0000916641-01-501207.txt : 20011009
0000916641-01-501207.hdr.sgml : 20011009
ACCESSION NUMBER: 0000916641-01-501207
CONFORMED SUBMISSION TYPE: 8-K
PUBLIC DOCUMENT COUNT: 3
CONFORMED PERIOD OF REPORT: 20010925
ITEM INFORMATION: Other events
FILED AS OF DATE: 20010926
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: SUNTRUST BANKS INC
CENTRAL INDEX KEY: 0000750556
STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021]
IRS NUMBER: 581575035
STATE OF INCORPORATION: GA
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 8-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-08918
FILM NUMBER: 1745034
BUSINESS ADDRESS:
STREET 1: 303 PEACHTREE ST N E
CITY: ATLANTA
STATE: GA
ZIP: 30308
BUSINESS PHONE: 4045887711
MAIL ADDRESS:
STREET 1: 303 PEACHTREE ST N E
CITY: ATLANTA
STATE: GA
ZIP: 30308
8-K
1
d8k.txt
CURRENT REPORT
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) September 25, 2001
------------------
SunTrust Banks, Inc.
--------------------
(Exact name of registrant as specified in its charter)
Georgia 001-08918 58-1575035
----------------------------- ------------------------ ---------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
303 Peachtree St., N.E., Atlanta, Georgia 30308
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (404) 588-7711
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Item 5. OTHER EVENTS
On September 25, 2001, SunTrust Bank, a wholly-owned subsidiary of the
registrant ("SunTrust"), entered into a Purchase and Assumption Agreement (the
"Purchase Agreement"), by and between Huntington Bancshares Incorporated
("Huntington"), The Huntington National Bank ("HNB") and SunTrust, which
provides for the acquisition by SunTrust of certain assets, deposits, and other
liabilities held in connection with Huntington's retail and corporate branch
banking business in the State of Florida (the "Purchase"). A copy of the joint
press release issued by the parties in connection with the Purchase is attached
hereto as Exhibit 99.1. On September 26, 2001, SunTrust held an analyst and
investor meeting by telephone during which SunTrust discussed the Purchase. A
copy of the presentation materials discussed at the meeting is attached hereto
as Exhibit 99.2.
-2-
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SUNTRUST BANKS, INC.
(Registrant)
Date: September 26, 2001 By:
-----------------------------------------
Raymond D. Fortin
Senior Vice President
-3-
Index of Exhibits
-----------------
Exhibit 99.1 Press Release
Exhibit 99.2 Analyst/Investor Presentation
EX-99.1
3
dex991.txt
PRESS RELEASE
EXHIBIT 99.1
News
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[LOGO]SunTrust
Contacts:
Investors: Media:
Gary Peacock Barry Koling In Florida: Carolyn Gosselin
(404) 658-4879 (202) 879-6101 (407) 237-4861
For Immediate Release
SunTrust to Expand Florida Banking Franchise
Purchase of Huntington Florida Units Enhances Position in Key Growth Markets
ATLANTA, Sept. 26, 2001 -- SunTrust Banks, Inc. today announced an expansion of
its Florida banking activities through the acquisition of the Florida banking
franchise of The Huntington National Bank. Specifically, SunTrust and Huntington
have signed a definitive agreement under which SunTrust will acquire
Huntington's retail, small business, commercial, treasury management and
investment-related businesses in Florida. Included are:
. 106 branches, plus 35 smaller supermarket banking outlets and five Private
Client Services offices.
. Deposits of $4.7 billion.
. Approximately $2.6 billion in loan assets, primarily consumer, small
business and commercial loans;
. Approximately $860 million in trust assets under management;
. 453 ATMs;
. Some 1,400 employees.
Under the terms of the definitive agreement, SunTrust will pay Huntington a
premium of 15 per cent of Huntington's average deposits prior to the transaction
closing, which is expected to take place in February, 2002 subject to regulatory
approvals. Based on Huntington deposits on July 31, 2001, the premium would be
$705 million.
SunTrust said it expects to incur one-time charges associated with the
Huntington transaction of approximately $100 million in 2002, and that the
transaction will add to earnings beginning in 2003. Additionally, SunTrust will
add $40 million to its loans loss reserve.
