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Actionable news in STI: SUNTRUST BANKS Inc,

Suntrust Reports First Quarter 2016 Results

The following excerpt is from the company's SEC filing.

Solid Revenue Momentum and Continued Expense Discipline

Result in Positive Operating Leverage and Strong Earnings Growth

ATLANTA -- SunTrust Banks, Inc. (NYSE: STI) reported net income available to common shareholders of

$430 million

per average common diluted share. This compares to

per share in the prior quarter, which was favorably impacted by discrete items totaling $0.03 per share, and $0.78 per share in the

first quarter

. Earnings per share for the current quarter increased 8% compared to a year ago.

“We delivered solid revenue growth this quar ter as we

continued to meet

more client needs across each of our businesses, benefiting from our diverse business model and consistent strategies,” said William H. Rogers, Jr., chairman and CEO of SunTrust Banks, Inc. “This revenue performance, combined with continued expense discipline, resulted in a good start to the year with 8% earnings growth. We remain highly focused on improving the financial well-being of our clients and

communities and delivering increased value to our

shareholders.”

First Quarter

Financial Highlights

Income Statement

Net income available to common shareholders was

per average common diluted share, compared to

for the fourth quarter of 2015, which included $0.03 per share in discrete tax benefits.

Earnings per share for the current quarter increased 8% compared to the first quarter of 2015.

Total revenue increased 3% compared to the prior quarter and

Sequential revenue growth was driven by a 3% increase in net interest income, as well as 2% growth in noninterest income.

Higher net interest income in the current quarter more than offset the 4% decline in noninterest income compared to the first quarter of 2015.

Net interest margin was 3.04% in the current quarter, up 6 basis points and 21 basis points compared to the prior quarter and first quarter of 2015, respectively.

Provision for credit losses increased, both sequentially and compared to the prior year, due to loan growth, higher energy-related reserves, and moderating asset quality improvements.

Noninterest expense

sequentially, driven by seasonality in employee compensation and benefits costs.

Noninterest expense increased

compared to the first quarter of 2015 largely due to higher marketing and outside processing costs associated with the expansion of our business.

The efficiency and tangible efficiency ratios in the current quarter were

, respectively, which were generally stable compared to the prior quarter and much improved compared to the first quarter of 2015.

Balance Sheet

Average loan balances increased 2% sequentially and 4% compared to the first quarter of 2015, with growth across most loan categories.

Average consumer and commercial deposits

sequentially and 6% compared to the prior year.

Capital

Estimated capital ratios continue to be well above regulatory requirements. The Common Equity Tier 1 ratio was estimated to be

as of

March 31, 2016

, on a fully phased-in basis.

During the quarter, the Company repurchased $175 million of common stock and common stock warrants in accordance with its 2015 capital plan.

Book value per share was

$44.97

, and tangible book value per share was

$32.90

, respectively, compared to December 31, 2015.

Asset Quality

Nonperforming loans increased

$303 million

from the prior quarter and represented

of total loans at

. The sequential increase was largely due to downgrades of certain energy-related loans.

Net charge-offs for the current quarter were

$85 million

of average loans on an annualized basis, relatively stable compared to the prior quarter and down

$14 million

The provision for credit losses increased

$50 million

sequentially due loan growth, higher energy-related reserves, and moderating asset quality improvements.

, the allowance for loan and lease losses (ALLL) to period-end loans ratio was

basis points lower than the prior quarter, as a higher ALLL for commercial loans was generally offset by a lower ALLL for residential loans.

Presented on a fully taxable-equivalent basis

Income Statement

(Dollars in millions, except per share data)

1Q 2016

4Q 2015

3Q 2015

2Q 2015

1Q 2015

Net interest income

$1,318

$1,281

$1,247

$1,203

$1,175

Noninterest income

Earnings per average common diluted share

(Dollars in billions)

Average loans

$138.4

$135.2

$132.8

$133.3

Capital ratios at period end

Tier 1 capital (transitional)

Common Equity Tier 1 ("CET1") (transitional)

Common Equity Tier 1 ("CET1") (fully phased-in)

Total average shareholders’ equity to total average assets

Net charge-offs to average loans (annualized)

Allowance for loan and lease losses to period-end loans

Nonperforming loans to total loans

Current period Tier 1 capital and CET1 ratios are estimated as of the date of this news release.

See page 21 for non-U.S. GAAP reconciliation

Consolidated Financial Performance Details

(Presented on a fully taxable-equivalent basis unless otherwise noted)

Total revenue was

$2.1 billion

for the current quarter, an increase of

$53 million

compared to the prior quarter. The increase was primarily driven by higher net interest income as a result of loan growth and net interest margin expansion, as well as higher mortgage-related and capital markets revenue. Compared to the

of 2015, total revenue increased $107 million as higher net interest income was partially offset by lower noninterest income.

