SunTrust Banks, Inc. 2014 Annual Report Annual Report

199 Pages·2015·2.96 MB·English

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Annual
Report
SunTrust Banks, Inc.
303 Peachtree Street, NE
Atlanta, GA 30308
SunTrust Bank, Member FDIC. ©2015 SunTrust Banks, Inc. SunTrust and How can we help you shine? are federally registered service marks of SunTrust Banks, Inc.
Shareholder Information
Corporate Headquarters Corporate Mailing Address Notice of Annual Meeting Stock Trading
SunTrust Banks, Inc. SunTrust Banks, Inc. The Annual Meeting of SunTrust Banks, Inc. common
303 Peachtree Street, NE P.O. Box 4418 Shareholders will be held stock is traded on the New York
Atlanta, GA 30308 Center 645 on Tuesday, April 28, 2015 Stock Exchange (NYSE) under
800.SUNTRUST Atlanta, GA 30302-4418 at 9:30 a.m., EST in Suite 105 on the symbol STI.
the first floor of SunTrust Plaza
Garden Offices, 303 Peachtree
Center Avenue, Atlanta, Georgia.
Quarterly Common Stock Prices and Dividends Shareholder Services
The quarterly high, low, and close prices of SunTrust’s common stock for Registered shareholders of SunTrust Banks, Inc. who wish to
Table of Contents
each quarter of 2014 and 2013 and the dividends paid per share are change the name, address, or ownership of common stock,
shown below. to report lost certificates, or to consolidate accounts should
Our Purpose Sets Our Path 1 Market Price Dividends contact our transfer agent:
Quarter Ended High Low Close Paid
Computershare
SunTrust Corporate Profile 2 2014 P.O. Box 30170
December 31 $43.06 $33.97 $41.90 $0.20 College Station, TX 77842-3170
A Message to Our Shareholders 3 September 30 40.86 36.42 38.03 0.20 866.299.4214
June 30 40.84 36.82 40.06 0.20 www.computershare.com
March 31 41.26 36.23 39.79 0.10
Our Accomplishments 4 For general shareholder information, contact
2013
Investor Relations at 877.930.8971.
December 31 $36.99 $31.97 $36.81 $0.10
Financial Highlights 5
September 30 36.29 31.59 32.42 0.10
Analyst Information
June 30 32.84 26.97 31.57 0.10
The Way Forward 6 March 31 29.98 26.93 28.81 0.05 Analysts, investors, and others seeking additional
financial information should contact:
Together, We’re Stronger 9 Ankur Vyas
Credit Ratings
Director of Investor Relations
Ratings as of December 31, 2014.
Helping Our Clients Shine 10 SunTrust Banks, Inc.
P.O. Box 4418
Standard Mail Code: GA-ATL-645
Helping Our Communities Shine 12 Moody’s & Poor’s Fitch Atlanta, GA 30302-4418
Bank Level 877.930.8971
Helping Our Teammates Shine 14 If you wish to contact Investor Relations via email, please
Long-term ratings
use the “Contact IR” link on the Investor Relations website.
Senior debt A3 A- BBB+
Board of Directors 16 Subordinated debt Baa1 BBB+ BBB
Investor Relations Website
Short-term ratings P-2 A-2 F2
Executive Leadership Team 16 To find the latest investor information about SunTrust,
including stock quotes, news releases, corporate governance
Corporate Level information and financial data, go to investors.suntrust.com.

Long-term ratings
Senior debt Baa1 BBB+ BBB+
Client Information
Subordinated debt Baa2 BBB BBB
For assistance with SunTrust products and services,
Preferred stock Ba1 BB+ BB-
call 800.SUNTRUST or visit www.suntrust.com.
