Wholesale Banking clients
9
1,659
1,367
~1,280 ~1,225
2011 2016 2Q17 2018
Savings from branch reductions fund investments in….
…resulting in a better overall client experience
Enhanced branch exterior with
expanded ATM and Teller
Connect network
Improved client experience
within branches
(more advisory personnel)
Further enhanced and
expanded online and mobile
banking resources
CONSUMER BANKING: OMNI-CHANNEL STRATEGY
Full Service
Branches
Continued evolution towards a digitally-centered business enables branch reductions…
10
$1.8B
$3.1B
4Q 15 4Q 16
SPOTLIGHT ON
With Good Returns and Strong Credit Quality
5.18%
Average Portfolio Yield2
0.38%
2016 NCO
770
Average FICO
1.5–2 years
Average Duration
Loans from $5,000
to $100,000
Quick
response time
$
Money in your account
as soon as 1 day
1 2 3
Simple three step
process
National Online Consumer Lending Platform with an Outstanding Client Experience
Diverse, Growing Portfolio
Average
Balance1
Efficient &
Scalable Platform
See appendix slide #20 for footnotes
34%
10%
25%
16%
14%
Unsecured Auto
Secured Auto
Home Improvement
Debt Consolidation
Marine, RV, Other
IMPROVING
EFFICIENCY &
RETURNS
2
12
ADJUSTED TANGIBLE EFFICIENCY RATIO1
Revenue
Growth
Initiatives
Outlined
on Slide 7
Execute Omni-Channel strategy
→ 6% net branch reduction by end of 2Q 17
Streamline operations infrastructure; digitize end-to-end
processes and leverage ongoing investments in technology
More effectively manage third-party relationships
More efficient deployment of human capital
Reduce volume-related costs within mortgage production
The Path to <60%
Reduced Expenses
71.5%
66.9%
65.3%
63.3%
62.6% 62.0%
61%-62%
<60%
2011 2012 2013 2014 2015 2016 2017 Medium-Term
Target
(2019)
1. Efficiency ratios (FTE) were 72.0%, 59.3%, 71.2%, 66.7%, 63.1% and 62.6% for 2011, 2012, 2013, 2014, 2015, and 2016 respectively. Please refer to appendix slide #18 for GAAP reconciliations
13
OPTIMIZING THE BALANCE SHEET TO
ENHANCE RETURNS
Notable Statistics
Commercial & Industrial Portfolio: 20+ industry
sectors & LOB’s
□ Maximum exposure to any sector3: 6% of loans
Consumer / Residential Portfolio4: Average FICO
score of 750+
Return Improvement - Going Forward
Grow Consumer Lending
Maintain focus on relationship returns / client ROE in
Wholesale Banking
Increase capital returns to shareholders
Improve efficiency ratio
See appendix slide #20 for footnotes
Commercial
& Industrial
48%
Residential
Mortgage
(Non-Guaranteed)
18%
0.78%
9.4%
0.94%
10.9%
ROA ROTCE
2013 2016
Maintain Diversity1 Improve Returns
2
3
STRONG CAPITAL
POSITION
SUPPORTS GROWTH
15
3.6%
4.5%
SunTrust Traditional
Banks Median
STRONG CAPITAL POSITION SUPPORTS GROWTH
Strong Capital Position
9.4%
~8-9%
Basel III
CET1
Target Level
62%
73%
2015 2016
Increased Capital Returns
Targeted M&A
LightStream (2012)
Lantana Oil & Gas Partners (2014)
MSR acquisitions (~$41 billion UPB since January 2014)
Pillar & Cohen Financial (2016)
$133.6
$141.1
2015 2016
Organic Growth
(Loan growth & investments outlined on slide 7)
Average
Loans ($B)
Fully Phased-In CET11 Stressed Capital Erosion2
#3 of 20
Payout Ratio4
3
See appendix slide #20 for footnotes
16
Note: 2016 Accomplishment figures refer to the YoY change of FY 2015 vs. FY 2016
RECAP: WHY INVEST IN SUNTRUST?
