SunTrust 2007 Annual Report Download - page 27

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Cautionary Statement Regarding Forward-Looking Statements
The information included or incorporated by reference in this Form 10-K may contain forward-looking statements.
Statements that do not describe historical or current facts, including statements about beliefs and expectations, are forward-
looking statements. These statements often include the words “believes,” “expects,” “anticipates,” “estimates,” “intends,”
“plans,” “targets,” “initiatives,” “potentially,” “probably,” “projects,” “outlook” or similar expressions or future
conditional verbs such as “may,” “will,” “should,” “would,” and “could.”
Forward looking statements involve significant risks and uncertainties. Investors are cautioned against placing undue
reliance on our forward-looking statements. Actual results may differ materially from those set forth in the forward-looking
statements. Such statements are based upon the current beliefs and expectations of the management of SunTrust and on
information currently available to management. Such statements speak as of the date hereof, and SunTrust does not assume
any obligation to update the statements included or incorporated by reference or to update the reasons why actual results
could differ from those contained in such statements in light of new information or future events. The forward looking
statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Factors that might cause our future financial performance to vary from that described in our forward-looking statements
include risks discussed in this MD&A and in other periodic reports that we file with the SEC. In addition, the discussion
contained in Item 1A. “Risk Factors,” sets forth certain risks and uncertainties that we believe could cause actual future
results to differ materially from expected results. However, other factors besides those listed below or discussed in our
reports to the SEC also could adversely affect our results, and the reader should not consider this list of factors to be a
complete set of all potential risks or uncertainties.
This narrative will assist readers in their analysis of the accompanying consolidated financial statements and supplemental
financial information of the Company. It should be read in conjunction with the Consolidated Financial Statements and
Notes.
When we refer to “SunTrust,” “the Company,” “we,” “our” and “us” in this narrative, we mean SunTrust Banks, Inc. and
Subsidiaries (consolidated). Effective October 1, 2004, National Commerce Financial Corporation (“NCF”) merged with
SunTrust. The results of operations for NCF were included with our results beginning October 1, 2004. Periods prior to the
acquisition date do not reflect the impact of the merger.
In Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), net interest income,
net interest margin and the efficiency ratio are presented on a fully taxable-equivalent (“FTE”) basis and the quarterly ratios
are presented on an annualized basis. The FTE basis adjusts for the tax-favored status of income from certain loans and
investments. We believe this measure to be the preferred industry measurement of net interest income and it enhances
comparability of net interest income arising from taxable and tax-exempt sources. We also present diluted earnings per
common share excluding merger expense and an efficiency ratio excluding merger expense that exclude merger charges
related to the NCF acquisition. We believe the exclusion of the merger charges, which represent incremental costs to
integrate NCF’s operations, is more reflective of normalized operations. Additionally, we present a return on average realized
common shareholders’ equity, as well as a return on average common shareholders’ equity (“ROE”). We also present a
return on average assets less net unrealized securities gains/losses and a return on average total assets (“ROA”). The return
on average realized common shareholders’ equity and return on average assets less net unrealized securities gains/losses
exclude realized securities gains and losses and the Coca-Cola Company dividend, from the numerator, and net unrealized
securities gains from the denominator. We present a tangible efficiency ratio and a tangible equity to tangible assets ratio,
which excludes the cost of and the other effects of intangible assets resulting from merger and acquisition (“M&A”) activity.
We believe these measures are useful to investors because, by removing the effect of intangible asset costs from merger and
acquisition activity (the level of which may vary from company to company), it allows investors to more easily compare our
efficiency and capital adequacy to other companies in the industry. The measures are utilized by management to assess our
efficiency, and that of our lines of business, as well as our capital adequacy. We provide reconcilements in Tables 21 and 22
in the MD&A for all non-US GAAP measures. Certain reclassifications may be made to prior period financial statements and
related information to conform them to the 2007 presentation.
15