STI 2018 Annual Report

Consumer Segment The pace of change in the Consumer business is tremendous; client preferences evolve dramatically each year and we strive to provide clients with a platform that allows them to do business with SunTrust at their convenience. For certain clients, that means ensuring that our branches and call centers are staffed with talented teammates who can assist with their full range of needs, from a simple transaction to lending to financial planning. For clients that are looking for more insightful advice around their financial goals and priorities, we have made concerted efforts to elevate our expertise by hiring and developing Premier Bankers and Private Financial Advisors. For other clients, that means ensuring that we have digital platforms which allow them to accomplish all of their financial planning and transactions via self-service, at any hour of the day. We have made and continue to make investments in our mobile and online platforms to ensure we are providing for a frictionless experience and putting more functionalities at their fingertips. We have made great strides here; greater than 90% of our consumer products can now be opened with a mobile device, and our new payments platform in partnership with Zelle® makes it much easier for clients to execute P2P transactions. In fact, P2P users increased by 138% and transaction volumes increased by 300% in 2018. In addition to the changes we have seen in mobile and online banking, the world of consumer lending has also evolved significantly. Fortunately, SunTrust has been at the forefront of this evolution. In 2012, we acquired LightStream, an online consumer lending platform, which provides financing to prime and super prime borrowers for the majority of consumer purchases (cars, home improvement projects, debt consolidation, etc.). Better yet, the application takes the average client less than 20 minutes to complete, and in many cases we are able to provide same- day funding. We strongly believe we have a headstart in this space, but we are highly focused on ensuring we make consistent investments to keep up with the pace of innovation and fully capitalize upon the competitive advantage that LightStream provides. We have also made significant investments in point- of-sale lending partnerships; today, we have three partners (two of which were added in 2018) which provide financing for home improvement-related projects. These investments have put us at the center of when and where consumers make their lending decision. LightStream and third-party partnerships combined delivered approximately $2 billion in loan growth in 2018, improving growth and returns within the Consumer Segment while also allowing us to reach a new set of clients (roughly 25% of production is from SunTrust clients). In March, we introduced SmartGUIDE, our new fully digital mortgage application which takes an average client 37 minutes to complete (about half the time of a traditional mortgage application). Since its introduction, we have already achieved 64% adoption and should see further progress from here. This not only provides for a superior client experience, it also streamlines our underwriting process and reduces loan cycle origination times. In addition to meeting the depository and lending needs of our Consumer clients, we are also highly focused on meeting their wealth management needs. Within Private Wealth Management (PWM), we are focused on having the right team, coverage model, and technology to support our clients and our teammates. One of our primary areas of focus within PWM in 2018 was hiring new advisors and expanding into new markets. New production AUM in 2018 was $4.2 billion, 70% higher than 2017, which helped offset the market pressures we felt in the fourth quarter of 2018. We also introduced a new Digital Client Portal to our PWM clients which provides clients with a fully digital, bespoke, holistic view of all aspects of their financial lives and includes enhanced financial planning tools. One of the key benefits of the investments we have made in our Digital Client Portal is that we will be able to leverage the architecture we built for all clients across the bank. Bigger picture, I feel very good about the investments in technology and talent we have made across our Consumer Segment to enhance the client experience. My own confidence is validated by third-party recognition. We received a number of impressive awards in 2018 which are outlined on page 25 of this report; the most notable of these are the four Javelin leader awards for our mobile and online platforms, which represent very strong performance relative to our peers. BB&T has also received a number of impressive awards that support my earlier comment that we are both coming from a position of strength. Overall, 2018 was a very strong year for our Consumer Segment. Our healthy, broad-based balance sheet growth, the higher-rate environment, and well-controlled deposit costs drove a 4% increase in revenues relative to 2017. This strong revenue growth, combined with our ongoing efficiency initiatives, drove a 200-basis-point improvement in the Consumer Segment’s efficiency ratio. Going forward, we are excited about the opportunity we have to enhance our consumer banking delivery model by bringing together the best of both companies’ capabilities and strategies, and increasing our investments in client-friendly technology. We also benefit from certain revenue synergy opportunities including the ability to leverage our LightStream platform, SmartGUIDE application, and point-of-sale lending platform into an expanded client base. Wholesale Segment Within our Wholesale Segment, we have a clear competitive advantage because of our talent and our focus on the middle- market. We win because of the quality of our people, the advice they deliver, and the way we work together. More specifically, we deliver a comprehensive set of product capabilities and industry expertise to middle-market clients in a One Team manner. The competitive advantage we have in Wholesale today is largely the result of the investments we have made over the last 15 years in hiring, developing, and retaining talent. By way of background, during the Financial Crisis, several of our larger competitors were shrinking; however, we remained committed to investing in growth. This allowed us to capitalize on an opportunity to recruit key talent; many of the leaders we brought in at this time are the foundation for the superior middle-market corporate & investment banking platform we have built (which goes to market as SunTrust Robinson Humphrey, or STRH). To put numbers behind it, over the last 10 years, we have hired more than 800 bankers at STRH, and we will continue to recruit key talent into our platform each year. With the exception of a small energy boutique, Lantana, which we acquired in 2014, this growth has been organic. Today, STRH has eight industry practice groups and over 30 sub-industry verticals and a robust equity research and trading platform with over 700 small- and mid-cap companies under coverage. And, we deliver our full suite of capabilities from 14 different offices across the country. STRH’s revenues have increased at a strong 7% CAGR over the past five years. Technically, STRH is one of our three lines of business within Wholesale, with the other two being Commercial Banking and Commercial Real Estate (CRE). However, I don’t think about STRH as its own line of business—the lines are intentionally blurred between our three Wholesale lines of business. Our STRH platform exists to serve the capital markets needs of all Wholesale clients, not just our corporate and investment banking clients. In fact, 20% of our capital markets income in 2018 (investment banking and trading) was from our Commercial Banking, CRE, and Private Wealth clients, up from just 12% compared to the prior year. Across the industry, it is not common for commercial bankers, investment bankers, industry specialists, and product specialists to work cohesively—but this is exactly what happens at SunTrust every day—what we refer to as the One Team approach. “Across the industry, it is not common for commercial bankers, investment bankers, industry specialists, and product specialists to work cohesively—but this is exactly what happens at SunTrust every day—what we refer to as the One Team approach.” “These investments have put us at the center of when and where consumers make their lending decision. LightStream and third-party partnerships combined delivered approximately $2 billion in loan growth in 2018…” Complementary and Diversified Business Mix Primarily Regional BB&T SunTrust Combined Retail Banking Consumer Lending Commercial Banking Small Business Payments National Wealth Insurance Brokerage Corporate & Investment Banking Mortgage Banking Specialty Finance Digital Lending Page 8