SunTrust Profit Rises 35% as Less Set Aside for Bad Loans
SunTrust Banks Inc. (STI), Georgia’s biggest lender, said second-quarter profit rose 35 percent as bad-loan provisions fell.
Net income increased to $365 million, or 68 cents a share, from $270 million, or 50 cents, a year earlier, the Atlanta-based bank said today in a statement. The average estimate of 29 analysts surveyed by Bloomberg was 67 cents a share.
SunTrust’s provision for credit losses declined by 51 percent to $146 million from a year earlier, according to the statement. Net charge-offs also dropped by almost half, falling to $179 million from $350 million a year earlier.
“The credit-quality story continues to be a good one with nonperforming loans and net charge-offs hitting their lowest levels in over five years,” Chief Executive Officer William Rogers said in a conference call following the results.
SunTrust rose 1.3 percent to $34.75 at 10:40 a.m. in New York. The shares gained 21 percent this year through yesterday, compared with the 28 percent advance of the 24-company KBW Bank Index.
SunTrust said in May that it was in talks with U.S. authorities to settle claims over its handling of loans backed by the Federal Housing Administration and possible violations of the False Claims Act.