• <60% Medium-Term (2019) Tangible Efficiency
Ratio Goal
→ Will be achieved via revenue growth (see
above) and disciplined expense
management
→ Various strategies and initiatives underway
to mitigate expense growth and improve
operating leverage in 2017 and beyond
▫ 6% net branch reduction to be
completed by end of 2Q 17
5th consecutive year of efficiency
improvements
• Met 2016 goal: 65 bp reduction in tangible
efficiency ratio relative to FY 2015
• Maintained focus on returns
→ $1 billion auto loan sale
→ Increased capital return
Improving
Efficiency & Returns
• Continued opportunity to increase dividends
and share buybacks
• Continue to adhere to strong underwriting
standards in order to drive strong CCAR
performance and through-the-cycle returns
• Evaluate targeted growth and acquisition
opportunities
5th consecutive year of increased capital
return
• 15% increase in 2016 capital return
→ 9% increase in dividends per share
→ 22% increase in share repurchases
• Completed acquisition of Pillar Financial
Strong Capital
Position
Investment Thesis Medium-Term Focus & Potential
Strong & Diverse
Franchise; Investing
in Growth
• Execute Wholesale Banking strategy (add
expertise, acquire and deepen client
relationships via capital markets and T&PS)
• Continue to grow and invest in LightStream and
other consumer lending initiatives
• Increase advisory-oriented bankers and deepen
relationships with mass affluent households
• Organic servicing portfolio growth will partially
buffer decline in mortgage production
5th consecutive year of EPS growth
• 7% revenue growth driven by:
→ Broad-based loan and deposit growth
→ Continued momentum in capital markets
(9th consecutive record year for investment
banking income)
→ Market share gains in mortgage
2016 Accomplishments
1
2
3
APPENDIX
18
2011 2012 2013 2014 2015 2016
Reported (GAAP) Basis
Net Interest Income 5,065 5,102 4,853 4,840 4,764 5,221
Noninterest Income 3,421 5,373 3,214 3,323 3,268 3,383
Revenue 8,486 10,475 8,067 8,163 8,032 8,604
Noninterest Expense¹ 6,194 6,284 5,831 5,543 5,160 5,468
Efficiency Ratio 73.0% 60.0% 72.3% 67.9% 64.2% 63.6%
Reconciliation:
Net Interest Income 5,065 5,102 4,853 4,840 4,764 5,221
FTE Adjustment 114 123 127 142 142 138
Net Interest Income-FTE 5,179 5,225 4,980 4,982 4,906 5,359
Noninterest Income 3,421 5,373 3,214 3,323 3,268 3,383
Revenue-FTE 8,600 10,598 8,194 8,305 8,174 8,742
Efficiency Ratio-FTE 72.0% 59.3% 71.2% 66.7% 63.1% 62.6%
Adjustment Items (Noninterest Income):
3Q-4Q 12 student / Ginnie Mae loan sale (losses) (92)
Securities gains/(losses) 1,938
Pre-tax mortgage repurchase provision related to loans sold to GSEs prior to 2009 (371)
GSE mortgage repurchase settlements (63)
RidgeWorth sale 105
Adjusted Noninterest Income 3,421 3,898 3,277 3,218 3,268 3,383
Adjusted Revenue-FTE² 8,600 9,123 8,257 8,200 8,174 8,742
Noninterest Expense¹ 6,194 6,284 5,831 5,543 5,160 5,468
Adjustment Items (Noninterest Expense):
Legacy affordable housing impairment 96
Charitable contribution of KO shares 38
Impact of certain legacy mortgage legal matters 323 324
Mortgage servicing advances allowance increase 96
Adjusted Noninterest Expense² 6,194 6,150 5,412 5,219 5,160 5,468
Amortization Expense 43 46 23 25 40 49
Adjusted Tangible Expenses² 6,151 6,104 5,389 5,194 5,120 5,419
Adjusted Efficiency Ratio-FTE³ 72.0% 67.4% 65.6% 63.7% 63.1% 62.6%
Adjusted Tangible Efficiency Ratio-FTE³ 71.5% 66.9% 65.3% 63.3% 62.6% 62.0%
RECONCILIATION: ADJUSTED EFFICIENCY RATIO (FTE) &
ADJUSTED TANGIBLE EFFICIENCY RATIO (FTE)
1. In accordance with updated GAAP, amortization of affordable housing investments of $40 million, $39 million, and $49 million were reclassified and are now presented in provision for income taxes for the
2011, 2012, and 2013, respectively. Previously, the amortization was presented in other noninterest expense
2. Adjusted revenue and expenses are provided as they remove certain items that are material and/or potentially non-recurring. Adjusted figures are intended to provide management and investors information
on trends that are more comparable across periods and potentially more comparable across institutions
3. Represents adjusted noninterest expense / adjusted revenue – FTE. Adjusted tangible efficiency ratio excludes amortization expense, the impact of which is (0.50%), (0.43%), (0.27%), (0.30%), (0.49%), and
