SunTrust Reports Second Quarter 2019 Results

ATLANTA, July 18, 2019 /PRNewswire/ -- For the second quarter of 2019, SunTrust Banks, Inc. STI reported net income available to common shareholders of $663 million, or $1.48 per average common diluted share, which includes $0.07 per share of discrete tax benefits and $(0.03) per share of merger-related impacts associated with the Company's previously announced proposed merger with BB&T Corporation. This compares to $1.24 for the prior quarter, which included $0.04 per share of discrete tax benefits and $(0.09) per share of merger-related impacts, and $1.49 for the second quarter of 2018.

For the first half of 2019, earnings per average common diluted share were $2.72 which includes $59 million, or $(0.11) per share of merger-related impacts. This compares to $2.78 for the first half of 2018.

"SunTrust has delivered good performance in the first half of 2019, with revenue increasing by 3%, the adjusted tangible efficiency ratio improving by 50 basis points, and earnings per share increasing by 2% (excluding non-core items). The interest rate environment certainly became more challenging in the second quarter, which offset some of our core business progress," said William H. Rogers, Jr., chairman and CEO of SunTrust Banks, Inc. "As we continue to prepare for the proposed merger with BB&T, I am increasingly pleased with how well the teams are working together—we have developed strong levels of partnership and alignment. We are confident and excited about the opportunity Truist will have to enhance shareholder value, improve the client experience, and invest in our teammates, associates, and communities."

Second Quarter 2019 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 21% marginal federal tax rate as well as 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 $663 million, or $1.48 per average common diluted share, compared to $1.24 for the prior quarter and $1.49 for the second quarter of 2018.
• The second quarter of 2019 included a $205 million insurance settlement benefit related to financial crisis-related claims which was used to make a $205 million charitable contribution to the SunTrust Foundation. The current quarter also included a $44 million gain on the sale of accruing troubled debt restructured ("TDR") loans which was largely offset by a $42 million net securities loss related to a repositioning of the Company's securities AFS portfolio.
• Merger-related costs were $8 million in the second quarter of 2019, compared to $45 million in the first quarter of 2019. In addition to these costs, there were $6 million of other merger-related expenses in the current quarter that were primarily recorded in 'other noninterest expense'. Combined, this represented $14 million, or $(0.03) per share, of merger-related impacts in the current quarter.
• Total revenue was up 10% both sequentially and year-over-year, driven primarily by the aforementioned insurance settlement. Excluding the insurance settlement, total revenue was up 1% sequentially and 2% year-over-year. The sequential increase was driven by higher noninterest income and the year-over-year increase was driven by higher net interest income.
• Net interest margin was 3.16% in the current quarter, reflecting an 11 and 12 basis point decline sequentially and year-over-year, respectively, driven by higher funding costs and declines in short-term and long-term interest rates.
• Provision for credit losses decreased $26 million sequentially and increased $95 million year-over-year. The sequential decrease was primarily driven by slower loan growth and lower net charge-offs. The year-over-year increase was driven primarily by an allowance for loan and lease losses ("ALLL") to period-end loans held for investment ("LHFI") ratio that increased 1 basis point sequentially (from March 31, 2019 to June 30, 2019), compared to a 5 basis point decline a year ago (from March 31, 2018 to June 30, 2018).
• Noninterest expense increased $149 million sequentially and $248 million year-over-year. Excluding the aforementioned $205 million charitable contribution to the SunTrust Foundation and the $14 million and $45 million of merger-related impacts in the current and prior quarter, respectively, noninterest expense decreased $25 million sequentially and increased $29 million compared to the prior year. The sequential decrease was driven by improved operating losses and lower other noninterest expense. The year-over-year increase was driven by higher employee compensation and benefits and ongoing investments in technology.
• The efficiency and tangible efficiency ratios for the current quarter were 63.4% and 62.8%, respectively, which were unfavorably impacted by the merger-related impacts and the charitable contribution, but favorably impacted by the insurance settlement. Excluding these items, the adjusted tangible efficiency ratio was 59.0% for the current quarter, compared to 60.8% for the prior quarter and 58.7% for the prior year.

