- First-quarter net income to common shareholders of $340 million, or 63 cents a share.
- Earnings beat the consensus EPS estimate of 61 cents.
- Provision for credit losses down to $212 million from $328 million in Q4.
- Mortgage production revenue declines to $159 million from $241 million in Q4.
- Expenses see broad decline of 10% quarter over quarter and 12% year over year.
Updated from 8:11 a.m. ET with late morning market action and comment from Jefferies analyst Ken Usdin.
NEW YORK ( TheStreet) -- SunTrust (STI) on Friday reported sharp declines in credit costs and other expenses, helping the company mitigate the effect of a large and expected sequential decline in mortgage production income.
The Atlanta-based regional lender reported first-quarter net income available to common shareholders of $340 million, or 63 cents a share, compared to $350 million, or 65 cents a share, in the fourth quarter, and $245 million, or 46 cents a share, in the first quarter of 2012.First-quarter net interest income was $1.221 billion, declining from $1.246 billion the previous quarter, and $1.311 billion a year earlier. The main factor in the sequential decline was the lower number of days in the first quarter. SunTrust's net interest margin -- the spread between the average yield on loans and investments and the average cost for deposits and borrowings -- narrowed to 3.33% in the first quarter from 3.36% in the fourth quarter and 3.49% a year earlier. Average performing loans were $119.4 billion in the first quarter, down 1% from the previous quarter and from a year earlier, as planned declines in student loans and residential mortgage loans were partially offset by increases in commercial and industrial loans and indirect auto loans.
The first-quarter provision for loan losses was $212 million, declining from $328 million in the fourth quarter and $317 million in the first quarter of 2012. SunTrust's asset quality continued to improve, with a ratio of nonperforming loans to total loans of 1.21% as of March 31, compared to 1.27% in December and 2.16% in March 2012. The annualized ratio of net charge-offs to average loans was 0.76%, improving from 1.30% the previous quarter and 1.38% a year earlier.
First-quarter non-interest income totaled $863 million, declining from $1.015 billion in the fourth quarter, and $876 million a year earlier. Mortgage production revenue in the first quarter was $159 million, declining from $241 million the previous quarter, but increasing from $63 million a year earlier. The sequential decline in mortgage income was expected, with refinance volumes declining and lower gains on the sale of new loans in the secondary market.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV