(RTTNews) - SunTrust Banks, Inc. (STI: News ), the holding company for SunTrust Bank, reported Thursday a loss for the third quarter, that reflected debt charges, higher loan-loss provisions and a sharp fall in revenues, in the midst of continued challenging economic and credit operating environment. Looking to the balance of 2009 and into 2010, the company said it remains focused on risk-mitigation, efficiency and executing client-driven initiatives to deliver steadily improving results.

Net loss for the quarter was $316.9 million, compared to prior year's net income of $312.4 million. SunTrust Banks said its third-quarter net loss available to common shareholders was $377.1 million or $0.76 per share, compared to a net income of $304.4 million or $0.87 per share in the prior year period.

The latest quarter results included $131.3 million or $0.16 per share of mark-to-market losses on the company's public debt and related hedges carried at fair value.

On average, 26 analysts polled by Thomson Reuters expected the company to report a loss of $0.65 per share for the quarter. Analysts' estimates typically exclude special items.

According to the company, the loss in the quarter was primarily attributable to the $390.8 million increase in the provision for loan losses and a $292.8 million increase in valuation losses associated with the fair value of the company's public debt.
Commenting on the results, James Wells III, SunTrust Chairman and Chief Executive Officer, stated, "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. Nevertheless, we are encouraged by some positive core business trends and the prospect of an improving economy."

Total revenue, on fully taxable equivalent basis, for the quarter, declined 21% to $1.943 billion from $2.461 billion in the year-ago period. Excluding net securities gains and losses, fully taxable-equivalent total revenue fell 17.1% to $1.897 billion from $2.288 billion a year ago. Fourteen analysts' consensus estimate was $2.11 billion for the quarter.

Overall revenue remained cyclically soft with stable net interest income and lower noninterest income, the company said. On a fully taxable equivalent basis, net interest income for the quarter was $1.168 billion, down 0.6% from $1.176 billion last year, reflecting an expanded net interest margin to 3.10% from prior year's 3.07% that was offset by a reduction in average earning assets.

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