Balance Sheet

• Average performing LHFI was up 1% compared to the prior quarter and up 9% year-over-year, driven primarily by growth in C&I, CRE, consumer direct, and consumer indirect loans.
• Average consumer and commercial deposits remained relatively stable compared to the prior quarter and were up 1% year-over-year, driven primarily by growth in NOW accounts and time deposits. This growth was partially offset by a decline in money market account balances compared to both prior periods as well as a decline in demand deposits compared to the second quarter of 2018.

Capital

• Estimated capital ratios continue to be well above regulatory requirements. The Common Equity Tier 1 ("CET1") ratio was estimated to be 9.2% as of June 30, 2019, slightly higher relative to the prior quarter.
• Book value per common share was $53.47 and tangible book value per common share was $39.54, up 5% and 6%, respectively, from March 31, 2019, driven primarily by growth in retained earnings and a decrease in accumulated other comprehensive loss.

Asset Quality

• Nonperforming loans ("NPLs") increased $14 million from the prior quarter and represented 0.34% of period-end LHFI at both June 30, 2019 and March 31, 2019.
• Net charge-offs for the current quarter were $85 million, or 0.22% of total average LHFI on an annualized basis, compared to 0.26% during the prior quarter and 0.20% during the second quarter of 2018.
• At June 30, 2019, the ALLL to period-end LHFI ratio was 1.07%, up 1 basis point compared to the prior quarter and down 7 basis points relative to the prior year.
• Provision for credit losses decreased $26 million sequentially and increased $95 million year-over-year. The sequential decrease was driven primarily by slower loan growth and lower net charge-offs. The year-over-year increase was driven primarily by an ALLL ratio that increased 1 basis point sequentially (from March 31, 2019 to June 30, 2019), compared to a 5 basis point decline a year ago (from March 31, 2018 to June 30, 2018).

Consolidated Financial Performance Details
(Commentary is on a fully taxable-equivalent basis unless otherwise noted)

Revenue

Total revenue was $2.6 billion for the current quarter, an increase of 10%, compared to the prior quarter and the prior year. Excluding the $205 million insurance settlement benefit related to financial crisis-related claims recognized in the current quarter, total revenue was up 1% sequentially and 2% year-over-year. The sequential increase was driven by higher noninterest income and the year-over-year increase was driven by higher net interest income.

Net Interest Income

Net interest income was $1.6 billion for the second quarter of 2019, a decrease of $10 million compared to the prior quarter due primarily to lower earning asset yields and higher funding costs, which drove a decline in the net interest margin, partially offset by a $2.0 billion, or 1%, increase in average performing LHFI. The $47 million increase relative to the prior year was driven by a 9% increase in average performing LHFI, partially offset by a decline in the net interest margin.

Net interest margin for the current quarter was 3.16%, compared to 3.27% and 3.28% in the prior quarter and prior year, respectively. The decrease relative to the prior periods was driven primarily by higher funding costs and declines in short-term and long-term interest rates which drove a decline in earning asset yields.

For the six months ended June 30, 2019, net interest income was $3.1 billion, a $152 million, or 5%, increase compared to the six months ended June 30, 2018. The net interest margin was 3.22% for the first half of 2019, a 4 basis point decrease compared to the same period in 2018. The increase in net interest income was driven primarily by a $12.2 billion, or 7%, increase in average earning assets, partially offset by a 4 basis point decline in the net interest margin.

Noninterest Income

Noninterest income was $1.0 billion for the current quarter, compared to $784 million for the prior quarter and $829 million for the second quarter of 2018. Excluding the $205 million insurance settlement benefit related to financial crisis-related claims, noninterest income increased $36 million sequentially and decreased $9 million year-over-year. The sequential increase was driven by higher commercial real estate related income and investment banking income. The year-over-year decline was driven by lower investment banking income and client transaction-related fees, which were largely offset by higher commercial real estate related income.

