Two supra-regional banks in the DC market did release fourth quarter earnings. SunTrust and BB&T both did report stronger profits in the fourth quarter, and both banks did state that an improvement in credit quality including a reduction in net-charge offs and non-performing loans did accompany a better earnings performance. SunTrust did report a profit of $152 million up from $114 million a year earlier, and BB&T $391 million up from $208 million or an 88% increase over fourth quarter 2010.
An improvement in credit quality is only a part of the equation to stronger profits at both institutions, loan growth especially commercial or business lending did support stronger fourth quarter results. BB&T saw loan growth at an annualized rate of 7%, and SunTrust did attribute commercial lending growth as a contributor to fourth quarter results. The return of banking institutions to lending is a positive sign for the marketplace and the overall economy.
Outside the DC marketplace, strong loan growth did bolster earnings at US Bancorp as reported by DailyFinance.com. Loan growth has been a contributor to stronger results at US Bancorp for the third straight quarter in a row. In addition, Wells Fargo saw a 20 % jump in profits due to strong loan growth for the mega national banks as reported in the Examiner.com.
The performance of supra-regional bank players differ from the earnings reports by Bank of America and Citigroup as investment trading and exposure to the problems in Europe play less of a role in future performance. The results do show the bank’s beginning to emerge from the credit cycle with an appetite to begin lending again. Upon current trends continuing, this return to lending is a positive for DC and recovery in the US economy.
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