Positive Operating Trends Continue, Fueled By Strong Loan and Deposit Growth
ATLANTA, July 19 /PRNewswire-FirstCall/ -- SunTrust Banks, Inc.
(NYSE: STI) today reported net income for the second quarter of 2005 of $465.7
million, up from $386.6 million in the second quarter of 2004. Net income per
diluted share was $1.28, down from the $1.36 per diluted share earned in the
second quarter of 2004. Operating income per diluted share was $1.37, up 1%
from the second quarter of 2004. Operating income does not include $33.6
million of after-tax merger charges incurred in the second quarter of 2005
associated with SunTrust's acquisition of National Commerce Financial
Corporation (NCF), which closed on October 1, 2004.
"Strong revenue growth coupled with effective cost control led to the
continuation of positive operating trends this quarter," said L. Phillip
Humann, SunTrust Chairman and Chief Executive Officer. "Hallmarks of the
quarter included significant loan and deposit growth, evidence of the success
that sales and customer retention initiatives are having. In addition, credit
quality remained excellent with charge-offs near historically low levels.
These positive trends helped offset an increase in provision for loan losses
necessary to accommodate another quarter of very strong loan growth."
Discussion of Historical Results and Estimated Historical Combined Results
In order to assist investors in comparing the financial results of the
now-combined SunTrust and NCF, estimated historical combined information for
the second quarter and first six months of 2004 is presented as if the merger
had been completed at the beginning of the period presented. In management's
view, the estimated historical combined financial results assist investors in
better understanding the comparative performance and underlying growth
dynamics of the combined Company. For further information regarding the
estimated historical combined financial information, including reconciliations
of certain financial information, please see Appendix B.
Furthermore, NCF's systems applications were converted to SunTrust's
systems applications in April 2005. In some cases, NCF classified loans and
deposits differently for financial reporting compared to the SunTrust
methodology. While prior to the conversion NCF loan and deposit accounts were
mapped as closely as possible to SunTrust classifications, it was anticipated
that additional reclassifications could occur once the system conversions were
completed. As a result, to better ascertain underlying growth dynamics of the
combined Company, sequential annualized growth rates adjusted for estimated
reclassifications have been provided. In management's view, sequential
annualized growth rates adjusted for estimated reclassifications assist
investors in better understanding the comparative performance and underlying
growth dynamics of loans and deposits for the combined Company. For further
information regarding the consolidated daily average balances for loans and
deposits for the first and second quarters of 2005, adjusted for estimated
reclassifications that arose as a result of the systems conversions, please
see Appendix C.
Second Quarter 2005 Summary:
Estimated
Historical Estimated
Combined Historical
2nd Quarter 2nd Quarter Reported 2nd Quarter Combined
2005 2004 % Change 2004 % Change
Income Statement
(Dollars in
millions except
per share data)
Net income $465.7 $386.6 20% $471.7 (1)%
Operating net
income (1) 499.3 386.6 29% 471.7 6%
Net income per
diluted share 1.28 1.36 (6)% NR
Operating net
income per
diluted share (2) 1.37 1.36 1% NR
Revenue 1,913.3 1,507.8 27% 1,828.3 5%
Revenue
excluding
securities
gains and
losses 1,913.4 1,516.8 26% 1,837.3 4%
Noninterest
expense 1,172.8 928.4 26% 1,103.1 6%
Noninterest
expense before
amortization
of intangible
assets and
merger expense 1,088.7 913.9 19% 1,075.6 1%
Efficiency ratio 61.30% 61.58% NR
Operating
efficiency
ratio (3) 58.46% 61.58% NR
Balance Sheet
(Dollars in
billions)
Average loans $107.0 $80.9 32% $94.7 13%
Average
customer
deposits 93.1 73.2 27% 86.6 8%
Asset Quality
(Dollars in
millions)
Net charge-offs
to average
loans 0.13% 0.19% NR
Net charge-offs $35.4 $37.6 (6)% NR
- Total average loans increased 13% and total average consumer and
commercial deposits increased 8% from the second quarter of 2004 on an
estimated historical combined basis, reflecting the effectiveness of
SunTrust's company-wide sales focus.
- Total revenue increased 5% from the second quarter of 2004 on an
estimated historical combined basis, driven by fully taxable net
interest income growth of 6% and noninterest income growth of 3%.
- Noninterest expense before amortization of intangible assets and merger
expense increased only 1% from the second quarter of 2004 on an
estimated historical combined basis, evidence of the focus on expense
management.
- Revenue growth and good expense management led to positive operating
leverage as demonstrated in the efficiency ratio improvement from the
second quarter of 2004, especially in the operating efficiency ratio
measurement that excludes merger related expenses. The efficiency ratio
for the second quarter of 2005 was 61.30%, a 28 basis point decrease
from the second quarter of 2004. The operating efficiency ratio, which
excludes merger expenses, was 58.46%, a 312 basis point decrease from
the operating efficiency ratio in the second quarter of 2004.
- Credit quality was outstanding during the quarter; net charge-offs were
0.13% of average loans, down from 0.19% of average loans in the second
quarter of 2004.
- Although net income decreased 1% from the second quarter of 2004 on an
estimated historical combined basis, operating net income, which
excludes merger expenses, increased 6%.
- SunTrust completed the NCF conversion of all branches and significant
systems during the quarter. One-time merger expenses are on track and
cost savings are ahead of expectations for 2005.
(1) Excludes 2nd quarter 2005 merger related expenses, net of taxes,
which totaled $33.6 million.
(2) Excludes 2nd quarter 2005 merger related expenses, net of taxes, per
diluted share of $.09.
(3) Excludes 2nd quarter 2005 merger related expenses of $54.3 million,
which had the effect of reducing the efficiency ratio by 284 basis
points.
NR - Not reported.
Financial Performance
For the quarter, reported return on average total assets (ROA) was 1.13%
and return on average total equity (ROE) was 11.48%. Excluding net realized
and unrealized securities gains and losses and dividends from The Coca-Cola
Company, return on average assets was 1.11% and return on average realized
equity was 12.02%. Operating ROA and ROE, which excludes merger charges, was
1.21% and 12.31%, respectively.
For the first six months of 2005, the Company reported net income of
$958.0 million, up from $748.4 million earned in the same period in 2004. Net
income per diluted share was $2.64, flat from the same period in 2004.
Operating net income per diluted share was $2.77 for the first six months of
2005, up 5% from the same period in 2004. ROA for the first six months of
2005 was 1.18% and ROE was 11.93%. Excluding net realized and unrealized
securities gains and losses and dividends from The Coca-Cola Company, return
on average assets was one basis point lower and return on average realized
equity was 68 basis points higher than the reported returns.
Revenue
Total revenue was $1,913.3 million for the second quarter of 2005, up from
$1,507.8 million in the second quarter of 2004. On an estimated historical
combined basis, total revenue was up 5% from the second quarter of 2004. On a
sequential annualized basis, total revenue, excluding securities gains and
losses and the net gain on sale of Receivables Capital Management (RCM)
factoring assets that occurred in the first quarter, increased 10%. Revenue
growth was driven by increases in both net interest income and noninterest
income.
For the first six months of 2005, total revenue was $3,796.4 million, up
from $2,966.7 million for the same period in 2004. On an estimated historical
combined basis, for the first six months of 2005, total revenue was up 5% from
the same period in 2004. Revenue growth for the first six months of 2005 was
also driven by increases in both net interest income and noninterest income.
