SunTrust 2014 Annual Report Download - page 93

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Total noninterest income was $402 million during 2013, a
decrease of $100 million, or 20%, compared to 2012. The
decrease was predominantly driven by a decline in mortgage
production related income and lower mortgage servicing
income, partially offset by a decline in the mortgage repurchase
provision. Mortgage production related income decreased $27
million due to lower gain on sale margins and lower loan
production, largely offset by an approximate $600 million
decline in mortgage repurchase provision. Loan originations
were $29.9 billion for the year ended December 31, 2013,
compared to $32.1 billion during 2012, a decrease of $2.2 billion,
or 7%. Mortgage servicing income was $87 million, a decrease
of $173 million, or 67%, driven by less favorable net MSR hedge
performance, higher decay, and lower servicing fees due to a
decline in the servicing portfolio. Total loans serviced were
$136.7 billion at December 31, 2013 compared with $144.9
billion at December 31, 2012, down 6%.
Total noninterest expense was $1.5 billion during 2013, an
increase of $134 million, or 10%, compared to 2012. Operating
losses and collection services increased $234 million due to $291
million in charges to settle certain mortgage-related legal matters
and a $96 million charge related to the increase in our allowance
for servicing advances recorded during the third quarter of 2013,
compared to lower legal and servicing related losses recognized
during 2012. These expenses were partially offset by declines in
consulting expense of $84 million, predominantly due to lower
costs associated with the Federal Reserve Consent Order, staff
expense of $33 million, credit services expense of $15 million,
and other real estate expense of $14 million. Additionally, total
allocated support costs increased $51 million.
Corporate Other
Corporate Other net income during the year ended December 31,
2013 was $519 million, a decrease of $1.0 billion, or 66%,
compared to 2012. The decrease was primarily due to the
securities gains as a result of the sale of our investment in The
Coca-Cola Company stock during 2012 and lower net interest
income as a result of maturing commercial loan related-swap
income, partially offset by lower provision for income taxes.
Net interest income was $317 million during 2013, a
decrease of $84 million, or 21%, compared to 2012. The decrease
was driven by lower income from interest rate swaps and a $31
million decrease in foregone dividend income resulting from the
sale of The Coca-Cola Company stock in 2012. These declines
were partially offset by a decrease in funding costs. Total average
assets decreased $1.8 billion, or 6%, primarily driven by a
reduction in the securities AFS portfolio due to the
aforementioned sale of The Coca-Cola Company stock. Average
long-term debt decreased $1.9 billion, or 17%, and average short-
term borrowings decreased $1.5 billion, or 27%, compared to
2012. The decline in average long-term debt was primarily due
to the repayment of senior and subordinated debt, while the
decline in average short-term debt was the result of the repayment
of FHLB borrowings.
Total noninterest income was $241 million during 2013, a
decrease of $1.9 billion, or 89%, compared to 2012,
predominantly due to a $1.9 billion net gain on sale of our
investment in The Coca-Cola Company stock in 2012. This
decrease was partially offset by a $63 million decline in mark-
to-market valuation losses on our public debt and index-linked
CDs carried at fair value.
Total noninterest expense was $86 million during 2013, a
decrease of $125 million, or 59% compared to 2012. The
decrease in expense was mainly due to a higher recovery of
internal cost allocations and declines in severance costs,
incentive compensation and employee benefits related to
business performance, and operating losses compared to 2012.
Additionally, 2012 expenses also included a $38 million
charitable contribution of The Coca-Cola Company stock to the
SunTrust Foundation and debt extinguishment charges related
to the redemption of higher cost trust preferred securities.
The benefit for income taxes was $63 million during 2013
compared to a provision for income taxes of $781 million during
2012. The provision for income taxes for the year 2012 included
the income tax impact of the gains on the sale of The Coca-Cola
Company stock, while 2013 included the impact of certain audit
settlements, statute expirations, tax planning strategies, and
changes in tax rates.
FOURTH QUARTER 2014 RESULTS
Quarter Ended December 31, 2014 vs. Quarter Ended
December 31, 2013
We reported net income available to common shareholders of
$378 million during the fourth quarter of 2014, a decrease of $35
million, or 8%, compared with the same period of the prior year.
Earnings per average common diluted share were $0.72 for the
fourth quarter of 2014. The fourth quarter of 2014 results include
a $145 million legal provision, or $0.17 per share, related to
legacy mortgage matters, to increase legal reserves and complete
the resolution of a specific matter. Excluding the impact of this
expense, adjusted earnings per average common diluted share
were $0.88, compared to $0.77 in the fourth quarter of 2013.
During the fourth quarter of 2014, net interest income on a
FTE basis was $1.2 billion which was consistent with the fourth
quarter of 2013. Net interest margin decreased 24 basis points
to 2.96% during the fourth quarter of 2014, compared to the same
period in 2013, largely due to a 23 and 26 basis point reduction
in loan and investment securities yields, respectively.
The provision for credit losses was $74 million during the
fourth quarter of 2014, a decrease of $27 million, or 27%,
compared to the fourth quarter of 2013, as asset quality continued
to improve due to targeted reductions of NPLs, primarily within
the residential and CRE categories, as well as a decline in net
charge-offs.
Total noninterest income was $795 million for the fourth
quarter of 2014, a decrease of $19 million, or 2%, compared to
the fourth quarter of 2013, largely driven by foregone
RidgeWorth revenue and lower trading income, partially offset
by higher mortgage-related and investment banking income.
Trust and investment management income decreased $47
million during the fourth quarter of 2014 compared to the fourth
quarter of 2013, entirely due to foregone revenue resulting from
the sale of RidgeWorth. Investment banking income increased
$13 million during the fourth quarter of 2014 compared to the
fourth quarter of 2013, primarily driven by higher syndicated
finance and M&A advisory revenues, partially offset by a decline
in equity and fixed income origination fees. Trading income