EX-99.1 2 dex991.htm NEWS RELEASE News release

Exhibit 99.1

 

LOGO   News Release

 

Contact:   
Investors    Media
Steve Shriner    Barry Koling
(404) 827-6714    (404) 230-5268

For Immediate Release

October 18, 2007

SunTrust Reports Third Quarter 2007 Earnings

 


Company Says Progress on Key Performance Initiatives Overshadowed by Earnings Impact of

Challenging Market Conditions

ATLANTA—SunTrust Banks, Inc. (NYSE: STI) today reported net income available to common shareholders for the third quarter of 2007 of $412.6 million compared to $535.6 million in the third quarter of 2006. Net income per average common diluted share was $1.18 compared to $1.47 in the third quarter of 2006. The results included approximately $161 million in net valuation losses, or $0.28 per diluted common share after tax, and $45 million in severance expenses, or $0.08 per diluted common share after tax.

“It’s disappointing that the positive impact of continuing progress in our broad-based program to drive enhanced shareholder value was overshadowed by the difficult market conditions that affected our industry in the third quarter and that, obviously, took a significant toll on our results,” said James M. Wells III, President and Chief Executive Officer of SunTrust.

Specifically, Mr. Wells noted that the positive impact of continued expense discipline and continued net interest margin expansion was, as anticipated, offset by a decline in market value of certain financial assets held by SunTrust and severance expense related to a previously announced efficiency initiative. Third quarter results also reflected a higher provision for loan losses attributable to the deterioration in the credit environment.

“Clearly, we are not immune to the deterioration in the housing market and related turmoil in the capital markets and change in the credit cycle,” Mr. Wells observed. “That said, we remain encouraged by the underlying strength in key product areas and by the progress of our ongoing drive to enhance productivity and efficiency across the Company.”

During the quarter, the Company recognized approximately $161 million in net valuation losses. The net losses pertained primarily to mark-to-market valuations on loan warehouses and trading assets and liabilities carried at fair value. Most of the losses are unrealized, and the Company continues to evaluate alternatives in order to maximize the economic value of these assets. The after-tax earnings impact of the $161 million in net valuation losses was $0.28 per diluted common share.

The Company also incurred $45 million in severance costs during the quarter. The severance costs are for employees impacted by the elimination of 2,400 jobs during 2007 and 2008. Approximately 1,000 employees were notified of position eliminations in late August. These positions were eliminated as part of the organization review aspect of the Company’s broad-based E2 Efficiency and Productivity Program.

 


Third Quarter 2007 Consolidated Highlights:

 

      3rd Quarter
2007
    3rd Quarter
2006
    %
Change
 
   

Income Statement

        

(Dollars in millions, except per share data)

        

Net income available to common shareholders

   $ 412.6     $ 535.6     (23 )%

Net income available to common shareholders excluding severance charge

     440.5       535.6     (18 )%

Net income per average common diluted share

     1.18       1.47     (20 )%

Net income per average common diluted share excluding severance charge

     1.26       1.47     (14 )%

Revenue – fully taxable-equivalent

     2,038.4       2,032.8       %

Provision for loan losses

     147.0       61.6     139 %

Noninterest income

     819.1       858.9     (5 )%

Noninterest expense

     1,291.2       1,205.5     7 %

Noninterest expense excluding severance charge

     1,246.2       1,205.5     3 %

Net interest margin

     3.18 %     2.93 %    

Efficiency ratio

     63.35 %     59.30 %    

Efficiency ratio excluding severance charge

     61.14 %     59.30 %    
   

Balance Sheet

        

(Dollars in billions)

        

Average loans

   $ 119.6     $ 120.7     (1 )%

Average consumer and commercial deposits

     96.7       97.6     (1 )%
   

Capital

        

Tier 1 capital ratio (1)

     7.45 %     7.70 %    

Total average shareholders’ equity to total average assets

     10.05 %     9.78 %    

Tangible equity to tangible assets

     6.32 %     6.42 %    
   

Asset Quality

        

Net charge-offs to average loans (annualized)

Nonperforming loans to total loans

    

 

0.34

0.83

%

%

   

 

0.12

0.48

%

%

   
   

(1) Current period Tier 1 capital ratio is estimated as of the earnings release date.

   

             

 

   

Net income available to common shareholders decreased 23% and net income per average common diluted share decreased 20% from the third quarter of 2006 due to lower noninterest income related to net valuation losses recognized primarily on loan warehouses and trading assets carried at fair value and higher provision for loan losses.

   

Fully taxable-equivalent revenue was flat compared to the third quarter of 2006, as net interest income growth was offset by the decline in noninterest income.

   

Fully taxable-equivalent net interest income increased 4% from the third quarter of 2006. Net interest margin for the third quarter of 2007 was 3.18%, a 25 basis point improvement from the third quarter of 2006. The increase in net interest margin was largely the result of balance sheet management strategies executed in the first and second quarters of 2007.

   

Noninterest income declined 5% from the third quarter of 2006, driven primarily by the mark-to-market losses on loan warehouses and trading assets carried at fair value. The impact of these unrealized valuation losses was partially offset by growth in service charges on deposit accounts, retail investment services, and mortgage servicing income.

 

 

Noninterest expense increased 7% from the third quarter of 2006, driven by $49.5 million in net initial implementation costs associated with the E2 initiatives, approximately $32 million resulting from the Company’s election to record at fair value certain newly-originated mortgage loans held for sale, a $33.6 million decrease in the accrued liability associated with a capital instrument that the Company intends to call and replace in the fourth quarter, and a $9.8 million charge resulting from the early extinguishment of debt. Excluding the impact of these third quarter of 2007 items, noninterest expense grew approximately 2.6%, driven primarily by increased operating losses.

   

Total average loans and total average consumer and commercial deposits decreased 1% from the third quarter of 2006. The decline in average loans was due to loan sales associated with specific balance sheet

 

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management strategies that began in the second quarter of 2006 and were accelerated in the first half of 2007. The decline in average consumer and commercial deposits was driven mainly by declines in demand deposit, money market, and savings account balances.

   

The estimated Tier 1 capital, total average shareholders’ equity to total average assets, and tangible equity to tangible asset ratios were 7.45%, 10.05%, and 6.32%, respectively. The Company maintains a Tier 1 capital ratio target of 7.5%.

   

Given the flexibility gained through the capital restructuring program and balance sheet management strategies executed in the first half of 2007, the Company repurchased 10.2 million shares of common stock for approximately $850 million through an accelerated share repurchase agreement and open-market purchases year-to-date.

   

Annualized net charge-offs were 0.34% of average loans for the third quarter of 2007, up from 0.12% of average loans in the third quarter of 2006 and 0.30% of average loans in the second quarter of 2007. The increase reflects the change in the credit cycle from the historically low net charge-offs experienced in the first nine months of 2006 and the negative impact from deterioration in certain segments of the consumer and residential real estate market. The increase in net charge-offs from the third quarter of 2006 was most pronounced in the home equity, residential mortgage, and commercial categories, though the increase in commercial was primarily related to a single borrower.

   

Nonperforming loans to total loans increased to 0.83% as of September 30, 2007, from 0.48% as of September 30, 2006, due mainly to an increase in residential mortgage and real estate construction nonperforming loans. The increase in residential mortgage nonperforming loans was driven by the maturation of this portfolio and the deterioration of credit quality in Alt-A mortgage loans and home equity lines, of which the majority are well-collateralized or insured. The increase in real estate construction nonperforming loans is reflective of the overall weakening of the housing market.

CONSOLIDATED FINANCIAL PERFORMANCE

Revenue

Fully taxable-equivalent revenue was $2,038.4 million for the third quarter of 2007, which was flat compared to the third quarter of 2006, driven by net interest income growth that offset the decline in noninterest income. On a sequential annualized basis, fully taxable-equivalent revenue decreased 57% from the second quarter of 2007. Excluding securities gains and losses including the sale of The Coca-Cola Company stock in May 2007, fully taxable-equivalent revenue decreased 19% from the second quarter of 2007 on a sequential annualized basis primarily due to approximately $161 million of net valuation losses incurred in the third quarter of 2007.

For the nine months ended September 30, 2007, fully taxable-equivalent revenue was $6,480.1 million, up 5% from the same period in 2006. Excluding securities gains and losses and the net gain on sale of the Bond Trustee business, fully taxable-equivalent revenue was up 2% from the nine months ended September 30, 2006, due to modest growth in both net interest income and noninterest income.

Net Interest Income

Fully taxable-equivalent net interest income was $1,219.2 million in the third quarter of 2007, an increase of 4% from the third quarter of 2006. Net interest margin for the third quarter of 2007 was 3.18%, a 25 basis point improvement from the third quarter of 2006. On a sequential annualized basis, fully taxable-equivalent net interest income was flat compared to the second quarter of 2007. However, net interest margin increased 8 basis points from the second quarter of 2007, marking the third consecutive 8 basis point sequential quarter improvement. The continued improvement in net interest margin was driven mainly by balance sheet management strategies executed in the first half of this year, which has resulted in improved yields on earning assets, as well as de-leveraging the balance sheet and reducing the level of higher-cost wholesale funding. Average earning asset yields increased 8 basis points compared to the

 

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second quarter of 2007, while average interest bearing liability costs declined 1 basis point resulting in a 9 basis point increase in the interest rate spread.

For the nine months ended September 30, 2007, fully taxable-equivalent net interest income was $3,627.5 million, up 2% from the same period in 2006. Net interest margin for the nine months ended September 30, 2007 was 3.10%, an 8 basis point improvement over the same period in 2006. The improvement in fully taxable-equivalent net interest income and net interest margin over this period is mainly attributable to balance sheet management strategies executed this year.

Noninterest Income

Total noninterest income was $819.1 million for the third quarter of 2007, down 5% from the third quarter of 2006. The third quarter of 2006 included a $112.8 million gain, net of related expenses, on the sale of the Bond Trustee business, as well as $91.8 million in net securities losses resulting from the restructuring of a portion of the securities portfolio. The net impact of these transactions was a positive $21.0 million to total noninterest income in the third quarter of 2006. The other significant driver of the decline in noninterest income was the market value losses recognized on loan warehouses and trading assets carried at fair value. Specifically, in the third quarter of 2007, the Company incurred a net negative mark-to-market adjustment of approximately $161 million driven by market value declines in securitization warehouses, trading assets, and mortgage loans held for sale, as well as a positive mark on long-term corporate debt carried at fair value. The net impact of these adjustments caused a decline in trading account profits and commissions compared to the third quarter of 2006. However, trading account profits and commissions was positively impacted by stronger customer related trading activities, primarily derivatives. The negative market value losses recognized on mortgage loans held for sale was the key driver of the 74% decline in mortgage production income. The decline in mortgage production income was partially offset by the Company’s second quarter of 2007 election to record at fair value certain newly-originated mortgage loans held for sale, resulting in loan fees being recognized at time of origination rather than deferred and recognized as part of the gain/loss on sale.

Partially offsetting these reductions to noninterest income was growth in several areas, including trust and investment management income, service charges on deposit accounts, retail investment services, other charges and fees, card fees, and mortgage servicing-related income. Trust and investment management income grew 1% compared to the third quarter of 2006; however, this growth rate was negatively impacted by the merger of Lighthouse Partners into Lighthouse Investment Partners in the first quarter of 2007 and the sale of the Bond Trustee business in the third quarter of 2006. Growth in retail investment services income of 28% was driven by strong annuity sales. Growth in card fees of 9% was due to higher interchange fees. Growth in mortgage servicing income of 56% was primarily due to a larger servicing portfolio.

For the nine months ended September 30, 2007, noninterest income was $2,852.7 million, an increase of 10% from the same period in 2006. Excluding securities gains and losses and the net gain on sale of the Bond Trustee business, noninterest income increased 2% compared to the nine months ended September 30, 2006. The factors contributing to the growth were similar to those noted for the growth over the same quarter of last year.

Noninterest Expense

Total noninterest expense in the third quarter of 2007 was $1,291.2 million, up 7% from the third quarter of 2006. The third quarter of 2007 expense level was impacted by the following items:

 

 

 

$49.5 million increase resulting from initial implementation costs associated with the E2 initiatives incurred in the third quarter of 2007, of which $45.0 million was due to severance charges associated with the organizational review component of the Company’s E2 Efficiency and Productivity Program. These initiatives generated $59.5 million of cost saves in the third quarter of 2007 and $140.1 million of cost saves thus far in 2007.

