SunTrust Earnings Per Share Increased to $0.39; Favorable Loan, Deposit, and Asset Quality Trends

SunTrust Banks, Inc. reported on October 21 net income available to common shareholders of $211 million, or $0.39 per average common share, for the third quarter of 2011.  This compares favorably to earnings of  $0.33 per average common share for the second quarter of 2011.  Results benefited from continued improvement in credit quality, resulting in a decline in the provision for credit losses, as well as higher loan balances.  Earnings improved significantly from the $0.17 per average common share reported for the third quarter of 2010.

"Lower-cost deposit growth and improved credit quality continued in the third quarter," said SunTrust President and Chief Executive Officer, William H. Rogers, Jr.  "Further, overall loan growth was driven by solid increases in targeted consumer and commercial loan portfolios.  We remain focused on delivering improved shareholder value through the execution of our client-centric initiatives and the implementation of our expense program."

Third Quarter 2011 Financial Highlights

Income Statement

Net income available to common shareholders was $0.39 per average common share, compared to earnings of $0.33 per average common share for the prior quarter and $0.17 per average common share for the third quarter of 2010.

Earnings per share was $0.81 for the first nine months of 2011 compared to a net loss of $(0.41) per average common share in 2010. The growth was driven by higher net interest income, a lower provision for credit losses, and the elimination of the TARP preferred dividends at the end of the first quarter of 2011.

Revenue, excluding net gains on the sale of investment securities, was relatively stable compared to the prior quarter and the third quarter of 2010, up 1% and down 2%, respectively.

Net interest income increased modestly compared to the prior quarter and 2% compared to the third quarter of 2010. Growth from the prior year was primarily due to lower rates on deposits, a continued shift in deposit mix toward lower-cost deposits, and a reduction in higher-cost funding.

The net interest margin was 3.49%, a decline of four basis points from the prior quarter due to lower earning asset yields, partially offset by lower rates on interest-bearing liabilities. The margin increased eight basis points over the third quarter of 2010 due to favorable deposit mix and pricing trends.

Noninterest income declined 1% from the prior quarter. Higher mortgage production income and debt valuation gains were offset by lower gains on the sale of investment securities and lower investment banking revenue. Noninterest income decreased 14% compared to the third quarter of 2010, primarily due to lower mortgage-related revenue and lower gains on the sale of investment securities.

Noninterest expense increased 1% compared to the prior quarter due to higher mortgage-related expenses. Expenses increased 4% over the third quarter of 2010, attributable to higher mortgage-related expenses, as well as increased employee compensation due to improved revenue in certain businesses and an increase in personnel.

 

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