Form 8-K SUNTRUST BANKS INC For: Mar 06
UNITED STATES 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) | March 6, 2018 |
SunTrust Banks, Inc. |
(Exact name of registrant as specified in its charter) |
Georgia | 001-08918 | 58-1575035 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
303 Peachtree St., N.E., Atlanta, Georgia | 30308 | |
(Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code | (800) 786- 8787 |
Not Applicable |
(Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 7.01 Regulation FD Disclosure.
SunTrust Banks, Inc. (the “Registrant” or “SunTrust”) is scheduled to make a presentation at the Raymond James Institutional Investors Conference in Orlando, Florida on Tuesday, March 6, 2018 at 8:05 a.m. (ET). Aleem Gillani, Corporate Executive Vice President and Chief Financial Officer of SunTrust, will make SunTrust's presentation. A copy of the materials to be used by the Registrant during its presentation is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference. Such materials will also be available on the Registrant's website at investors.suntrust.com.
Information contained on the Registrant's website is not incorporated by reference into this Current Report on Form 8-K. The information in the preceding paragraph, as well as Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section. Such information may only be incorporated by reference into another filing under the Exchange Act or the Securities Act of 1933 if such subsequent filing specifically references Section 7.01 of this Current Report on Form 8-K. All information in the presentation materials speak as of the date thereof, and the Registrant does not assume any obligation to update such information in the future. In addition, the Registrant disclaims any inference regarding the materiality of such information which otherwise may arise as a result of its furnishing such information under Item 7.01 of this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
99.1. Materials to be presented March 6, 2018 (furnished with the Commission as a part of this Form 8-K).
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: March 6, 2018 | By: | /s/ Curt Phillips | ||
Curt Phillips, Group Vice President, Associate | ||||
General Counsel and Assistant Corporate Secretary |
© 2018 SunTrust Banks, Inc. SunTrust is a federally registered trademark of SunTrust Banks, Inc.
2018 RAYMOND JAMES
INSTITUTIONAL INVESTORS
CONFERENCE
Aleem Gillani, Chief Financial Officer
March 6, 2018
2
The following should be read in conjunction with the financial statements, notes and other information contained in the Company’s 2017 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current
Reports on Form 8-K.
This presentation includes non-GAAP financial measures to describe SunTrust’s performance. We reconcile those measures to GAAP measures within the presentation or in the appendix. The Company presents the
following non-GAAP measures because many investors find them useful. Specifically:
• Consistent with Securities and Exchange Commission Industry Guide 3, the Company presents efficiency ratios on a fully taxable equivalent (“FTE”) and 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 35% and state income taxes where applicable to increase tax-exempt interest income to a taxable-equivalent basis.
• The Company presents certain capital information on a tangible basis, including return on average tangible common equity. These measures exclude the after-tax impact of purchase accounting intangible assets.
• 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. Adjusted
tangible efficiency ratio-FTE removes the impact of certain material and potentially non-recurring items from the calculation of Tangible efficiency ratio-FTE.
• The Company presents adjusted EPS which excludes the impact of certain material and potentially non-recurring items.
• The Company presents the Basel III Common Equity Tier 1 (CET1) ratio on a fully phased-in basis. The fully phased-in ratio considers a 250% risk-weighting for MSRs and deduction from capital of certain
carryforward DTAs, the overfunded pension asset, and other intangible assets.
