SunTrust Banks (NYSE: STI) reported Q3 EPS of $0.81, $0.02 better than the analyst estimate of $0.79. Revenue for the quarter came in at $1.92 billion versus the consensus estimate of $2.07 billion.

Third Quarter 2014 Financial Highlights

Income Statement

• Net income available to common shareholders was $563 million, or $1.06 per average common diluted share; excluding the $130 million tax benefit in the current quarter, net income available to common shareholders was $433 million, or $0.81 per share.
  • On an adjusted basis, earnings per share were flat compared to the prior quarter and increased $0.15, or 23%, compared to the third quarter of 2013.
• Total revenue declined $170 million, compared to the prior quarter primarily driven by the $105 million gain on sale of RidgeWorth in the prior quarter and foregone RidgeWorth-related revenue, as well as a decline in investment banking income.
• Compared to the third quarter of 2013, total revenue increased 6%. Excluding the $63 million incremental mortgage repurchase provision incurred in the third quarter of 2013, total revenue increased 2% driven primarily by higher mortgage servicing income.
• Reported noninterest expense decreased $258 million compared to the prior quarter. Excluding the $179 million in specific legacy mortgage-related losses incurred in the prior quarter, noninterest expense declined $79 million, or 6%.
• The efficiency and tangible efficiency ratios in the quarter were 62.0% and 61.7%, respectively.

Balance Sheet

• For the third quarter, total loans (on a period-end basis) increased 2% and 6% compared to June 30, 2014 and September 30, 2013, respectively, with the growth occurring in C&I, commercial real estate, and consumer loans, while residential mortgage loans continued to trend down.
  • Average performing loans were unchanged as growth in the commercial and consumer portfolios was offset by the $2 billion transfer of guaranteed residential mortgage loans to loans held for sale in the second quarter. The ultimate sale was subsequently completed in the third quarter.
• Average investment securities increased 6% sequentially and 7% compared to the third quarter of 2013 in anticipation of forthcoming liquidity-related regulatory requirements.
• Average client deposits increased 1% sequentially and 4% compared to the third quarter of 2013, with the favorable mix shift toward lower-cost deposits continuing.

Capital

• Estimated capital ratios continued to be well above regulatory requirements. The Basel I Tier 1 common and Basel III common equity Tier 1 ratios were estimated to be 9.6% and 9.7%, respectively.
• During the quarter, the Company repurchased $215 million of common shares.
• Book value per share was $40.85 and tangible book value per common share was $29.21, both up 2% compared to June 30, 2014. The increase was primarily due to growth in retained earnings.

Asset Quality

• Asset quality continued to improve as nonperforming loans decreased 15% from the prior quarter and totaled 0.58% of total loans at September 30, 2014.
• Annualized net charge-offs increased 4 basis points sequentially, representing 0.39% of average loans.
• The provision for credit losses increased $20 million compared to the prior quarter primarily due to a modest increase in net charge-offs.

For earnings history and earnings-related data on SunTrust Banks (STI) click here.