 

4


   

Approximately $32 million increase in compensation expense related to the Company’s election to record at fair value certain newly-originated mortgage loans held for sale. Under this election, costs associated with the origination of mortgage loans held for sale are recognized as a component of compensation expense when the loan is originated. Prior to the fair value election, these costs were deferred and recognized as part of the gain/loss on sale of the loan.

   

$33.6 million decrease in the accrued liability associated with a capital instrument that the Company intends to call and replace in the fourth quarter.

   

$9.8 million increase in other expense for the loss on early retirement of fixed rate debt that was carried at cost. The debt was not part of the Company’s fair value election as the interest on the debt was not being hedged.

Excluding the impact of the above items, expense growth was approximately 2.6% in the third quarter of 2007 relative to the same quarter last year, demonstrating the impact the E2 initiatives had on controlling expense growth. This incremental expense growth was driven by a $42.2 million increase in operating losses primarily related to application fraud associated with mortgage loans.

For the nine months ended September 30, 2007, noninterest expense was $3,778.4 million, an increase of 4% compared to the same period in 2006. The factors impacting noninterest expense were similar to those noted for the growth over the same quarter of last year. Please refer to the Third Quarter 2007 Earnings Presentation for further information on year-to-date expense growth.

Balance Sheet

As of September 30, 2007, SunTrust had total assets of $175.9 billion. Shareholders’ equity of $17.9 billion as of September 30, 2007, represented 10% of total assets. Book value per common share was $50.01 as of September 30, 2007.

Loans

Average loans for the third quarter of 2007 were $119.6 billion, down $1.2 billion, or 1%, from the third quarter of 2006. The decline was due to balance sheet management strategies implemented since the second quarter of 2006 and accelerated in the first half of 2007. The strategies resulted in the sale of nearly $10 billion in loans over the past year, primarily comprised of mortgage, student, and corporate loans. Taking into account these loan sales, the Company had underlying loan growth across most categories. Compared to the second quarter of 2007, average loans were up $1.4 billion, or 5% on a sequential annualized basis, primarily driven by commercial loan growth.

Deposits

Average consumer and commercial deposits for the third quarter of 2007 were $96.7 billion, down 1% from the third quarter of 2006. The decrease in deposits was driven by declines in demand deposit, money market, and savings account balances. Given the higher-rate environment as compared to 2006, customer preference has been for higher-yielding products. This demand has driven the continuation of the deposit mix shift away from lower-rate products, such as demand deposits, toward higher-rate products, such as time deposits, the Company’s Signature Advantage deposit product, or other alternative investment products with higher rates. The alternative investment products include securities sold under agreements to repurchase and off-balance sheet products, such as STI Classic money market mutual funds. Total brokered and foreign deposits declined 24% from the third quarter of 2006, as the Company strategically reduced the size of its loan and securities portfolios thereby reducing reliance on these higher cost funding sources.

On a sequential annualized basis, average consumer and commercial deposits decreased 5% from the second quarter of 2007, driven by a 17% sequential annualized decrease in demand deposits. The third quarter is typically the weakest growth quarter of the year due to seasonality. The Company continues to aggressively pursue deposit growth initiatives.

 

5


Capital

The estimated Tier 1 capital and tangible equity to tangible asset ratios at September 30, 2007 were 7.45% and 6.32%, a decline of 25 and 10 basis points, respectively, compared to September 30, 2006. In the second half of 2006, the Company executed a capital restructuring program and established a Tier 1 capital ratio target of 7.5%. Given the flexibility gained through the capital restructuring program and balance sheet management strategies, the Company repurchased 8.7 million shares of common stock for approximately $850 million through an accelerated share repurchase agreement and open-market purchases during the second quarter of 2007. Upon expiration of the accelerated share repurchase agreement, which resulted in the repurchase of 8.0 million shares in the second quarter, the Company received, without additional payment, an additional 1.5 million shares in the third quarter. As a result, year-to-date the Company has repurchased approximately 10.2 million shares.

Asset Quality

Annualized net charge-offs in the third quarter of 2007 were 0.34% of average loans, up from 0.12% in the third quarter of 2006 and 0.30% in the second quarter of 2007. Net charge-offs were $103.7 million in the third quarter of 2007, as compared to $36.1 million in the third quarter of 2006 and $88.3 million in the second quarter of 2007. The increase in net charge-offs over the third quarter of 2006 reflects the change in the credit cycle from historically low net charge-offs experienced in the first nine months of 2006 and the negative impact from deterioration in certain segments of the consumer and residential real estate market. The increase in net charge-offs from the third quarter of 2006 was most pronounced in the home equity, residential mortgage, and commercial categories, though the increase in commercial was primarily related to a single borrower. The increase compared to the second quarter of 2007 was most pronounced in the home equity and indirect consumer categories.

Nonperforming loans were $1,003.8 million, or 0.83% of total loans as of September 30, 2007, compared to $585.4 million, or 0.48% of total loans as of September 30, 2006 and $764.6 million, or 0.64% of total loans as of June 30, 2007. The increase in nonperforming loans compared to both periods was mainly due to an increase in residential mortgage and real estate construction nonperforming loans. The increase in residential mortgage nonperforming loans was driven by the maturation of this portfolio and the deterioration of credit quality in Alt-A mortgage loans and home equity lines, of which the majority is well-collateralized or insured. The increase in real estate construction nonperforming loans is reflective of the overall weakening of the housing market.

The allowance for loan and lease losses increased $43.3 million from June 30, 2007 to $1,093.7 million as of September 30, 2007. The increase in the allowance for loan and lease losses was attributable to a $2.0 billion increase in period-end loans compared to June 30, 2007 and the deterioration in certain segments of the consumer and residential real estate market, and resulted in a $42.3 million increase in provision for loan losses compared to the second quarter of 2007. The allowance for loan and lease losses as of September 30, 2007 represented 0.91% of period-end loans compared to 0.88% as of June 30, 2007. The allowance for loan and lease losses as of September 30, 2007 represented 109% of period-end nonperforming loans.

LINE OF BUSINESS FINANCIAL PERFORMANCE

The following discussion details results for SunTrust’s five business lines: Retail, Commercial, Corporate and Investment Banking, Mortgage, and Wealth and Investment Management. All revenue is reported on a fully taxable-equivalent basis. For the lines of business, results include net interest income which is computed using matched-maturity funds transfer pricing. Further, provision expense is represented by net charge-offs.

SunTrust also reports results for Corporate Other and Treasury, which includes the Treasury department as well as the residual expense associated with operational and support expense allocations. This segment also includes differences created between internal management accounting practices and Generally Accepted Accounting Principles, certain matched-maturity funds transfer pricing credits and

 

6


charges, differences in provision expense compared to net charge-offs, as well as equity and its related impact.

Retail

preliminary data

(in millions)

   3rd Quarter
2007
   3rd Quarter
2006
   %
Change

Net income

   $153.0    $180.9    (15) %
   

Revenue - fully taxable-equivalent

   856.8    852.2    1    
   

Average total loans

   32,065.8    30,834.6    4     
   

Average total deposits

   67,401.6    69,660.0    (3)    

Three Months Ended September 30, 2007 vs. 2006

Retail’s net income for the third quarter of 2007 was $153.0 million, a decrease of $27.9 million, or 15%, compared to the third quarter of 2006. This decrease was primarily the result of higher provision expense and lower net interest income, partially offset by higher noninterest income.

Net interest income declined $10.5 million, or 2%, driven by a $2.3 billion, or 3%, decline in average deposits. Deposit spreads improved slightly despite the continued trend in customer preference towards higher-yielding deposit products. Specifically, increases in higher-cost NOW account products were offset by declines in lower-cost money market and demand deposit products. Total average loans increased $1.2 billion, or 4%, driven by growth in home equity, business banking, and newly-originated student loans. Retail continued to decrease its exposure to relatively low spread student consolidation loans where loans held for sale average balances declined $304 million, or 40%.

Provision for loan losses increased $45.3 million reflecting normalization of the credit cycle from historically low levels, as well as additional negative impact from the current deterioration in certain segments of the consumer portfolio, primarily related to the residential real estate market. The provision increase was most pronounced in the home equity and indirect auto products but also increased for commercial loans.

Total noninterest income increased $15.2 million, or 6%, from the third quarter of 2006. This increase was driven primarily by an 11% increase in service charges on deposit accounts from both consumer and business clients. Interchange and ATM fees also grew. Partially offsetting the fee income growth was a decrease in gains on sales of student loans.

Total noninterest expense increased $4.0 million, or less than 1%, from the third quarter of 2006. Increases in personnel expense related to investments in the branch distribution network and business banking were offset by a decrease in shared corporate expense allocations.

Nine Months Ended September 30, 2007 vs. 2006

Retail’s net income for the nine months ended September 30, 2007 was $475.6 million, a decrease of $63.5 million, or 12%, compared to the same period in 2006. The decrease was primarily the result of higher provision expense and lower net interest income, partially offset by higher noninterest income.

Net interest income decreased $21.1 million, or 1%, driven by the continued shift in deposit mix to higher-rate deposit products resulting in compressed spreads. Average deposits decreased $342.9 million, less than 1%, as increases in higher-cost time deposits and certain NOW account products were offset by declines in lower-cost money market and demand deposit balances. Net interest income from deposits decreased only 2% despite the shift to higher cost deposit products. Net interest income was also negatively impacted by a $768 million, or 55%, decrease in average loans held for sale, as Retail has decreased its exposure to relatively low spread student consolidation loans. Positively impacting net interest income was a $791 million, or 3%, increase in average loans driven by growth in home equity loans and business banking loans. These increases were partially offset by a decrease in indirect auto loans, direct installment, and newly-originated student loans.

 

7


Provision for loan losses increased $100.3 million reflecting normalization of the credit cycle from historically low levels and deterioration in certain segments of the consumer portfolio, primarily related to the residential real estate market. The increase was most pronounced in home equity and indirect auto products.

Total noninterest income increased $18.6 million, or 2%. The increase was due to growth in service charges on deposit accounts driven by higher consumer and business client fees. Interchange income also grew driven by higher transaction volumes. These increases were partially offset by a decrease in gains on sales of student loans.

Total noninterest expense was flat compared to the same period in 2006. Decreases in amortization of core deposit intangibles and new loan production expense were partially offset by an increase in personnel expense related to investments in the branch distribution network and business banking.

Commercial

preliminary data

(in millions)

   3rd Quarter
2007
   3rd Quarter
2006
   %
Change

Net income

   $105.0    $109.1    (4) %
   

Revenue - fully taxable-equivalent

   302.4    312.1    (3)    
   

Average total loans

   33,016.6    32,985.9    –     
   

Average total deposits

   14,031.7    13,601.1    5     

Three Months Ended September 30, 2007 vs. 2006

Commercial’s net income for the third quarter of 2007 was $105.0 million, a decrease of $4.1 million, or 4%. The decrease was primarily the result of lower net interest income partially offset by higher noninterest income.

Net interest income decreased $14.1 million, or 6%. Although average deposits increased $430.6 million, or 3%, the continued shift in deposit mix to higher-rate deposit products decreased net interest income by $6.1 million. This compression in deposit spreads was primarily due to a decrease in demand deposits, as customers redeployed liquidity in the current rate environment to higher-yielding NOW accounts and off balance sheet sweep products. The increase in average deposits was driven by increases in institutional and government deposits, partially offset by decreases in lower-cost demand deposits and money market accounts. Average loans were relatively flat, increasing $30.8 million, while net interest income decreased $8.2 million, or 5%. While commercial domestic loan spreads were up slightly, commercial real estate spreads decreased.

Provision for loan losses was $3.0 million, an increase of $1.3 million compared to the third quarter of 2006.

Total noninterest income increased $4.5 million, or 6%, driven by increases in service charges on deposit accounts and higher referral revenues from the BankCard, equipment leasing, and capital markets products, partially offset by a decrease in business credit card income.

Total noninterest expense was relatively flat, increasing $0.8 million. Decreases in staff expense, credit and collection services, and shared corporate expense were more than offset by increased Affordable Housing- related expenses.

Nine Months Ended September 30, 2007 vs. 2006

Commercial’s net income for the nine months ended September 30, 2007 was $303.9 million, a decrease of $14.8 million, or 5%. The decrease was primarily driven by a decline in net interest income and higher provision expense, partially offset by higher noninterest income and lower noninterest expense.

Net interest income decreased $32.5 million, or 5%. Although average deposits increased $527.7 million, or 4%, the continued shift in deposit mix to higher-rate deposit products decreased net interest income $26.9 million. This compression in deposit spreads was primarily due to a decrease in demand

 

8


deposits, as customers redeployed liquidity in the current rate environment to higher-yielding NOW accounts and off balance sheet sweep products. The increase in average deposits was driven by increases in institutional and government deposits, partially offset by decreases in lower-cost demand deposits and money market accounts. Average loans increased $565.0 million, or 2%, while net interest income decreased $4.5 million, or 1%. While commercial loan spreads were up slightly, commercial real estate spreads decreased.

