News Releases

Back to News Releases

SunTrust Reports Third Quarter Earnings and Details First and Second Quarter Restatements

-- Company Cites Continued Strong Earnings Trends, Performance Momentum;

-- Restatement Increases First Half Net Income by $25.1 Million or 9 Cents Per Share

PRNewswire-FirstCall
ATLANTA
Nov 12, 2004

SunTrust Banks, Inc. today reported net income of $368.8 million for the third quarter of 2004, up 11% from the third quarter of 2003. Net income per diluted share was $1.30, up 10% from the $1.18 per diluted share earned in the third quarter of 2003.

"SunTrust's focus on our markets and our customers is continuing to pay off in a very tangible, and very positive, way," said L. Phillip Humann, SunTrust chairman, president and chief executive officer. Mr. Humann cited strong revenue growth, based on growth in both net interest income and noninterest income, coupled with the positive impact of increasingly effective expense discipline, as "solid evidence that our people are doing an excellent job in translating the earnings potential of our Company into strong, sustainable financial performance."

Mr. Humann noted that SunTrust's earnings potential has been enhanced by the October 1, 2004 completion of its merger with National Commerce Financial Corporation. The move provides SunTrust with stronger or new positions in key high-growth Southeast markets, as well as expanded business capabilities. Because it took place immediately after the close of the third quarter, the merger completion had no impact on SunTrust's third quarter financial results.

For the first nine months of 2004, net income was $1,117.2 million, up 13% from the $989.8 million earned in the same period of 2003. Net income per diluted share was $3.94, up 12% from the first nine months of 2003.

Fully taxable-equivalent net interest income was $893.7 million in the third quarter, up 6% from the third quarter of 2003. The net interest margin for the quarter was 3.11%, comparable to 3.13% in the second quarter of 2004, up from 2.98% a year ago, and fully in line with SunTrust's expectations.

Average loans for the third quarter were $83.8 billion, up 8% from the third quarter of 2003, and average earning assets were $114.3 billion, up 2% from the third quarter of 2003. Not including the impact of Three Pillars Funding Corp. (Three Pillars), a multi-seller commercial paper conduit, average loans in the third quarter were up 11% and average earning assets were up 4% from the third quarter of 2003. In what it termed an "encouraging sign," SunTrust noted that while loans to large corporate borrowers did not grow in the third quarter, neither did balances in this key category decline as had been the pattern earlier in the year.

Average consumer and commercial deposits for the third quarter were $74.1 billion, up 5% from the third quarter of 2003. SunTrust said success in deposit generation is attributable to the Company's focus on sales and customer service across its footprint.

Total noninterest income including net securities losses was $627.7 million for the quarter, up 9% from the third quarter of 2003. The positive impact of SunTrust's sales focus was also reflected in total noninterest income excluding net securities losses of $645.9 million in the quarter, up 19% from the third quarter of 2003. Noninterest income excluding net securities losses represented 42% of total revenue for the third quarter of 2004.

Total noninterest expense in the third quarter was $929.8 million, up 8% from the third quarter of 2003, reflecting heightened company cost control efforts.

SunTrust's net charge-off and nonperforming asset levels continue to compare very favorably with the most recently published industry averages. Net charge-offs in the third quarter were $51.0 million, or 0.24%, of average loans. The provision for loan losses was $41.8 million for the third quarter.

Nonperforming assets were $304.2 million at quarter end, or 0.36%, of loans, other real estate owned and other repossessed assets, down 6% from $324.4 million as of June 30, 2004. Nonperforming assets at September 30, 2004 included $282.9 million in nonperforming loans, $10.9 million in other real estate owned and $10.4 million in other repossessed assets. The allowance for loan losses at September 30, 2004 was $893.0 million and represented 1.06% of period-end loans and 315.7% of nonperforming loans.

At September 30, 2004, SunTrust had total assets of $127.8 billion. Equity capital of $10.1 billion represented 7.9% of total assets. Book value per share was $35.79, up 9% from September 30, 2003.

To view the corresponding financial tables and information, please refer to the Investor Relations section located under "About SunTrust" on our Web site at http://www.suntrust.com/ . This information may also be directly accessed via the quick link entitled "3rd Quarter Earnings Release" located at the lower right hand corner of the SunTrust homepage.

