SunTrust Climbs After Beating Analysts’ First-Quarter Estimates

Apr 21, 2014 10:45 am ET

April 21 (Bloomberg) -- SunTrust Banks Inc., Georgia’s biggest lender, climbed as much as 3.9 percent after the firm reported first-quarter profit that beat Wall Street estimates.

SunTrust increased 68 cents to $38.63 at 10:33 a.m. in New York and traded for as much as $39.41. The Atlanta-based bank was the best performer in the 24-company KBW Bank Index, which slid 0.14 percent.

Net income rose 15 percent to $405 million, or 73 cents a diluted share, SunTrust said today in a statement. Results surpassed the 66-cent adjusted estimate of 29 analysts surveyed by Bloomberg. The net interest margin improved, and the company wrote off fewer bad loans while setting aside less money to cover future defaults.

“We generated solid growth across most of our noninterest income categories, notably in investment banking and wealth management, where we’ve made incremental investments to help drive growth,” Chief Executive Officer William Rogers said today on a conference call with analysts.

Revenue in the first three months decreased 4 percent, according to a slide presentation. Wholesale banking revenue increased 5 percent, the bank said.

“Modestly weaker-than-expected trust income, deposit service charges, card fees and ‘other’ income was offset by better-than-expected total mortgage banking income,” Chris Mutascio, an analyst at Stifel Financial Corp.’s KBW unit, said in a research note. SunTrust has been building its investment bank and expanding its presence beyond the U.S. southeast.