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68 SunTrust Banks, Inc. Annual Report 2003
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued
NOTE 7
ALLOWANCE FOR LOAN LOSSES
Activity in the allowance for loan losses is summarized in the table below:
(Dollars in thousands) 2003 2002
Balance at beginning of year $930,114 $ 867,059
Allowance from acquisitions, dispositions
and other activity – net 9,324 15,531
Provision for loan losses 313,550 469,792
Loan charge-offs (394,328) (490,117)
Loan recoveries 83,262 67,849
Balance at end of year $941,922 $ 930,114
NOTE 8
PREMISES AND EQUIPMENT
Premises and equipment at December 31 were as follows:
(Dollars in thousands) Useful Life 2003 2002
Land $402,726 $368,876
Buildings and improvements 5 – 40 years 1,391,864 1,367,298
Leasehold improvements 1 – 30 years 294,876 279,263
Furniture and equipment 3 – 20 years 1,231,944 1,236,609
Construction in progress 81,940 81,068
3,403,350 3,333,114
Less accumulated depreciation and amortization 1,808,043 1,725,914
Total premises and equipment $1,595,307 $1,607,200
Operating Capital
(Dollars in thousands) Leases Leases
2004 $94,816 $3,109
2005 78,738 2,254
2006 67,848 1,982
2007 50,592 1,877
2008 35,407 1,877
Thereafter 172,092 29,994
Total minimum lease payments 499,493 41,093
Amounts representing interest 24,090
Present value of net minimum lease payments $17,003
The carrying amounts of premises and equipment subject to
mortgage indebtedness (included in long-term debt) were not
significant at December 31, 2003 and 2002.
Various Company facilities are leased under both capital
and noncancelable operating leases with initial remaining terms
in excess of one year. Minimum payments, by year and in aggre-
gate, as of December 31, 2003 were as follows:
Net premises and equipment included $11.5 million and
$12.5 million at December 31, 2003 and 2002, respectively,
related to capital leases.
Aggregate rent expense (principally for offices), including
contingent rental expense, amounted to $124.7, $122.5 and
$117.0 million for 2003, 2002 and 2001, respectively.