SunTrust Banks Inc. rebounded from a prior-year loss in the second quarter caused by increased credit costs, as the Atlanta regional bank reported lower loan-loss provisions.
Results were better than analysts expected.
Regional lenders are getting squeezed as their loan troubles ease very slowly while new sources of business are remain scarce. SunTrust serves an area that was particularly hard hit by the real-estate crash and has been posting losses since the start of the financial crisis, though credit trends have been improving lately.
The company reported a profit of $12 million, compared with a prior-year loss of $183.5 million. On a per share basis which includes preferred-dividend impacts and other items, the loss narrowed to 11 cents from 41 cents. Revenue decreased 2% to $2.16 billion even though net interest income rose 8%.
Analysts polled by Thomson Reuters most recently forecast a loss of 35 cents of $1.94 billion in revenue.
Loan-loss provisions were $662 million from $962.2 million a year earlier and $862 million in the first quarter. Net charge-offs, or loans lenders don't think are collectible, fell to 2.57% from 2.59% and from 2.91%, respectively. Non-performing loans, or those near default, declined to 4.16% from 4.48% and 4.55%.
Shares closed Wednesday at $22.42 and were inactive premarket. The stock is up by about half in the past year.