<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarterly Period Ended June 30, 1997
Commission File Number 1-8918
SUNTRUST BANKS, INC.
(Exact name of registrant as specified in its charter)
Georgia 58-1575035
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
303 Peachtree Street, N.E., Atlanta, Georgia 30308
(Address of principal executive offices) (Zip Code)
(404) 588-7711
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes __X__ No _____
At July 31, 1997, 212,339,255 shares of the Registrant's Common Stock, $1.00
par value were outstanding.
Page 1
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Statement Description Page No.
Consolidated Statements of Income
Six months ended June 30, 1997 and 1996 4
Consolidated Balance Sheets
June 30, 1997, December 31, 1996 and June 30, 5
1996
Consolidated Statements of Cash Flow
Six months ended June 30, 1997 and 1996 6
Consolidated Statements of Shareholders' Equity
Six months ended June 30, 1997 and 1996 7
The above mentioned financial statements have been prepared in accordance
with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X, and
accordingly do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial statements.
However, in the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the six months ended June 30, 1997 are not
necessarily indicative of the results that may be expected for the full year
1997.
Fully diluted per common share data have not been presented because there
were no material differences between such amounts and the per common share
data as presented. Earnings per common share were based on the weighted
average common equivalent shares outstanding for the periods presented.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
MD&A of the Registrant is included on pages 9 through 20.
Page 2
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
<CAPTION>
Three Months Six Months
Ended June 30 Ended June 30
(Dollars in thousands except per share data)<F1> 1997 1996 1997 1996
<S> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $ 747,526 $ 657,953 $ 1,463,678 $ 1,304,358
Interest and dividends on investment securities
Taxable interest 114,279 112,534 224,969 216,388
Tax-exempt interest 10,278 11,803 20,928 24,040
Dividends (1) 9,371 8,240 18,576 16,329
Interest on funds sold 13,207 6,909 27,255 15,879
Interest on deposits in other banks 143 300 417 561
Other interest 3,637 777 5,701 1,483
Total interest income 898,441 798,516 1,761,524 1,579,038
Interest Expense
Interest on deposits 289,934 269,948 566,898 537,828
Interest on funds purchased 77,738 54,533 155,445 110,417
Interest on other short-term borrowings 24,877 11,412 43,315 26,676
Interest on long-term debt 36,133 18,365 63,631 36,661
Total interest expense 428,682 354,258 829,289 711,582
Net Interest Income 469,759 444,258 932,235 867,456
Provision for loan losses 29,246 26,194 55,436 51,222
Net interest income after provision for loan losses 440,513 418,064 876,799 816,234
Noninterest Income
Trust income 78,692 70,478 157,062 141,150
Service charges on deposit accounts 61,890 58,111 121,632 113,816
Other charges and fees 53,524 44,922 104,663 84,468
Credit card fees 18,384 16,561 37,189 33,578
Securities gains (losses) (362) (2,169) 1,029 15,093
Other noninterest income 15,973 12,171 32,328 25,645
Total noninterest income 228,101 200,074 453,903 413,750
Noninterest Expense
Salaries and other compensation 205,741 188,290 408,149 369,120
Employee benefits 29,476 26,334 61,858 55,758
Net occupancy expense 32,428 34,454 64,958 68,137
Equipment expense 30,291 27,980 60,438 55,496
Operating supplies 9,081 9,842 18,682 19,585
Marketing and community relations 16,850 18,615 33,652 33,860
Postage and delivery 10,455 9,634 21,793 19,653
Other noninterest expense 79,023 78,230 157,819 172,785
Total noninterest expense 413,345 393,379 827,349 794,394
Income before income taxes 255,269 224,759 503,353 435,590
Provision for income taxes 89,833 72,662 176,861 133,074
Net Income $ 165,436 $ 152,097 $ 326,492 $ 302,516
Average common equivalent shares 213,571,707 224,060,675 215,886,478 224,724,452
Net income per average common share $ 0.77 $ 0.68 $ 0.51 $ 1.34
Dividends declared per common share 0.23 0.20 0.45 0.40
(1) Includes dividends on common stock of
The Coca-Cola Company 6,757 6,033 13,515 12,067
<FN>
<F1>See notes to consolidated financial statements
</TABLE>
Page 3
<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEETS
<CAPTION>
June 30 December 31 June 30
(Dollars in thousands) 1997 1996 1996
<S> <C> <C> <C>
Assets
Cash and due from banks $ 2,631,506 $ 3,037,309 $ 2,419,853
Interest-bearing deposits in other banks 3,876 13,461 22,365
Trading account 372,049 80,377 70,160
Investment securities <F1> 11,776,991 10,551,166 10,779,101
Funds sold 801,768 1,721,845 852,061
Loans 37,684,289 35,404,171 32,401,234
Reserve for loan losses (739,776) (725,849) (722,569)
Net loans 36,944,513 34,678,322 31,678,665
Premises and equipment 947,783 768,266 744,984
Intangible assets 275,265 277,736 280,711
Customers' acceptance liability 458,889 507,554 375,486
Other assets 1,250,164 832,213 843,598
Total assets $ 55,462,804 $ 52,468,249 $ 48,066,984
Liabilities
Noninterest-bearing deposits $ 8,348,012 $ 8,900,260 $ 7,533,998
Interest-bearing deposits 27,484,866 27,990,129 27,481,619
Total deposits 35,832,878 36,890,389 35,015,617
Funds purchased 7,154,594 6,047,692 4,548,778
Other short-term borrowings 1,832,422 867,961 816,132
Long-term debt 2,699,169 1,565,341 1,104,932
Acceptances outstanding 458,889 507,554 375,486
Other liabilities 2,344,198 1,709,332 1,570,205
Total liabilities 50,322,150 47,588,269 43,431,150
Shareholders' Equity
Preferred stock, no par value; 50,000,000 shares
authorized; none issued
Common stock, $1.00 par value; 350,000,000
shares authorized (F2) 216,608 225,608 243,644
Additional paid in capital 300,281 310,612 318,349
Retained earnings 2,790,242 2,972,900 3,630,419
Treasury stock and other (F3) (230,532) (230,918) (998,728)
Realized shareholders' equity 3,076,599 3,278,202 3,193,684
Unrealized gains (losses) on investment
securities, net of taxes 2,064,055 1,601,778 1,442,150
Total shareholders' equity 5,140,654 4,879,980 4,635,834
Total liabilities and shareholders' equity $ 55,462,804 $ 52,468,249 $ 48,066,984
(1) Includes unrealized gains (losses) on
investment securities $ 3,336,432 $ 2,588,907 $ 2,329,819
(2) Common shares outstanding 212,332,818 220,469,001 223,652,957
(3) Treasury shares of common stock 4,275,239 5,139,056 19,991,327
<FN>
<F1>See notes to consolidated financial statements.