Provision for loan losses increased $6.5 million compared to the same period in 2006.

Total noninterest income increased $7.8 million, or 4%, driven by increases in service charges on deposit accounts and higher referral revenues from the BankCard and capital markets products, partially offset by a decrease in business credit card income.

Total noninterest expense decreased $3.4 million, or 1%. Decreases in credit and collection services expense, various discretionary expenses, and shared corporate expenses were partially offset by increased Affordable Housing-related expenses.

Corporate and Investment Banking

preliminary data

(in millions)

   3rd Quarter
2007
   3rd Quarter
2006
   %
Change

Net income

   $(14.2)    $45.1    NM %
   

Revenue - fully taxable-equivalent

   100.8    195.6    (48)    
   

Average total loans

   15,959.1    16,693.4    (4)     
   

Average total deposits

   3,462.2    2,885.3    20     

“NM”—Not meaningful

Three Months Ended September 30, 2007 vs. 2006

Corporate and Investment Banking had a net loss of $14.2 million for the third quarter of 2007, a decrease of $59.2 million compared to the prior year. The decrease was driven by write-downs and losses primarily in securitization warehouses due to capital markets volatility associated with turmoil in the mortgage industry, lack of loan liquidity, and widening credit spreads.

Net interest income was relatively flat, decreasing $0.2 million. Average loan balances decreased $734.3 million, or 4%, while the corresponding net interest income increased 1% due to a 5 basis point increase in spreads. The decline in balances was driven by a $1.9 billion structured asset sale of corporate loans in the first quarter of 2007, partially offset by growth in corporate banking loans and lease financing assets. Total average deposits were up $576.9 million, or 20%, while net interest income was down $0.2 million. This increase in balances was primarily in higher cost money market accounts.

Provision for loan losses was $13.6 million, an increase of $7.8 million from the same period in 2006.

Total noninterest income decreased $94.6 million, or 67%. The decrease was primarily driven by write-downs and losses of approximately $121 million in collateralized debt obligations, mortgage-backed securities and collateralized loan obligation warehouses carried at fair value. Partially offsetting these losses were record performances in derivatives, structured leasing, and tax-exempt underwriting revenues, up 115%, 216%, and 42%, respectively.

Total noninterest expense decreased $8.3 million, or 7%, driven primarily by lower incentive-based compensation expense tied to revenue.

Nine Months Ended September 30, 2007 vs. 2006

Corporate and Investment Banking’s net income for the nine months ended September 30, 2007 was $99.0 million, a decrease of $66.6 million, or 40%. The decrease was driven by write-downs and losses primarily in securitization warehouses due to capital markets volatility created by turmoil in the mortgage industry, lack of loan liquidity, and widening credit spreads. In addition, higher provision for loan losses expense and lower net interest income contributed to the decline.

 

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Net interest income decreased $15.2 million, or 8%. Average loan balances decreased $541.0 million, or 3%, while spreads declined 10 basis points resulting in a 13% decrease in loan related net interest income. The decline in balances was driven by a $1.9 billion structured asset sale of corporate loans in the first quarter of 2007, partially offset by growth in the corporate banking loans and lease financing assets. Total deposits were down $168.5 million, or 5%, driven by a decline in corporate demand deposit balances. Deposit related net interest income was down $3.8 million, or 8%, as deposit spreads dropped 21 basis points due to a shift to higher cost money market accounts. Partially offsetting these declines was improved net interest income on investments due to higher balances and favorable spreads.

Provision for loan losses was $30.4 million increasing from $5.0 million in the same period of 2006.

Total noninterest income decreased $65.5 million, or 14%. The decrease was primarily driven by write-downs and losses of approximately $134 million in collateralized debt obligations, mortgage-backed securities, and collateralized loan obligation warehouses carried at fair value, most of which occurred during the third quarter of 2007. Additional weakness in fixed income trading, equity offerings, loan related fees, and M&A was partially offset by strong performance in bond originations, corporate loan syndications, derivatives, and structured leasing.

Total noninterest expense decreased $0.1 million, driven by lower compensation expense resulting from lower revenue and lower shared corporate expenses, offset by the reversal of leveraged lease expense in the second quarter of 2006, increased salary expense, and higher outside processing expenses.

Mortgage

preliminary data

(in millions)

   3rd Quarter
2007
   3rd Quarter
2006
   %
Change

Net income

   $(12.0)    $64.2    NM %
   

Revenue - fully taxable-equivalent

   221.5    253.6    (13)    
   

Average total loans

   30,084.2    31,619.8    (5)     
   

Average total deposits

   2,322.9    1,998.8    16     

“NM” – Not meaningful

Three Months Ended September 30, 2007 vs 2006

Mortgage had a net loss of $12.0 million for the third quarter of 2007, a decrease in net income of $76.2 million. The decline was primarily a result of net valuation losses on the mortgage warehouse driven by mortgage spread widening and credit-related losses resulting from turmoil in the mortgage markets. Mortgage experienced approximately $88 million in losses from mortgage spread widening in the third quarter of 2007.

Net interest income decreased $23.9 million, or 15%. The decline was driven by decreases in average loans held for investment and average loans held for sale at compressed spreads, partially offset by higher investment securities balances. Average loans, primarily consumer mortgages and residential construction loans, declined $1.5 billion, or 5%, and resulted in a reduction in net interest income of $19.4 million. The decline in loans was a result of balance sheet management strategies initiated in the second half of 2006 and accelerated in the first half of 2007. Average loans held for sale declined $0.5 billion. The balance decline in conjunction with compressed spreads reduced net interest income $12.3 million. Offsetting these reductions was an increase in average investment securities of $4.0 billion which contributed $8.0 million to the change in net interest income.

Provision for loan losses increased $11.0 million to $11.7 million driven by higher consumer mortgage charge-offs.

Total noninterest income declined $8.2 million, or 8%, due to lower production income partially offset by higher servicing income. Total loan production of $12.6 billion was down $1.1 billion, or 8%, from the third quarter 2006. Production income declined $29.3 million, or 60%, due to net valuation losses caused by spread widening in mortgage markets partially offset by the recognition of loan origination fees resulting from the Company’s election to record certain mortgage loans at fair value beginning in May 2007. Mortgage servicing income was up $20.5 million, or 56%, principally due to higher fee income derived

 

10


from a larger servicing portfolio. At September 30, 2007, total loans serviced were $149.9 billion, up 20% from $124.8 billion at September 30, 2006.

Total noninterest expense was up $81.3 million, or 53%. The major drivers of the higher expense were a $35.0 million increase in operating losses, primarily due to loan application fraud related to customer misstatements of income and/or assets on Alt-A products originated in prior periods, and the recognition of loan origination costs resulting from the Company’s election to record certain mortgage loans at fair value in May 2007. The remaining increase was driven by other credit-related and growth- related costs.

Nine Months Ended September 30, 2007 vs 2006

Mortgage’s net income for the nine months ended September 30, 2007 was $37.6 million, a decline of $166.2 million, or 82%. The decline was a result of net valuation losses on the mortgage warehouse driven by mortgage spread widening and credit-related losses resulting from turmoil in the mortgage markets. Additionally, lower secondary marketing margins and higher growth and volume-related expense were partially offset by higher servicing income. Mortgage experienced approximately $88 million in losses from mortgage spread widening in the third quarter of 2007.

Net interest income declined $55.9 million, or 12%, principally due to declines in income on loans held for investment and loans held for sale at lower spreads, partially offset by increased income on deposits and investment securities. Total average loans were down $0.2 billion. The volume decline in conjunction with lower spreads resulted in a $36.5 million decline in net interest income. Loans held for sale increased $1.8 billion, however, compressed spreads resulted in a decline in net interest income of $31.8 million. Additionally, mortgage servicing rights increased $0.2 billion and combined with increased funding costs resulted in a $12.3 million decline in net interest income. Deposits were up $0.4 billion due to higher escrow balances and contributed $16.5 million to the change in net interest income. Investment securities were up $2.6 billion positively impacting the change in net interest income by $5.5 million.

Provision for loan losses was $35.0 million an increase of $29.3 million driven by higher consumer mortgage charge-offs.

Total noninterest income declined $53.5 million, or 17%, driven by lower production income that was partially offset by higher servicing income and other miscellaneous income. Total production of $45.4 billion was up $5.1 billion, or 13%, over the prior year. Production income declined $100.5 million due to narrower secondary marketing margins, as well as net valuation losses on the mortgage warehouse resulting from mortgage spread widening and credit-related charges. The decline in production income was partially offset by the recognition of loan origination fees resulting from the Company’s election to record certain mortgage loans at fair value in May of 2007. Total servicing income was up $25.1 million, or 23%, principally due to higher servicing balances and lower mortgage servicing rights amortization, partially offset by lower gains on sales of mortgage servicing rights. Other income was up $21.9 million due to increases in insurance income and trading account income. At September 30, 2007, total loans serviced were $149.9 billion, up 20% from $124.8 billion at September 30, 2006.

Total noninterest expense increased $132.0 million, or 29%. The major drivers of the higher expense were a $54.4 million increase in operating losses, primarily due to loan application fraud related to customer misstatements of income and/or assets on Alt-A products originated in prior periods, and the recognition of loan origination costs resulting from the Company’s election to record certain mortgage loans at fair value beginning in May 2007. The remaining increase was driven by other credit-related and growth-related costs.

 

11


Wealth and Investment Management

preliminary data

(in millions)

   3rd Quarter
2007
   3rd Quarter
2006
   %
Change

Net income

   $60.4    $123.2    (51) %
   

Revenue - fully taxable-equivalent

   343.1    447.8    (23)    
   

Average total loans

   7,848.9    8,128.0    (3)     
   

Average total deposits

   9,608.3    9,534.1    1     

Three Months Ended September 30, 2007 vs. 2006

Wealth and Investment Management’s net income for the third quarter of 2007 was $60.4 million, a decrease of $62.8 million, or 51%. The decrease was primarily due to the $69.9 million after-tax gain on sale of the Bond Trustee business in the third quarter of 2006. Excluding the gain on sale of the Bond Trustee business, net income increased $7.1 million or 13%. The increase was primarily driven by strong growth in retail investment income and lower noninterest expenses. These benefits were partially offset by the impact of the merger of Lighthouse Partners into Lighthouse Investment Partners in the first quarter of 2007, the loss of trust revenue due to the sale of the Bond Trustee business, and lower net interest income.

Net interest income decreased $7.2 million, or 8%, primarily due to a shift in deposit mix to higher cost deposits. Average deposits increased $0.1 billion, or 1%, due to an increase in higher-cost NOW accounts and time deposits, partially offset by declines in lower-cost demand and money market deposits resulting in a $4.8 million decrease in net interest income. Average loans decreased $0.3 billion, or 3%, reducing net interest income $2.2 million. The decline in average loans was driven by lower consumer mortgage and commercial lending balances, partially offset by growth in personal credit lines.

Provision for loan losses increased $1.2 million primarily due to higher home equity net charge-offs.

Total noninterest income decreased $97.4 million, or 27%, primarily driven by the $112.8 million third quarter 2006 gain on sale of the Bond Trustee business and the resulting loss in trust revenue. Despite lost trust revenue from the Lighthouse Partners merger in the first quarter of 2007 and the Bond Trustee sale, total trust income rose $1.4 million, or 1%. Retail investment income increased $15.4 million, or 28%, with particularly strong growth in annuity sales.

Total noninterest expense decreased $5.5 million, or 2%. Higher compensation expense related to retail investment sales was more than offset by decreases in discretionary expense, lower Lighthouse related expense, and a reduction in shared corporate expenses.

End of period assets under management were approximately $142.9 billion compared to $138.6 billion as of the same period last year. Approximately $5.4 billion in Lighthouse Partners assets were merged into Lighthouse Investment Partners and are not included in the September 30, 2007 total. Assets under management include individually managed assets, the STI Classic Funds, institutional assets managed by Trusco Capital Management, and participant-directed retirement accounts. SunTrust’s total assets under advisement were approximately $253.0 billion, which includes $142.9 billion in assets under management, $59.3 billion in non-managed trust assets, $42.4 billion in retail brokerage assets, and $8.5 billion in non-managed corporate trust assets.