Client transaction-related fees (namely service charges on deposits, other charges and fees, and card fees) increased $3 million sequentially and decreased $11 million year-over-year. The sequential increase was driven by one more day during the current quarter while the year-over-year decrease was driven primarily by lower client-related transaction activity.

Investment banking income was $142 million for the current quarter, compared to $130 million in the prior quarter and $169 million for the second quarter of 2018. The $12 million sequential increase was due primarily to higher equity offerings, while the year-over-year decrease was driven by lower syndicated finance and M&A activity.

Mortgage related income for the current quarter was $86 million, compared to $100 million for the prior quarter and $83 million for the second quarter of 2018. The $14 million sequential decline was driven primarily by lower servicing-related income attributable to both unfavorable net hedge performance and higher decay, offset partially by higher production-related income due to increased purchase and refinance volumes. At June 30, 2019, the servicing portfolio totaled $167.2 billion, down 1% compared to the prior quarter and 2% year-over-year.

Retail investment services income was $75 million for the current quarter, compared to $69 million for the prior quarter and $73 million for the prior year. The $6 million sequential increase was due primarily to increased client transaction activity as well as improved market conditions, which led to an increase in retail brokerage assets under management.

Commercial real estate related income was $50 million for the current quarter, compared to $24 million for the prior quarter and $18 million for the prior year. The sequential and year-over-year increases were driven primarily by higher structured real estate related income, in addition to higher commercial mortgage production from the Company's agency lending business.

Net securities (losses)/gains totaled ($42) million for the current quarter. These securities losses arose from a repositioning of the Company's securities AFS portfolio. There were no net securities (losses)/gains in either the prior quarter or prior year.

Other noninterest income was $72 million for the current quarter, compared to $24 million in the prior quarter and $38 million in the second quarter of 2018. The sequential and year-over-year increases were due primarily to a $44 million gain on the sale of accruing TDRs during the second quarter of 2019. The year-over-year increase was partially offset by a $12 million remeasurement gain on an equity investment in GreenSky, Inc. (a financial technology company with which the Company partners) recognized during the prior year quarter.

For the six months ended June 30, 2019, noninterest income was $1.8 billion, compared to $1.6 billion for the six months ended June 30, 2018. The $184 million increase compared to the prior year was driven by the insurance settlement in the current quarter.

Noninterest Expense

Noninterest expense was $1.6 billion in the current quarter, up $149 million sequentially and $248 million compared to the second quarter of 2018. The sequential and year-over-year increases were driven primarily by the $205 million charitable contribution to the SunTrust Foundation. When excluding the $205 million charitable contribution and $14 million in merger-related impacts, noninterest expense decreased $25 million sequentially and increased $29 million compared to the prior year. The sequential decrease was driven by improved operating losses and lower other noninterest expense. The year-over-year increase was driven by higher employee compensation and benefits and ongoing investments in technology.

Employee compensation and benefits expense was $828 million in the current quarter, compared to $824 million in the prior quarter and $802 million in the second quarter of 2018. The $4 million sequential increase was driven primarily by higher salaries, due to merit increases, and an increase in incentive plan compensation, almost entirely offset by the seasonal second quarter decline in employee benefit costs and FICA taxes. The $26 million year-over-year increase was driven primarily by higher salary and benefits costs in the current quarter.

Outside processing and software expense was $241 million in the current quarter, compared to $238 million in the prior quarter and $227 million in the second quarter of 2018. The $14 million year-over-year increase was driven primarily by higher software-related costs resulting from the amortization of new and upgraded technology assets.

