SunTrust Banks, Inc. (NYSE:STI) Q4 2014 Earnings Conference Call - Final Transcript

Jan 16, 2015 • 08:00 am ET


SunTrust Banks, Inc. (NYSE:STI) Q4 2014 Earnings Conference Call - Final Transcript


Loading Event

Loading Transcript


Welcome to the SunTrust Fourth Quarter Earnings Conference Call and thank you for standing by. At this time, all participant lines are in a listen-only mode until the question-and-answer portion of today's conference. [Operator Instructions] Today's conference call is being recorded. If you have any objections, please disconnect at this time.And now I'll turn the call over to Ankur Vyas, Director of Investor Relations. Thank you, you may begin.

Ankur Vyas

Thank you, Brad. Good morning, and welcome to SunTrust fourth quarter 2014 earnings conference call. Thank you for joining us. In addition to today's press release, we've also provided a presentation that covers the topics we plan to address during our call. The press release, presentation and detailed financial schedules can be accessed at me today, among other members of our executive management team, are Bill Rogers, our Chairman and Chief Executive Officer; and Aleem Gillani, our Chief Financial Officer.

(Cautionary-Forward Looking Statements)

With that, I'll turn the call over to Bill.

William H. Rogers

Thanks, Ankur. I'll begin this morning with a high level overview of the quarter, and then I'll turn it over to Aleem to discuss the results in more detail. Following Aleem's comments, I'll review our performance at the segment level and wrap up with my perspectives on 2014 as a whole.Throughout the year we made significant progress on several fronts, continue to expense discipline and further improvement in credit quality, help to offset the impact of the sustained low rate environment on revenues and translated into core earnings growth and lower adjusted tangible efficiency ratio. Our performance in the fourth quarter continued that momentum.

Reported earnings per share for the quarter were $0.72 on net income of common of $378 million. This quarter's results included a $145 million legal provision to both resolve and reserve for legacy mortgage matters. We remain focused on resolving these matters in a prudent fashion and this quarter's accrual was another step in the right direction. Excluding the legal provision adjusted earnings per share were $0.88 up 9% sequentially and 14% year-over-year.

Total revenue was up modestly relative to the prior quarter. Net interest income was essentially flat as it has been in prior quarters with solid loan and deposit growth offset by continued margin compression. Non-interest income was up 2% sequentially driven primarily by higher mortgage related income and good performance in investment banking. Adjusted expenses were generally stable to the prior quarter, however down a full 7% compared to the prior year driven by continued expense reduction efforts, lower cyclical cost and the sale of RidgeWorth.

Importantly for the full year we reduced our expense base from 2013 as adjusted expenses were down nearly $200 million or 4% year-over-year. Accordingly we met our efficiency ratio goal with an adjusted tangible efficiency ratio

William H. Rogers

of 63% for the year well below the target we set at the beginning of the year.

Given our out performance in 2014 and the real revenue headwinds we faced in 2015 further progress in the short-term becomes much more