SunTrust 2006 Annual Report Download - page 21

values could adversely affect the value of property used as collateral for our loans and investments. If
poor economic conditions result in decreased demand for real estate loans, our profits may decrease
because our alternative investments may earn less income than real estate loans.
Clients could pursue alternatives to bank deposits, causing us to lose a relatively inexpensive
source of funding.
Checking and savings account balances and other forms of client deposits could decrease if clients
perceive alternative investments, such as the stock market, as providing superior expected returns. When
clients move money out of bank deposits in favor of alternative investments, we can lose a relatively
inexpensive source of funds, increasing the Company’s funding costs.
Consumers may decide not to use banks to complete their financial transactions, which could
affect net income.
Technology and other changes now allow parties to complete financial transactions without banks. For
example, consumers can pay bills and transfer funds directly without banks. This process could result in
the loss of fee income, as well as the loss of client deposits and the income generated from those
deposits.
We have businesses other than banking which subjects the Company to a variety of risks.
We are a diversified financial services company. This diversity subjects earnings to a broader variety of
risks and uncertainties.
Hurricanes and other natural disasters may adversely affect loan portfolios and operations and
increase the cost of doing business.
Large scale natural disasters may significantly affect loan portfolios by damaging properties pledged as
collateral and by impairing the ability of certain borrowers to repay their loans. The ultimate impact of a
natural disaster on future financial results is difficult to predict and will be affected by a number of
factors, including the extent of damage to the collateral, the extent to which damaged collateral is not
covered by insurance, the extent to which unemployment and other economic conditions caused by the
natural disaster adversely affect the ability of borrowers to repay their loans, and the cost of collection
and foreclosure moratoriums, loan forbearances and other accommodations granted to borrowers and
other clients.
Negative public opinion could damage our reputation and adversely impact business and
revenues.
As a financial institution, our earnings and capital are subject to risks associated with negative public
opinion. Negative public opinion could result from our actual or alleged conduct in any number of
activities, including lending practices, the failure of any product or service sold by us to meet our
customers’ expectations or applicable regulatory requirements, corporate governance and acquisitions,
or from actions taken by government regulators and community organizations in response to those
activities. Negative public opinion can adversely affect our ability to keep and attract and/or retain
clients and can expose us to litigation and regulatory action. Actual or alleged conduct by one of our
businesses can result in negative public opinion about our other businesses. Negative public opinion
could also affect the Company’s credit ratings, which are important to its access to unsecured wholesale
borrowings; significant changes in these ratings could change the cost and availability of these sources
of funding.
We rely on other companies to provide key components of our business infrastructure.
Third parties provide key components of the business infrastructure such as Internet connections and
network access. Any disruption in Internet, network access or other voice or data communication
services provided by these third parties or any failure of these third parties to handle current or higher
volumes of use could adversely affect the ability to deliver products and services to clients and
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