How SunTrust is Managing Its Expansion Into New Markets

If it works well, replicate it.

That’s the strategy SunTrust Banks Inc. has implemented to expand its auto unit’s commercial operations.

On the heels of 25% year-over-year auto loan growth, Atlanta-based SunTrust is branching out operations into Dallas, Chicago, and Boston. The bank will offer a full line of wholesale and indirect banking products to dealers in the three cities.

The move comes after the bank’s investment arm, SunTrust Robinson Humphrey, grew its corporate banking presence into those same markets as part of a bigger national expansion strategy. “We decided to mirror the moves we’ve made in other parts of our bank and expand beyond the retail footprint,” says Beau Cummins, SunTrust’s commercial and business banking executive.

The superregional bank is yet one more player in three of the nation’s most competitive auto lending markets. But, Cummins says, being a large bank with an established investment arm via Robinson Humphrey gives his company an advantage. Beyond being just a lender, SunTrust is a multifaceted advisor that provides a full suite of capabilities, including the bank’s floorplan lending, dealership facilities financing, and online lending platform called Light Stream.

“We have all the capabilities of a traditional regional bank, but we also have an investment bank that has a very expansive set of capabilities that we can bring to bear on behalf of our clients to help them reach their growth goals,” Cummins says.


Cummins used the growth goals of a recently visited dealer group client to further make that point. “They painted a picture of going from 50 to 150 dealerships,” Cummins says. “When you paint a picture like that, they clearly have a material need for capital to achieve that goal. Growth capital comes in multiple forms. It can be debt or equity capital. But it can also come from private or public markets.”

Specifically, SunTrust can help dealers raising capital manage the risk of interest rate movements before they go to market. The bank also offers services focused around cash management. Another value-add could come on the acquisition side, Cummins said, through introductions to other dealers who might wish to sell.

“Once they have decided where they’re going, there’s a multitude of paths that our full set of capabilities allows us to talk to them about,” he says.

But is the hop-skip outside the bank’s southeastern footprint part of a more aggressive growth spurt? “If we were to have aggressive growth goals, you’d find we are behaving differently than I just described,” he says. “We want to respond to the demand in the marketplace and the demand within our client set for perspective clients and existing clients.”

PNC Financial Services Group has taken a similar path toward expansion. Pittsburgh-based PNC added 400 branches in the Southeast to its footprint when it bought the American retail banking business of Royal Bank of Canada back in 2011. “We’ve expanded a lot of our dealer networks across geographies, particularly in the Southeast, and we’re seeing growth there,” said Chief Financial Officer Robert Reilly earlier this year.

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