Short-term ratings P-2 A-2 F2
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Website Access to United States Securities 1
Ratings Outlook Stable Stable Positive and Exchange Commission Filings 4

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All reports filed electronically by SunTrust Banks, Inc. with
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the United States Securities and Exchange Commission, n
including the annual report on Form 10-K, quarterly reports u
on Form 10-Q, current event reports on Form 8-K, and a
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amendments to those reports filed or furnished pursuant to
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Section 13(a) or 15(d) of the Exchange Act, are accessible as
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soon as reasonably practicable at no cost on the Investor p
Relations website at investors.suntrust.com. o
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Our Purpose
Sets Our Path
At SunTrust, success goes beyond just
financial performance. Success is also defined
by the impact we make on the lives of our
clients, our communities and our teammates.
Linton Allen, founder of SunBank, one of SunTrust’s predecessor banks,
subscribed to the following philosophy:
If you build your community, you build your bank.

For him, the purpose of a financial institution was as much about service as
it was about the bottom line. He believed that those working in the banking
industry have an obligation to leave behind a positive and lasting legacy for
their communities. Today, Allen’s values continue to motivate and guide us.
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Corporate
Profile
SunTrust Banks, Inc. is one of the nation’s largest and Private Wealth Management provides a full array of wealth
strongest financial services companies, with total assets of management products and professional services to high net
$190 billion as of December 31, 2014, but most importantly, worth and institutional clients seeking active management
we are an organization driven by purpose and a personal touch. of their financial resources. Private Wealth Management also
includes GenSpringSM, which provides family office solutions to
We are passionate about Lighting the
ultra-high net worth individuals and their families.
Way to Financial Well-Being. Helping
instill a sense of confidence in the financial 2. Wholesale Banking
circumstances of clients, communities,
Wholesale Banking focuses on helping businesses across
teammates and shareholders is at the
the country by delivering a comprehensive suite of financial
center of everything we do.
services including lending, liquidity management, treasury
and payment, M&A advisory and capital raising. Leading
We deliver a full suite of products and financial services
industry and product specialists work seamlessly as One Team
to serve the needs of our consumer, business, corporate
to provide tailored solutions to meet the evolving needs of our
and institutional clients. Our businesses are organized into
clients. The Wholesale Banking business units include Corporate
three segments:
& Investment Banking (SunTrust Robinson Humphrey),
Commercial and Business Banking, Commercial Real Estate
1. Consumer Banking and
and Treasury & Payment Solutions.
Private Wealth Management
Consumer Banking brings together the resources of the
3. Mortgage Banking
company to provide clear and unbiased financial guidance
Mortgage Banking offers the full range of home financing
to consumer and small business clients in the Southeast,
options and support to help clients purchase or refinance a
Mid-Atlantic and select national markets. Services are
home. Committed to delivering the full resources of SunTrust,
provided through an extensive network of traditional and
professional loan consultants offer a highly personalized
in-store retail branches, ATMs, digital and online channels,
approach from locations throughout SunTrust’s retail banking
as well as telephone contact centers. Financial products and
footprint and to clients nationally through our website,
services offered include deposits, investments, mortgages,
consumer-direct call center and network of correspondent lenders.
home equity loans, auto loans, student loans, credit cards
and other consumer loans.
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A Message To
Our Shareholders
from William H. Rogers, Jr.
Chairman and Chief Executive Officer
SunTrust Banks, Inc.
As a company, we are committed to Lighting the Way to Financial Well-Being. This commitment allowed
us to deliver strong results for our clients, communities, teammates and shareholders in 2014. We made
meaningful progress on our strategic priorities, as evidenced by solid balance sheet growth, lower expenses
and further improvement in credit quality. This successful execution helped SunTrust overcome the industry
headwinds of reduced mortgage activity and the ongoing impact of the prolonged low-rate environment
on net interest income.

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The result: 18% adjusted earnings growth and a significantly improved efficiency ratio. Our
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shareholders were rewarded by this performance with total shareholder return of 16% in 2014. 1
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Going forward, we will continue to keep our purpose of Lighting n
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the Way to Financial Well-Being at the center of everything we do. u
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It is a promise we make to our clients, our communities and our l

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teammates; and when we do this well, our business expands and e
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our shareholders are rewarded. o
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Our Accomplishments
2014 Financial Highlights
For the year 2014, SunTrust reported net income available to common shareholders of $1.7 billion, or $3.23 per share.
