SunTrust 2004 Annual Report Download

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2004 Annual Report
Translating Potential Into Performance

Table of contents

  • Page 1
    2004 Annual Report Translating Potential Into Performance

  • Page 2
    ... in selected markets nationally. The Company's 1,710 retail and specialized service branches and 2,804 ATMs are located primarily in Florida, Georgia, Maryland, North Carolina, South Carolina, Tennessee, Virginia and the District of Columbia. In addition, SunTrust provides customers with a selection...

  • Page 3

  • Page 4
    ... Expansion into new, high-growth geographic markets and enhancement of our banking capabilities through our acquisition of Memphis-based National Commerce Financial Corporation (NCF). • Evolution of our executive management structure to accommodate the retirement of several long-service executives...

  • Page 5
    ...as in South Carolina, Georgia, Florida and Virginia. The NCF merger brings significant business opportunities to SunTrust as we offer access to SunTrust's broader capabilities, such as wealth management, securities and capital markets-related services, to former NCF customers in our new markets. The...

  • Page 6
    ... corporate mission - "to help people and institutions prosper" - is communicated t h ro u g h o u t the organization. We were gratified by the results of a comprehensive employee survey undertaken in 2004 that indicated that an unusually high proportion of SunTrust employees "care about the Company...

  • Page 7
    ... money ought to work even harder for them. At SunTrust, we're committed to keeping our clients connected, protected and supported to ensure that the right products and the highest standards of service are delivered every step of the way. Respecting and understanding our clients allow us to develop...

  • Page 8
    ... desktop access to account data, SunTrust understands that clients require multiple, secure channels of service that are available anytime, any w h e re. T h a t's w hy, in addition to our network of conve n i e n t ly located branches - including many supermarket branches with extended hours - we...

  • Page 9
    ... that each dollar placed in an account with us - from a personal checking account to a large business payroll - reflects an implicit t r u s t. We respect that commitment, and safeguard our clients' interests by prov i d i n g security and fraud protection in every transaction. We are dedicated to...

  • Page 10
    ... and support to their enterprise at each stage of the business cycle. We know that our clients' needs, and those of the businesses they manage, will...structure, or they need succession planning advice or an exit strategy, SunTrust brings effective solutions. We believe that a critical part of our job...

  • Page 11
    ... small- to mid-size business establish its first 401(k) and pension plan, or execute a large enterprise's merger and acquisition, real estate financing, commercial mortgage or investment strategy. While business circumstances may change, our dedication and support for our clients is unwavering...

  • Page 12

  • Page 13

  • Page 14
    ... is on long-term relationships, we t a ke the time to t h o ro u g h ly understand our clients' businesses. We ' re able to offer uniquely structured solutions, such as large-scale financing, treasury management tools, and access to capital markets through the underwriting of equities or bonds. 12...

  • Page 15
    ... and long-tenured relationship managers who work to deliver results for our clients over the long term. With every transaction, whether it invo lves corporate or personal assets, traditional credit structures, or complex, customized terms, S u n Trust is a capable and trusted partner. For the people...

  • Page 16

  • Page 17

  • Page 18
    ... Loans Deposits Total shareholders' equity Common shares - diluted (thousands) At December 31 Total assets Earning assets Loans Allowance for loan losses Deposits Total shareholders' equity Common shares outstanding (thousands) Market value of investment in common stock of The Coca-Cola Company...

  • Page 19
    ...FINANCIAL DATA MANAGEMENT'S DISCUSSION CONSOLIDATED STATEMENTS OF INCOME CONSOLIDATED BALANCE SHEETS CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY CONSOLIDATED STATEMENTS OF CASH FLOW NOTES TO CONSOLIDATED FINANCIAL STATEMENTS BOARD OF DIRECTORS GENERAL INFORMATION SUNTRUST 2004 ANNUAL REPORT 17

  • Page 20
    ... gain Net income Dividends declared Market price: High Low Close Selected Average Balances Total assets Earning assets Loans Deposits Total shareholders' equity At December 31 Total assets Earning assets Loans Allowance for loan losses Deposits Long-term debt Total shareholders' equity Ratios and...