Nine Months Ended September 30, 2007 vs. 2006

Wealth and Investment Management’s net income for the nine months ended September 30, 2007 was $181.5 million, a decrease of $46.5 million, or 20%. The decrease was primarily due to the $69.9 million after-tax gain on sale of the Bond Trustee business in the third quarter of 2006. Excluding the gain on sale of the Bond Trustee business, net income increased $23.4 million, or 15%, and was driven by an after-tax gain on sale upon merger of Lighthouse Partners into Lighthouse Investment Partners of $20.2 million and increased retail investment income, partially offset by lower net interest income and higher noninterest expenses.

 

12


Net interest income decreased $12.5 million, or 5%, as the continued shift in deposit mix to higher cost products compressed spreads. Average deposits increased $0.5 billion, or 5%, due to increases in higher-cost NOW account products and time deposit balances, partially offset by decreases in lower-cost demand and money market deposits which reduced deposit spreads 27 basis points and net interest income $10.0 million. Average loans decreased $0.1 billion, or 1%, resulting in a $3.2 million decline in net interest income. The decline in average loans was driven by lower consumer mortgages and commercial loans, partially offset by growth in personal credit lines.

Provision for loan losses increased $4.2 million primarily due to higher home equity and personal credit lines net charge-offs.

Total noninterest income decreased $53.3 million, or 6%, primarily driven by the $112.8 million gain on sale of the Bond Trustee business in the third quarter of 2006. Excluding this gain, noninterest income increased $59.5 million, due to a $32.3 million gain on sale upon merger of Lighthouse Partners, as well as strong growth in retail investment income which increased $37.4 million, or 23%, mainly due to increased annuity sales. Negatively impacting noninterest income was the loss of trust revenues from the Lighthouse Partners merger and sale of the Bond Trustee business.

Total noninterest expense increased $5.9 million, or 1%. Growth was primarily attributable to increases in staff and intangible amortization expenses, partially offset by a decrease in shared corporate expenses.

Corporate Other and Treasury

preliminary data

(in millions)

   3rd Quarter
2007
   3rd Quarter
2006
   %
Change

Net income

   $127.9    $13.2    NM %
   

Average securities available for sale

   14,935.9    23,869.1    (37)     

“NM” – Not meaningful

Three Months Ended September 30, 2007 vs. 2006

Corporate Other and Treasury’s net income for the third quarter of 2007 was $127.9 million, an increase of $114.7 million compared to the third quarter of 2006. The increase was mainly driven by higher net interest income due to balance sheet management strategies executed in the first half of the year, an increase in noninterest income due to securities losses incurred in the third quarter of 2006, and net valuation gains recorded on securities and long-term corporate debt carried at fair value.

Net interest income increased $101.3 million mainly due to the execution of balance sheet management strategies which improved the yield on the securities portfolio and deleveraged the balance sheet reducing reliance on higher-cost wholesale funding. Total average assets decreased $9.0 billion, or 28%, mainly due to the reduction in the size of the investment portfolio. Total average deposits decreased $6.9 billion, or 25%, mainly due to a decrease in brokered and foreign deposits as the Company reduced its reliance on wholesale funding sources.

Provision for loan losses, which predominantly represents the difference between consolidated provision for loan losses and net charge-offs for the lines of business, increased $18.8 million. The increase is the result of the Company increasing the allowance for loan losses $43.3 million in the third quarter of 2007 compared to a $25.5 million increase in the third quarter of 2006.

Total noninterest income increased $140.8 million. This was mainly due to securities losses of $91.5 million incurred in the third quarter of 2006 and a $61.7 million increase in trading income due to net valuation gains recorded on securities and the Company’s long-term corporate debt carried at fair value.

Total noninterest expense increased $13.5 million compared to the third quarter of 2006. This increase included $45 million in severance costs associated with the E2 initiative. This increase was partially offset by a $33.6 million decrease in the accrued liability associated with a capital instrument that the Company intends to call and replace in the fourth quarter. Additionally, reductions in total staff expense in support functions and consulting expenses demonstrates the continued impact the E2 Efficiency and Productivity Program had on controlling expense growth.

 

13


Nine Months Ended September 30, 2007 vs. 2006

Corporate Other and Treasury’s net income for the nine months ended September 30, 2007 was $525.4 million, an increase of $369.4 million compared to the same period in 2006. The increase was mainly driven by an increase in net interest income due to balance sheet management strategies executed in the first half of this year, a $145.6 million after-tax gain on sale of The Coca-Cola Company stock, securities losses resulting from the securities portfolio repositioning in the third quarter of 2006, and a net valuation gain on securities and long-term corporate debt carried at fair value.

Net interest income increased $201.4 million mainly due to the aforementioned balance sheet management strategies which improved the yield on the securities portfolio and reduced the Company’s reliance on wholesale funding sources. Total average assets decreased $6.3 billion, or 19%, primarily due to a reduction in the size of the securities portfolio. Total average deposits decreased $2.8 billion, or 11%, mainly due to a decrease in brokered and foreign deposits.

Provision for loan losses, which predominantly represents the difference between consolidated provision for loan losses and net charge-offs for the lines of business, decreased $4.4 million, or 7%.

Total noninterest income increased $412.7 million. This was mainly driven by the $234.8 million gain on sale of The Coca-Cola Company stock, securities losses resulting from the securities portfolio repositioning in the third quarter of 2006, and $114.7 million increase in trading income due to net valuation gains recorded on securities and the Company’s long-term corporate debt carried at fair value.

Total noninterest expense decreased $1.2 million compared to the same period in 2006. Included in the nine months ended September 30, 2007, was $50.7 million in initial implementation costs associated with the E2 initiative, of which $45 million was severance. Positively impacting noninterest expense was a $33.6 million decrease in the accrued liability associated with a capital instrument that the Company intends to call and replace in the fourth quarter. Additionally, reductions in total staff expense in support functions and consulting expenses demonstrates the continued impact the E2 Efficiency and Productivity Program had on controlling expense growth.

Corresponding Financial Tables and Information

Investors are encouraged to review the foregoing summary and discussion of SunTrust’s earnings and financial condition in conjunction with the detailed financial tables and information which SunTrust has also published today and SunTrust’s forthcoming quarterly report on Form 10-Q. Detailed financial tables and other information are available on our Web site at www.suntrust.com in the Investor Relations section located under “About SunTrust”. This information is also included in a current report on Form 8-K filed with the SEC today.

This news release contains certain non-US GAAP financial measures to describe the Company’s performance. The reconciliation of those measures to the most directly comparable US GAAP financial measures, and the reasons why SunTrust believes such financial measures may be useful to investors, can be found in the financial information contained in the appendices of this news release.

Conference Call

SunTrust management will host a conference call on October 18, 2007, 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: 3Q07). Individuals calling from outside the United States should dial 1-517-308-9091 (Passcode: 3Q07). A replay of the call will be available beginning October 18, 2007, and ending November 2, 2007, by dialing 1-800-391-9847 (domestic) or 1-402-220-3093 (international).

Alternatively, individuals may listen to the live webcast of the presentation by visiting the SunTrust Web site at 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, “3rd Quarter Earnings Release.” Beginning the afternoon of October 18, 2007, listeners may

 

14


access an archived version of the webcast in the “Webcasts and Presentations” subsection found under “Investor Relations.” This webcast will be archived and available for one year. A link to the Investor Relations page is also found in the footer of the SunTrust home page.

SunTrust Banks, Inc., headquartered in Atlanta, is one of the nation’s largest banking organizations, serving a broad range of consumer, commercial, corporate and institutional clients. 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, equipment leasing and capital markets services. SunTrust’s Internet address is www.suntrust.com.

Forward-Looking Statements

This news release may contain forward-looking statements. Statements that do not describe historical or current facts, including statements about beliefs and expectations, are forward-looking statements. These statements often include the words “may,” “could,” “will,” “should,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “initiatives,” “targets,” “potentially,” “probably,” “projects,” “outlook” or similar expressions. Such statements are based upon the current beliefs and expectations of SunTrust’s management, and on information currently available to management, and speak as of the date hereof. 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 SunTrust’s results to differ materially from those described in the forward-looking statements can be found in the Company’s 2006 Annual Report on Form 10-K, in the Quarterly Reports on Form 10-Q and in the Current Reports filed on Form 8-K with the Securities and Exchange Commission and available at the Securities and Exchange Commission’s internet site (http://www.sec.gov). Those factors include: changes in general business or economic conditions or the competitive banking environment; changes in market interest rates or capital markets; significant changes in legislation or regulatory requirements, or the fiscal and monetary policies of the federal government and its agencies; significant changes in securities markets or markets for residential or commercial real estate; increases in the cost of funds resulting from customers pursuing alternatives to bank deposits or shifting from demand deposits to higher-cost products; hurricanes and other natural disasters; competitive pressures among local, regional, national, and international banks, thrifts credit unions, and other financial institutions; litigation; the potential that the Company may acquire other institutions or may divest certain portions of its business; changes in accounting principles, policies, or guidelines; we carry certain financial instruments at fair value and are subject to market risk; we rely on other companies to provide key components of our business infrastructure; weakness in residential property values and mortgage loan markets could adversely affect us; and we may be required to repurchase mortgage loans or indemnify mortgage loan purchasers as a result of breaches of representations and warranties, borrower fraud, or certain borrower defaults, which could harm our liquidity, results of operations and financial condition.

The forward-looking statements in this news release speak only as of this date, and SunTrust does not assume any obligation to update such statements or to update the reasons why actual results could differ from those contained in such statements.

###

 

15


SunTrust Banks, Inc. and Subsidiaries

FINANCIAL HIGHLIGHTS

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


    

Three Months Ended

September 30

   

%

Change

   

Nine Months Ended

September 30

   

%

Change

 
     2007     2006       2007     2006    

EARNINGS & DIVIDENDS

           

Net income

  $420.2     $535.6     (21.5 )%   $1,622.9     $1,611.1     0.7 %

Net income available to common shareholders

  412.6     535.6     (23.0 )   1,600.5     1,611.1     (0.7 )

Net income available to common shareholders excluding gain on sale of shares of The Coca-Cola Company 1

  412.6     535.6     (23.0 )   1,455.0     1,611.1     (9.7 )

Total revenue - FTE 2

  2,038.4     2,032.8     0.3     6,480.1     6,149.1     5.4  

Total revenue - FTE excluding net securities gains and losses and net gain on sale of Bond Trustee business 1

  2,037.4     2,011.8     1.3     6,242.7     6,122.2     2.0  

Net income per average common share

           

Diluted

  1.18     1.47     (19.7 )   4.52     4.42     2.3  

Diluted excluding gain on sale of shares of The Coca-Cola Company 1

  1.18     1.47     (19.7 )   4.11     4.42     (7.0 )

Basic

  1.19     1.48     (19.6 )   4.57     4.46     2.5  

Dividends paid per average common share

  0.73     0.61     19.7     2.19     1.83     19.7  

CONDENSED BALANCE SHEETS

           

Selected Average Balances

           

Total assets

  $174,653     $180,501     (3.2 )%   $178,694     $179,632     (0.5 )%

Earning assets

  152,328     158,915     (4.1 )   156,439     157,860     (0.9 )

Loans

  119,559     120,742     (1.0 )   119,739     119,066     0.6  

Consumer and commercial deposits

  96,708     97,643     (1.0 )   97,471     96,711     0.8  

Brokered and foreign deposits

  21,140     27,958     (24.4 )   23,925     26,614     (10.1 )

Total shareholders’ equity

  17,550     17,662     (0.6 )   17,732     17,342     2.2  

As of

           

Total assets

  175,857     183,105     (4.0 )      

Earning assets

  151,229     160,288     (5.7 )      

Loans

  120,748     121,237     (0.4 )      

Allowance for loan and lease losses

  1,094     1,087     0.6        

Consumer and commercial deposits

  98,834     98,684     0.2        

Brokered and foreign deposits

  17,026     25,709     (33.8 )      

Total shareholders’ equity

  17,907     18,589     (3.7 )      

FINANCIAL RATIOS & OTHER DATA

           

Return on average total assets

  0.95 %   1.18 %   (19.5 )%   1.21 %   1.20 %   0.8 %

Return on average assets less net unrealized securities gains 1

  0.93     1.28     (27.3 )   1.09     1.22     (10.7 )

Return on average common shareholders’ equity

  9.60     12.10     (20.7 )   12.42     12.45     (0.2 )

Return on average realized common shareholders’ equity 1

  9.86     13.73     (28.2 )   11.70     13.24     (11.6 )

Net interest margin 2

  3.18     2.93     8.5     3.10     3.02     2.6  

Efficiency ratio 2

  63.35     59.30     6.8     58.31     59.29     (1.7 )

Tangible efficiency ratio 1

  62.13     58.03     7.1     57.18     58.01     (1.4 )

Effective tax rate

  26.68     27.94     (4.5 )   29.99     29.71     0.9  

Tier 1 capital ratio 

  7.45 3   7.70     (3.2 )      

Total capital ratio 

  10.75 3   11.07     (2.9 )      

Tier 1 leverage ratio 

  7.30 3   7.27     0.4        

Total average shareholders’ equity to total average assets

  10.05     9.78     2.8     9.92     9.65     2.8  

Tangible equity to tangible assets 1

  6.32     6.42     (1.6 )      

Full-time equivalent employees

  32,903     34,293     (4.1 )      

Number of ATMs

  2,518     2,568     (1.9 )      

Full service banking offices

  1,683     1,699     (0.9 )      

Traditional

  1,339     1,347     (0.6 )      

In-store

  344     352     (2.3 )      

Book value per common share

  $50.01     $49.71     0.6        

Market price:

           

High

  90.47     81.59     10.9     94.18     81.59     15.4  

Low

  73.61     75.11     (2.0 )   73.61     69.68     5.6  

Close

  75.67     77.28     (2.1 )   75.67     77.28     (2.1 )

Market capitalization

  26,339     28,120     (6.3 )      

Average common shares outstanding (000s)

           

Diluted

  349,592     365,121     (4.3 )   354,244     364,322     (2.8 )

Basic

  346,150     361,805     (4.3 )   350,501     361,009     (2.9 )

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

2 Revenue, net interest margin, and efficiency ratios are presented on a fully taxable-equivalent (“FTE”) basis. The FTE basis adjusts for the tax-favored status of net interest income from certain loans and investments. The Company believes this measure to be the preferred industry measurement of net interest income and it enhances comparability of net interest income arising from taxable and tax-exempt sources. Total revenue - FTE equals net interest income on a FTE basis plus noninterest income.

