EX-99.1 2 a33119earningsrelease-exhi.htm EXHIBIT 99.1 Exhibit


Exhibit 99.1
suntrustlogo1q2019.jpg
News Release
Contact:
 
 
 
Investors
 
Media
 
Ankur Vyas
 
Mike McCoy
 
(404) 827-6714
 
(404) 588-7230
 
For Immediate Release
April 18, 2019

SunTrust Reports First Quarter 2019 Results
Improved Profitability and Strong Loan Growth Highlight 1Q Results
Planned Merger with BB&T On Track

ATLANTA -- For the first quarter of 2019, SunTrust Banks, Inc. (NYSE: STI) reported net income available to common shareholders of $554 million, or $1.24 per average common diluted share, which includes $(0.09) per share of merger-related costs associated with the Company's previously announced proposed merger with BB&T Corporation. This compares to $1.40 for the prior quarter and $1.29 for the first quarter of 2018.

“Our performance continues to improve and this quarter was no exception, with earnings per share increasing by 3% year-over-year (excluding merger-related costs). Loan growth remains a bright spot, with average balances up 3% sequentially and 8% year-over-year, a reflection of the ongoing investments in our business and our clients’ optimistic outlook on the economy,” said William H. Rogers, Jr., chairman and CEO of SunTrust Banks, Inc. “More importantly, while our results this quarter highlight SunTrust’s individual strength, we know that after merging with BB&T, we will be even better positioned to enhance shareholder value, improve the client experience, and invest in our teammates, associates, and communities.”

1



First Quarter 2019 Financial Highlights
(Commentary is on a fully taxable-equivalent basis unless otherwise noted. Consistent with SEC guidance in Industry Guide 3 that contemplates the calculation of tax-exempt income on a tax equivalent basis, net interest income, net interest margin, total revenue, and efficiency ratios are provided on a fully taxable-equivalent basis, which generally assumes a 21% marginal federal tax rate as well as state income taxes, where applicable. We provide unadjusted amounts in the table on page 3 of this news release and detailed reconciliations and additional information in Appendix A on pages 21 and 22.)

Income Statement
Net income available to common shareholders was $554 million, or $1.24 per average common diluted share, compared to $1.40 for the prior quarter and $1.29 for the first quarter of 2018.
The first quarter of 2019 included $45 million, or $(0.09) per average common share of merger-related costs, comprised primarily of M&A advisory fees and legal costs associated with the Company's previously announced proposed merger with BB&T Corporation.
The prior quarter included a $(0.10) per share discrete charge associated with the settlement of a legacy pension plan.
Total revenue was down 2% sequentially and up 4% year-over-year. The sequential decrease was driven primarily by lower noninterest income, while the year-over-year increase was driven by higher net interest income.
Net interest margin was 3.27% in the current quarter, stable sequentially and up 3 basis points compared to the prior year quarter. The year-over-year increase was driven primarily by higher benchmark interest rates in addition to positive mix shift in the loans held for investment (“LHFI”) portfolio, offset partially by higher funding costs.
Provision for credit losses increased $66 million sequentially and $125 million year-over-year, driven by strong loan growth and a stable allowance for loan and lease losses (“ALLL”) to period-end LHFI ratio (compared to declines in prior quarters).
Noninterest expense increased $7 million sequentially and $72 million year-over-year. The current quarter included $45 million of aforementioned merger-related costs. The prior quarter included a $60 million pre-tax pension plan settlement charge. Excluding these discrete items, noninterest expense increased $22 million sequentially and $27 million year-over-year.
The efficiency and tangible efficiency ratios for the current quarter were 63.4% and 62.7%, respectively, which were unfavorably impacted by the $45 million of merger-related costs. Excluding these costs, the adjusted tangible efficiency ratio was 60.8% for the current quarter, compared to 58.6% for the prior quarter and 62.1% for the prior year quarter.

Balance Sheet
Average performing LHFI was up 3% compared to the prior quarter and up 8% year-over-year, driven by growth across most loan categories.
Average consumer and commercial deposits decreased 1% compared to the prior quarter and remained relatively stable year-over-year, driven primarily by declines in money market accounts and demand deposits, offset largely by growth in NOW accounts and time deposits.

Capital
Estimated capital ratios continue to be well above regulatory requirements. The Common Equity Tier 1 (“CET1”) ratio was estimated to be 9.1% as of March 31, 2019, lower than the prior quarter due primarily to loan growth.
During the quarter, the Company repurchased $250 million of its outstanding common stock. The Company does not expect to utilize the $500 million remaining share repurchase authorization available under its 2018 Capital Plan in view of the proposed merger.
Book value per common share was $51.15 and tangible book value per common share was $37.22, up 3% and 4%, respectively, from December 31, 2018, driven primarily by growth in retained earnings and a decrease in accumulated other comprehensive loss.


2



Asset Quality
Nonperforming loans (“NPLs”) decreased $4 million from the prior quarter and represented 0.34% of period-end LHFI at March 31, 2019, compared to 0.35% of period-end LHFI at December 31, 2018.
Net charge-offs for the current quarter were $97 million, or 0.26% of total average LHFI on an annualized basis, compared to 0.26% during the prior quarter and 0.22% during the first quarter of 2018.
At March 31, 2019, the ALLL to period-end LHFI ratio was 1.06%, stable compared to the prior quarter.
Provision for credit losses increased $66 million sequentially and $125 million year-over-year, driven by strong loan growth and a stable ALLL to period-end LHFI ratio (compared to declines in prior quarters).

 
 
 
 
 
 
 
 
 
 
Income Statement (Dollars in millions, except per share data)
1Q 2019
 
4Q 2018
 
3Q 2018
 
2Q 2018
 
1Q 2018
Net interest income
$1,544
 
$1,547
 
$1,512
 
$1,488
 
$1,441
Net interest income-FTE 1
1,567
 
1,570
 
1,534
 
1,510
 
1,461
Net interest margin
3.22
%
 
3.22
%
 
3.22
%
 
3.23
%
 
3.20
%
Net interest margin-FTE 1
3.27

 
3.27

 
3.27

 
3.28

 
3.24

Noninterest income
$784
 
$818
 
$782
 
$829
 
$796
Total revenue
2,328

 
2,365

 
2,294

 
2,317

 
2,237

Total revenue-FTE 1
2,351

 
2,388

 
2,316

 
2,339

 
2,257

Noninterest expense
1,489

 
1,482

 
1,384

 
1,390

 
1,417

Provision for credit losses
153

 
87

 
61

 
32

 
28

Net income available to common shareholders
554

 
632

 
726

 
697

 
612

Earnings per average common diluted share
1.24

 
1.40

 
1.56

 
1.49

 
1.29

 
 
