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Mortgage Servicing Boost SunTrust’s Income

On Friday, SunTrust Banks, Inc. reported its Q1 2017 results. The bank posted a net income of $451 million, or $0.91 per average common diluted share. This is a three percent increase over the previous quarter and a four percent year-over-year increase.

"Our performance this quarter is the direct result of the investments we have been making in strengthening our franchise and diversifying our business mix," said William H. Rogers, Jr., Chairman and CEO of SunTrust Banks, Inc.  "2017 is off to a good start and we remain committed to investing in client growth, improving efficiency, and increasing capital returns."

Total revenue for the quarter was $2.2 billion, a $55 million increase from the previous quarter. Net interest income increased $23 million.

The bank noted that higher mortgage-related income and investment-related income pushed the noninterest income up by $32 million.

Mortgage servicing income posted a strong quarter, with a net income of $53 million over the previous quarter’s $25 million. Still, this was a decrease from the previous year’s Q1 income of $62 million.

Mortgage production income was $53 million for Q1 2017, a decrease from Q4 2016’s $78 million, and a year-over-year decrease from Q1 2016’s $60 million.

At the end of Q1 2017, early stage delinquencies were 0.72 percent, unchanged from the previous quarter.  Excluding government-guaranteed loans which accounts for 0.50 percent, early stage delinquencies were 0.22 percent, down 5 basis points from the prior quarter and down 7 basis points compared to a year ago.

SunTrust banks has seen a steady decrease in nonperforming loans over the past several quarters, going from 0.70 percent in Q3 2016, to 0.59 percent in Q4 2016, the most recent data showing the ratio of nonperforming loans at 0.55 percent.

Total non-performing assets were down $61 million from the previous quarter, which SunTrust banks attributes to the continued resolution of problem energy credits.

About Author: Seth Welborn

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