3 Current period tier 1 capital, total capital and tier 1 leverage ratios are estimated as of the earnings release date.

 

Page 1


SunTrust Banks, Inc. and Subsidiaries

FIVE QUARTER FINANCIAL HIGHLIGHTS

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


      Three Months Ended  
      September 30
2007
    June 30
2007
   

March 31

2007

    December 31
2006
    September 30
2006
 

EARNINGS & DIVIDENDS

          

Net income

   $420.2     $681.4     $521.2     $506.3     $535.6  

Net income available to common shareholders

   412.6     673.9     513.9     498.6     535.6  

Net income available to common shareholders excluding gain on sale of shares of The Coca-Cola Company1

   412.6     528.3     513.9     498.6     535.6  

Total revenue - FTE 2

   2,038.4     2,374.6     2,067.2     2,067.7     2,032.8  

Total revenue - FTE excluding net securities gains and losses and net gain on sale of Bond Trustee business 1

   2,037.4     2,138.2     2,067.2     2,032.4     2,011.8  

Net income per average common share

          

Diluted

   1.18     1.89     1.44     1.39     1.47  

Diluted excluding gain on sale of shares of The Coca-Cola Company 1

   1.18     1.48     1.44     1.39     1.47  

Basic

   1.19     1.91     1.45     1.41     1.48  

Dividends paid per average common share

   0.73     0.73     0.73     0.61     0.61  

CONDENSED BALANCE SHEETS

          

Selected Average Balances

          

Total assets

   $174,653     $179,996     $181,506     $182,343     $180,501  

Earning assets

   152,328     157,594     159,474     160,115     158,915  

Loans

   119,559     118,165     121,515     121,364     120,742  

Consumer and commercial deposits

   96,708     97,927     97,792     98,553     97,643  

Brokered and foreign deposits

   21,140     23,983     26,714     26,124     27,958  

Total shareholders’ equity

   17,550     17,928     17,720     18,155     17,662  

As of

          

Total assets

   175,857     180,314     186,385     182,162     183,105  

Earning assets

   151,229     157,095     163,299     159,064     160,288  

Loans

   120,748     118,788     116,913     121,454     121,237  

Allowance for loan and lease losses

   1,094     1,050     1,034     1,045     1,087  

Consumer and commercial deposits

   98,834     97,822     99,875     99,776     98,684  

Brokered and foreign deposits

   17,026     25,069     23,563     24,246     25,709  

Total shareholders’ equity

   17,907     17,369     17,969     17,814     18,589  

FINANCIAL RATIOS & OTHER DATA

          

Return on average total assets

   0.95 %   1.52 %   1.16 %   1.10 %   1.18 %

Return on average assets less net unrealized securities gains 1

   0.93     1.18     1.15     1.04     1.28  

Return on average common shareholders’ equity

   9.60     15.51     12.10     11.20     12.10  

Return on average realized common shareholders’ equity 1

   9.86     12.71     12.54     11.17     13.73  

Net interest margin 2

   3.18     3.10     3.02     2.94     2.93  

Efficiency ratio 2

   63.35     52.69     59.79     59.67     59.30  

Tangible efficiency ratio 1

   62.13     51.64     58.65     58.49     58.03  

Effective tax rate

   26.68     31.45     30.59     27.07     27.94  

Tier 1 capital ratio 

   7.45 3   7.49     7.60     7.72     7.70  

Total capital ratio 

   10.75 3   10.67     10.94     11.11     11.07  

Tier 1 leverage ratio 

   7.30 3   7.11     7.24     7.23     7.27  

Total average shareholders’ equity to total average assets

   10.05     9.96     9.76     9.96     9.78  

Tangible equity to tangible assets 1

   6.32     5.85     5.97     6.03     6.42  

Full-time equivalent employees

   32,903     33,241     33,397     33,599     34,293  

Number of ATMs

   2,518     2,533     2,543     2,569     2,568  

Full service banking offices

   1,683     1,685     1,691     1,701     1,699  

Traditional

   1,339     1,338     1,338     1,349     1,347  

In-store

   344     347     353     352     352  

Book value per common share

   $50.01     $48.33     $49.00     $48.78     $49.71  

Market price:

          

High

   90.47     94.18     87.43     85.64     81.59  

Low

   73.61     78.16     80.76     76.76     75.11  

Close

   75.67     85.74     83.04     84.45     77.28  

Market capitalization

   26,339     29,928     29,604     29,972     28,120  

Average common shares outstanding (000s)

          

Diluted

   349,592     356,008     357,214     358,292     365,121  

Basic

   346,150     351,987     353,448     354,677     361,805  

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

2 Revenue, net interest margin, and efficiency ratios are presented on a fully taxable-equivalent (“FTE”) basis. The FTE basis adjusts for the tax-favored status of net interest income from certain loans and investments. The Company believes this measure to be the preferred industry measurement of net interest income and it enhances comparability of net interest income arising from taxable and tax-exempt sources. Total revenue - FTE equals net interest income on a FTE basis plus noninterest income.

3 Current period tier 1 capital, total capital and tier 1 leverage ratios are estimated as of the earnings release date.

 

Page 2


SunTrust Banks, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands) (Unaudited)


    As of September 30     Increase/(Decrease) 3  
    2007     2006     Amount     %  

ASSETS

       

Cash and due from banks

  $4,162,456     $4,066,173     $96,283     2.4 %

Interest-bearing deposits in other banks

  29,684     39,982     (10,298 )   (25.8 )

Funds sold and securities purchased under agreements to resell

  968,553     1,147,423     (178,870 )   (15.6 )

Trading assets

  9,566,806     3,675,917     5,890,889     NM  

Securities available for sale1

  15,243,133     25,553,320     (10,310,187 )   (40.3 )

Loans held for sale (loans at fair value: $5,681,549 as of

  8,675,427     11,501,646     (2,826,219 )   (24.6 )

September 30, 2007)

       

Loans:

       

Commercial

  34,969,714     35,018,715     (49,001 )   (0.1 )

Real estate:

       

Home equity lines

  14,598,774     14,014,617     584,157     4.2  

Construction

  14,358,990     13,595,924     763,066     5.6  

Residential mortgages

  31,603,884     33,711,399     (2,107,515 )   (6.3 )

Commercial real estate

  12,487,309     12,459,023     28,286     0.2  

Consumer:

       

Direct

  4,419,290     4,082,257     337,033     8.3  

Indirect

  7,642,099     8,022,512     (380,413 )   (4.7 )

Credit card

  668,353     332,947     335,406     NM  
                   

Total loans

  120,748,413     121,237,394     (488,981 )   (0.4 )

Allowance for loan and lease losses

  (1,093,691 )   (1,087,316 )   6,375     0.6  
                   

Net loans

  119,654,722     120,150,078     (495,356 )   (0.4 )

Goodwill

  6,912,110     6,903,001     9,109     0.1  

Other intangible assets

  1,327,060     1,120,102     206,958     18.5  

Other assets

  9,317,278     8,946,911     370,367     4.1  
                   

Total assets2

  $175,857,229     $183,104,553     ($7,247,324 )   (4.0 )
                   

LIABILITIES

       

Noninterest-bearing consumer and commercial deposits

  $20,857,240     $22,813,455     ($1,956,215 )   (8.6 )%

Interest-bearing consumer and commercial deposits:

       

NOW accounts

  20,319,435     17,508,754     2,810,681     16.1  

Money market accounts

  24,011,524     23,803,496     208,028     0.9  

Savings

  4,376,155     5,699,545     (1,323,390)     (23.2 )

Consumer time

  17,037,866     16,615,445     422,421     2.5  

Other time

  12,231,832     12,243,372     (11,540)     (0.1 )
                   

Total consumer and commercial deposits

  98,834,052     98,684,067     149,985     0.2  

Brokered deposits (CDs at fair value: $189,513 as of September 30, 2007; $84,955 as of September 30, 2006)

  14,188,886     18,264,554     (4,075,668 )   (22.3 )

Foreign deposits

  2,836,775     7,444,329     (4,607,554 )   (61.9 )
                   

Total deposits

  115,859,713     124,392,950     (8,533,237 )   (6.9 )

Funds purchased

  1,512,054     5,926,570     (4,414,516 )   (74.5 )

Securities sold under agreements to repurchase

  5,548,486     7,362,480     (1,813,994 )   (24.6 )

Other short-term borrowings

  2,971,761     1,744,479     1,227,282     70.4  

Long-term debt (notes at fair value: $6,859,983 as of September 30, 2007)

  22,661,381     17,477,276     5,184,105     29.7  

Trading liabilities

  1,906,002     1,611,648     294,354     18.3  

Other liabilities

  7,490,585     5,999,843     1,490,742     24.8  
                   

Total liabilities

  157,949,982     164,515,246     (6,565,264 )   (4.0 )
                   

SHAREHOLDERS’ EQUITY

       

Preferred stock, no par value

  500,000     500,000     -     -  

Common stock, $1.00 par value

  370,578     370,578     -     -  

Additional paid in capital

  6,709,002     6,735,458     (26,456 )   (0.4 )

Retained earnings

  10,897,059     10,258,441     638,618     6.2  

Treasury stock, at cost, and other

  (1,821,360 )   (453,934 )   1,367,426     NM  

Accumulated other comprehensive income

  1,251,968     1,178,764     73,204     6.2  
                   

Total shareholders’ equity

  17,907,247     18,589,307     (682,060 )   (3.7 )
                   

Total liabilities and shareholders’ equity

  $175,857,229     $183,104,553     ($7,247,324 )   (4.0 )
                   

Common shares outstanding

  348,073,971     363,868,470     (15,794,499 )   (4.3 )

Common shares authorized

  750,000,000     750,000,000     -     -  

Preferred shares outstanding

  5,000     5,000     -     -  

Preferred shares authorized

  50,000,000     50,000,000     -     -  

Treasury shares of common stock

  22,504,427     6,709,928     15,794,499     NM  

1 Includes net unrealized gains of   $2,391,606     $1,915,277     $476,329     24.9 %
2 Includes earning assets of   151,228,575     160,287,584     (9,059,009 )   (5.7 )

3 ”NM” - Not meaningful. Those changes over 100 percent were not considered to be meaningful.