 
 
 
 
 
 
 
 
Balance Sheet (Dollars in billions)
 
 
 
 
 
 
 
 
 
Average LHFI

$154.3

 

$149.7

 

$146.0

 

$144.2

 

$142.9

Average consumer and commercial deposits
159.9

 
161.6

 
159.3

 
159.0

 
159.2

 
 
 
 
 
 
 
 
 
 
Capital
 
 
 
 
 
 
 
 
 
Basel III capital ratios at period end 2 :
 
 
 
 
 
 
 
 
 
Tier 1 capital
10.16
%
 
10.30
%
 
10.72
%
 
10.86
%
 
11.00
%
Common Equity Tier 1 ("CET1")
9.09

 
9.21

 
9.60

 
9.72

 
9.84

Total average shareholders’ equity to total average assets
11.25

 
11.21

 
11.71

 
11.78

 
12.05

 
 
 
 
 
 
 
 
 
 
Asset Quality
 
 
 
 
 
 
 
 
 
Net charge-offs to total average LHFI (annualized)
0.26
%
 
0.26
%
 
0.24
%
 
0.20
%
 
0.22
%
ALLL to period-end LHFI 3
1.06

 
1.06

 
1.10

 
1.14

 
1.19

NPLs to period-end LHFI
0.34

 
0.35

 
0.47

 
0.52

 
0.50

1 See Appendix A on pages 21 and 22 for non-U.S. GAAP reconciliations and additional information.
2 Basel III capital ratios are calculated under the standardized approach using regulatory capital methodology applicable to the Company for each period presented, including the phase-in of transition provisions through January 1, 2018. Capital ratios at March 31, 2019 are estimated as of the date of this document.
3 LHFI measured at fair value were excluded from period-end LHFI in the calculation as no allowance is recorded for loans measured at fair value.

Consolidated Financial Performance Details
(Commentary is on a fully taxable-equivalent basis unless otherwise noted)
Revenue
Total revenue was $2.4 billion for the current quarter, a decrease of $37 million, or 2%, compared to the prior quarter, driven by lower noninterest income. Noninterest income decreased $34 million sequentially due largely to lower commercial real estate-related income, investment banking income, and client transaction-related fees, offset partially by higher trading income and mortgage-related income. Compared to the first quarter of 2018, total revenue increased $94 million, or 4%, driven by a $106 million increase in net interest income as a result of net interest margin expansion and strong growth in average earning assets, offset partially by lower noninterest income.

3



Net Interest Income
Net interest income was $1.6 billion for the first quarter of 2019, a decrease of $3 million compared to the prior quarter due primarily to fewer days during the current quarter, largely offset by strong loan growth. The $106 million increase relative to the prior year was driven by a 3 basis point expansion in the net interest margin and 6% growth in average earning assets.
Net interest margin for the current quarter was 3.27%, which was stable compared to the prior quarter and 3 basis points higher than the prior year. The year-over-year increase was driven primarily by higher earning asset yields, offset partially by higher funding costs.
Noninterest Income
Noninterest income was $784 million for the current quarter, compared to $818 million for the prior quarter and $796 million for the first quarter of 2018. The $34 million sequential decrease was due largely to lower commercial real estate-related income, investment banking income, and client transaction-related fees, offset partially by higher trading income and mortgage-related income. Compared to the prior year, noninterest income decreased $12 million driven primarily by lower other noninterest income, wealth-related income, and client transaction-related fees, offset partially by higher capital markets and mortgage-related income.
Client transaction-related fees (namely service charges on deposits, other charges and fees, and card fees) decreased $15 million sequentially and $6 million year-over-year due primarily to lower client transaction activity. The sequential decrease was also driven by fewer days during the current quarter.
Investment banking income was $130 million for the current quarter, compared to $146 million in the prior quarter and $133 million for the first quarter of 2018. The $16 million sequential decrease was due to lower syndicated finance and M&A activity.
Trading income was $60 million for the current quarter, compared to $24 million in the prior quarter and $42 million in the prior year. The $36 million sequential and $18 million year-over-year increases were due primarily to positive changes in mark-to-market valuations on corporate bond inventory in the current quarter in addition to increased client activity.
Mortgage-related income for the current quarter was $100 million, compared to $85 million for the prior quarter and $90 million for the first quarter of 2018. The $15 million sequential and $10 million year-over-year increases were driven primarily by higher servicing-related income attributable to favorable net hedge performance and lower decay. The year-over-year increase was also favorably impacted by higher core servicing fees. At March 31, 2019, the servicing portfolio totaled $169.3 billion, relatively stable compared to the prior quarter and a 3% increase year-over-year due to MSRs purchased in the first and third quarters of 2018.
Trust and investment management income was $71 million for the current quarter, compared to $74 million for the prior quarter and $75 million for the prior year quarter. The $3 million sequential and the $4 million year-over-year decreases were due primarily to lower fees arising from adverse market conditions, which led to reduced assets under management at the end of the fourth quarter of 2018.
Retail investment services income was $69 million for the current quarter, compared to $74 million for the prior quarter and $72 million for the prior year quarter. The $5 million sequential and $3 million year-over-year decreases were due primarily to reduced client transaction activity and adverse market conditions, which led to reduced assets under management at the end of the fourth quarter of 2018.
Commercial real estate-related income was $24 million for the current quarter, compared to $68 million for the prior quarter and $23 million for the prior year. The sequential decrease was driven primarily by seasonal declines in structured real estate, SunTrust Community Capital (tax credit-related income), and the Company's agency lending business.