  • Page 21
    ... SunTrust operates primarily within Florida, Georgia, Maryland, North Carolina, South Carolina, Tennessee, Virginia, West Virginia, and the District of Columbia. The acquisition of NCF on October 1, 2004 strengthened the Company's existing footprint, as well as expanded the footprint into new...

  • Page 22
    ...and cross-selling efforts. On the downside, the demand for large corporate lending continued to be sluggish throughout 2004. The Company plans to capitalize on opportunities within the NCF footprint by pursuing smaller corporate and commercial customers. Average consumer and commercial deposits grew...

  • Page 23
    ... SunTrust's reporting units, management uses discounted cash flow models which require assumptions about the Company's revenue growth rate and the cost of equity. ESTIMATES OF FAIR VALUE Fair value is defined as the amount at which a financial instrument could be exchanged in a transaction between...

  • Page 24
    ... do not have a pre-existing relationship with the Company. Alexander Key is currently located in Atlanta, GA, Nashville, TN, Washington,DC, Jacksonville, FL, Orlando, FL, and Richmond, VA. Wealth and Investment Management also offers professional investment management and trust services to clients...

  • Page 25
    ... discount relationships; SunTrust Online, which handles customer phone inquiries and phone sales and manages the Internet banking function; Human Resources, which includes the recruiting, training and employee benefit administration functions; Finance, which includes accounting, budgeting, planning...

  • Page 26
    ...) Retail Commercial Corporate and Investment Banking Mortgage Wealth and Investment Management NCF (acquired October 1, 2004) pated in a rising rate environment as clients earn a higher credit on their deposits. Noninterest expense increased $67.8 million, or 23.8%. Affordable Housing activities...

  • Page 27
    ...$133.9 million due to balance sheet management derivative activities and lower matched-maturity funds transfer pricing allocated to the lines of business. The loan loss provision declined $68.1 million due to improved credit quality and the difference between the Company's consolidated provision and...

  • Page 28
    ... for sale Interest-bearing deposits Trading assets Total interest income Interest Expense NOW accounts Money Market accounts Savings deposits Consumer time deposits Brokered deposits Foreign deposits Other time deposits Funds purchased and securities sold under agreements to repurchase Other short...

  • Page 29
    ... cost funding sources, such as developing initiatives to grow customer deposits. Campaigns to attract customer deposits were implemented in 2003 and 2004.The Company believes that deposit growth has also benefited from the volatility in the financial markets. Combined average NOW accounts, savings...

  • Page 30
    ... and Shareholders' Equity Interest-bearing deposits: NOW accounts Money Market accounts Savings Consumer time Other time Total interest-bearing consumer and commercial deposits Brokered deposits Foreign deposits Total interest-bearing deposits Funds purchased and securities sold under agreements to...

  • Page 31
    MANAGEMENT ' S DISCUSSION continued 2001 Average Balances Income/ Expense Yields/ Rates Average Balances 2000 Income/ Expense Yields/ Rates Average Balances 1999 Income/ Expense Yields/ Rates $ 68,...2.91% $3,293.4 3.58% $3,148.4 2.71% $3,188.0 3.55% 3.15% 3.88% SUNTRUST 2004 ANNUAL REPORT 29

  • Page 32
    ... processing and software Equipment expense Marketing and customer development Consulting and legal Amortization of intangible assets Postage and delivery Communications Credit and collection services Other staff expense Operating supplies Merger-related expense FDIC premiums Other real estate income...

  • Page 33
    ... improvement in adjustable rate mortgage production, which the Company tends to retain in its portfolio. The increase in home equity lines was due to better products, sales focus, and crossselling efforts. Commercial loans on a historical SunTrust basis were up slightly taking into account the 2004...

