SunTrust Banks in Atlanta reported an improvement in quarterly earnings despite a steep decline in mortgage banking activity.

The $207 billion-asset company reported Friday that its net income rose 6% from a year earlier to $505 million. Earnings per share of $1.03 topped the mean of estimates compiled by FactSet Research Systems by 4 cents.

“We continued to realize benefits from our consistent focus on optimizing our business mix and investing in growth,” William Rogers, the company’s chairman and CEO, said in a press release.

SunTrust, led by CEO William Rogers, stepped up lending in a number of consumer areas during the second quarter.

Net interest income rose 15% to $1.3 billion. Total loans held for investment rose by 2% to $144 billion, while the net interest margin expanded by 15 basis points to 3.14%. The loan-loss provision fell by 38% to $90 million.

Direct consumer lending rose 21% to $8.2 billion; guaranteed student loans rose 18% to $6.5 billion. SunTrust also refrained from raising deposit rates.

Noninterest income fell 8% to $827 million. Income from mortgage originations fell 50% to $56 million. Investment banking and trading fees rose by double-digit percentage rates.

Noninterest expense rose 3% to $1.4 billion from costs related to the acquisition of Pillar & Cohen Financial and higher salaries and occupancy expense.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.
Andy Peters

Andy Peters

Andy Peters writes about regional banks, consumer finance and debt collections for American Banker.