Compass Point: SunTrust Banks Margin Widens, Loans Increase

SunTrust Banks, Inc. STI fourth-quarter earnings revealed an expanding operating margin and decent loan growth, an analyst said Friday.

"Finally, a decent number," Compass Point's Kevin Barker said in a note maintaining a Buy rating and $45 target.

SunTrust's net earnings fell 8 percent but excluding charges, results beat Wall Street's earnings expectations.

The company traded recently at $37.95, up more than 3.3 percent.

SunTrust had sold off sharply earlier this month when it warned of a fourth-quarter charge of $145 million, or $0.17 a share, for legal costs related to previously disclosed mortgage matters.

SunTrust agreed in June to pay about $1 billion in a settlement of U.S. Justice Department, allegations related to residential mortgages and foreclosures.

Loans in the recent period grew 0.7 percent, well below Wall Street's estimate of 1.8 percent, according to Barker.

But net charge-offs declined to 0.28 percent, from 0.39 percent, last quarter while non-performing loans declined to 0.48 percent, from 0.58 percent, Barker said.