  • Page 34
    MANAGEMENT ' S DISCUSSION continued Table 8 / COMMERCIAL LOANS BY SELECTED INDUSTRIES1 (Dollars in millions) Construction Real estate Business services & nonprofits Retail trade Manufacturing Finance & insurance Health & social assistance Wholesale trade Public administration Professional, ...

  • Page 35
    ... factors are developed and applied to the various loan pools. Adjustments are made to the allowance for specific loan pools based on an assessment of internal and external influences on credit quality that have not yet been reflected in the historical loss or risk-rating data. These influences...

  • Page 36
    ... NCF ALLL methodology. Until NCF loans are converted to SunTrust's loan accounting systems, the former NCF management will continue to develop its allowance using its methodology. The NCF ALLL process includes loss estimates based on the review of individual loans with an identifiable loss and...

  • Page 37
    ... 31 Unrealized Unrealized Gains Losses Fair Value U.S. Treasury and other U.S. government agencies and corporations 2004 2003 2002 States and political subdivisions 2004 2003 2002 Asset-backed securities 2004 2003 2002 Mortgage-backed securities 2004 2003 2002 Corporate bonds 2004 2003 2002 Other...

  • Page 38
    ... Noninterest bearing NOW accounts Money Market accounts Savings Consumer time Other time Total consumer and commercial deposits Brokered deposits Foreign deposits Total deposits 2004 $21,047.1 13,777.5 22,864.7 7,225.4 8,333.5 3,843.3 77,091.5 4,273.5 5,767.9 $87,132.9 Year Ended December 31 2003...

  • Page 39
    ... element supporting business decision making at SunTrust. The Company is currently implementing an enterprise risk management framework that will improve the Company's ability to manage its aggregate risk profile. The Company's Chief Risk Officer (CRO) reports to the Chief Executive Officer and...

  • Page 40
    ... market risk, and mainly arises from the structure of the balance sheet (non-trading activities). SunTrust is also exposed to market risk in its trading activities, mortgage servicing rights, mortgage warehouse and pipeline, and equity holdings of The Coca-Cola Company common stock. The ALCO meets...

  • Page 41
    ...relatively short time horizon (two years). Key assumptions in the simulation analysis (and in the valuation analysis discussed later in this section) relate to the behavior of interest rates and spreads, the changes in product balances and the behavior of loan and deposit customers in different rate...

  • Page 42
    ...the time the customer locks in the rate on the anticipated loan and the time the loan is sold on the secondary mortgage market, which is typically 90-150 days. The Company manages interest rate risk predominately with forward sale agreements, where the changes in value of the forward sale agreements...

  • Page 43
    ... hedges of commercial loans. Represents interest rate swaps designated as fair value hedges of fixed-rate loans and reverse repurchase agreements. Forward contracts are designated as fair value hedges of closed mortgage loans, including both fixed and floating, which are held for sale. Certain other...

  • Page 44
    ... 2.20 $ $ $6,015 30 2.29% 2.91 $7,467 (39) 4.29% 2.13 $ $4,650 (92) 3.92% 2.12 $1,500 30 4.97% 2.15 All interest rate swaps have variable pay or receive rates with resets of three months or less, and are the pay or receive rates in effect at December 31, 2004. 42 SUNTRUST 2004 ANNUAL REPORT

  • Page 45
    ...to those policies. The Company's sources of funds include a large, stable deposit base, secured advances from the Federal Home Loan Bank and access to the capital markets. The Company structures its balance sheet so that illiquid assets, such as loans, are funded through customer deposits, long-term...

  • Page 46
    ...agreements and the lines of credit prevent the Company from creating liens on, disposing of, or issuing (except to related parties) voting stock of subsidiaries. Further, there are restrictions on mergers, consolidations, certain leases, sales or transfers of assets, and minimum shareholders' equity...

  • Page 47
    ...commitments1 Home equity lines Commercial real estate Commercial paper conduit Commercial credit card Total unused lines of credit Letters of credit Financial standby Performance standby Commercial Total letters of credit 1 Includes $3.8 billion and $2.8 billion in interest rate locks accounted for...

