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SunTrust Reports Lower Delinquency, New CEO

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As SunTrust Banks Inc. announced the execution of a succession plan for its top executive slot — it separately reported an improvement in delinquency, a reduction in mortgage assets and a one-third decline in originations.

First-quarter earnings data released Thursday indicate residential loan production was $5.8 billion. Fundings were down from $8.7 billion in the fourth-quarter 2010.

But business was better than the first-quarter 2010, when loan closings were $5.6 billion.

Retail SunTrust originators generated $3.7 billion in business during the first three months of this year, while wholesale production was $0.8 billion and correspondent acquisitions were $1.3 billion. Refinances accounted for 71 percent of first-quarter activity, diminishing from 78 percent in the prior period.

SunTrust said it serviced $164.5 billion in home loans as of the end of the first quarter, falling again from $167.2 billion at the end of last year and from $178.0 billion a year earlier. The third-party servicing portfolio accounted for $132.7 billion of the latest number.

Residential mortgage assets fell to $28.0 billion from $28.5 billion and were $27.3 billion in the first-quarter 2010. Home-equity products on the books also declined to $16.4 billion from the fourth quarter’s $16.8 billion and from $17.4 billion on March 31, 2010.

Residential construction loans finished the first quarter at $1.2 billion, easing from $1.3 billion on Dec. 31 and tumbling from $1.7 billion at the same time in 2010.

Total residential delinquency of between 30 and 89 days on all but the guaranteed portion of its residential mortgage portfolio fell to 1.60 percent from 1.74 percent and was 1.79 percent 12 months prior. The March 31 figure reflected a residential rate of 1.63 percent, home-equity delinquency of 1.46 percent and construction delinquency of 2.94 percent.

Repurchase demands rose to $363 million from the prior quarter’s $293 million. Repurchase reserves ended the period at $270 million.

Commercial real estate loans eased to $6.0 billion from $6.2 billion and were also lower than $6.9 billion a year ago. Commercial construction holdings were cut to $2.1 billion from $2.6 billion and were less than half of the $4.3 billion owned during the same period last year.

Delinquency on commercial mortgages was 0.33 percent, better than 0.43 percent three months earlier and 0.77 percent a year earlier.

The parent company earned $180 million, about the same as the $185 million earned in the final quarter of last year. SunTrust had a $161 million loss a year earlier.

Headcount closed out the quarter at 29,052, four employees fewer than at the end of 2010. The number of full-time employees was 28,263 at the same point last year.

SunTrust operated 1,665 full-service banking offices as of March 31.

SunTrust Banks Inc. separately announced that James M. Wells III was relieved of his chief executive officer title and remains executive chairman. Wells, a director for the Federal Reserve Bank of Atlanta, was appointed CEO of SunTrust in 2007 and chairman in 2009. Wells, who originally started with United Virginia Bankshares which was acquired by SunTrust, retires on Dec. 31.

William H. Rogers Jr., who was became SunTrust’s president in 2008, took over as CEO. Rogers was named chief operating officer last year.

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