First & Second Quarter Restatement

As a result of errors in the calculation of allowance for loan loss reserves, provision for loan losses in the first quarter of 2004 was reduced from the originally reported $59.4 million to $53.8 million, a reduction of $5.6 million. Net income for the first quarter increased by $3.4 million, or $0.02 per diluted share, as a result. Likewise, provision for loan losses in the second quarter of 2004 was reduced from the originally reported $38.8 million to $2.8 million, a reduction of $36.0 million. Net income for the second quarter increased $21.7 million, or $0.07 per diluted share. Total effect on net income for the first half of the year was $25.1 million, or $0.09 per diluted share. Please refer to Appendix B of this press release to view corresponding financial tables and information.

Conference Call Information

SunTrust management will host a conference call on November 12, 2004 at 8:30 a.m. (Eastern Time) to discuss the earnings results and business trends. Individuals are encouraged to call in beginning at 8:15 a.m. (Eastern Time) by dialing 1-888-822-9863 (Passcode: 3Q04; Leader: Gary Peacock.). Individuals calling from outside the United States should dial 1-484-630-1854 (Passcode: 3Q04; Leader: Gary Peacock). A replay of the call will be available beginning November 12, 2004 and ending November 26, 2004 at 5:00 p.m. (Eastern Time) by dialing 1-866-481-9895 (domestic) or 1-203-369-1579 (international).

Alternatively, individuals may listen to the live webcast of the presentation by visiting the SunTrust Web site at http://www.suntrust.com/ . The webcast will be hosted under "Investor Relations" located under "About SunTrust" or may be accessed directly from the SunTrust home page by clicking on the earnings-related link, "3rd Quarter Earnings Release". Beginning the afternoon of November 12, 2004, listeners may access an archived version of the presentation in the "Webcasts and Presentations" subsection found under "Investor Relations". A link to the Investor Relations page is also found in the footer of the SunTrust home page.

SunTrust Banks, Inc., headquartered in Atlanta, Georgia, is one of the nation's largest commercial banking organizations. The Company operates through an extensive distribution network primarily in 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/ .

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, SunTrust's plans, objectives, expectations and intentions and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of SunTrust's management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. Factors that could cause SunTrust's results to differ materially from those described in the forward-looking statements can be found in the 2003 Annual Reports on Form 10-K of SunTrust and National Commerce Financial Corporation ("NCF"), in the Quarterly Report on Form 10-Q and 10-Q/A of SunTrust and NCF, and in the Current Reports filed on Form 8-K of SunTrust and NCF filed with the Securities and Exchange Commission and available at the Securities and Exchange Commission's internet site ( http://www.sec.gov/ ). The forward- looking statements in this press release speak only as of the date of the filing, and SunTrust does not assume any obligation to update the forward- looking statements or to update the reasons why actual results could differ from those contained in the forward-looking statements.

This press release could contain some non-GAAP measures to describe our Company's performance. The reconcilement of those measures to GAAP measures can be found in the financial information contained at the end of this press release.

   SunTrust Banks, Inc. and Subsidiaries
   RECONCILEMENT OF NON-GAAP MEASURES
   APPENDIX A TO THE PRESS RELEASE

                                       Quarter - to - Quarter Comparison
                                                 2nd Quarter   1st Quarter
                                   3rd Quarter       2004          2004
                                       2004     (As restated) (As restated)

    NON-GAAP MEASURES
     PRESENTED IN THE PRESS
     RELEASE
    (Dollars in thousands)

    Net income                         $368,766      $386,571      $361,835
    Securities losses/(gains),
     net of tax                          11,825         5,881        (3,203)
    Net income excluding
     securities gains and losses       $380,591      $392,452      $358,632

    Total average assets           $127,127,968  $127,287,458  $123,853,747
    Average net unrealized
     securities gains                (2,054,978)   (2,803,917)   (2,580,304)
    Average assets less net
     unrealized securities gains   $125,072,990  $124,483,541  $121,273,443