  • Page 48
    ...normal credit approval and monitoring processes. As part of its community reinvestment initiatives, the Company invests in multi-family affordable housing properties throughout its footprint as a limited and/or general partner.The Company receives affordable housing federal and state tax credits for...

  • Page 49
    ... an improvement in customer-driven fee income, specifically in the wealth management and capital market business, and increases in service charges on deposits and other charges and fees. Retail investment services income increased $25.1 million, or 18.4%, due to an increase in broker production, an...

  • Page 50
    ... Classic Funds, institutional assets managed by Trusco Capital Management, and participantdirected retirement accounts. Noninterest expense increased $38.7 million, or 8.1%. Increased commissions and incentives from new business activity in SunTrust Securities and Alexander Key were the main drivers...

  • Page 51
    ...9.5%. Balance sheet growth in consumer loans, commercial loans, and deposits drove the increase in net interest income. Home equity lending showed the strongest growth in the loan category while demand deposits showed the strongest growth in the deposit category. Average SUNTRUST 2004 ANNUAL REPORT...

  • Page 52
    ...derivatives, foreign exchange and syndicated finance fee income.The remainder of the increase was the result of higher merchant banking revenue. Noninterest expense increased $6.4 million, or 7.7%. The increase was primarily due to an increase in asset impairment reserves in SunTrust Equity Partners...

  • Page 53
    ...Basic Dividends declared Book value Market Price: High Low Close Selected Average Balances Total assets Earning assets Loans Consumer and commercial deposits Brokered and foreign deposits Total shareholders' equity ...53 281,330 278,631 1.12% 1.02 15.13 16.12 3.21 59.26 SUNTRUST 2004 ANNUAL REPORT 51

  • Page 54
    ... and Shareholders' Equity Interest-bearing deposits: NOW accounts Money Market accounts Savings Consumer time Other time Total interest-bearing consumer and commercial deposits Brokered deposits Foreign deposits Total interest-bearing deposits Funds purchased and securities sold under agreements to...

  • Page 55
    ... processing and software Equipment expense Marketing and customer development Amortization of intangible assets Merger-related expense Consulting and legal Other staff expense Postage and delivery Communications Credit and collection services Operating supplies FDIC premiums Other real estate income...

  • Page 56
    ... in 2004 than prior year.The increase was due to merger-related expenses of $23.7 million for systems conversions, project management, conformity changes, and customer communications related to the NCF acquisition. CORPORATE/OTHER Corporate/Other's loss before taxes was $254.6 million compared to...

  • Page 57
    ... $ $ Commercial 2004 (Dollars in millions) Average total assets Average total ...Corporate & Investment Banking 2004 (Dollars in millions) Average total assets...$ Provision for loan losses includes an allocation to the lines of business reflecting net credit losses. SUNTRUST 2004 ANNUAL REPORT 55

  • Page 58
    ... Net interest income after provision for loan losses Noninterest income Noninterest expense Total income before taxes Provision for income taxes Net income 1 $ Provision for loan losses includes an allocation to the lines of business reflecting net credit losses. 56 SUNTRUST 2004 ANNUAL REPORT

  • Page 59
    ...1.3 (11.1) 1.4 1.3 45.3 1.5 (12.5) 43.8 14.5 19.7 234.6 232.4 (232.6) (168.9) 156.5 153.8 $ (389.1) $ (322.7) The provision for loan losses for Corporate/Other reflects the difference between the Company's consolidated provision for loan losses and net charge-offs. SUNTRUST 2004 ANNUAL REPORT 57

  • Page 60
    ... securities gains/losses and The Coca-Cola Company dividend, by average assets less net unrealized securities gains. Computed by dividing net income excluding securities gains/losses and The Coca-Cola Company dividend, by average realized shareholders' equity. 58 SUNTRUST 2004 ANNUAL REPORT

  • Page 61
    ... gains/losses and The Coca-Cola Company dividend, by average assets less net unrealized securities gains. Computed by dividing annualized net income excluding securities gains/losses and The Coca-Cola Company dividend, by average realized shareholders' equity. 2 SUNTRUST 2004 ANNUAL REPORT 59

  • Page 62
    ... NCF acquisition. The purchases were made to satisfy valid elections by NCF shareholders to acquire SunTrust common stock that were not originally honored as a result of SunTrust error. 2 3 Table 26 / FUNDS PURCHASED AND SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE1 At December 31 Balance Rate...

