Among banks in Florida, loan losses force SunTrust, Synovus, Regions deeper into the red
SunTrust, the Atlanta-based bank with deep roots in Florida, reported a startling swing to a third-quarter loss of $377.1 million, or 76 cents a share, compared a profit of $304.4 million, or 87 cents a share, in the same period last year.
There was a time not too long ago that such a reversal of fortune would have sent shudders through SunTrust and even Atlanta. Now it's just another day in a banking industry reeling from loan losses.
Not to pick just on SunTrust. Another Georgia banking company big in Florida, Synovus, outdid SunTrust by reporting a quarterly loss of $437.7 million on top of a $40 million loss a year earlier. Synovus shares on Friday plummeted 18 percent to close under $3. And Alabama's Regions Bank, another prominent player in Florida, reported a like loss -- $437 million -- in the latest quarter.
In a conference call with analysts, SunTrust CEO Jim Wells (in photo) was asked by Goldman Sachs' Brian Foran about the direction of Florida home prices.
Foran: "You expect them to continue to fall. How much further are you expecting and is the recent improvement Case-Shiller data just a head fake in your opinion?"
Jim Wells: "For our forecasting purposes, we generally use the Case-Shiller data, and so are expecting between 15% and 20% declines right now in the Florida market. That’s a really bad answer because there are five or six separate markets. Some of the northern and more central markets are showing much better performance with South Florida actually beginning to show some signs of improvement. We are seeing increasing home sales in Florida, and backlogs are reducing somewhat. However, the real answer is 15% to 20% is what's in our forecast."
it would be "premature," Wells said in the conference call, "to declare broad victory over recessionary pressures or to start talking about turning corners and hitting a bottom."
-- Robert Trigaux, Times Business Columnist