SunTrust 2011 Annual Report Download - page 24
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under the heading Corporate Governance its: (i) Code of Ethics; (ii) Corporate Governance Guidelines; and (iii) the charters of
SunTrust Board committees.
The Company’s Annual Report on Form 10-K is being distributed to shareholders in lieu of a separate annual report containing
financial statements of the Company and its consolidated subsidiaries.
Item 1A. RISK FACTORS
The risks described in this Form 10-K are not the only risks we face. Additional risks that are not presently known or that we
presently deem to be immaterial also could have a material adverse effect on our financial condition, results of operations, business,
and prospects.
As one of the largest lenders in the Southeast and Mid-Atlantic U.S. and a provider of financial products and services to
consumers and businesses across the U.S., our financial results have been, and may continue to be, materially affected by
general economic conditions, particularly unemployment levels and home prices in the U.S., and a deterioration of economic
conditions or of the financial markets may materially adversely affect our lending and other businesses and our financial
results and condition.
We generate revenue from the interest and fees we charge on the loans and other products and services we sell, and a substantial
amount of our revenue and earnings comes from the net interest income and fee income that we earn from our consumer and
wholesale banking businesses, including our mortgage banking business. These businesses have been, and may continue to be,
materially affected by the state of the U.S. economy, particularly unemployment levels and home prices. Although the U.S. economy
has continued to gradually improve from the severely depressed levels of 2008 and early 2009, economic growth has been slow
and uneven and the housing market remains weak. In addition, financial uncertainty stemming from the sovereign debt crisis in
Europe and U.S. debt and budget matters, including the raising of the debt limit, deficit reduction, and the downgrade of U.S.
debt ratings, as well as other recent events and concerns such as the political unrest in the Middle East, the increased volatility of
commodity prices and the increase in the price of oil, and the uncertainty surrounding financial regulatory reform and its effect
on the revenues of financial services companies such as us, have impacted and may continue to impact the continuing global
economic recovery. A prolonged period of slow growth in the U.S. economy or any deterioration in general economic conditions
and/or the financial markets resulting from the above matters or any other events or factors that may disrupt or dampen the global
economic recovery could materially adversely affect our financial results and condition.
The high unemployment rate in the U.S., together with elevated levels of distressed property sales and the significant decline in
home prices across the U.S., including in many of our large banking markets such as Florida, may be causing consumers to delay
home purchases and has resulted in elevated credit costs and nonperforming asset levels which have adversely affected our credit
performance and our financial results and condition. If unemployment levels do not improve or if home prices continue to fall we
would expect to incur higher than normal charge-offs and provision expense from increases in our allowance for credit losses.
These conditions may adversely affect not only consumer loan performance but also commercial and CRE loans, especially for
those business borrowers that rely on the health of industries or properties that may experience deteriorating economic conditions.
The ability of these borrowers to repay their loans may be reduced, causing us to incur significantly higher credit losses. In addition,
current economic conditions have made it more challenging for us to increase our consumer and commercial loan portfolios by
making loans to creditworthy borrowers at attractive yields. Although we have significant capacity to add loans to our balance
sheet, loan demand has been soft resulting in our retaining a much higher amount of lower yielding liquid assets on our balance
sheet. If economic conditions do not continue to improve or if the economy worsens and unemployment rises, which would likely
result in a decrease in consumer and business confidence and spending, the demand for our credit products, including our mortgages,
may fall, which would adversely affect our interest and fee income and our earnings.
A deterioration in business and economic conditions, which may erode consumer and investor confidence levels, and/or increased
volatility of financial markets, also could adversely affect financial results for our fee-based businesses, including our wealth
management, investment advisory, and investment banking businesses. We earn fee income from managing assets for others and
providing brokerage and other investment advisory and wealth management services. Because investment management fees are
often based on the value of assets under management, a decrease in the market prices of those assets could reduce our fee income.
Changes in stock market prices could affect the trading activity of investors, reducing commissions and other fees we earn from
our brokerage business. Poor economic conditions and volatile or unstable financial markets also can adversely affect our debt
and equity underwriting and advisory businesses.