Updated from 10:18 a.m. EDT

Officials at

SunTrust

(STI) - Get Report

, a big regional bank, expressed frustration with its "solid if not spectacular" third-quarter earnings, which rose 2.7% over last year, but missed the consensus estimate of Wall Street analysts by a penny.

The Atlanta-based bank reported net income of $343 million, or earnings of $1.20 a share -- a penny shy of the Thomson Financial First Call estimate.

But the news most bank investors will focus on today is that loan losses and nonperforming loans continue to rise at the nation's ninth-largest bank -- something that's become a concern at all the nation's banks. Nonperforming loans were up 16% to $553.8 million in the quarter.

SunTrust Chief Executive and Chairman Phillip Humann said "charge-offs" for bad loans are higher than the bank would like, but he called the situation "manageable."

"What continues to matter is that the overall level of nonperformers will be manageable for us," Humann said in a conference call.

The bulk of that increase in sour loans was the result of a $46 million loan to a division of

Adelphia

, the bankrupt cable company, whose former executives have been charged with fraud. Bank officials say they added the Adelphia loan to the nonperforming category as the result of the Shared National Credit Review by bank regulators.

SunTrust is the first of the nation's big banks to report earnings. Its profit report comes at a time that bank stocks have been under siege as investors worry about the continued climb in troubled loans at the nation's banks.

Overall, the bank said it reclassified $86 million in loans as nonperforming, in response to the annual examination by regulators of how banks are handling big-ticket commercial loans.

SunTrust officials also sought to throw cold water on talk about another Federal Reserve rate cut to spur the lackluster economy. Bank executives told industry analysts that another interest rate cut could hurt banks because it would reduce the amount of dollars banks take in from interest charged on loans, something which helped bolster SunTrust's bottom line in the third quarter.