  • Page 63
    ... Asset-backed securities1 Mortgage-backed securities1 Corporate bonds Total debt securities Fair Value U.S. Treasury and other U.S. government agencies and corporations States and political subdivisions Asset-backed securities1 Mortgage-backed securities1 Corporate bonds Total debt securities...

  • Page 64
    ..., and West Virginia, and El Banco branches in Georgia. NBC Bank, FSB and First Market Bank, FSB are federal savings banks primarily regulated by the Office of Thrift Supervision (the OTS). NBC Bank, FSB is headquartered in Memphis, Tennessee and has branches in Mississippi and Florida. The Company...

  • Page 65
    ... and fiscal policies and regulations, including those determined by the Federal Reserve Board, the Federal Deposit Insurance Corporation and state regulators • changes may occur in the securities markets • competitors of SunTrust may have greater financial resources and develop products that...

  • Page 66
    ...- PROPERTIES The Company's headquarters is located in Atlanta, Georgia. As of December 31, 2004, SunTrust Bank owned 832 of its 1,676 full-service banking offices, and leased the remaining banking offices. (See Note 8 to the Consolidated Financial Statements.) CONTROLS AND PROCEDURES EVALUATION OF...

  • Page 67
    ...filed a Current Report on Form 8-K with respect to the foregoing on February 11, 2005, the filing was not timely. On December 8, 2004 the Compensation Committee of the Company's Board of Directors designated certain key employees as new participants in the Company's Supplemental Executive Retirement...

  • Page 68
    ...used: SunTrust Banks, Inc. - Company or SunTrust SunTrust Bank Holding Company - Bank Parent Company National Commerce Financial Corporation - NCF INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Consolidated Statements of Income Consolidated Balance Sheets Consolidated Statements of Shareholders' Equity...

  • Page 69
    ... REGISTERED PUBLIC ACCOUNTING FIRM TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF SUNTRUST BANKS , INC .: We have completed an integrated audit of SunTrust Banks, Inc.'s 2004 consolidated financial statements and of its internal control over financial reporting as of December 31, 2004 and audits...

  • Page 70
    ... Reporting, management has excluded National Commerce Financial Corporation ("NCF") from its assessment of internal control over financial reporting as of December 31, 2004 because it was acquired by the Company in a purchase business combination during 2004. We have also excluded NCF from our audit...

  • Page 71
    ...Service charges on deposit accounts Trust and investment management income Other noninterest income Securities (losses)/gains Total noninterest income Noninterest Expense Employee compensation Employee benefits Net occupancy expense Equipment expense Marketing and customer development Merger-related...

  • Page 72
    ...from banks Interest-bearing deposits in other banks Funds sold and securities purchased under agreements to resell Trading assets Securities available for sale1 Loans held for sale Loans Allowance for loan losses Net loans Premises and equipment Goodwill Other intangible assets Customers' acceptance...

  • Page 73
    ... options and stock compensation element 1,905 Acquisition of treasury stock (200) Acquisition of National Commerce Financial, Inc. 76,415 Performance stock activity 302 Amortization of compensation element of performance stock - Issuance of stock for employee benefit plans 495 Balance, December 31...

  • Page 74
    ... brokered deposits Net decrease in funds purchased and other short-term borrowings Proceeds from the issuance of long-term debt Repayment of long-term debt Proceeds from the exercise of stock options Proceeds from stock issuance Acquisition of treasury stock Performance stock activity Dividends paid...