</TABLE>
Page 4
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOW
<CAPTION>
Six Months
Ended June 30
(In thousands)<F1> 1995 1994
<S> <C> <C>
Cash flow from operating activities:
Net income $ 326,491 $ 302,516
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 75,528 62,791
Provision for loan losses 55,436 51,222
Provision for losses on other real estate 1,056 1,797
Amortization of compensation element of
restricted stock 4,448 4,854
Securities (gains) and losses, net (1,029) (15,092)
(Gains) and losses on sale of equipment, other
real estate and repossessed assets, net (11,953) (4,317)
Recognition of unearned loan income (120,333) (93,704)
Change in period-end balances of:
Trading account (291,672) 26,453
Interest receivable (40,456) (10,736)
Prepaid expenses (53,175) (38,246)
Other assets (331,345) 86,911
Taxes payable 40,494 (4,964)
Interest payable 27,549 (23,881)
Other accrued expenses 289,678 29,081
Net cash provided by operating activities (29,283) 374,685
Cash flow from investing activities:
Proceeds from maturities of investment securities 570,845 1,001,870
Proceeds from sales of investment securities 520,707 534,292
Purchase of investment securities (1,568,041) (2,156,758)
Net (increase) decrease in loans (2,191,774) (957,710)
Capital expenditures (236,382) (59,081)
Proceeds from sale of equipment, other real estate
and repossessed assets 5,870 2,954
Net inflow (outflow) from bank acquisitions 0 (1,207)
Other (14,773) (17,134)
Net cash provided(used) by investing activities (2,913,548) (1,652,774)
Cash flow from financing activities:
Net increase (decrease) in deposits (1,057,511) 1,754,044
Net increase (decrease) in funds purchased and
other short-term borrowings 2,071,363 (1,016,218)
Proceeds from the issuance of long-term debt 1,310,813 200,433
Repayment of long-term debt (176,985) (97,846)
Proceeds from the exercise of stock options 4,395 3,328
Payments to acquire treasury stock (448,401) (151,034)
Dividends paid (96,308) (89,898)
Net cash provided by financing activities 1,607,366 602,809
Net decrease in cash and cash equivalents (1,335,465) (675,280)
Cash and cash equivalents at beginning of period 4,772,615 3,969,559
Cash and cash equivalents at end of period $3,437,150 $3,294,279
Supplemental Disclosure
Interest paid $ 856,838 $ 735,463
Taxes paid 137,935 138,482
<FN>
<F1>See notes to consolidated financial statements.
</TABLE>
Page 5
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<CAPTION> Unrealized
Additional Treasury Gains (Losses)
Common Paid in Retained Stock and on Securities
(In thousands)<F1> Stock Capital Earnings Other<F2> Net of Taxes Total
<S> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1996 $130,461 $434,724 $3,417,801 $(871,953) $1,158,548 $4,269,581
Stock dividend 113,183 (113,183) - - - -
Balance, January 1, 1996, restated 243,644 321,541 3,417,801 (871,953) 1,158,548 4,269,581
Net income - - 302,516 - - 302,516
Cash dividends declared on common
stock, $0.40 per share - - (89,898) - - (89,898)
Proceeds from exercise of stock options - (8,584) - 11,912 - 3,328
Acquisition of treasury stock - - - (151,034) - (151,034)
Issuance of treasury stock for 401(k) - 1,873 - 5,376 - 7,249
Issuance, net of forfeitures, of treasury
stock as restricted stock - 3,519 - 5,802 - 9,321
Issuance of treasury stock for acquisition - - - 5,636 - 5,636
Compensation element of restricted stock - - - (9,321) - (9,321)
Amortization of compensation element
of restricted stock - - - 4,854 - 4,854
Change in unrealized gains (losses)
on securities, net of taxes - - - - 283,602 283,602
Balance, June 30, 1996 $243,644 $318,349 $3,630,419 $(998,728) $1,442,150 $4,635,834
Balance, January 1, 1997 $225,608 $310,612 $2,972,900 $(230,918) $1,601,778 $4,879,980
Net income - - 326,492 - - 326,492
Cash dividends declared on common
stock, $0.45 per share - - (96,308) - - (96,308)
Proceeds from exercise of stock options - (12,629) - 17,024 - 4,395
Acquisition of treasury stock - - - (448,401) - (448,401)
Retirement of treasury stock (9,000) - (412,842) 421,842 - -
Issuance of treasury stock for 401(k) - 1,189 - 6,583 - 7,772
Issuance, net of forfeitures, of treasury
stock as restricted stock - 1,109 - 6,172 - 7,281
Compensation element of restricted stock - - - (7,282) - (7,282)
Amortization of compensation element
of restricted stock - - - 4,448 - 4,448
Change in unrealized gains (losses)
on securities, net of taxes - - - - 462,277 462,277
Balance, June 30, 1997 $216,608 $300,281 $2,790,242 $(230,532) $2,064,055 $5,140,654
<FN>
<F1>See notes to consolidated financial statements.
<F2>* Balance at June 30, 1997 includes $178,234 for Treasury Stock and $52,298 for Deferred Compensation.
</TABLE>
Page 6
Notes to Consolidated Financial Statements
Note 1 - Accounting Policies
The consolidated financial statements include the accounts of the Company and
its subsidiaries. All significant intercompany accounts and transactions have
been eliminated. These financial statements should be read in conjunction
with the Company's annual financial statements and related notes for the year
ended December 31, 1996.
Note 2 - Stock Dividend
On May 21, 1996, the Company paid a stock dividend of one share of SunTrust
common stock for each outstanding share of SunTrust common stock to
shareholders of record on May 1, 1996. The consolidated financial statements
for prior periods have been restated for the effect of this stock dividend.
Note 3 - Recent Accounting Developments
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128 (SFAS No. 128), Earnings Per Share.
SFAS No. 128 establishes standards for computing and presenting earnings per
share (EPS) and applies to entities with publicly held common stock. SFAS No.
128 simplifies the standards for computing earnings per share previously
found in APB Opinion No. 15 and makes them comparable to international EPS
standards. It replaces the presentation of primary EPS with a presentation of
basic EPS. It also requires dual presentation of basic and diluted EPS on the
face of the statement of earnings for all entities with complex capital
structures and requires a reconciliation of the numerator and denominator of
the basic EPS computation to the numerator and denominator of the diluted EPS
computation. SFAS No. 128 is effective for financial statements issued for
periods ending after December 15, 1997, earlier application is not permitted.
The pro forma basic and diluted EPS calculated under SFAS No. 128 were not
materially different from the primary and fully-diluted earnings per share
presented for the periods ended June 30, 1997 and 1996.
In June 1997, the Financial Accounting Standards Board issued Statement of
Financing Accounting Standards No. 130, Reporting Comprehensive Income, which
is effective for annual and interim periods ending after December 15, 1997.
This statement requires that all items that are required to be recognized
under accounting standards as comprehensive income be reported in a financial
statement that is displayed with the same prominence as other financial
statements.