Net Interest Income
Fully taxable net interest income was $1,142.4 million in the second
quarter of 2005, up from $885.1 million in the second quarter of 2004. On an
estimated historical combined basis, fully taxable net interest income was up
6% from the second quarter of 2004. The primary factors driving the net
interest income growth year-over-year have been strong loan growth and year-
over-year improvement in net interest margin. On an estimated historical
combined basis, loans have grown 13% on average from the second quarter of
2004. The net interest margin improved from 3.13% for the second quarter of
2004 to 3.16% for the second quarter of 2005. The net interest margin of
3.16% for the second quarter of 2005 was down nine basis points from the first
quarter of 2005 due to a number of factors, including: 1) the reversal of the
day count benefit that occurred in the first quarter; 2) the mix of both the
strong incremental loan growth and how the growth was funded had a dilutive
effect on net interest margin; 3) an increase in loans held for sale at a
compressed margin; 4) increases in deposit pricing to remain competitive; and
5) the impact of the flattening yield curve during the second quarter.
Although net interest margin declined in the second quarter of 2005, fully
taxable net interest income increased 5% in the second quarter compared to the
first quarter of 2005 on a sequential annualized basis.
For the first six months of 2005, fully taxable net interest income was
$2,271.7 million, up from $1,749.0 million for the same period in 2004. On an
estimated historical combined basis for the first six months of 2005, fully
taxable net interest income was up 6% from the same period in 2004.
Noninterest Income
Total noninterest income was $770.9 million for the second quarter of 2005,
up from $622.7 million for the second quarter of 2004. On an estimated
historical combined basis, total noninterest income for the second quarter was
up 3% from the second quarter of 2004. Comparing the second quarter to the
first quarter of 2005, total noninterest income excluding securities gains and
losses and the net gain on sale of RCM factoring assets that occurred in the
first quarter increased 17% on a sequential annualized basis. Drivers of the
increase in noninterest income have been growth in service charge fee income,
trust and investment management income and mortgage related income.
For the first six months of 2005, noninterest income excluding securities
gains and losses and the net gain on the sale of RCM factoring assets was
$1,510.5 million, up from $1,221.9 million for the same period in 2004. On an
estimated historical combined basis for the first six months of 2005,
noninterest income excluding securities gains and losses and the net gain on
the sale of RCM factoring assets was up 4% from the same period in 2004.
Noninterest Expense
Total noninterest expense in the second quarter of 2005 was $1,172.8
million, up from $928.4 million for the second quarter of 2004. On an
estimated historical combined basis, total noninterest expense before
amortization of intangible assets and merger expenses was up 1% from the
second quarter of 2004. Comparing the second quarter to the first quarter of
2005, total noninterest expense before amortization of intangible assets and
merger expenses increased 4% on a sequential annualized basis. Cost savings
from the merger integration amounted to $18 million in the second quarter of
2005, bringing the total cost savings to $26 million for the first six months
of 2005.
The Company's reported efficiency ratio was 61.30% for the second quarter
of 2005 compared to 60.22% for the first quarter of 2005. The operating
efficiency ratio, which excludes the impact of merger expenses, was 58.46%.
This compares favorably to the first quarter operating efficiency ratio of
58.85% and the adjusted operating efficiency ratio, which excludes the impact
of the net gain on sale of RCM factoring assets in addition to merger expenses,
of 59.48%.
For the first six months of 2005, total noninterest expense was $2,306.7
million, up from $1,818.2 million for the same period of 2004. For the first
six months of 2005, total noninterest expense before amortization of
intangible assets and merger expenses was up 3% from the same period of 2004
on an estimated historical combined basis.
Balance Sheet
At June 30, 2005, SunTrust had total assets of $169.0 billion. Equity
capital of $16.6 billion represented 10% of total assets. Book value per
share was $45.96, up from $44.59 on March 31, 2005.
Loans
Average loans for the second quarter of 2005 were $107.0 billion, up from
$80.9 billion for the second quarter of 2004. On an estimated historical
combined basis, average loans were up 13% from the second quarter of 2004. On
a sequential annualized basis, average loans grew 15% from the first quarter
to the second quarter of 2005. Areas of strongest growth in the consumer
category were residential real estate, home equity and consumer direct.
Commercial loan growth was strong across all market segments.
Deposits
Average consumer and commercial deposits for the second quarter of 2005
were $93.1 billion, up from $73.2 billion for the second quarter of 2004. On
an estimated historical combined basis, average consumer and commercial
deposits for the second quarter were up 8% from the second quarter of 2004.
On a sequential annualized basis, average consumer and commercial deposits
grew 9% from the first quarter to the second quarter of 2005. On a sequential
annualized basis adjusted for estimated reclassifications, noninterest-bearing
and time deposit growth was particularly strong in the second quarter. Time
deposit growth was enhanced through a marketing campaign that began in the
first quarter and continued through a portion of the second quarter.
Asset Quality
Credit quality trends continued to improve in the second quarter of 2005.
Net charge-offs in the second quarter of 2005 were 0.13% of average loans,
down from 0.14% of average loans in the first quarter of 2005 and 0.19% of
average loans in the second quarter of 2004. Net charge-offs were $35.4
million in the second quarter of 2005 compared to $36.8 million in the first
quarter of 2005. Nonperforming assets were $380.3 million at June 30, 2005 or
0.35% of loans, other real estate owned and other repossessed assets, as
compared to $392.3 million or 0.37% of loans, other real estate owned and
other repossessed assets at March 31, 2005.
Although the credit trends continued to improve, the allowance for loan
and lease losses was increased to $1,036.2 million at June 30, 2005 from
$1,023.7 million at March 31, 2005 to accommodate the continuation of
significant loan growth. Provision expense increased from $10.6 million in
the first quarter of 2005 to $47.8 million in the second quarter of 2005 as a
result of the need to increase the allowance for loan and lease losses. The
allowance for loan and leases losses at June 30, 2005 represented 0.95% of
loans and 296.7% of nonperforming loans. SunTrust believes its net charge-off
and nonperforming asset levels continue to compare very favorably with the
most recently published industry averages.
Elimination of Material Weakness in Internal Control Over Financial
Reporting
SunTrust disclosed that there was a material weakness in the Company's
internal control over financial reporting relating to the allowance for loan
and lease losses initially in its Form 10-Q for the third quarter of 2004, in
the subsequent Form 10-K for the year ended December 31, 2004 and in the Form
10-Q for the first quarter of 2005. Management has determined that SunTrust
has eliminated the material weakness in internal control over financial
reporting relating to the allowance for loan and lease losses through a series
of remedial actions undertaken since the identification of the material
weakness.
Corresponding Financial Tables and Information
To view the corresponding financial tables and information, please refer
to the Investor Relations section located under "About SunTrust" on our Web
site at http://www.suntrust.com. This information may also be directly
accessed via the quick link entitled "2nd Quarter Earnings Release" on the
SunTrust homepage.
Conference Call
SunTrust management will host a conference call on July 19, 2005 at
8:00 a.m. (Eastern Time) to discuss the earnings results and business trends.
Individuals are encouraged to call in beginning at 7:45 a.m. (Eastern Time) by
dialing 1-888-972-7805 (Passcode: 2Q05; Leader: Greg Ketron). Individuals
calling from outside the United States should dial 1-517-308-9091 (Passcode:
2Q05; Leader: Greg Ketron). A replay of the call will be available beginning
July 19, 2005 and ending August 2, 2005 at 5:00 p.m. (Eastern Time) by dialing
1-800-947-6436 (domestic) or 1-203-369-3984 (international).