"From a corporate perspective, this move fits perfectly with our strategic
priority of efficiently leveraging SunTrust's existing position in high growth,
demographically attractive markets," said L. Phillip Humann, SunTrust Chairman,
President and CEO. "This particular transaction represents a unique opportunity
to achieve meaningful cost reductions without impacting customer service levels
or sales momentum."
2
SunTrust expects to reduce annual operating expenses relative to the acquired
business by about $48 million, approximately 36 per cent of the current expense
base. About 65 per cent of the expense reduction will be phased in during 2002,
with the full level of savings realized the following year.
Following completion of a structured business integration process that gets
underway immediately, the acquired Huntington franchise will be integrated into
SunTrust's existing Florida banking organization, which currently encompasses
370 branches throughout the State and some 9,500 employees.
"The addition of the Huntington business not only enhances our position in some
high opportunity markets, especially in eastern and western Florida, but also
solidifies our long-standing position as a leading bank in Florida overall,"
said George W. Koehn, Chairman and CEO of SunTrust Banks of Florida. "We look
forward to welcoming Huntington customers and employees to SunTrust."
Mr. Koehn noted that the addition of the Huntington business would move SunTrust
into the number one market share position in the highly attractive Orlando and
Lakeland/Winter Haven markets, and to a solid number two position in both
Daytona and the Tampa Bay area.
Since many SunTrust and Huntington branches are in close proximity, Mr. Koehn
said the proposed combination of the two networks "will permit us to achieve
substantial operating efficiencies while offering Huntington customers access to
additional banking locations, a broader range of products, more choice of
delivery channels and SunTrust's recognized brand of quality service."
Mr. Koehn said SunTrust anticipates retaining 65 of Huntington's branches and
consolidating 45 offices of both SunTrust and Huntington, almost all of which
are less than a half mile away from one another. Plans concerning the 35
Huntington supermarket outlets, primarily in Albertson's supermarkets, will be
announced within 30 days.
Mr. Koehn said normal attrition patterns are expected to account for the bulk of
job eliminations associated with the business integration. As a result, any
actual layoffs among Huntington's approximately 1,400 Florida employees are
expected to be "very limited in number." SunTrust has already committed to offer
positions to all satisfactorily performing Huntington tellers in traditional
branches, plus certain other customer contact personnel.
Conversion of Huntington customer accounts is expected to take place coincident
with the transaction closing in February 2002. An extensive customer
communication effort is planned prior to any changes being implemented. "In the
end, this transaction is all about keeping customers happy," said Mr. Koehn. "A
smooth and seamless customer conversion is our number one priority."
SunTrust Banks, Inc., headquartered in Atlanta, Georgia, is the nation's
ninth-largest commercial banking organization. As of June 30, 2001, SunTrust had
total assets of $100.8 billion and total deposits of $63.3 billion. The company
operates through an extensive distribution network in Alabama, Florida, Georgia,
Maryland, Tennessee, Virginia and the District of Columbia and also serves
customers in selected markets nationally. Its primary businesses include
deposit, credit,
3
trust and investment services. Through various subsidiaries the company provides
credit cards, mortgage banking, insurance, brokerage and capital markets
services. SunTrust's Internet address is www.suntrust.com.
----------------
================================================================================
Note to Analysts and Investors: SunTrust Banks, Inc. will host a conference call
on Wednesday, September 26, at 9:00 A.M. to discuss this announcement.
Individuals may access the call by dialing 888-469-0641 and by entering passcode
74325. Alternatively, individuals may listen to a live webcast of the
presentation by visiting the SunTrust website at www.suntrust.com. The webcast
----------------
will be hosted on the "Investor Relations" page located under "About SunTrust"
and may be accessed by clicking on the blue phrase "Click here for Webcast."
Note to Media: SunTrust Banks Florida CEO George W. Koehn will host a media
briefing at SunTrust's Florida headquarters at 11:30 today, Wednesday, September
26. The briefing will be held on the third floor of the Park Building, in the
Bankers' Guest Club, 200 South Orange Avenue, Orlando, Florida. For those who
would like to participate in the media briefing via conference call, please dial
888-790-1752, pass code George Koehn.
