SunTrust 2005 Annual Report Download - page 16

Download and view the complete annual report

Please find page 16 of the 2005 SunTrust annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 116

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116

14 SUNTRUST 2005 ANNUAL REPORT
Business Highlights
We further institutionalized our Company-wide sales culture.
Today, the key components of a world-class sales organization are
very much in place at SunTrust. This includes frequent sales meet-
ings in all geographic banking regions and all business lines with spe-
cific sales and referral goals, tracking and measurement mecha-
nisms, and most importantly, incentives that align employee, client,
and shareholder interests. Our sales people increasingly take a “360
degree view” of each client’s needs and look across business lines to
deliver the full range of SunTrust products and services. A visible
result of this focus is significantly higher levels of referrals and cross-
sales. One example of this: an emphasis on cross-selling home equity,
deposit and other consumer products to mortgage clients resulted in
over 100,000 of these products being sold to those clients, a
substantial increase over 2004.
We are seeing the benefits of our merger with the former
National Commerce Financial Corporation (“NCF”) in significant
new business opportunities as well as operating efficiencies that
exceeded our initial projections by almost a third. The merger was
legally completed in late 2004 with the highly visible conversion
of customer accounts and launch of the SunTrust brand into former
NCF markets taking place in April 2005. By any standard, the con-
version was smooth and successful, providing the latest example of
SunTrust’s skill at merger integration.
To increase our market reach, we announced plans to expand
into the demographically attractive Charleston, South Carolina area,
where over the next three years we’ll open 16 traditional and in-
store branches to complement our presence in other parts of the
state.
In early 2006, we signed a new strategic banking agreement with
Wal-Mart that provides for enhancement of our partnership over the
next three years. We also announced plans to acquire 11 in-store
branches in Florida Wal-Mart Supercenter stores in a move that
bolsters the highly successful partnership we have with Wal-Mart
throughout our footprint.
We accelerated implementation of performance initiatives
within our five key lines of business. Some examples include:
•In Retail Banking, in addition to enhancing our branch presence,
we upgraded our online banking capabilities for small business
clients, streamlined our deposit products, and improved turn-
around times for home equity loans through a combination of
technology and process improvements while lowering the cost
per closed loan.
•In Commercial Banking, expanded use of sales management
technology plus an increased emphasis on cross-sales resulted in
solid growth in the Commercial and Industrial, and Real Estate
loan portfolios and points to the success of our relationship
management approach. Targeted investments in Treasury
Management technology and commercial card products, coupled
with a sales strategy focused on a wider range of payment solu-
tions, resulted in increased sales volumes while also enhancing our
competitive position in this high-potential core business segment.
•In Corporate and Investment Banking, we stepped-up cross-sell-
ing of capital markets products to the Corporate, Commercial,
and Wealth and Investment Management client bases and
enhanced our capital markets capabilities by investing in both
new and existing products.
85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05
$0.00
$3.00
$6.00
10.0% CAGR
9.2% CAGR
0.84
0.93
1.09
1.19
1.31
1.38
1.45
1.64
1.89
2.32
2.56
2.87
3.13
3.04 0.37
4.30
4.72 0.07
4.66 0.14
4.73
5.19 0.06
5.47 0.17
0.09
4.13 0.10
EPS per Generally Accepted Accounting Principles (GAAP) Reduction in EPS due to merger expense
BOTTOM LINE MOMENTUM
The rate of growth in SunTrust’s earnings per share (“EPS”)1in recent years compares favorably with the long-term historical trend in the EPS
compound annual growth rate (“CAGR”)2. This is a good indication of solid momentum in bottom line earnings over time.
1EPS as originally reported and adjusted for stock splits.
2CAGR based on GAAP EPS excluding merger expense.