Net Interest Income

(Presented on a fully taxable-equivalent basis)

Net interest income was

$1.3 billion

$37 million

compared to the prior quarter. The increase was primarily due to loan growth and higher loan yields due to the rise in short-term benchmark interest rates. Compared to the

of 2015, the

$143 million

increase in net interest income was driven by growth in average earning asset balances and yields, and a decline in interest-bearing liability rates.

Net interest margin for the current quarter was

in the prior quarter and

in the first quarter of 2015. When compared to the prior quarter, the 6 basis point increase was driven largely by higher loan yields, partially offset by slightly higher funding costs. The 21 basis point increase compared to the first quarter of 2015 was due primarily to higher benchmark interest rates, improved loan mix, lower securities premium amortization, and an increase in commercial loan-related swap income, all of which contributed to a 19 basis point increase in earning asset yields. Strong deposit growth enabled a 34% reduction in long-term debt, resulting in an improved funding mix and a 2 basis point decline in interest-bearing liability rates.

Noninterest Income

Noninterest income was

$781 million

for the current quarter, compared to

$765 million

for the prior quarter and

$817 million

of 2015. The

$16 million

increase from the prior quarter was related primarily to higher mortgage-related and capital markets revenue, partially offset by declines in other noninterest income categories. Compared to the first quarter of 2015, noninterest income decreased

$36 million

, driven by lower wealth management-related income in the current quarter and asset disposition gains in the prior year.

Investment banking income was

$98 million

$104 million

$97 million

of 2015. The $6 million decrease from the prior quarter was largely driven by a decline in equity originations and M&A activity given market conditions in the first quarter of 2016.

Trading income was

$55 million

$42 million

of 2015. The $13 million sequential increase was driven primarily by mark-to-market valuation losses recognized in the fourth quarter of 2015 related to securities that were ultimately sold in the first quarter.

Mortgage production income for the current quarter was

$60 million

$83 million

of 2015. The $7 million

from the prior quarter was primarily due to

higher refinance activity and slightly higher gain-on-sale margins

. Mortgage application volume increased 37% compared to the fourth quarter of 2015. The $23 million decrease compared to the first quarter of 2015 was driven primarily by a decline in gain-on-sale margins and reduced refinance activity.

Mortgage servicing income was

$62 million

$56 million

$43 million

of 2015. The $6 million increase from the prior quarter was driven by improved net hedge performance combined with a decline in the servicing asset decay, partially offset by a seasonal reduction in servicing fees. The $19 million increase compared to the first quarter of 2015 was also due to improved net hedge performance and a decline in the servicing asset decay, accompanied by higher servicing fees as a result of a larger portfolio. The servicing portfolio was

$149 billion

$142 billion

March 31

. The Company purchased MSRs on residential loans with a UPB of $8.1 billion during the three months ended March 31, 2016; however, only $1.8 billion of these loans are reflected in the aforementioned UPB amount as the transfer of servicing for the remainder is scheduled for the second quarter of 2016.

Trust and investment management income was

$75 million

for the current quarter, compared to $79 million in the prior quarter and

$84 million

$9 million

decrease compared to the prior year was due to a decline in assets under management.

Other noninterest income was

$38 million

$30 million

in the prior quarter and $63 million in the

of 2015. The $8 million increase compared to the prior quarter was due to higher leasing-related income. The $25 million decrease compared to the first quarter of 2015 was largely due to an $18 million gain on the sale of affordable housing investments and higher gains on the sale of loans during the first quarter of 2015.

Noninterest Expense

Noninterest expense was

in the current quarter, an

compared to the prior quarter and the first quarter of 2015, respectively. The sequential increase was primarily due to the seasonal increase in employee benefit costs while other expenses remained well controlled as a result of our ongoing expense discipline. The increase compared to the first quarter of 2015 was largely due to higher outside processing costs and the increase in marketing and customer development expenses associated with our campaign to further advance the Company's purpose.

Employee compensation and benefits expense was

$774 million

in the current quarter, compared to

$690 million

$771 million

of 2015. The sequential increase of

was due to the seasonal increase in employee benefits costs.

Operating losses were

$24 million

$22 million

of 2015. The $10 million increase compared to the prior year was primarily due to the recovery of previously recorded mortgage-related losses during the first quarter of 2015.

Outside processing and software expense was

$198 million

$222 million

$189 million

of 2015. The sequential decrease of $24 million was due to the recognition of discrete costs in prior quarter and normal quarterly variability. The increase from the first quarter of 2015 was driven by higher utilization of third-party services as a result of continued expansion of our businesses, in addition to higher compliance costs.

Marketing and customer development expense was

$44 million

$48 million

$27 million

of 2015. The increase over the first quarter of 2015 was due largely to the aforementioned marketing campaign.

Other noninterest expense was

in the current quarter, compared to $127 million in the prior quarter, and

$111 million

of 2015. The $20 million decline compared to the prior quarter was driven by lower consulting and credit-related expenses. Amortization expense decreased $7 million sequentially due to increased investments in low-income community development projects in the fourth quarter.

