SunTrust Banks Inc.

Address:
P.O. Box 4418
Atlanta, Georgia 30302-4418
U.S.A.

Telephone: (404) 588-7711 beginoItheskypehighlighting
(404) 588-7711 endoItheskypehighlighting
Fax: (404) 588-7929
http://www.suntrust.com

Statistics:
Public Company
Incorporated: 1985
Employees: 21,000
Sales: $667.3 million (1997)
SICs: 6712 Bank Holding Companies; 6021 National Commercial Banks; 6022 State
Commercial Banks

Company Perspectives:

SunTrust Banks Inc. is a leading provider oI high-value Iinancial services that are delivered
through the decentralized management oI individual banks and subsidiaries responsible Ior their
local markets. Its mission is to initiate and strengthen relationships by meetings with high-quality
services that provide a high return to its shareholders. The company's primary objective is to
operate sound Iinancial institutions that promote the economic well-being oI its customers,
employees, and their communities. It combines the advantages oI strong, Iocused, and
accountable decentralized local management with Iinancial, technological, and capital markets
strength to achieve its vision. Market recognition Ilows Irom its ability to remain sound while
sustaining high perIormance over time. SunTrust seeks growth but will not sacriIice quality or
proIitability. Its goal is to achieve all three.


Company History:
A holding company Iormed by Trust Company oI Georgia in 1985, SunTrust Banks Inc. had
total assets oI $55.5 billion in 1997, making it the 19th largest bank in the United States. In a city
that had seen its large Iinancial institutions overtaken by NationsBank and Wachovia during the
1980s and 1990s, SunTrust remained the only major banking company with headquarters in
Atlanta. With three principal subsidiaries in Georgia, the company has more than 695 combined
banking locations and provides a variety oI services that include traditional banking, trust and
investment management, mortgage banking, credit cards, discount brokerage, credit-related
insurance, data processing and inIormation, and numerous other services. At the heart oI the
bank's stability are its 48.3 million shares oI common stock in Atlanta's most Iamous commercial
enterprise, Coca-Cola, a relationship that dates back to the company's origins.
A Century of Trust Company
SunTrust traces its roots to the Trust Company, a bank Iounded in Atlanta in 1891. Trust
Company would remain a major institution in the city Ior the next century, though since the
Iormation oI SunTrust in 1985 and the Iull name change oI all company institutions which went
into eIIect in 1995, little remains oI the old company's history.
At the time oI Trust Company's Iounding in the last decade oI the 19th century, Atlanta was
already well on its way to becoming the leading commercial center that it would become by the
1990s. From the devastation wrought by the Civil War and Sherman's burning oI the city,
Atlanta had emerged much like its symbol, the phoenix, a bird which rejuvenates itselI
periodically through immersion in Iire. By the 1890s, as Atlanta took on the nickname "The Gate
City," a druggist named Asa Candler had developed a sweet brown carbonated drink destined to
place the city squarely on the commercial map.
The drink, oI course, was Coca-Cola, and in 1919 the WoodruII Iamily would purchase the
Candlers' interest in the company. The patriarch oI the clan, Ernest WoodruII, had become
president oI Trust Company, in which capacity he served Irom 1904 to 1922. With the Iamily's
acquisition oI the company, WoodruII in 1919 took Coca-Cola public, using Trust Company as
underwriter. In return, Trust Company received $110,000 worth, in 1919 dollars, oI Coca-Cola
stock. This investment would Iorm the heart oI the company's Iortunes over the century that
Iollowed.
Though WoodruII leIt his position as bank president in 1922, the link between Trust Company
and Coke was Iormed. Ultimately Ernest's son Robert would take his place at the helm oI Coca-
Cola, a position he would hold into the 1980s. During his long career, WoodruII would leave a
heavy imprint on Atlanta in the Iorm oI numerous donations by the Ioundation named Ior him.
His Iamily, however, had already made a strong and abiding mark on Trust Company: "From
them evolved the bank's steady, glitz-eschewing philosophy," according to Rob Chambers oI the
