NEW YORK ( TheStreet) -- SunTrust Banks (STI - Get Report) late on Thursday announced multiple mortgage settlements, penalties and accounting adjustments that totaled over $1 billion and promised to wipe out half the company's third-quarter earnings.
The Atlanta lender said the various settlements and other items would "have a negative after-tax impact of $179 million, or $0.33 per share, on the company's third-quarter earnings results." Before the announcement, the consensus among analysts polled by Thomson Reuters was for SunTrust to report third-quarter net income of $372 million, or 68 cents a share.
The KBW Bank Index (I:BKX) has risen 19% this year, following a 30% return during 2012.
SunTrust announced the following items on a pre-tax basis, not all of which will be reflected in the company's third-quarter results:
- A settlement of mortgage repurchase claims with Freddie Mac (FNCC), resulting in a cash payment by SunTrust of $40 million.
- A mortgage putback settlement with Fannie Mae (FNMA) for $373 million, which after adjusting for $145 million in credits to SunTrust for prior loan repurchases resulted in a cash payment by the bank of $228 million.
- An agreement to settle claims on SunTrust loans insured by the Federal Housing Administration and also to settle civil claims against the bank under the national mortgage settlement, resulting in a commitment to $500 million in "consumer relief" and a $468 million cash payment.
- A settlement with the Federal Reserve, also under the national mortgage settlement, resulting in a fine of $160 million.
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