Income Taxes

For the current quarter, the Company recorded an income tax provision of

$195 million

$185 million

$191 million

of 2015. The effective tax rate for the current quarter was

of 2015. The effective tax rate in the prior quarter was favorably impacted by $17 million in discrete income tax items.

, the Company had total assets of

$194.2 billion

and total shareholders’ equity of

$24.1 billion

, representing

of total assets. Book value per share was

December 31, 2015

, driven by growth in retained earnings and an increase in accumulated other comprehensive income driven by the decline in long-term interest rates.

Average performing loans were

$137.6 billion

for the current quarter, a

over the prior quarter and a

. Sequentially, growth in average C&I loans, consumer loans, nonguaranteed residential mortgages, and commercial construction loans of

$1.7 billion

$896 million

$387 million

$296 million

, respectively, was partially offset by a $312 million decline in home equity products.

, growth was concentrated in C&I loans, nonguaranteed residential mortgages, consumer direct loans, and commercial construction loans. This growth was partially offset by declines in home equity products and commercial real estate loans, as well as consumer indirect loans due to the $1 billion indirect auto loan securitization in the second quarter of 2015.

Deposits

Average consumer and commercial deposits for the current quarter were

$149.2 billion

increase over the prior quarter and a

. The sequential increase was driven by a

increase in both NOW and money market account balances, partially offset by a 1% decline in noninterest-bearing deposits. Compared to the

, the increase was driven by growth in lower-cost deposits, primarily NOW and money market account balances, partially offset by an

decline in time deposits.

Capital and Liquidity

The Company’s estimated capital ratios were well above current regulatory requirements with the Common Equity Tier 1 ratio estimated to be

, on a fully phased-in basis. The ratios of average total equity to average total assets and tangible equity to tangible assets were

12.33%

, respectively, at

. The Company continues to have substantial available liquidity in the form of cash, high-quality government-backed or government-sponsored securities, and other available contingency funding sources.

Per its 2015 capital plan, the Company declared a common stock dividend of

per common share and repurchased $151 million of its outstanding common stock and $24 million of its common stock warrants in the

of 2016. The Company will repurchase $175 million of common stock in the second quarter of 2016 to complete its 2015 capital plan.

Total nonperforming assets were

$1.0 billion

, up $300 million and $339 million compared to the prior quarter and the

, respectively. These increases were primarily due to downgrades of certain energy-related loans. At

, the percentage of nonperforming loans to total loans was

. Other real estate owned totaled

$52 million

from the prior quarter and a

Net charge-offs were

during the current quarter, relatively stable compared to the prior quarter and a decrease of

. The ratio of annualized net charge-offs to total average loans was

during the current quarter, compared to

during the prior quarter and

. The provision for credit losses was

$101 million

in the current quarter, an increase of

$46 million

, respectively. The increase in the provision for credit losses was due loan growth, higher energy-related reserves, and moderating asset quality improvements.

, the allowance for loan and lease losses was

, which represented

of total loans, an increase of

. Excluding government-guaranteed and fair value loans, the allowance for loan and lease losses to period-end loans ratio was

Early stage delinquencies declined 3 basis points from the prior quarter to 0.67% at

. Excluding government-guaranteed loans, early stage delinquencies were 0.29%, down 1 basis point from the prior quarter.

Accruing restructured loans totaled

$2.6 billion

and nonaccruing restructured loans totaled

$233 million

, of which

were residential loans,

$131 million

were consumer loans, and

$69 million

were commercial loans.

OTHER INFORMATION

About SunTrust Banks, Inc.

SunTrust Banks, Inc. is a purpose-driven company dedicated to Lighting the Way to Financial Well-Being for the people, businesses, and communities it serves. Headquartered in Atlanta, the Company has three business segments: Consumer Banking and Private Wealth Management, Wholesale Banking, and Mortgage Banking. Its flagship subsidiary, SunTrust Bank, operates an extensive branch and ATM network throughout the high-growth Southeast and Mid-Atlantic states, along with 24-hour digital access. Certain business lines serve consumer, commercial, corporate, and institutional clients nationally. As of

, SunTrust had total assets of

$194 billion

and total deposits of

$152 billion

. The Company provides deposit, credit, trust, investment, mortgage, asset management, securities brokerage, and capital market services. SunTrust leads onUp, a national movement inspiring Americans to build financial confidence. Join the movement at onUp.com.

Business Segment Results

The Company has included its business segment financial tables as part of this release. All revenue in the business segment tables is reported on a fully taxable-equivalent basis. For the business segments, results include net interest income, which is computed using matched-maturity funds transfer pricing. Further, provision for credit losses represents net charge-offs by segment combined with an allocation to the segments of the provision attributable to quarterly changes in the allowance for loan and lease losses and unfunded commitment reserve balances. SunTrust also reports results for Corporate Other, which includes the Treasury department as well as the residual expense associated with operational and support expense allocations. The Corporate Other segment also includes differences created between internal management accounting practices and U.S. Generally Accepted Accounting Principles ("U.S. GAAP") and certain matched-maturity funds transfer pricing credits and charges. A detailed discussion of the business segment results will be included in the Company’s forthcoming Form 10-Q.