Atlanta Journal and Constitution.
That philosophy, along with its mother lode oI Coca-Cola stock, ensured steady growth Ior Trust
Company through the ups and downs oI the mid-20th century. By the 1970s, Trust Company had
adopted as its logo a "big blue T," with an advertising campaign that centered around that
nickname. From the image projected by the bank, the operative term in "Trust Company" was
"Trust."
The company's stability would become a particularly noteworthy Iacet in years to come, as one
by one its competitors were swallowed by the giants Irom North Carolina, NationsBank and
Wachovia. The Iormer absorbed Bank South and Citizens & Southern (C & S), while the latter
took over First Atlanta. Georgia Federal, National Bank oI Georgia, Fulton Federal, and
numerous other Iormer competitors likewise disappeared; only Trust Company remained apart.
When Trust Company, too, ceased to exist, it would not be through acquisition, but through
transIormation Irom within.
The 1980s: Trust Company Plus SunBanks Equals SunTrust
In 1984, Trust Company announced its intention to merge with another bank. A year later,
reciprocal interstate banking laws between Georgia and Florida became eIIective, and on July 1,
1985, Trust Company Iormally merged with Orlando-based SunBanks. It was an auspicious
beginning; starting with $16 billion in assets, the new company ended the year with $19.4
billion.
In 1985, SunTrust also acquired two banks with total assets oI $130 million. It would continue to
make such acquisitions, some smaller and some larger--Ior instance, Iour acquisitions in 1993
totalled $2.2 billion--throughout the coming years. However, as oI 1998 its only merger, other
than the initial one that created the company, came in 1986. In that year, SunTrust took on the $5
billion Third National Corporation oI Nashville. Now the bank had oIIices in a wide swath Irom
Miami to the mountains oI Tennessee, as well as a tiny Ioothold in Alabama through Third
National, which became SunTrust Banks oI Tennessee Inc.
The year 1986 was also pivotal in that it saw the Iormation oI the subsidiary SunTrust Securities.
In addition, the company created "The SunTrust Vision," a statement oI principles which would
remain in eIIect Ior years to come. As the mid-1980s became the late 1980s, the company's
reputation grew. During the Iirst halI oI 1987, SunTrust posted the highest earnings in the
industry, and later that year American Banker named it "Top PerIorming Regional Bank Holding
Company." In 1988, it acquired two Mellon Bank trust subsidiaries in Florida and was added to
the Standard & Poor 500 Index.
In the energetic, sometimes volatile, business climate oI the 1980s, the bank Iaced serious
challenges as well. When it entered the Tennessee market in 1986, the area had seemed a
promising one, particularly since Saturn and other automakers had begun moving production
Iacilities there. Yet the local real estate market experienced a sudden and severe downturn, which
according to SunTrust's own literature might have had an extremely adverse eIIect on the
company iI not Ior its "quick action to conIront this problem." With spreading repercussions
Irom the crisis in savings and loan institutions, 1989 was not a good year Ior banking. The
increased leveraging oI companies in preceding years became a matter oI concern, as did real
estate lending practices. In 1990, the Iederal government required substantial increases in deposit
insurance premiums.
Again, however, SunTrust's Ioundation--its Coca-Cola stock and its conservative principles--
stood it in good stead. The company had obtained stock in Columbia Pictures Entertainment
during Coke's short-lived ownership oI that entertainment company, and in 1989 SunTrust
realized a $10 million windIall Irom the sale oI Columbia common stock. Also in that year, it
began consolidating its regional banking subsidiaries Irom a high oI 53; within six years, the
company had reduced this number to just 29.
With the approaching retirement oI its Iirst chairman, Bob Strickland, the company in 1990
instituted a plan oI succession. Joel Wells became chairman and James B. "Jimmy" Williams
became president and CEO. In 1991 Williams became chairman while remaining CEO, and Phil