Excluding certain non-core items in both 2013 and 2014, adjusted earnings per share were $2.74 and $3.24, respectively,
representing 18% growth year over year. Adjusted return on average assets improved 10 basis points to 0.98%, while adjusted
return on average tangible common equity increased 85 basis points to 11.4%.
Our earnings growth and improved returns were driven by a significant reduction in expenses and further asset quality
improvement. Total revenue, excluding the gain on sale of RidgeWorth Capital Management, was relatively stable compared
to the prior year, as the impact of a lower net interest margin and the decline in mortgage origination activity was more than
offset by solid loan and deposit growth, additional momentum in our wealth management and investment banking businesses,
and higher mortgage servicing income.
Adjusted expenses declined by approximately $200 million, as we right-sized our mortgage business and cyclical costs were
reduced. However, a portion of these savings was reinvested in key growth areas, which we believe will drive sustainable
profitability over the long term.
Accordingly, we achieved an adjusted tangible efficiency ratio of 63% for the year, well ahead of the target we set at the
beginning of 2014 and approximately 200 basis points better than our 2013 performance. We have made considerable progress
toward our long-term tangible efficiency ratio target of sub-60%, and we remain firmly focused on that commitment. Achieving
this important objective will be a key driver of delivering additional value to you, our shareholders.
Average performing loans grew 7%, led by continued momentum in commercial and industrial, commercial real estate and
direct consumer loans. Average client deposits grew 4%, with a favorable mix shift to lower-cost deposit products continuing.
Credit quality continued to improve, as nonperforming loans declined 35% to 0.48% of loans and net charge-offs declined 34%
to 0.34% of average loans. These improvements, in conjunction with sustained high-quality loan production, contributed
to the $211 million reduction in the provision for credit losses. This performance is the result of improving economic conditions,
in addition to the significant actions we have taken over the past several years to de-risk our balance sheet and improve the
quality of our loan production. Acknowledging our substantially improved asset quality and increased profitability, Standard
and Poor’s upgraded the senior long-term credit rating of our primary operating subsidiary, SunTrust Bank, to “A-” from “BBB+”
in the fourth quarter.
We continued to maintain strong capital levels, with a Basel III Common Equity Tier 1 ratio of 9.7%, relatively stable compared
to the prior year. We did this while also growing total assets by 9% to support further client business. In addition, tangible book
value per share increased 10% relative to the prior year. We repurchased $458 million of common stock in 2014, and we
doubled our total annual common stock dividend from $0.35 per share in 2013 to $0.70 per share in 2014. The cumulative
actions we have taken to improve our risk and earnings profile, combined with our strong capital and liquidity levels, should help
us further increase capital return to shareholders.
Aside from a solid financial performance, 2014 also marked a meaningful step forward with regard to the resolution of certain
legacy mortgage matters, which will allow us to more firmly focus on meeting more of our clients’ needs while driving more
consistent profitability.
