SunTrust Banks, Inc.’s (STI - Analyst Report) fourth-quarter 2014 adjusted earnings of 88 cents per share surpassed the Zacks Consensus Estimate of 80 cents. Moreover, the reported figure came in 14.3% higher than the prior-year quarter number.
For the full year 2014, adjusted earnings per share came in at $3.24, up 18% year over year. This also outpaced the Zacks Consensus Estimate of $3.15.
Better-than-expected results were supported by lower provisions as well as growth in loans and deposits. However, improvement in revenue generation remained muted. Also, elevated expenses acted as a dampener.
After considering the impact of a legal provision for legacy mortgage matters, net income available to common shareholders amounted to $378 million or 72 cents per share, down from $413 million or 77 cents per share in the year-ago quarter.
Suntrust Banks Inc. – Earnings Surprise | FindTheBest
Quarterly Performance
Total revenue declined 1% year over year to $2.04 billion. However, the reported figure was slightly higher than the Zacks Consensus Estimate of $2.03 billion.
For 2014, total revenue rose 1% year over year to $8.3 billion. Excluding the pre-tax gain on the RidgeWorth sale, total revenue was relatively stable. Further, it outpaced the Zacks Consensus Estimate of $8.2 billion.
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Net interest income rose marginally year over year to $1.25 billion. However, net interest margin fell 24 basis points (bps) year over year to 2.96%, mainly driven by lower loan and investment securities yields.
Non-interest income summed to $795 million, down 2.3% year over year. The fall was owing to a reduction in trading income as well as the foregone RidgeWorth wealth management revenue, partly mitigated by a rise in mortgage-related and investment banking income.
Non-interest expense totaled $1.41 billion, up 3.6% year over year. Notably, expenses during the quarter increased due to the above mentioned legal provision. Excluding this, non-interest expenses declined 7% year over year.
SunTrust’s efficiency ratio stood at 69.00% compared with 66.05% in the prior-year quarter. A rise in efficiency ratio indicates lower profitability.
As of Dec 31, 2014, SunTrust had total assets of $190.3 billion while shareholders’ equity summed $23.0 billion, representing 12.10% of the total assets.
As of Dec 31, 2014, loans grew 4% year over year to $133.1 billion. Total consumer and commercial deposits rose 9% year over year to $139.2 billion.
Credit Quality
