updated 10/11/2004 8:59:36 AM ET 2004-10-11T12:59:36

SunTrust Banks Inc. said Monday that it expects to restate earnings higher for the first and second quarters of 2004 due to changes in loan loss allowances, and plans to delay its third-quarter earnings release pending completion of an audit committee review.

The company has placed chief credit officer Sandra W. Jansky and controller Jorge Arrieta on paid administrative leave until the review is completed.

For the first quarter, earnings are expected to rise by $17.4 million, or 7 cents per share. Income for the second quarter will increase by about $4.8 million, or 1 cent per share.

SunTrust said the expected restatement results from errors in input data used to calculate the first- and second-quarter allowances for loan losses, related solely to the company's indirect auto loan portfolio. The errors were discovered during final preparation of third-quarter financial results.

SunTrust's audit committee and independent counsel Wilmer Cutler Pickering Hale and Dorr LLP have begun a review of the errors, communications by certain SunTrust personnel to its independent auditors about the errors, loan loss reserve issues and related matters.

SunTrust said the review could result in additional restatements to previous financial reports, including further adjustments to first- and second-quarter 2004 results.

Shares were down 17 cents at $69.78 in pre-market activity on the New York Stock Exchange.

Copyright 2004 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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