4



Other noninterest income was $24 million for the current quarter, compared to $26 million in the prior quarter and $48 million in the first quarter of 2018. The $24 million year-over-year decrease was due primarily to a $23 million remeasurement gain on an equity investment in a fintech company during the first quarter of 2018.
Noninterest Expense
Noninterest expense was $1.5 billion in the current quarter, up $7 million sequentially and $72 million compared to the first quarter of 2018. The current quarter included $45 million in aforementioned merger-related costs. The prior quarter included a $60 million pre-tax pension plan settlement charge. Excluding these discrete items, noninterest expense increased $22 million sequentially and $27 million year-over-year. The sequential increase was driven primarily by seasonal increases in employee compensation and benefits, partially offset by lower operating losses. The year-over-year increase was driven by higher outside processing and software costs, offset partially by lower employee compensation and benefits and regulatory assessments.
Employee compensation and benefits expense was $824 million in the current quarter, compared to $857 million in the prior quarter and $853 million in the first quarter of 2018. The $33 million sequential decrease was driven primarily by the $60 million legacy pension plan settlement charge recognized in the fourth quarter of 2018, offset partially by the seasonal increase in employee benefit costs and FICA taxes. The $29 million year-over-year decrease was primarily driven by lower contract labor costs in the current quarter.
Outside processing and software expense was $238 million in the current quarter, compared to $242 million in the prior quarter and $206 million in the first quarter of 2018. The $32 million year-over-year increase was driven primarily by higher software-related costs resulting from the amortization of new and upgraded technology assets.
Net occupancy expense was $102 million in the current quarter, stable compared to the prior quarter and $8 million higher than the first quarter of 2018. The year-over-year increase was driven primarily by higher rent expense and the absence of amortization of deferred gains on sale leaseback transactions following the adoption of the lease accounting standard during the first quarter of 2019.
Merger-related costs totaled $45 million for the current quarter. This represents a new income statement line item introduced to capture merger-related expenses associated with the Company's proposed merger with BB&T Corporation as announced on February 7, 2019. The current quarter costs were driven by M&A advisory fees and legal costs.
Marketing and customer development expense was $41 million in the current quarter, compared to $49 million in the prior quarter and $41 million in the first quarter of 2018. The $8 million sequential decrease was driven by normal seasonality in advertising and client development costs.
Operating losses were $22 million in the current quarter, compared to $39 million in the prior quarter and $6 million in the first quarter of 2018. The sequential decrease was driven primarily by higher legal and fraud-related costs recognized during the fourth quarter of 2018. The year-over-year increase was driven primarily by a $10 million net benefit from the progression of certain legal matters during the first quarter of 2018.
Regulatory assessments expense was $19 million in the current quarter, compared to $7 million in the prior quarter and $41 million in the prior year. The sequential increase was driven primarily by a $9 million regulatory assessment credit recognized during the fourth quarter of 2018. The year-over-year decrease was driven by the cessation of the FDIC Deposit Insurance Fund surcharge in the fourth quarter of 2018.
Other noninterest expense was $141 million in the current quarter, compared to $122 million in the prior quarter and $121 million in the first quarter of 2018. The $19 million sequential and $20 million year-over-year increases were driven primarily by higher branch closure-related costs.

5



Income Taxes
For the first quarter of 2019, the Company recorded a provision for income taxes of $104 million compared to $136 million for the prior quarter and $147 million for the first quarter of 2018. The effective tax rate for the current quarter was 15%, compared to 17% in the prior quarter and 19% in the first quarter of 2018. The first quarter of 2019 included $17 million of discrete tax benefits primarily related to the typical seasonal impact from stock-based compensation.
Balance Sheet
At March 31, 2019, the Company had total assets of $220.4 billion and total shareholders’ equity of $24.8 billion, representing 11% of total assets. Book value per common share was $51.15 and tangible book value per common share was $37.22, up 3% and 4%, respectively, compared to December 31, 2018, driven primarily by growth in retained earnings and a decrease in accumulated other comprehensive loss.
Loans and Deposits
Average performing LHFI totaled $153.7 billion for the current quarter, up 3% compared to the prior quarter and up 8% compared to the prior year driven by broad-based growth across most loan categories, with the exception of commercial construction, residential home equity products, and residential construction.
Average consumer and commercial deposits totaled $159.9 billion for the current quarter, down 1% compared to the prior quarter and relatively stable compared to the first quarter of 2018. These sequential and year-over-year changes were driven by declines in money market accounts and demand deposits, offset by growth in NOW accounts and time deposits.
Capital and Liquidity
The Company’s estimated capital ratios were well above current regulatory requirements with the Common Equity Tier 1 ratio estimated to be 9.1% at March 31, 2019. The ratios of average total equity to average total assets and tangible common equity to tangible assets were 11.3% and 7.7%, respectively, at March 31, 2019. The Company continues to have substantial available liquidity in the form of cash, high-quality government-backed or government-sponsored securities, and other available contingency funding sources.
The Company declared a common stock dividend of $0.50 per common share and repurchased $250 million of its outstanding common stock in the first quarter of 2019. The Company does not expect to utilize the $500 million remaining share repurchase authorization available under its 2018 Capital Plan in view of the proposed merger with BB&T Corporation.
Asset Quality
Overall asset quality performance continues to be strong. Nonperforming assets ("NPAs") totaled $648 million at March 31, 2019, up $59 million from the prior quarter and down $130 million year-over-year. The ratio of NPLs to period-end LHFI was 0.34%, 0.35%, and 0.50% at March 31, 2019, December 31, 2018, and March 31, 2018, respectively. The year-over-year decrease was driven primarily by lower residential mortgage nonperforming loans due to loans transitioning from non-accruing (as a result of forbearance relief provided after hurricanes) back to accruing status. 
Net charge-offs totaled $97 million during the current quarter, stable compared to the prior quarter and an increase of $18 million compared to the first quarter of 2018. The ratio of annualized net charge-offs to total average LHFI was 0.26% during the current quarter, compared to 0.26% during the prior quarter and 0.22% during the prior year quarter.

6



The provision for credit losses was $153 million in the current quarter, an increase of $66 million sequentially and $125 million year-over-year, driven by strong loan growth and a stable ALLL to period-end LHFI ratio (compared to declines in prior quarters). At March 31, 2019, the ALLL was $1.6 billion, which represented 1.06% of period-end loans, stable relative to December 31, 2018 and a 13 basis point decline relative to March 31, 2018, driven by continued improvements in asset quality.
Early stage delinquencies decreased 9 basis points from the prior quarter and 4 basis points from March 31, 2018 to 0.64% at March 31, 2019. Excluding government-guaranteed loans, early stage delinquencies were 0.21%, down 6 basis points compared to the prior quarter and down 1 basis point compared to the first quarter of 2018.

In the current quarter, the Company transferred $465 million of accruing residential troubled debt restructured ("TDR") loans from LHFI to loans held for sale ("LHFS"), in anticipation of a sale in the second quarter of 2019. This resulted in a transfer of $31 million of the associated allowance transferring into the carrying value in LHFS. This transaction had no impact on the provision for loan losses in the first quarter.   

