SunTrust Bank announced the resolution of a previously reported "non-performing loan" last week. The firm's earnings were revised downward for 4Q06 and the 2006 Fiscal Year as a result. The resolution of the commercial loan, written as a straight financing to "another corporation," will mean an increase of $40 million to the bank's loan loss provision.
SunTrust was partially repaid through sales of the borrower's assets to an unrelated third party with a remaining $69 million charged off. This comes after the company had reported "record earnings for 2006" in its press release back in mid-January.
The firm has recently lost 13 members of its CDO group, including the group's head James Bennison, who left to start up Atlanta-based CDO manager Terminus Asset Management Co.
(c) 2007 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.