SunTrust Banks in Atlanta on Friday reported a slight increase in profit that could have been greater were it not for a surge in energy chargeoffs.
The $199 billion-asset company's second-quarter earnings rose 2% from a year earlier to $475 million, or 94 cents a share. Revenue rose 7% to $2.2 billion.
SunTrust recorded a $146 million loan-loss provision, which was much higher than the $26 million it set aside a year earlier. Net chargeoffs more than doubled to $137 million, with more than half of those tied to the energy sector, which made up 2% of total loans. SunTrust said it has been working to resolve issues with its energy credits; nonperforming assets in that sector fell 16% since March 31 to $354 million.
Net interest income rose 10% to $1.3 billion from year earlier. Total loans increased 7% to $142 billion, including a 71% jump in commercial construction loans. The net interest margin widened by 13 basis points to 2.91%.
Noninterest income increased by 3% to $898 million as mortgage-related income offset a decline in investment banking income.
Noninterest expenses edged up by 1% to $1.3 billion, largely because of higher compensation and marketing expenditures.