Alternatively, individuals may listen to the live webcast of the
presentation by visiting the SunTrust Web site at http://www.suntrust.com. The
webcast will be hosted under "Investor Relations" located under "About
SunTrust" or may be accessed directly from the SunTrust home page by clicking
on the earnings-related link, "2nd Quarter Earnings Release". Beginning the
afternoon of July 19, 2005, listeners may access an archived version of the
presentation in the "Webcasts and Presentations" subsection found under
"Investor Relations". A link to the Investor Relations page is also found in
the footer of the SunTrust home page.
SunTrust Banks, Inc., (NYSE: STI) headquartered in Atlanta, Georgia, is
one of the nation's largest commercial banking organizations. The Company
operates an extensive branch and ATM network throughout the high-growth
Southeast and Mid-Atlantic states and a full array of technology-based,
24-hour delivery channels. The Company also serves customers in selected
markets nationally. Its primary businesses include deposit, credit, trust and
investment services. Through various subsidiaries the company provides credit
cards, mortgage banking, insurance, brokerage and capital markets services.
SunTrust's Internet address is suntrust.com.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Such statements
include, but are not limited to, SunTrust's plans, objectives, expectations
and intentions and other statements that are not historical facts. Such
statements are based upon the current beliefs and expectations of SunTrust's
management and are subject to significant risks and uncertainties. Actual
results may differ from those set forth in the forward-looking statements.
Factors that could cause SunTrust's results to differ materially from those
described in the forward-looking statements can be found in the 2004 Annual
Report on Form 10-K of SunTrust, in the Quarterly Reports on Form 10-Q and 10-
Q/A of SunTrust and the Quarterly Reports on Form 10-Q of NCF and in the
Current Reports filed on Form 8-K of SunTrust and NCF filed with the
Securities and Exchange Commission and available at the Securities and
Exchange Commission's internet site (http://www.sec.gov). The forward-looking
statements in this press release speak only as of the date of the filing, and
SunTrust does not assume any obligation to update the forward-looking
statements or to update the reasons why actual results could differ from those
contained in the forward-looking statements.
This press release contains certain non-GAAP measures to describe our
Company's performance. The reconciliation of those measures to the most
directly comparable GAAP measures can be found in the financial information
contained in Appendix A of this press release.
SunTrust Banks, Inc. and Subsidiaries
RECONCILEMENT OF NON-GAAP MEASURES
APPENDIX A TO THE PRESS RELEASE
(Dollars in thousands)
Three Months Ended
June 30 March 31 December 31
2005 2005 2004
NON-GAAP MEASURES
PRESENTED IN THE PRESS
RELEASE
Net income $465,700 $492,294 $455,729
Securities
losses/(gains), net of
tax 17 3,509 12,595
Net income excluding
securities gains and
losses 465,717 495,803 468,324
The Coca-Cola Company
dividend, net of tax (12,027) (12,028) (10,739)
Net income excluding
securities gains and
losses and
The Coca-Cola
Company dividend $453,690 $483,775 $457,585
Total average assets $165,253,589 $161,218,222 $156,570,092
Average net unrealized
securities gains (1,791,566) (2,032,787) (2,056,737)
Average assets less net
unrealized securities
gains $163,462,023 $159,185,435 $154,513,355
Total average equity $16,275,567 $16,119,430 $15,818,968
Average accumulated
other comprehensive
income (1,139,477) (1,285,278) (1,304,553)
Total average realized
equity $15,136,090 $14,834,152 $14,514,415
Return on average total
assets 1.13 % 1.24 % 1.16 %
Impact of excluding net
realized and unrealized
securities gains/losses
and The Coca-Cola
Company dividend (0.02) (0.01) 0.02
Return on average total
assets less net
unrealized
securities gains (1) 1.11 % 1.23 % 1.18 %
Return on average total
shareholders' equity 11.48 % 12.39 % 11.46 %
Impact of excluding net
unrealized securities
gains 0.54 0.84 1.08
Return on average
realized shareholders'
equity (2) 12.02 % 13.23 % 12.54 %
Noninterest income $770,909 $753,814 $759,003
Securities
losses/(gains) 27 5,659 19,377
Gain on sale of RCM
assets, net of related
expenses - (19,874) -
Total noninterest income
excluding securities
gains and losses
and net gain on
sale of RCM assets (3) $770,936 $739,599 $778,380
Net interest income $1,123,709 $1,111,560 $1,084,204
FTE adjustment 18,720 17,666 16,684
Net interest income -
FTE 1,142,429 1,129,226 1,100,888
Noninterest income 770,909 753,814 759,003
Total revenue 1,913,338 1,883,040 1,859,891
Securities
losses/(gains) 27 5,659 19,377
Gain on sale of RCM
assets, net of related
expenses - (19,874) -
Total revenue excluding
securities gains and
losses and net gain
on sale of RCM
assets (3) $1,913,365 $1,868,825 $1,879,268
SunTrust Banks, Inc. and Subsidiaries
RECONCILEMENT OF NON-GAAP MEASURES
APPENDIX A TO THE PRESS RELEASE
(Dollars in thousands)
Three Months Ended
September 30 June 30
2004 2004
NON-GAAP MEASURES PRESENTED IN THE
PRESS RELEASE
Net income $368,766 $386,571
Securities losses/(gains), net of
tax 11,825 5,881
Net income excluding securities
gains and losses 380,591 392,452
The Coca-Cola Company dividend, net
of tax (10,740) (10,739)
Net income excluding securities
gains and losses and
The Coca-Cola Company dividend $369,851 $381,713
Total average assets $127,127,968 $127,287,458
Average net unrealized securities
gains (2,054,978) (2,803,917)
Average assets less net unrealized
securities gains $125,072,990 $124,483,541
Total average equity $9,992,905 $10,194,201
Average accumulated other
comprehensive income (1,318,332) (1,804,833)
Total average realized equity $8,674,573 $8,389,368
Return on average total assets 1.15 % 1.22 %
Impact of excluding net realized
and unrealized securities
gains/losses and The Coca-Cola
Company dividend 0.03 0.01
Return on average total assets less
net unrealized securities gains (1) 1.18 % 1.23 %
Return on average total
shareholders' equity 14.68 % 15.25 %
Impact of excluding net unrealized
securities gains 2.28 3.05
Return on average realized
shareholders' equity (2) 16.96 % 18.30 %
Noninterest income $627,692 $622,665
Securities losses/(gains) 18,193 9,048
Gain on sale of RCM assets, net of
related expenses - -
Total noninterest income excluding
securities gains and losses
and net gain on sale of RCM
assets (3) $645,885 $631,713
Net interest income $876,874 $872,429
FTE adjustment 16,821 12,637
Net interest income - FTE 893,695 885,066
Noninterest income 627,692 622,665
Total revenue 1,521,387 1,507,731
Securities losses/(gains) 18,193 9,048
Gain on sale of RCM assets, net of
related expenses - -
Total revenue excluding securities
gains and losses and net gain on
sale of RCM assets (3) $1,539,580 $1,516,779
SunTrust Banks, Inc. and Subsidiaries
RECONCILEMENT OF NON-GAAP MEASURES
APPENDIX A TO THE PRESS RELEASE
(Dollars in thousands)
Six Months Ended
June 30
2005 2004
NON-GAAP MEASURES PRESENTED IN THE
