SunTrust Banks Inc. on Thursday reported a fourth-quarter loss as the company faced rising loan defaults and credit expenses.
SunTrust also cut its quarterly dividend to 10 cents a share from 54 cents.
The Atlanta-based regional bank posted a loss of $379.2 million, or $1.08 per share, compared with a profit of $3.3 million, or a penny per share, during the fourth quarter of 2007.
Revenue rose 9 percent to $1.93 billion from $1.77 billion.
Analysts polled by Thomson Reuters, on average, forecast earnings of 7 cents per share on revenue of $2.16 billion.
"The fact that SunTrust is not alone in paying the price of a deteriorating economy on our business and our clients does not make today's results any less painful to report," said Chief Executive James Wells in a statement. "We are under no illusions as to the severity of this credit cycle."
Like nearly all other banks, SunTrust was forced to set aside a growing amount of cash to cover rising loan defaults. SunTrust's provision for loan losses rose to $962.5 million during the quarter, up from $356.8 million during the same quarter in 2007.
Net charge-offs, loans written off as not being repaid, rose to $552.5 million from $168 million. Like many other lenders, SunTrust has been hurt by deteriorating residential and commercial real estate conditions, especially in Florida.
SunTrust said it would cut its quarterly dividend to 10 cents per share until "the economic environment and earnings outlook improve."
Wells attributed the quarterly loss to increased unemployment and continued declines in home values that drove loan delinquencies significantly higher during the quarter.
However, he said SunTrust remains "in a very strong capital position and has excellent liquidity."
During the fourth quarter, SunTrust raised about $4.85 billion from the U.S. Treasury under the government's Capital Purchase Program. The program is part of the U.S. Treasury Troubled Asset Relief Program that is designed to encourage U.S. financial institutions to build capital and increase the flow of financing to U.S. businesses and consumers.
It also issued $3 billion of debt guaranteed by the Federal Deposit Insurance Corp. under the government's liquidity guarantee program.
For the full year, SunTrust earned $746.9 million, or $2.13 per share, down from a profit of $1.6 billion, or $4.55 per share, in fiscal 2007.
Shares of SunTrust fell $1.41, or 9.3 percent, to $13.80 in premarket activity. The stock has ranged from $14.71 to $70 over the past year.