Corresponding Financial Tables and Information

Investors are encouraged to review the foregoing summary and discussion of SunTrust’s earnings and financial condition in conjunction with the detailed financial tables and information which SunTrust has also published today and SunTrust’s forthcoming Form 10-Q. Detailed financial tables and other information are also available at investors.suntrust.com. This information is also included in a current report on Form 8-K furnished with the SEC today.

Conference Call

SunTrust management will host a conference call on

April 22

, at 8:00 a.m. (Eastern Time) to discuss the earnings results and business trends. Individuals may call in beginning at 7:45 a.m. (Eastern Time) by dialing 1-888-972-7805 (Passcode: 1Q16). Individuals calling from outside the United States should dial 1-517-308-9091 (Passcode: 1Q16). A replay of the call will be available approximately one hour after the call ends on

, and will remain available until May 22,

, by dialing 1-866-402-3772 (domestic) or 1-203-369-0559 (international). Alternatively, individuals may listen to the live webcast of the presentation by visiting the SunTrust investor relations website at investors.suntrust.com. Beginning the afternoon of

, listeners may access an archived version of the webcast in the “Events & Presentations” section of the investor relations website. This webcast will be archived and available for one year.

Important Cautionary Statement About Forward-Looking Statements

This news release includes non-GAAP financial measures to describe SunTrust’s performance. The reconciliations of those measures to GAAP measures are provided within or in the appendix to this news release. In this news release, the Company presents net interest income and net interest margin on a fully taxable-equivalent (“FTE”) basis, and ratios on an annualized basis. The FTE basis adjusts for the tax-favored status of income from certain loans and investments. The Company believes this measure to be the preferred industry measurement of net interest income and provides relevant comparison between taxable and non-taxable amounts.

This news release contains forward-looking statements. Statements regarding potential future share repurchases and future expected dividends are forward-looking statements. Also, any statement that does not describe historical or current facts is a forward-looking statement. These statements often include the words “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “forecast,” “goals,” “targets,” “initiatives,” “focus,” “potentially,” “probably,” “projects,” “outlook” or similar expressions or future conditional verbs such as “may,” “will,” “should,” “would,” and “could.” Forward-looking statements are based upon the current beliefs and expectations of management and on information currently available to management. Our statements speak as of the date hereof, and we do not assume any obligation to update these statements or to update the reasons why actual results could differ from those contained in such statements in light of new information or future events.

Forward-looking statements are subject to significant risks and uncertainties. Investors are cautioned against placing undue reliance on such statements. Actual results may differ materially from those set forth in the forward looking statements. Future dividends, and the amount of any such dividend, must be declared by our board of directors in the future in their discretion. Also, future share repurchases and the timing of any such repurchase are subject to market conditions and management's discretion. Additional factors that could cause actual results to differ materially from those described in the forward-looking statements can be found in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended

and in other periodic reports that we file with the SEC.

SunTrust Banks, Inc. and Subsidiaries

FINANCIAL HIGHLIGHTS

(Dollars in millions and shares in thousands, except per share data) (Unaudited)

Three Months Ended March 31

Change

EARNINGS & DIVIDENDS

Total revenue - FTE

Net income per average common share:

Diluted

Dividends paid per common share

CONDENSED BALANCE SHEETS

Selected Average Balances:

Total assets

$193,014

$189,265

Earning assets

174,189

168,179

138,372

133,338

Intangible assets including mortgage servicing rights ("MSRs")

Consumer and commercial deposits

149,229

140,476

Brokered time and foreign deposits

Total shareholders’ equity

23,797

23,172

Preferred stock

Period End Balances:

194,158

189,881

175,710

168,269

139,746

132,380

Allowance for loan and lease losses ("ALLL")

151,264

143,239

24,053

23,260

FINANCIAL RATIOS & OTHER DATA

Return on average total assets

Return on average common shareholders’ equity

Return on average tangible common shareholders' equity

Net interest margin

Efficiency ratio

Tangible efficiency ratio

Effective tax rate

Basel III capital ratios at period end (transitional)

Total capital

Basel III fully phased-in CET1 ratio

Tangible equity to tangible assets

Book value per common share

$42.01

Tangible book value per common share

Market capitalization

18,236

21,450

Average common shares outstanding:

509,931

526,837

505,482

521,020

Full-time equivalent employees

23,945

24,466

Number of ATMs

Full service banking offices

See Appendix A for reconcilements of non-U.S. GAAP performance measures.

Total revenue, net interest margin, and efficiency ratios are presented on a fully taxable-equivalent (“FTE”) basis. The FTE basis adjusts for the tax-favored status of net interest income from certain loans and investments. The Company believes this measure to be the preferred industry measurement of net interest income and it enhances comparability of net interest income arising from taxable and tax-exempt sources. Total revenue - FTE equals net interest income on an FTE basis plus noninterest income.