PRESS RELEASE
Net income $957,994 $748,406
Securities losses/(gains), net of
tax 3,525 2,679
Net income excluding securities
gains and losses 961,519 751,085
The Coca-Cola Company dividend, net
of tax (24,056) (21,478)
Net income excluding securities
gains and losses and The Coca-Cola
Company dividend $937,463 $729,607
Total average assets $163,247,052 $125,570,602
Average net unrealized securities
gains (1,911,510) (2,692,110)
Average assets less net unrealized
securities gains $161,335,542 $122,878,492
Total average equity $16,197,929 $10,017,242
Average accumulated other
comprehensive income (1,211,975) (1,725,273)
Total average realized equity $14,985,954 $8,291,969
Return on average total assets 1.18 % 1.20 %
Impact of excluding net realized
and unrealized securities
gains/losses and The Coca-Cola
Company dividend (0.01) (0.01)
Return on average total assets less
net unrealized securities gains (1) 1.17 % 1.19 %
Return on average total
shareholders' equity 11.93 % 15.02 %
Impact of excluding net unrealized
securities gains 0.68 2.67
Return on average realized
shareholders' equity (2) 12.61 % 17.69 %
Noninterest income $1,524,723 $1,217,751
Securities losses/(gains) 5,686 4,121
Gain on sale of RCM assets, net of
related expenses (19,874) -
Total noninterest income excluding
securities gains and losses and
net gain on sale of RCM assets (3) $1,510,535 $1,221,872
Net interest income $2,235,269 $1,724,077
FTE adjustment 36,386 24,893
Net interest income - FTE 2,271,655 1,748,970
Noninterest income 1,524,723 1,217,751
Total revenue 3,796,378 2,966,721
Securities losses/(gains) 5,686 4,121
Gain on sale of RCM assets, net of
related expenses (19,874) -
Total revenue excluding securities
gains and losses and net gain on
sale of RCM assets (3) $3,782,190 $2,970,842
Three Months Ended
June 30 March 31 % (4)
2005 2005 Change
AVERAGE LOW COST
CONSUMER AND COMMERCIAL
DEPOSIT RECONCILEMENT
Noninterest bearing
deposits $24,309,721 $23,723,080 2.5%
NOW accounts 17,519,608 17,479,848 0.2
Savings 6,462,425 7,506,923 (13.9)
Total average low cost
consumer and commercial
deposits $48,291,754 $48,709,851 (0.9)
Three Months Ended
June 30 June 30 %
2005 2004 Change
AVERAGE LOW COST CONSUMER
AND COMMERCIAL DEPOSIT
RECONCILEMENT
Noninterest bearing
deposits $24,309,721 $20,591,615 18.1%
NOW accounts 17,519,608 12,811,554 36.7
Savings 6,462,425 6,990,929 (7.6)
Total average low cost
consumer and commercial
deposits $48,291,754 $40,394,098 19.6
(1) SunTrust presents a return on average assets less net unrealized gains
on securities. The foregoing numbers reflect primarily adjustments
to remove the effects of the Company's securities portfolio which
includes the ownership by the Company of 48.3 million shares of
The Coca-Cola Company. The Company uses this information internally
to gauge its actual performance in the industry. The Company believes
that the return on average assets less the net unrealized securities
gains is more indicative of the Company's return on assets because it
more accurately reflects the return on the assets that are related to
the Company's core businesses which are primarily customer
relationship and customer transaction driven. The return on average
assets less net unrealized gains on securities is computed by dividing
annualized net income, excluding securities gains/losses and The Coca-
Cola Company dividend, by average assets less net unrealized
securities gains.
(2) The Company also believes that the return on average realized equity
is more indicative of the Company's return on equity because the
excluded equity relates primarily to a long term holding of a specific
security. The return on average realized shareholders' equity is
computed by dividing annualized net income, excluding securities
gains/losses and The Coca-Cola Company dividend, by average realized
shareholders' equity.
(3) SunTrust presents total noninterest income and total revenue excluding
realized securities gains and losses and the net gain on the sale of
RCM assets. The Company believes total noninterest income and total
revenue without securities gains and losses is more indicative of the
Company's performance because it isolates income that is primarily
customer relationship and customer transaction driven. SunTrust
further excludes the net gain on the sale of RCM assets because the
Company believes the exclusion of the net gain is more indicative of
normalized operations.
(4) Multiply by 4 to calculate sequential annualized growth or reductions
discussed in the earnings call.
SunTrust Banks, Inc. and Subsidiaries
RECONCILEMENT OF NON-GAAP MEASURES
APPENDIX A TO THE PRESS RELEASE, continued
(Dollars in thousands)
Three Months Ended Six Months Ended
June 30 March 31 June 30
2005 2005 2005
SELECTED NON-GAAP OPERATING
MEASURES AND ADJUSTED
OPERATING MEASURES PRESENTED
IN THE PRESS RELEASE (1)
Net income $465,700 $492,294 $957,994
Merger expense, net of tax 33,642 15,958 49,600
Operating net income 499,342 508,252 1,007,594
Net gain on sale of RCM
assets, net of tax - (12,322) (12,322)
Adjusted operating net income $499,342 $495,930 $995,272
Diluted earnings per share $1.28 $1.36 $2.64
Impact of excluding merger
expense 0.09 0.04 0.13
Operating diluted earnings per
share 1.37 1.40 2.77
Impact of net gain on sale of
RCM assets - (0.03) (0.03)
Adjusted operating diluted
earnings per share $1.37 $1.37 $2.74
Total revenue $1,913,338 $1,883,040 $3,796,378
Securities losses 27 5,659 5,686
Net gain on sale of RCM assets - (19,874) (19,874)
Adjusted total revenue $1,913,365 $1,868,825 $3,782,190
Noninterest income $770,909 $753,814 $1,524,723
Net gain on sale of RCM assets - (19,874) (19,874)
Noninterest income excluding
net gain on sale of RCM
assets $770,909 $733,940 $1,504,849
Noninterest expense $1,172,825 $1,133,906 $2,306,731
Merger expense (54,262) (25,738) (80,000)
Noninterest expense excluding
merger expense $1,118,563 $1,108,168 $2,226,731
Efficiency ratio 61.30 % 60.22 % 60.76 %
Impact of excluding merger
expense (2.84) (1.37) (2.11)
Operating efficiency ratio 58.46 58.85 58.65
Impact of net gain on sale of
RCM assets - 0.63 0.31
Adjusted operating efficiency
ratio 58.46 % 59.48 % 58.96 %
Return on average total assets 1.13 % 1.24 % 1.18 %
Impact of excluding merger
expense 0.08 0.04 0.06
Operating return on average
total assets (2) 1.21 % 1.28 % 1.24 %
Return on average total
shareholders' equity 11.48 % 12.39 % 11.93 %
Impact of excluding merger
expense 0.83 0.40 0.61
Operating return on average
total shareholders' equity (3) 12.31 % 12.79 % 12.54 %
(1) SunTrust presents selected financial data on an operating basis that
excludes merger charges, which represent incremental costs to
integrate NCF's operations. The Company also presents selected
financial data on an adjusted operating basis, which further excludes
the net gain related to the sale of RCM assets. The Company believes
the exclusion of these two measures is more reflective of normalized
operations.
(2) Computed by dividing annualized operating net income by average total
assets.
(3) Computed by dividing annualized operating net income by average total
shareholders' equity.