OTHER INFORMATION

About SunTrust Banks, Inc.
SunTrust Banks, Inc. (NYSE: STI) is a purpose-driven company dedicated to Lighting the Way to Financial Well-Being for the people, businesses, and communities it serves. SunTrust leads onUp, a national movement inspiring Americans to build financial confidence. Headquartered in Atlanta, the Company has two business segments: Consumer and Wholesale. Its flagship subsidiary, SunTrust Bank, operates an extensive branch and ATM network throughout the high-growth Southeast and Mid-Atlantic states, along with 24-hour digital access. Certain business lines serve consumer, commercial, corporate, and institutional clients nationally. As of March 31, 2019, SunTrust had total assets of $220 billion and total deposits of $162 billion. The Company provides deposit, credit, trust, investment, mortgage, asset management, securities brokerage, and capital market services. Learn more at suntrust.com.
Business Segment Results
The Company has included its business segment financial tables as part of this release. Revenue and income amounts labeled "FTE" in the business segment tables are reported on a fully taxable-equivalent basis. For the business segments, net interest income is computed using matched-maturity funds transfer pricing and noninterest income includes federal and state tax credits that are grossed-up on a pre-tax equivalent basis. Further, provision/(benefit) for credit losses represents net charge-offs by segment combined with an allocation to the segments of the provision/(benefit) attributable to each segment's quarterly change in the allowance for loan and lease losses ("ALLL") and unfunded commitments reserve balances. SunTrust also reports results for Corporate Other, which includes the Treasury department as well as the residual expense associated with operational and support expense allocations. The Total Corporate Other results presented in this document also include Reconciling Items, which are comprised of differences created between internal management accounting practices and U.S. Generally Accepted Accounting Principles ("U.S. GAAP") and certain matched-maturity funds transfer pricing credits and charges. A detailed discussion of the business segment results will be included in the Company’s forthcoming Form 10-Q.
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 included in this release and the earnings presentation which SunTrust has also published today and SunTrust’s forthcoming Form 10-Q. Detailed financial tables and the earnings presentation are also available at investors.suntrust.com. This information is also included in a current report on Form 8-K furnished with the SEC today.

7



Conference Call
SunTrust management will host a conference call on April 18, 2019, at 11:00 a.m. (Eastern Time) to discuss the earnings results and business trends. Individuals may call in beginning at 10:30 a.m. (Eastern Time) by dialing 1-877-209-9920 (Passcode: SunTrust). Individuals calling from outside the United States should dial 1-612-332-1210 (Passcode: SunTrust). A replay of the call will be available approximately one hour after the call ends on April 18, 2019, and will remain available until May 18, 2019, by dialing 1-800-475-6701 (domestic) or 1-320-365-3844 (international) (Passcode: 445929). Alternatively, individuals may listen to the live webcast of the presentation by visiting the SunTrust investor relations website at investors.suntrust.com. Beginning the afternoon of April 18, 2019, individuals may access an archived version of the webcast in the “Events & Presentations” section of the SunTrust investor relations website. This webcast will be archived and available for one year.
Non-GAAP Financial Measures
This news release includes non-GAAP financial measures to describe SunTrust’s performance. Additional information and reconciliations of those measures to GAAP measures are provided in the appendix to this news release beginning at page 21.
In this news release, consistent with SEC Industry Guide 3, the Company presents total revenue, net interest income, net interest margin, and efficiency ratios on a fully taxable equivalent (“FTE”) basis, and ratios on an annualized basis. The FTE basis adjusts for the tax-favored status of net interest income from certain loans and investments using a federal tax rate of 21%, as well as state income taxes, where applicable, to increase tax-exempt interest income to a taxable-equivalent basis. 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-FTE plus noninterest income.
The Company presents the following additional non-GAAP measures because many investors find them useful. Specifically:
The Company presents certain capital information on a tangible basis, including Tangible equity, Tangible common equity, the ratio of Tangible equity to tangible assets, the ratio of Tangible common equity to tangible assets, Tangible book value per share, and the Return on tangible common shareholders’ equity, which removes the after-tax impact of purchase accounting intangible assets from shareholders' equity and removes related intangible asset amortization from Net income available to common shareholders. The Company believes these measures are useful to investors because, by removing the amount of intangible assets that results from merger and acquisition activity and amortization expense (the level of which may vary from company to company), they allow investors to more easily compare the Company’s capital position and return on average tangible common shareholders' equity to other companies in the industry who present similar measures. The Company also believes that removing these items provides a more relevant measure of the return on the Company's common shareholders' equity. These measures are utilized by management to assess capital adequacy and profitability of the Company.
Similarly, the Company presents Efficiency ratio-FTE, Tangible efficiency ratio-FTE, and Adjusted tangible efficiency ratio-FTE. The efficiency ratio is computed by dividing Noninterest expense by Total revenue. Efficiency ratio-FTE is computed by dividing Noninterest expense by Total revenue-FTE. Tangible efficiency ratio-FTE excludes the amortization related to intangible assets and certain tax credits. The Company believes this measure is useful to investors because, by removing the impact of amortization (the level of which may vary from company to company), it allows investors to more easily compare the Company’s efficiency to other companies in the industry. Adjusted tangible efficiency ratio-FTE removes the pre-tax impact of merger-related costs recognized in the first quarter of 2019 as well as the pre-tax impact of the legacy pension plan settlement charge recognized in the fourth quarter of 2018 from the calculation of Tangible efficiency ratio-FTE. See slide 21 in the earnings presentation (Exhibit 99.2) as well as Appendix A in this news release for more details on these items. The Company believes this measure (adjusted tangible efficiency ratio-FTE) is useful to investors because it is more reflective of normalized operations as it reflects results that are primarily client relationship and client transaction driven. This measure is utilized by management to assess the efficiency of the Company and its lines of business.

