SunTrust Banks Q3 Adj. Profit Beats View, Provision For Credit Losses Falls

(RTTNews) - SunTrust Banks, Inc. (STI) on Friday reported an 8 percent decline in profit for the third quarter from last year despite higher revenues.

However, both revenue and adjusted earnings for the quarter beat analysts' expectations, helped by higher capital markets and mortgage-related income as well as a fall in the provision for credit losses.

SunTrust's average client deposits for the latest quarter rose 10 percent from the year-ago period to $145.2 billion, while total loans at quarter end increased 1 percent to $133.6 billion.

The lender's provision for credit losses declined 66 percent from last year to $32 million, driven by the continued improvement in overall asset quality. Meanwhile, net interest margin declined to 2.94 percent from 3.03 percent last year, reflecting declines in loan and investment securities yields.

For the third-quarter, net income available to SunTrust's common shareholders was $519 million or $1.00 per share, down from $563 million or $1.06 per share in the year-ago period.

Excluding items, adjusted earnings for the quarter were $1.00 per share, compared to $0.81 per share in the year-ago period.

On average, 30 analysts polled by Thomson Reuters expected the company to report earnings of $0.84 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenue for the quarter grew 1 percent to $2.06 billion from $2.03 billion in the year-ago period. Analysts had a consensus revenue estimate of $2.04 billion for the quarter.

Net interest income edged down slightly from last year to $1.25 billion driven by lower earnings asset yields. Noninterest income increased 4 percent to $811 million, reflecting higher investment banking and mortgage-related income, along with higher gains on the sale of investment securities.

STI closed Thursday's trading at $39.52. In Friday's pre-market activity, the stock is up $1.00 or 2.53 percent to $40.52.