In his personal and professional lives, Hugh S. "Beau" Cummins III, the head of SunTrust's investment bank, is a risk-taker.
The 47-year-old dealmaker skateboards — despite the many injuries he has suffered doing it since childhood — to stay in shape for snowboarding.
Cummins has taken risks in the office, too. In 2005, he stepped down as Bank of America's head of debt capital markets and investment grade and liquid products origination. He moved his family to Atlanta and became head of the debt capital markets business at SunTrust Robinson Humphrey. This year he became the sole head of corporate and investment banking at SunTrust, one of the larger U.S. banking companies, and the chairman and chief executive of its investment banking arm.
He wanted to build up an investment bank rapidly, but the credit markets slowed that down. Now Cummins wants to build a team that is mentioned in the same sentence as Wall Street's bulge-bracket firms.
SunTrust's investment bank is growing, with hires in debt and equity capital markets, mergers and acquisitions and other types of advisory work, and he said, the $170 billion-asset firm uses its balance sheet to bring in mandates.
"The opportunity I saw was that we could … integrate the investment and corporate banking, integrate the equity capital raising with the debt capital raising and take the M&A business and reorient it from a boutique business that was Rolodex-driven to one that was organized by sectors or industry expertise, and align it with our banking, which would be sector-driven," Cummins said in a telephone interview. SunTrust is playing "the universal banking model investment banking game." He and his colleagues "took the old Robinson Humphrey, the old debt capital markets piece and the corporate banking piece and snapped them together to create a universal bank model."
Cummins' division posted $57.8 million of net income for the second quarter, versus a record $77 million a year earlier. The parent company attributed the decline to "decreased equity capital markets activities and a shift of revenue from noninterest income to net interest income upon the consolidation of [its] commercial paper conduit in the first quarter of 2010." Investment banking brought in $55.9 million in net income that quarter.
Last year, investment banking operations made more than $272 million, according to documents filed with regulators. In 2005, the year Cummins came aboard, it made $216 million from investment banking.
SunTrust Robinson Humphrey's business lines include equity and debt research, sales and trading, and M&A and capital structure advice. It does the majority of this work for companies with revenue of $500 million $5 billion, though it also works with firms with revenue outside that range.
The bankers at SunTrust Robinson Humphrey say they are helping to shed their parent company's image as a regional bank. They cite transactions like a deal to place $250 million of New York Times Co. debt with the Mexican investor Carlos Slim and companies controlled by him; SunTrust was the sole placement agent.
In the first quarter, SunTrust Robinson Humphrey advised the Boston private-equity firm ABRY Partners on its $1.2 billion acquisition of the cable television provider RCN Corp. Also, it was the joint bookrunning manager for the Phoenix waste management company Republic Services Inc.'s $1.5 billion issuance of senior notes and the sole lead arranger for Healthcare Finance Group's $100 million receivables securitization program. This month, the firm served as financial adviser to Arena Resources, an Oklahoma gas and exploration company, in its $6.8 billion merger with the Texas oil and gas company SandRidge Energy.