SunTrust 2010 Annual Report Download - page 4

2
who are in or at risk of financial distress — and we are working
hard to help homeowners stay in their homes if they have
the income and the desire to do so. We modified or provided
other workouts for more than 41,600 homeowners at risk for
foreclosure in 2010.
At the same time, a new law to overhaul the U.S. financial
services industry is transforming the relationship between clients
and their financial institutions. As the year closed, certain aspects
of regulatory reform were becoming clearer with the regulators
drafting or revising specific regulations that will ultimately impact
the industry and our clients in a variety of ways.
It is clear that the incremental regulatory burden will be
significant, and the time, resources, and investment required
by the industry to comply with the volume of new regulations
will be enormous. Less apparent is whether the legislation and
resulting regulation will ultimately have a positive net impact on
consumers, the industry, and the U.S. economy.
As we have said previously, we do know that financial
regulation will impact our financial results. Certain changes —
such as the CARD Act and the Volcker rule on proprietary trading
— are expected to have little impact on SunTrust. Others, such
as the debit interchange rule, may have a material impact on
that revenue stream.
You can be assured that we are committed to ensuring
that our businesses remain competitive in this new regulatory
environment, and we expect to manage well through these
changes and undertake actions to mitigate the financial effects
to our businesses. We remain steadfast in promoting the
long-term health and vitality of the economy and in serving
the interests and expectations of our clients, shareholders,
teammates, and communities.
New Federal Reserve Capital Evaluation. As part of its
overall effort to provide greater oversight, the federal government
announced last fall a further evaluation of capital plans for the
nation’s largest banks, including SunTrust. This evaluation
includes a Comprehensive Capital Plan Review in early 2011,
and we expect our TARP repayment discussions will occur
formally within that context.
Our TARP repayment strategy has been very deliberate, with
the best interests of our shareholders in mind. We believe our
patience has been appropriate as it has enabled us to deliver
meaningful improvements in our performance that, among other
things, have resulted in an increased stock price.
Once the Federal Reserve’s review of capital plans is
completed toward the end of the first quarter, we will be in a
better position to reevaluate our repayment options and the
appropriate timing. We have stated on many occasions our
willingness, our ability, and our desire to repay the government’s
investment in our Company at the appropriate time. We are
pleased that SunTrust enters the capital plan review process with
a reduced risk profile, improving credit and earnings trends, and
a Tier 1 Common ratio in excess of 8 percent — which already
exceeds the Basel III 7 percent standard that will not become
effective until 2019.
We remain steadfast in
promoting the long-term
health and vitality of
the economy and in
serving the interests and
expectations of our clients,
shareholders, teammates,
and communities.