This presentation contains forward-looking statements. Statements regarding future levels of earnings per share, efficiency ratios, capital returns, investment banking market share, the number of full service
branches, common equity tier 1 ratio, technology enhancements (including potential cost savings as a result thereof) and the percentage of client solutions available through digital platforms 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,” “targets,” “strategies,” “goals,” “initiatives,” “opportunity,” “potentially,” “probably,” “projects,” “outlook,” or similar expressions or future conditional verbs such as “may,” “will,” “should,”
“would,” and “could.” Such statements are based upon the current beliefs and expectations of management and on information currently available to management. They speak as of the date hereof, and we do not
assume any obligation to update the statements made herein 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. 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, 2017 and in other periodic reports that we file with the SEC. Those factors include: current and future legislation and regulation could require us to change our
business practices, reduce revenue, impose additional costs, or otherwise adversely affect business operations or competitiveness; we are subject to stringent capital adequacy and liquidity requirements and our
failure to meet these would adversely affect our financial condition; the monetary and fiscal policies of the federal government and its agencies could have a material adverse effect on our earnings; our financial
results have been, and may continue to be, materially affected by general economic conditions, and a deterioration of economic conditions or of the financial markets may materially adversely affect our lending and
other businesses and our financial results and condition; changes in market interest rates or capital markets could adversely affect our revenue and expenses, the value of assets and obligations, and the availability
and cost of capital and liquidity; our earnings may be affected by volatility in mortgage production and servicing revenues, and by changes in carrying values of our servicing assets and mortgages held for sale due to
changes in interest rates; interest rates on our outstanding financial instruments might be subject to change based on regulatory developments, which could adversely affect our revenue, expenses, and the value of
those financial instruments; disruptions in our ability to access global capital markets may adversely affect our capital resources and liquidity; we are subject to credit risk; we may have more credit risk and higher
credit losses to the extent that our loans are concentrated by loan type, industry segment, borrower type, or location of the borrower or collateral; we rely on the mortgage secondary market and GSEs for some of
our liquidity; loss of customer deposits could increase our funding costs; any reduction in our credit rating could increase the cost of our funding from the capital markets; we are subject to litigation, and our
expenses related to this litigation may adversely affect our results; we may incur fines, penalties and other negative consequences from regulatory violations, possibly even inadvertent or unintentional violations;
we are subject to certain risks related to originating and selling mortgages, and may be required to repurchase mortgage loans or indemnify mortgage loan purchasers as a result of breaches of representations and
warranties, or borrower fraud, and this could harm our liquidity, results of operations, and financial condition; we face risks as a servicer of loans; consumers and small businesses may decide not to use banks to
complete their financial transactions, which could affect net income; we have businesses other than banking which subject us to a variety of risks; negative public opinion could damage our reputation and adversely
impact business and revenues; we may face more intense scrutiny of our sales, training, and incentive compensation practices; we rely on other companies to provide key components of our business infrastructure;
competition in the financial services industry is intense and we could lose business or suffer margin declines as a result; we continually encounter technological change and must effectively develop and implement
new technology; maintaining or increasing market share depends on market acceptance and regulatory approval of new products and services; we have in the past and may in the future pursue acquisitions, which
could affect costs and from which we may not be able to realize anticipated benefits; we depend on the expertise of key personnel, and if these individuals leave or change their roles without effective
replacements, operations may suffer; we may not be able to hire or retain additional qualified personnel and recruiting and compensation costs may increase as a result of turnover, both of which may increase costs
and reduce profitability and may adversely impact our ability to implement our business strategies; our framework for managing risks may not be effective in mitigating risk and loss to us; our controls and procedures
may not prevent or detect all errors or acts of fraud; we are at risk of increased losses from fraud; our operational and communications systems and infrastructure may fail or may be the subject of a breach or cyber-
attack that, if successful, could adversely affect our business and disrupt business continuity; a disruption, breach, or failure in the operational systems and infrastructure of our third party vendors and other service
providers, including as a result of cyber-attacks, could adversely affect our business; natural disasters and other catastrophic events could have a material adverse impact on our operations or our financial condition
and results; the soundness of other financial institutions could adversely affect us; we depend on the accuracy and completeness of information about clients and counterparties; our accounting policies and
processes are critical to how we report our financial condition and results of operation, and they require management to make estimates about matters that are uncertain; depressed market values for our stock and
adverse economic conditions sustained over a period of time may require us to write down some portion of our goodwill; our stock price can be volatile; we might not pay dividends on our stock; our ability to receive
dividends from our subsidiaries or other investments could affect our liquidity and ability to pay dividends; and certain banking laws and certain provisions of our articles of incorporation may have an anti-takeover
effect.
