SunTrust 2015 Annual Report Download - page 54

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Business Segments Highlights
Consumer Banking and Private Wealth Management
Consumer Banking and Private Wealth Management net income
increased 8% compared to 2014, due to strong deposit growth,
our balance sheet optimization efforts, and further improvements
in credit quality. Loan balances declined 3% in 2015, due to loan
sales and securitizations, partially offset by a 5% increase in
consumer loan production. Noninterest income declined 1%
compared to 2014, largely due to declines in wealth
management-related revenue during 2015, as well as continued
declines in service charges. While current market conditions
have made growing wealth management revenue more
challenging, meeting more of our clients’ wealth and investment
needs continues to be a strategic priority. Expenses have been
well-controlled, as we have been using efficiency gains to invest
in client-facing talent and technology. We continue to generate
solid returns from our digital investments and expect this to
increase as mobile adoption rates and digital sales trend upwards.
Looking forward, we remain optimistic about the long-term
trajectory of this business as we execute against our strategic
priorities, and as the value of our strong deposit growth is more
fully realized in a normal interest rate environment.
Wholesale Banking
Wholesale Banking net income increased 9%, driven by broad-
based revenue growth, partially offset by energy-related reserve
increases in 2015. Net interest income was up 6%, driven by 8%
loan growth and 16% growth in deposits. The loan growth was
broad-based across each line of business and most industry
verticals, partially offset by intentional reductions in lower-
return areas. The strong deposit momentum within this business
also continued, evidence of the success our liquidity specialists
have had and the enhancements we have made to our treasury
and payment product offerings. Noninterest income increased
10% compared to 2014, primarily as a result of the 14% growth
in investment banking income where we had record years in
equity originations, mergers and acquisitions, syndicated and
leveraged finance, and investment grade bond originations. This
breadth of growth in investment banking income reflects the
investments we have made to expand our capabilities and
become more of a strategic advisor to our clients. Our efficiency
also improved as we drove further operating leverage, while also
investing in revenue generating initiatives. While market
conditions can be inconsistent from quarter to quarter, we are
encouraged by our differentiated business model and remain
focused on expanding our client base, meeting more of their
complex corporate finance and advisory needs, and continuing
to grow this business.
Mortgage Banking
Mortgage Banking net income increased considerably compared
to the prior year, primarily due to the improved credit quality of
the loan portfolio, both as a result of the improving housing
market and our proactive actions to reduce risk. This
improvement was partially offset by a decline in net interest
income resulting from loan sales in 2014 and lower loan spreads
in 2015. Production volume increased by 38% in 2015, due
primarily to higher refinancing activity. New purchase volume
also improved in 2015, a sign of the continued improvement of
the economies in our markets. We also grew our servicing
portfolio by approximately 5%, as a result of portfolio
acquisitions. In both production and servicing, we achieved our
objectives of targeted market share growth. Overall, we benefited
from improving asset quality and good expense discipline, which
have allowed this business to become a more consistent
contributor to the bottom line performance of the overall
Company.
Additional information related to our business segments can be
found in Note 20, "Business Segment Reporting," to the
Consolidated Financial Statements in this Form 10-K, and
further discussion of our business segment results for 2015 and
2014 can be found in the "Business Segment Results" section of
this MD&A.