Net occupancy expense was $102 million in the current quarter, stable compared to the prior quarter and $12 million higher than the second quarter of 2018. The year-over-year increase was driven primarily by lease termination gains recognized in the prior year and higher rent expense.

Merger-related costs captures certain merger-related expenses associated with the Company's proposed merger with BB&T Corporation as announced on February 7, 2019. Current quarter costs totaled $8 million and were primarily comprised of legal fees. In addition to these costs, there were $6 million of other merger-related expenses that were primarily recorded in 'other noninterest expense'. The prior quarter costs totaled $45 million and were primarily comprised of M&A advisory and legal fees.

Operating losses were $14 million in the current quarter, compared to $22 million in the prior quarter and $17 million in the second quarter of 2018. The sequential decrease was driven primarily by lower fraud-related and legal costs recognized during the quarter.

Regulatory assessments expense was $17 million in the current quarter, compared to $19 million in the prior quarter and $39 million in the prior year. The year-over-year decrease was driven by the cessation of the FDIC Deposit Insurance Fund surcharge in the fourth quarter of 2018.

Other noninterest expense was $124 million in the current quarter, compared to $141 million in the prior quarter and $114 million in the second quarter of 2018. The $17 million sequential decline was related to lower branch closure costs while the $10 million year-over-year increase was driven primarily by higher gains on the sale of certain real estate assets in the second quarter of 2018 (recorded as a contra expense).

For the six months ended June 30, 2019, noninterest expense was $3.1 billion compared to $2.8 billion for the six months ended June 30, 2018. The $321 million increase was driven largely by the $205 million charitable contribution, $59 million in merger-related impacts, $46 million in outside processing and software expense, and $20 million in net occupancy expenses.

Income Taxes

For the second quarter of 2019, the Company recorded a provision for income taxes of $105 million compared to $104 million for the prior quarter and $171 million for the second quarter of 2018. The effective tax rate for the current quarter was 13%, compared to 15% in the prior quarter and 19% in the second quarter of 2018. The second quarter of 2019 included $32 million of discrete tax benefits related primarily to the resolution of certain tax matters, while the first quarter of 2019 included $17 million of discrete tax benefits primarily related to the typical seasonal impact from stock-based compensation.

Balance Sheet

At June 30, 2019, the Company had total assets of $222.3 billion and total shareholders' equity of $25.9 billion, representing 12% of total assets. Book value per common share was $53.47 and tangible book value per common share was $39.54, up 5% and 6%, respectively, compared to March 31, 2019, driven primarily by growth in retained earnings and a decrease in accumulated other comprehensive loss.

Loans and Deposits

Average performing LHFI totaled $155.7 billion for the current quarter, up 1% compared to the prior quarter and up 9% compared to the prior year. The sequential growth was driven primarily by increases in C&I, CRE, consumer direct, and consumer indirect loans, offset partially by declines in residential home equity products and nonguaranteed residential mortgages. Year-over-year loan growth was led by increases in the same loan categories that drove the sequential growth, in addition to growth in nonguaranteed residential mortgages.

Average consumer and commercial deposits totaled $159.9 billion for the current quarter, relatively stable compared to the prior quarter and up 1% compared to the second quarter of 2018. Sequentially, a decline in money market account balances was largely offset by growth across all other consumer deposit products. Year-over-year increases in NOW accounts and time deposits were offset, in large part, by declines in demand deposits and money market accounts.

Capital and Liquidity

The Company's estimated capital ratios were well above current regulatory requirements with the Common Equity Tier 1 ratio estimated to be 9.2% at June 30, 2019. The ratios of average total equity to average total assets and tangible common equity to tangible assets were 11.4% and 8.1%, respectively, at June 30, 2019. The Company continues to have substantial available liquidity in the form of cash, high-quality government-backed or government-sponsored securities, and other available contingency funding sources.