IMPORTANT CAUTIONARY STATEMENT
3
Market Position
National Businesses
• Corporate & Investment Banking
• Commercial Banking
• Commercial Real Estate
• Consumer Lending (LightStream, GreenSky partnership)
• Specialty PWM
• Correspondent Mortgage
SUNTRUST OVERVIEW
See appendix slide #26 for footnotes
Purpose-Oriented
– Leading the onUp movement to promote financial
confidence
– Creator of Momentum onUp, an industry-leading
workplace financial wellness program offered to our
corporate clients
Strong Franchise & Diverse Business
Mix
– 14% deposit market share in top 10 MSA’s (double the
peer median)1
– Broad suite of lending, depository, capital markets, and
advisory capabilities
o SunTrust Robinson Humphrey is a leading middle-
market corporate & investment bank
o Robust digital platform & set of capabilities
Optimal Market Position
– Well-diversified mix of regionally-focused businesses
(within the high growth markets of the Southeast and
Mid-Atlantic) & more nationally-oriented businesses
– Top 10 across most dimensions2; large enough to
compete with the largest banks while still being small
enough to serve our clients as One Team
Proven Performance
– Six consecutive years of higher earnings per share,
improved efficiency, and increased capital returns
Optimal
Size3
Assets: $206bn
Loans: $143bn
Deposits: $161bn
Strong Financial
Performance
14% EPS Growth4
12.2% ROTCE5
2.3% Dividend Yield6
Regional Businesses
• Consumer Banking
• Consumer Lending (HELOC,
credit card)
• Private Wealth Management
• Retail Mortgage
4
INVESTMENT THESIS
2017 marked the 6th consecutive year of improvement across key metrics
Strong & Diverse Franchise
Investing in Growth
Improving Efficiency
& Returns
Strong Capital Position
Supports Growth
(Dividends & share buybacks as a % of net income)
1 3 2
(Adjusted tangible efficiency ratio2) (Earnings per share1)
1. 2012, 2013, 2014, and 2017 values represent adjusted earnings per share. The impact of excluding discrete items was ($1.40), $0.33, $0.01, and ($0.39) for 2012, 2013, 2014, and 2017, respectively. Please refer to
appendix slide #24 for GAAP reconciliations
2. Adjusted figures are intended to provide management and investors information on trends that are more comparable across periods and potentially more comparable across institutions. There were no
adjustments in 2011, 2015, and 2016. GAAP efficiency ratios were 73.0%, 60.0%, 72.3%, 67.9%, 64.2%, 63.6%, and 64.1% for 2011, 2012, 2013, 2014, 2015, 2016, and 2017, respectively. Please refer to
appendix slide #23 for GAAP reconciliations
3. Source: Bloomberg. Reflects 3/2/2012 – 3/2/2018. Peers include BAC, BBT, CFG, FITB, HBAN, KEY, MTB, PNC, RF, USB, WFC. Dividends assumed to be reinvested in same security
6 Year Total Shareholder Return: 239% (3rd highest among peers3)
$0.94
$2.19
$2.74
$3.24
$3.58 $3.60
$4.09
2011 2012 2013 2014 2015 2016 2017
71.5%
66.9%
65.3%
63.3%
62.6% 62.0%
61.0%
2011 2012 2013 2014 2015 2016 2017
8% 11%
26%
48%
62%
73%
89%
2011 2012 2013 2014 2015 2016 2017
STRONG & DIVERSE
FRANCHISE
Investing in Growth
1
6
WHOLESALE SEGMENT: COMPETITIVE ADVANTAGE
Full Product
Capabilities
Industry
Vertical
Expertise
Middle-Market
Focus
OneTeam
Approach
Balance
Sheet
Universal
Banks
Regional
Banks
Boutique
Firms
Achieving
National
Recognition
Named the 2017
USA Outstanding
M&A Middle
Markets
Investment Bank
of the Year by
Atlas Awards
Named the 2016
U.S. Mid-Market
Equity House by
International
Financing Review
(IFR)
7
~2-3%
Current market
share1
~5%
Long-term
potential
$232
$270
$311 $315
$341 $355
$404
$461
$494
$599
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
INVESTMENT BANKING: SUSTAINABLE GROWTH
The Path to ~5% Market Share: Build on Existing Momentum
Proven Success with Future Growth Potential
Grow Left Lead
Relationships
SunTrust serves as the left
lead bank for <15% of clients;
significant opportunity remains
Grow Revenue From
Commercial Banking
Continue to bring industry and
product expertise to non-CIB
clients (see slide 8 for details)
Re
ce
nt
Im
pr
ov
em
en
t2
Fu
tu
re
Po
te
nt
ia
l
12%
Increase Average Fee
Per Transaction
By-product of growth in lead
relationships and advisory
businesses
9%
Grow M&A and
Equity
Continue to realize returns on
investments and improve
strategic relevance with clients
21% 10%
IB
Income
($MM)
See appendix slide #26 for footnotes
8
EXPORTING CIB’S COMPETITIVE ADVANTAGE TO
COMMERCIAL BANKING
X
5x
8x
Average Revenue Per
Commercial Banking Client
Average Revenue Per Client with
Industry Coverage
Average Revenue Per Client with
Corporate Finance & Industry Coverage
Proven Success
Overview Competitive Position
• Traditional Commercial Banking client: $5–$250MM in annual
revenue (usually private)
→ SunTrust has ~13k Commercial Banking clients
→ Primarily within traditional Southeast / Mid-Atlantic markets
• Our strategy: bring the skills, discipline, and client coverage model
from CIB (including product and industry expertise) to Commercial
Banking clients
→ The vast majority of division presidents now have a
background in investment banking (most previously worked
at STRH)
→ Created targeted industry specialties (e.g. aging services,
ports & logistics, restaurants & retail)
• Differentiated business model affords us the opportunity to serve
clients outside of traditional retail banking footprint
→ Recently expanded into Ohio and Texas
Risk Mgmt.
