SunTrust Banks Q3 Profit Jumps - Update

(RTTNews) - Diversified financial services holding company SunTrust Banks, Inc. (STI) Friday reported a sharp increase in the third-quarter profit, reflecting 6 percent growth in revenue and decline in expenses. Provision for credit losses decreased from last year.

For the third quarter, net income available to common shareholders surged to $563 million or $1.06 per share from $179 million or $0.33 per share in the previous year. Excluding certain items, earnings per share for the quarter were $0.81, while the firm posted $0.66 last year.

On average, 23 analysts polled by Thomson Reuters expected the company to report earnings of $0.81 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenue grew 6 percent to $2.03 billion from $1.92 billion in the year ago quarter. Wall Street analysts were looking for revenue of $2.07 billion for the quarter.

Excluding $63 million incremental mortgage repurchase provision incurred in the third quarter of 2013, total revenue increased 2 percent, driven mainly by higher mortgage servicing income.

Net interest income slightly increased to $1.25 billion from $1.24 billion a year earlier. Non-interest income was $780 million, up from $680 million in the previous year.

Non-interest expense declined to $1.26 billion from $1.73 billion in the preceding year.

"We delivered solid performance this quarter driven by increased client loan and deposit business, further efficiency improvements, and continued strong asset quality performance, which helped mitigate the impact of the continued challenging low rate environment," said William Rogers, Jr., chairman and chief executive officer of SunTrust Banks.

Provision for credit losses decreased to $93 million from $95 million last year.

Tier 1 capital ratio was 10.50 percent, compared to 10.97 percent in the same period last year.

STI is currently trading at $35.88, up 2.69 percent.