8



Important Cautionary Statement About Forward-Looking Statements
This news release contains forward-looking statements. Statements regarding the utilization of the Company's share repurchase authorization under its 2018 Capital Plan, its proposed merger with BB&T, including the benefits thereof, and the availability of liquidity to the Company are forward-looking statements. Also, any statement that does not describe historical or current facts is a forward-looking statement. These statements often include the words “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “forecast,” “goals,” “targets,” “initiatives,” “opportunity,” “focus,” “potentially,” “probably,” “projects,” “outlook,” or similar expressions or future conditional verbs such as “may,” “will,” “should,” “would,” and “could.” Forward-looking statements are based upon the current beliefs and expectations of management and on information currently available to management. Our statements speak as of the date hereof, and we do not assume any obligation to update these statements or to update the reasons why actual results could differ from those contained in such statements in light of new information or future events.
Forward-looking statements are subject to significant risks and uncertainties. Investors are cautioned against placing undue reliance on such statements. Actual results may differ materially from those set forth in the forward looking statements. Additional factors that could cause actual results to differ materially from those described in the forward-looking statements can be found in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2018 and in other periodic reports that we file with the SEC.
Additional Information about the Merger and Where to Find It
In connection with the Company’s proposed merger with BB&T, BB&T has filed with the SEC a registration statement on Form S-4 to register the shares of BB&T’s capital stock to be issued in connection with the merger. The registration statement includes a joint proxy statement/prospectus, which will be sent to the shareholders of BB&T and SunTrust seeking their approval of the proposed transaction.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT ON FORM S-4, THE JOINT PROXY STATEMENT/PROSPECTUS INCLUDED WITHIN THE REGISTRATION STATEMENT ON FORM S-4 AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION BECAUSE THESE DOCUMENTS DO AND WILL CONTAIN IMPORTANT INFORMATION ABOUT BB&T, SUNTRUST, AND THE PROPOSED TRANSACTION.
Investors and security holders may obtain copies of these documents free of charge through the website maintained by the SEC at www.sec.gov or from BB&T at its website, www.bbt.com, or from SunTrust at its website, www.suntrust.com. Documents filed with the SEC by BB&T will be available free of charge by accessing BB&T’s website at http://bbt.com/ under the tab “About BB&T” and then under the heading “Investor Relations” or, alternatively, by directing a request by telephone or mail to BB&T Corporation, 200 West Second Street, Winston-Salem, North Carolina 27101, (336) 733-3065, and documents filed with the SEC by SunTrust will be available free of charge by accessing SunTrust’s website at http://suntrust.com/ under the tab “Investor Relations,” and then under the heading “Regulatory & Legal” or, alternatively, by directing a request by telephone or mail to SunTrust Banks, Inc., 303 Peachtree Street, N.E., Atlanta, Georgia 30308, (877) 930-8971.
Participants in the Solicitation
BB&T, SunTrust and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of BB&T and SunTrust in connection with the proposed transaction under the rules of the SEC. Certain information regarding the interests of these participants and a description of their direct and indirect interests, by security holdings or otherwise, are included in the joint proxy statement/prospectus regarding the proposed transaction and will be included in other relevant materials to be filed with the SEC when they become available. Additional information about BB&T, and its directors and executive officers, may be found in the definitive proxy statement of BB&T relating to its 2019 Annual Meeting of Shareholders filed with the SEC, and other documents filed by BB&T with the SEC. Additional information about SunTrust, and its directors and executive officers, may be found in the definitive proxy statement of SunTrust relating to its 2019 Annual Meeting of Shareholders filed with the SEC, and other documents filed by SunTrust with the SEC. These documents can be obtained free of charge from the sources described above.


9



SunTrust Banks, Inc. and Subsidiaries
FINANCIAL HIGHLIGHTS
(Dollars in millions and shares in thousands, except per share data) (Unaudited) 
Three Months Ended March 31
 
%
2019

2018
 
 Change
EARNINGS & DIVIDENDS
 

 
 
 
Net income

$580

 

$643

 
(10
)%
Net income available to common shareholders
554

 
612

 
(9
)
Total revenue
2,328

 
2,237

 
4

Total revenue-FTE 1
2,351

 
2,257

 
4

Net income per average common share:
 
 
 
 
 
Diluted

$1.24



$1.29

 
(4
)%
Basic
1.25


1.31

 
(5
)
Dividends declared per common share
0.50


0.40

 
25

CONDENSED BALANCE SHEETS
 
 
 
 
 
Selected Average Balances:
 
 
 
 
 
Total assets

$217,403



$204,132

 
7
 %
Earning assets
194,385


182,874

 
6

Loans held for investment ("LHFI")
154,258


142,920

 
8

Intangible assets including residential mortgage servicing rights ("MSRs")
8,394


8,244

 
2

Residential MSRs
1,984


1,833

 
8

Consumer and commercial deposits
159,921


159,169

 

Total shareholders’ equity
24,466


24,605

 
(1
)
Preferred stock
2,025


2,390

 
(15
)
Period End Balances:
 
 
 
 
 
Total assets

$220,425



$204,885

 
8
 %
Earning assets
196,316


182,913

 
7

LHFI
155,233


142,618

 
9

Allowance for loan and lease losses ("ALLL")
1,643


1,694

 
(3
)
Consumer and commercial deposits
161,092


161,357

 

Total shareholders’ equity
24,823


24,269

 
2

FINANCIAL RATIOS & OTHER DATA
 
 
 
 
 
Return on average total assets
1.08
%

1.28
%
 
(16
)%
Return on average common shareholders’ equity
10.06


11.23

 
(10
)
Return on average tangible common shareholders’ equity 1
13.91


15.60

 
(11
)
Net interest margin
3.22


3.20

 
1

Net interest margin-FTE 1
3.27

 
3.24

 
1

Efficiency ratio
63.97

 
63.35

 
1

Efficiency ratio-FTE 1
63.35


62.77

 
1

Tangible efficiency ratio-FTE 1
62.70


62.11

 
1

Adjusted tangible efficiency ratio-FTE 1
60.78

 
62.11

 
(2
)
Effective tax rate 
15


19

 
(21
)
Basel III capital ratios at period end 2:
 
 
 
 
 
Common Equity Tier 1 ("CET1")
9.09
%
 
9.84
%
 
(8
)%
Tier 1 capital
10.16

 
11.00

 
(8
)
Total capital
11.84

 
12.90

 
(8
)
Leverage
9.15

 
9.75

 
(6
)
Total average shareholders’ equity to total average assets
11.25


12.05

 
(7
)
Tangible equity to tangible assets 1
8.71


9.11

 
(4
)
Tangible common equity to tangible assets 1
7.71

 
8.04

 
(4
)
Book value per common share

$51.15



$47.14

 
9

Tangible book value per common share 1
37.22


33.97

 
10

Market capitalization
26,290


31,959

 
(18
)
Average common shares outstanding:
 
 
 
 
 
Diluted
446,662


473,620

 
(6
)
Basic
443,566


468,723

 
(5
)
Full-time equivalent employees
22,626


23,208

 
(3
)
Number of ATMs
2,030


2,075

 
(2
)
Full service banking offices
1,152


1,236

 
(7
)
 
 
 
 
 
 
1 
See Appendix A for additional information and reconcilements of non-U.S. GAAP performance measures.
2 
Basel III capital ratios are calculated under the standardized approach using regulatory capital methodology applicable to the Company for each period presented, including the phase-in of transition provisions through January 1, 2018. Capital ratios at March 31, 2019 are estimated as of the date of this release.