In June 1997, the Financial Accounting Standards Board issued Statement of
Financing Accounting Standards No.131, Disclosures about Segments of an
Enterprise and Related Information, which is effective for annual and interim
periods ending after December 15, 1997. This statement establishes standards
for the method that public entities use to report information about operating
segments in annual financial statements and requires that those enterprises
report selected information about operating segments in interim financial
reports issued to shareholders. It also establishes standards for related
disclosures about products and services, geographical areas and major
customers.
Note 4 - Derivative Financial Instruments
Derivatives are used to hedge interest rate exposures by modifying the
interest rate characteristics of related balance sheet instruments.
The specific criteria required for derivatives used for such purposes are
described below. Derivatives that do not meet these criteria are carried at
market value with changes in value recognized currently in earnings.
Currently, it is not the Company's policy to hold derivitaves that do not
qualify as hedges.
Derivatives used as hedges must be effective at reducing the risk associated
with the exposure being hedged and must be designated as a hedge at the
inception of the derivative contract. Derivatives used for hedging purposes
include swaps, forwards, futures, and purchased options. The fair value of
derivative contracts are carried off-balance sheet and the unrealized gains
and losses on derivative contracts are generally deferred. The interest
component associated with derivatives used as hedges or to modify the
interest rate characteristics of assets and liabilities is recognized over
the life of the contract in net interest income. Upon contract settlement or
termination, the cumulative change in the market value of such derivatives is
recorded as an adjustment to the carrying value of the underlying asset or
liability and recognized in net interest income over the expected remaining
life of the related asset or liability. In instances where the underlying
instrument is sold, the cumulative change in the value of the associated
derivative is recognized immediately in the component of earnings relating to
the underlying instrument.
Page 7
<PAGE>
The following is an analysis of the financial performance of SunTrust Banks,
Inc. (SunTrust or Company) for the second quarter of 1997 and provides
comments on earlier periods. In this discussion net interest income and net
interest margin are presented on a taxable-equivalent basis. Also all ratios
are presented on an annualized basis.
<TABLE>
TABLE 1 - SELECTED QUARTERLY FINANCIAL DATA
(Dollars in millions except per share data)
<CAPTION>
Quarters
1997 1996
2 1 4 3 2
<S> <C> <C> <C> <C> <C>
Summary of Operations
Interest and dividend income $ 898.4 $ 863.1 $ 846.5 $ 820.4 $ 798.6
Interest expense 428.7 400.6 384.2 366.0 354.3
Net interest income 469.7 462.5 462.3 454.4 444.3
Provision for loan losses 29.2 26.2 34.7 30.0 26.2
Net interest income after provision for loan losses 440.5 436.3 427.6 424.4 418.1
Noninterest income 228.1 225.8 207.0 197.2 200.1
Noninterest expense 413.3 414.0 399.1 389.6 393.4
Income before provision for income taxes 255.3 248.1 235.5 232.0 224.8
Provision for income taxes 89.9 87.0 77.0 76.4 72.7
Net income $ 165.4 $ 161.1 $ 158.5 $ 155.6 $ 152.1
Per common share
Net income $ 0.77 $ 0.74 $ 0.72 $ 0.70 $ 0.68
Dividends declared 0.23 0.23 0.23 0.20 0.20
Book value 24.21 22.31 22.13 21.43 20.73
Common stock market price
High 59.00 54.75 52.50 41.50 38.00
Low 44.13 46.13 40.88 34.88 33.25
Close 55.06 46.38 49.25 41.00 37.00
Selected Average Balances
Total assets $53,498.3 $51,906.5 $50,061.1 $48,122.6 $47,019.5
Earning assets 46,238.1 45,054.0 43,763.9 42,179.2 41,241.8
Loans 37,000.9 35,894.2 34,416.9 33,029.6 32,265.2
Total deposits 36,078.8 35,519.5 34,840.7 34,652.8 34,378.8
Realized shareholders' equity 3,128.2 3,229.2 3,334.0 3,281.7 3,232.0
Total shareholders' equity 5,007.8 4,966.6 4,841.3 4,713.7 4,522.2
Common equivalent shares (thousands) 213,572 218,227 221,840 222,683 224,061
Financial Ratios and Other
ROA<F1> 1.31 % 1.33 % 1.32 % 1.35 % 1.36 %
ROE<F1> 21.21 20.23 18.91 18.86 18.93
Net interest margin<F1> 4.16 4.25 4.29 4.38 4.43
Net interest income - taxable-equivalent $ 479.2 $ 472.0 $ 472.2 $ 464.2 $ 454.2
<FN>
<F1>ROA, ROE and net interest margin are calculated excluding unrealized gains
on investment securities because the unrealized gains are not included in
income.
</TABLE>
Page 8
<PAGE>
<TABLE>
TABLE 2A - CONSOLIDATED DAILY AVERAGE BALANCES, INCOME/EXPENSE AND AVERAGE
YIELDS EARNED AND RATES PAID
(Dollars in millions; yields on a taxable-equivalent basis)
<CAPTION>
Quarter Ended
June 30, 1997 March 31, 1997 June 30, 1996
Average Income/ Yields/ Average Income/ Yields/ Average Income/ Yields/
Balances Expense Rates Balances Expense Rates Balances Expense Rates
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Loans<F1>
Taxable $36,296.5 $738.0 8.16 % $35,193.9 $707.2 8.15 % $31,645.9 $649.3 8.25 %
Tax-exempt<F2> 704.4 14.0 7.95 700.3 13.4 7.77 619.3 13.0 8.42
Total loans 37,000.9 752.0 8.15 35,894.2 720.6 8.14 32,265.2 662.3 8.26
Investment securities:
Taxable 7,412.5 123.7 6.69 7,275.6 119.9 6.68 7,605.0 120.8 6.39
Tax-exempt<F2> 708.5 15.1 8.57 731.1 15.7 8.70 783.9 17.4 8.91
Total investment securities 8,121.0 138.8 6.85 8,006.7 135.6 6.87 8,388.9 138.2 6.63
Funds sold 845.5 13.3 6.27 969.4 14.0 5.88 515.7 6.9 5.39
Other short-term investments<F2> 270.7 3.8 5.69 183.7 2.4 5.24 72.0 1.1 6.14
Total earning assets 46,238.1 907.9 7.88 45,054.0 872.6 7.85 41,241.8 808.5 7.88
Reserve for loan losses (733.5) (728.1) (715.6)
Cash and due from banks 2,197.8 2,259.8 2,256.2
Premises and equipment 945.0 885.4 742.4
Other assets 1,813.8 1,629.2 1,408.3
Unrealized gains(losses) on
investment securities 3,037.1 2,806.2 2,086.4
Total assets $53,498.3 $51,906.5 $47,019.5
Liabilities and Shareholders' Equity
Interest-bearing deposits:
NOW/Money market accounts $10,494.5 $ 71.2 2.72 % $10,489.4 $ 71.0 2.75 % $10,488.3 $ 73.4 2.82 %
Savings 5,297.6 47.4 3.59 5,403.2 47.8 3.59 5,769.2 53.8 3.75
Consumer time 7,016.1 90.6 5.18 7,050.2 89.5 5.15 7,231.3 92.5 5.14
Other time<F3> 5,808.1 80.7 5.58 5,142.7 68.7 5.41 3,705.0 50.3 5.46
Total interest-bearing deposits 28,616.3 289.9 4.06 28,085.5 277.0 4.00 27,193.8 270.0 3.99
Funds purchased 5,827.0 77.8 5.35 6,108.1 77.7 5.16 4,352.3 54.5 5.04
Other short-term borrowings 1,762.1 24.9 5.66 1,358.9 18.4 5.50 848.4 11.4 5.41
Long-term debt 2,191.7 36.1 6.61 1,659.0 27.5 6.72 1,106.6 18.4 6.68
Total interest-bearing liabilities 38,397.1 428.7 4.48 37,211.5 400.6 4.37 33,501.1 354.3 4.25
Noninterest-bearing deposits 7,462.5 7,434.0 7,185.0
Other liabilities 2,630.9 2,294.4 1,811.2
Realized shareholders' equity 3,128.2 3,229.2 3,232.0
Net unrealized gains(losses)
on investment securities 1,879.6 1,737.4 1,290.2
Total liabilities and
shareholders' equity $53,498.3 $51,906.5 $47,019.5
Interest rate spread 3.40 % 3.48 % 3.63 %
Net Interest Income $ 479.2 $472.0 $454.2
Net Interest Margin 4.16 % 4.25 % 4.43 %
Page 9
<PAGE>
<FN>
<F1>Interest income includes loan fees of $24.1, $23.2, and $24.7 in the
quarters ended June 30, and March 31, 1997 and June 30, 1996 and $47.3 and
$46.5 in the six months ended June 30, 1997 and 1996. Nonaccrual loans are
included in average balances and income on such loans, if recognized, is
recorded on a cash basis.