  • Page 75
    ...headquarters in Atlanta, Georgia. SunTrust's principal banking subsidiaries, SunTrust Bank and National Bank of Commerce (NBC), offer a full line of financial services for consumers and businesses through their branches located primarily in Florida, Georgia, Maryland,Tennessee, North Carolina, South...

  • Page 76
    ..., the Company allocates the cost of the loan and the servicing rights based on their relative fair market values at the time of sale of the underlying mortgage loan. Fair value is determined through a review of valuation assumptions that are supported by market and economic data collected from...

  • Page 77
    ... estimates of key assumptions, including credit losses, loan repayment speeds and discount rates commensurate with the risks involved. Gains or losses on sales as well as servicing fees are recorded in noninterest income. DERIVATIVE FINANCIAL INSTRUMENTS It is the policy of the Company to record...

  • Page 78
    ... for loan commitments accounted for as derivative instruments. Interest rate lock commitments (IRLCs) represent commitments to extend credit at specified interest rates. In the normal course of business, the Company enters into derivatives, consisting primarily of mortgage-backed security (MBS...

  • Page 79
    ... retail banking, savings and trust services through its branches located in North Carolina, South Carolina, Georgia, Tennessee, Mississippi, Arkansas, Virginia, and West Virginia. The merger enhanced the Company's geographic position, as well as expanded the Company's footprint to include new areas...

  • Page 80
    ... continues and additional information becomes available. Assets Cash and cash equivalents Securities available for sale Net loans and loans held for sale Goodwill Core deposit intangibles Other intangibles Mortgage servicing rights Other assets Total assets Liabilities Deposits Long-term debt...

  • Page 81
    ... Financial Services, Inc. (Lighthouse) based in Hilton Head Island, South Carolina. The Company acquired approximately $637 million in assets, $567 million in loans, and $421 million in deposits. In addition, SunTrust paid $131 million in a combination of cash and SunTrust stock. The transaction...

  • Page 82
    ... and other debt securities Equity securities Mortgage-backed securities Derivative contracts Municipal securities Commercial paper Total trading assets Trading Liabilities U.S. government and agency securities Derivative contracts Other Total trading liabilities 80 SUNTRUST 2004 ANNUAL REPORT

  • Page 83
    ... and other U.S. government agencies and corporations States and political subdivisions Asset-backed securities Mortgage-backed securities Corporate bonds Common stock of The Coca-Cola Company Other securities Total securities available for sale The amortized cost and fair value of investments in...

  • Page 84
    ... impairments associated with the above securities at December 31, 2004. Note 6 / LOANS The composition of the Company's loan portfolio at December 31 is shown in the following table: (Dollars in thousands) Commercial Real estate Home equity Construction Residential mortgages Other Credit card...

  • Page 85
    ... Company completed its annual review as of September 30, 2004, and determined there was no impairment of goodwill as of this date. The changes in the carrying amount of goodwill by reportable segment for the twelve months ended December 31, 2004 and 2003 are as follows: SUNTRUST 2004 ANNUAL REPORT...

  • Page 86
    ... NCF acquisition Branch divestiture Other acquisitions Balance, December 31, 2004 Retail $ 687,185 7,499 41,830 - - 736,514 449 - (4,975) - - - $731,988 Corporate and Investment Commercial Banking $ 96,626 $ 94,852 2,203 - 24,447 - - - - - 123,276 94,852 190 123,466 $94,852 Mortgage $ 15...

  • Page 87
    ... million of unused borrowings under unsecured lines of credit from non-affiliated banks were available to the Parent Company to support outstanding commercial paper and provide for general liquidity needs. The average balances of shortterm borrowings for the year ended December 31, 2004, 2003, and...

  • Page 88
    ... in one factor may result in changes in another (for example, increases in market interest rates may result in lower prepayments and increased credit losses), which might magnify or counteract the sensitivities. The Company has securitized mortgage loans and retained varying degrees of recourse...

  • Page 89
    ...long-term debt agreements prevent the Company from creating liens on, disposing of, or issuing (except to related parties) voting stock of subsidiaries. Further, there are restrictions on mergers, consolidations, certain leases, sales or transfers of assets, minimum shareholders' equity, and maximum...