10



SunTrust Banks, Inc. and Subsidiaries
FIVE QUARTER FINANCIAL HIGHLIGHTS
 
Three Months Ended
 
March 31
 
December 31
 
September 30
 
June 30
 
March 31
(Dollars in millions and shares in thousands, except per share data) (Unaudited)
2019
 
2018
 
2018
 
2018
 
2018
EARNINGS & DIVIDENDS
 
 
 
 
 
 
 
 
 
Net income

$580

 

$658

 

$752

 

$722

 

$643

Net income available to common shareholders
554

 
632

 
726

 
697

 
612

Total revenue
2,328

 
2,365

 
2,294

 
2,317

 
2,237

Total revenue-FTE 1
2,351

 
2,388

 
2,316

 
2,339

 
2,257

Net income per average common share:
 
 
 
 
 
 
 
 
 
Diluted

$1.24

 

$1.40

 

$1.56

 

$1.49

 

$1.29

Basic
1.25

 
1.41

 
1.58

 
1.50

 
1.31

Dividends declared per common share
0.50

 
0.50

 
0.50

 
0.40

 
0.40

CONDENSED BALANCE SHEETS
 
 
 
 
 
 
 
 
 
Selected Average Balances:
 
 
 
 
 
 
 
 
 
Total assets

$217,403

 

$212,934

 

$207,395

 

$204,548

 

$204,132

Earning assets
194,385

 
190,742

 
186,344

 
184,566

 
182,874

LHFI
154,258

 
149,708

 
145,995

 
144,156

 
142,920

Intangible assets including residential MSRs
8,394

 
8,491

 
8,396

 
8,355

 
8,244

Residential MSRs
1,984

 
2,083

 
1,987

 
1,944

 
1,833

Consumer and commercial deposits
159,921

 
161,573

 
159,348

 
158,957

 
159,169

Total shareholders’ equity
24,466

 
23,873

 
24,275

 
24,095

 
24,605

Preferred stock
2,025

 
2,025

 
2,025

 
2,025

 
2,390

Period End Balances:
 
 
 
 
 
 
 
 
 
Total assets

$220,425

 

$215,543

 

$211,276

 

$207,505

 

$204,885

Earning assets
196,316

 
192,497

 
188,141

 
185,304

 
182,913

LHFI
155,233

 
151,839

 
147,215

 
144,935

 
142,618

ALLL
1,643

 
1,615

 
1,623

 
1,650

 
1,694

Consumer and commercial deposits
161,092

 
161,544

 
159,332

 
160,410

 
161,357

Total shareholders’ equity
24,823

 
24,280

 
24,139

 
24,316

 
24,269

FINANCIAL RATIOS & OTHER DATA
 
 
 
 
 
 
 
 
 
Return on average total assets
1.08
%
 
1.23
%
 
1.44
%
 
1.42
%
 
1.28
%
Return on average common shareholders’ equity
10.06

 
11.54

 
13.01

 
12.73

 
11.23

Return on average tangible common shareholders’ equity 1
13.91

 
16.13

 
18.06

 
17.74

 
15.60

Net interest margin
3.22

 
3.22

 
3.22

 
3.23

 
3.20

Net interest margin-FTE 1
3.27

 
3.27

 
3.27

 
3.28

 
3.24

Efficiency ratio
63.97

 
62.66

 
60.34

 
59.98

 
63.35

Efficiency ratio-FTE 1
63.35

 
62.06

 
59.76

 
59.41

 
62.77

Tangible efficiency ratio-FTE 1
62.70

 
61.13

 
58.94

 
58.69

 
62.11

Adjusted tangible efficiency ratio-FTE 1
60.78

 
58.63

 
58.94

 
58.69

 
62.11

Effective tax rate
15

 
17

 
11

 
19

 
19

Basel III capital ratios at period end 2:
 
 
 
 
 
 
 
 
 
CET1
9.09
%
 
9.21
%
 
9.60
%
 
9.72
%
 
9.84
%
Tier 1 capital
10.16

 
10.30

 
10.72

 
10.86

 
11.00

Total capital
11.84

 
12.02

 
12.47

 
12.67

 
12.90

Leverage
9.15

 
9.26

 
9.66

 
9.82

 
9.75

Total average shareholders’ equity to total average assets
11.25

 
11.21

 
11.71

 
11.78

 
12.05

Tangible equity to tangible assets 1
8.71

 
8.65

 
8.76

 
9.01

 
9.11

Tangible common equity to tangible assets 1
7.71

 
7.63

 
7.72

 
7.96

 
8.04

Book value per common share

$51.15

 

$49.57

 

$48.00

 

$47.70

 

$47.14

Tangible book value per common share 1
37.22

 
35.73

 
34.51

 
34.40

 
33.97

Market capitalization
26,290

 
22,541

 
30,632

 
30,712

 
31,959

Average common shares outstanding:
 
 
 
 
 
 
 
 
 
Diluted
446,662

 
452,957

 
464,164

 
469,339

 
473,620

Basic
443,566

 
449,404

 
460,252

 
465,529

 
468,723

Full-time equivalent employees
22,626

 
22,899

 
22,839

 
23,199

 
23,208

Number of ATMs
2,030

 
2,082

 
2,053

 
2,062

 
2,075

Full service banking offices
1,152

 
1,218

 
1,217

 
1,222

 
1,236

 
 
 
 
 
 
 
 
 
 
1 
See Appendix A for additional information and reconcilements of non-U.S. GAAP performance measures.
2 
Basel III capital ratios are calculated under the standardized approach using regulatory capital methodology applicable to the Company for each period presented, including the phase-in of transition provisions through January 1, 2018. Capital ratios at March 31, 2019 are estimated as of the date of this release.