Solutions
Capital
Raising
Alt. Liquidity
Solutions
Strategic
Solutions
$1
00
M
M
$2
5M
M
Loans Deposits /
Treasury Mgmt.
Bulge-Bracket Banks $1
0B
$1
B
Advisory Solutions
Client Needs
Cl
ie
nt
S
iz
e
Regional
Banks
Community
Banks
SunTrust Commercial Banking
Capture underserved market by bringing
advisory solutions to smaller clients
9
CONSUMER: MEETING EVOLVING CLIENT NEEDS
Branch
ATM
Teller
Connect
Call
Center
Chat,
Email,
Text
Online
Banking
Our mobile-centric approach allows us to focus on simplifying the client experience, meet
clients where they want to do business, and reduce our cost to serve
Mobile-Centric Strategy Invest In A Superior Mobile App 1
And Optimize Our Branch Network 3
1,659
~1,230
2011 2018F
Full Service
Branches
To Meet Evolving Client Needs 2
Mobile App Average Rating
(4.3 stars vs. peers 3.8 stars1)
17%
Digital
Sales
19%
Mobile
Deposits
20%
Mobile
Sign Ons
1. Source: iOS and Android app store as of February 26, 2018. Represents the average between iOS and Android ratings
10
30%
33%
24%
SunTrust Large Bank
Average
Regional Bank
Average
Mobile Capabilities In Line with Large Banks and Ahead of Regional Banks
Mobile Customer Adoption1 % Deposits Made Via Mobile2
20%
13%
11%
SunTrust Large Bank
Average
Regional Bank
Average
Digital Sales Contribution3
22%
23%
10%
SunTrust Large Bank
Average
Regional Bank
Average
Drivers of Success:
• Superior client experience drives above-average mobile
adoption and usage
• Ongoing improvements increase adoption, login
frequency, and sales effectiveness
→ Streamlined and simplified new account opening
process in 2017
→ Since launch of Zelle, P2P transactions up 83%
→ Targeted offers, enabled by data & analytics,
drove 35% YoY increase in new account openings
Areas of Improvement:
• Improve digital enrollment among new clients
→ SunTrust enrollment: 31% | regional bank
average: 52%4
• Improve service capabilities across the digital platform
→ Secure two-way messaging platform
• Continue to enhance payments capabilities
→ Early adopter of Real-Time Payments through The
Clearing House
See appendix slide #26 for footnotes
CONSUMER BANKING: MOBILE-CENTRIC STRATEGY
11
$1.3
$1.5
4Q 16 4Q 17
$3.1
$4.0
4Q 16 4Q 17
$1.7
$1.9
4Q 16 4Q 17
CONSUMER LENDING
Strong
Growth
(Average
Balance $bn)
Named Finalist for Top Consumer
Lending Platform by LendIt3
Named as CNBC’s Top 50
Disruptor for 2017
Received Top 5 scores for 3 cards
in the 2016 ranking by U.S. News
& World Report
Nationally
Recognized
LightStream GreenSky Partnership Credit Card
5% of Total Loans | High-Quality Portfolios (Average FICO: 750+)4 | Good Risk-Adjusted Returns
See appendix slide #26 for footnotes
Good Risk-
Adjusted
Returns1
Yield: 5.34%
NCO: 0.67%
Yield: 4.38%
NCO: 0.00%2
Yield: 10.12%
NCOs: 2.28%
Future
Growth
Currently have less than ~2% of
the applicable market share
Less than ~15% of GreenSky
customers are SunTrust clients
Opportunity for new partnerships
SunTrust only has ~30% wallet
share with the clients that
already have a SunTrust card
IMPROVING
EFFICIENCY &
RETURNS
2
13
SAVINGS FUND INVESTMENTS
Real Estate
• Pursue further branch reductions
• Consolidate non-branch real estate (e.g. mortgage
offices being reduced from 10 to 3)
Cost
Saving
Initiatives
• Streamline operations (in connection with
investments in core systems which digitize end-to-
end processes and enhance teammate effectiveness)
• Optimize staffing models (e.g. spans and layers)
• Tailor benefits and incentive plans
Organizational Efficiency
Technology Enhancements
• Increase automation and
self-service channels
• Continue transition to the cloud
• Continue to upgrade and digitize
core systems (teller platform,
payments hub, collections, etc.)