SunTrust Banks, Inc. and Subsidiaries
QUARTER-TO-QUARTER COMPARISON - ACTUAL
APPENDIX B TO THE PRESS RELEASE
Three Months Ended
Sequential
Increase/ Annual-
June 30 March 31 (Decrease) ized(1)
2005 2005 Amount % %
STATEMENTS OF INCOME
(Dollars in
thousands)
NET INTEREST INCOME $1,123,709 $1,111,560 $12,149 1.1 % 4.4 %
Provision for loan
losses 47,811 10,556 37,255 352.9 NM
NET INTEREST INCOME
AFTER PROVISION
FOR LOAN LOSSES 1,075,898 1,101,004 (25,106) (2.3) (9.1)
NONINTEREST INCOME
Deposit and other fees
(2) 357,545 343,634 13,911 4.0 16.2
Trust and investment
management income 167,503 164,515 2,988 1.8 7.3
Broker / dealer
revenue (3) 138,149 149,196 (11,047) (7.4) (29.6)
Other noninterest
income 107,739 82,254 25,485 31.0 NM
Noninterest income
before securities
(losses)/gains
and net gain on
sale of RCM
assets (4) 770,936 739,599 31,337 4.2 16.9
Gain on sale of RCM
assets, net of
related expenses - 19,874 (19,874) (100.0) NM
Noninterest income
before securities
(losses)/gains 770,936 759,473 11,463 1.5 6.0
Securities
(losses)/gains (27) (5,659) 5,632 (99.5) NM
Total noninterest
income 770,909 753,814 17,095 2.3 9.1
NONINTEREST EXPENSE
Personnel expense 623,284 634,793 (11,509) (1.8) (7.3)
Net occupancy expense 73,483 75,851 (2,368) (3.1) (12.5)
Outside processing and
software 89,282 82,848 6,434 7.8 31.1
Equipment expense 51,579 52,882 (1,303) (2.5) (9.9)
Marketing and customer
development 36,298 31,629 4,669 14.8 59.0
Other noninterest
expense 214,819 198,948 15,871 8.0 31.9
Noninterest expense
before
amortization of
intangible assets
and merger
expense (5) 1,088,745 1,076,951 11,794 1.1 4.4
Amortization of
intangible assets 29,818 31,217 (1,399) (4.5) (17.9)
Merger expense 54,262 25,738 28,524 110.8 NM
Total noninterest
expense 1,172,825 1,133,906 38,919 3.4 13.7
INCOME BEFORE INCOME
TAXES 673,982 720,912 (46,930) (6.5) (26.0)
Provision for income
taxes 208,282 228,618 (20,336) (8.9) (35.6)
NET INCOME 465,700 492,294 (26,594) (5.4) (21.6)
Merger expense, net of
tax 33,642 15,958 17,684 110.8 NM
OPERATING NET INCOME 499,342 508,252 (8,910) (1.8) (7.0)
Net gain on sale of
RCM assets, net of
tax - (12,322) 12,322 (100.0) NM
ADJUSTED OPERATING NET
INCOME $499,342 $495,930 $3,412 0.7 2.8
REVENUE (Dollars in
thousands)
Net interest income $1,123,709 $1,111,560 $12,149 1.1 % 4.4 %
FTE adjustment 18,720 17,666 1,054 6.0 23.9
Net interest income -
FTE 1,142,429 1,129,226 13,203 1.2 4.7
Noninterest income 770,909 753,814 17,095 2.3 9.1
Total revenue 1,913,338 1,883,040 30,298 1.6 6.4
Securities
losses/(gains) 27 5,659 (5,632) (99.5) NM
Net gain on sale of
RCM assets - (19,874) 19,874 (100.0) NM
Total revenue
excluding securities
gains and losses
and net gain on
sale of RCM
assets $1,913,365 $1,868,825 $44,540 2.4 9.5
SELECTED AVERAGE
BALANCES (Dollars in
millions)
Average Loans (6, 8)
Commercial $32,508 $33,518 ($1,010) (3.0)% (12.1)%
Real estate 1-4 family 26,324 23,527 2,797 11.9 47.6
Real estate commercial
and construction 21,496 19,224 2,272 11.8 47.3
Real estate equity 12,135 11,574 561 4.8 19.4
Consumer (7) 14,291 15,175 (884) (5.8) (23.3)
Credit cards 213 198 15 7.6 30.3
Total loans $106,967 $103,216 $3,751 3.6 14.5
Average deposits (8)
Noninterest bearing
deposits $24,310 $23,723 $587 2.5 % 9.9 %
NOW accounts 17,520 17,480 40 0.2 0.9
Money Market accounts 25,473 24,767 706 2.9 11.4
Savings 6,462 7,507 (1,045) (13.9) (55.7)
Consumer and other
time 19,300 17,491 1,809 10.3 41.4
Total consumer and
commercial
deposits 93,065 90,968 2,097 2.3 9.2
Brokered and foreign
deposits 15,709 13,424 2,285 17.0 68.1
Total deposits $108,774 $104,392 $4,382 4.2 16.8
SELECTED CREDIT DATA
(Dollars in
thousands)
Nonaccrual loans $328,018 $337,057 ($9,039) (2.7)% (10.7)%
Restructured loans 21,236 20,071 1,165 5.8 23.2
Total nonperforming
loans 349,254 357,128 (7,874) (2.2) (8.8)
Other real estate
owned (OREO) 25,263 27,555 (2,292) (8.3) (33.3)
Other repossessed
assets 5,786 7,662 (1,876) (24.5) (97.9)
Total
nonperforming
assets $380,303 $392,345 ($12,042) (3.1) (12.3)
Allowance for loan and
lease losses $1,036,173 $1,023,746 $12,427 1.2 4.9
(1) Multiply percentage change by 4 to calculate sequential annualized
change. Any sequential annualized change over 100 percent is labeled
as "NM." Those changes over 100 percent were not considered to be
meaningful.
(2) Includes service charges on deposits, card and other charges and fees.
(3) Includes retail investment services, investment banking income and
trading account profits and commissions.
(4) SunTrust presents noninterest income before securities (losses)/gains
and the net gain on the sale of RCM assets. The Company believes
noninterest income before securities gains and losses is more
indicative of the Company's performance because it isolates income
that is primarily customer relationship and customer transaction
driven. SunTrust further excludes the net gain on the sale of RCM
assets because the Company believes the exclusion of the net gain
provides better comparability and is more indicative of normalized
operations.
(5) The Company presents noninterest expense before amortization of
intangible assets and merger expense. The Company believes the
exclusion of these measures provides better comparability and is more
reflective of normalized operations.
(6) SunTrust's average nonaccrual and restructured loans are included in
the respective categories to conform to the NCF presentation.
(7) Includes consumer direct and consumer indirect loans.
(8) See Appendix C for the impact of the estimated reclassification
adjustments resulting from the April 22, 2005 NCF systems conversion.
SunTrust Banks, Inc. and Subsidiaries
QUARTER-TO-QUARTER COMPARISON - HISTORICAL COMBINED GROWTH
APPENDIX B TO THE PRESS RELEASE, continued
The 2nd quarter and year-to-date 2004 figures represent SunTrust and NCF
on a historical combined basis.
See page 15 for a reconcilement of these historical combined amounts.
