SunTrust 2009 Annual Report Download - page 3

TO OUR SHAREHOLDERS
Writing this in early 2010, I must admit to a certain
degree of relief that 2009 is behind us. Details of the
severe, recession-related pressures faced last year by
our industry, our clients, and our Company have been
well reported and need not be recounted in detail here.
The impact on SunTrust’s fi nancial performance—notably
higher credit costs, softer fee income, and generally
weak loan demand—ultimately caused a loss of $3.98
per share for the year. There is no way to minimize my
disappointment in this result—recession or no recession.
The fact that our entire industry experienced the negative
earnings impact of the turbulent operating environment
does not make it any more palatable to report to you.
As diffi cult as 2009 was, the year ended on a more
encouraging note than it began. Fears of a global fi nancial
meltdown largely receded following coordinated efforts
to restore stability to financial markets. In the US,
indications that the recession is behind us are increasingly
credible, and there are even signs of improvement in the
housing market. This is all welcome news, and it augurs
well for SunTrust’s post-recession prospects.
Positive signals notwithstanding, we are tempered in our
optimism. The economy is far from strong, and there is
uncertainty in the outlook. Asset quality, revenues, and
ultimately earnings improvement will need time to gain
traction. That timing is largely dependent upon the
strength and sustainability of the economic recovery
coupled with the increasing effectiveness of our efforts
to grow the business. While our business was negatively
affected by the recessionary environment and borrowers’
intense focus on reducing leverage, SunTrust supported
its clients and communities through the extension of
approximately $90 billion in new loan originations,
commitments and renewals of commercial and consumer
loans during the year.
The operating environment for banks is also cloudy in
terms of the legislative and regulatory framework within
which we will be operating. The fi nancial services industry
is poised at the brink of a new relationship with our
rulemakers. It is not clear at this point what changes
there will be and how they will affect the way we do
business. We fundamentally agree with the idea that
certain regulatory reforms are needed and could
contribute to a more smoothly functioning financial
system, which is in everyone’s best interest. But, to
borrow a phrase, the devil is in the details. Our hope
is that specifi c legislative measures will be thoughtful,
responsible, inclusive, and augment the industry’s
ability to continue to support our communities,
finance individual dreams, and help contribute to
national economic growth. We are working with others
in our industry, and with government officials in
Washington, DC, to encourage the development of
responsible reform legislation.
Looking beyond Washington, our teammates are serving
our clients, running our businesses more effi ciently, and
executing the strategies aimed at making sure we are
well positioned competitively to take full advantage of
post-recession growth opportunities. To that end, we are
improving service quality and front-line execution. We
continue to be focused on controlling expenses and
managing risk. We are thinking in new ways and sharing
ideas across the organization. In time, we are confi dent
that the positive impact of these efforts will be refl ected
in our results.
The details of our 2009 fi nancial results are presented
in the 10-K that comprises the bulk of this annual report.
I will spend the balance of this letter outlining the
strong, stable foundation upon which we believe we can
drive improved performance. We are pursuing initiatives
designed to deliver that improved performance now and
as the economy recovers.
A STRONG FOUNDATION
As we see it, the elements that comprise SunTrust’s
strong foundation are our large and well-diversifi ed
franchise, solid capital, excellent liquidity, and relative
credit strength.
Large and Well-Diversifi ed Franchise
In terms of growth potential, SunTrust’s southeastern
and mid-Atlantic footprint is arguably the best in banking
with projected population growth well above the
national average. We have built strong market share in
some of the highest growth markets in the country. We
tend to focus our presence around the larger metropolitan
areas, and we believe that we are well diversifi ed within
our footprint, which includes a strong presence in Florida
that historically has contributed positively to our growth
SUNTRUST 2009 ANNUAL REPORT
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