• Leverage new loan origination
platforms in Wholesale and
Consumer which improve loan
cycle times and automate certain
capabilities
Procurement
• Consolidate vendors
• Improve contract negotiations
• Optimize in-house services and capabilities
• Make ongoing enhancements to mobile app
• Create enterprise client portal (see slide 15)
• Improve treasury & payments platform
(underway)
• Digitize mortgage application (underway)
• Increase digital, self-serve channels (80-90%
of solutions will be available via digital
platforms by 2019)
Client-Friendly Technology
Wholesale Revenue Growth
• Expand industry and product
expertise in CIB and Commercial
Banking (introduced new Aging
Services vertical in 1Q 18)
• Attract, develop, and retain top
talent (improves strategic
relevance with clients)
• Continue expansion of
Commercial Banking
• Enhance CRE capabilities
(including integration of
Pillar/Cohen)
Fund
Investments
in Growth &
Technology
Consumer Revenue Growth
• Expand digital lending platform (LightStream and
third party partnerships), including further
marketing spend
• Grow wealth management by retaining top talent
and acquiring new teams (in new and existing
markets)
14
Established a data lake foundation
Introduced SunTrust Deals
(provides targeted offers based on
spending history & preferences)
Recent Progress
Upgraded mobile app & digital
foundation (improved user
interface + capabilities)
Added new payments hub
through partnership with Zelle
Upgraded loan origination
platforms within
Wholesale & Mortgage
Built private cloud and began
expanding to
hybrid public & private cloud
Introduced robotic
capabilities (40+ bots in use,
150+ bots in development)
Advance data lake
capabilities to enhance
client analytics
Future Enhancements
Introduce enterprise
client portal (see slide 15)
Create mobile app for
Wholesale clients
Leverage LightStream platform
to enhance digital lending &
fraud detection
Enhance flexibility and
integration through API’s
Deploy intelligent processes and
bots using process automation,
data, and cognitive chat
API
SPOTLIGHT ON TECHNOLOGY
Provide a consistent, superior client experience by creating
an integrated ecosystem which meets clients where they
are and brings SunTrust into their experiences
1
Enhance the efficiency
and effectiveness of
the Company
2
Provides relevant, tailored, and timely
offers across client segments
Improves teammate effectiveness
through smarter client insight
Impact
Serves as a client’s single source for
financial confidence and increases
relevance with clients
Improves ability to leverage third party
partnerships (created first API between
Blend & Black Knight)
Increases agility & lowers cost to serve
(cloud migration has eliminated ~$15
million in costs, more to come)
Shortens loan cycle times and
streamlines end-to-end origination
Provides scalable, cloud-based loan
origination platforms
Improves service delivery and speed
Reduces opportunity for human error
Improves efficiency
Primary
Objectives
Digitize front-end of mortgage application
15
Business Value
•Connects with Clients: leverages APIs to connect
to other channels outside of traditional banking (branch,
ATM, call center)
•Flexibility: segment specific functionality (e.g. advisor
info, entitlements) and differentiated visual treatment
•Efficiency: reusable components with less duplication
of key functionality (e.g. money movement)
•Speed to Market: scalable portal infrastructure
and modular framework with built-in integrations
SPOTLIGHT ON TECHNOLOGY
Enterprise Client Portal
Client Value
•Holistic, Tailored User Experience: provides a
consolidated relationship view
• Integrated Planning Tools: enables clients to
establish a plan, set goals and track progress while also
providing valuable financial well-being resources
•Ease of Use: intuitive and simple user experience
based on industry-leading API and cloud technology
•Accessibility: responsive design with consistent
experience on any screen
16
Key Takeaways
• We will achieve our targets