Prior period amounts have been updated to remove noncontrolling interest from common shareholders' equity in the calculation.

Current period capital ratios are estimated as of the earnings release date.

FIVE QUARTER FINANCIAL HIGHLIGHTS

September 30

June 30

$189,656

$188,341

$188,310

170,262

168,334

168,461

135,214

132,837

132,829

Intangible assets including MSRs

148,163

145,226

142,851

23,583

23,384

23,239

190,817

187,036

188,858

172,114

168,555

168,499

136,442

133,560

132,538

148,921

145,337

143,922

23,437

23,664

23,223

Efficiency ratio

Tangible efficiency ratio

$43.45

$43.44

$42.26

21,793

19,659

22,286

514,507

518,677

522,479

508,536

513,010

516,968

24,043

24,124

24,237

CONSOLIDATED STATEMENTS OF INCOME

Increase/(Decrease)

Amount

Interest income

$1,411

$1,272

Interest expense

NET INTEREST INCOME

NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES

NONINTEREST INCOME

Service charges on deposit accounts

Other charges and fees

Card fees

Retail investment services

Mortgage production related income

Mortgage servicing related income

Total noninterest income

NONINTEREST EXPENSE

Net occupancy expense

Equipment expense

FDIC premium/regulatory exams

Total noninterest expense

INCOME BEFORE PROVISION FOR INCOME TAXES

Provision for income taxes

NET INCOME INCLUDING INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST

Net income attributable to noncontrolling interest

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS

Net interest income - FTE

Cash dividends paid per common share

(16,906

(15,538

Net interest income includes the effects of FTE adjustments using a federal tax rate of 35% and state income taxes where applicable to increase tax-exempt interest income to a taxable-equivalent basis. See Appendix A for a reconcilement of this non-U.S. GAAP measure to the related U.S.GAAP measure.

FIVE QUARTER CONSOLIDATED STATEMENTS OF INCOME

$1,363

$1,333

$1,297

Card fees

Net securities gains

(4,576

(3,054

Net interest income includes the effects of FTE adjustments using a federal tax rate of 35% and state income taxes where applicable to increase tax-exempt interest income to a taxable-equivalent basis. See Appendix A for a reconcilement of this non-U.S. GAAP measure to the related U.S. GAAP measure.

CONSOLIDATED BALANCE SHEETS

(Decrease)/Increase

ASSETS

Cash and due from banks

$3,074

$6,483

($3,409

Federal funds sold and securities borrowed or purchased under agreements to resell

Interest-bearing deposits in other banks

Trading assets and derivative instruments

Securities available for sale

28,188

26,761

Loans held for sale ("LHFS")

(1,493

Loans held for investment:

Commercial and industrial ("C&I")

68,963

65,574

Commercial real estate ("CRE")

Commercial construction

Residential mortgages - guaranteed

Residential mortgages - nonguaranteed

25,148

23,419

Residential home equity products

12,845

13,954

(1,109

Residential construction

Consumer student - guaranteed

Consumer other direct

Consumer indirect

10,522

10,336

Consumer credit cards

Total loans held for investment

(1,770

(1,893

Net loans held for investment

137,976

130,487

Goodwill

Other intangible assets

Other assets

Total assets

$194,158

$189,881

$4,277

LIABILITIES

Deposits:

Noninterest-bearing consumer and commercial deposits

$42,256

$42,376

Interest-bearing consumer and commercial deposits:

NOW accounts

39,273

34,574

Money market accounts

53,327

49,430

Savings

Consumer time

Other time

Total consumer and commercial deposits

Brokered time deposits

Foreign deposits

Total deposits

152,161

144,423

Funds purchased

Securities sold under agreements to repurchase

Other short-term borrowings

Long-term debt

13,012

(4,498

Trading liabilities and derivative instruments

Other liabilities

Total liabilities

170,105

166,621

SHAREHOLDERS' EQUITY

Preferred stock, no par value

Common stock, $1.00 par value

Additional paid-in capital

Retained earnings

14,999

13,600

Treasury stock, at cost, and other

(1,759

(1,124

Accumulated other comprehensive income/(loss), net of tax

Total shareholders' equity

Total liabilities and shareholders' equity

Common shares outstanding

505,443

522,031

(16,588

Common shares authorized

750,000

Preferred shares outstanding

Preferred shares authorized

Treasury shares of common stock

44,478

27,890

Includes earning assets of

$175,710

$168,269

“NM” - Not meaningful. Those changes over 100 percent were not considered to be meaningful.

