The new tax law helped boost fourth-quarter results at SunTrust Banks in Atlanta, while the recent rate hikes led to gains in spread income.
The $206 billion-asset company’s net income rose 58% to $710 million from a year ago. Earnings per share, including several one-time items, came in at $1.48. Excluding those items, earnings of $1.09 per share met the mean of analysts’ estimates compiled by FactSet Research Systems.
The revaluation of SunTrust’s deferred tax liability, plus other discrete items, added $291 million to net income.
SunTrust recorded other items related to the new tax law, including a $50 million contribution to its charitable foundation, a $25 million contribution to the company’s 401(k) plan, a $109 loss from restructuring its portfolio of securities available for sale and a $5 million loss from the sale of servicing rights. The combined tax impact of those items, excluding the revaluation of its deferred tax liability, was a $70 million benefit.
The aggregate impact of all items related to tax reform was $172 million benefit to SunTrust’s fourth-quarter earnings.
SunTrust's results also included several previously announced items, including a $107 million gain from the sale of its Premium Assignment Corp. subsidiary and a $36 million charge to cover costs of an early-retirement program.
“We … took significant actions this quarter which better position the company for success and give me increased confidence that 2018 will be another great year for SunTrust,” Chairman and CEO Bill Rogers said in a news release.
Net interest income increased 9% to $1.4 billion on higher earning asset yields and growth in average earning assets.
Noninterest income climbed 2% to $833 million. Income from trading and mortgage production dropped, while mortgage servicing and trust and investment management income improved.
Noninterest expense rose 9% to $1.5 billion due to the previously disclosed one-time items.