<F2>Interest income includes the effects of taxable-equivalent adjustments
(reduced by the nondeductible portion of interest expense) 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 net
taxable-equivalent adjustment amounts included in the above table
aggregated $9.5, $9.5 and $9.9 in the quarters ended June 30 and March 31,
1997 and June 30, 1996 and $19.0 and $20.4 in the six months ended June
30, 1997 and 1996.
<F3>Interest rate swap transactions used to help balance the Company's
interest-sensitivity position increased interest expense by $0.8, $0.4,
and $0.5 in the quarters ended June 30, 1997, March 31, 1997 and June 30,
1996 and $1.2 and $0.8 in the six months ended June 30, 1997 and June 30,
1996. Without these swaps, the rate on other time deposits and the net
interest margin would have been 5.52% and 4.16%, 5.38% and 4.25%, and
5.40% and 4.44% in the quarters ended June 30 and March 31, 1997 and June
30, 1996 and 5.46% and 4.21%, and 5.50% and 4.39% in the six months ended
June 30, 1997 and 1996.
</TABLE>
Page 10
<PAGE>
<TABLE>
TABLE 2b - CONSOLIDATED DAILY AVERAGE BALANCES, INCOME/EXPENSE AND AVERAGE
YIELDS EARNED AND RATES PAID
(Dollars in millions; yields on a taxable-equivalent basis)
<CAPTION>
Six Months Ended
June 30, 1997 June 30, 1996
Average Income/ Yields/ Average Income/ Yields/
Balances Expense Rates Balances Expense Rates
<S> <C> <C> <C> <C> <C> <C>
Assets
Loans<F1>
Taxable $35,748.2 $1,445.2 8.15 % $31,225.8 $1,286.8 8.29 %
Tax-exempt<F2> 702.4 27.4 7.86 625.7 26.4 8.50
Total loans 36,450.6 1,472.6 8.15 31,851.5 1,313.2 8.29
Investment securities:
Taxable 7,344.5 243.6 6.69 7,368.0 232.9 6.36
Tax-exempt<F2> 719.7 30.8 8.64 797.2 35.4 8.93
Total investment securities 8,064.2 274.4 6.86 8,165.2 268.3 6.61
Funds sold 907.1 27.3 6.06 592.2 15.9 5.39
Other short-term investments<F2> 227.4 6.2 5.51 69.0 2.1 6.08
Total earning assets 45,649.3 1,780.5 7.87 40,677.9 1,599.5 7.91
Reserve for loan losses (730.8) (710.3)
Cash and due from banks 2,228.6 2,236.2
Premises and equipment 915.4 737.5
Other assets 1,722.0 1,378.7
Unrealized gains(losses) on
investment securities 2,922.3 2,010.7
Total assets $52,706.8 $46,330.7
Liabilities and Shareholders' Equity
Interest-bearing deposits:
NOW/Money market accounts $10,492.0 $ 142.2 2.73 % $10,272.3 $ 146.0 2.86 %
Savings 5,350.1 95.2 3.59 5,237.5 97.9 3.76
Consumer time 7,033.0 180.1 5.16 7,475.5 193.9 5.22
Other time<F3> 5,477.2 149.4 5.50 3,631.4 100.0 5.54
Total interest-bearing deposits 28,352.3 566.9 4.03 26,616.7 537.8 4.06
Funds purchased 5,966.8 155.5 5.25 4,351.9 110.4 5.10
Other short-term borrowings 1,561.6 43.3 5.59 955.4 26.7 5.61
Long-term debt 1,926.8 63.6 6.66 1,084.8 36.7 6.80
Total interest-bearing liabilities 37,807.5 829.3 4.42 33,008.8 711.6 4.34
Noninterest-bearing deposits 7,448.3 7,113.6
Other liabilities 2,463.6 1,744.6
Realized shareholders' equity 3,178.4 3,219.4
Net unrealized gains(losses)
on investment securities 1,809.0 1,244.3
Total liabilities and
shareholders' equity $52,706.8 $46,330.7
Interest rate spread 3.45 % 3.57 %
Net Interest Income $ 951.2 $ 887.9
Net Interest Margin 4.20 % 4.39 %
<FN>
<F1>See note <F1> on table 2A.
<F2>See note <F2> on table 2A.
<F3>See note <F3> on table 2A.
</TABLE>
Page 11
<PAGE>
Net Interest Income/Margins. The Company's net interest margin of 4.16% for
the second quarter of 1997 was 27 basis points lower than the second quarter
of last year. The rate on earning assets was 7.88% in the second quarter of
1997 and 1996. At the same time, the rate on interest-bearing liabilities
increased 23 basis points. Rapid earning asset growth funded by growth in
higher cost funding sources put downward pressure on the net interest margin.
Interest rate swaps also contributed to the decrease of this year's net
interest margin (see the discussion entitled "Derivatives" on page 17).
Interest income which the Company was unable to recognize on nonperforming
loans had a negative impact of 2 basis points on the net interest margin in
the first six months of both 1997 and 1996. Table 2 contains more detailed
information concerning average balances and interest yields earned and rates
paid.
