SunTrust Banks, Inc. reported a net income increase of 14 percent to $467 million available to common shareholders, according to the bank’s Q2 2015 earnings statement released Friday. The bank credits their continued execution of core strategies to their solid earnings growth and improved returns.
The Q2 2015 net income for SunTrust was $0.89 per average common diluted share compared to $0.78 per share earned in the last quarter, and includes a $0.03 favorable impact by a per share from a discreet income tax benefit.
According to the report, earnings per share increased $0.17 over the second quarter of 2014, which was negatively impacted by $0.09 per share. For the first half of 2015, earnings per share were $1.67.
"Our performance this quarter demonstrates solid execution of our key strategies - deepening client relationships, optimizing the balance sheet, and improving efficiency,” said William H. Rogers, Jr., chairman and CEO of SunTrust. “This was evidenced by higher revenue, continued deposit growth, and improved returns. In addition, our asset quality performance continues to be strong. As we look forward, we are confident in our strategies and remain intensely focused on delivering further value to our clients and shareholders.”
Total revenue was $2.1 billion for the current quarter, an increase of $85 million compared to the previous quarter. SunTrust noted that this increase is mostly due to higher net interest income and broad-based growth in fee income.
SunTrust determined that mortgage production-related income for the current quarter was $76 million compared to $83 million for the prior quarter and $52 million for the second quarter of 2014. Mortgage production volume increased 27 percent compared to the prior quarter and applications declined 10 percent sequentially, entirely driven by lower refinance activity given the increase in interest rates in the second quarter.
“The sequential quarter decrease was due to a decline in interest rate lock volume and gain-on-sale margins,” the report said. “The increase compared to the second quarter of 2014 was driven by higher mortgage production volume and a decline in the provision for repurchases, partially offset by a decline in gain-on-sale margins. Gain-on-sale margins in the current quarter were adversely impacted by higher mortgage interest rates and an increase in loan production from the correspondent channel.”
The earnings report also found that mortgage servicing income was $30 million for the current quarter, compared to $43 million in the prior quarter.
Comerica reported that their Q2 2015 earnings reached $135 million, or $0.73 cents per share in their earnings statement also released on Friday. Last quarter, the bank reported a net income of $134 million and $151 million for Q2 2014.
"Our second quarter results reflect the advantages of our diverse geographic footprint and industry expertise," said Ralph W. Babb, Jr., chairman and CEO for Comerica. "Average loans were up $2.1 billion, or 5 percent, compared to a year ago and were up $682 million, or 1 percent, relative to the first quarter, with increases in most markets and business lines. Relative to the first quarter, average deposits increased $408 million, or 1 percent, with noninterest-bearing deposits up $668 million.”
Comerica’s revenue increased 2 percent compared to Q1 2015 and the bank returned $96 million to shareholders through equity buybacks and increased dividends.
"Revenue was up 2 percent, with growth in both net interest income and fee income in the second quarter. Charge-offs, nonaccruals and criticized loans remained well below normal historical levels. The provision for credit losses increased, primarily as a result of an increase in reserves for energy exposure. Noninterest expenses decreased $23 million to $436 million, primarily due to a decrease in litigation-related expense. Our balance sheet is well positioned to benefit as rates rise. We remain focused on the long-term with a relationship banking strategy that continues to serve us well."