FIVE QUARTER CONSOLIDATED BALANCE SHEETS

$4,299

($1,225

$3,788

$5,915

27,825

27,270

27,113

67,062

65,371

65,713

24,744

24,351

24,038

13,171

13,416

13,672

10,127

10,119

(1,752

(1,786

(1,834

134,690

131,774

130,704

$190,817

$3,341

$187,036

$188,858

$42,272

$41,487

$42,773

38,990

36,164

35,125

51,783

51,628

49,586

149,830

146,371

144,937

10,109

167,380

163,372

165,635

SHAREHOLDERS’ EQUITY

14,686

14,341

13,944

(1,658

(1,451

(1,282

Total liabilities and shareholders’ equity

508,712

(3,269

514,106

518,045

41,209

35,815

31,876

$172,114

$168,555

$168,499

CONSOLIDATED DAILY AVERAGE BALANCES, INCOME/EXPENSE, AND AVERAGE YIELDS EARNED/RATES PAID

Increase/(Decrease) From

Sequential Quarter

Prior Year Quarter

(Dollars in millions) (Unaudited)

Balances

Interest Income/Expense

Yields/

Loans held for investment:

Commercial and industrial ("C&I") - FTE

$68,058

$66,405

$1,653

$2,333

24,712

24,325

12,849

13,161

(1,104

10,279

10,098

Nonaccrual

Total loans held for investment - FTE

Securities available for sale:

Taxable

27,164

26,823

Tax-exempt - FTE

Total securities available for sale - FTE

27,315

26,984

Loans held for sale ("LHFS") - FTE

Interest earning trading assets

Total earning assets - FTE

(1,750

(1,764

(2,552

14,639

14,525

Noninterest earning trading assets and derivative instruments

Unrealized gains on securities available for sale, net

$3,358

$3,749

LIABILITIES AND SHAREHOLDERS’ EQUITY

Interest-bearing deposits:

$37,994

$37,293

$4,835

53,063

52,250

Total interest-bearing consumer and commercial deposits

107,153

105,515

Total interest-bearing deposits

108,055

106,561

Interest-bearing trading liabilities

(1,347

(4,381

Total interest-bearing liabilities

123,278

119,644

Noninterest-bearing deposits

42,076

42,648

Noninterest-bearing trading liabilities and derivative instruments

Shareholders’ equity

Interest Rate Spread

Net Interest Income - FTE

Net Interest Margin

Interest income includes loan fees of

and $47 million for the three months ended

Interest income and yields include the effects of fully taxable-equivalent ("FTE") adjustments for the tax-favored status of net interest income from certain loans and investments using a federal income tax rate of 35% and, where applicable, state income taxes to increase tax-exempt interest income to a taxable-equivalent basis. The Company believes this measure to be the preferred industry measurement of net interest income and it enhances comparability of net interest income arising from taxable and tax-exempt sources.

Net interest margin is calculated by dividing annualized net interest income - FTE by average total earning assets.

CONSOLIDATED DAILY AVERAGE BALANCES, INCOME/EXPENSE, AND AVERAGE YIELDS EARNED/RATES PAID, continued

September 30, 2015

June 30, 2015

March 31, 2015

C&I - FTE

$65,269

$65,743

$65,725

24,109

23,479

23,104

13,381

13,657

13,953

10,284

10,708

26,621

26,175

25,676

Tax-exempt - FTE

26,791

26,355

25,868

LHFS - FTE

(1,804

(1,864

(1,910

14,522

14,649

14,417

$35,784

$34,356

$33,159

51,064

49,527

49,193

103,075

100,548

99,184

104,085

101,666

100,434

12,410

13,018

119,214

119,120

120,994

42,151

42,303

41,292

Net Interest Income - FTE

Net Interest Margin

Interest income includes loan fees of $50 million, $48 million, and

Interest income and yields include the effects of fully taxable-equivalent ("FTE") adjustments for the tax-favored status of net interest income from certain loans and investments using a federal income tax rate of 35% and, where applicable, state income taxes to increase tax-exempt interest income to a taxable-equivalent basis. The Company believes this measure to be the preferred industry measurement of net interest income and it enhances comparability of net interest income arising from taxable and tax-exempt sources.

OTHER FINANCIAL DATA

(Decrease)/Increase

CREDIT DATA

Allowance for credit losses, beginning of period

$1,815

$1,991

(Benefit)/provision for unfunded commitments

Provision/(benefit) for loan losses:

Total provision for loan losses

Charge-offs:

Total charge-offs

Recoveries:

Total recoveries

Allowance for credit losses, end of period

$1,831

$1,947

Components:

$1,770

$1,893

Unfunded commitments reserve

Net charge-offs to average loans held for investment (annualized):

Total net charge-offs to total average loans held for investment

Period Ended

Nonaccrual/nonperforming loans ("NPLs"):

Total nonaccrual/NPLs

Other real estate owned (“OREO”)

Other repossessed assets

Total nonperforming assets ("NPAs")

$1,035

$2,569

$2,589

Nonaccruing restructured loans

Accruing loans held for investment past due > 90 days (guaranteed)

Accruing loans held for investment past due > 90 days (non-guaranteed)

Accruing LHFS past due > 90 days

NPLs to total loans held for investment

NPAs to total loans held for investment plus OREO, other repossessed assets, and nonperforming LHFS

ALLL to period-end loans held for investment

ALLL to period-end loans held for investment,

excluding government-guaranteed and fair value loans

ALLL to NPLs

(1.27x)

ALLL to annualized net charge-offs

This ratio is computed using the allowance for loan and lease losses.