Noninterest Income. Noninterest income in the second quarter and the first
six months of 1997, adjusted to exclude the effect of securities gains
(losses), increased 13.0% and 13.6% from the comparable periods a year ago.
Trust income, the Company's largest source of noninterest income, increased
11.7% and 11.3% over the same periods. Mortgage fees were 11.2% higher in the
second quarter of this year compared to the same period last year due to
higher volume in our mortgage banking business. Credit card fees also
increased 11.0% and 10.8%.
<TABLE>
TABLE 3 - NONINTEREST INCOME
(In millions)
<CAPTION>
Quarters
1997 1996
2 1 4 3 2
<S> <C> <C> <C> <C> <C>
Trust income $ 78.7 $ 78.4 $ 69.0 $ 68.1 $ 70.5
Service charges on deposit accounts 61.9 59.7 60.7 57.9 58.1
Corporate and institutional investment services 4.6 5.0 4.8 3.4 3.3
Retail investment income 8.5 8.0 5.1 6.3 6.2
Credit card fees 18.4 18.8 17.0 15.7 16.6
Mortgage fees 10.9 9.2 8.8 8.7 9.8
Other charges and fees 29.5 29.0 25.9 23.8 25.6
Securities gains (losses) (0.4) 1.4 (0.4) (0.5) (2.2)
Trading account profits and commissions 4.8 4.0 4.1 3.5 3.1
Other income 11.2 12.3 12.0 10.3 9.1
Total noninterest income $228.1 $225.8 $207.0 $197.2 $200.1
</TABLE>
Page 12
<PAGE>
Noninterest Expense. Noninterest expense increased 5.1% and 4.2% in the
second quarter and first six months of 1997 compared to the same periods last
year. Personnel expense, consisting of salaries, other compensation and
employee benefits, increased 9.6% and 10.6% over the aforementioned periods.
Other noninterest expense increased substantially over last year due to
expenditures made in connection with various projects to stimulate business
growth and development.
<TABLE>
TABLE 4 - NONINTEREST EXPENSE
(In millions)
<CAPTION>
Quarters
1997 1996
2 1 4 3 2
<S> <C> <C> <C> <C> <C>
Salaries $169.8 $167.0 $165.6 $161.7 $156.0
Other compensation 36.0 35.4 34.2 32.9 32.3
Employee benefits 29.5 32.4 28.8 26.0 26.4
Net occupancy expense 32.5 32.5 35.2 34.9 34.4
Equipment expense 30.3 30.1 30.4 29.5 28.0
FDIC premiums 1.4 1.8 1.4 14.1 1.4
Marketing and community relations 16.9 16.8 23.3 19.2 18.7
Postage and delivery 10.5 11.3 10.3 10.5 9.7
Operating supplies 9.1 9.6 9.4 8.9 9.9
Other real estate expense (1.3) (1.2) (1.1) 0.4 (0.5)
Communications 8.6 9.1 8.6 8.3 7.8
Consulting and legal 5.4 5.7 8.5 5.8 6.1
Amortization of intangible assets 8.0 7.7 7.3 6.8 6.5
Other expense 56.6 55.8 37.2 30.6 56.7
Total noninterest expense $413.3 $414.0 $399.1 $389.6 $393.4
Efficiency ratio 58.4 % 59.3 % 58.8 % 58.9 % 60.1 %
</TABLE>
Provision for Loan Losses. The Company raised its provision for loan losses
in the second quarter of 1997 to $29.2 million from $26.2 million in the
same period last year, yet the provision still exceeded net charge-offs by
$5.3 million. Net loan charge-offs were $41.4 million in the first six
months of this year, representing 0.23% of average loans. The comparable net
charge-off amount for 1996 was $28.7 million or 0.18% of average loans.
Consumer loan charge-offs increased slightly yet remain low compared to
historical standards.
The Company maintains a reserve for loan losses to absorb possible
losses in the loan portfolio. The reserve consists of three elements; (i)
reserves established on specific loans, (ii) reserves based on historical
loan loss experience, and (iii) reserves based on economic conditions in the
Company's individual markets. The specific reserve element is based on a
regular analysis of all loans and commitments over a fixed dollar amount
where the internal credit rating is at or below a pre-determined
classification. The historical loan loss element represents a projection of
future credit problems and is determined statistically using a loss migration
analysis that examines loss experience and the related internal gradings of
loans charged-off. The general economic condition element is determined by
management at the individual subsidiary banks and is based on a subjective
evaluation of specific economic factors in their markets that might affect
the collectibility of loans. SunTrust is committed to the early recognition
of possible problems and to a strong, conservative reserve.
The Company's reserve for loan losses totaled $739.8 million at June 30,
1997, which was 1.96% of quarter-end loans and 430.2% of total nonperforming
loans. These ratios at December 31, 1996 were 2.05% and 342.0% and at June
30, 1996 were 2.23% and 371.0%.
Page 13
<PAGE>
<TABLE>
TABLE 5 - SUMMARY OF LOAN LOSS EXPERIENCE
(Dollars in millions)
<CAPTION>
Quarters
1997 1996
2 1 4 3 2
<S> <C> <C> <C> <C> <C>
Reserve for Loan Losses
Balances - beginning of quarter $ 734.5 $ 725.8 $ 724.7 $ 722.6 $ 712.4
Reserve of purchased banks 0.0 0.0 0.0 0.0
Provision for loan losses 29.2 26.2 34.7 30.0 26.2
Charge-offs:
Commercial 0.0 0.0 0.0 0.0 0.0
Real estate:
Construction (1.5) (1.1) (1.5) (2.3) (1.1)
Mortgage, 1-4 family (1.8) (1.4) (3.0) (2.8) (1.5)
Other (0.3) (0.3) (0.3) (0.2) (0.4)
Lease financing (12.5) (11.6) (11.7) (10.6) (9.5)
Credit card (14.0) (12.7) (13.9) (12.6) (10.9)
Other consumer loans (35.3) (32.0) (45.9) (40.9) (28.6)
Total charge-offs (65.4) (59.1) (76.3) (69.4) (52.0)
Recoveries:
Commercial 0.0 0.1 0.1 0.1 0.1
Real estate:
Construction 1.1 1.3 1.5 1.2 2.1
Mortgage, 1-4 family 0.1 0.1 0.1 0.1 0.2
Other 1.8 2.4 1.7 1.7 1.7
Lease financing 5.5 5.4 4.8 5.0 4.9
Credit card 11.3 14.5 12.3 13.0 12.6
Other consumer loans (24.0) (17.5) (33.6) (27.9) (16.0)
Total recoveries (4.2) 6.3 (13.1) (6.8) 5.6
Net charge-offs (69.6) (52.8) (89.4) (76.2) (46.4)
Balance - end of quarter $ 694.1 $ 699.2 $ 670.0 $ 676.4 $ 692.2
Quarter-end loans outstanding:
Domestic $37,382.9 $36,148.1 $35,154.8 $33,567.4 $32,124.4
International 301.4 279.9 249.4 256.9 276.8
Total $37,684.3 $36,428.0 $35,404.2 $33,824.3 $32,401.2
Ratio of reserve to quarter-end loans 1.96 % 2.02 % 2.05 % 2.14 % 2.23
Average loans $37,000.9 $35,894.2 $34,416.9 $33,029.6 $32,265.2
Ratio of net charge-offs (annualized)
to average loans 0.26 % 0.20 % 0.39 % 0.34 % 0.20 %
