2002 Global Financial Services Conference L. Phillip Humann, Chairman, President & CEO April 24, 2002 New York
FORWARD LOOKING STATEMENT DISCLOSURE Today s presentation and discussion, including related questions and answers, may contain estimates of future operating results for SunTrust. These estimates constitute forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) which involve significant risks and uncertainties. Actual results could differ materially from those contained in or implied by such statements for a variety of reasons including, but not limited to: Changes in interest rates, Changes in accounting principles, policies, or guidelines, Significant changes in the economic scenario, Significant changes in regulatory requirements, and Significant changes in securities markets. SunTrust does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made. -2 -
PRESENTATION CONTENT Financial Highlights Summary Results Huntington- Florida Fee Income Deposits Credit Quality Business Highlights Trust and Investment Management Update High Net Worth Initiatives Summary Questions and Answers -3 -
Presentation Context A CONSERVATIVE OPERATING APPROACH Examples of SunTrust Conservatism 1) 2) 3) 4) 5) 6) 7) 8) 9) 10) Less One-Time Charges: Equal to 1% of earnings in 2001 vs. 13% for the industry. Minimal over five years. (1) Less Risky Balance Sheet: No sub-prime, minor cards, more mortgages, less commercial real estate. Lower Problem Loan Levels: Level of loan losses and problem loans best among 10 largest banks. Dodged the NASDAQ Bubble: Trust unit stayed away from concentration in high-risk areas. Didn t Get Burned by Venture Capital: No write-downs. Under $200 million of exposure. Exited Poor businesses Early: Exited cards early and now auto leasing (under $300 million of exposure.) Less Complex Special Purpose Entities: One entity has $2 billion of performing, non-classified loans. Routine Buybacks: Constant since 1986, speaking to consistency of use of free cash flow. No Mortgage Servicing Write-Downs: One of the few large participants not to take an impairment charge. Held Firm in Wachovia War: Did not up the bid via a continuous bidding war. (1) Differential of Operating Earnings compared to Reported Earnings Source: Mike Mayo, Prudential Securities -4 -
Financial Highlights 1Q 2002 AND FULL YEAR 2001 Reported Net Income Earnings Per Share Operating Income Operating Income per share Return on Assets (1) Return on Equity Efficiency Ratio (1) (1) (2) 1Q 2002 304.9 1.06 344.7 1.20 1.21 18.37 58.87 1Q 2001 337.5 1.14 337.5 1.14 1.36 21.85 55.38 Change (10)% (7)% 2% 5% -15 bps -348 bps -349 bps Full Year 2001 $1,375.5 $4.72 $1,395.7 $4.79 1.37% 21.74% 56.96% $1,294.1 $4.30 $1,321.7 $4.39 1.35% 21.46% 57.47% 26 Consecutive Years of Operating Earnings Growth Full Year 2000 Change 6% 10% 6% 9% +2 bps +28 bps +51 bps (1) Based on reported basis (2) Return on Average Realized Equity -5 -
Financial Highlights CONSISTENT CORE EARNINGS PER SHARE GROWTH (1) 1.20 1.10 1.00 0.90 0.80 0.70 0.60 0.50 1.01 0.96 0.91 0.80 0.83 0.85 0.87 0.86 4Q 97 1Q 98 2Q 98 3Q 98 4Q 98 1Q 99 2Q 99 3Q 99 1.06 1.07 4Q 99 1Q 00 1.191.22 1.24 1.20 1.11 1.12 1.13 1.14 2Q 00 3Q 00 4Q 00 1Q 01 2Q 01 3Q 01 4Q 01 1Q 02 (1) Operating EPS -6 -
Financial Highlights HUNTINGTON - FLORIDA Closed: February 15, 2002 Franchise: Cost Savings: Smooth Integration: Net addition of 59 branches/313 ATMs/250,000 new clients Retail, Commercial Banking and Private Services operations $4.4 billion deposits/$2.6 billion loans $48 million 36% of estimated Huntington Florida core expense base Cumulative phase in: - Year 1 65% - Year 2 100% Closed or consolidated 45 traditional/35 in-store branches 20 week integration planning period Builds on highly successful 2000 Crestar merger experience Telescoped time-frame & simultaneous divestiture confirm skill at complex integration Customer retention stronger than business case Market Tampa Lakeland/ Winter Haven Orlando Daytona Sarasota/ Bradenton SunTrust Prior Deposit Share/Rank 9.3% 4 17.1% 3 24.7% 2 18.0% 3 12.2% 2 SunTrust Current Deposit Share/Rank 14% 2 26% 1 29% 1 21% 2 18% 2 Market demographics include strong mix of affluent, middle market and retirees Note: Market share data as of 6/30/01 excluding credit union balances -7-
Financial Highlights NONINTEREST INCOME ($ in Millions) 1Q 2002 1Q 2001 % Change Trust Income Deposit Charges Mortgages Fees Corp & Invst. Banking Retail Investments Credit Card Fees Other Charges & Fees Total fees Total fees (w/o Huntington-FL) $129 146 24 70 31 31 120 $552 $546 $124 120 38 44 25 26 92 $469 $469 4% 22 (37) 61 26 22 30 18% 17% -8-
Financial Highlights SOLID CORE DEPOSIT (1) GROWTH ($ in Millions) 1Q 2002 1Q 2001 $ Change % Change DDA NOW MMA SAV CDs Total Total (w/o Huntington-FL) $14,596 9,620 19,191 6,272 12,532 $62,211 $60,021 $13,138 8,219 12,954 6,251 13,976 $54,539 $54,339 $1,458 1,401 6,237 21 (1,444) $7,673 $5,483 11% 17 48 0 (10) 14% 10% (1) Consumer and Commercial Deposits (excludes Broker & Foreign Deposits) -9-
