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Last Update: 22-Oct-12 09:09 ET
SunTrust Banks shares fall 2% following miss on EPS
SunTrust Banks (STI $28.00 -0.63) reported third quarter earnings of GAAP $1.98 per share, $0.03 worse than the GAAP Capital IQ Consensus Estimate of $2.01; revenues fell 13.3% year/year to $1.9 billion may not compare to the $3.03 bln consensus.
Key Metrics: Net interest margin for the third quarter of 2012 was 3.38%, a decline of 1 basis point from the second quarter of 2012 and a decline of 11 basis points from the third quarter of 2011 Mortgage production income for the third quarter of 2012 was a loss of $64 million compared to income of $103 million for the second quarter of 2012 and income of $54 million for the third quarter of 2011. Average loans for the third quarter of 2012 were $124.1 billion compared to average loans of $123.4 billion and $115.6 billion during the second quarter of 2012 and third quarter of 2011, respectively. Provision for credit losses increased $150 million and $103 million compared to the prior quarter and third quarter of 2011, respectively.
Asset Quality: Nonperforming loans totaled $1.7 billion as of September 30, 2012, down $727 million, or 30%, relative to the prior quarter. Net charge-offs were $511 million in the current quarter compared to $350 million for the prior quarter and $492 million for the third quarter of 2011. The Tier 1 common equity ratio increased to an estimated 9.80%, up from 9.40% at the end of the prior quarter.
"As we manage through the challenging revenue environment, we remain intensely focused on deepening client relationships and improving efficiency." Mr. Rogers noted that favorable core performance trends include strong mortgage production income, continued commercial and industrial loan growth, solid noninterest bearing deposit account gains, and a marked decrease in nonperforming loans. Estimated capital ratios continue to be well above current regulatory requirements.
Key Metrics: Net interest margin for the third quarter of 2012 was 3.38%, a decline of 1 basis point from the second quarter of 2012 and a decline of 11 basis points from the third quarter of 2011 Mortgage production income for the third quarter of 2012 was a loss of $64 million compared to income of $103 million for the second quarter of 2012 and income of $54 million for the third quarter of 2011. Average loans for the third quarter of 2012 were $124.1 billion compared to average loans of $123.4 billion and $115.6 billion during the second quarter of 2012 and third quarter of 2011, respectively. Provision for credit losses increased $150 million and $103 million compared to the prior quarter and third quarter of 2011, respectively.
Asset Quality: Nonperforming loans totaled $1.7 billion as of September 30, 2012, down $727 million, or 30%, relative to the prior quarter. Net charge-offs were $511 million in the current quarter compared to $350 million for the prior quarter and $492 million for the third quarter of 2011. The Tier 1 common equity ratio increased to an estimated 9.80%, up from 9.40% at the end of the prior quarter.
"As we manage through the challenging revenue environment, we remain intensely focused on deepening client relationships and improving efficiency." Mr. Rogers noted that favorable core performance trends include strong mortgage production income, continued commercial and industrial loan growth, solid noninterest bearing deposit account gains, and a marked decrease in nonperforming loans. Estimated capital ratios continue to be well above current regulatory requirements.