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Financial Highlights
(Dollars in millions, except per share data)
Year ended December 31 2014 2013 2012
For The Year
Net income $1,774 $1,344 $1,958
Net income available to common shareholders 1,722 1,297 1,931
Adjusted net income available to common shareholders1 1,729 1,476 1,178
Total revenue — FTE 1, 2 8,305 8,194 10,598
Noninterest expense 5,543 5,831 6,284
Common dividends paid 371 188 107
Per Common Share
Net income — diluted $3.23 $2.41 $3.59
Adjusted net income — diluted 1 3.24 2.74 2.19
Dividends paid 0.70 0.35 0.20
Common stock closing price 41.90 36.81 28.35
Book value 41.52 38.61 37.59
Tangible book value 1 29.82 27.01 25.98
Financial Ratios
Return on average total assets 0.97% 0.78 % 1.11 %
Adjusted return on average total assets 1 0.98 0.88 0.68
Return on average common shareholders’ equity 8.06 6.34 9.56
Return on average tangible common shareholders’ equity 1 11.33 9.25 14.02
Adjusted return on average tangible common shareholders’ equity 1 11.37 10.52 8.55
Net interest margin 2 3.07 3.24 3.40
Efficiency ratio 2 66.74 71.16 59.29
Tangible efficiency ratio 1,2 66.44 70.89 58.86
Adjusted tangible efficiency ratio 1,2 63.34 65.27 66.91
Tier 1 common equity 9.60 9.82 10.04
Tier 1 capital 10.80 10.81 11.13
Total capital 12.51 12.81 13.48
Selected Average Balances
Total assets $182,176 $172,497 $176,134
Earning assets 162,189 153,728 153,479
Loans 130,874 122,657 122,893
Deposits 133,742 129,141 128,504
Total shareholders’ equity 22,170 21,167 20,495
Common shares — diluted 533,391 539,093 538,061
At December 31
Total assets $190,328 $175,335 $173,442
Earning assets 168,678 156,856 151,223
Loans 133,112 127,877 121,470
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Allowance for loan and lease losses 1,937 2,044 2,174 0
Deposits 140,567 129,759 132,316 1
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Total shareholders’ equity 23,005 21,422 20,985
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Common shares outstanding 524,540 536,097 538,959
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1 See reconciliation of non-GAAP measures in Table 34, “Selected Financial Data and Reconcilement of Non-U.S. GAAP Measures,” in the MD&A section of the Company’s 2014 Annual e
Report on Form 10-K. p
2 Total revenue is comprised of net interest income presented on a fully taxable-equivalent (FTE) basis and noninterest income. The net interest margin and efficiency ratios are presented o
on a FTE basis. The FTE basis adjusts for the tax-favored status of income from certain loans and investments. The Company believes this measure to be the preferred industry measurement r
of net interest income and it enhances comparability of net interest income arising from taxable and tax-exempt sources. t
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The Way Forward
Our clients’ confidence continues to improve, and we are focused on helping them capitalize on the improving
economy. We have the scale to compete with the largest banks, but are also small enough to remain nimble and to
respond effectively to changing market conditions and consumer preferences.
The U.S. economy continues to be on a positive track. While slowing global growth and the steep decline in oil
prices create uncertainty, continued job gains and improving housing prices, combined with the potential net
benefit to consumers from lower oil prices, should help keep the U.S. economy on a path of further improvement.
We have a strong market position and continue to execute on our strategic priorities:
1 Deepen Client 2 Enhance Returns by Optimizing 3 Improve
Relationships Balance Sheet and Business Mix Efficiency
1. Deepen Client Relationships
Our clients are at the center of everything we do, and we continue
to enhance our products and capabilities to better meet their needs.
In Consumer Banking and Private Wealth Management, we have added nearly 200 Premier Bankers over the past two years
to help serve the wealth and investment advisory needs of our branch-based clients. For our high net worth and mass affluent
clients, we introduced SunTrust SummitView®, a financial planning and account aggregation tool that helps clients obtain a full
picture of their finances, resulting in more confidence and control. In addition, SummitView allows our advisors to have a
complete view of a client’s financial standing, which enables them to provide even more relevant advice. For all of our clients,
we have enhanced our digital capabilities – including improved mobile and tablet apps, an accessible and content-rich Resource
Center on suntrust.com, and the offering of Apple Pay™. Our continued innovation in this space earned us multiple Digital
Banking Experience Leader awards from Javelin Strategy & Research.
In Wholesale Banking, the investments we have been making in our Corporate & Investment Banking (CIB) platform,
SunTrust Robinson Humphrey, continue to yield positive returns, as 2014 marked the seventh consecutive record year of
investment banking income. We are applying our expertise from CIB to our Commercial Real Estate and Commercial and
Business Banking clients to help them access the capital markets, expand their businesses and explore M&A opportunities.
We believe our success is rooted in our differentiated business model – our One Team approach encourages teammates to
work collaboratively to meet clients’ needs across the platform.
Given the changes to the mortgage industry, our primary goal in Mortgage Banking has been to right-size our infrastructure;
however, as has been the case across the company, we have also been focused on meeting more clients’ needs. Mortgages
are a key product offering for our private wealth clients, and the business as a whole serves as an entry point to the rest of the
company for many new clients. As an example, the percentage of our mortgage clients that have at least one other product
has increased from 26% to 31% over the past year.
Deepening client relationships requires coordination across the company and a client-first approach. When we succeed, we take one
step further in Lighting the Way to Financial Well-Being for our clients.
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2. Enhance Returns by Optimizing Balance Sheet and Business Mix
Over the past several years we have been focused on diversifying our balance sheet and reducing our
concentration of residential real estate loans. This component of the strategy is largely complete, as
residential-related loans have declined from 50% of our portfolio in 2007 to 29% at the end of 2014.
We grew our commercial and consumer loan exposure over the same time frame, and in 2014 average
performing commercial and consumer loans grew 14% and 8%, respectively.
Going forward, the balance sheet optimization strategy will focus on enhancing returns more so than
materially changing the business mix. Our balance sheet is an important resource, and we need to ensure
that we use it effectively. We evaluate our returns on capital in the context of the entire client relationship,
which includes deposits and fee income in addition to lending, and when we are unable to meet our
internal hurdles, we explore balance sheet management alternatives. Accordingly, we sold over $4 billion
of lower-return loans in 2014.
Our progress on this strategic initiative has resulted in a much more diversified company, with better growth
opportunities and improved access to new markets and clients. Additionally, the enhanced diversity of our
balance sheet should aid in reducing the volatility of our financial performance in the future.
3. Improve Efficiency
Streamlining the way we do business not only allows us to increase
profitability, but also improves the effectiveness of how we serve our
clients and our communities.
Since setting our long-term tangible efficiency ratio
target of sub-60%, we have made significant
progress – improving this ratio on an
adjusted basis from 72% in 2011 to
63% in 2014. To date, the entire
improvement has been driven
by rigorous expense discipline,
evidenced by the 16% reduction
in our adjusted expense base
since 2011. In 2014, our expense
reduction efforts were focused on
right-sizing our mortgage business,
optimizing our delivery model and 2
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streamlining our operations.
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In Mortgage Banking, we exceeded A
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our initial $200 million savings goal by n
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acting decisively against the backdrop of
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a lower origination environment. Additionally, l
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we continued to proactively reduce our e
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nonperforming loans and delinquent servicing
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portfolio balances. We also streamlined our go-to-market r
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model by consolidating our retail and consumer direct channels
and discontinuing our broker channel. 7
Our clients have increasingly adopted digital applications as their primary means of conducting their banking activities, and we
have reallocated resources to support increasing investments in these channels. Branches continue to play an important role in
fostering relationships with new clients and addressing existing clients’ more complex needs, while self-service channels such
as ATMs and digital products are playing a more predominant role in meeting everyday needs. As such, we reduced our branch
count by 3% in 2014 while growing our digital investments, and going forward, we will continue to evolve our delivery network to
service changing client needs and preferences.
Lastly, we have begun streamlining our operations and support-related infrastructure. For example, we consolidated 64
decentralized mortgage processing locations into five end-to-end campuses. Additionally, we have continued to increase
utilization of technology in certain areas, such as encouraging the usage of e-statements and using scanners to process
checks more efficiently in our branches.
Importantly, while streamlining our organization, we have not
lost focus on the bigger picture: efficiency improvements are
derived from both expense discipline and revenue growth.
Despite the challenging industry environment, we
have taken a measured approach to expense
reduction, being mindful of the continuing need
to make important investments for long-term
prosperity. In 2014, we hired new talent across
each of our businesses to help further expand
our revenue opportunities. As previously
noted, we also increased our investments
in digital channels so our clients can
conduct their banking when, where and
how they choose. In addition, we continued
to invest in our risk management and
compliance infrastructure to ensure that
we are meeting and exceeding increasing
regulatory requirements.
Going forward, revenue growth will become an
increasingly important component of lowering our
efficiency ratio, as we have already taken steps to
meaningfully reduce our cost base. We are continuing to
invest in key growth priorities to drive increased revenue,
which we expect will lead to improved financial performance
over the long term.
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