• Fostering a culture of
continuous improvement is
as important as these goals
→We have significant
opportunity beyond
<60%
• Efficiencies generate
capacity to invest in
growth and do more for
our clients
IMPROVING EFFICIENCY: PROVEN SUCCESS &
FUTURE OPPORTUNITY
1. Adjusted figures are intended to provide management and investors information on trends that are more comparable across periods and potentially more comparable across institutions. There were no
adjustments in 2011, 2015, and 2016. GAAP efficiency ratios were 73.0%, 60.0%, 72.3%, 67.9%, 64.2%, 63.6%, and 64.1% for 2011, 2012, 2013, 2014, 2015, 2016, and 2017, respectively. Please refer to
appendix slide #23 for GAAP reconciliations
Adjusted
Tangible
Efficiency
Ratio1
71.5%
66.9%
65.3%
63.3%
62.6% 62.0%
61.0% 60-61%
<60%
2011 2012 2013 2014 2015 2016 2017 2018
TER Target
2019
TER Target
Adjusted
Tangible
Efficiency
Ratio
(FTE)1
3
STRONG CAPITAL
POSITION
SUPPORTS GROWTH
18
STRONG CAPITAL POSITION
103%
92%
SunTrust Peer Median
2.3%
2.0%
SunTrust Peer Median
Total Announced Payout Ratio3 Dividend Yield4
#4 of 12 #4 of 12
Provides Capacity to Repatriate Capital and
Deliver Above-Average Returns
Common Equity Tier 1
(fully phased-in)1 Stressed Capital Erosion
2
2.1%
2.6%
SunTrust Peer Median
#2 of 12
Strong Capital Position & Strong CCAR
Performance
9.6%
~8-9%
Basel III CET1 Target Level
See appendix slide #26 for footnotes
19
RECAP: WHY INVEST IN SUNTRUST?
Strong & Diverse Franchise; Investing in Growth
Targeting 7th consecutive year of EPS growth
1
Improving Efficiency & Returns
Targeting 7th consecutive year of improvements in efficiency
2
Strong Capital Position
Targeting 7th consecutive year of increased capital returns
Attractive dividend yield
3
APPENDIX
21
0.05%
0.13%
0.26%
0.31%
0.36% 0.36%
0.42%
0.46% 0.46% 0.47%
0.57%
0.77%
STI FITB MTB HBAN BBT USB KEY PNC RF CFG BAC WFC
4.53% 4.63% 4.78%
4.88% 5.13%
5.23% 5.28% 5.43%
5.63% 5.75%
6.50% 6.70%
STI HBAN BBT PNC CFG BAC KEY MTB FITB WFC RF USB
CCAR Average Loss Rate (2014-2017)
4 Year Standard Deviation of CCAR Average Loss Rate (2014-2017)
CCAR results continue to validate our consistent, disciplined underwriting & portfolio diversity
CONSISTENTLY STRONG CCAR PERFORMANCE
2014: 4.6%
2015: 4.5%
2016: 4.5%
2017: 4.5%
22
STRONG CREDIT QUALITY
4Q 17 Nonperforming Loan Ratio1
2017 Net Charge-Off Ratio2
1. Represents nonaccrual loans divided by total loans (excluding loans held for sale). Source: SNL Financial as of December 31, 2017
2. Source: SNL Financial as of December 31, 2017
0.28%
0.43% 0.47%
0.53% 0.55%
0.57%
0.73%
0.78% 0.82%
0.83% 0.84%
0.96%
BBT USB STI FITB HBAN KEY BAC CFG WFC RF PNC MTB
0.16%
0.21%
0.23% 0.24% 0.25%
0.28%
0.30%
0.32%
0.37% 0.38%
0.43%
0.48%
MTB PNC HBAN KEY STI CFG WFC FITB BBT RF BAC USB
23
2011 2012 2013 2014 2015 2016 2017
Reported (GAAP) Basis
Net Interest Income 5,065 5,102 4,853 4,840 4,764 5,221 5,633
Noninterest Income 3,421 5,373 3,214 3,323 3,268 3,383 3,354
Revenue 8,486 10,475 8,067 8,163 8,032 8,604 8,987
Noninterest Expense¹ 6,194 6,284 5,831 5,543 5,160 5,468 5,764
Efficiency Ratio 73.0% 60.0% 72.3% 67.9% 64.2% 63.6% 64.1%
Reconciliation:
Net Interest Income 5,065 5,102 4,853 4,840 4,764 5,221 5,633
FTE Adjustment 114 123 127 142 142 138 145
Net Interest Income-FTE 5,179 5,225 4,980 4,982 4,906 5,359 5,778
Noninterest Income 3,421 5,373 3,214 3,323 3,268 3,383 3,354
Revenue-FTE 8,600 10,598 8,194 8,305 8,174 8,742 9,132
Efficiency Ratio-FTE 72.0% 59.3% 71.2% 66.7% 63.1% 62.6% 63.1%
Adjustment Items (Noninterest Income):
3Q-4Q 12 student / Ginnie Mae loan sale (losses) (92)
Securities gain related to the sale of Coca Cola stock 1,938
Pre-tax mortgage repurchase provision related to loans sold to GSEs prior to 2009 (371)
GSE mortgage repurchase settlements (63)
RidgeWorth sale 105
Premium Assignment Corporation sale 107
Securities & MSR losses in connection with tax reform-related actions (114)
Adjusted Noninterest Income 3,421 3,898 3,277 3,218 3,268 3,383 3,361
