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SunTrust: 'Plan B' Financial Loser

Boehner did say that he would "continue to work with our colleagues in the House and the Senate on a plan that protects families and small businesses from the fiscal cliff."

The KBW Bank Index (I:BKX) was down over 1% to close at 51.28, with all 24 index components seeing declines, except for US Bancorp (USB), which was up four cents to close at $32.48.

Among the "big four" U.S. bank holding companies, Bank of America (BAC - Get Report) fared the worst, with shares down 2% to close at $11.29. The shares have returned 104% year-to-date, following last year's painful 58% decline.

While it's looking like 2012 will be one for the record books for Bank of America, the shares are still down 15% since the end of 2010, and it has been quite a ride for investors. After quickly rising to a closing price of $9.81 on March 20, the shares then dipped to a close at $6.83 on May 21, before continuing their fitful climb to Thursday's year-to-date closing high of $11.52.

SunTrust's Transition and Capital Return


Shares of SunTrust of Atlanta have returned 61% year-to-date, following a 40% decline during 2011.

The shares trade for 1.1 times tangible book value, according to Thomson Reuters Bank insight, and for 10.4 times the consensus 2013 earnings estimate of $2.71 a share, among analysts polled by Thomson Reuters. The consensus 2014 EPS estimate is $3.01.

SunTrust during the third quarter made several moves to shore up its balance sheet and address its risk from mortgage repurchase demands, including the sale of its stake in Coca-Cola (KO) shares, resulting in a pre-tax gain of $1.9 billion. The company also reported a $371 million provision for mortgage repurchase claims during the third quarter, saying that the move had ""increased the mortgage repurchase reserve to a level that is expected to cover the estimated losses on loans sold to Government Sponsored Enterprises (GSEs) prior to 2009."

The company also sold " $0.5 billion of nonperforming mortgage and commercial real estate loans," while moving "$1.4 billion of delinquent and current student loans and $0.5 billion of delinquent Ginnie Mae loans to loans held for sale."

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