SunTrust Banks posts smaller loss in 2nd quarter as credit quality improvesBy AP
Thursday, July 22, 2010
SunTrust Banks cuts 2nd-quarter loss by two-thirds
ATLANTA — SunTrust Banks Inc. on Thursday said it cut its second-quarter net loss by two-thirds, as the credit quality of its loans continues to improve.
Separately, the regional bank was ordered to pay $1.44 million in fines, compensation and commission refunds by the Financial Industry Regulatory Authority. Two brokers at SunTrust have been accused of making improper investments for 17 mostly elderly, retired or disabled customers from February 2004 to November 2006.
SunTrust did not admit or deny wrongdoing, but agreed to the entry of the regulatory agency findings.
SunTrust, whose market in Southern states has been hit hard by the housing crisis, lost $56 million, or 11 cents per share — a 66 percent improvement from the $164 million, or 41 cents per share, loss posted in the same quarter a year earlier.
Revenue fell 2 percent to $2.16 billion from $2.19 billion. Last year’s quarterly revenue was buoyed by a $112 million gain related to the sale of securities and higher mortgage-related income.
Results nevertheless beat the expectation of analysts, who had forecast a loss of 35 cents per share and revenue of $1.94 billion, according to Thomson Reuters.
Atlanta-based SunTrust set aside less money in the quarter to cover credit losses, down 31 percent to $662 million.
Net interest income rose by 8 percent to $1.21 billion while noninterest income — such as from banking fees — fell by 11 percent to $952 million. Noninterest income included $57 million in net gains from the sale of securities and $63 million in gains in the value of its public debt and related hedges.
SunTrust’s average loans totaled $113 billion in the quarter, down 9 percent, with real estate construction loans falling by 50 percent.
Total deposits rose by 3 percent to $116.5 billion, up 3 percent.
Shares jumped $2.38, or 10.6 percent, to $24.80 in premarket action.
Tags: Atlanta, Georgia, North America, Regulatory Agencies, United States