HISTORICAL COMBINED
Three Months Ended
June 30 Increase/(Decrease)
2005 2004 Amount %
STATEMENTS OF INCOME (Dollars
in thousands)
NET INTEREST INCOME $1,123,709 $1,066,415 $57,294 5.4 %
Provision for loan losses 47,811 15,672 32,139 205.1
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 1,075,898 1,050,743 25,155 2.4
NONINTEREST INCOME
Deposit and other fees (1) 357,545 355,631 1,914 0.5
Trust and investment management
income 167,503 156,352 11,151 7.1
Broker / dealer revenue (2) 138,149 161,914 (23,765) (14.7)
Other noninterest income 107,739 81,998 25,741 31.4
Noninterest income before
securities (losses)/gains
and net gain on sale of
RCM assets(3) 770,936 755,895 15,041 2.0
Gain on sale of RCM assets, net
of related expenses - - - -
Noninterest income before
securities (losses)/gains 770,936 755,895 15,041 2.0
Securities (losses)/gains (27) (8,982) 8,955 (99.7)
Total noninterest income 770,909 746,913 23,996 3.2
NONINTEREST EXPENSE
Personnel expense 623,284 598,729 24,555 4.1
Net occupancy expense 73,483 75,042 (1,559) (2.1)
Outside processing and software 89,282 77,680 11,602 14.9
Equipment expense 51,579 52,934 (1,355) (2.6)
Marketing and customer
development 36,298 35,788 510 1.4
Other noninterest expense 214,819 235,442 (20,623) (8.8)
Noninterest expense before
amortization of
intangible assets and merger
expense(4) 1,088,745 1,075,615 13,130 1.2
Amortization of intangible
assets 29,818 27,491 2,327 8.5
Merger expense 54,262 - 54,262 100.0
Total noninterest expense 1,172,825 1,103,106 69,719 6.3
INCOME BEFORE INCOME TAXES 673,982 694,550 (20,568) (3.0)
Provision for income taxes 208,282 222,888 (14,606) (6.6)
NET INCOME 465,700 471,662 (5,962) (1.3)
Merger expense, net of tax 33,642 - 33,642 100.0
OPERATING NET INCOME 499,342 471,662 27,680 5.9
Net gain on sale of RCM assets,
net of tax - - - -
ADJUSTED OPERATING NET INCOME $499,342 $471,662 $27,680 5.9
REVENUE (Dollars in thousands)
Net interest income $1,123,709 $1,066,415 $57,294 5.4 %
FTE adjustment (5) 18,720 15,017 3,703 24.7
Net interest income - FTE 1,142,429 1,081,432 60,997 5.6
Noninterest income 770,909 746,913 23,996 3.2
Total revenue 1,913,338 1,828,345 84,993 4.6
Securities losses/(gains) 27 8,982 (8,955) (99.7)
Net gain on sale of RCM assets - - - -
Total revenue excluding
securities gains and losses
and net gain on sale of
RCM assets $1,913,365 $1,837,327 $76,038 4.1
SELECTED AVERAGE BALANCES
(Dollars in millions)
Average Loans (6)
Commercial $32,508 $31,775 $733 2.3 %
Real estate 1-4 family 26,324 20,018 6,306 31.5
Real estate commercial and
construction 21,496 17,864 3,632 20.3
Real estate equity 12,135 9,497 2,638 27.8
Consumer (7) 14,291 15,382 (1,091) (7.1)
Credit cards 213 167 46 27.5
Total loans $106,967 $94,703 $12,264 12.9
Average deposits
Noninterest bearing deposits $24,310 $23,292 $1,018 4.4 %
NOW accounts 17,520 15,090 2,430 16.1
Money Market accounts 25,473 24,207 1,266 5.2
Savings 6,462 8,697 (2,235) (25.7)
Consumer and other time 19,300 15,270 4,030 26.4
Total consumer and
commercial deposits 93,065 86,556 6,509 7.5
Brokered and foreign deposits 15,709 12,677 3,032 23.9
Total deposits $108,774 $99,233 $9,541 9.6
SELECTED CREDIT DATA (Dollars
in thousands)
Nonaccrual loans $328,018 $320,548 $7,470 2.3 %
Restructured loans 21,236 18,189 3,047 16.8
Total nonperforming loans 349,254 338,737 10,517 3.1
Other real estate owned (OREO) 25,263 36,865 (11,602) (31.5)
Other repossessed assets 5,786 14,201 (8,415) (59.3)
Total nonperforming assets $380,303 $389,803 ($9,500) (2.4)
Allowance for loan and lease
losses $1,036,173 $1,080,681 ($44,508) (4.1)
SunTrust Banks, Inc. and Subsidiaries
QUARTER-TO-QUARTER COMPARISON - HISTORICAL COMBINED GROWTH
APPENDIX B TO THE PRESS RELEASE, continued
The 2nd quarter and year-to-date 2004 figures represent SunTrust and NCF
on a historical combined basis.
See page 15 for a reconcilement of these historical combined amounts.
HISTORICAL COMBINED
Six Months Ended
June 30 Increase/(Decrease)
2005 2004 Amount %
STATEMENTS OF INCOME (Dollars
in thousands)
NET INTEREST INCOME $2,235,269 $2,109,134 $126,135 6.0 %
Provision for loan losses 58,367 81,597 (23,230) (28.5)
NET INTEREST INCOME AFTER
PROVISION LOAN LOSSES 2,176,902 2,027,537 149,365 7.4
NONINTEREST INCOME
Deposit and other fees (1) 701,179 692,753 8,426 1.2
Trust and investment management
income 332,018 309,068 22,950 7.4
Broker / dealer revenue (2) 287,345 307,617 (20,272) (6.6)
Other noninterest income 189,993 145,636 44,357 30.5
Noninterest income before
securities (losses)/gains
and net gain on sale of
RCM assets(3) 1,510,535 1,455,074 55,461 3.8
Gain on sale of RCM assets, net
of related expenses 19,874 - 19,874 100.0
Noninterest income before
securities (losses)/gains 1,530,409 1,455,074 75,335 5.2
Securities (losses)/gains (5,686) 6,863 (12,549) (182.9)
Total noninterest income 1,524,723 1,461,937 62,786 4.3
NONINTEREST EXPENSE
Personnel expense 1,258,077 1,184,646 73,431 6.2
Net occupancy expense 149,334 150,308 (974) (0.6)
Outside processing and software 172,130 149,895 22,235 14.8
Equipment expense 104,461 105,252 (791) (0.8)
Marketing and customer
development 67,927 69,036 (1,109) (1.6)
Other noninterest expense 413,767 440,673 (26,906) (6.1)
Noninterest expense before
amortization of
intangible assets and merger
expense(4) 2,165,696 2,099,810 65,886 3.1
Amortization of intangible
assets 61,035 56,770 4,265 7.5
Merger expense 80,000 - 80,000 100.0
Total noninterest expense 2,306,731 2,156,580 150,151 7.0
INCOME BEFORE INCOME TAXES 1,394,894 1,332,894 62,000 4.7
Provision for income taxes 436,900 409,153 27,747 6.8
NET INCOME 957,994 923,741 34,253 3.7
Merger expense, net of tax 49,600 - 49,600 100.0
OPERATING NET INCOME 1,007,594 923,741 83,853 9.1
Net gain on sale of RCM assets,
net of tax (12,322) - (12,322) (100.0)
ADJUSTED OPERATING NET INCOME $995,272 $923,741 $71,531 7.7
REVENUE (Dollars in thousands)
Net interest income $2,235,269 $2,109,134 $126,135 6.0 %
FTE adjustment (5) 36,386 29,378 7,008 23.9
Net interest income - FTE 2,271,655 2,138,512 133,143 6.2
Noninterest income 1,524,723 1,461,937 62,786 4.3
Total revenue 3,796,378 3,600,449 195,929 5.4
Securities losses/(gains) 5,686 (6,863) 12,549 182.9
Net gain on sale of RCM assets (19,874) - (19,874) (100.0)
Total revenue excluding
securities gains and losses
and net gain on sale of
RCM assets $3,782,190 $3,593,586 $188,604 5.2
SELECTED AVERAGE BALANCES
(Dollars in millions)
Average Loans (6)
Commercial $33,011 $32,202 $809 2.5 %
Real estate 1-4 family 24,931 19,402 5,529 28.5
Real estate commercial and
construction 20,370 17,767 2,603 14.7
Real estate equity 11,856 9,170 2,686 29.3
Consumer (7) 14,729 15,222 (493) (3.2)
Credit cards 205 161 44 27.3
Total loans $105,102 $93,924 $11,178 11.9
Average deposits
Noninterest bearing deposits $24,018 $22,352 $1,666 7.5 %
NOW accounts 17,500 14,792 2,708 18.3
Money Market accounts 25,122 24,139 983 4.1
Savings 6,982 8,376 (1,394) (16.6)
Consumer and other time 18,400 15,422 2,978 19.3
Total consumer and
commercial deposits 92,022 85,081 6,941 8.2
Brokered and foreign deposits 14,573 12,484 2,089 16.7
Total deposits $106,595 $97,565 $9,030 9.3
SELECTED CREDIT DATA (Dollars
in thousands)
Nonaccrual loans
Restructured loans
Total nonperforming loans
Other real estate owned (OREO)
Other repossessed assets
Total nonperforming assets
Allowance for loan and lease
losses
(1) Includes service charges on deposits, card and other charges and fees.
(2) Includes retail investment services, investment banking income and
trading account profits and commissions.
(3) SunTrust presents noninterest income before securities (losses)/gains
and the net gain on the sale of RCM assets.
The Company believes noninterest income before securities gains and
losses is more indicative of the Company's performance because it
isolates income that is primarily customer relationship and customer
transaction driven. SunTrust further excludes the net gain on the
sale of RCM assets because the Company believes the exclusion of the
net gain provides better comparability and is more indicative of
normalized operations.
(4) The Company presents noninterest expense before amortization of
intangible assets and merger expense. The Company believes the
exclusion of these measures provides better comparability and is more
reflective of normalized operations.
(5) NCF's FTE adjustments were reduced $4.4 million and $9.1 million from
the second quarter and first six months of 2004, respectively, to
conform to SunTrust's methodology.
(6) SunTrust's average nonaccrual and restructured loans are included in
the respective categories to conform to the NCF presentation.
(7) Includes consumer direct and consumer indirect loans.
SunTrust Banks, Inc. and Subsidiaries
SUNTRUST / NCF - SELECTED HISTORICAL FINANCIAL DATA
APPENDIX B TO THE PRESS RELEASE, continued
Three Months Ended
June 30, 2004
Historical
SunTrust NCF Combined
STATEMENTS OF INCOME (Dollars in
thousands)
NET INTEREST INCOME $872,429 $193,986 $1,066,415
Provision for loan losses 2,827 12,845 15,672
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 869,602 181,141 1,050,743
NONINTEREST INCOME
Deposit and other fees (1) 301,191 54,440 355,631
Trust and investment management
income 140,366 15,986 156,352
Broker / dealer revenue (2) 135,203 26,711 161,914
Other noninterest income 54,953 27,045 81,998
Noninterest income before
securities (losses)/gains 631,713 124,182 755,895
Securities (losses)/gains (9,048) 66 (8,982)
Total noninterest income 622,665 124,248 746,913
NONINTEREST EXPENSE
Personnel expense 520,922 77,807 598,729
Net occupancy expense 61,629 13,413 75,042
Outside processing and software 70,619 7,061 77,680
Equipment expense 45,740 7,194 52,934
Marketing and customer development 31,655 4,133 35,788
Other noninterest expense 183,294 52,148 235,442
Noninterest expense before
amortization of
intangible assets 913,859 161,756 1,075,615
Amortization of intangible assets 14,590 12,901 27,491
Total noninterest expense 928,449 174,657 1,103,106
INCOME BEFORE INCOME TAXES 563,818 130,732 694,550
Provision for income taxes 177,247 45,641 222,888
NET INCOME $386,571 $85,091 $471,662
REVENUE (Dollars in thousands)
Net interest income $872,429 $193,986 $1,066,415
FTE adjustment (3) 12,637 2,380 15,017
Net interest income - FTE 885,066 196,366 1,081,432
Noninterest income 622,665 124,248 746,913
Total revenue 1,507,731 320,614 1,828,345
Securities losses/(gains) 9,048 (66) 8,982
Total revenue excluding securities
gains and losses $1,516,779 $320,548 $1,837,327
SELECTED AVERAGE BALANCES (Dollars in
millions)
Average Loans (4)
Commercial $27,654 $4,121 $31,775
Real estate 1-4 family 18,934 1,084 20,018
Real estate commercial and
construction 14,043 3,821 17,864
Real estate equity 7,619 1,878 9,497
Consumer (5) 12,535 2,847 15,382
Credit cards 151 16 167
Total loans $80,936 $13,767 $94,703
Average deposits
Noninterest bearing deposits $20,591 $2,701 $23,292
NOW accounts 12,812 2,278 15,090
Money Market accounts 22,367 1,840 24,207
Savings 6,991 1,706 8,697
Consumer and other time 10,405 4,865 15,270
Total consumer and commercial
deposits 73,166 13,390 86,556
Brokered and foreign deposits 10,154 2,523 12,677
Total deposits $83,320 $15,913 $99,233
SELECTED CREDIT DATA (Dollars in
thousands)
Nonaccrual loans $282,910 $37,638 $320,548
Restructured loans 18,189 - 18,189
Total nonperforming loans 301,099 37,638 338,737
Other real estate owned (OREO) 14,246 22,619 36,865
Other repossessed assets 9,076 5,125 14,201
Total nonperforming assets $324,421 $65,382 $389,803
Allowance for loan and lease losses $902,243 $178,438 $1,080,681
SunTrust Banks, Inc. and Subsidiaries
SUNTRUST / NCF - SELECTED HISTORICAL FINANCIAL DATA
APPENDIX B TO THE PRESS RELEASE, continued
Six Months Ended
June 30, 2004
Historical
SunTrust NCF Combined
STATEMENTS OF INCOME (Dollars in
thousands)
NET INTEREST INCOME $1,724,077 $385,057 $2,109,134
Provision for loan losses 56,664 24,933 81,597
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 1,667,413 360,124 2,027,537
NONINTEREST INCOME
Deposit and other fees (1) 588,850 103,903 692,753
Trust and investment management
income 276,584 32,484 309,068
Broker / dealer revenue (2) 255,144 52,473 307,617
Other noninterest income 101,294 44,342 145,636
Noninterest income before
securities (losses)/gains 1,221,872 233,202 1,455,074
Securities (losses)/gains (4,121) 10,984 6,863
Total noninterest income 1,217,751 244,186 1,461,937
NONINTEREST EXPENSE
Personnel expense 1,027,718 156,928 1,184,646
Net occupancy expense 123,488 26,820 150,308
Outside processing and software 136,245 13,650 149,895
Equipment expense 90,825 14,427 105,252
Marketing and customer development 61,874 7,162 69,036
Other noninterest expense 347,817 92,856 440,673
Noninterest expense before
amortization of
intangible assets 1,787,967 311,843 2,099,810
Amortization of intangible assets 30,230 26,540 56,770
Total noninterest expense 1,818,197 338,383 2,156,580
INCOME BEFORE INCOME TAXES 1,066,967 265,927 1,332,894
Provision for income taxes 318,561 90,592 409,153
NET INCOME $748,406 $175,335 $923,741
REVENUE (Dollars in thousands)
Net interest income $1,724,077 $385,057 $2,109,134
FTE adjustment (3) 24,893 4,485 29,378
Net interest income - FTE 1,748,970 389,542 2,138,512
Noninterest income 1,217,751 244,186 1,461,937
Total revenue 2,966,721 633,728 3,600,449
Securities losses/(gains) 4,121 (10,984) (6,863)
Total revenue excluding securities
gains and losses $2,970,842 $622,744 $3,593,586
SELECTED AVERAGE BALANCES (Dollars in
millions)
Average Loans (4)
Commercial $28,143 $4,059 $32,202
Real estate 1-4 family 18,383 1,019 19,402
Real estate commercial and
construction 13,976 3,791 17,767
Real estate equity 7,365 1,805 9,170
Consumer (5) 12,409 2,813 15,222
Credit cards 145 16 161
Total loans $80,421 $13,503 $93,924
Average deposits
Noninterest bearing deposits $19,744 $2,608 $22,352
NOW accounts 12,572 2,220 14,792
Money Market accounts 22,252 1,887 24,139
Savings 6,663 1,713 8,376
Consumer and other time 10,533 4,889 15,422
Total consumer and commercial
deposits 71,764 13,317 85,081
Brokered and foreign deposits 10,077 2,407 12,484
Total deposits $81,841 $15,724 $97,565
SELECTED CREDIT DATA (Dollars in
thousands)
Nonaccrual loans
Restructured loans
Total nonperforming loans
Other real estate owned (OREO)
Other repossessed assets
Total nonperforming assets
Allowance for loan and lease losses
(1) Includes service charges on deposits, card and other charges and
fees.
