...Earnings Profile Improved But Lags: SunTrust Bank, Inc's (STI) earnings performance has improved, although it trailed the peer median through the first nine months of 2017. Prefinancial crisis, STI earned an ROA of roughly 110bps¡130bps. However, since then STI's returns, in line with the industry, have been much lower. Fitch Ratings expects that STI will likely operate on the lower end of that range over the near to intermediate term, assuming a higher rate environment. Asset Quality Remains Benign: STI's asset quality profile remains good, inclusive of low levels of nonaccrual loans and loan losses. STI reported a slight increase in NCOs in 3Q17, but they remain modest at just 21bps during the quarter. STI indicated that loan losses will fall within a 25bps¡35bps range in 2017 and 2018. Diversified Business Model: STI's earnings incorporate a solid level of non-interest income. Some of this comes from SunTrust Robinson Humphrey, with investment banking and trading income accounting for...
