UPDATE: SunTrust Posts Upbeat Q2 Profit, Shares Rise

SunTrust Banks (NYSE: STI) reported a 5.8% gain in its second-quarter profit.The bank's quarterly profit surged to $399 million, versus a year-ago profit of $377 million. Its per-share earnings rose to $0.72 from $0.68 per share. Excluding certain items, the bank's adjusted earnings came in at $0.81 per share, up from $0.68 per share. Its revenue rose to $2.2 billion. Its interest income increased 0.2% and loans surged 7.7%. However, analysts were projecting earnings of $0.77 per share on revenue of $2.06 billion in revenue. Mortgage servicing income came in at $45 million versus $54 million in the earlier quarter, while investment banking income rose to $119 million from $88 million in the previous quarter.Its adjusted efficiency ratio came in at 68.77% in the period. Net interest income gained $5 million to $1.2 billion versus the prior quarter, while noninterest income came in at $957 million up from $791 million in the previous quarter. Average performing loans increased 2% to $129.8 billion versus the prior quarter, while average client deposits came in at $130.5 billion up from $128.4 billion in the earlier quarter.SunTrust's net interest margin declined to 3.11%, versus 3.25% in the year-ago period and compared to 3.19% in the prior quarter. The bank's average performing loans rose 8% y/y, while average client deposits gained 3%.William H. Rogers, Jr., Chairman and Chief Executive Officer of SunTrust Banks said, "Favorable revenue trends, particularly growth in loans, deposits and fee income, coupled with continued expense discipline and further asset quality improvements led to solid core earnings growth this quarter."SunTrust shares gained 2.59% to $40.75 in pre-market trading.