Humann was named to the position oI president.
ew ame, Same Bank in the 1990s
In 1992, the year the company's investment in Coca-Cola passed the $1 billion mark, SunTrust
introduced an initial group oI six mutual Iunds as the STI Classic Iamily oI Iunds. The next year,
Euromoney magazine rated SunTrust Banks Inc. the 14th best bank in the world on the basis oI
its stability and solid perIormance. Likewise in 1994 several STI Classic Funds earned national
recognition Ior their strong perIormances. By that point, STI had made available to the public a
total oI 18 diIIerent Iunds. Also in 1994, the company Iormed SunTrust Capital Markets and
inaugurated a series oI growth initiatives to increase revenue and core earnings.
In 1994 and 1995, the company took steps to consolidate all subsidiaries under the SunTrust
brand name. Up until then, Ior instance, the Georgia subsidiary had continued to operate under
the Trust Company name with the "big blue T" logo. In Florida, moreover, where a number oI
local bankers took pride in the Iact that the 1992 devastation wrought by Hurricane Andrew had
not presented a major setback to SunBanks, the sun was Iinally setting.
In a bittersweet 1996 proIile, the Wall Street Journal reported on one tangible consequence oI
SunTrust's decision to bring all its banks together under one brand-name, which went into Iull
eIIect in 1995. With the end oI SunBanks came the removal oI a major Miami landmark, the
large orange sign, 12 Ieet high and 88 Ieet across, on the bank's Brickell Avenue tower.
According to the bank's marketing manager, Karen Dorscher, "Every time they'd shoot a movie
in Miami, we'd see the orange sign," which had appeared most recently in True Lies with Arnold
Schwarzenegger and the Sylvester Stallone movie The Specialist. Bank oIIicials arranged to have
more than 100 small cubes cut Irom the big orange "S," and they sent these&mdash-graved with
the inscription "a piece oI history"&mdasho local leaders and journalists. With more pieces leIt
over Irom the "S," Dorscher told the Journal, "I took the leItovers to my son's day care, and they
built things with it."
Focus on the Information Age for the Future
SunTrust Banks was likewise in a building mode, with a heightened Iocus on technology. In
1995, it instituted "PC Banking," a personal computer-based home banking service. OIIered
through an agreement with Intuit Inc., makers oI Quicken, a popular Iinancial management
soItware package, PC Banking made SunTrust only the second Iinancial institution in the
Southeast to oIIer on-line banking. The company also made steps in the area oI in-store banking.
SunTrust's Georgia subsidiary in 1995 entered into an agreement with Publix Super Markets to
oIIer in-store banking Iacilities throughout the state. The bank's Chattanooga aIIiliate, part oI the
Tennessee subsidiary, signed a similar agreement with Winn Dixie stores.
Another area oI technological development Ior SunTrust in the mid-1990s was enhanced
automatic teller machines (ATM) service. Now the company oIIered statement printing, coupon
and stamp dispensing, and check cashing at its ATMs. For some time SunTrust had its Telebank
24 service in place, a 24-hour automated banking system available by phone, and it expanded its
oIIerings through this system to include investment inIormation and other types oI services. At
the level oI the client/server systems connecting its branches and subsidiaries, until 1995
SunTrust had three platIorms in operation; in that year, it introduced a single platIorm to link its
intranet.
Technological advancements also allowed the company to present its commercial customers with
a number oI services. SunTrust in 1995 became the Iirst bank in the U.S. to oIIer its corporate
customers inIormation access by means oI both CD-ROM and an on-line connection. SunTrust
also applied new technologies to an upgrade oI its wholesale lockbox service and to assisting
customers in receiving Iax copies oI check images directly through a PC. This would in turn
introduce heightened levels oI security. In conjunction with Antinori SoItware Inc., SunTrust
developed an automated system to saIeguard against Iraudulent checks. It also began oIIering
one oI the nation's Iirst image-based systems designed to assist in processing damaged checks.