11



SunTrust Banks, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
 
Three Months Ended
 
Increase/(Decrease)
(Dollars in millions and shares in thousands, except per share data) (Unaudited)
March 31
 
2019

2018
 
Amount
 
 % 4
Interest income

$1,987



$1,668

 

$319

 
19
 %
Interest expense
443


227

 
216

 
95

NET INTEREST INCOME
1,544


1,441

 
103

 
7

Provision for credit losses
153


28

 
125

 
NM

NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES
1,391


1,413

 
(22
)
 
(2
)
NONINTEREST INCOME
 
 
 
 
 
 
 
Service charges on deposit accounts
137


146

 
(9
)
 
(6
)
Other charges and fees 1
87

 
85

 
2

 
2

Card fees
82


81

 
1

 
1

Investment banking income 1
130


133

 
(3
)
 
(2
)
Trading income
60


42

 
18

 
43

Mortgage related income 2
100

 
90

 
10

 
11

Trust and investment management income
71

 
75

 
(4
)
 
(5
)
Retail investment services
69

 
72

 
(3
)
 
(4
)
Commercial real estate related income
24

 
23

 
1

 
4

Net securities gains/(losses)


1

 
(1
)
 
(100
)
Other noninterest income
24


48

 
(24
)
 
(50
)
Total noninterest income
784


796

 
(12
)
 
(2
)
NONINTEREST EXPENSE
 

 
 
 
 
 
Employee compensation and benefits
824


853

 
(29
)
 
(3
)
Outside processing and software
238


206

 
32

 
16

Net occupancy expense
102


94

 
8

 
9

Merger-related costs
45

 

 
45

 
NM

Equipment expense
42

 
40

 
2

 
5

Marketing and customer development
41

 
41

 

 

Operating losses
22


6

 
16

 
NM

Regulatory assessments
19

 
41

 
(22
)
 
(54
)
Amortization
15

 
15

 

 

Other noninterest expense
141


121

 
20

 
17

Total noninterest expense
1,489


1,417

 
72

 
5

INCOME BEFORE PROVISION FOR INCOME TAXES
686


792

 
(106
)
 
(13
)
Provision for income taxes
104


147

 
(43
)
 
(29
)
NET INCOME INCLUDING INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST
582


645

 
(63
)
 
(10
)
Less: Net income attributable to noncontrolling interest
2


2

 

 

NET INCOME

$580



$643

 

($63
)
 
(10
)%
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS

$554



$612

 

($58
)
 
(9
)%
Net interest income-FTE 3
1,567


1,461

 
106

 
7

Total revenue
2,328

 
2,237

 
91

 
4

Total revenue-FTE 3
2,351

 
2,257

 
94

 
4

Net income per average common share:
 
 
 
 
 
 
 
Diluted
1.24


1.29

 
(0.05
)
 
(4
)
Basic
1.25


1.31

 
(0.06
)
 
(5
)
Dividends declared per common share
0.50


0.40

 
0.10

 
25

Average common shares outstanding:
 
 
 
 
 
 
 
Diluted
446,662


473,620

 
(26,958
)
 
(6
)
Basic
443,566


468,723

 
(25,157
)
 
(5
)
 
 
 
 
 
 
 
 
1 Beginning July 1, 2018, the Company began presenting bridge commitment fee income related to capital market transactions in Investment banking income on the Consolidated Statements of Income. For periods prior to July 1, 2018, this income was previously presented in Other charges and fees and has been reclassified to Investment banking income for comparability.
2 Beginning with the Company's Annual Report on Form 10-K for the year ended December 31, 2018, the Company began presenting Mortgage production related income and Mortgage servicing related income as a single line item on the Consolidated Statements of Income titled Mortgage related income. Prior periods have been conformed with this updated presentation for comparability.
3 See Appendix A for additional information and reconcilements of non-U.S. GAAP measures to the related U.S.GAAP measures.
4 “NM” - Not meaningful. Those changes over 100 percent were not considered to be meaningful.

12



SunTrust Banks, Inc. and Subsidiaries
FIVE QUARTER CONSOLIDATED STATEMENTS OF INCOME
 
Three Months Ended
 
 
 
Three Months Ended
(Dollars in millions and shares in thousands, except per share data)
(Unaudited)
March 31
 
December 31
 
Increase/(Decrease)
 
September 30
 
June 30
 
March 31
2019
 
2018
 
Amount
 
 % 4
 
2018
 
2018
 
2018
Interest income

$1,987

 

$1,944

 

$43

 
2
 %
 

$1,834

 

$1,759

 

$1,668

Interest expense
443

 
397

 
46

 
12

 
322

 
271

 
227

NET INTEREST INCOME
1,544

 
1,547

 
(3
)
 

 
1,512

 
1,488

 
1,441

Provision for credit losses
153

 
87

 
66

 
76

 
61

 
32

 
28

NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES
1,391

 
1,460

 
(69
)
 
(5
)
 
1,451

 
1,456

 
1,413

NONINTEREST INCOME
 
 
 
 
 
 
 
 
 
 
 
 
 
Service charges on deposit accounts
137

 
146

 
(9
)
 
(6
)
 
144

 
144

 
146

Other charges and fees 1
87

 
92

 
(5
)
 
(5
)
 
89

 
91

 
85

Card fees
82

 
83

 
(1
)
 
(1
)
 
75

 
85

 
81

Investment banking income 1
130

 
146

 
(16
)
 
(11
)
 
150

 
169

 
133

Trading income
60

 
24

 
36

 
NM

 
42

 
53

 
42

Mortgage related income 2
100

 
85

 
15

 
18

 
83

 
83

 
90

Trust and investment management income
71

 
74

 
(3
)
 
(4
)
 
80

 
75

 
75

Retail investment services
69

 
74

 
(5
)
 
(7
)
 
74

 
73

 
72

Commercial real estate related income
24

 
68

 
(44
)
 
(65
)
 
24

 
18

 
23

Net securities gains/(losses)

 

 

 

 

 

 
1

Other noninterest income
24

 
26

 
(2
)
 
(8
)
 
21

 
38

 
48

Total noninterest income
784

 
818

 
(34
)
 
(4
)
 
782

 
829

 
796

NONINTEREST EXPENSE
 
 
 
 
 
 
 
 
 
 
 
 
 
Employee compensation and benefits
824

 
857

 
(33
)
 
(4
)
 
795

 
802

 
853

Outside processing and software
238

 
242

 
(4
)
 
(2
)
 
234

 
227

 
206

Net occupancy expense
102

 
102

 

 

 
86

 
90

 
94

Merger-related costs
45

 

 
45

 
NM

 

 

 

Equipment expense
42

 
42

 

 

 
40

 
44

 
40

Marketing and customer development
41

 
49

 
(8
)
 
(16
)
 
45

 
40

 
41

Operating losses
22

 
39

 
(17
)
 
(44
)
 
18

 
17

 
6

Regulatory assessments
19

 
7

 
12

 
NM

 
39

 
39

 
41

Amortization
15

 
22

 
(7
)
 
(32
)
 
19

 
17

 
15

Other noninterest expense
141

 
122

 
19

 
16

 
108

 
114

 
121

Total noninterest expense
1,489

 
1,482

 
7

 

 
1,384

 
1,390

 
1,417

INCOME BEFORE PROVISION FOR INCOME TAXES
686

 
796

 
(110
)
 
(14
)
 
