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SunTrust Reports Record Operating Income and Earnings Per Share

PRNewswire
ATLANTA
Oct 10, 2001

SunTrust Banks, Inc. today reported record operating income for the third quarter of 2001 of $354.3 million, up 7% from the third quarter of 2000. Operating income per diluted share was $1.22, up 10% from the $1.11 per diluted share earned in the third quarter of 2000. Operating income for the third quarter of 2001 excludes $20.2 million in after-tax nonrecurring items associated with the Company's proposal to acquire Wachovia and for the third quarter of 2000 excludes the $5.4 million in after-tax merger related charges. Reported net income was $334.1 million for the quarter or $1.15 per diluted share compared to $326.8 million or $1.10 per diluted share in the third quarter of 2000. For the quarter, reported return on assets was 1.34% and return on average realized equity was 21.02%.

"Despite the headwind of a much weakened economy, we are very pleased to announce yet another record quarter, reflective of SunTrust's commitment to providing one of the most consistent and high quality earnings performance in our industry," said L. Phillip Humann, SunTrust's Chairman, President, and Chief Executive Officer. "Our Company benefited from continued growth in fee income and disciplined control of expenses. And while we have, predictably, seen an increase in our levels of nonperforming assets and charge-offs, our credit quality remains sound and very favorable compared to recently published peer results."

For the first nine months of 2001, operating income was $1,039.0 million compared to the $989.8 million earned in the first nine months of 2000. Operating income per diluted share for the first nine months of 2001 was $3.55, up 9% from that earned in 2000. Including $20.2 million in after-tax non recurring items associated with the Company's Wachovia proposal in 2001 and $26.0 million in after-tax merger-related charges in 2000, for the first nine months of 2001, reported net income was $1,018.8 million, up 6% from the $963.7 million earned in the first nine months of 2000. Net income per diluted share was $3.48, up 9% from the first nine months of 2000.

Fully taxable net interest income was $813.9 million in the third quarter, up 4% from the third quarter of 2000. The net interest margin for the quarter was 3.56%, up 9 basis points from the third quarter of 2000. For the first nine months of 2001, fully taxable net interest income was $2,463.2 million, up 5% from the first nine months of 2000.

Average loans for the third quarter were $69.0 billion and average earning assets were $90.6 billion. Adjusting for recent securitizations, average loans were up .5% from the third quarter of last year. Average consumer and commercial deposits for the third quarter were $57.1 billion, up an annualized 5% from the second quarter.

Noninterest income, excluding securities gains and losses, was $514.2 million in the quarter, up 15% from the third quarter of 2000. Total noninterest income, including net securities gains, was $550.4 million for the quarter, up 23% from the third quarter of 2000. Noninterest income represented 40% of total revenue or 39% without net securities gains. For the first nine months of 2001, noninterest income, excluding securities gains and losses, was $1,477.1 million, up 12% from the first nine months of 2000.

Total noninterest expense in the quarter was $776.8 million. As previously mentioned, included in the noninterest expenses for the third quarter was $32 million ($20.2 million after-tax) or $.07 per diluted share in expenses associated with the Company's proposal to acquire Wachovia. Additionally, in the third quarter the Company spent $17.5 million ($11.4 million after-tax) or $.04 per diluted share on its One Bank initiative for enhancements to customer based systems that will yield operating efficiencies in the future. For the first nine months of 2001, the Company spent $39.1 million ($25.4 million after-tax) or $.09 per diluted share on this initiative. Adjusting for unusual expense items, third quarter 2001 noninterest expenses were up 4% compared to third quarter 2000. The Company's efficiency ratio was 56.94% in the third quarter of 2001, an improvement from the 57.50% reported in the third quarter of 2000. For the first nine months of 2001, total noninterest expense was $2,283.3 million, up 7% from the first nine months of 2000. The improvement in operating efficiency is attributable to a series of initiatives undertaken over the past two years to enhance standardization across the Company following consolidation of SunTrust's banking charters in January 2000.

Consistent with the slowing economy, the Company's charge-offs and nonperforming asset levels rose in the third quarter. Net charge-offs in the third quarter were $79.9 million or .46% of average loans. The provision for loan losses was $80.2 million for the third quarter. For the first nine months of 2001, annualized net charge-offs were .35% of average loans.

Nonperforming assets were $509.1 million at quarter end or .73% of loans and foreclosed properties. Total nonperfoming assets were up 18% from the second quarter end. The Company continues to sell nonperforming assets in the secondary loan market as opportunities permit. Nonperforming assets at September 30, 2001 included $490.2 million in nonperforming loans and $18.9 million in net other real estate owned. The allowance for loan losses at September 30, 2001 was $866.4 million and represented 1.24% of loans and 176.7% of nonperforming loans. Over the long term, the Company's net charge-offs and non-performing asset levels have been substantially below industry averages, and current levels remain much better than the most recently published industry averages.

On September 26, the Company announced plans to acquire Huntington's Florida franchise. Huntington-Florida has approximately $4.7 billion in deposits and $2.6 billion in loans and operates 141 branches in central and southwestern Florida. This acquisition expands the Company's presence in some of the best markets in Florida.

At September 30, 2001, SunTrust had total assets of $103.3 billion. Equity capital of $8.2 billion represented 7.94% of total assets. Book value per share was $28.40, up 10% from the third quarter 2000.

To view the corresponding financial tables and information, please refer to the Investor Relations section located under "About SunTrust" on our website at http://www.suntrust.com/ . This information may also be directly accessed via the quick link entitled "Earnings Release" located at the lower right hand corner of the SunTrust homepage.

Also, SunTrust will host a conference call this morning at 9:00 a.m. (Eastern). Individuals may access the call by dialing 888-709-9420; passcode 75302 (domestically) or 415-228-3886; passcode 75302 (internationally). A replay of the call will be available beginning this afternoon by dialing 800-944-7324; passcode 89371 (domestically) or 402-220-3515; passcode 89371 (internationally). The replay of the call will be available for ten days.

SunTrust Banks, Inc., headquartered in Atlanta, Georgia, is the nation's ninth-largest commercial banking organization. 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, 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 http://www.suntrust.com/ .

This press release may contain forward-looking statements as defined by federal securities law which involve significant risks and uncertainties. Actual results could differ materially from those contained in or implied by such statements for a variety of reasons including, but not limited to: changes in interest rates; changes in accounting principles, policies, or guidelines; significant changes in the economic scenario: significant changes in regulatory requirements; and significant changes in securities markets.

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SOURCE: SunTrust Banks, Inc.

Contact: Investors, Gary Peacock, +1-404-658-4879, or Media, Barry
Koling, +1-404-230-5268, both of SunTrust Banks