</TABLE>
Page 14
<TABLE>
TABLE 6 - NONPERFORMING ASSETS
(Dollars in millions)
<CAPTION>
1997 1996
June 30 March 31 December 31 September 30 June 30
<S> <C> <C> <C> <C> <C>
Nonperforming Assets
Nonaccrual loans:
Domestic:
Commercial $ 29.1 $ 36.5 $ 45.6 $ 29.1 $ 34.6
Real Estate:
Construction 12.6 13.6 13.3 14.9 3.7
Mortgage, 1-4 family 54.8 59.5 49.6 49.7 49.5
Other 55.0 59.9 81.0 80.1 93.2
Lease financing 1.0 1.3 2.3 0.2 0.1
Consumer loans 8.5 10.2 10.5 10.9 10.9
Total nonaccrual loans 161.0 181.0 202.3 184.9 192.0
Restructured loans 11.0 9.9 9.9 2.7 2.8
Total nonperforming loans 172.0 190.9 212.2 187.6 194.8
Other real estate owned 41.9 43.9 43.6 51.9 53.5
Total Nonperforming Assets $213.9 $234.8 $255.8 $239.5 $248.3
Ratios:
Nonperforming loans to total loans 0.46 % 0.52 % 0.60 % 0.55 % 0.60 %
Nonperforming assets to total loans
plus other real estate owned 0.57 0.64 0.72 0.71 0.77
Reserve to nonperforming loans 430.15 384.68 342.03 386.23 371.01
Accruing Loans Past Due 90 Days or More 25.9 33.9 34.2 28.0 29.9
</TABLE>
Nonperforming Assets. Nonperforming assets consist of nonaccrual and
restructured loans and other real estate owned. Nonperforming assets have
decreased $41.9 million since December 31, 1996 and $34.4 million since June
30, 1996. Included in nonperforming loans at June 30, 1997 are loans
aggregating $25.5 million which are current as to the payment of principal
and interest but have been placed in nonperforming status because of
uncertainty over the borrowers' ability to make future payments. In
management's opinion, all known material potential problem loans are included
in Table 6.
Interest income on nonaccrual loans, if recognized, is recorded on a cash
basis. During the first six months of 1997, the gross amount of interest
income that would have been recorded on nonaccrual loans and restructured
loans at June 30, 1997, if all such loans had been accruing interest at the
original contractual rate, was $8.9 million. Interest income recognized in
the six months ended June 30, 1997 on all such nonperforming loans at June
30, 1997, was $3.4 million.
Page 15
<PAGE>
<TABLE>
Table 7 - Loan Portfolio by Types of Loans (in millions)
<CAPTION>
1997 1996
June 30 March 31 December 31 September 30 June 30
<S> <C> <C> <C> <C> <C>
Commercial:
Domestic $12,668.3 $12,267.0 $11,725.5 $10,985.2 $10,405.4
International 289.9 268.4 240.6 247.7 269.4
Real estate:
Construction 1,411.2 1,416.5 1,384.8 1,330.2 1,246.4
Mortgage, 1-4 family 12,326.0 11,839.2 11,508.2 11,018.1 10,524.1
Other 4,751.7 4,656.1 4,585.8 4,547.6 4,540.3
Lease financing 632.3 607.9 607.5 598.3 569.4
Credit card 993.9 904.9 946.8 857.2 770.6
Other consumer loans 4,611.0 4,468.0 4,405.0 4,240.0 4,075.6
Loans $37,684.3 $36,428.0 $35,404.2 $33,824.3 $32,401.2
</TABLE>
Loans. During the second quarter and first six months of 1997, average loans
increased 14.7% and 14.4% over the same periods a year ago, however, loan
growth slowed during the second quarter. Since December 31, 1996, the two
loan categories experiencing significant growth were 1-4 family residential
mortgage loans (most of which are variable rate loans) and domestic
commercial loans. The average loan to deposit ratios were 102.6% and 101.8%
in the second quarter and first six months of 1997 compared with 93.9% and
94.4% in the same periods of 1996.
At June 30, 1997, international outstandings, which include loans,
acceptances, deposits in other banks, foreign guarantees and accrued
interest, totaled $325.1 million, an increase of 18.9% from $273.5 million at
December 31, 1996.
Income Taxes. The provision for income taxes was $89.9 and $176.9 million in
the second quarter and first six months of 1997 compared to $72.7 and $133.2
million in the same periods last year.
Investment Securities. The investment portfolio continues to be managed to
maximize yield over an entire interest rate cycle while providing liquidity
and minimizing risk. The portfolio yield increased from an average of 6.63%
in the second quarter of 1996 to 6.85% in the second quarter of this year.
The portfolio size (measured at cost) increased to $8.2 billion, while the
growth in liabilities was used to fund loan growth. The average life of the
portfolio was approximately 3.3 years and its duration, the average time to
the receipt of the present value of the portfolio's expected cash flow, was
2.3 years at June 30, 1997. At June 30, 1997, approximately 30.0% of the
portfolio consisted of U.S. Treasury securities, 7.8% U.S. government agency
securities, 46.7% mortgage-backed securities, 8.4% municipal securities, and
7.1% in other securities (calculated as a percent of total par value). All of
the Company's holdings in mortgage-backed securities are backed by U.S.
government or federal agency guarantees limiting the credit risk associated
with the mortgage loans. At June 30, 1997, the carrying value of the
securities portfolio was $3.3 billion over its amortized cost, consisting
entirely of a $3.3 billion unrealized gain on the Company's investment in
common stock of The Coca-Cola Company.
Page 16
<PAGE>
Liquidity Management. Liquidity is managed to ensure there is sufficient
cash flow to satisfy demand for credit, deposit withdrawals and other
attractive market opportunities. A large, stable core deposit base, strong
capital position and excellent credit ratings are the solid foundation for
the Company's liquidity position. It is enhanced by an investment portfolio
structured to provide liquidity as needed, which occurred in several quarters
in 1996 and 1997 when loan demand exceeded deposit growth. Liquidity is also
strengthened by ready access to regional and national wholesale funding
sources including fed funds purchased, securities sold under agreements to
repurchase, negotiable certificates of deposit and offshore deposits, as well
as an active bank deposit note program, commercial paper issuance by the
Parent Company, and Federal Home Loan Bank (FHLB) advances for several
subsidiary banks who are FHLB members.