(2) Includes retail investment services, investment banking income and
trading account profits and commissions.
(3) NCF's FTE adjustments were reduced $4.4 million and $9.1 million
from the second quarter and first six months of 2004, respectively,
to conform to SunTrust methodology.
(4) SunTrust's average nonaccrual and restructured loans are included
in the respective categories to conform to the NCF presentation.
(5) Includes consumer direct and consumer indirect loans.
SunTrust Banks, Inc. and Subsidiaries
CONSOLIDATED DAILY AVERAGE BALANCES - ADJUSTED (1)
APPENDIX C TO THE PRESS RELEASE
(Dollars in millions)
Three Months Ended
June 30
2005
Average Estimated
Balances - Reclassif-
Reported ication As Adjusted
Loans
Real estate 1-4 family $26,224.1 $528.8 $26,752.9
Real estate construction 9,196.9 (234.5) 8,962.4
Real estate equity 12,134.7 (104.4) 12,030.3
Real estate commercial 12,214.5 827.8 13,042.3
Commercial 32,393.4 (762.7) 31,630.7
Business credit card 213.1 - 213.1
Consumer - direct 5,404.7 (467.7) 4,937.0
Consumer - indirect 8,861.1 197.4 9,058.5
Nonaccrual and restructured 324.2 15.3 339.5
Total loans $106,966.7 $- $106,966.7
Deposits
Noninterest-bearing deposits $24,309.7 $15.0 $24,324.7
NOW accounts 17,519.6 (4.6) 17,515.0
Money Market accounts 25,472.9 205.4 25,678.3
Savings 6,462.4 (215.8) 6,246.6
Consumer time 12,122.0 (565.5) 11,556.5
Other time 7,177.9 565.5 7,743.4
Total consumer and commercial
deposits 93,064.5 - 93,064.5
Brokered deposits 9,580.3 - 9,580.3
Foreign deposits 6,128.9 - 6,128.9
Total deposits $108,773.7 $- $108,773.7
SunTrust Banks, Inc. and Subsidiaries
CONSOLIDATED DAILY AVERAGE BALANCES - ADJUSTED (1)
APPENDIX C TO THE PRESS RELEASE
(Dollars in millions)
Three Months Ended
March 31
2005
Average Estimated
Balances - Reclassif-
Reported ication As Adjusted
Loans
Real estate 1-4 family $23,435.7 $2,163.4 $25,599.1
Real estate construction 9,621.2 (959.3) 8,661.9
Real estate equity 11,573.7 (427.1) 11,146.6
Real estate commercial 9,537.0 3,386.1 12,923.1
Commercial 33,423.9 (3,120.0) 30,303.9
Business credit card 197.7 - 197.7
Consumer - direct 6,767.2 (1,913.4) 4,853.8
Consumer - indirect 8,384.4 807.6 9,192.0
Nonaccrual and restructured 275.0 62.7 337.7
Total loans $103,215.8 $- $103,215.8
Deposits
Noninterest-bearing deposits $23,723.1 $61.4 $23,784.5
NOW accounts 17,479.8 (18.8) 17,461.0
Money Market accounts 24,767.4 840.2 25,607.6
Savings 7,506.9 (882.8) 6,624.1
Consumer time 12,324.0 (2,313.4) 10,010.6
Other time 5,166.6 2,313.4 7,480.0
Total consumer and commercial
deposits 90,967.8 - 90,967.8
Brokered deposits 6,462.1 - 6,462.1
Foreign deposits 6,962.3 - 6,962.3
Total deposits $104,392.2 $- $104,392.2
SunTrust Banks, Inc. and Subsidiaries
CONSOLIDATED DAILY AVERAGE BALANCES - ADJUSTED (1)
APPENDIX C TO THE PRESS RELEASE
(Dollars in millions)
Adjusted
Sequential
Adjusted Adjusted Annualized
Growth Growth Rate Growth
Rate(2)
Loans
Real estate 1-4 family $1,153.8 4.5 % 18.0 %
Real estate construction 300.5 3.5 13.9
Real estate equity 883.7 7.9 31.7
Real estate commercial 119.2 0.9 3.7
Commercial 1,326.8 4.4 17.5
Business credit card 15.4 7.8 31.2
Consumer - direct 83.2 1.7 6.9
Consumer - indirect (133.5) (1.5) (5.8)
Nonaccrual and restructured 1.8 0.5 2.1
Total loans $3,750.9 3.6 14.5
Deposits
Noninterest-bearing deposits $540.2 2.3 % 9.1 %
NOW accounts 54.0 0.3 1.2
Money Market accounts 70.7 0.3 1.1
Savings (377.5) (5.7) (22.8)
Consumer time 1,545.9 15.4 61.8
Other time 263.4 3.5 14.1
Total consumer and commercial
deposits 2,096.7 2.3 9.2
Brokered deposits 3,118.2 48.3 NM
Foreign deposits (833.4) (12.0) (47.9)
Total deposits $4,381.5 4.2 16.8
(1) As a result of the NCF systems conversion on April 22, 2005, SunTrust
presents consolidated average balances on an adjusted basis for both
loans and deposits. The Company believes these adjusted measures
provide a better comparison between reporting periods and are more
indicative of true loan and deposit fluctuations. The adjustments
represent reclassifications due to account mapping changes resulting
from the systems conversion.
(2) Multiply percentage change by 4 to calculate sequential annualized
change. Any sequential annualized change over 100 percent is labeled
as "NM." Those changes over 100 percent were not considered to be
meaningful.
SOURCE SunTrust Banks, Inc.
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Related links:
http://www.suntrust.com
CONTACT:
Investors, Greg Ketron, +1-404-827-6714, or
Media, Barry Koling, +1-404-230-5268, both of SunTrust Banks,
Inc.
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