While southeastern competitors binge on acquisitions, SunTrust Banks Inc. is staying true to homegrown growth plans.
In announcing yet another net income record Tuesday, the $55 billion- asset banking company showed off gains in several key areas and beat consensus estimates by a penny.
In a prepared statement, James B. Williams, chairman of the Atlanta- based banking company, attributed the results to improved expense control and credit quality along with solid internally generated revenue growth. "Loan growth and credit quality continue to be outstanding," he said.
Net income for the second quarter totaled $165.4 million, up 8.7% from the second quarter of 1996. On a per share basis, earnings were up 13.2%, to 77 cents, from 68 cents last year. The per share increases were aided by the company's repurchase of about 2.3 million shares.
Centura Banks Inc., another southeastern regional, also reported solid quarterly results.
The Rocky Mount, N.C.-based company said Monday that it had earned $20 million in the second quarter, up 16% from the previous year. Fully diluted earnings per share totaled 76 cents a share, in line with analysts' estimates, up from 67 cents last year.
The SunTrust earnings were in line with the bank's history of solid performance, analysts said.
"Their earnings are consistent and predictable," said John W. Coffey, an analyst at Robinson-Humphrey Co. "They move up quarter to quarter in stair- step fashion."
Loans grew to $37.7 billion, up from $32.4 billion a year earlier, pushing net interest income to $479.2 million, up 5.5% from mid-1996. A significant gain was also seen in noninterest income, which grew 13%, excluding securities gains, to $228.5 million.
Total nonperforming assets decreased $20.9 million from the first- quarter level, totaling $213.9 million at June 30.
SunTrust's efficiency ratio improved to 58.44% in the second quarter, from 60.12% a year earlier.
The results reflected SunTrust's efforts over the last two years to streamline operations while building up sales efforts in credit cards; mortgage, retail, and commercial lending; and corporate banking.
"It is clear we've seen good fee growth as well as good long-term growth in earnings directly impacted by the growth project," said James C. Armstrong, SunTrust first vice president, investor relations. +++
SunTrust Banks Inc. Atlanta Dollar amounts in millions (except per share) Second Quarter 2Q97 2Q96 Net income $165.4 $152.1 Per share 0.77 0.68 ROA 1.31% 1.36% ROE 21.21% 18.93% Net interest margin 4.16% 4.43% Net interest income 479.2 454.2 Noninterest income 228.1 200.1 Noninterest expense 413.3 393.4 Loss provision 29.2 26.2 Net chargeoffs (23.9) (16.0) Year to Date 1997 1996 Net income $326.5 $302.5 Per share 1.51 1.34 ROA 1.32% 1.37% ROE 20.71% 18.90% Net interest margin 4.20% 4.39% Net interest income 951.2 887.9 Noninterest income 453.9 413.8 Noninterest expense 827.3 794.4 Loss provision 55.4 51.2 Net chargeoffs (41.4) (28.7) Balance Sheet 6/30/97 6/30/96 Assets $55,463.0 $48,067.0 Deposits 35,833.0 35,016.0 Loans 37,684.0 32,401.0 Reserve/nonp. loans 430.2% 371.0% Nonperf. loans/loans 0.46% 0.60% Nonperf. assets/assets 0.39% 0.52% Nonperf. assets/loans + OREO
0.57% 0.77% Leverage cap. ratio NA 6.58% Tier 1 cap. ratio NA 7.86% Tier 1+2 cap. ratio NA 10.60% ===