The Company declared a common stock dividend of $0.50 per common share in the second quarter of 2019. Additionally, SunTrust Bank issued $1.35 billion of 3-year fixed rate senior notes and $650 million of 3-year floating rate senior notes in the second quarter of 2019 under its Global Bank Note program.

Asset Quality

Overall asset quality performance continues to be strong. Nonperforming assets ("NPAs") totaled $598 million at June 30, 2019, down $50 million from the prior quarter and $216 million year-over-year. The ratio of NPLs to period-end LHFI was 0.34%, 0.34%, and 0.52% at June 30, 2019, March 31, 2019, and June 30, 2018, respectively. The year-over-year decrease was driven primarily by lower residential mortgage NPLs due to loans transitioning from non-accruing status (as a result of forbearance relief provided after hurricanes) back to accruing status.

Net charge-offs totaled $85 million during the current quarter, a decline of $12 million compared to the prior quarter and an increase of $12 million compared to the second quarter of 2018. The ratio of annualized net charge-offs to total average LHFI was 0.22% during the current quarter, compared to 0.26% during the prior quarter and 0.20% during the prior year.

The provision for credit losses was $127 million in the current quarter, a decrease of $26 million sequentially and an increase of $95 million year-over-year. The sequential decrease was driven primarily by slower loan growth and lower net charge-offs. The year-over-year increase was driven primarily by an ALLL ratio that increased 1 basis point sequentially (from March 31, 2019 to June 30, 2019), compared to a 5 basis point decline a year ago (from March 31, 2018 to June 30, 2018). At June 30, 2019, the ALLL was $1.7 billion, which represented 1.07% of period-end loans, up 1 basis point relative to March 31, 2019 and a 7 basis point decline relative to June 30, 2018, the latter of which was driven by improved asset quality.

Early stage delinquencies decreased 5 basis points from the prior quarter and 13 basis points from June 30, 2018 to 0.59% at June 30, 2019. Excluding government-guaranteed loans, early stage delinquencies were 0.23%, up 2 basis points compared to the prior quarter and up 1 basis point compared to the second quarter of 2018.

OTHER INFORMATION

About SunTrust Banks, Inc.
SunTrust Banks, Inc. STI is a purpose-driven company dedicated to Lighting the Way to Financial Well-Being for the people, businesses, and communities it serves. SunTrust leads onUp, a national movement inspiring Americans to build financial confidence. Headquartered in Atlanta, the Company has two business segments: Consumer and Wholesale. Its flagship subsidiary, SunTrust Bank, operates an extensive branch and ATM network throughout the high-growth Southeast and Mid-Atlantic states, along with 24-hour digital access. Certain business lines serve consumer, commercial, corporate, and institutional clients nationally. As of June 30, 2019, SunTrust had total assets of $222 billion and total deposits of $161 billion. The Company provides deposit, credit, trust, investment, mortgage, asset management, securities brokerage, and capital market services. Learn more at suntrust.com.

Business Segment Results
The Company has included its business segment financial tables as part of this release. Revenue and income amounts labeled "FTE" in the business segment tables are reported on a fully taxable-equivalent basis. For the business segments, net interest income is computed using matched-maturity funds transfer pricing and noninterest income includes federal and state tax credits that are grossed-up on a pre-tax equivalent basis. Further, provision/(benefit) for credit losses represents net charge-offs by segment combined with an allocation to the segments of the provision/(benefit) attributable to each segment's quarterly change in the allowance for loan and lease losses ("ALLL") and unfunded commitments reserve balances. SunTrust also reports results for Corporate Other, which includes the Treasury department as well as the residual expense associated with operational and support expense allocations. The Total Corporate Other results presented in this document also include Reconciling Items, which are comprised of differences created between internal management accounting practices and U.S. Generally Accepted Accounting Principles ("U.S. GAAP") and certain matched-maturity funds transfer pricing credits and charges. A detailed discussion of the business segment results will be included in the Company's forthcoming Form 10-Q.