Loans carried at fair value were excluded from the calculation.

See Appendix A for reconciliation of non-U.S. GAAP performance measures.

"NM" - Not meaningful. Those changes over 100 percent were not considered to be meaningful.

FIVE QUARTER OTHER FINANCIAL DATA

$1,847

$1,886

$1,752

$1,786

$1,834

Nonaccrual/NPLs:

Nonperforming LHFS

Total NPAs

$2,603

$2,571

$2,576

ALLL to period-end loans held for investment,

(0.79x)

(0.13x)

OTHER FINANCIAL DATA, continued

MSRs -

Fair Value

OTHER INTANGIBLE ASSETS ROLLFORWARD

Balance, beginning of period

$1,206

$1,219

Servicing rights originated

Servicing rights purchased

Fair value changes due to inputs and assumptions

Other changes in fair value

Servicing rights sold

$1,181

$1,193

$1,307

$1,325

Balance, March 31, 2016

$1,182

$1,198

Primarily reflects changes in discount rates and prepayment speed assumptions, due to changes in interest rates.

Represents changes due to the collection of expected cash flows, net of accretion, due to the passage of time.

(Shares in thousands) (Unaudited)

COMMON SHARES ROLLFORWARD

524,540

Common shares issued for employee benefit plans

Repurchase of common stock

(4,260

(5,396

(4,024

(4,213

(2,873

Balance, end of period

APPENDIX A TO THE EARNINGS RELEASE - RECONCILEMENT OF NON-U.S. GAAP MEASURES

$1,282

$1,246

$1,211

$1,167

$1,140

Taxable-equivalent adjustment

$2,099

$2,046

$2,058

$2,077

$1,992

Impact of removing average intangible assets and related amortization, other than MSRs and other servicing rights

Impact of excluding amortization related to intangible assets and certain tax credits

Basel III Common Equity Tier 1 ("CET1") ratio (transitional)

Impact of MSRs and other under fully phased-in approach

Certain amounts in this schedule are presented net of applicable income taxes, calculated based on each subsidiary’s federal and state tax rates and are adjusted for any permanent differences.

SunTrust presents return on average tangible common shareholders' equity, which removes the after-tax impact of purchase accounting intangible assets from average common shareholders' equity and removes related intangible asset amortization from net income available to common shareholders. The Company believes this measure is useful to investors because, by removing the impact of intangible assets and related amortization that result from merger and acquisition activity (the level of which may vary from company to company), it allows investors to more easily compare the Company’s return on average common shareholders' equity to other companies in the industry. The Company also believes that removing these items provides a more relevant measure of the return on the Company's common shareholders' equity.

Computed by dividing noninterest expense by total revenue - FTE. The FTE basis adjusts for the tax-favored status of net interest income from certain loans and investments. The Company believes this measure to be the preferred industry measurement of net interest income and it enhances comparability of net interest income arising from taxable and tax-exempt sources.

SunTrust presents a tangible efficiency ratio, which excludes the amortization related to intangible assets and certain tax credits. The Company believes this measure is useful to investors because, by removing the impact of amortization (the level of which may vary from company to company), it allows investors to more easily compare the Company’s efficiency to other companies in the industry. This measure is utilized by management to assess the efficiency of the Company and its lines of business.

Current period Basel III capital ratios are estimated as of the earnings release date. Fully phased-in ratios consider a 250% risk-weighting for MSRs and deduction from capital of certain carryforward DTAs, the overfunded pension asset, and other intangible assets. The Company believes these measures may be useful to investors who wish to understand the Company's current compliance with future regulatory requirements.

APPENDIX A TO THE EARNINGS RELEASE - RECONCILEMENT OF NON-U.S. GAAP MEASURES, continued

(Dollars in millions, except per share data) (Unaudited)

$24,053

$23,437

$23,664

$23,223

$23,260

Goodwill, net of deferred taxes of $243 million, $240 million, $237 million, $234 million, and $231 million, respectively

(6,094

(6,097

(6,100

(6,103

(6,106

Other intangible assets (including MSRs and other servicing rights), net of deferred taxes of $3 million, $3 million, $4 million, $4 million, and $0, respectively

(1,195

(1,322

(1,279

(1,412

(1,193

17,953

17,334

17,557

17,114

17,142

Noncontrolling interest

(1,225

Tangible common equity

$16,627

$16,001

$16,226

$15,781

$15,811

(6,337

(1,198

(1,325

(1,416

Tangible assets

$187,812

$184,471

$180,689

$182,511

$183,532

Tangible equity to tangible assets

Tangible book value per common share

$31.45

$31.56

$30.46

$30.29

$139,746

$136,442

$133,560

$132,538

$132,380

Government-guaranteed loans held for investment

(5,888

(5,551

(5,215

(5,026

(4,992

Fair value loans held for investment

Total loans held for investment, excluding government-guaranteed and fair value loans

$133,603

$130,634

$128,083

$127,249

$127,120

ALLL to total loans held for investment,

SunTrust presents a tangible equity to tangible assets ratio that excludes the after-tax impact of purchase accounting intangible assets. The Company believes this measure is useful to investors because, by removing the effect of intangible assets that result from merger and acquisition activity (the level of which may vary from company to company), it allows investors to more easily compare the Company’s capital adequacy to other companies in the industry. This measure is used by management to analyze capital adequacy.

