The Atlanta-based bank reported $411 million in net income, or 78 cents per share, which translates to a 7 percent increase over Q1 of 2014 and $33 million more than in Q4. This despite a 2 percent drop in total revenues from Q4, which the company attributed to $145 million in legal expenses related to legacy mortgage matters. The company is in the process of paying down a half-billion dollars in connection with the National Mortgage Settlement of 2012.
Total revenue was $2 billion for Q1, $51 million down from Q4. According to the statement, the decline was primarily due to lower net interest income wrought by low-rate mortgage loans. Net interest income was $1.2 billion in Q1, $73 million short of Q4. This, however, was partially offset by an increase in noninterest income, which benefited from higher mortgage production-related income, the bank reported. Compared to the first quarter of 2014, total revenue declined $38 million, which the bank chalked up to essentially the same reasons.
A major boon to the bank’s bottom line in Q1 was the drop in nonperforming loans. The bank reported a 3 percent decline in nonperforming loans, which comprised less than half a percent of its total first quarter loans. SunTrust also cited highly improved efficiency as a reason it posted good numbers last quarter. According to the statement, the efficiency and tangible efficiency ratios in Q1 were each about 64 percent.
The bank also reported a roughly 10 percent climb in estimated capital ratios in Q1, as the company repurchased about $115 million of its common stock. It plans to buy as much as $875 million of its common shares through the second quarter of 2016, the report stated.
"Continued expense discipline and strong asset quality performance, coupled with growth in noninterest income, contributed to solid performance in the first quarter and helped to mitigate the impact of the persistent low-rate environment," said William Rogers, the bank’s chairman and CEO. He added that the bank plans to continue building its efficiency as a main way to boost investor returns throughout this year.