Reuters: Regulatory News: UPDATE 1-SunTrust profit surges on Coca-Cola share sale

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UPDATE 1-SunTrust profit surges on Coca-Cola share sale Oct 22nd 2012, 11:02 Mon Oct 22, 2012 7:02am EDT * Q3 EPS $1.98 vs $0.39 year earlier * Books $1.9 bln gain on Coca-Cola share sale * Credit quality improves Oct 22 (Reuters) - SunTrust Banks Inc's third-quarter profit surged as the lender gained from the accelerated sale of its shares in Coca-Cola Co that produced a pre-tax gain of $1.9 billion. Atlanta-based SunTrust accelerated the sale of the shares, originally set for 2014 and 2015, to reduce volatility in its capital adequacy ratios ahead of the implementation of the new Basel III rules. SunTrust has owned shares in Coca-Cola since 1919 when a predecessor bank participated in the underwriting of the company's initial public offering and received the shares in lieu of fees. The bank said in September that it would record the gain and a $375 million charge in the quarter to cover requests from Fannie Mae and Freddie Mac to buy back mortgages it sold to the regulators before 2009. Net income rose to $1.07 billion, or $1.98 per share, from $211 million, or 39 cents per share, a year earlier. Analysts on average were expecting the regional bank to earn $1.99 per share, according to Thomson Reuters I/B/E/S. The bank's credit quality continued to improve. Non-performing loans were just 1.42 percent of its total loan book, down from 2.76 percent a year earlier. SunTrust, which suffered large losses due to the financial crisis, was one of the four big U.S. banks whose capital plans, including raising dividends and buying back shares, were rejected by the Federal Reserve in March as part of its stress-test reviews. The Fed did not object in August to SunTrust's revised capital plan, which did not include dividend increases or share buybacks. SunTrust shares, which have risen more than 50 percent over the last year, closed at $28.63 on Friday on the New York Stock Exchange. Link this Share this Digg this Email Reprints

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