    Total average equity             $9,992,905   $10,194,201    $9,840,282
    Average other comprehensive
     income                          (1,318,332)   (1,804,833)   (1,645,712)
    Total average realized equity    $8,674,573    $8,389,368    $8,194,570

    Return on average total assets         1.15 %        1.22 %        1.18
    Impact of excluding net
     realized and unrealized
     securities gains/losses               0.06          0.05          0.01
    Return on average total assets less
     net realized and unrealized
     securities gains/losses (1)           1.21 %        1.27 %        1.19

    Return on average total
     shareholders' equity                 14.68 %       15.25 %       14.79
    Impact of excluding net
     unrealized securities gains           2.77          3.56          2.81
    Return on average realized
     shareholders' equity  (2)            17.45 %       18.81 %       17.60

    Net interest income                $876,874      $872,429      $851,648
    FTE adjustment                       16,821        12,637        12,256
    Net interest income - FTE           893,695       885,066       863,904
    Noninterest income                  627,692       622,665       595,086
    Total revenue                     1,521,387     1,507,731     1,458,990
    Securities losses/(gains)            18,193         9,048        (4,927)
    Total revenue excluding
     securities gains and losses     $1,539,580    $1,516,779    $1,454,063


   SunTrust Banks, Inc. and Subsidiaries
   RECONCILEMENT OF NON-GAAP MEASURES
   APPENDIX A TO THE PRESS RELEASE
                                           Quarter - to - Quarter Comparison
                                              4th Quarter      3rd Quarter
                                                  2003             2003

    NON-GAAP MEASURES PRESENTED IN THE
     PRESS RELEASE
    (Dollars in thousands)

    Net income                                    $342,507        $331,583
    Securities losses/(gains), net of tax          (12,676)        (20,214)
    Net income excluding securities
     gains and losses                             $329,831        $311,369

    Total average assets                      $124,756,099    $126,701,810
    Average net unrealized securities gains     (2,363,948)     (2,401,899)
    Average assets less net unrealized
     securities gains                         $122,392,151    $124,299,911

    Total average equity                        $9,435,794      $9,236,849
    Average other comprehensive income          (1,503,355)     (1,526,448)
    Total average realized equity               $7,932,439      $7,710,401

    Return on average total assets                    1.09 %          1.04 %
    Impact of excluding net realized and
     unrealized securities gains/losses              (0.02)          (0.05)
    Return on average total assets less
     net realized and unrealized
     securities gains/losses (1)                      1.07 %          0.99 %

    Return on average total shareholders' equity     14.40 %         14.24
    Impact of excluding net unrealized
     securities gains                                 2.10            1.78
    Return on average realized shareholders'
     equity (2)                                      16.50 %         16.02

    Net interest income                           $865,520        $832,800
    FTE adjustment                                  11,981          11,588
    Net interest income - FTE                      877,501         844,388
    Noninterest income                             584,072         574,478
    Total revenue                                1,461,573       1,418,866
    Securities losses/(gains)                      (19,501)        (31,098)
    Total revenue excluding securities
     gains and losses                           $1,442,072      $1,387,768


   SunTrust Banks, Inc. and Subsidiaries
   RECONCILEMENT OF NON-GAAP MEASURES
   APPENDIX A TO THE PRESS RELEASE

                                                     YTD Comparison
                                                      September 30
                                                2004               2003

    NON-GAAP MEASURES PRESENTED IN THE
     PRESS RELEASE
    (Dollars in thousands)

    Net income                                $1,117,172         $989,790
    Securities losses/(gains), net of tax         14,504          (67,844)
    Net income excluding securities
     gains and losses                         $1,131,676         $921,946

    Total average assets                    $126,093,513     $121,506,210
    Average net unrealized securities gains   (2,478,183)      (2,335,960)
    Average assets less net unrealized
     securities gains                       $123,615,330     $119,170,250

    Total average equity                     $10,009,069       $8,964,144
    Average other comprehensive income        (1,588,635)      (1,480,318)
    Total average realized equity             $8,420,434       $7,483,826

