SunTrust 2004 Annual Report Download - page 4

Among the Year’s Highlights:
•E x cellent bottom-line earnings growth reflecting solid,
b u s i n e s s - d r i v en re venue expansion, best-in-class cre d i t
quality and increasingly effective expense discipline.
• Expansion into new, high-growth geographic markets
and enhancement of our banking capabilities through
our acquisition of Memphis-based National Co m m e r c e
Financial Corporation (NCF).
• Evolution of our executive management structure to
accommodate the retirement of several long-service
executives and to establish the leadership framework
to guide future growth.
•A sharpened focus on the sales, service and customer
orientation critical to maintaining S u n Tr u s t ’s per-
formance momentum and competitive advantage
in the marketplace.
We encourage you to review the in-depth discussion
of financial results that makes up the bulk of this annual
report. The story that emerges from these pages is
generally one of a year that started off good and got
b e t t e r. Included is detailed commentary on the re s t a t e-
ment of our first and second quarter 2004 earnings.
This development received a fair amount of market vis-
ibility when announced in the third quarter.
Translating Potential Into Performance
As 2004 unfolded, various performance-oriented
i n vestments, business initiatives and efficiency pro g r a m s
undertaken in recent years paid off. Net income was
$1.6 billion, or $5.19 per diluted share, up 10% f rom last
year. Return on average assets was 1.18% and return
on common equity was 13.71%. Virtually all other key
performance measures were up comfortably from prior
year levels, a signal that SunTrust has shaken off any
lingering effect of the economic downturn that d a m p-
ened industry, and our own, performance in the 2001-
2003 timeframe.
The improvement in SunTrust’s stock price did not, we
believe, entirely reflect the Company’s performance
momentum. It appears, howeve r, that the inve s t m e n t
community is beginning to more broadly recognize the
merits of SunTrust’s investment story and we are
encouraged that the stock price picked up towards the
end of the year.
Meanwhile, we are pleased to report that the Board of
Directors in February 2005 approved a 10% increase in
the cash dividend paid on the Co m p a n y’s common stock.
This brings the annual dividend per share to $2.20.
Positive Performance Trends
Revenue growth steadily picked up steam during the
year as gains in net interest income – our biggest earn-
ings component, and also the one that had been most
affected by economic weakness – joined already robust
non-interest income. We kept basic operating expenses
in check while maintaining our program of inve s t m e n t
in the people, technology and the business capabilities
necessary for f u t u r e growth. And our traditional emphasis
on credit q u a l i t y, coupled with an improved economy,
led to a sharp reduction in cre d i t- related costs. All o f
t h e s e p o s i t i v e performance t rends added up to the stro n g
bottom line results reported for the year.
Each of our five key business lines – Retail Banking,
Commercial Banking, Wealth and Investment Manage-
m e n t, Corporate and Investment Banking, and Mortgage
Banking – contributed to our overall results in 2004.
Looking ahead, we believewe have built the right mix
of businesses – and within those businesses, the right
product and delivery capabilities – to ensure balanced
re venue generation despite the ups and downs of
the business cycle, swings in the stock market, and the
inevitable credit pre s s u res that impact our industry.
We are concentrated in what many believe is the best
geographic footprint in U.S. banking. Our Southeast and
M i d - A tlantic franchise includes enviable market positions
in some of the highest-growth markets in the nation.
NCF Merger: “The Best of Both Worlds”
Certain SunTrust business lines operate outside our
geographic footprint wheretargeted opportunities
exist. Our mortgage business, for example, successfully
originates loans nationally. And in 2004, our Asset
Management Advisors and Leasing units opened new
offices in key U.S. cities. We also participate in the
ongoing consolidation of our industry by pursuing a
selective approach to mergers and acquisitions.
Our focus is on two types of acquisitions. The first type
is intended to enhance our business capabilities, such as
our early 2004 acquisition of Seix Investment Ad v i s o r s ,
2S U N T R U S T 2 0 0 4 A N N U A L R E P O R T
Our S o u t h e a s t and M i d - At l a n t i c
franchise includes enviable marke t
p o s i t i o n s in some of the highest-
growth markets in the nation.