Adjusted Revenue-FTE² 8,600 9,123 8,257 8,200 8,174 8,742 9,139
Noninterest Expense¹ 6,194 6,284 5,831 5,543 5,160 5,468 5,764
Adjustment Items (Noninterest Expense):
Legacy affordable housing impairment 96
Charitable contribution of KO shares 38
Impact of certain legacy mortgage legal matters 323 324
Mortgage servicing advances allowance increase 96
Efficiency related charges as outlined in 12/4/17 8-K 36
Contribution to communities / teammates in connection with tax-reform 75
Adjusted Noninterest Expense² 6,194 6,150 5,412 5,219 5,160 5,468 5,653
Amortization Expense 43 46 23 25 40 49 75
Adjusted Tangible Expenses² 6,151 6,104 5,389 5,194 5,120 5,419 5,578
Adjusted Efficiency Ratio-FTE³ 72.0% 67.4% 65.6% 63.7% 63.1% 62.6% 61.9%
Adjusted Tangible Efficiency Ratio-FTE³ 71.5% 66.9% 65.3% 63.3% 62.6% 62.0% 61.0%
RECONCILIATION: ADJUSTED EFFICIENCY RATIO (FTE) &
ADJUSTED TANGIBLE EFFICIENCY RATIO (FTE)
1. In accordance with updated GAAP, amortization of affordable housing investments of $40 million, $39 million, and $49 million were reclassified and are now presented in provision for income taxes for 2011,
2012, and 2013, respectively. Previously, the amortization was presented in other noninterest expense
2. Adjusted revenue and expenses are provided as they remove certain items that are material and potentially non-recurring. Adjusted figures are intended to provide management and investors information on
trends that are more comparable across periods and potentially more comparable across institutions
3. Represents adjusted noninterest expense / adjusted revenue – FTE. Adjusted tangible efficiency ratio excludes amortization expense, the impact of which is (0.50%), (0.50%), (0.28%), (0.30%), (0.49%),
(0.56%), and (0.82%) for 2011, 2012, 2013, 2014, 2015, 2016, and 2017, respectively
24
RECONCILIATION OF EARNINGS PER SHARE
($ in millions, except per share amounts) 2012 2013 2014 2017
Net income available to common shareholders $1,931 $1,297 $1,722 $2,179
Significant items impacting the year:
Securities gains related to sale of Coke stock (1,938) - - -
Mortgage repurchase provision 371 - - -
Charitable expense related to the Coke stock contribution 38 - - -
Provision for credit losses related to NPL sales 172 - - -
Losses on sale of guaranteed loans 92 - - -
Valuation losses related to planned sale of Affordable Housing investments 96 - - -
Charges for legacy mortgage-related matters - 482 324 -
Gain on sale of Ridgeworth - - (105) -
Gain on sale of Premium Assignment Corporation - - - (107)
Securities & MSR losses in connection with tax reform-related actions - - - 114
Contribution to communities / teammates in connection with tax-reform - - - 75
Efficiency related charges as outlined in 12/4/17 8-K - - - 36
Tax (benefit)/expense related to above items 416 (190) (82) (42)
Net tax benefit related to subsidiary reorganization and other - (113) - -
Tax benefit related to completion of tax authority examination - - (130) -
Net tax benefit related to revaluation of net deferred tax liability and other discrete tax items - - - (291)
Tax expense related to SunTrust Mortgage ("STM") state NOL valuation allowance adjustment - - - 27
Net income available to common shareholders, excluding significant items impacting the year $1,178 $1,476 $1,729 $1,991
Net income per average common share, diluted $3.59 $2.41 $3.23 $4.47
Net income per average common share, diluted, excluding significant items impacting the year $2.19 $2.74 $3.24 $4.09
25
RECONCILIATION: COMMON EQUITY TIER 1 RATIO1
1. The Common Equity Tier 1 ratio is subject to certain phase-in requirements under Basel III beginning in 2015, and as such we have presented a reconciliation of the Common Equity Tier 1 ratio as calculated
considering the phase-in requirements (Common Equity Tier 1 – Transitional) to the fully phased-in ratio
2. Primarily includes the phase-out from capital of certain DTAs, the overfunded pension asset, and other intangible assets
3. Primarily relates to the increased risk weight to be applied to mortgage servicing assets on a fully phased-in basis