Average total deposits for the second quarter and first six months of
1997 increased 4.9% and 6.1% over the same periods a year ago. Interest-
bearing deposits represented 79.3% and 79.2% of average deposits for the
second quarter and first six months of 1997, compared to 79.1% and 78.9% for
the same periods in 1996. In the second quarter of 1997, average net
purchased funds (average funds purchased less average funds sold) increased
$1.1 billion over the same period in 1996. Net purchased funds were 10.8% and
11.1% of average earning assets for the second quarter and first six months
of 1997 as compared to 9.3% and 9.2% in the same periods a year ago.
Derivatives. The Company enters into various derivatives contracts in a
dealer capacity for customers and in managing its own interest rate risk.
Where contracts have been created for customers, the Company enters into
offsetting positions to eliminate its exposure to market risk. The principal
derivative contract used by the Company is the interest rate swap. Interest
rate swaps are contracts in which a series of interest rate flows, based on a
specific notional amount and a fixed and floating interest rate, are
exchanged over a prescribed period. The Company also monitors its sensitivity
to changes in interest rates and uses interest rate swap contracts to limit
the volatility of net interest income. Table 8 details interest rate swaps as
of June 30, 1997 used for managing interest rate sensitivity.
<TABLE>
TABLE 8 - INTEREST RATE SWAPS
<CAPTION>
Average Average Average
(Dollars in millions) Notional Fair Maturity Rate Rate
At June 30, 1997 Value Value In Months Paid Received
<S> <C> <C> <C> <C> <C>
Gain position:
Receive fixed $ 203.8 $ 6.5 107.7 5.78 % 7.33 %
Pay fixed 251.8 3.9 83.7 6.36 5.76
Total gain position 455.6 10.4
Loss position:
Receive fixed 1,821.5 (20.5) 31.3 5.79 5.77
Pay fixed 334.6 (2.2) 13.1 6.03 5.84
Total loss position 2,156.1 (22.7)
Total $2,611.7 ($12.3)
</TABLE>
The majority of the swaps are designated as hedges on deposits and other
interest-bearing liabilities. During the six months ended June 30, 1997,
hedge swaps decreased net interest income by $1.2, compared with a $0.8
decrease in the corresponding 1996 period.
Page 17
<PAGE>
<TABLE>
TABLE 9 - CAPITAL RATIOS
(Dollars in millions)
<CAPTION>
1997 1996
June 30 March 31 December 31 September 30 June 30
<S> <C> <C> <C> <C> <C>
Tier 1 capital:
Realized shareholders' equity $ 3,075.8 $ 3,146.9 $ 3,278.2 $ 3,271.5 $ 3,193.7
Trust preferred securities 600.0 0.0 0.0 0.0 0.0
Intangible assets other than servicing rights (275.3) (277.2) (244.1) (249.0) (251.3)
Total Tier 1 capital 3,400.5 2,869.7 3,034.1 3,022.5 2,942.4
Tier 2 capital:
Allowable reserve for loan losses 561.0 526.3 510.8 487.8 470.8
Allowable long-term debt 958.2 858.2 877.1 877.9 557.2
Total Tier 2 capital 1,519.2 1,384.5 1,387.9 1,365.7 1,028.0
Total capital $ 4,919.7 $ 4,254.2 $ 4,422.0 $ 4,388.2 $ 3,970.4
Risk-weighted assets $44,703.9 $41,900.0 $40,651.0 $38,788.8 $37,413.6
Risk-based ratios:
Tier 1 capital 7.60 % 6.84 % 7.46 % 7.78 % 7.86 %
Total capital 11.00 10.15 10.87 11.30 10.60
Tier 1 leverage ratio 6.77 5.89 6.40 6.63 6.58
Total shareholders' equity to assets 9.27 8.96 9.30 9.63 9.64
</TABLE>
Capital Resources. Consistent with the objective of operating a sound
financial organization, SunTrust maintains capital ratios well above
regulatory requirements. The rate of internal capital generation has been
more than adequate to support asset growth. Table 9 presents capital ratios
for the five most recent quarters.
Regulatory agencies measure capital adequacy with a framework that makes
capital requirements sensitive to the risk profiles of individual banking
companies. The guidelines define capital as either Tier 1 (primarily
shareholders' equity excluding unrealized gains and losses on investment
securities) or Tier 2 (certain debt instruments and a portion of the reserve
for loan losses). The Company and its subsidiary banks are subject to a
minimum Tier 1 capital to risk-weighted assets ratio of 4% and total capital
(Tier 1 plus Tier 2) to risk-weighted assets ratio of 8%. The Federal Reserve
Board (Board) has also established an additional capital adequacy guideline
referred to as the Tier 1 leverage ratio which measures the ratio of Tier 1
capital to average quarterly assets.
The Federal Deposit Insurance Corporation Improvement Act of 1991
(FDICIA) requires the establishment of a capital-based supervisory system of
prompt corrective action for all depository institutions. The Board's
implementation of FDICIA defines "well capitalized" institutions as those
whose capital ratios equal or exceed the following minimum ratios: Tier 1
capital ratio of 6%, total risk-based capital ratio of 10%, and a Tier 1
leverage ratio of 5%. At June 30, 1997, the Company's Tier 1 capital, total
risk-based capital and Tier 1 leverage ratios were 7.60%, 11.00% and 6.77%,
respectively.
In 1995, the Board of Directors authorized the Company to repurchase up
to 20,000,000 shares of SunTrust common stock. At June 30, 1997, the Company
has a remaining 788,894 shares that may be purchased under this
authorization. In April 1997, the Board of Directors authorized the
repurchase of up to another 15,000,000 shares of SunTrust common stock.
Page 18
<PAGE>
Nonbanking Subsidiaries. SunTrust Mortgage, Inc. originates and services
mortgage loans on both residential and income property, principally
throughout Florida, Georgia and Tennessee. SunTrust Mortgage is primarily a
mortgage banker selling to the secondary market and representing
institutional investors. SunTrust Mortgage also assists various SunTrust
banks in their origination of mortgage loans for sale in the secondary market
and for retention in their portfolio. At June 30, 1997, the servicing
portfolio was $15.4 billion, which includes $9.7 billion in loans serviced
for subsidiary banks of SunTrust. SunTrust Insurance Company operates as a
reinsurer for credit life and accident and health insurance sold to loan
customers of SunTrust. SunTrust Securities engages in securities brokerage
services and conducts incidental activities such as offering custodial and
cash management services. SunTrust Capital Markets, Inc. serves as the
investment banking arm of SunTrust. Its business activities include public
finance, corporate finance and the sale of investment securities to
corporations, institutions and government entities. Personal Express Loans,
Inc. operates as a consumer finance company. STI Credit Corporation operates
as a leasing subsidiary, primarily for commercial customers. Other nonbank
subsidiaries primarily support the Company's banking operations, providing
data processing and other services.
State Summary. SunTrust Banks, Inc. operates through three principal
subsidiaries, SunTrust Banks of Florida, Inc., SunTrust Banks of Georgia,
Inc. and SunTrust Banks of Tennessee, Inc., all well-established bank holding
companies within their respective states. Data in Table 10 does not include
financial results of SunTrust's Parent Company and certain other non-bank
subsidiaries (including SunTrust BankCard N.A. which holds all the credit
card balances of the company). It is also before elimination of certain
intercompany accounts and balances.
