Regional banks' results improve as credit woes ease
U.S. regional banks reported improved results on Thursday as credit woes began to ease, but they cautioned that loan demand is still soft among their so-called Main Street borrowers.
Healthier loan portfolios boosted second-quarter results at SunTrust Banks Inc , BB&T Corp and Huntington Bancshares Inc .
Atlanta-based SunTrust reported a narrower net loss of $56 million , or 11 cents per share, compared with a loss of $164.4 million, or 41 cents, a year earlier.
Winston-Salem, North Carolina-based BB&T reported net income rose to $210 million, or 30 cents per share, from $121 million, or 20 cents, a year ago.
Columbus, Ohio-based Huntington swung to a profit of $48 million, or 3 cents per share, from a loss of $125 million, or 40 cents a share.
U.S. regional banks, unlike their larger national counterparts, are in some cases still struggling with high levels of credit losses, the latest dip in consumer sentiment and long-term concerns about the impact of the new financial reform law.
Like other banks that have reported results throughout the past week, regional banks on Thursday reported a mixed outlook for loan demand.
At the beginning of the year we thought that by now we would be seeing a pickup in loan demand as the economy began to expand, said Stephen Steinour, chief executive of Huntington. While there have been some signs of economic expansion, meaningful loan growth has not yet materialized.
SunTrust said borrowers are hesitant to seek credit in the current economy. Its average loan balances declined 9 percent year-over-year.
BB&T bucked the trend, saying new loan originations were up 13.6 percent over the first quarter, to $15.4 billion.
(Reporting by Joe Rauch, additional reporting by Elinor Comlay in New York.)
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