As SunTrust approached a new millennium as the 19th-largest bank in the United States, aspects
oI its operation would have been unrecognizable to the bank's Iounders Irom the 1890s. But two
themes remained constant: the signiIicance oI its relationship with Coca-Cola, and the
conservative attitude oI stable, managed growth instilled by the WoodruII Iamily.
Noting that James B. Williams sat on the Coca-Cola board and that Coke chairman Roberto
Goizueta (who died in the summer oI 1997) sat on the SunTrust board, the Atlanta Journal and
Constitution in June 1997 proIiled the strong bond between the bank and the soIt-drink maker. A
large portion oI the "trust and other business" at the bank, according to market analyst John W.
Mason, "stems Irom wealthy oIIicers and shareholders oI Coca-Cola.... Most oI the public and
the media doesn't understand that seventy-Iive to 100 percent oI the bank's business comes Irom
thirty percent, even twenty percent oI its customers."
A central Iacet oI SunTrust's Iinancial picture is its Coca-Cola shares. By 1997, nearly eight
decades aIter Ernest WoodruII paid the bank's underwriting Iee in Coke stock, the original
$110,000 had grown to a value oI $3.3 billion. The shares, now numbering 48.3 million, had
grown by $2 billion since the beginning oI 1992, and with earnings per share at $74, the Coke
dividend accounted Ior a whopping 11 cents, or nearly 15 percent.
This sizeable nest egg, the Atlanta paper noted, "helps keep the bank stock pricey and beyond
reach oI unwanted suitors except those with the deepest oI pockets." In other words, one key
Iactor underlying SunTrust's continued independence Irom the North Carolina superbanks--
which made it by 1997 the sole Atlanta-based Iinancial institution--is its stock in Coca-Cola.
Furthermore, in the Iour years since 1993, SunTrust had bought back more than 39 million oI its
own shares at a cost in excess oI $1 billion and had plans to buy more oI the 216 million shares
still outstanding. This Iurther decreased its potential vulnerability to takeover and increased
earnings per share.
Less tangible but no less real is the cautious mentality which has governed SunTrust Irom its
origins. On March 21, 1998, Williams retired and President Phillip Humann assumed his role as
chairman and CEO, but the Journal and Constitution predicted no signiIicant change oI
direction. OI Williams and Humann, SummerIield K. Johnston--Goizueta's successor as
chairman oI Coke and a director at SunTrust--said, "They're not the same people, but they've
been in lock-step Ior a number oI years. They're both conservative, thorough bankers."
The bank's slow-growth strategies, however, could be a liability in a climate increasingly
governed by the most aggressive competitors. According to the Atlanta paper, Wall Street
analysts "continued to express concern that SunTrust Banks is becoming a lost lamb as a
relentless round oI acquisitions is creating ever-larger wolves in the banking industry." The
article noted that SunTrust had purchased Nashville-based Equitable Securities in September
1997, "but hasn't acquired a bank oI consequential size since its purchase oI Third National ... in
1986."
Still, Williams and Humann appeared to be in agreement in their reIusal to let the strategies oI
competitors such as NationsBank determine their own response to events. Jon R. Burke oI
Brown, oI Burke Capital Partners observed, "They've been miraculously good at not being
reactive.... And they've retained a community Iocus."
Principal Subsidiaries: SunTrust Banks oI Florida Inc.; SunTrust Banks oI Georgia Inc.;
SunTrust Banks oI Tennessee Inc.


Further Reading:

Chambers, Rob, "A New Leader Ior SunTrust: But No Switch in Direction," Atlanta Journal and
Constitution, February 11, 1998, p. E1.
------, "Enterprise: Coca-Cola Long an Important Part oI SunTrust," Atlanta Journal and
Constitution, June 8, 1997, p. H10.
"SunTrust Settles Escrow Suit," Wall Street Journal, February 26, 1996.
"SunTrust's Earnings Ior 4th Quarter Rose Despite Its Expenses," Wall Street Journal, January
10, 1996, p. B4.
Tippett, Karen L., "Florida Journal: Signing OII: SunTrust Preserves Plastic," Wall Street
Journal, February 28, 1996, p. F2.
Source: nternational Directory of Company Histories, Vol. 23. St. James Press, 1998.