SunTrust 2008 Annual Report Download - page 5

economic growth. During the course of 2008, loans grew
$4.7 billion or 3.8%. A key goal is to continue to expand
prudent lending to financially strong companies and
individuals, thus increasing market share. In that context,
SunTrust’s relative strength and stability provide a
competitive advantage in a turbulent marketplace.
As economic conditions deteriorated during 2008,
mitigating credit risk took on increased urgency. The
focus was on the subsets of loan portfolios under the
most significant stress, notably related to residential
real estate. Regarding home equity lines, for example,
origination through third-party channels was eliminated,
loan-to-value guidelines were adjusted, and commitments
in higher-risk situations were reduced. Residential
construction lending standards were tightened at
SunTrust beginning in late 2006. Further, our default
management capabilities were augmented with
additional personnel and enhanced processes and tools.
As a result of these and other actions, higher-risk
balances and exposures are down considerably, particularly
in markets that have gained considerable attention,
such as Florida and Atlanta. So, while nonperforming
loans and charge-offs clearly have risen, we believe the
ultimate realization of risk will be much less than it
otherwise could have been. We continue to closely
monitor the credit picture and are taking appropriate
actions to further mitigate risk.
Looking Ahead
At the end of 2008, we announced a series of
organizational changes in both leadership and
structure. Included was the designation of William H.
Rogers, Jr. as the Corporation’s President. Furthermore,
additional responsibilities were assumed by our Chief
Financial Officer, Mark A. Chancy; C.T. Hill, head of our
Mid-Atlantic banking group; and Thomas G. Kuntz,
head of our Florida banking group. In part, the changes
were designed to streamline the process through which
client-focused business strategies are implemented
on a day-to-day basis, primarily within our geographic
banking units. The idea is to make sure we are always
organizationally positioned to capitalize swiftly on
growth opportunities even as we continue to deal with
challenges in the environment.
No one can predict how long or deep the current housing
correction and economic slowdown will be. At this
writing, unfortunately, there is no basis to assume
that 2009 will be any less challenging than 2008. That
said, there remain significant opportunities for SunTrust
to grow its business in anticipation of a resumption
of economic growth. The SunTrust team is in the
marketplace every day, capitalizing on those growth
opportunities by serving existing clients well, attracting
new ones, and doing all of the other things that make
it possible to look beyond current pressures with a
reasoned and realistic sense of confidence.
I am proud of what our people are doing, and believe
that you should be too. Their hard work — combined
with our solid capital and balance sheet positioning,
continued success in expense management, increased
momentum in generating loans and deposits, effective
business mix management,and prudent credit, risk and
liquidity management — should all add up to stronger
performance as market conditions improve.
On behalf of our management team and our Board
of Directors, I wish to thank our employees for their
dedication during a very tough year. And finally, thank
you, our shareholders, for your investment and your
continued support.
JAMES M. WELLS III
Chairman and Chief Executive Officer
SunTrust 2008 Annual Report
3