Corresponding Financial Tables and Information
Investors are encouraged to review the foregoing summary and discussion of SunTrust's earnings and financial condition in conjunction with the detailed financial tables included in this release and the earnings presentation which SunTrust has also published today and SunTrust's forthcoming Form 10-Q. Detailed financial tables and the earnings presentation are also available at investors.suntrust.com. This information is also included in a current report on Form 8-K furnished with the SEC today.

Conference Call
SunTrust management will host a conference call on July 18, 2019, at 11:00 a.m. (Eastern Time) to discuss the earnings results and business trends. Individuals may call in beginning at 10:45 a.m. (Eastern Time) by dialing 1-877-209-9920 (Passcode: SunTrust). Individuals calling from outside the United States should dial 1-612-332-1210 (Passcode: SunTrust). A replay of the call will be available approximately one hour after the call ends on July 18, 2019, and will remain available until August 18, 2019, by dialing 1-800-475-6701 (domestic) or 1-320-365-3844 (international) (Passcode: 467809). Alternatively, individuals may listen to the live webcast of the presentation by visiting the SunTrust investor relations website at investors.suntrust.com. Beginning the afternoon of July 18, 2019, individuals may access an archived version of the webcast in the "Events & Presentations" section of the SunTrust investor relations website. This webcast will be archived and available for one year.

Non-GAAP Financial Measures
This news release includes non-GAAP financial measures to describe SunTrust's performance. Additional information and reconciliations of those measures to GAAP measures are provided in the appendix to this news release beginning at page 12.

In this news release, consistent with SEC Industry Guide 3, the Company presents total revenue, net interest income, net interest margin, and efficiency ratios on a fully taxable equivalent ("FTE") basis, and ratios on an annualized basis. The FTE basis adjusts for the tax-favored status of net interest income from certain loans and investments using a federal tax rate of 21%, as well as state income taxes, where applicable, to increase tax-exempt interest income to a taxable-equivalent basis. The Company believes this measure to be the preferred industry measurement of net interest income and it enhances comparability of net interest income arising from taxable and tax-exempt sources. Total revenue-FTE equals net interest income-FTE plus noninterest income.

The Company presents the following additional non-GAAP measures because many investors find them useful. Specifically:

• The Company presents certain capital information on a tangible basis, including Tangible equity, Tangible common equity, the ratio of Tangible equity to tangible assets, the ratio of Tangible common equity to tangible assets, Tangible book value per share, and the Return on tangible common shareholders' equity, which removes the after-tax impact of purchase accounting intangible assets from shareholders' equity and removes related intangible asset amortization from Net income available to common shareholders. The Company believes these measures are useful to investors because, by removing the amount of intangible assets that results from merger and acquisition activity and amortization expense (the level of which may vary from company to company), they allow investors to more easily compare the Company's capital position and return on average tangible common shareholders' equity to other companies in the industry who present similar measures. The Company also believes that removing these items provides a more relevant measure of the return on the Company's common shareholders' equity. These measures are utilized by management to assess capital adequacy and profitability of the Company.
• Similarly, the Company presents Efficiency ratio-FTE, Tangible efficiency ratio-FTE, and Adjusted tangible efficiency ratio-FTE. The efficiency ratio is computed by dividing Noninterest expense by Total revenue. Efficiency ratio-FTE is computed by dividing Noninterest expense by Total revenue-FTE. Tangible efficiency ratio-FTE excludes the amortization related to intangible assets and certain tax credits. The Company believes this measure is useful to investors because, by removing the impact of amortization (the level of which may vary from company to company), it allows investors to more easily compare the Company's efficiency to other companies in the industry. Adjusted tangible efficiency ratio-FTE removes the pre-tax impact of unusual or infrequent items from the calculation of Tangible efficiency ratio-FTE. These items include the charitable contribution to the SunTrust Foundation and the insurance settlement benefit related to financial crisis-related claims recognized in the second quarter of 2019, merger-related impacts recognized in the first and second quarters of 2019, and the legacy National Commerce Financial Corporation ("NCF") pension plan settlement charge recognized in the fourth quarter of 2018. See slide 21 in the earnings presentation (Exhibit 99.2) as well as Appendix A in this news release for more details on these items. The Company believes this measure (Adjusted tangible efficiency ratio-FTE) is useful to investors because it is more reflective of normalized operations as it reflects results that are primarily client relationship and client transaction driven. This measure is utilized by management to assess the efficiency of the Company and its lines of business.