 

Page 3


SunTrust Banks, Inc. and Subsidiaries

FIVE QUARTER CONSOLIDATED BALANCE SHEETS

(Dollars in thousands) (Unaudited)


    As of  
    September 30
2007
   

June 30

2007

   

March 31

2007

    December 31
2006
    September 30
2006
 

ASSETS

         

Cash and due from banks

  $4,162,456     $4,254,430     $3,867,957     $4,235,889     $4,066,173  

Interest-bearing deposits in other banks

  29,684     25,991     21,974     21,810     39,982  

Funds sold and securities purchased under agreements to resell

  968,553     1,143,995     883,833     1,050,046     1,147,423  

Trading assets

  9,566,806     13,044,972     21,545,502     2,777,629     3,675,917  

Securities available for sale 1

  15,243,133     14,725,957     13,163,036     25,101,715     25,553,320  

Loans held for sale

  8,675,427     12,474,932     14,067,788     11,790,122     11,501,646  

Loans:

         

Commercial

  34,969,714     34,362,837     33,484,170     34,613,882     35,018,715  

Real estate:

         

Home equity lines

  14,598,774     14,303,659     14,039,685     14,102,655     14,014,617  

Construction

  14,358,990     14,417,949     14,175,478     13,892,988     13,595,924  

Residential mortgages

  31,603,884     30,759,216     30,248,543     33,830,101     33,711,399  

Commercial real estate

  12,487,309     12,416,329     12,454,475     12,567,824     12,459,023  

Consumer:

         

Direct

  4,419,290     4,391,739     4,293,308     4,160,091     4,082,257  

Indirect

  7,642,099     7,739,369     7,840,962     7,936,102     8,022,512  

Credit card

  668,353     396,624     375,938     350,690     332,947  
                             

Total loans

  120,748,413     118,787,722     116,912,559     121,454,333     121,237,394  

Allowance for loan and lease losses

  (1,093,691 )   (1,050,362 )   (1,033,939 )   (1,044,521 )   (1,087,316 )
                             

Net loans

  119,654,722     117,737,360     115,878,620     120,409,812     120,150,078  

Goodwill

  6,912,110     6,897,050     6,896,723     6,889,860     6,903,001  

Other intangible assets

  1,327,060     1,290,460     1,293,457     1,181,984     1,120,102  

Other assets

  9,317,278     8,719,225     8,765,951     8,702,742     8,946,911  
                             

Total assets 2

  $175,857,229     $180,314,372     $186,384,841     $182,161,609     $183,104,553  
                             

LIABILITIES

         

Noninterest-bearing consumer and commercial deposits

  $20,857,240     $22,725,654     $22,765,045     $22,887,176     $22,813,455  

Interest-bearing consumer and commercial deposits:

         

NOW accounts

  20,319,435     20,255,930     20,802,207     20,230,763     17,508,754  

Money market accounts

  24,011,524     21,645,616     22,070,587     22,371,828     23,803,496  

Savings

  4,376,155     4,698,516     5,102,312     5,198,980     5,699,545  

Consumer time

  17,037,866     16,745,010     17,044,783     16,824,239     16,615,445  

Other time

  12,231,832     11,751,246     12,089,882     12,262,902     12,243,372  
                             

Total consumer and commercial deposits

  98,834,052     97,821,972     99,874,816     99,775,888     98,684,067  

Brokered deposits

  14,188,886     16,659,978     18,203,295     18,150,059     18,264,554  

Foreign deposits

  2,836,775     8,408,752     5,360,164     6,095,682     7,444,329  
                             

Total deposits

  115,859,713     122,890,702     123,438,275     124,021,629     124,392,950  

Funds purchased

  1,512,054     3,405,459     6,433,195     4,867,591     5,926,570  

Securities sold under agreements to repurchase

  5,548,486     6,081,096     6,851,863     6,950,426     7,362,480  

Other short-term borrowings

  2,971,761     2,083,518     1,958,438     2,062,636     1,744,479  

Long-term debt

  22,661,381     20,604,933     19,007,959     18,992,905     17,477,276  

Trading liabilities

  1,906,002     2,156,279     1,642,958     1,634,097     1,611,648  

Other liabilities

  7,490,585     5,723,532     9,083,615     5,818,719     5,999,843  
                             

Total liabilities

  157,949,982     162,945,519     168,416,303     164,348,003     164,515,246  
                             

SHAREHOLDERS’ EQUITY

         

Preferred stock, no par value

  500,000     500,000     500,000     500,000     500,000  

Common stock, $1.00 par value

  370,578     370,578     370,578     370,578     370,578  

Additional paid in capital

  6,709,002     6,589,387     6,688,660     6,627,196     6,735,458  

Retained earnings

  10,897,059     10,739,449     10,325,246     10,541,152     10,258,441  

Treasury stock, at cost, and other

  (1,821,360 )   (1,751,449 )   (1,101,172 )   (1,151,269 )   (453,934 )

Accumulated other comprehensive income

  1,251,968     920,888     1,185,226     925,949     1,178,764  
                             

Total shareholders’ equity

  17,907,247     17,368,853     17,968,538     17,813,606     18,589,307  
                             

Total liabilities and shareholders’ equity

  $175,857,229     $180,314,372     $186,384,841     $182,161,609     $183,104,553  
                             

Common shares outstanding

  348,073,971     349,052,800     356,504,563     354,902,566     363,868,470  

Common shares authorized

  750,000,000     750,000,000     750,000,000     750,000,000     750,000,000  

Preferred shares outstanding

  5,000     5,000     5,000     5,000     5,000  

Preferred shares authorized

  50,000,000     50,000,000     50,000,000     50,000,000     50,000,000  

Treasury shares of common stock

  22,504,427     21,525,598     14,073,835     15,675,832     6,709,928  

1 Includes net unrealized gains of   $2,391,606     $2,035,623     $2,333,896     $2,103,362     $1,915,277  
2 Includes earning assets of   151,228,575     157,094,873     163,299,162     159,063,834     160,287,584  

 

Page 4


SunTrust Banks, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME

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


     Three Months Ended     Nine Months Ended  
     September 30     Increase/(Decrease) 2     September 30     Increase/(Decrease) 2  
     2007     2006     Amount     %     2007    2006     Amount     %  

Interest income

   $2,515,292     $2,525,489     ($10,197 )   (0.4 )%   $7,587,219    $7,227,289     $359,930     5.0 %

Interest expense

   1,323,104     1,374,097     (50,993 )   (3.7 )   4,035,188    3,728,113     307,075     8.2  
                                       

NET INTEREST INCOME

   1,192,188     1,151,392     40,796     3.5     3,552,031    3,499,176     52,855     1.5  

Provision for loan losses

   147,020     61,568     85,452     NM     308,141    146,730     161,411     NM  
                                       

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

   1,045,168     1,089,824     (44,656 )   (4.1 )   3,243,890    3,352,446     (108,556 )   (3.2 )
                                       

NONINTEREST INCOME

                 

Service charges on deposit accounts

   213,939     194,262     19,677     10.1     599,818    572,092     27,726     4.8  

Trust and investment management income

   175,242     173,717     1,525     0.9     514,180    517,617     (3,437 )   (0.7 )

Retail investment services

   71,064     55,544     15,520     27.9     206,392    168,974     37,418     22.1  

Other charges and fees

   120,730     113,347     7,383     6.5     357,225    339,677     17,548     5.2  

Investment banking income

   47,688     47,046     642     1.4     159,844    159,342     502     0.3  

Trading account profits and commissions

   (31,187 )   20,404     (51,591 )   NM     75,451    103,461     (28,010 )   (27.1 )

Card fees

   70,450     64,916     5,534     8.5     203,225    183,460     19,765     10.8  

Mortgage production related income

   12,950     50,336     (37,386 )   (74.3 )   68,617    169,952     (101,335 )   (59.6 )

Mortgage servicing related income

   57,142     36,633     20,509     56.0     138,072    112,744     25,328     22.5  

Net gain on sale of Bond Trustee business

   -     112,759     (112,759 )   (100.0 )   -    112,759     (112,759 )   (100.0 )

Gain on sale upon merger of Lighthouse Partners

   -     -     -     -     32,340    -     32,340     100.0  

Other noninterest income

   80,130     81,783     (1,653 )   (2.0 )   260,080    231,582     28,498     12.3  

Securities gains/(losses), net

   991     (91,816 )   92,807     NM     237,423    (85,854 )   323,277     NM  
                                       

Total noninterest income

   819,139     858,931     (39,792 )   (4.6 )   2,852,667    2,585,806     266,861     10.3  
                                       

NONINTEREST EXPENSE

                 

Employee compensation and benefits

   677,765     674,322     3,443     0.5     2,087,378    2,068,360     19,018     0.9  

Net occupancy expense

   87,626     85,613     2,013     2.4     258,533    248,367     10,166     4.1  

Outside processing and software

   105,132     98,699     6,433     6.5     305,538    292,038     13,500     4.6  

Equipment expense

   51,532     50,249     1,283     2.6     154,764    147,804     6,960     4.7  

Marketing and customer development

   46,897     35,932     10,965     30.5     135,928    127,956     7,972     6.2  

Amortization of intangible assets

   24,820     25,792     (972 )   (3.8 )   73,266    78,922     (5,656 )   (7.2 )

Loss on extinguishment of debt

   9,800     -     9,800     100.0     9,800    -     9,800     100.0  

Other noninterest expense

   287,673     234,892     52,781     22.5     753,229    682,636     70,593     10.3  
                                       

Total noninterest expense

   1,291,245     1,205,499     85,746     7.1     3,778,436    3,646,083     132,353     3.6  
                                       

INCOME BEFORE PROVISION FOR INCOME TAXES

   573,062     743,256     (170,194 )   (22.9 )   2,318,121    2,292,169     25,952     1.1  

Provision for income taxes

   152,898     207,668     (54,770 )   (26.4 )   695,230    681,052     14,178     2.1  
                                       

Net income

   420,164     535,588     (115,424 )   (21.6 )   1,622,891    1,611,117     11,774     0.7  

Preferred dividends

   7,526     -     7,526     100.0     22,408    -     22,408     100.0  
                                       

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS

   $412,638     $535,588     ($122,950 )   (23.0 )   $1,600,483    $1,611,117     ($10,634 )   (0.7 )
                                       

Net interest income - FTE 1

   $1,219,243     $1,173,860     $45,383     3.9     $3,627,467    $3,563,265     $64,202     1.8  

Net income per average common share

                 

Diluted

   1.18     1.47     (0.29 )   (19.7 )   4.52    4.42     0.10     2.3  

Basic

   1.19     1.48     (0.29 )   (19.6 )   4.57    4.46     0.11     2.5  

Cash dividends paid per common share

   0.73     0.61     0.12     19.7     2.19    1.83     0.36     19.7  

Average common shares outstanding (000s)

                 

Diluted

   349,592     365,121     (15,529 )   (4.3 )   354,244    364,322     (10,078 )   (2.8 )

Basic

   346,150     361,805     (15,655 )   (4.3 )   350,501    361,009     (10,508 )   (2.9 )

1 Net interest income includes the effects of FTE adjustments using a federal tax rate of 35% and state income taxes where applicable to increase tax-exempt interest income to a taxable-equivalent basis.

2 “NM” - Not meaningful. Those changes over 100 percent were not considered to be meaningful.

 

Page 5


SunTrust Banks, Inc. and Subsidiaries

FIVE QUARTER CONSOLIDATED STATEMENTS OF INCOME

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


    Three Months Ended  
    September 30
2007
   

June 30

2007

  March 31
2007
   

December 31

2006

  September 30
2006
 

Interest income

  $2,515,292     $2,543,870   $2,528,057     $2,564,731   $2,525,489  

Interest expense

  1,323,104     1,348,586   1,363,498     1,403,442   1,374,097  
                         

NET INTEREST INCOME

  1,192,188     1,195,284   1,164,559     1,161,289   1,151,392  

Provision for loan losses

  147,020     104,680   56,441     115,806   61,568  
                         

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

  1,045,168     1,090,604   1,108,118     1,045,483   1,089,824  
                         

NONINTEREST INCOME

         

Service charges on deposit accounts

  213,939     196,844   189,035     191,628   194,262  

Trust and investment management income

  175,242     164,620   174,318     169,248   173,717  

Retail investment services

  71,064     71,785   63,543     65,000   55,544  

Other charges and fees

  120,730     118,358   118,137     122,386   113,347  

Investment banking income

  47,688     61,999   50,157     71,211   47,046  

Trading account profits and commissions

  (31,187 )   16,437   90,201     9,586   20,404  

Card fees

  70,450     68,580   64,195     64,187   64,916  

Mortgage production related income

  12,950     64,322   (8,655 )   47,476   50,336  

Mortgage servicing related income

  57,142     45,527   35,403     8,994   36,633  

Net gain on sale of Bond Trustee business

  -     -   -     -   112,759  

Gain on sale upon merger of Lighthouse Partners

  -     -   32,340     -   -  

Other noninterest income

  80,130     109,738   70,212     97,473   81,783  

Securities gains/(losses), net

  991     236,412   20     35,377   (91,816 )
                         

Total noninterest income

  819,139     1,154,622   878,906     882,566   858,931  
                         

NONINTEREST EXPENSE

         

