SunTrust: Financial Winner
By Philip van Doorn - 08/09/12 - 4:23 PM EDT
NEW YORK (TheStreet
) -- SunTrust
was the winner among the largest U.S. financial names on Thursday, with shares rising over 1% to close at $24.70.
The broad indexes were again mixed, as investors reacted to a mixed batch of economic data. The U.S. Labor Department reported that first-time jobless claims for the week ended Aug. 4 declined to 361,000 from an upwardly revised 367,000 the previous week. The four-week moving average for unemployment claims rose to 368,250 from 366,000 the previous week.
The Commerce Department reported that the U.S. trade deficit in June narrowed by 10.7% from May, to $42.9 billion, while exports increased by 0.9%, to $185 billion. Imports declined by 1.5% during June, to $227.9 billion.
China's National Bureau of Statistics reported that the nation's total industrial production increased 9.2% year-over-year, declining from a 9.5% growth rate in June, while retail sales growth slowed to 13.1% from 13.7%.
The KBW Bank Index
rose slightly to close at 46.58, with all but seven of the 24 index components showing at least slight gains for the session.
SunTrust's shares have now declined 2% year-to-date, following a 35% decline during 2011.
Based on a quarterly payout of eight cents, the shares have a dividend yield of 3.93%.
The shares trade 95% of their reported June 30 tangible book value of $26.02, and for 9.5 times the consensus 2013 earnings estimate of $2.61 a share, among analysts polled by Thomson Reuters. The consensus 2012 EPS estimate is $1.98.
The Atlanta lender in its second-quarter 10-Q filing on August 1 estimated that under the Federal Reserve's
proposed final rules for the implementation of Basel III capital standards, its Tier 1 common equity ratio was roughly 8.0% as of June 30, declining from the previous reported Basel 1 Tier 1 common equity ratio of 9.40%, which included third-quarter redemptions of trust preferred securities. The company said the estimated Basel III Tier 1 common equity ratio was "comfortably in excess of the proposed requirements," which won't be fully phased-in until January 2019.
Despite the strong level of capital and improved credit metrics during the second quarter, SunTrust CEO Bill Rogers said on July 23 that "while the Fed is in the process of reviewing" a revised capital plan, the bank had "elected not to request any increase in the current level of the dividend or any other return of capital at this time," since the revised plan "only covered capital actions for the fourth quarter of 2012 and the first quarter of 2013."
SunTrust's original 2012 capital plan was only partially approved by the Federal Reserve in March, with regulator agreeing to the company's plan to redeem trust preferred shares, but objecting to any common share buybacks or an increase in the dividend on common shares.
Interested in more on SunTrust? See TheStreet Ratings' report card for this stock.
-- Written by Philip van Doorn in Jupiter, Fla.
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