EX-99.2
4
dex992.txt
PRESENTATION MATERIALS
EXHIBIT 99.2
[LOGO]SUNTRUST
Acquisition of Huntington's Florida Franchise
September 26, 2001
[LOGO]SUNTRUST
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Forward Looking Statement
This presentation contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such statements include, but
are not limited to, (i) statements about the benefits of an acquisition of the
Huntington Florida Franchise, including future financial and operating results,
cost savings and accretion to reported and cash earnings that may be realized
from such acquisition; (ii) statements with respect to SunTrust's plans,
objectives, expectations and intentions and other statements that are not
historical facts; and (iii) other statements identified by words such as
"believes", "expects", "anticipates", "estimates", "intends", "plans",
"targets", "projects", and similar expressions. These statements are based upon
the current beliefs and expectations of SunTrust's management and are subject to
significant risks and uncertainties. Actual results may differ from those set
forth in the forward-looking statements.
The following factors, among others, could cause actual results to differ
materially from the anticipated results or other expectations expressed in the
forward-looking statements: (1) the businesses of SunTrust and Huntington
Florida may not be integrated successfully or such integration may be more
difficult, time-consuming or costly than expected; (2) expected revenue
synergies and cost savings from the acquisition may not be fully realized or
realized within the expected time frame; (3) revenues following the acquisition
may be lower than expected; (4) deposit attrition, operating costs, customer
loss and business disruption, including, without limitation, difficulties in
maintaining relationships with employees, customers, clients or suppliers, may
be greater than expected following the acquisition; (5) the regulatory approvals
required for the acquisition may not be obtained on the proposed terms or on the
anticipated schedule; (6) competitive pressures among depository and other
financial institutions may increase significantly and may have an effect on
pricing, spending, third-party relationships and revenues; (7) the strength of
the United States economy in general and the strength of the local economies in
which the combined company will conduct operations may be different than
expected, resulting in, among other things, a deterioration in credit quality or
a reduced demand for credit, including the resultant effect on the combined
company's loan portfolio and allowance for loan losses; (8) changes in the U.S.
and foreign legal and regulatory framework; and (9) adverse conditions in the
stock market, the public debt market and other capital markets (including
changes in interest rate conditions) and the impact of such conditions on the
combined company's capital markets and asset management activities.
- 2 -
[LOGO]SUNTRUST
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Overview
Transaction Terms
Premium: 15% Deposit Premium
Cost Savings: $48 million
36% of estimated
Huntington Florida
core expense base
Divestitures: +/-5% of deposits
Restructuring Charge: $100 Million
Loan Loss Allowance
Increase: $40 Million
Accounting/Structure: Purchase; cash
Steps to Completion: Customary regulatory
approvals
Expected Closing: February 2002
- 3 -
[LOGO]SUNTRUST
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Overview
Context
. Huntington announced company restructuring including sale of their Florida
franchise July 12, 2001
. Size of transaction limits integration risk
- SunTrust Florida organization to manage the top two priorities:
customer/employee retention and customer/employee integration
- On-going minimal impact to corporate resources and non-Florida market
areas/(1)/
. Have factored in economic slowdown due to recent events
/(1)/ Other than data conversion resources
- 4 -
[LOGO]SUNTRUST
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Overview
Precedent Transaction Analysis
Announce Entity Assets Premium/
Date Buyer Seller Sold (Deposits) Sold Deposits
-------- ---------------------- ---------------------- ----------------- --------------------- ---------------
5/17/99 Charter One St. Paul Bank Sale 5.9 Billion 21%
Financial Bancorp, Inc.
6/16/99 Fifth Third CNB Bank Sale 7.2 Billion 37%
Bancorp Bancshares, Inc.
6/21/99 Citizens UST Bank Sale 5.9 Billion 23%
Financial, Inc. Corporation
2/7/00 BB&T One Valley Bank Sale 6.6 Billion 16%
Corporation Bancorp, Inc.
7/31/00 Firstar First Union 41 TN 1.8 Billion 20%
Corporation Corporation branches (deposits) (est)
1/24/01 BB&T F&M National Bank Sale 3.6 Billion 26%
Corporation Corporation
7/17/01 Royal Bank of Mellon Financial 345 DE, NJ, 13.4 Billion 16%
Scotland Corporation PA (deposits)
branches
9/24/01 SunTrust Huntington- Subject 4.7 Billion 15%
Florida Transaction (deposits)
- 5 -
[LOGO]SUNTRUST
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Overview
Huntington Florida Franchise
. Retail, Commercial Banking and Private Client Services operations in
central and southwestern Florida
. Integrated delivery network:
- 141 branches 106 traditional
35 in-stores (Albertson's, 1 Wal-Mart)
- 5 Private Client Services offices/(1)/
- 456 store-based and remote ATM's
. Ranks among the top six banks within current Florida MSA's, with
approximately 6% market share in Florida overall
/(1)/ Huntington will retain three Florida wealth management locations, their
Florida Indirect Loan origination business and their Florida mortgage
origination platform.
