What happened

Shares of SunTrust Banks (NYSE:STI) gained 10.5% in April, according to data provided by S&P Global Market Intelligence, as investors looked past weaker-than-expected first-quarter earnings and instead focused on the progress being made toward SunTrust's acquisition by BB&T (NYSE:BBT).

So what

SunTrust managed the rare feat of seeing its share price move higher even after reporting quarterly results that fell short of expectations. The regional bank earned $1.24 per share in the first quarter, $0.06 per share shy of the consensus estimate, on revenue that, at $2.33 billion, hit analyst targets.

A banker speaks to a couple at his desk.

Image source: Getty Images.

By comparison, SunTrust earned $1.40 per share in the prior quarter and $1.24 per share in the first quarter of 2018. The bank said that the latest quarter's results included $45 million, or about $0.09 per share, in merger-related costs. Without the merger costs, SunTrust's earnings would have increased 3% year over year.

"Our performance continues to improve and this quarter was no exception," CEO William H. Rogers Jr. said in a statement accompanying the results. "More importantly, while our results this quarter highlight SunTrust's individual strength, we know that after merging with BB&T, we will be even better positioned to enhance shareholder value, improve the client experience, and invest in our teammates, associates, and communities."

Indeed, while investors would likely have preferred to see SunTrust outperform in the quarter, any disappointment in the results was likely offset by the bank's progress in getting its sale completed. In February, BB&T announced plans to buy SunTrust for $28 billion, the largest U.S. bank transaction since the financial crisis.

Now what

BB&T, for its part, delivered a first quarter that came in ahead of expectations even after factoring in merger costs. And BB&T CEO Kelly King said on BB&T's post-earnings call that the merger planning is "going extraordinarily well," with management at the two companies holding weekly meetings to review and plan for the merger. Regulators held public meetings on the deal in late April and early May, and King said they are on target to get the deal done before year-end.

Because the deal is an all-stock transaction, SunTrust shares should logically go up along with shares of BB&T.

SunTrust's quarter provided no reason for BB&T to walk away from the merger, and executives with both companies appear confident that the deal will get done as scheduled. That's reason enough for shares of SunTrust to trend upward in April alongside shares of BB&T.