Important Cautionary Statement About Forward-Looking Statements
This news release contains forward-looking statements. Statements regarding the Company's proposed merger with BB&T, including the benefits thereof, and the availability of liquidity to the Company 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," "forecast," "goals," "targets," "initiatives," "opportunity," "focus," "potentially," "probably," "projects," "outlook," or similar expressions or future conditional verbs such as "may," "will," "should," "would," and "could." Forward-looking statements are based upon the current beliefs and expectations of management and on information currently available to management. Our statements speak as of the date hereof, and we do not assume any obligation to update these statements 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. Additional 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" in our Annual Report on Form 10-K for the year ended December 31, 2018 and in other periodic reports that we file with the SEC.

Additional Information about the Merger and Where to Find It
In connection with the Company's proposed merger with BB&T, BB&T has filed with the SEC a registration statement on Form S-4 to register the shares of BB&T's capital stock to be issued in connection with the merger, as amended on May 7, 2019, June 14, 2019, and June 19, 2019. The registration statement includes a joint proxy statement/prospectus. BB&T and SunTrust commenced mailing the joint proxy statement/prospectus to shareholders on or about June 27, 2019.

INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT ON FORM S-4, THE JOINT PROXY STATEMENT/PROSPECTUS INCLUDED WITHIN THE REGISTRATION STATEMENT ON FORM S-4 AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION BECAUSE THESE DOCUMENTS DO AND WILL CONTAIN IMPORTANT INFORMATION ABOUT BB&T, SUNTRUST, AND THE PROPOSED TRANSACTION.

Investors and security holders may obtain copies of these documents free of charge through the website maintained by the SEC at www.sec.gov or from BB&T at its website, www.bbt.com, or from SunTrust at its website, www.suntrust.com. Documents filed with the SEC by BB&T will be available free of charge by accessing BB&T's website at http://bbt.com/ under the tab "About BB&T" and then under the heading "Investor Relations" or, alternatively, by directing a request by telephone or mail to BB&T Corporation, 200 West Second Street, Winston-Salem, North Carolina 27101, (336) 733-3065, and documents filed with the SEC by SunTrust will be available free of charge by accessing SunTrust's website at http://suntrust.com/ under the tab "Investor Relations," and then under the heading "Regulatory & Legal" or, alternatively, by directing a request by telephone or mail to SunTrust Banks, Inc., 303 Peachtree Street, N.E., Atlanta, Georgia 30308, (877) 930-8971.

Participants in the Solicitation
BB&T, SunTrust and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of BB&T and SunTrust in connection with the proposed transaction under the rules of the SEC. Certain information regarding the interests of these participants and a description of their direct and indirect interests, by security holdings or otherwise, are included in the joint proxy statement/prospectus regarding the proposed transaction and will be included in other relevant materials to be filed with the SEC when they become available. Additional information about BB&T, and its directors and executive officers, may be found in the definitive proxy statement of BB&T relating to its 2019 Annual Meeting of Shareholders filed with the SEC on March 19, 2019, and other documents filed by BB&T with the SEC. Additional information about SunTrust, and its directors and executive officers, may be found in the definitive proxy statement of SunTrust relating to its 2019 Annual Meeting of Shareholders filed with the SEC on March 8, 2019, and other documents filed by SunTrust with the SEC. These documents can be obtained free of charge from the sources described above.