- 6 -
[LOGO]SUNTRUST
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Overview
Huntington Florida Franchise
Loans ($Millions) Deposits ($Millions)
------------------------ ------------------------
Retail 845 DDA 581
Indirect 325 MMA 849
Residential 249 NOW 538
Commercial 735 SAV 555
Commercial RE 421 Time 2,042
------
2,575 Repos 139
------
Total Deposits 4,704
. Includes $860MM of trust assets under management
As of July 31, 2001
. Transaction value is based primarily on an attractive retail customer base
that is complementary to the existing SunTrust Florida franchise
. Not dependent upon Florida tourism
-7-
[LOGO]SUNTRUST
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Strategic Benefits
Huntington Operates In Rapidly Growing Markets With Attractive Demographics
[GRAPHIC]
Strategic Benefits
Forecast Median
Household Forecast
Key Huntington Markets Income Growth(1) Population Growth(1)
---------------------- ---------------- --------------------
Orlando 8.8% 10.9%
Sarasota 12.9% 7.3%
Tampa - St. Petersburg 12.2% 5.4%
Lakeland/Winter Haven 8.1% 7.6%
Daytona 6.9% 9.4%
National Averages 12.4% 4.5%
(1) Forecast 2000-2005
-8-
[LOGO]SUNTRUST
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Strategic Benefits
Huntington Enhances SunTrust's Position In Key High Opportunity Florida Markets
SunTrust Current SunTrust + Huntington,
Market Deposit Share/Rank Deposit Share/Rank
----------------------------- ------------------------- ----------------------------
Tampa 9.3%, 4 14% 2
Lakeland/Winter Haven 17.1% 3 26% 1
Orlando 24.7% 2 29% 1
Daytona 18.0% 3 21% 2
Sarasota/Bradenton 12.2% 2 18% 2
Strategic Benefits
Market demographics include strong mix
of affluent, middle market and retirees
Note: Market share data as of 6/30/01 excluding credit union balances
- 9 -
[LOGO]SunTrust
--------------------------------------------------------------------------------
Financial Impacts
Value Creation Through Appropriate Cost Savings
Annual Cost Savings: $48 million
Cumulative Phase In:
Year 1 65%
Year 2 100%
Traditional Branch Consolidations: 45
% of Huntington Core Expense: 36%
Estimated Restructure Charge: $100 Million
Position Reductions: 600
Financial Impacts
--------------------------------------------------------------------------------
Combined companies' employee attrition will support majority
of headcount reductions. Job assurances have been given to
Huntington teller and certain other personnel(1).
--------------------------------------------------------------------------------
(1) Exception: Employees on disciplinary action
- 10 -
[LOGO]SunTrust
--------------------------------------------------------------------------------
Financial Impacts
Branch Proximity Allows Low
Customer Impact Consolidations
(less than).25 .25 - .50 .50 - .75 .75 - 1.0 (greater than)1.0
Miles Miles Miles Miles Miles Total
-------------------------------------------------------------------------------------------
Number
of Traditional
Branches 22 15 3 4 1 45
% of Total
Closed
Branches 49% 33% 7% 9% 2% 100%
-----------------------------------------------
82% of branch consolidations within 1/2 mile
-----------------------------------------------
- 11 -
[LOGO]SunTrust
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Financial Impacts
Attractive Pricing Produces Earnings Accretion And Supports A Return Over Cost
Of Capital
Cash EPS Accretion:
- Neutral in 2002
- Accretive in subsequent years
Transaction IRR: 11-13% compared to SunTrust cost of equity of 11%
Conservative Assumptions:
- Account Deposit and Loan Attrition at 10-12%
- Assumes no revenue enhancements
- 12 -
[LOGO]SunTrust
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Summary
. Enhances current SunTrust Florida franchise
- Strengthens positions in some of the best markets
. Proximity of branches allows cost savings without significant customer
disruption
. Low integration risk given size of transaction and Company's integration
experience
. Financially attractive using conservative assumptions
- 13 -