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SunTrust Banks earnings fall 4% YOY

SunTrust Banks Inc. on Jan. 20 reported fourth-quarter 2016 net income available to common shareholders of $448 million, or 90 cents per share. In comparison, it was $467 million, or 91 cents per share, a year ago.

Full-year 2016 net income available to common shareholders, meanwhile, was $1.81 billion, or $3.60 per share, compared with 2015's $1.86 billion, or $3.58 per share.

The S&P Capital IQ consensus normalized EPS estimate was 88 cents for the recent quarter and $3.53 for the full year.

The Atlanta-based company generated total revenue of $2.16 billion, up 7% from its year-ago level. The increase was partially due to capital markets growth and higher mortgage purchase and refinancing activity. On the other hand, trust and investment management income, at $73 million, was down year over year, largely because of lower assets under management.

Service charges on deposits, card fees and similar fees were roughly flat from a year ago. From the linked quarter, however, they were down $10 million because of an enhanced posting order process and lower client-related transactional activity.

Total nonperforming assets stood at $919 million at the end of December 2016, down by $100 million from the third quarter, thanks to the resolution of problem energy credits. Net charge-offs amounted to $136 million, up by $10 million sequentially and by $53 million year over year. The increase was attributed not only to energy, but to commercial real estate and indirect auto as well. Of the recent quarter's net charge-offs, $40 million were energy-related.

SunTrust recorded a fourth-quarter provision for credit losses of $101 million. It had been $97 million in the third quarter and $51 million in the fourth quarter of 2015.

Net interest margin, on a fully taxable equivalent basis, was 3.00%, up from the linked quarter's 2.96% and the year-ago period's 2.98%.