Juneja rates all three banks "outperform."

SunTrust reported second-quarter earnings available to common shareholders of $365 million, or 68 cents a share, increasing from $340 million, or 63 cents a share , in the first quarter, and $270 million, or 50 cents a share, during the second quarter of 2012. The company's noninterest expenses totaled $1.397 billion in the second quarter, increasing from $1.363 billion the previous quarter, but declining from $1.546 billion a year earlier.

SunTrust's credit related expenses were down 31% year-over-year to $125 million during the second quarter. The company expects its "normalized" annual costs to decline to a level of less than $325 million, implying another 35% reduction from second-quarter levels, and implying quite a bit of expense leverage for earnings growth.

Bank of America's noninterest expenses declined to $16.081 billion in the second quarter, from $19.500 billion the previous quarter and $17.048 billion a year earlier. The first-quarter number reflected the MBIA settlement.

Bank of America said its expenses tied to Legacy Asset Servicing (LAS) -- mainly on problem loans acquired along with Countrywide Financial in 2008 -- totaled $2.3 billion during the second quarter. The bank said had previous projected its quarterly LAS expenses would decline to $2.1 billion by the end of 2013. The company on July 17 said that by the fourth quarter, it now expected these expenses to drop below $2.0 billion.

When asked during the company's earnings conference call if $16 billion would be a good starting point for third-quarter expenses, Bank of America CFO Bruce Thompson said, "that's correct."

Wells Fargo's second-quarter noninterest expense declined to $7.213 billion, from $7.377 billion in the first quarter, and $7.580 billion in the second quarter of 2012. The sequential decline mainly reflected seasonal bonuses paid during the first quarter. The company's efficiency ratio - essentially the number of pennies of overhead costs for each dollar of revenue - was 57.3% during the second quarter, improving from 58.2 a year earlier. Wells Fargo's goal is to keep the efficiency ratio in a range of 55% to 59%.

-- Written by Philip van Doorn in Jupiter, Fla.

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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.

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