    Return on average total assets                  1.18 %           1.09 %
    Impact of excluding net realized and
     unrealized securities gains/losses             0.04            (0.06)
    Return on average total assets less
     net realized and unrealized
     securities gains/losses (1)                    1.22 %           1.03 %

    Return on average total shareholders' equity   14.91 %          14.76 %
    Impact of excluding net unrealized
     securities gains                               3.04             1.71
    Return on average realized
     shareholders' equity (2)                      17.95 %          16.47 %

    Net interest income                       $2,600,951       $2,454,783
    FTE adjustment                                41,714           33,033
    Net interest income - FTE                  2,642,665        2,487,816
    Noninterest income                         1,845,443        1,718,929
    Total revenue                              4,488,108        4,206,745
    Securities losses/(gains)                     22,314         (104,375)
    Total revenue excluding securities
     gains and losses                         $4,510,422       $4,102,370


                                         Quarter - to - Quarter Comparison
                                           3rd Quarter  3rd Quarter   Change
                                               2004         2003         %

     NON-GAAP DISCLOSURES FOR IMPACTS
      OF THREE PILLARS (3)
     (Dollars in millions)

     Average loans - reported                 $83,753      $77,733      7.7
     Impact of Three Pillars                      -         (1,975)
     Average loans excluding Three Pillars    $83,753      $75,758     10.6

     Average earning assets - reported       $114,334     $112,329      1.8
     Impact of Three Pillars                        -       (2,490)
     Average earning assets excluding
      Three Pillars                          $114,334     $109,839      4.1

     Average commercial loans - reported      $27,631      $29,502     (6.3)
     Impact of Three Pillars                      -         (1,975)
     Average commercial loans excluding
      Three Pillars                           $27,631      $27,527      0.4

     Average commercial loan yield - reported    3.98 %       3.52 %   13.1
     Impact of Three Pillars                      -           0.09
     Average commercial loan yield excluding
      Three Pillars                              3.98 %       3.61 %   10.2

     Net interest margin - reported              3.11 %       2.98 %    4.4
     Impact of Three Pillars                      -           0.06
     Net interest margin excluding
      Three Pillars                              3.11 %       3.04 %    2.3


                                          Quarter - to - Quarter Comparison
                                          3rd Quarter  2nd Quarter   Change
                                              2004         2004       %(4)

     REVENUE GROWTH RATE
     (Dollars in thousands)

     Total revenue excluding securities
      gains and losses                     $1,539,580   $1,516,779     1.5

     AVERAGE LOW COST CONSUMER AND
      COMMERCIAL DEPOSIT RECONCILEMENT
     (Dollars in thousands)

     Demand deposits                      $20,490,191  $20,591,615    (0.5)
     NOW accounts                          12,999,444   12,811,554     1.5
     Savings                                7,424,698    6,990,929     6.2
     Total average low cost consumer
      and commercial deposits             $40,914,333  $40,394,098     1.3


                                          Quarter - to - Quarter Comparison
                                          3rd Quarter   3rd Quarter   Change
                                              2004          2003         %

    REVENUE GROWTH RATE
    (Dollars in thousands)

    Total revenue excluding securities
     gains and losses                     $1,539,580    $1,387,768     10.9

    AVERAGE LOW COST CONSUMER AND
     COMMERCIAL DEPOSIT RECONCILEMENT
    (Dollars in thousands)

    Demand deposits                      $20,490,191   $18,946,800      8.1
    NOW accounts                          12,999,444    11,792,851     10.2
    Savings                                7,424,698     6,315,666     17.6
    Total average low cost consumer and
     commercial deposits                 $40,914,333   $37,055,317     10.4


    1 Computed by dividing annualized net income, excluding tax effected
      securities gains and losses, by average assets less net unrealized
      gains on securities.
    2 Computed by dividing annualized net income, excluding tax effected
      securities gains and losses, by average realized shareholders' equity.
    3 Under the provisions of FASB Interpretation No. 46, SunTrust
      consolidated its commercial paper conduit, Three Pillars, effective
      July 1, 2003.
      As of March 1, 2004, Three Pillars was restructured and
      deconsolidated.  Adjustments were made to reported figures for
      comparability purposes.
    4 Multiply by 4 to calculate sequential annualized growth or reductions
      discussed in the earnings call.


