SunTrust Banks Inc. fourth-quarter loss narrowed more than expected as the Atlanta regional bank's credit picture improved sequentially.
Chairman and chief executive James M. Wells III said soft revenue and weak loan demand from consumer and commercial borrowers reflected continued pressure from the recession, although he said he was encouraged by improving credit trends.
Loan-loss provisions rose 1.2% to $973.7 million from a year earlier but fell 14% from the previous quarter.
Net charge-offs, loans the bank doesn't expect to collect, improved sequentially, while nonperforming loans, or those in danger of default, showed further stabilization. Charge-offs rose to 2.83% of average loans from 1.72% a year earlier but were down from 3.33% the previous quarter. Nonperforming loans rose to 4.75% of total loans plus other real estate and repossessed assets, up from 3.1% and 4.67%, respectively.
SunTrust, which serves areas of the southeast U.S. hit hard by the real estate crash, has suffered from exposure to local construction and commercial real estate, as well as effects of high unemployment. Meanwhile, banks have generally been reporting improved fourth-quarter bottom lines and better-than-expected results.
SunTrust posted a loss of $248.1 million, or 64 a share, compared with a loss of $347.6 million, or $1.07 a share, a year earlier. A survey of analysts by Thomson Reuters predicted a 75-cent loss. Revenue excluding investment gains and losses increased 1.2% to $1.88 billion.
Shares closed Thursday at $24.53 and weren't active premarket. The stock fell 30% in 2009 but has risen a fifth since the beginning of the year.