SunTrust presents tangible book value per common share, which excludes the after-tax impact of purchase accounting intangible assets and also excludes noncontrolling interest and preferred stock from tangible equity. The Company believes this measure is useful to investors because, by removing the effect of intangible assets that result from merger and acquisition activity as well as noncontrolling interest and preferred stock (the level of which may vary from company to company), it allows investors to more easily compare the Company’s book value of common stock to other companies in the industry.

SunTrust presents a ratio of ALLL to total loans held for investment, excluding government-guaranteed and fair value loans. The Company believes that the exclusion of loans that are held at fair value with no related allowance, and loans guaranteed by a government agency that do not have an associated allowance recorded due to nominal risk of principal loss, better depicts the allowance relative to loans the allowance is intended to cover.

CONSUMER BANKING AND PRIVATE WEALTH MANAGEMENT

(Dollars in millions) (Unaudited)

% Change

Statements of Income:

Provision for credit losses

Net interest income - FTE - after provision for credit losses

Noninterest income before net securities gains/(losses)

Net securities gains/(losses)

Noninterest expense before amortization

Income - FTE - before provision for income taxes

Net income including income attributable to noncontrolling interest

Less: net income attributable to noncontrolling interest

$1,055

$1,029

$41,597

$41,127

Other intangible assets excluding MSRs

47,268

47,129

93,314

90,507

Performance Ratios:

Impact of excluding amortization and associated funding cost of intangible assets

Other Information (End of Period)

Trust and institutional managed assets

$41,740

$43,994

Retail brokerage managed assets

10,976

10,481

Total managed assets

52,716

54,475

Non-managed assets

92,216

95,607

Total assets under advisement

$144,932

$150,082

Provision for credit losses represents net charge-offs by segment combined with an allocation to the segments for the provision attributable to quarterly changes in the allowance for loan and lease losses and unfunded commitment reserve balances.

Beginning in the first quarter of 2016, the Company implemented a new policy for the classification and disclosure of assets under advisement. The primary change was related to the reclassification of brokerage assets into managed and non-managed assets. Prior period amounts were restated for comparative purposes.

WHOLESALE BANKING

% Change

Provision/(benefit) for credit losses

Net interest income - FTE - after provision/(benefit) for credit losses

$70,757

$67,733

84,375

81,160

53,567

47,565

Provision/(benefit) for credit losses represents net charge-offs by segment combined with an allocation to the segments for the provision/(benefit) attributable to quarterly changes in the allowance for loan and lease losses and unfunded commitment reserve balances.

MORTGAGE BANKING

Benefit for credit losses

Net interest income - FTE - after benefit for credit losses

$25,946

$24,439

29,203

27,936

Production Data:

Channel mix

$2,251

$2,424

Correspondent

Total production

$4,952

$5,109

Channel mix - percent

Purchase and refinance mix

Refinance

$2,613

$3,070

Purchase and refinance mix - percent

Applications

$9,205

$9,794

Mortgage Servicing Data (End of Period):

Total loans serviced

$148,941

$141,760

Total loans serviced for others

121,277

115,179

Net carrying value of MSRs

Ratio of net carrying value of MSRs to total loans serviced for others

Benefit for credit losses represents net charge-offs by segment combined with an allocation to the segments for the benefit attributable to quarterly changes in the allowance for loan and lease losses and unfunded commitment reserve balances.

CORPORATE OTHER

% Change

Net interest income/(expense)

Net interest income/(expense) - FTE

Net interest income/(expense) - FTE - after provision/(benefit) for credit losses

Income/(loss) - FTE - before provision/(benefit) for income taxes

Provision/(benefit) for income taxes

Net income/(loss) including income attributable to noncontrolling interest

27,272

25,809

32,168

33,040

Other Information (End of Period):

Duration of investment portfolio (in years)

Net interest income interest rate sensitivity:

% Change in net interest income under:

Instantaneous 200 basis point increase in rates over next 12 months

Instantaneous 100 basis point increase in rates over next 12 months

Instantaneous 25 basis point decrease in rates over next 12 months

Net interest income/(expense) is driven by matched funds transfer pricing applied for segment reporting and actual net interest income.

Provision/(benefit) for credit losses represents net charge-offs by segment combined with an allocation to the segments for the provision/(benefit) attributable to quarterly changes in the allowance for loan and lease losses and unfunded commitments reserve balances.

CONSOLIDATED SEGMENT TOTALS

$138,372

$133,338

The above information was disclosed in a filing to the SEC. To see the filing, click here.

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