  • Page 90
    ... losses Accrued expenses Other Gross deferred tax assets Deferred tax liabilities Net unrealized gains on securities available for sale Leasing Employee benefits Mortgage Intangible assets Fixed assets Loans Gross deferred tax liabilities Net deferred tax liability 88 SUNTRUST 2004 ANNUAL REPORT

  • Page 91
    ...be paid at the same rate as the shares of Performance Stock; however, these units will not carry voting privileges. Note 16 / EMPLOYEE BENEFIT PLANS SunTrust sponsors various incentive plans for eligible employees. The Management Incentive Plan for key executives provides for annual cash awards, if...

  • Page 92
    ... thousands except per share data) Balance, January 1, 2002 Granted Exercised/vested Cancelled, expired/forfeited Amortization of compensation for performance stock Balance, December 31, 2002 Granted Exercised/vested Cancelled, expired/forfeited Acquisition of Lighthouse Amortization of compensation...

  • Page 93
    ... 1, 2004, SunTrust acquired National Commerce Financial Corporation (NCF). Prior to the acquisition, NCF sponsored a funded qualified retirement plan, an unfunded nonqualified retirement plan for some of its participants, and certain post retirement health benefits for its employees. Effective...

  • Page 94
    ... health care cost trend rates have a significant effect on the amounts reported for the post retirement health care plans. As of December 31, 2004, SunTrust has assumed that retiree health care costs will increase at an initial rate of 10.50% per year. SunTrust's medical plans are managed carefully...

  • Page 95
    ..., or 0.9% of total plan assets and $4.2 million, 0.3% of total plan assets at the end of 2004 and 2003, respectively. The SunTrust benefit plan committee establishes investment policies and strategies and regularly monitors the performance of the funds. The Company's investment strategy with respect...

  • Page 96
    ...2005 based on the well funded status of the Plan and contribution limitations under the Employee Retirement Income Security Act of 1974 (ERISA). The expected benefit payments for the Supplemental Retirement Plan will be paid directly from SunTrust corporate assets. The 2005 expected contribution for...

  • Page 97
    ... a discount rate of 5.75%. Based on the investment policy for the Retirement Plan and the other Post Retirement Benefit Plan, as well as an asset study that was performed in 2003 and 2004 based on SunTrust's asset allocations and future expectations, the expected rate of return on plan assets was...

  • Page 98
    ... risk is the adverse effect that a change in interest rates, currency or implied volatility rates has on the value of a financial instrument.The Company manages the market risk associated with interest rate, credit, and equity derivatives and foreign exchange contracts by establishing and monitoring...

  • Page 99
    ... hedges of foreign currency exposure within the guidelines of SFAS No. 133.The Company buys and sells credit protection to customers and dealers using credit default swaps.These derivative instruments allow the Company to pay or receive a stream of payments in return SUNTRUST 2004 ANNUAL REPORT 97

  • Page 100
    ... entity's failure to perform under an obligating agreement; (iii) indemnification agreements that contingently require the indemnifying party to make payments to an indemnified party based on changes in an underlying factor that is related to an asset, a liability, 98 SUNTRUST 2004 ANNUAL REPORT

  • Page 101
    .... (STCM), NCF Financial Services, Inc. (NCFFS), and NBC Capital Markets Group (NBCCMG), broker-dealer affiliates of SunTrust, use a common third party clearing broker to clear and execute their clients' securities transactions and to hold client accounts. Under their respective agreements, STS, STCM...

  • Page 102
    ...380 22,127,166 1,098,563 $ Financial assets Cash and short-term investments Trading assets Securities available for sale Loans held for sale Loans Mortgage servicing rights Financial liabilities Consumer and commercial deposits Brokered deposits Foreign deposits Short-term borrowings Long-term debt...

  • Page 103
    ...: Retail, Commercial, Corporate and Investment Banking (CIB), Mortgage, Wealth and Investment Management, and NCF. In addition, the Company reports Corporate/Other which includes the investment securities portfolio, long-term debt, capital, short-term liquidity and funding activities, balance sheet...