Page 19
<PAGE>
<TABLE>
TABLE 10 - FINANCIAL HIGHLIGHTS - BANKING SUBSIDIARIES
(Dollars in Millions)
<CAPTION>
SunTrust Banks SunTrust Banks SunTrust Banks
of Florida, Inc. of Georgia, Inc. of Tennessee, Inc.
1997 1996 1997 1996 1997 1996
<S> <C> <C> <C> <C> <C> <C>
Summary of Operations<F1>
Net interest income (FTE) $ 500.2 $ 464.4 $ 321.9 $ 290.8 $ 146.1 $ 134.2
Provision for loan losses 20.5 20.8 10.0 10.7 4.5 4.6
Trust income 76.7 71.9 57.3 50.9 19.0 18.1
Other noninterest income 150.5 135.0 96.9 86.4 41.7 38.2
Personnel expense 171.1 159.2 112.0 99.4 55.0 50.4
Other noninterest expense 247.7 223.5 144.0 123.5 61.1 56.6
Net income 176.9 164.1 135.7 125.4 53.1 48.6
Selected Average Balances<F2>
Total assets 25,051 22,858 20,774 16,614 7,485 6,773
Earning assets 23,591 21,323 16,275 13,322 7,212 6,482
Loans 17,773 16,077 12,892 10,705 5,596 4,847
Total deposits 18,444 18,378 11,673 9,938 5,747 5,457
Realized shareholders' equity 2,062 1,955 1,452 1,328 593 557
At June 30
Total assets 25,767 23,058 22,473 18,143 7,697 6,917
Earning assets 24,202 21,528 17,311 14,309 7,346 6,534
Loans 18,185 16,144 13,494 11,115 5,744 4,895
Reserve for loan losses 380 376 200 199 113 117
Total deposits 18,350 18,403 11,718 11,095 5,796 5,572
Realized shareholders' equity 2,114 2,018 1,554 1,377 615 574
Total shareholders' equity 2,125 2,000 3,591 2,832 618 571
Credit Quality
Net loan charge-offs<F1> 10.1 7.4 5.9 4.3 5.4 2.0
Nonperforming loans<F2> 94.7 131.8 53.5 50.6 23.4 12.1
Other real estate owned<F2> 25.7 31.8 3.8 5.0 12.1 16.7
Ratios
ROA<F3> 1.42 % 1.44 % 1.53 % 1.72 % 1.43 % 1.44 %
ROE<F3> 17.30 16.87 18.85 18.99 18.06 17.52
Net interest margin<F3> 4.28 4.38 3.99 4.39 4.09 4.16
Efficiency ratio<F3> 57.58 57.00 53.78 52.07 56.14 56.13
Total shareholders' equity/assets<F2> 8.25 8.67 15.98 15.61 8.03 8.26
Net loan charge-offs to average loans<F3> 0.12 0.09 0.09 0.08 0.20 0.08
Nonperforming loans to total loans<F2> 0.53 0.84 0.40 0.46 0.42 0.25
Nonperforming assets to total loans plus
other real estate owned<F2> 0.68 1.04 0.43 0.51 0.63 0.60
Reserve to loans<F2> 2.14 2.39 1.50 1.81 2.01 2.45
Reserve to nonperforming loans<F2> 400.9 285.3 373.2 392.3 483.0 969.0
<FN>
<F1>For the six month period ended June 30.
<F2>At June 30.
<F3>Annualized for the first six months.
</TABLE>
Page 20
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit Index:
Exhibit Exhibit No. Page No.
Statement re: Computation of Per Share Earnings 11 22
(b) SunTrust did not file any reports on Form 8-K during the second quarter
of 1997.
SIGNATURES
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 this 13th day of August, 1997.
SunTrust Banks, Inc.
(Registrant)
/s/ W.P. O'Halloran
William P. O'Halloran
Senior Vice President and Controller
(Chief Accounting Officer)
Page 21
<PAGE>
<TABLE>
EXHIBIT 11
Statement re: Computation of Per Share Earnings
(In thousands, except per share data)
<CAPTION>
Three Months Six Months
Ended June 30 Ended June 30
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Primary
Net income $165,436 $152,097 $326,492 $302,516
Average common shares outstanding 213,664 224,624 216,008 225,210
Average common share equivalents outstanding (F1):
Stock options 1,426 1,300 1,467 1,365
Restricted sock (1,518) (1,863) (1,589) (1,851)
Average primary common shares 213,572 224,061 215,886 224,724
Earnings per common share - Primary $ 0.77 $ 0.68 $ 1.51 $ 1.34
Fully Diluted
Net income $165,436 $152,097 $326,492 $302,516
Average common shares outstanding 213,664 224,624 216,008 225,210
Average common share equivalents outstanding (F1):
Stock options 1,472 1,310 1,496 1,384
Restricted sock (1,516) (1,863) (1,571) (1,847)
Average fully diluted common shares 213,620 224,071 215,933 224,747
Earnings per common share - Fully Dilute $ 0.77 $ 0.68 $ 1.51 $ 1.34
<FN>
<F1>Includes the incremental effect of stock options and restricted
stock outstanding computed under the treasury stock method.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 2,631,506
<INT-BEARING-DEPOSITS> 3,876
<FED-FUNDS-SOLD> 801,768
<TRADING-ASSETS> 372,049
<INVESTMENTS-HELD-FOR-SALE> 11,776,991
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 37,684,289
<ALLOWANCE> 739,776
<TOTAL-ASSETS> 55,462,804
<DEPOSITS> 35,832,878
<SHORT-TERM> 8,987,016
<LIABILITIES-OTHER> 2,803,087
<LONG-TERM> 2,699,169
<COMMON> 216,608
0
0
<OTHER-SE> 4,924,046
<TOTAL-LIABILITIES-AND-EQUITY> 55,462,804
<INTEREST-LOAN> 1,463,678
<INTEREST-INVEST> 264,473
<INTEREST-OTHER> 33,373
<INTEREST-TOTAL> 1,761,524
<INTEREST-DEPOSIT> 566,898
<INTEREST-EXPENSE> 829,289
<INTEREST-INCOME-NET> 932,235
<LOAN-LOSSES> 55,436
<SECURITIES-GAINS> 1,029
<EXPENSE-OTHER> 827,349
<INCOME-PRETAX> 503,353
<INCOME-PRE-EXTRAORDINARY> 326,492
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 326,492
<EPS-PRIMARY> 1.51
<EPS-DILUTED> 1.51
<YIELD-ACTUAL> 4.20
<LOANS-NON> 161,007
<LOANS-PAST> 25,863
<LOANS-TROUBLED> 10,974
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 722,569
<CHARGE-OFFS> 67,367
<RECOVERIES> 25,858
<ALLOWANCE-CLOSE> 739,776
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 739,776
</TABLE>