(0.56%) for 2011, 2012, 2013, 2014, 2015, and 2016, respectively
Note: 2011, 2012, 2013, and 2014 values represent the adjusted efficiency ratio and adjusted tangible efficiency ratio, 2015 and 2016 represent reported efficiency ratio and reported tangible efficiency ratio
19
RECONCILIATION: COMMON EQUITY TIER 1 RATIO1
1. The Common Equity Tier 1 ratio is subject to certain phase-in requirements under Basel III beginning in 2015, and as such we have presented a reconciliation of the Common Equity Tier 1 ratio as calculated
considering the phase-in requirements (Common Equity Tier 1 – Transitional) to the fully phased-in ratio. All figures are estimated at the time of the earnings release and subject to revision
2. Primarily includes the phase-out from capital of certain DTAs, the overfunded pension asset, and other intangible assets
3. Primarily relates to the increased risk weight to be applied to mortgage servicing assets on a fully phased-in basis
Note: Totals may not foot due to rounding
4Q 16
Common Equity Tier 1 – Transitional $17.0
Adjustments2 (0.0)
Common Equity Tier 1 – Fully phased-in $16.9
Risk-weighted Assets: Common Equity Tier 1 – Transitional $176.8
Adjustments3 2.4
Risk-weighted Assets: Common Equity Tier 1 – Fully phased-in $179.2
Common Equity Tier 1 – Transitional 9.59%
Common Equity Tier 1 – Fully phased-in 9.43%
20
FOOTNOTES
Slide #3:
1. Assets, loans, deposits, client, and teammate data as of December 31, 2016; market capitalization as of February 3, 2017
2. Rank is amongst U.S. bank holding companies and excludes non-traditional banks. Asset and loan rankings are sourced via bank holding company regulatory filings (Y-9C) and are as of September 30, 2016.
Deposit rankings are sourced via FDIC deposit market share data, and are as of June 30, 2016, pro-forma for completed and pending mergers and acquisitions
3. Represents full-time equivalent employees
4. Source: SNL Financial, as of June 30, 2016, based on top 10 MSAs (by deposits) for each institution, pro-forma for completed and pending mergers and acquisitions. Numerator is company’s total deposits in its top
10 MSAs and denominator is total deposits in those 10 MSAs
Note: Peer group includes BBT, CMA, COF, FITB, KEY, MTB, PNC, RF, USB, WFC
Slide #4:
1. source: Bureau of Labor Statistics. Represents the MSAs with the highest job growth percentages from FY 2009 to September 2016
2. Source: https://bea.gov/scb/pdf/2016/07%20July/0716_gdp_by_state.pdf. Represents GDP in 2015 as % of total US GDP for GA, FL, NC, SC, TN, MD, VA, DC, KY
3. Source: SNL Financial and Nielsen. Demographic data is provided by Nielsen based primarily on US Census data. For non-census year data, Nielsen uses samples and projections to estimate the demographic data.
SNL performs calculations on the underlying data provided by Nielsen for some of the data
Slide #10:
1. LightStream portfolio average balances for 4Q 15 and 4Q 16
2. For the three months ended December 31, 2016. Rates range from 1.74% to 14.99% depending on loan purpose, amount, term and credit profile
Slide #13:
1. Data as of December 31, 2016. Consumer Lending includes consumer direct loans (other than student guaranteed), consumer indirect loans and consumer credit cards. Guaranteed includes guaranteed student
loans and guaranteed residential mortgages. Construction includes both commercial and residential construction. Note: totals may not foot due to rounding
2. Return on average common shareholders’ equity was 6.3% and 8.0% for 2013 and 2016, respectively. The effect of excluding intangible assets, excluding MSRs, was 3.1%and 2.9% for 2013 and 2016, respectively
3. Not including real estate loans which are classified as C&I
4. Represents weighted average score as of December 31, 2016. Includes consumer loans, home equity, and residential mortgage. Excludes guaranteed loans
Slide #15:
1. Please see Appendix slide #19 to reconcile to GAAP CET1 ratio
2. Represents the difference between the starting and minimum Basel III Common Equity Tier 1 Ratios resulting from the Federal Reserve’s 2016 CCAR severely adverse scenario
3. CCAR 2016 Traditional Banks include BAC, BANCW, BBT, BBVA, BMO, C, CFG, CMA, FITB, HBAN, JPM, KEY, MTB, PNC, RF, STI, TD, USB, WFC, ZION
4. Payout Ratio = (Common Stock Dividends and Share Repurchases) / Net Income Available to Common Shareholders