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Friday, November 15, 2019
   
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Banking & Finance

SunTrust Reports 2nd Quarter Loss

SunTrust Banks, Inc. released its second quarter 2009 financial results, reporting a loss of $183.460 million versus a profit of $540 million in the same quarter last year.  For the first six months of 2009, the banks has now lost $998 million versus a profit last year of $830 million from January through June.  The loss was equal to $.41 a share.
During the six months, the banking company wrote down $751 million in after tax, non-cash goodwill impairment charge for the value of its loans, made up of $299 million in commercial and other loans, and $451.9 million in residential loans, but as of June 30, stated that no other write downs were needed under GAAP rules.
“The economic recession continued to impact our results in the second quarter, as most economic indicators continued to deteriorate. Notably, the national unemployment rate increased from 8.5 percent at March 31, 2009 to 9.5 percent at June 30, 2009, which is up from 7.2 percent at the end of 2008,” according to the bank’s executive summary with its SEC filing.  
“During the quarter, we experienced positive trends and preliminary signs of improvement in several areas of our core business. While we continue to work through credit and earnings challenges as a result of the weak economy, we experienced strong deposit growth, increasing net interest margin, positive fee income growth in certain areas, continued strong expense management, and lower early stage delinquencies in our loan portfolio. As a result of these positive factors, combined with our enhanced capital position, we believe we have the strength and resources to continue to manage through sustained economic weakness,” the statement continues.
“While we are not pleased by these results that were dominated by recession-related pressures, we saw positive trends and preliminary signs of improvement in several areas of our core business during the quarter. In addition, the growth of our allowance for loan losses declined from the prior quarter and grew at the slowest pace over the past five quarters, with the provision for loan losses actually declining when compared to the previous quarter,”it concludes.
Also, during the first six months of last year, on May 1, 2008, SunTrust Banks, Inc. acquired GB&T Bancshares, Inc. (“GB&T”) which affects year over year comparisons, as well.
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