SunTrust Banks (STI 65.44), which has a large footprint in the Southeast and Mid-Atlantic states, is taking a big step to reward its employees and local communities with the savings it anticipates receiving from tax reform.
In a certain respect, SunTrust is following in the footsteps of other banks, like Wells Fargo (WFC 61.30) and Fifth Third (FITB 30.64), which have already announced employee bonuses and an increase in their minimum wage to $15.00 per hour. Regardless, it's all good news just the same that will potentially provide a boost to the economy in 2018.
In the specific case of SunTrust, the bank announced after Thursday's close that it has committed to the following provisions based on the passage of tax reform:
- $50 million in additional community grants to national and local financial well-being efforts
- Minimum wage increase to $15 per hour
- Merit base pay increases for certain other hourly teammates (approximately 20 percent of workforce)
- A one percent 401(k) contribution to retirement savings for all teammates, in addition to the company's six percent match opportunity
- $1,000 financial incentive for all teammates that complete the SunTrust Momentum onUp financial fitness program
SunTrust's announcement is a nice way to wrap up 2017 and a nice present for its employees to unwrap in 2018.
Like many bank stocks, STI has had a good year, up 19.3% as of Thursday's close. That actually leaves it trailing the S&P 500 (+20.0%), yet it is well ahead of the SPDR S&P Regional Banking ETF (KRE 59.45), which is up just 7%.