SunTrust Cuts Fourth-Quarter Forecast On Increased Loan Loss Provision
The Southeastern and Mid-Atlantic regional banker SunTrust Banks lowered its fourth-quarter and full-year net income results Thursday to account for a $40 million increase in its provision for loan losses.
The revision resulted in an earnings reduction of 7 cents a share for the quarter.
The company now says fourth-quarter net income available to common shareholders dropped to $498.6 million, or $1.39 a share, from $523.6 million, or $1.46 a share.
Full-year 2006 earnings available to common shareholders were $2.11 billion, or $5.82 a share, down from the previously reported $2.13 billion, or $5.88 a share.
SunTrust said the revision comes after developments last month regarding the resolution of a previously disclosed large commercial loan that had been on non-accrual status since August 2006. The result was a $40 million increase in the bank's loan loss provision.
The unidentified borrower signed an agreement to sell the majority of its assets, primarily customer contracts, to an unrelated third party. The SunTrust loan was partially repaid and the remaining $69 million was charged off.