Employee compensation and benefits

  677,765     710,613   699,000     657,093   674,322  

Net occupancy expense

  87,626     84,650   86,257     85,846   85,613  

Outside processing and software

  105,132     100,730   99,676     101,538   98,699  

Equipment expense

  51,532     53,823   49,409     49,234   50,249  

Marketing and customer development

  46,897     43,326   45,705     45,249   35,932  

Amortization of intangible assets

  24,820     24,904   23,542     24,304   25,792  

Loss on extinguishment of debt

  9,800     -   -     11,665   -  

Other noninterest expense

  287,673     233,148   232,408     258,848   234,892  
                         

Total noninterest expense

  1,291,245     1,251,194   1,235,997     1,233,777   1,205,499  
                         

INCOME BEFORE PROVISION FOR INCOME TAXES

  573,062     994,032   751,027     694,272   743,256  

Provision for income taxes

  152,898     312,601   229,731     187,918   207,668  
                         

Net income

  420,164     681,431   521,296     506,354   535,588  

Preferred dividends

  7,526     7,519   7,363     7,729   -  
                         

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS

  $412,638     $673,912   $513,933     $498,625   $535,588  
                         

Net interest income - FTE 1

  $1,219,243     $1,219,952   $1,188,272     $1,185,166   $1,173,860  

Net income per average common share

         

Diluted

  1.18     1.89   1.44     1.39   1.47  

Basic

  1.19     1.91   1.45     1.41   1.48  

Cash dividends paid per common share

  0.73     0.73   0.73     0.61   0.61  

Average common shares outstanding (000s)

         

Diluted

  349,592     356,008   357,214     358,292   365,121  

Basic

  346,150     351,987   353,448     354,677   361,805  

1 Net interest income includes the effects of FTE adjustments using a federal tax rate of 35% and state income taxes where applicable to increase tax-exempt interest income to a taxable-equivalent basis.

 

Page 6


SunTrust Banks, Inc. and Subsidiaries

CONSOLIDATED DAILY AVERAGE BALANCES,

AVERAGE YIELDS EARNED AND RATES PAID

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


     Three Months Ended  
     September 30, 2007     June 30, 2007  
     Average
Balances
    Interest
Income/
Expense
   Yields/
Rates
    Average
Balances
    Interest
Income/
Expense
   Yields/
Rates
 

ASSETS

              

Loans:

              

Real estate 1-4 family

   $31,003.5     $498.5    6.43 %   $30,754.4     $493.2    6.42 %

Real estate construction

   13,686.6     260.0    7.54     13,710.1     259.4    7.59  

Real estate home equity lines

   14,133.1     279.5    7.85     13,849.7     272.4    7.89  

Real estate commercial

   12,759.3     225.3    7.01     12,731.8     220.8    6.95  

Commercial - FTE 1

   34,247.9     562.6    6.52     33,607.7     539.6    6.44  

Business credit card

   516.3     4.2    3.29     403.7     5.9    5.80  

Consumer - direct

   4,368.0     80.0    7.26     4,347.5     78.2    7.21  

Consumer - indirect

   7,966.4     124.6    6.21     8,063.6     123.1    6.12  

Nonaccrual and restructured

   877.5     3.8    1.72     696.1     4.8    2.76  
                                  

Total loans

   119,558.6     2,038.5    6.76     118,164.6     1,997.4    6.78  

Securities available for sale:

              

Taxable

   11,546.2     179.7    6.23     11,014.3     167.7    6.09  

Tax-exempt - FTE 1

   1,040.9     15.8    6.05     1,041.2     15.2    5.85  
                                  

Total securities available for sale - FTE 1

   12,587.1     195.5    6.21     12,055.5     182.9    6.07  

Funds sold and securities purchased under agreements to resell

   872.5     11.1    4.99     1,038.1     13.2    5.04  

Loans held for sale

   9,748.0     155.6    6.39     13,454.3     200.4    5.96  

Interest-bearing deposits

   24.9     0.3    4.28     24.1     0.3    5.74  

Interest earning trading assets

   9,536.5     141.2    5.88     12,857.6     174.3    5.44  
                                  

Total earning assets

   152,327.6     2,542.2    6.62     157,594.2     2,568.5    6.54  

Allowance for loan and lease losses

   (1,059.1 )        (1,037.6 )     

Cash and due from banks

   3,417.2          3,427.7       

Premises and equipment

   1,924.6          1,980.1       

Other assets

   14,795.3          14,646.8       

Noninterest earning trading assets

   1,155.9          986.6       

Unrealized gains on securities available for sale, net

   2,091.9          2,398.7       
                      

Total assets

   $174,653.4          $179,996.5       
                      

LIABILITIES AND SHAREHOLDERS’ EQUITY

              

Interest-bearing deposits:

              

NOW accounts

   $19,543.4     $117.9    2.39 %   $20,065.8     $119.0    2.38 %

Money market accounts

   22,560.3     160.0    2.81     21,773.3     142.0    2.62  

Savings

   4,456.5     13.3    1.19     4,786.7     14.8    1.24  

Consumer time

   16,839.9     193.4    4.56     16,942.3     190.5    4.51  

Other time

   11,862.4     146.3    4.89     11,962.4     144.5    4.85  
                                  

Total interest-bearing consumer and commercial deposits

   75,262.5     630.9    3.33     75,530.5     610.8    3.24  

Brokered deposits

   15,806.3     214.6    5.31     16,972.2     227.5    5.30  

Foreign deposits

   5,333.6     68.8    5.05     7,011.2     92.9    5.24  
                                  

Total interest-bearing deposits

   96,402.4     914.3    3.76     99,513.9     931.2    3.75  

Funds purchased

   2,291.3     28.9    4.94     3,967.7     52.2    5.21  

Securities sold under agreements to repurchase

   5,732.2     64.7    4.42     6,339.0     74.4    4.64  

Interest-bearing trading liabilities

   354.1     3.4    3.85     453.1     4.4    3.87  

Other short-term borrowings

   2,730.1     33.6    4.89     2,262.3     28.3    5.02  

Long-term debt

   21,143.5     278.1    5.22     19,772.4     258.0    5.24  
                                  

Total interest-bearing liabilities

   128,653.6     1,323.0    4.08     132,308.4     1,348.5    4.09  

Noninterest-bearing deposits

   21,445.1          22,395.8       

Other liabilities

   5,633.7          6,185.4       

Noninterest-bearing trading liabilities

   1,370.8          1,178.8       

Shareholders’ equity

   17,550.2          17,928.1       
                      

Total liabilities and shareholders’ equity

   $174,653.4          $179,996.5       
                      
                      

Interest Rate Spread

        2.54 %        2.45 %
                          

Net Interest Income - FTE 1

     $1,219.2        $1,220.0   
                  
                      

Net Interest Margin 2

        3.18 %        3.10 %
                      

1 The fully taxable-equivalent (“FTE”) basis adjusts for the tax-favored status of net interest income from certain loans and investments. The Company believes this measure to be the preferred industry measurement of net interest income and it enhances comparability of net interest income arising from taxable and tax-exempt sources.

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

 

Page 7


SunTrust Banks, Inc. and Subsidiaries

CONSOLIDATED DAILY AVERAGE BALANCES,

AVERAGE YIELDS EARNED AND RATES PAID

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


    Three Months Ended  
    March 31, 2007     December 31, 2006     September 30, 2006  
    Average
Balances
    Interest
Income/
Expense
  Yields/
Rates
    Average
Balances
    Interest
Income/
Expense
  Yields/
Rates
    Average
Balances
    Interest
Income/
Expense
  Yields/
Rates
 

ASSETS

                 

Loans:

                 

Real estate 1-4 family

  $34,089.1     $527.3   6.19 %   $34,345.4     $531.8   6.19 %   $33,875.7     $519.4   6.13 %

Real estate construction

  13,430.3     252.7   7.63     13,204.0     254.3   7.64     12,805.6     247.5   7.67  

Real estate home equity lines

  13,738.1     268.3   7.92     13,722.9     273.4   7.90     13,626.3     270.2   7.87  

Real estate commercial

  12,830.6     220.2   6.96     12,784.8     223.1   6.93     12,808.6     223.4   6.92  

Commercial - FTE 1

  34,032.8     535.6   6.38     33,965.1     545.8   6.37     34,306.9     542.1   6.27  

Business credit card

  369.5     5.5   5.94     351.4     5.3   5.99     323.8     5.0   6.14  

Consumer - direct

  4,220.5     76.0   7.30     4,116.3     76.8   7.40     4,206.9     76.7   7.23  

Consumer - indirect

  8,166.5     122.0   6.06     8,231.8     123.8   5.97     8,339.1     121.5   5.78  

Nonaccrual and restructured

  637.5     4.5   2.85     642.1     5.0   3.06     449.1     4.4   3.87  
                                               

Total loans

  121,514.9     2,012.1   6.72     121,363.8     2,039.3   6.67     120,742.0     2,010.2   6.61  

Securities available for sale:

                 

Taxable

  6,650.6     108.7   6.54     22,170.4     282.0   5.09     23,027.9     286.9   4.98  

Tax-exempt - FTE 1

  1,038.8     15.2   5.86     998.0     14.6   5.85     968.7     14.1   5.84  
                                               

Total securities available for sale - FTE 1

  7,689.4     123.9   6.44     23,168.4     296.6   5.12     23,996.6     301.0   5.02  

Funds sold and securities purchased under agreements to resell

  1,006.3     12.9   5.12     1,176.3     15.4   5.15     1,084.1     14.3   5.16  

Loans held for sale

  11,205.2     173.7   6.20     12,009.3     198.4   6.61     11,026.4     188.0   6.82  

Interest-bearing deposits

  28.9     0.4   5.69     31.2     0.3   3.76     25.8     0.3   5.04  

Interest earning trading assets

  18,028.9     228.8   5.15     2,365.8     38.6   6.46     2,039.8     34.2   6.64  
                                               

Total earning assets

  159,473.6     2,551.8   6.49     160,114.8     2,588.6   6.41     158,914.7     2,548.0   6.36  

Allowance for loan and lease losses

  (1,050.5 )       (1,086.1 )       (1,070.8 )    

Cash and due from banks

  3,520.0         3,683.1         3,705.8      

Premises and equipment

  2,001.0         1,957.4         1,925.7      

Other assets

  14,271.9         14,708.2         14,702.1      

Noninterest earning trading assets

  985.1         1,000.5         948.8      

Unrealized gains on securities available for sale, net

  2,305.3         1,965.4         1,374.6      
                             

Total assets

  $181,506.4         $182,343.3         $180,500.9      
                             

LIABILITIES AND SHAREHOLDERS’ EQUITY

                 

Interest-bearing deposits:

                 

NOW accounts

  $19,820.1     $115.9   2.37 %   $18,441.1     $102.2   2.20 %   $16,596.2     $78.1   1.87 %

Money market accounts

  22,089.1     142.9   2.62     23,075.7     153.1   2.63     24,267.0     171.4   2.80  

Savings

  5,024.8     16.3   1.32     5,437.0     23.6   1.73     5,591.2     24.1   1.71  

Consumer time

  16,809.4     183.1   4.42     16,682.8     180.8   4.30     16,402.5     169.8   4.11  

Other time

  12,115.8     144.0   4.82     12,338.6     148.3   4.77     11,852.2     138.1   4.62  
                                               

Total interest-bearing consumer and commercial deposits

  75,859.2     602.2   3.22     75,975.2     608.0   3.18     74,709.1     581.5   3.09  

Brokered deposits

  18,888.5     250.8   5.31     18,102.0     243.1   5.25     18,420.7     246.1   5.23  

Foreign deposits

  7,825.6     102.9   5.26     8,022.2     107.6   5.25     9,537.6     128.5   5.27  
                                               

Total interest-bearing deposits

  102,573.3     955.9   3.78     102,099.4     958.7   3.73     102,667.4     956.1   3.69  

Funds purchased

  4,693.1     61.2   5.22     5,163.4     68.8   5.21     4,206.7     56.2   5.23  

Securities sold under agreements to repurchase

  6,768.0     79.5   4.70     7,148.8     86.3   4.72     7,146.3     86.0   4.71  

Interest-bearing trading liabilities

  409.4     4.3   4.25     488.5     5.3   4.28     291.0     2.7   3.70  

Other short-term borrowings

  1,758.4     21.7   5.01     1,913.3     24.4   5.08     1,001.3     14.2   5.62  

Long-term debt

  19,000.8     240.9   5.14     17,854.2     259.9   5.78     17,735.2     258.9   5.79  
                                               

Total interest-bearing liabilities

  135,203.0     1,363.5   4.09     134,667.6     1,403.4   4.13     133,047.9     1,374.1   4.10  

Noninterest-bearing deposits

  21,933.1         22,577.7         22,933.4      

Other liabilities

  5,499.1         5,779.5         5,664.5      

Noninterest-bearing trading liabilities

  1,150.8         1,163.0         1,193.3      

Shareholders’ equity

  17,720.4         18,155.5         17,661.8      
                             

Total liabilities and shareholders’ equity

  $181,506.4         $182,343.3         $180,500.9      
                             
                             

Interest Rate Spread

      2.40 %       2.28 %       2.26 %
                                   

Net Interest Income - FTE 1

    $1,188.3       $1,185.2       $1,173.9  
                       
                             

Net Interest Margin 2

      3.02 %       2.94 %       2.93 %
                             

1 The fully taxable-equivalent (“FTE”) basis adjusts for the tax-favored status of net interest income from certain loans and investments. The Company believes this measure to be the preferred industry measurement of net interest income and it enhances comparability of net interest income arising from taxable and tax-exempt sources.

