Updated from 9:48 a.m.

SunTrust Banks

(STI) - Get Report

said third-quarter profit rose 4.8%, beating analyst estimates by just a penny.

The Atlanta bank said it earned $535.6 million, or $1.47 a share, compared to $510.8 million, or $1.40 a share, a year ago. Revenue rose just a mere 1.2%, to $2.03 billion from the year-earlier quarter, while noninterest expenses rose 2.4% to $1.2 billion.

Analysts had estimated that SunTrust would earn $1.46 a share in the third quarter, according to Thomson Financial.

"Despite a challenging environment, which included a flat to inverted yield curve throughout the quarter, we were able to post solid results," says SunTrust's chairman and chief executive, Phillip Humann. "We undertook a number of initiatives this quarter that, combined with our intense sales focus, strong credit quality and diversified business model, should provide momentum going into 2007."

Despite strong year-over-year loan growth, SunTrust's revenue growth was slower than in prior quarters due to the challenging operating environment, but it was able to offset slower revenue growth by reducing its rate of expense growth through "cost control initiatives, posting lower loan provision expense that resulted from improved credit loss experience, and realizing a lower provision for income taxes," it said.

SunTrust recorded a $113 million gain from the sale of its bond trustee business. It also restructured part of its investment portfolio in the third quarter, which accounted for all $92 million of its security losses in the quarter.