Financial Highlights STRONG CREDIT QUALITY 1Q2002 4Q2001 1Q2001 Nonperforming Assets/Loans+ORE Reserves/Loans Reserves/Nonperforming Loans Loan Charge-Off Ratio.78 1.31 173.6.69.84 1.26 155.4.50.52 1.24 250.1.38-10-
NONPERFORMING ASSETS AS OF 3/31/02 Credit Quality SunTrust NPA Mix Percent of Loans +ORE Commercial Real Estate Consumer 13% OREO 6% 3% 3.00 2.50 2.00 Residential Mortgages 15% 63% 1.50 1.00 0.76 0.78 0.86 0.97 1.02 1.05 1.21 1.51 0.50 Commercial 1 st Quarter NPA = $ 552.7 million 0.00 1.67 2.58 Bank One Fleet (%) -11- National City US Bancorp Wells Fargo SunTrust SouthTrust New Wachovia Ba nk of America AmSouth
ADEQUATE RESERVES TO COVER CHARGE-OFFS Credit Quality NET CHARGE-OFF RATIO COMPARISON ALLOWANCE COVERAGE COMPARISON 7-12- 1.79 1.69 1.84 1.75 1.59 2.02 2.36 2.39 2.86 2.86 2.83 2.76 2.61 2.47 3.39 3.34 4.15 4.49 3.96 5.54 6 5 4 0.83 0.89 0.98 1.23 1.21 1.18 1.52 1.60 1.08 1.15 3 2 1 Multiple of Charge-off Coverage 1.40 1.20 0 Bank of America US Bancorp Fleet Bank One Wells Fargo SouthTrust SunTrust New Wachovia Fleet National City AmSouth Bank One Wells Fargo US Bancorp Bank of America 0.29 0.35 0.32 0.47 0.49 0.51 0.57 0.82 0.80 0.75 0.88 1.00 0.80 0.60 0.40 0.20 0.00 SouthTrust SunTrust National City AmSouth New Wachovia (%) 1998-2001 Avg. Net Charge-off ratio Trailing Four Quarter Avg. NCOs 03/31/02 Allowance Coverage of 1998-2001 Average Net Charge-offs 03/31/02 Allowance Coverage of Trailing Four Quarter Net Charge-offs
Credit Quality SUMMARY Diversified, balanced and stable portfolio mix Bias toward lower-risk credit products Lowest nonperforming assets ratio of 10 largest banks Charge-off experience drives lower reserve requirements Lowest net charge-offs ratio of 10 largest banks Low charge-off levels sustained over the last 10 years -13-
Business Highlights TRUST AND INVESTMENT MANAGEMENT UPDATE Investment Performance STI Classic Funds named #3 Mutual Fund Family in the Nation by Barrons (1) 65% of STI funds rated Morningstar 4 or 5 stars (2) 68% of STI funds rated Lipper A or B (3) Positive net inflows into STI Classics For Private Client Services organization New Personal Trust business up 55% for 1 st Quarter $96.6 billion of discretionary Assets Under Management AUM up 8% sequentially S&P flat Dow up 4% NASDAQ down 5% (1) February 2, 2002 (2) Source: Morningstar Principia Pro and Putnam Lovell calculations (3) As of December 2001-14-
Business Highlights HIGH NET WORTH INITIATIVES Asset Management Advisors (AMA) Purchased in April 2001 Integrate newly acquired product, service and technology capabilities from AMA to create a new sales channel focused on mega-wealthy client acquisition (retain AMA brand equity) Located boutique offices in high opportunity markets to target investment management and family office services to individuals and families with $25 million and greater in investable assets Jupiter, Orlando and Atlanta offices open; will expand opportunistically Alexander Key Build a separate identity full service brokerage distribution channel to target high net worth clients with $500 thousand to $10 million in investable assets; leverage SunTrust Robinson-Humphrey capabilities Support full service broker positioning as the client s objective, trusted advisor who offers financial planning and a full product array (including non-proprietary, fee -based management) Channel to be primarily a new client acquisition vehicle working closely with Corporate and Investment Banking Recently opened Atlanta office with 5-10 seasoned brokers with rapid expansion of other high opportunity markets strategically and opportunistically -15-
Why SunTrust? EXCELLENT GROWTH PROSPECTS Excellent future growth prospects and strong positions in the fastest growing markets in the United States (%) 9 8.0 8 7 6 5 4 3 2 1 0 SunTrust 7.1 6.9 B of A Weighted Average Population Growth (5-Yr Projected Growth Rate: 2000-2005) Wells Fargo 5.8 5.3 4.9 4.7 4.7 4.5 BB&T FirstUnion/Wach US Bancorp Bank One Northern Trust US Avg 3.7 3.4 Comerica JP Morgan 2.7 2.7 2.2 2.2 2.0 Citigroup Fifth Third Bank of NY KeyCorp FleetBoston 1.0 Nat'l City 0.4 0.2 PNC Mellon Our market area presents significant growth opportunity between 2000 and 2005 The weighted average growth rate for SunTrust markets is 60% higher than the national average Over 1 million new households will be added to our market area (8% growth) Median household wealth is projected to increase over 18% to $92,378 Deposits per household are projected to increase 12% to $31,603-16-
Why SunTrust? SUMMARY Performance-oriented company with bright prospects Conservative operating approach Strong positions in Country s fastest growing markets Consistent and long-term EPS growth; 26 consecutive years Strong credit quality While weaker in some sectors, very manageable Adequate loan loss reserve; compares well to peers Trust and Investment Management performance much improved Enhanced high net worth strategies will enhance future financial results -17-
Questions and Answers -18-