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."