The mortgage market slowdown hit SunTrust Banks, but not enough to prevent the Atlanta company from posting an increase in third-quarter profit thanks to an increase in consumer lending.

Net income at the $208 billion-asset company increased 12% to $512 million from a year earlier. Earnings per share were a penny better than the average analysts’ estimate of $1.05 compiled by FactSet Research Systems. Total revenue rose 4% to $2.28 billion.


“Investment banking has delivered nearly as much revenue in the first nine months of this year as [it] did in all of 2016,” SunTrust CEO Bill Rogers said Friday.

Net interest income after the loan-loss provision rose 8% to $1.3 billion. The average yield on earning assets rose 31 basis points to 3.51%. Improved yields helped lift the net interest margin 19 basis points to 3.07%.

SunTrust’s yields have improved as it has increased its credit-card and student lending and made more online personal loans through its LightStream subsidiary.

“There is a little bit of a mix effect as we grow consumer banking … And there may be slightly higher charge-offs coming out of that business over time,” Aleem Gillani, chief financial officer, said during a Friday morning conference call. “But we’re getting paid for that in terms of higher yields.”

Noninterest income fell 5% to $846 million. Mortgage production income dropped 57% to $61 million and mortgage servicing income declined 3% to $46 million.

The company did report another strong quarter from its SunTrust Robinson Humphrey investment bank unit, where income increased 19% to $166 million.

“Investment banking has delivered nearly as much revenue in the first nine months of this year as [it] did in all of 2016,” Chairman and CEO William Rogers said during the call.

Noninterest expenses fell 1% to $1.39 billion on lower costs for software and outside processing services.

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Andy Peters

Andy Peters

Andy Peters writes about regional banks, consumer finance and debt collections for American Banker.