Advertisement
New Zealand markets closed

  • NZX 50

    11,796.21
    -39.83 (-0.34%)
     

  • NZD/USD

    0.5892
    -0.0013 (-0.22%)
     

  • NZD/EUR

    0.5523
    -0.0022 (-0.39%)
     

  • ALL ORDS

    7,817.40
    -81.50 (-1.03%)
     

  • ASX 200

    7,567.30
    -74.80 (-0.98%)
     

  • OIL

    83.24
    +0.51 (+0.62%)
     

  • GOLD

    2,406.70
    +8.70 (+0.36%)
     

  • NASDAQ

    17,037.65
    -356.67 (-2.05%)
     

  • FTSE

    7,895.85
    +18.80 (+0.24%)
     

  • Dow Jones

    37,986.40
    +211.02 (+0.56%)
     

  • DAX

    17,737.36
    -100.04 (-0.56%)
     

  • Hang Seng

    16,224.14
    -161.73 (-0.99%)
     

  • NIKKEI 225

    37,068.35
    -1,011.35 (-2.66%)
     

  • NZD/JPY

    91.0710
    -0.1830 (-0.20%)
     

SunTrust (STI) Q2 Earnings Beat Estimates, Revenues Improve

Zacks Equity Research
Updated

SunTrust Banks' STI second-quarter 2018 earnings of $1.49 per share outpaced the Zacks Consensus Estimate of $1.30. Also, the figure compared favorably with the prior-year quarter’s earnings of $1.03.

Results were primarily driven by rise in revenues as well as lower provisions. Also, an improvement in overall asset quality was a tailwind. However, higher expenses hurt results to some extent.

Net income available to common shareholders for the quarter under review was $697 million, up 38% from the prior-year quarter.

Revenues Improve, Costs Increase

Total revenues for the reported quarter were $2.32 billion, up 4% year over year. Also, the figure surpassed the Zacks Consensus Estimate of $3.30 billion.

Net interest income (FTE basis) increased 5% year over year to $1.51 billion.

On a year-over-year basis, net interest margin (FTE basis) was up 14 basis points (bps) to 3.28%.

Non-interest income was $829 million, marginally up from the prior-year quarter. The marginal rise was due to higher investment banking income, trading income and retail investment services income.

Non-interest expenses increased marginally from the year-ago quarter to $1.39 billion, due to rise in employee compensation and benefits, outside processing and software, equipment costs, and amortization expenses.

Credit Quality Improves

Total non-performing assets were $814 million as of Jun 30, 2018, down 1% from the prior-year-quarter end. Also, provision for credit losses plunged 64% from the year-ago quarter to $32 million.

Non-performing loans to total loans held for investment remained unchanged year over year at 0.52% Further, the rate of net charge-offs to total average loans held for investment remained stable year over year at 0.20%.

Strong Balance Sheet

As of Jun 30, 2018, SunTrust had total assets of $207.51 billion while shareholders’ equity was $24.32 billion, representing nearly 12% of total assets.

As of Jun 30, 2018, loans held for investments were $144.94 billion, up 2% from the prior-quarter end. Total consumer and commercial deposits decreased marginally from the prior quarter to $160.41 billion.

SunTrust’s estimated common equity Tier 1 ratio under Basel III (on a fully phased-in basis) was 9.73% as of Jun 30, 2018.

Share Repurchase

During the reported quarter, the company bought back shares worth $330 million.

Our Viewpoint

SunTrust remains well positioned for growth, given its favorable deposit mix and enhanced credit quality. Easing margin pressure and initiatives to enhance efficiency are likely to support its revenues. However, a slowdown in the mortgage business is expected to hurt the top-line growth. This makes us apprehensive for the near-term.

SunTrust Banks, Inc. Price, Consensus and EPS Surprise
 

SunTrust Banks, Inc. Price, Consensus and EPS Surprise | SunTrust Banks, Inc. Quote

ADVERTISEMENT

SunTrust currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Major Regional Banks

Comerica CMA reported adjusted earnings per share of $1.90 in second-quarter 2018, up from the year-ago adjusted figure of $1.15. Including certain non-recurring items, earnings were $1.87. The Zacks Consensus Estimate was $1.62.

The PNC Financial Services Group PNC reported second-quarter 2018 earnings per share of $2.72, beating the Zacks Consensus Estimate of $2.58. Moreover, the bottom line reflected a 30% increase from the prior-year quarter.

Driven by top-line strength, Citigroup C delivered a positive earnings surprise of 5.2% in second-quarter 2018. Earnings from continuing operations per share of $1.62 for the reported quarter easily outpaced the Zacks Consensus Estimate of $1.54. Also, earnings were up 28% year over year.

Will You Make a Fortune on the Shift to Electric Cars?

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It's not the one you think.

See This Ticker Free >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
The PNC Financial Services Group, Inc (PNC) : Free Stock Analysis Report
 
Comerica Incorporated (CMA) : Free Stock Analysis Report
 
SunTrust Banks, Inc. (STI) : Free Stock Analysis Report
 
Citigroup Inc. (C) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.