SunTrust 2014 Annual Report Download - page 29

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establish branches across state lines by merging with a bank in
another state subject to certain restrictions. A BHC may not
directly or indirectly acquire ownership or control of more than
5% of the voting shares or substantially all of the assets of any
bank or merge or consolidate with another BHC without the prior
approval of the Federal Reserve. Under the Dodd-Frank Act, a
BHC may not acquire another bank, or engage in new activities
that are financial in nature or acquire a non-bank company that
engages in activities that are financial in nature, unless the BHC
is both "well capitalized" and deemed by the Federal Reserve to
be "well managed." Moreover, a bank and its affiliates may not,
after the acquisition of another bank, control more than 10% of
the amount of deposits of insured depository institutions in the
U.S., and a financial company may not merge, consolidate or
acquire another company if the total consolidated liabilities of
the acquiring financial company after such acquisition exceeds
10% of the aggregated consolidated liabilities of all financial
companies at the end of the year preceding the transaction.
Additionally, certain states may have limitations on the amount
of deposits any bank may hold within that state.
On July 21, 2010, the Federal Reserve and other regulators
jointly published final guidance for structuring incentive
compensation arrangements at financial organizations. The
guidance does not set forth any formulas or pay caps for, but
contains certain principles which companies are required to
follow with respect to employees and groups of employees that
may expose the company to material amounts of risk. The three
primary principles are (i) balanced risk-taking incentives,
(ii) compatibility with effective controls and risk management,
and (iii) strong corporate governance. The Federal Reserve will
monitor compliance with this guidance as part of its safety and
soundness oversight.
Competition
The Company's primary operating footprint is in the Southeast
and Mid-Atlantic U.S., though certain lines of business serve
broader, national markets. Within those markets the Company
faces competition from domestic and foreign lending institutions
and numerous other providers of financial services. The
Company competes using a client-centered model that focuses
on high quality service, while offering a broad range of products
and services. The Company believes that this approach better
positions it to increase loyalty and expand relationships with
current clients and attract new ones. Further, the Company
maintains a strong presence within select markets, thereby
enhancing its competitive position.
While the Company believes it is well positioned within the
highly competitive financial-services industry, the industry
could become even more competitive as a result of legislative,
regulatory, economic, and technological changes, as well as
continued consolidation. The ability of non-banking financial
institutions to provide services previously limited to commercial
banks has intensified competition. Because non-banking
financial institutions are not subject to many of the same
regulatory restrictions as banks and bank holding companies,
they can often operate with greater flexibility and lower cost
structures. However, non-banking financial institutions may not
have the same access to deposit funds or government programs
and, as a result, those non-banking financial institutions may
elect, as some have done, to become financial holding companies
and gain such access. Securities firms and insurance companies
that elect to become financial holding companies may acquire
banks and other financial institutions. This could alter the
competitive environment in which the Company conducts
business. Some of the Company's competitors have greater
financial resources or face fewer regulatory constraints. As a
result of these various sources of competition, the Company
could lose business to competitors or be forced to price products
and services on less advantageous terms to retain or attract
clients.
Employees
At December 31, 2014, the Company had 24,638 full-time
equivalent employees. None of the domestic employees within
the Company are subject to a collective bargaining agreement.
Management considers its employee relations to be good.
Additional Information
See also the following additional information which is
incorporated herein by reference: Business Segments (under the
captions “Business Segments” and "Business Segment Results"
in Item 7, MD&A, of this Form 10-K, and Note 20, “Business
Segment Reporting,” to the Consolidated Financial Statements
in this Form 10-K); Net Interest Income (under the captions “Net
Interest Income/Margin” in the MD&A and “Selected Financial
Data” in Item 6); Securities (under the caption “Securities
Available for Sale” in the MD&A and Note 5 to the Consolidated
Financial Statements); Loans and Leases (under the captions
“Loans”, “Allowance for Credit Losses”, and “Nonperforming
Assets” in the MD&A and “Loans” and “Allowance for Credit
Losses” in Notes 6 and 7, respectively, to the Consolidated
Financial Statements); Deposits (under the caption “Deposits”
in the MD&A); Short-Term Borrowings (under the caption
“Short-Term Borrowings” in the MD&A and “Borrowings and
Contractual Commitments” in Note 11 to the Consolidated
Financial Statements); Trading Activities and Trading Assets and
Liabilities (under the caption “Trading Assets and Liabilities and
Derivatives” in the MD&A and “Trading Assets and Liabilities
and Derivatives” and “Fair Value Election and Measurement” in
Notes 4 and 18, respectively, to the Consolidated Financial
Statements); Market Risk Management (under the caption
“Market Risk Management” in the MD&A); Liquidity Risk
Management (under the caption “Liquidity Risk Management”
in the MD&A); Credit Risk Management (under the caption
"Credit Risk Management" in the MD&A); and Operational Risk
Management (under the caption “Operational Risk
Management” in the MD&A).
SunTrust's Annual Report on Form 10-K, Quarterly Reports
on Form 10-Q, Current Reports on Form 8-K and amendments
to those reports filed or furnished pursuant to Section 13(a) or
15(d) of the Exchange Act are available free of charge on the
Company's Investor Relations website at investors.suntrust.com
as soon as reasonably practicable after the Company
electronically files such material with, or furnishes it to, the SEC.
The SEC maintains an internet site that contains reports, proxy
and information statements, and other information regarding
issuers that file electronically with the SEC. The SEC's web site
address is www.sec.gov.