Note: Totals may not foot due to rounding
4Q 17
Common Equity Tier 1 – Transitional $17.1
Adjustments2 (0.0)
Common Equity Tier 1 – Fully phased-in $17.1
Risk-weighted Assets: Common Equity Tier 1 – Transitional $176.0
Adjustments3 2.7
Risk-weighted Assets: Common Equity Tier 1 – Fully phased-in $178.6
Common Equity Tier 1 – Transitional 9.7%
Common Equity Tier 1 – Fully phased-in 9.6%
($ in billions)
26
FOOTNOTES
All Slides:
Note: Peer group includes BAC, BBT, CFG, FITB, HBAN, KEY, MTB, PNC, RF, USB, WFC
Slide #11:
1. Yield and NCO represent FY 2017
2. SunTrust has a loss sharing agreement with GreenSky. 0.00% NCO indicates that losses have not exceeded those provided for in the loss share agreement
3. Refers to the 2017 LendIt Conference, a global conference series connecting the online lending community
4. Represents FICO at the time of origination
Slide #18:
1. Common equity tier 1 ratio (transitional) is 9.7%. Please refer to slide #25 for the reconciliation to GAAP
2. Represents the difference between the starting and minimum Basel III Common Equity Tier 1 Ratios resulting from the Federal Reserve’s 2017 CCAR severely adverse scenario. Following the release of 2017
DFAST Results, SunTrust investigated the driver of $1.1B in ‘other losses’ projected by the FRB. This loss resulted from a conservative interpretation of regulatory reporting requirements, which has since been
adjusted. Going forward this loss is expected to be ~$0.1B. Therefore, $1.0 billion of losses are excluded from the capital erosion in the 2017 DFAST results, which reduces stressed capital erosion to 2.1% from
2.5%
3. Payout Ratio = (Common Stock Dividends and Share Repurchases) / Net Income Available to Common Shareholders. Source: Barclays Research CCAR 2017 Review: $132bn of Capital to Be Returned Over Next 4
Quarters
4. As of March 1, 2018
Slide #10:
1. Source: Finalta study conducted by McKinsey. Represents total 90-day active digital users / total customers as of June 2017
2. Source: Finalta study conducted by McKinsey. Represents mobile check deposits / total cash and check deposits from July 2016–June 2017
3. Source: Finalta study conducted by McKinsey. Represents digital core product sales units / total core product sales units from July 2016–July 2017
4. Source: Finalta study conducted by McKinsey. Represents new-to-bank customers enrolled for digital / total new-to-bank customers acquired from July 2016–July 2017
Slide #3:
1. Source: SNL Financial, as of June 30, 2017, based on top 10 MSAs (by deposits) for each institution, pro-forma for completed and pending mergers and acquisitions. Numerator is company’s total deposits in its top
10 MSAs and denominator is total deposits in those 10 MSAs
2. Refers to rank amongst U.S. bank holding companies and excludes non-traditional banks. Asset and loan rankings are sourced via bank holding company regulatory filings (Y-9C) and are as of December 31, 2017.
Deposit rankings are sourced via FDIC deposit market share data, and are as of June 30, 2017, pro-forma for completed and pending mergers and acquisitions
3. Assets, loans, and deposits as of December 31, 2017
4. Represents adjusted EPS growth from FY 16 to FY 17 (reported EPS growth was 24%)
5. Represents adjusted return on tangible common equity. Reported ROTCE: 13.4%, impact of excluding discrete items is (1.2%)
6. As of March 1, 2018
Slide #7:
1. Refers to market share across Dealogic-tracked products (debt capital markets, M&A, and equity capital markets) within middle market and mid-corporate client coverage universe of STRH, based on Dealogic’s
data. Client coverage universe consists of a combination of Corporate Banking and Investment Banking client populations as well as any completed transactions where Dealogic has deemed STRH to have had a
role. (Latter generally relates to clients within non-CIB segments for whom STRH has delivered capital markets solutions.)
2. Represents change of FY 16 vs. FY 17