Expects Earnings of $103 Million in Second Quarter
ATLANTA -- SunTrust Banks Inc. said it expects to report second-quarter earnings of about $103 million, 11% more than the year-ago quarter's $92.6 million.
On a per-share basis, the 82 cents in profits slightly exceeded the Wall Street consensus forecast of 79 cents. In late trading Monday, SunTrust shares were selling at $40.625, up 12.5 cents.
$203 Million in First Half
For the first six months, Atlanta-based SunTrust, which has $35 billion in assets, said it expects profits of $203 million, or $1.60 per share, up 12% from the previous year's $181.6 million, or $1.42 per share. The company will report full results July 14.
SunTrust is the second southeastern superregional to estimate its second-quarter profit.
First Union Corp., Charlotte, N.C., last month said it expected to earn $110 million to $116 million, compared to $61 million in the 1991 second quarter. That, too, was slightly better than analysts' predictions.
SunTrust did not say what contributed to its second-quarter performance, but analysts believe the company's net interest margin held steady at about 5%, the high first-quarter level.
First Union had cited a strong net interest margin as one element fueling its second-quarter results. High net interest margins reported by banks are related to a continued softening in interest rates.
"We are expecting bank earnings across the board to be positive surprises," said Susan R. Leadem, an analyst at Robinson-Humphrey Co., Atlanta.
SunTrust, which rarely prereleases its earnings, said it did so to support its current offering of $200 million in 10-year notes.
The issue, which was priced last week at 7.37%, is being sold through underwriters led by Lehman Brothers Inc.
Florida Trust Subsidiary
Improved trust income and widening net interest margins at SunTrust contributed to first-quarter profit of $100.1 million, up 12.5% from the year-earlier quarter. The company's Florida trust subsidiary has been doing particularly well of late.
Although nonperforming assets have been trending downward, conservative SunTrust continues to build its reserves, which reached $392 million, or 97% of nonperforming loans, in the first quarter.
Analysts are expecting SunTrust to earn $404 million, or $3.18 per share, this year, compared to $371 million, or $2.90 per share, in 1991.