     SunTrust Banks, Inc. and Subsidiaries
     SELECTED FINANCIAL INFORMATION
     APPENDIX B TO THE PRESS RELEASE

                                             2nd Quarter
                                 2nd Quarter    2004
                                     2004    (Originally Increase/(Decrease)
                                (As restated)  reported)    Amount    %

     RESULTS OF OPERATIONS
     (Dollars in thousands,
      except per share data)

     Net interest income            $872,429   $872,429        $-      -  %
     Provision for loan losses         2,827     38,751   (35,924) (92.7)
     Net credit income               869,602    833,678    35,924    4.3
     Securities (losses)/gains        (9,048)    (9,048)        -      -
     Other noninterest income        631,713    631,713         -      -
     Net credit and noninterest
      income                       1,492,267  1,456,343    35,924    2.5
     Noninterest expense             928,449    928,449         -      -
     Income before income taxes      563,818    527,894    35,924    6.8
     Provision for income taxes      177,247    163,057    14,190    8.7
     Net Income                     $386,571   $364,837   $21,734    6.0

     Earnings per share
      Diluted                          $1.36      $1.29     $0.07    5.4
      Basic                             1.39       1.31      0.08    6.1

     SELECTED RATIOS
     Return on average total
      assets                            1.22       1.15      0.07    6.1  %
     Return on average assets less
      net realized and unrealized
      securities gains/losses           1.27       1.20      0.07    5.8
     Return on average total equity    15.25      14.39      0.86    6.0
     Return on average realized
      equity                           18.81      17.77      1.04    5.9
     CREDIT DATA
     (Dollars in thousands)
     Allowance for loan losses -
      beginning                     $936,972   $942,523   $(5,551)  (0.6) %
     Provision for loan losses         2,827     38,751   (35,924) (92.7)
     Net charge-offs                  37,556     37,556         -      -
     Allowance for loan losses -
      ending                        $902,243   $943,718  $(41,475)  (4.4)

     Allowance to period-end loans      1.09       1.14     (0.05)  (4.4)
     Allowance to nonperforming loans  299.7      313.4     (13.7)  (4.4)


                                           1st Quarter
                               1st Quarter     2004
                                   2004    (Originally Increase/(Decrease)
                              (As restated)  reported)   Amount     %

     RESULTS OF OPERATIONS
     (Dollars in thousands,
      except per share data)

     Net interest income           $851,648   $851,648        $-      -  %
     Provision for loan losses       53,837     59,388    (5,551)  (9.3)
     Net credit income              797,811    792,260     5,551    0.7
     Securities (losses)/gains        4,927      4,927         -      -
     Other noninterest income       590,159    590,159         -      -
     Net credit and noninterest
      income                      1,392,897  1,387,346     5,551    0.4
     Noninterest expense            889,748    889,748         -      -
     Income before income taxes     503,149    497,598     5,551    1.1
     Provision for income taxes     141,314    139,121     2,193    1.6
     Net Income                    $361,835   $358,477    $3,358    0.9

     Earnings per share
      Diluted                         $1.28      $1.26     $0.02    1.6
      Basic                            1.29       1.28      0.01    0.8

     SELECTED RATIOS
     Return on average total assets    1.18       1.16      0.02    1.7  %
     Return on average assets less
      net realized and unrealized
      gains on securities (3)          1.19       1.18      0.01    0.8
     Return on average total equity   14.79      14.65      0.14    1.0
     Return on average realized
      equity (3)                      17.60      17.44      0.16    0.9
     CREDIT DATA
     (Dollars in thousands)
     Allowance for loan losses -
      beginning                    $941,922   $941,922        $-      -  %
     Provision for loan losses       53,837     59,388    (5,551)  (9.3)
     Net charge-offs                 58,787     58,787         -      -
     Allowance for loan losses -
      ending                       $936,972   $942,523   $(5,551)  (0.6)

     Allowance to period-end loans     1.18       1.19     (0.01)  (0.8)
     Allowance to nonperforming
      loans                           309.7      311.5      (1.8)  (0.6)

SOURCE: SunTrust Banks, Inc.

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