SunTrust earnings story updated from 8:15 a.m. with additional in paragraphs five through seven.
NEW YORK (TheStreet) -- SunTrust Banks (STI) cut costs to report first quarter earnings of $393 million or $0.73 per share on Monday, up 16% versus a year ago and better than analyst estimates despite lower revenues.
Shares were up more than 2% to $38.74 in midday trading.
Revenues of $2.03 billion were slightly lower than both the fourth quarter of 2013 and the first quarter of 2013. Still, areas such as investment banking fees and mortgage servicing showed improvement, and loan balances rose.
Jefferies analyst Ken Usdin deemed the results "pretty good," in a report, adding "we have incremental confidence in STI's ability to meet its sub-64% efficiency ratio target for FY14 (ratio was 64.9% in 1Q)."
On a conference call following the release of the results, SunTrust CFO Aleem Gillani said expenses might rise if revenue increases but "in the context of our overall efficiency, I would think about our expenses declining as a percentage of revenue for the remainder of the year."
Expressing some skepticism was CLSA analyst Mike Mayo, who contended on the call that the efficiency ratio improved only when compared to the fourth quarter.
"If I look at year-over-year trends, it doesn't look so hot," Mayo said.