Fri, Jan. 16, 8:05 AM
- Q4 net income of $378M includes a $145M legal provision. Excluding that, EPS of $0.88 vs. $0.77 one year ago.
- Net interest income of $1.248B unchanged form a year ago, with NIM of 2.96% down 24 basis points.
- Noninterest income of $795M down from $814M a year ago. Mortgage production of $61M vs. $31M, production volume up 20%. Mortgage servicing income of $53M vs. $38M a year ago. Investment banking income of $109M vs. $96M, with trading income of $40M down from $57M
- Noninterest expense of $1.410B up from $1.361B, after $145M legal charge.
- Book value per share of $41.52 up 2% from last quarter. TBVS up $29.82 up 2%.
- Conference call is just getting underway.
- Previously: SunTrust Banks beats by $0.10, revenue in-line (Jan. 16)
- STI -0.3% premarket
Fri, Jan. 16, 6:03 AM
Thu, Jan. 15, 5:30 PM
Mon, Jan. 5, 3:36 PM| Comment!
Mon, Jan. 5, 1:25 PM
- "We view Wells Fargo (WFC -2.7%) as a core bank holding, but shares have reached our price target and we believe sentiment is now overwhelmingly positive after leading returns in 2014 (+21%, #1 among the top 50 banks)," says Baird's David George, who earlier downgraded the stock from Outperform to Neutral.
- Put the money in another bank? Not so quick, says George, suggesting the Fed could tighten later and be less aggressive than most expect, disappointing those hoping for higher rates to boost profits. Other than Wells Fargo, George sees sentiment highest in PNC Financial (PNC -2.7%), SunTrust (STI -3.9%), and U.S. Bancorp (USB -2.2%).
- Asset-sensitive names like Comerica (CMA -3.7%) and Zions (ZION -3.4%) lagged in 2014, but estimates still look to high.
- Top ideas would be Fifth Third (FITB -2.7%), Capital One (COF -2.4%), and JPMorgan (JPM -3%), but George is having a tough time finding value in the sector.
- Previously: Longtime Wells Fargo bull rings the register (Jan. 5)
Nov. 29, 2014, 8:00 AM
- New guidelines - set to take full effect on December 1 - are the result of an agreement reached last month between banks and the GSEs meant to clarify exactly when lenders could be called to task for mortgages sold to Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC) which ultimately default. Since the financial crisis, Fannie and Freddie have forced banks to repurchase billions of dollars worth of mortgages, leaving them naturally gun-shy about making new loans to all but the most pristine of credits.
- “It’s providing greater certainty for all the parties so that you can lend more confidently and make the whole judgment process much easier and more clear cut,” says Mike Heid, president of Wells Fargo (NYSE:WFC) Home Mortgage. Along with SunTrust (NYSE:STI), Wells says borrowers should begin to see initial changes - such as faster processing times, reduced credit score requirements, and greater leeway to those whose credit history suffered due to one-time events - in a few weeks.
- "We will be able to be looser and open up the net wider," says Mason-McDuffie Mortgage CEO Bill Godfrey, now expecting to make loans down to a 620 credit score from 660 previously.
- Not everyone agrees: “Unless we are convinced that the rules are going to be permanent and there is not going to be a look back or a reach back in future times…we are simply going to stay on the sidelines," U.S. Bancorp (NYSE:USB) boss Richard Davis has said, and Bank of America (NYSE:BAC) CEO Brian Moynihan made similar comments at a recent conference.
Nov. 11, 2014, 3:08 PM
Nov. 7, 2014, 9:42 AM| Comment!
Oct. 20, 2014, 10:10 AM
- An outlier to the upside in the regional banks is SunTrust (STI +1.4%) after being upgraded to Positive at Susquehanna.
- The stock's 9% decline since the market top on September 18 has put it in the red for the year. Maybe most notable from Friday's Q3 earnings results - largely inline, with sluggish growth as the bank joins its competitors in awaiting higher interest rates and faster loan activity - is management's expectation (CC transcript) that the Fed won't be lifting rates at all in 2015.
Oct. 17, 2014, 7:45 AM
- Q3 adjusted EPS of $0.81 vs. $0.66 one year ago.
- Net interest income: $1.251B vs. $1.240B a year ago, with NIM of 3.03% down 16 basis points. Deposits up 4%.
- Noninterest income of $780M vs. $680M a year ago. Mortgage production income of $45M vs. a loss of $10M a year ago. Mortgage production volume off 43% Y/Y. Mortgage servicing income of $44M vs. $11M a year ago (slowing refinancing means higher income). Investment banking income of $88M vs. $99M.
- Noninterest expense of $1.3B vs. $1.7B a year ago, but about flat after backing out last year's charges surrounding legacy mortgage issues.
- $215M worth of stock repurchased during quarter.
- Conference call at 9 ET
- Previously: SunTrust Banks EPS in-line, misses on revenue
- STI flat premarket
Oct. 17, 2014, 6:01 AM
Oct. 16, 2014, 5:30 PM
Sep. 18, 2014, 12:53 PM
- Banks, insurers, brokerages and anything else starved for yield continue to gain following yesterday's FOMC news. Among the gainers are Bank of America (BAC +1.9%) - which breaks above $17 for the first time since April - Citigroup (C +2.7%), Wells Fargo (WFC +1.1%), PNC (PNC +1.1%), Fifth Third (FITB +1.7%), SunTrust (STI +1.2%), Schwab (SCHW +2.3%), Prudential (PRU +2.5%), and Lincoln National (LNC +2.4%).
- The XLF +1.2%, KBE +1.5%, and KRE +2%.
- Financial sector ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, SEF, IYG, FXO, KBWB, FNCL, RKH, QABA, FINU, KRU, KBWR, RWW, RYF, KRS, FINZ
- Lit up bright red is the utility sector (XLU -1%), led by Southern Company (SO -1.1%), Dominion Resources (D -1.2%), Duke Energy (DUK -1.4%), and Pinnacle West (PNW -1.9%).
- Utility ETFs: XLU, IDU, VPU, UPW, RYU, FUTY, PUI, FXU, SDP, PSCU
Aug. 28, 2014, 11:42 AM
- In contrast to cuts at the major investment banks, SunTrust (STI) plans to hire up to 200 (which would boost headcount by 20%) at its investment bank, according to Mark Chancy, head of wholesale banking. The plan is to expand its capital markets and stock research businesses, particularly targeting energy and healthcare.
- "[SunTrust has] a competitive pay scale and a very attractive platform and culture to be able to acquire and retain what we believe is top talent," says Chancy.
Aug. 12, 2014, 5:42 PM
Jul. 21, 2014, 2:17 PM
- Despite reporting better than expected Q2 earnings on healthy revenue growth, SunTrust Banks (STI -2%) is lower after reporting that its net interest margin fell to 3.11% in the quarter from 3.19% in Q1 and from 3.25% in the year-ago period.
- On STI's earnings conference call, CFO Aleem Gillani said he expects net interest margin to start to stabilize next year, but warned that it "will grind down between now and then."
- On a more positive note, Q2 non-nterest expense rose by $130M, or ~9%, to $1.52B but Gillani noted that after stripping out $179M of legacy mortgage-related operating losses, non-interest expense declined by $49M.
- While Q2 mortgage production income slumped to $52M from $133M a year earlier, STI continues to benefit from stronger credit quality, as the provision for loans that could potentially sour dropped to $73M from $146M in the year-ago quarter and $102M in Q1.
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