  • Page 104
    ... The tables below disclose selected financial information for SunTrust's reportable business segments for the twelve months ended December 31, 2004, 2003, and 2002. Twelve Months Ended December 31, 2004 Corporate & Wealth and Investment Investment Banking Mortgage Management NCF $19,281,182 $23,505...

  • Page 105
    ... transactions and other economic events that bypass the income statement, consists of net income and unrealized gains and losses on securities available for sale, and derivatives net of income taxes and other comprehensive income related to retirement plans. Comprehensive income for the years ended...

  • Page 106
    ...Dollars in thousands) Outside processing and software Consulting and legal Amortization of intangible assets Postage and delivery Communications Credit and collection services Other staff expense Operating supplies FDIC premiums Other real estate income Other expense Total other noninterest expense...

  • Page 107
    ... Income From subsidiaries: Dividends - substantially all from the Bank Interest on loans Other income Other operating income Total operating income Operating Expense Interest on short-term borrowings Interest on long-term debt Employee compensation and benefits Service fees to subsidiaries Other...

  • Page 108
    ...thousands) Assets Cash in subsidiary banks Interest-bearing deposits in banks Funds sold and securities purchased under agreements to resell Trading account Securities available for sale Loans to subsidiaries Investment in capital stock of subsidiaries stated on the basis of the Company's equity in...

  • Page 109
    ... received from subsidiaries Income taxes paid by Parent Company Net income taxes received by Parent Company Interest paid Net non-cash contributions from (distributions to) subsidiaries Non-cash impact of acquisition of National Commerce Financial Non-cash dividend from subsidiaries $ 1,331,809...

  • Page 110
    ... Exchange Act of 1934 For the Fiscal Year Ended December 31, 2004 Commission file number 1-8918 SunTrust Banks, Inc. Incorporated in the State of Georgia IRS Employer Identification Number 58-1575035 Address: 303 Peachtree Street, NE, Atlanta, GA 30308 Telephone: 404-588-7711 Securities Registered...

  • Page 111
    ... Exchange Act of 1934. Shareholders may obtain the list of such Exhibits and copies of such documents upon request to Corporate Secretary, SunTrust Banks, Inc., Mail Code 643, P.O. Box 4418, Atlanta, Georgia, 30302. A copying fee will be charged for the Exhibits. CONSENT OF INDEPENDENT ACCOUNTANTS...

  • Page 112
    ... Executive Officer Florida Banking Group Carl F. Mentzer Senior Executive Vice President Chief Credit Officer Dennis M. Patterson Executive Vice President Corporate Sales Administration William H. Rogers, Jr. Executive Vice President Wealth and Investment Management, Mortgage and Commercial Lines...

  • Page 113
    ... Coast • SunTrust Bank, South Pinellas Co./St. Petersburg LOCATION Jacksonville Jacksonville Ocala Tallahassee Pensacola Gainesville Panama City Ft. Lauderdale Ft. Lauderdale Miami St. Lucie and Vero Sarasota Sarasota Fort Myers Naples Tampa Tampa Brooksville St. Petersburg KEY EXECUTIVE John...

  • Page 114
    ...well as accident and health insurance policies. SunTrust Leasing Corporation Provides equipment-related lease financing to businesses. SunTrust Mortgage, Inc. One of the nation's largest bank-owned mortgage companies. Originates, purchases, sells and services mortgage loans. SunTrust Securities, Inc...

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    ... floor of SunTrust Plaza Garden Offices, 303 Peachtree Center Avenue, Atlanta, Georgia. STOCK TRADING SunTrust Banks, Inc. common stock is traded on the New York Stock Exchange under the symbol "STI." QUARTERLY COMMON STOCK PRICES AND DIVIDENDS SunTrust offers a Dividend Reinvestment Plan that...

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    SunTrust Banks, Inc. 303 Peachtree Street Atlanta, GA 30308