Magazine article American Banker

SunTrust, SouthTrust, Hibernia and Synovus Post Earnings Gains

Magazine article American Banker

SunTrust, SouthTrust, Hibernia and Synovus Post Earnings Gains

Article excerpt

Propelled by a surprisingly strong net interest margin and good loan growth, SunTrust Banks Inc. earned $131.4 million in the second quarter, up 11% from a year earlier.

Atlanta-based SunTrust earned $1.09 a share - 4 cents above Wall Street consensus estimates as recorded by First Call.

"It was significantly better than anyone had expected, particularly in light of the fact that they added another $22 million to the loan-loss reserve," said Nancy Bush of Brown Brothers Harriman & Co.

Other southeastern banks reporting strong earnings Tuesday included Hibernia Corp., New Orleans, up 60% from the yearago quarter to $18.4 million, and Birmingham, Ala.-based South-Trust Corp., whose net rose 14% to $42.4 million.

Mortgage Gains Cited

Synovus Financial Corp., Columbus, Ga., clocked in with a 16% gain, to $20.7 million.

SunTrust reported an 11.5% annualized growth in loans from the first quarter. Investor relations spokesman Jim Armstrong cited residential mortgages, particularly a recent variable-rate promotion; commercial loans; and installment credit as major contributors. He said SunTrust's Florida and Georgia banks did the best, although loan growth picked up in Tennessee toward quarter's end.

Mr. Armstrong estimated that a buyback of about 1.5 million shares added 1 cent to SunTrust's earnings per share. SunTrust has repurchased nearly half of the 12 million shares it said it would buy back last fall. The program helps earnings per share by spreading net income over a smaller base.

SunTrust's margin reached 4.68%, fully eight basis points above the first quarter. The company tends to benefit from an environment of slightly rising interest rates because of its large base of demand deposits, shortterm securities and variable rate loans.


- Dollar amounts in millions (except per share) -

SECOND QUARTER          2Q94    2Q93
Net income            $131.4  $118.7
Per share               1.09    0.94
ROA                   1.34%   1.28%
ROE                  17.84%     16.74%
Net interest  margin   4.68%   4.87%
Net interest income    635.2   604.5
Noninterest income     177.2   181.9
Noninterest expense    351.4    353.9
Loss provision          33.9    46.3
Net chargeoffs          11.8    27.6
YEAR TO DATE            1994    1993
Net income            $258.5  $234.2
Per share               2.13    1.84
ROA                    1.33%   1.28%
ROE                   17.72%   16.63%
Net interest margin    4.64%    4.93%
Net interest income  1,235.9 1,213.9
Noninterest income     357.8   362.6
Noninterest expense    697.4   707.6
Loss provision          67.8    92.5
Net chargeoffs          27. … 
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