Balance Sheet OverviewSecond Quarter 2019 Compared to First Quarter 2019
Average loans held for investment for the second quarter of 2019 were $156.2 billion, an increase of $2.0 billion, compared to the
first quarter of 2019, driven primarily by growth in commercial and industrial, commercial real estate, consumer direct, and consumer indirect loans.
Commercial and industrial growth was widespread. Commercial Banking growth was driven largely by increases in auto dealer, aging services,
expansion markets, and core commercial clients. Commercial real estate growth was driven by investments made in permanent lending and bridge lending capabilities, which was partially offset by
run-off
in the
construction portfolio.
Consumer growth was primarily driven by ongoing investments made in digital and
point-of-sale
lending capabilities.
Average consumer and commercial deposits for the second
quarter 2019 were $159.9 billion, relatively stable compared to the prior quarter. Increases of $879 million, $738 million, $123 million, and $41 million in average interest bearing transaction deposits, average time
deposits, average savings balances, and average demand deposits, respectively, were offset by a $1.8 billion decline in average money market balances.
Asset Quality
Nonperforming loans held
for investment totaled $536 million at June 30, 2019, an increase of $14 million compared to March 31, 2019. The increase was driven by a $61 million increase in commercial nonperforming loans, largely offset by a
$47 million decrease in consumer nonperforming loans. There were no nonperforming loans held for sale at June 30, 2019, compared to $64 million at March 31, 2019 as these loans were sold in the second quarter of 2019 (for a
$44 million gain). Nonperforming loans and leases represented 0.34% of loans and leases held for investment, which was flat compared to March 31, 2019.
Troubled debt restructurings declined $120 million during the second quarter, with declines of $100 million in
non-accruing
troubled debt restructurings and $20 million in accruing troubled debt restructurings.
Loans 90 days or more past due and still accruing totaled $1.5 billion at June 30, 2019, a $183 million decrease compared to
March 31, 2019, due primarily to a decrease in government guaranteed residential mortgage loans.
Dividends and Capital
SunTrusts capital levels remained strong at June 30, 2019. SunTrust declared common dividends of $0.50 per share during the second
quarter of 2019, which was equal to the first quarter 2019.
Book value and tangible book value per share increased by 5% and 6%
sequentially, given growth in retained earnings and a decrease in accumulated other income loss.
Depositary Share Offering
On July 22, 2019, we priced an underwritten public offering of 1,700,000 depositary shares, each representing a 1/25
th
ownership interest in a share of our 4.800% Series N Fixed Rate Reset
Non-Cumulative
Perpetual Preferred Stock, $5.00 par value per share, with a liquidation
preference of $25,000 per share (equivalent to $1,000 per depositary share), at a public offering price of $1,000 per depositary share (the Depositary Share Offering). The Depositary Share Offering is expected to close on or about
July 29, 2019 concurrently with the closing of the sale of the Notes, subject to customary closing conditions. We estimate that the net proceeds of the Depositary Share Offering, after deducting the underwriters discount and our offering
expenses, will be approximately $1,685,924,000. The Depositary Share Offering was conducted as a separate public offering by means of a separate prospectus supplement. This offering of Notes and the Depositary Share offering are not
contingent upon each other.
PS-5