Earnings

SunTrust Beats Revenue Forecast Ahead Of BB&T Merger

SunTrust Banks Inc. reported results on Thursday (Oct. 17) that surpassed revenue expectations but fell in line with analysts’ earnings estimates for the third quarter.

But beyond the quarterly numbers, management said the company is satisfied with the movement toward a planned merger with BB&T Corp.

Drilling down into the numbers, the firm reported revenue of $2.4 billion and adjusted earnings per share (EPS) of $1.40, compared to expectations of $2.34 billion and $1.40 per share.

Overall loan growth was up 7 percent, which was driven by digital lending investments (point of sale partnerships as well as LightStream), indirect auto and mortgage.

During a conference call with analysts, CEO William H. Rogers Jr. said the company’s overall momentum on a standalone basis further validates his view that the bank is going into the proposed merger with BB&T “from a great position of strength.” Rogers added, “Individually, we are two very strong companies, and we’re going to be able to accomplish so much more together than either of us could have alone.” According to Rogers, “we’re targeting a close at some point in the fourth quarter.”

Rogers said the company has “made tremendous progress” in choosing the systems it will use for Truist and in making integration roadmaps. The company found roughly 100 ecosystems as part of the process. He said the company is confident that the selections it has made will create a strong foundation for Truist “by leveraging the best of both, architecting for the future and minimizing integration risk and providing additional security.”

In reference to digital efforts, management said that mortgage income also benefited from increased adoption of the company’s digital mortgage application, SmartGUIDE, which has progressed over 90 percent. CFO Allison Dukes said in the call, “This application, which provides for a significantly better user experience and streamlined aspect of the intake and underwriting process, combined with an improving back-end process, made our mortgage team very well-positioned to help our clients in the recent refinanced wave.”

Rogers said the bank had a “good quarter” overall, especially when it relates to strength in fee income-oriented businesses and continued balance sheet growth. He said both “are reflective of our successful execution against the strategic initiatives of our consumer and wholesale segments.”

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