SunTrust Banks, Inc. (NYSE:STI) Q4 2016 Earnings Conference Call Transcript

Jan 20, 2017 • 08:00 am ET

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SunTrust Banks, Inc. (NYSE:STI) Q4 2016 Earnings Conference Call Transcript

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Presentation
Operator
operator

Welcome to the SunTrust Fourth Quarter 2016 Earnings Conference Call. (Operator Instructions) This call is being recorded, if you have any objections, you may disconnect at this point. Now, I will turn the meeting over to Ankur Vyas, Director of Investor Relations. Thank you, you may begin.

Executive
Ankur Vyas

Welcome to SunTrust fourth quarter 2016 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 investors.suntrust.com. With 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.

(Forward-Looking Cautionary Statement) During the call, we will discuss non-GAAP financial measures when talking about the Company's performance. You can find the reconciliation of these measures to GAAP financial measures in our press release and on our website, investors.suntrust.com. Finally, SunTrust is not responsible for and does not edit, nor guarantee the accuracy of our earnings teleconference transcripts provided by third-parties. The only authorized live and archived webcasts are located on our website. With that, I'll now turn the call over to Bill.

Executive
Bill Rogers

We appreciate you joining us for our fourth quarter earnings call especially with the inauguration of our 45th President taking place later this morning. I'll begin with a brief overview of the quarter then I'm going to turn it over to Aleem for additional details including our results at the business segment level. I'll conclude with a review of our performance in 2016 as a whole, in addition to providing some forward-looking perspectives on our company's strategy and potential. We reported $0.90 of earnings this quarter, relatively stable compared to the prior quarter and prior year.

Overall I'd characterize this quarter as a solid conclusion to a strong year for SunTrust. In 2016, we grew earnings per share, delivered further improvement and efficiency and grew capital returns all for the fifth consecutive year. Similarly, total return for shareholders once again exceeded the median of our peer group. These consistent improvements are what gives me confidence that the strategies we've put in place back in 2011 and the discipline we've instilled in the company have us on the right track to grow revenue, improve efficiency and deliver relative shareholder value.

So to get into the specifics of the quarter, net interest margin improved four basis points sequentially as the increase in short-term rates and our focus on optimizing the balance sheet continues to improve loan yields. This NIM expansion and our continued balance sheet growth resulted in a 3% sequential and a 7% year-over-year increase in net interest income. Average loans were stable sequentially in part due to the $1 billion auto loan sale in September, but average earning assets increased 1% as a result of growth in our securities portfolio for the new LTR requirements.

Period in loans grew a solid 1% reflecting momentum across