Updated with analyst downgrade of the stock
GREENVILLE, S.C. (
South Financial Group
shares tumbled Wednesday on above-average volume after the regional bank posted a wider-than-expected third-quarter loss.
South Financial Group late Tuesday said it lost $340.8 million, or $1.95 a share, in the third quarter, widening from its year-ago loss and worse than the Thomson Reuters average estimate for a loss of only 44 cents a share. The bank said the loss came primarily from credit provisions and related costs.
The provision for credit losses for the third quarter totaled $224.2 million, South Financial said, compared with $131.3 million in the second quarter. The overall allowance for credit losses increased to $345.3 million in the recent quarter, up from $289.7 million sequentially, the bank said.
Following the earnings release, Sun Trust Robinson Humphrey downgraded South Financial's stock to neutral from buy. The firm said the stock's upside potential has diminished significantly following the larger-than-expected quarterly loss.
Shares of South Financial were falling by 43 cents, or 30.3%, to 99 cents. Earlier in the session, the stock touched an intraday low of 98 cents. More than 33.7 million shares changed hands by 1:45 p.m. EDT Wednesday, compared to the stock's 50-day average daily volume of 4.5 million, according to the
South Financial has a 167.4 million-share float with a short interest float of 2% as of Sept. 25, according to Yahoo! Finance. Only 1.9% of the company's shares are held by insiders with another 61.4% owned by institutions.
-- Written by Robert Holmes in New York
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