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

 

Page 8


SunTrust Banks, Inc. and Subsidiaries

CONSOLIDATED DAILY AVERAGE BALANCES,

AVERAGE YIELDS EARNED AND RATES PAID

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


    Nine Months Ended  
    September 30, 2007     September 30, 2006  
    Average
Balances
    Interest
Income/
Expense
  Yields/
Rates
    Average
Balances
    Interest
Income/
Expense
 

Yields/

Rates

 

ASSETS

           

Loans:

           

Real estate 1-4 family

  $31,937.7     $1,519.0   6.34 %   $33,246.6     $1,490.8   5.98 %

Real estate construction

  13,610.0     772.1   7.59     12,040.7     669.5   7.43  

Real estate home equity lines

  13,908.4     820.1   7.88     13,512.1     758.9   7.51  

Real estate commercial

  12,773.7     666.3   6.97     12,810.0     643.4   6.71  

Commercial - FTE 1

  33,963.6     1,637.8   6.45     33,792.7     1,541.6   6.10  

Business credit card

  430.4     15.6   4.83     303.1     13.9   6.13  

Consumer - direct

  4,312.5     234.2   7.26     4,577.0     236.8   6.92  

Consumer - indirect

  8,064.7     369.7   6.13     8,425.2     353.8   5.61  

Nonaccrual and restructured

  737.9     13.1   2.37     358.6     11.6   4.33  
                               

Total loans

  119,738.9     6,047.9   6.75     119,066.0     5,720.3   6.42  

Securities available for sale:

           

Taxable

  9,755.0     456.1   6.23     23,855.7     864.8   4.83  

Tax-exempt - FTE 1

  1,040.3     46.2   5.92     939.8     41.2   5.85  
                               

Total securities available for sale - FTE 1

  10,795.3     502.3   6.20     24,795.5     906.0   4.87  

Funds sold and securities purchased under agreement to resell

  971.8     37.3   5.05     1,152.6     41.5   4.74  

Loans held for sale

  11,463.8     529.8   6.16     10,770.5     529.6   6.56  

Interest-bearing deposits

  25.9     1.0   5.25     114.5     3.0   3.58  

Interest earning trading assets

  13,443.2     544.4   5.41     1,961.3     91.0   6.20  
                               

Total earning assets

  156,438.9     7,662.7   6.55     157,860.4     7,291.4   6.18  

Allowance for loan and lease losses

  (1,049.1 )       (1,053.0 )    

Cash and due from banks

  3,454.6         3,885.9      

Premises and equipment

  1,968.3         1,901.8      

Other assets

  14,573.2         14,589.3      

Noninterest earning trading assets

  1,043.2         943.0      

Unrealized gains on securities available for sale, net

  2,264.5         1,504.3      
                   

Total assets

  $178,693.6         $179,631.7      
                   

LIABILITIES AND SHAREHOLDERS’ EQUITY

           

Interest-bearing deposits:

           

NOW accounts

  $19,808.7     $352.8   2.38 %   $16,801.0     $205.6   1.64 %

Money market accounts

  22,142.6     444.9   2.69     24,990.6     481.4   2.58  

Savings

  4,753.9     44.4   1.25     5,348.9     55.4   1.39  

Consumer time

  16,864.0     567.0   4.49     15,265.4     433.8   3.80  

Other time

  11,979.3     434.8   4.85     10,745.3     344.6   4.29  
                               

Total interest-bearing consumer and commercial deposits

  75,548.5     1,843.9   3.26     73,151.2     1,520.8   2.78  

Brokered deposits

  17,211.1     692.9   5.31     17,197.8     637.5   4.89  

Foreign deposits

  6,714.3     264.6   5.20     9,415.8     347.7   4.87  
                               

Total interest-bearing deposits

  99,473.9     2,801.4   3.77     99,764.8     2,506.0   3.36  

Funds purchased

  3,641.9     142.4   5.15     4,195.5     154.2   4.85  

Securities sold under agreements to repurchase

  6,276.0     218.6   4.59     7,066.2     233.8   4.36  

Interest-bearing trading liabilities

  405.3     12.1   3.99     376.7     10.3   3.64  

Other short-term borrowings

  2,253.9     83.7   4.96     1,370.3     49.8   4.86  

Long-term debt

  19,980.0     777.0   5.20     18,852.2     774.0   5.49  
                               

Total interest-bearing liabilities

  132,031.0     4,035.2   4.09     131,625.7     3,728.1   3.79  

Noninterest-bearing deposits

  21,922.9         23,559.8      

Other liabilities

  5,773.1         5,934.3      

Noninterest-bearing trading liabilities

  1,234.3         1,170.3      

Shareholders’ equity

  17,732.3         17,341.6      
                   

Total liabilities and shareholders’ equity

  $178,693.6         $179,631.7      
                   
                   

Interest Rate Spread

      2.46 %       2.39 %
                       

Net Interest Income - FTE 1

    $3,627.5       $3,563.3  
               
                   

Net Interest Margin 2

      3.10 %       3.02 %
                   

1 The fully taxable-equivalent (“FTE”) basis adjusts for the tax-favored status of net interest income from certain loans and investments. The Company believes this measure to be the preferred industry measurement of net interest income and it enhances comparability of net interest income arising from taxable and tax-exempt sources.

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

 

Page 9


SunTrust Banks, Inc. and Subsidiaries

OTHER FINANCIAL DATA

(Dollars in thousands) (Unaudited)


     Three Months Ended           Nine Months Ended        
     September 30    

%

Change 1

    September 30    

%

Change 1

 
     2007     2006       2007     2006    

CREDIT DATA

            

Allowance for loan and lease losses - beginning

   $1,050,362     $1,061,862     (1.1 )%   $1,044,521     $1,028,128     1.6 %

Provision for loan losses

   147,020     61,568     NM     308,141     146,730     NM  

Allowance associated with loans at fair value2

   -     -     -     (4,100 )   -     (100.0 )

Charge-offs

            

Commercial

   (39,487 )   (23,062 )   71.2     (102,620 )   (55,670 )   84.3  

Real estate:

            

Home equity lines

   (29,075 )   (6,460 )   NM     (69,376 )   (17,778 )   NM  

Construction

   (2,477 )   (814 )   NM     (4,543 )   (1,051 )   NM  

Residential mortgages

   (19,853 )   (9,113 )   NM     (53,761 )   (21,790 )   NM  

Commercial real estate

   (789 )   (487 )   62.0     (1,770 )   (3,794 )   (53.3 )

Consumer:

            

Direct

   (5,661 )   (4,544 )   24.6     (16,879 )   (16,086 )   4.9  

Indirect

   (28,944 )   (18,639 )   55.3     (74,006 )   (56,865 )   30.1  
                            

Total charge-offs

   (126,286 )   (63,119 )   NM     (322,955 )   (173,034 )   86.6  
                            

Recoveries

            

Commercial

   6,322     9,636     (34.4 )   17,629     23,314     (24.4 )

Real estate:

            

Home equity lines

   2,101     1,618     29.9     5,607     5,311     5.6  

Construction

   82     520     (84.2 )   445     1,285     (65.4 )

Residential mortgages

   1,107     1,831     (39.5 )   4,134     6,223     (33.6 )

Commercial real estate

   861     475     81.3     1,064     4,464     (76.2 )

Consumer:

            

Direct

   2,108     2,713     (22.3 )   7,129     9,321     (23.5 )

Indirect

   10,014     10,212     (1.9 )   32,076     35,574     (9.8 )
                            

Total recoveries

   22,595     27,005     (16.3 )   68,084     85,492     (20.4 )
                            

Net charge-offs

   (103,691 )   (36,114 )   NM     (254,871 )   (87,542 )   NM  
                            

Allowance for loan and lease losses - ending

   $1,093,691     $1,087,316     0.6     $1,093,691     $1,087,316     0.6  
                            

Net charge-offs to average loans (annualized)

            

Commercial

   0.38 %   0.15 %   NM %   0.33 %   0.13 %   NM %

Real estate:

            

Home equity lines

   0.76     0.14     NM     0.61     0.12     NM  

Construction

   0.07     0.01     NM     0.04     -     100.0  

Residential mortgages

   0.24     0.08     NM     0.20     0.06     NM  

Commercial real estate

   -     -     -     0.01     (0.01 )   NM  

Consumer:

            

Direct

   0.32     0.17     88.2     0.30     0.20     50.0  

Indirect

   0.94     0.40     NM     0.69     0.34     NM  

Total net charge-offs to total average loans

   0.34     0.12     NM     0.28     0.10     NM  

Period Ended

            

Nonaccrual loans

            

Commercial

   $74,246     $263,684     (71.8 )%      

Real estate:

            

Construction

   158,194     26,508     NM        

Residential mortgages 3

   691,122     189,218     NM        

Commercial real estate

   40,649     54,394     (25.3 )      

Consumer loans

   10,580     22,685     (53.4 )      
                    

Total nonaccrual loans

   974,791     556,489     75.2        

Restructured loans

   29,057     28,934     0.4        
                    

Total nonperforming loans

   1,003,848     585,423     71.5        

Other real estate owned (OREO)

   156,106     41,690     NM        

Other repossessed assets

   9,974     6,670     49.5        
                    

Total nonperforming assets

   $1,169,928     $633,783     84.6        
                    

Total accruing loans past due 90 days or more

   $495,384     $301,878     64.1 %      
                    

Total nonperforming loans to total loans

   0.83 %   0.48 %   72.9 %      

Total nonperforming assets to total loans plus

            

OREO and other repossessed assets

   0.97     0.52     86.5        

Allowance to period-end loans

   0.91     0.90     1.1        

Allowance to nonperforming loans

   109.0     185.7     (41.3 )      

1 “NM” - Not meaningful. Those changes over 100 percent were not considered to be meaningful.

2 Amount removed from the allowance for loan losses related to the Company’s election to record $4.1 billion of residential mortgages at fair value.

3 Includes home equity lines on nonaccrual status.

 

Page 10


SunTrust Banks, Inc. and Subsidiaries

FIVE QUARTER OTHER FINANCIAL DATA

(Dollars in thousands) (Unaudited)


     Three Months Ended  
     September 30
2007
   

June 30

2007

    %
Change 1
    March 31
2007
    December 31
2006
    September 30
2006
 

CREDIT DATA

            

Allowance for loan and lease losses - beginning

   $1,050,362     $1,033,939     1.6 %   $1,044,521     $1,087,316     $1,061,862  

Provision for loan losses

   147,020     104,680     40.4     56,441     115,806     61,568  

Allowance associated with loans at fair value2

   -     -     -     (4,100 )   -     -  

Charge-offs

            

Commercial

   (39,487 )   (40,853 )   (3.3 )   (22,280 )   (127,831 )   (23,062 )

Real estate:

            

Home equity lines

   (29,075 )   (24,429 )   19.0     (15,872 )   (11,038 )   (6,460 )

Construction

   (2,477 )   (1,468 )   68.7     (598 )   (1,230 )   (814 )

Residential mortgages

   (19,853 )   (19,615 )   1.2     (14,293 )   (7,806 )   (9,113 )

Commercial real estate

   (789 )   (694 )   13.7     (287 )   (4,256 )   (487 )

Consumer:

            

Direct

   (5,661 )   (5,362 )   5.6     (5,856 )   (5,924 )   (4,544 )

Indirect

   (28,944 )   (19,301 )   50.0     (25,761 )   (25,450 )   (18,639 )
                                

Total charge-offs

   (126,286 )   (111,722 )   13.0     (84,947 )   (18