May 4 (Bloomberg) -- SunTrust Banks Inc.’s failure to win a seal of approval from billionaire investor Warren Buffett as he discussed the capital strength of his bank holdings didn’t prevent a 25 percent rally in the Georgia bank’s shares.

“The portfolio I run has Wells, USB, M&T and SunTrust,” Buffett told reporters yesterday in Omaha, Nebraska, referring to Wells Fargo & Co., U.S. Bancorp. and M&T Bank Corp. “I don’t know that much about SunTrust in order to give you an answer. The other three I can tell you do not need equity capital. We would buy stock in any of the three banks at the present prices.”

Buffett, the 78-year-old chairman of Berkshire Hathaway Inc., said one day after the firm’s May 2 annual meeting that San Francisco-based Wells Fargo, the second-largest holding in Berkshire’s portfolio, will prosper regardless of the results of the stress tests of top U.S. lenders. Wells Fargo, SunTrust and U.S. Bancorp are among the 19 banks undergoing tests to determine if they need to raise additional capital to buffer effects of a weakening economy. Details on individual banks are scheduled to be released May 7.

Buffett’s comments on Wells and other rivals helped spark a rally in the 24-member KBW Bank Index, which jumped 15 percent. SunTrust, Fifth Third Bancorp and Regions Financial Corp. each gained more than 25 percent today.

Shares Rise

SunTrust gained $3.46 to $17.27 at 4:15 p.m. in New York Stock Exchange composite trading. The stock has declined 42 percent this year. SunTrust had no comment, Barry Koling, a spokesman for the Atlanta-based bank, said in an e-mail today.

Regulators restrict the bank’s ability to comment publicly on the stress tests, SunTrust Chief Executive Officer James Wells told shareholders at the bank’s annual meeting on April 28. “I find it interesting that others can” comment on the tests, Wells said, the Atlanta Business Chronicle reported.

Berkshire held 3.2 million SunTrust shares as of Dec. 31, valued at $55.3 million as of the closing price today. Berkshire’s shares in Wells Fargo are valued at $7.04 billion, along with stakes of $1.37 billion in U.S. Bancorp and $378 million in M&T, according to data compiled by Bloomberg.

SunTrust reported a first-quarter loss of $815.2 million that included a non-cash, after-tax charge of $714.8 million to write down goodwill tied to home mortgages and commercial real estate. The bank has sold $4.9 billion in preferred shares in the government’s bank-rescue program and slashed its quarterly dividend by 77 percent to 10 cents per share.

Wells Fargo rose $4.64, or 24 percent, to $24.25; U.S. Bancorp increased $2.38, or 13 percent, to $20.34 and M&T gained $6.90, or 14 percent, to $56.29.

To contact the reporters on this story: Andrew Frye in Omahat ; afrye@bloomberg.net; David Mildenberg in Charlotte at dmildenberg@bloomberg.net.

Last Updated: May 4, 2009 16:48 EDT