Due to an increase in the provision for loan losses
SunTrust Banks has reported fully taxable-equivalent total revenue of $1,943.2m for the third quarter of 2009, a decrease of 21% compared to the third quarter of 2008. Fully taxable-equivalent total revenue, excluding net securities gains and losses, declined 17.1%. Fully taxable-equivalent net interest income declined 0.6% compared to the third quarter of 2008.
Fully taxable-equivalent net interest income was $1,168.2m, an increase of 4.2% from the second quarter of 2009 and a decline of 0.6% compared to the same quarter last year. Net interest margin increased 16 basis points and 3 basis points, respectively. Total noninterest income was $775.1m, down 39.7% from the third quarter of 2008.
Total noninterest expense was $1,428.8m, a decline of 14.2%, which included the $183.4m expenses related to the contribution of Coke shares to the SunTrust charitable foundation as well as the company’s proportionate share of potential costs of litigation related to Visa of $20m.
The bank reported a net loss of of $377.1m available to common shareholders, compared to $304.4m in the third quarter of 2008.
The decline in earnings was primarily attributable to the $390.8m after-tax increase in the provision for loan losses and a $292.8m after-tax increase in valuation losses associated with the fair value of the company’s public debt. The net loss was $133.5m higher than the previous quarter, driven primarily by a $106.5m after-tax increase in provision for loan losses.
James Wells, chairman and CEO of SunTrust, said: “Our third quarter bottom line results reflected the difficult operating environment for more traditional banks. Continued recession-related earnings pressures included higher credit costs, softer fee income and generally weak loan demand, as consumers de-leverage and businesses pay down existing credit lines and defer investments. we are encouraged by some positive core business trends and the prospect of an improving economy.
“SunTrust possesses the resources necessary to successfully manage through sustained economic weakness should it occur. The company remains focused on risk-mitigation, efficiency and executing client-driven initiatives designed to deliver steadily improving results as the operating environment gets better.”