849

 
895

 
792

Provision for income taxes
104

 
136

 
(32
)
 
(24
)
 
95

 
171

 
147

NET INCOME INCLUDING INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST
582

 
660

 
(78
)
 
(12
)
 
754

 
724

 
645

Less: Net income attributable to noncontrolling interest
2

 
2

 

 

 
2

 
2

 
2

NET INCOME

$580

 

$658

 

($78
)
 
(12
)%
 

$752

 

$722

 

$643

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS

$554

 

$632

 

($78
)
 
(12
)%
 

$726

 

$697

 

$612

Net interest income-FTE 3
1,567

 
1,570

 
(3
)
 

 
1,534

 
1,510

 
1,461

Total revenue
2,328

 
2,365

 
(37
)
 
(2
)
 
2,294

 
2,317

 
2,237

Total revenue-FTE 3
2,351

 
2,388

 
(37
)
 
(2
)
 
2,316

 
2,339

 
2,257

Net income per average common share:
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted
1.24

 
1.40

 
(0.16
)
 
(11
)
 
1.56

 
1.49

 
1.29

Basic
1.25

 
1.41

 
(0.16
)
 
(11
)
 
1.58

 
1.50

 
1.31

Dividends declared per common share
0.50

 
0.50

 

 

 
0.50

 
0.40

 
0.40

Average common shares outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted
446,662

 
452,957

 
(6,295
)
 
(1
)
 
464,164

 
469,339

 
473,620

Basic
443,566

 
449,404

 
(5,838
)
 
(1
)
 
460,252

 
465,529

 
468,723

 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 Beginning July 1, 2018, the Company began presenting bridge commitment fee income related to capital market transactions in Investment banking income on the Consolidated Statements of Income. For periods prior to July 1, 2018, this income was previously presented in Other charges and fees and has been reclassified to Investment banking income for comparability.
2 Beginning with the Company's Annual Report on Form 10-K for the year ended December 31, 2018, the Company began presenting Mortgage production related income and Mortgage servicing related income as a single line item on the Consolidated Statements of Income titled Mortgage related income. Prior periods have been conformed with this updated presentation for comparability.
3 See Appendix A for additional information and reconcilements of non-U.S. GAAP measures to the related U.S.GAAP measures.
4 “NM” - Not meaningful. Those changes over 100 percent were not considered to be meaningful.

13



SunTrust Banks, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
 
March 31
 
(Decrease)/Increase
(Dollars in millions and shares in thousands, except per share data) (Unaudited)
2019
 
2018
 
Amount
 
 % 2
ASSETS
 
 
 
 
 
 
 
Cash and due from banks

$4,521

 

$5,851

 

($1,330
)
 
(23
)%
Federal funds sold and securities borrowed or purchased under agreements to resell
1,386

 
1,428

 
(42
)
 
(3
)
Interest-bearing deposits in other banks
25

 
25

 

 

Trading assets and derivative instruments
6,259

 
5,112

 
1,147

 
22

Securities available for sale ("securities AFS")
31,853

 
30,934

 
919

 
3

Loans held for sale ("LHFS")
1,781

 
2,377

 
(596
)
 
(25
)
Loans held for investment ("LHFI"):
 
 
 
 
 
 
 
Commercial and industrial ("C&I")
73,278

 
66,321

 
6,957

 
10

Commercial real estate ("CRE")
7,889

 
5,352

 
2,537

 
47

Commercial construction
2,562

 
3,651

 
(1,089
)
 
(30
)
Residential mortgages - guaranteed
467

 
611

 
(144
)
 
(24
)
Residential mortgages - nonguaranteed
28,461

 
27,165

 
1,296

 
5

Residential home equity products
9,167

 
10,241

 
(1,074
)
 
(10
)
Residential construction
167

 
256

 
(89
)
 
(35
)
Consumer student - guaranteed
7,308

 
6,693

 
615

 
9

Consumer other direct
11,029

 
8,941

 
2,088

 
23

Consumer indirect
13,268

 
11,869

 
1,399

 
12

Consumer credit cards
1,637

 
1,518

 
119

 
8

Total LHFI
155,233

 
142,618

 
12,615

 
9

Allowance for loan and lease losses ("ALLL")
(1,643
)
 
(1,694
)
 
(51
)
 
(3
)
Net LHFI
153,590

 
140,924

 
12,666

 
9

Goodwill
6,331

 
6,331

 

 

Residential MSRs
1,883

 
1,916

 
(33
)
 
(2
)
Other assets
12,796

 
9,987

 
2,809

 
28

Total assets 1

$220,425

 

$204,885

 

$15,540

 
8
 %
LIABILITIES
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
Noninterest-bearing consumer and commercial deposits

$40,345

 

$43,494

 

($3,149
)
 
(7
)%
Interest-bearing consumer and commercial deposits:
 
 
 
 
 
 
 
NOW accounts
48,964

 
46,672

 
2,292

 
5

Money market accounts
48,855

 
50,627

 
(1,772
)
 
(4
)
Savings
6,820

 
6,849

 
(29
)
 

Consumer time
6,902

 
6,205

 
697

 
11

Other time
9,206

 
7,510

 
1,696

 
23

Total consumer and commercial deposits
161,092

 
161,357

 
(265
)
 

Brokered time deposits
1,060

 
1,022

 
38

 
4

Total deposits
162,152

 
162,379

 
(227
)
 

Funds purchased
1,169

 
1,189

 
(20
)
 
(2
)
Securities sold under agreements to repurchase
1,962

 
1,677

 
285

 
17

Other short-term borrowings
7,259

 
706

 
6,553

 
NM

Long-term debt
17,395

 
10,692

 
6,703

 
63

Trading liabilities and derivative instruments
1,609

 
1,737

 
(128
)
 
(7
)
Other liabilities
4,056

 
2,236

 
1,820

 
81

Total liabilities
195,602

 
180,616

 
14,986

 
8

SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
Preferred stock, no par value
2,025

 
2,025

 

 

Common stock, $1.00 par value
553

 
552

 
1

 

Additional paid-in capital
8,938

 
8,960

 
(22
)
 

Retained earnings
19,882

 
18,107

 
1,775

 
10

Treasury stock, at cost, and other
(5,609
)
 
(3,853
)
 
1,756

 
46

Accumulated other comprehensive loss, net of tax
(966
)
 
(1,522
)
 
(556
)
 
(37
)
Total shareholders' equity
24,823

 
24,269

 
554

 
2

Total liabilities and shareholders' equity

$220,425

 

$204,885

 

$15,540