Revenue rises 7% at SunTrust
SunTrust Banks in Atlanta turned a tax benefit and stronger investment banking income into higher quarterly profits.
The $206 billion-asset company’s net income rose 5% year over year to $451 million in the first quarter. Earnings per share were 91 cents, beating by 7 cents the average estimate of analysts compiled by FactSet Research Systems. Revenue rose 7% to $2.2 billion.
Profit was boosted by a $22 million discrete tax benefit related to share-based compensation, SunTrust said in a news release Friday. The tax benefit added 4 cents per share to earnings.
Net interest income after the loan-loss provision climbed 6% to $1.2 billion. The provision rose 18% to $119 million. The net interest margin improved 5 basis points to 3.09% as a result of higher interest rates.
Net loans held for investment rose 3% to $142 billion on increases in commercial construction, nonguaranteed residential mortgages and student loans.
Noninterest income rose 8% to $847 million. Investment banking income rose 70% to $167 million. Both mortgage production and servicing income declined.
Noninterest expense rose 11% to $1.5 billion on higher salaries, Federal Deposit Insurance Corp. premiums, regulatory exam expenses and costs associated with branch closures.
“Our performance this quarter is the direct result of the investments we have been making in strengthening our franchise and diversifying our business mix,” Chairman and CEO William Rogers said in the release.