SunTrust 2014 Annual Report Download - page 48

25
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Important Cautionary Statement About Forward-Looking
Statements
This report contains forward-looking statements. Statements
regarding: (1) future levels of net interest margin; swap income;
asset sensitivity; core expenses; cyclical costs; interest rates;
commercial loan swap income; NPLs; provision for loan losses;
the ALLL and the ratio of ALLL to total loans; net charge-offs,
including net charge-offs in the residential, commercial, and
consumer portfolios; and early stage delinquencies; (2) future
actions taken regarding the LCR and related effects, and our
ability to comply with future regulatory requirements within
regulatory timelines; (3) expected share repurchases; (4) future
changes in cyclical costs and our expense base, and efficiency
goals; (5) the impact of Dodd-Frank Act, Basel III regulatory
capital rules, and other regulatory standards on our capital ratios;
and (6) our ability to utilize state and federal DTAs; are forward
looking statements. Also, any statement that does not describe
historical or current facts is a forward-looking statement. These
statements often include the words “believes,” “expects,”
“anticipates,” “estimates,” “intends,” “plans,” “targets,”
“initiatives,” “potentially,” “probably,” “projects,” “outlook” or
similar expressions or future conditional verbs such as “may,”
“will,” “should,” “would,” and “could"; such statements are
based upon the current beliefs and expectations of management
and on information currently available to management. Such
statements speak as of the date hereof, and we do not assume
any obligation to update the statements made herein or to update
the reasons why actual results could differ from those contained
in such statements in light of new information or future events.
Forward-looking statements are subject to significant risks
and uncertainties. Investors are cautioned against placing undue
reliance on such statements. Actual results may differ materially
from those set forth in the forward-looking statements. Factors
that could cause actual results to differ materially from those
described in the forward-looking statements can be found in Part
I, "Item 1A. Risk Factors" of this report and include risks
discussed in this MD&A and in other periodic reports that we
file with the SEC. Additional factors include: 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. 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; legislation and
regulation, including the Dodd-Frank Act, as well as future
legislation and/or regulation, could require us to change certain
of our business practices, reduce our revenue, impose additional
costs on us, or otherwise adversely affect our business operations
and/or competitive position; we are subject to capital adequacy
and liquidity guidelines and, if we fail to meet these guidelines,
our financial condition would be adversely affected; loss of
customer deposits and market illiquidity could increase our
funding costs; we rely on the mortgage secondary market and
GSEs for some of our liquidity; our framework for managing
risks may not be effective in mitigating risk and loss to us; we
are subject to credit risk; our ALLL may not be adequate to cover
our eventual losses; we may have more credit risk and higher
credit losses to the extent that our loans are concentrated by loan
type, industry segment, borrower type, or location of the
borrower or collateral; a downgrade in the U.S. government's
sovereign credit rating, or in the credit ratings of instruments
issued, insured or guaranteed by related institutions, agencies or
instrumentalities, could result in risks to us and general economic
conditions that we are not able to predict; we are subject to certain
risks related to originating and selling mortgages. We may be
required to repurchase mortgage loans or indemnify mortgage
loan purchasers as a result of breaches of representations and
warranties, borrower fraud, or certain breaches of our servicing
agreements, and this could harm our liquidity, results of
operations, and financial condition; we face certain risks as a
servicer of loans; we are subject to risks related to delays in the
foreclosure process; our earnings may be affected by volatility
in mortgage production and servicing revenues, and by changes
in carrying values of our MSRs and mortgages held for sale due
to changes in interest rates; changes in market interest rates or
capital markets could adversely affect our revenue and expense,
the value of assets and obligations, and the availability and cost
of capital and liquidity; disruptions in our ability to access global
capital markets may adversely affect our capital resources and
liquidity; the fiscal and monetary policies of the federal
government and its agencies could have a material adverse effect
on our earnings; clients could pursue alternatives to bank
deposits, causing us to lose a relatively inexpensive source of
funding; consumers may decide not to use banks to complete
their financial transactions, which could affect net income; we
have businesses other than banking which subject us to a variety
of risks; negative public opinion could damage our reputation
and adversely impact business and revenues; we rely on other
companies to provide key components of our business
infrastructure; we are at risk of increased losses from fraud; a
failure in or breach of our operational or security systems or
infrastructure, or those of our third party vendors and other
service providers, including as a result of cyber-attacks, could
disrupt our businesses, result in the disclosure or misuse of
confidential or proprietary information, damage our reputation,
increase our costs and cause losses; the soundness of other
financial institutions could adversely affect us; we depend on the
accuracy and completeness of information about clients and
counterparties; competition in the financial services industry is
intense and could result in losing business or margin declines;
maintaining or increasing market share depends on market
acceptance and regulatory approval of new products and
services; we might not pay dividends on our common stock; our
ability to receive dividends from our subsidiaries could affect
our liquidity and ability to pay dividends; any reduction in our
credit rating could increase the cost of our funding from the
capital markets; we have in the past and may in the future pursue
acquisitions, which could affect costs and from which we may
not be able to realize anticipated benefits; we are subject to
certain litigation, and our expenses related to this litigation may
adversely affect our results; we may incur fines, penalties and