Diversification is not only wise for individuals, but for financial institutions, too. Case in point: SunTrust Banks (NYSE:STI), which reported fourth-quarter earnings yesterday.

While the company has cashed in on the mortgage boom, it had the foresight to position its business so as not to crater when the boom cooled in the fourth quarter. In fact, the company has focused its balance sheet for higher interest rates.

The big picture: SunTrust, the ninth-largest U.S. bank, announced fourth-quarter net income of $342.5 million. This translated into earnings per share of $1.21, which beat average analyst estimates of $1.19.

The details: SunTrust showed improvement in a key metric, interest margin (essentially, the difference between earnings on loans and interest paid on deposits). Interest margin increased from 2.98% in the third quarter to 3.09% in the fourth.

Financial institutions go on and on about keeping costs low. But, on the conference call, SunTrust CEO L. Phillip Humann stressed that the company has been increasing its sales efforts. So far, it seems to be paying off. According to Humann, the company is "now on track to deliver the consistently strong performance for which we historically have been known."

Of course, it definitely helps that the U.S. economy is on the rebound, which translate into an increase in corporate lending.

In the stodgy world of banking, the news out of SunTrust is optimistic. With Citigroup (NYSE:C), Bank of America (NYSE:BAC), and J.P. Morgan Chase (NYSE:JPM) all reporting next week, SunTrust's nice quarter probably bodes well.

Tom Taulli is the author of six books on investing, such as Investing in IPOs (Bloomberg Press), as well as a professor of finance at the USC School of Business. You can reach him attom@taulli.com.