WASHINGTON (dpa-AFX) - Diversified financial services holding company SunTrust Banks, Inc. (STI) Monday reported increased profit for the first quarter, even as revenue declined amid decreases in mortgage production income and net interest income. Both earnings and revenues topped Wall Street expectations and the lender reported lower provision for credit losses.
William Rogers, Jr., chairman and CEO of SunTrust Banks, said, 'Our 16% earnings per share growth over the past year reflects progress in several key areas-expense management, credit quality improvement, and increased lending to clients.'
Net income available to common shareholders increased to $393 million or $0.73 per average common share from $340 million or $0.63 per average common share in the previous year.
On average, 27 analysts polled by Thomson Reuters expected earnings of $0.66 per share for the quarter. Analysts' estimates typically exclude one-time items.
On a fully taxable-equivalent or FTE basis, total revenue slid to $2.03 billion from $2.11 billion. Analysts estimated revenues of $2.01 billion for the quarter.
Net interest income on FTE basis, reduced to $1.239 billion from $1.251 billion in the previous year as net interest margin was 3.19 percent compared to 3.33 percent last year.
Non-interest income for the quarter fell to $791 million from $863 million in the prior year.
Mortgage production income declined to $43 million from $159 million for the first quarter of 2013, due to a 65 percent decline in production volume and a decline in gain on sale margins.
Investment banking income improved $20 million due to growth in loan syndication, M&A advisory, and equity offering fees.
Further, expenses were largely unchanged from the preceding year. Effective tax rate was 24 percent compared to 31 percent in the first quarter of 2013.
Provision for credit losses declined to $102 million from $212 million, as improvement in asset quality more than offset the impact of loan growth on the allowance for loan losses.
STI closed down 0.6 percent at $37.95 on Thursday.
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