SunTrust Reports Second Quarter 2017 Results

ATLANTA, July 21, 2017

Earnings per average common diluted share increased 13% compared to the first quarter and 10% compared to the second quarter of 2016.  For the first half of 2017, earnings per share grew 9% compared to the same period a year ago.

"Our strong performance this quarter reflects our commitment to deliver against our strategy.  We continued to realize benefits from our consistent focus on optimizing our business mix and investing in growth, made further progress in improving our efficiency, and significantly increased our capital returns to shareholders," said William H. Rogers, Jr., chairman and CEO of SunTrust Banks, Inc.  "Overall, I am pleased with the momentum we have created; our fundamentals are strong, our execution continues to improve, and I am confident in our ability to deliver further growth for our clients, communities, teammates, and shareholders."

Second Quarter 2017 Financial Highlights
(Commentary is on a fully taxable-equivalent basis unless otherwise noted. Consistent with SEC guidance in Industry Guide 3 that contemplates the calculation of tax-exempt income on a tax equivalent basis, net interest income, net interest margin, total revenue, and efficiency ratios are provided on a fully taxable-equivalent basis, which generally assumes a 35% marginal federal tax rate and state income taxes, where applicable.  We provide unadjusted amounts in the table on page 3 of this news release and detailed reconciliations and additional information in Appendix A on pages 12 and 13.)

Income Statement

• Net income available to common shareholders was $505 million, or $1.03 per average common diluted share, compared to $0.91 for the prior quarter and $0.94 for the second quarter of 2016.
• Total revenue increased 1% compared to the prior quarter and 2% compared to the second quarter of 2016.
• These increases were driven largely by higher net interest income as a result of net interest margin expansion and growth in earning assets.
• Net interest margin was 3.14% in the current quarter, up 5 basis points sequentially and up 15 basis points compared to the prior year, driven by higher earning asset yields arising from higher benchmark interest rates, continued positive mix shift in the loan portfolio, and lower premium amortization in the securities portfolio.
• Provision for credit losses decreased $29 million sequentially and $56 million year-over-year primarily as a result of lower net charge-offs.
• Noninterest expense declined 5% sequentially and increased 3% compared to the prior year.
• The sequential decrease was driven primarily by a seasonal decline in personnel costs, higher branch closure and severance costs recognized in the prior quarter, and lower operating losses.
• The increase relative to the prior year was driven primarily by the recent acquisition of Pillar & Cohen Financial ("Pillar/Cohen"), higher compensation (as a result of improved business performance), higher net occupancy expense, and higher FDIC premiums, partially offset by lower other noninterest expense.
• The efficiency and tangible efficiency ratios in the current quarter were 61.2% and 60.6%, respectively, which represent significant improvements compared to the prior quarter, driven primarily by seasonal declines in employee benefits costs, ongoing expense management initiatives, and solid revenue growth.

Balance Sheet

• Average loan balances increased 1% sequentially and 2% year-over-year, driven primarily by growth in consumer lending.
• Average consumer and commercial deposits increased slightly sequentially and increased 3% compared to the second quarter of 2016, driven by growth in demand and time deposits.

Capital