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This is the second time in six years that the seventh-largest U.S. bank has needed to restate its earnings because of errors in allowances for loan losses.
Stephen Taub, CFO.com | US
October 13, 2004
SunTrust Banks Inc. announced that it placed two finance executives on paid administrative leave and that it expects to restate its results for the first six months of 2004.
The two executives are Sandra W. Jansky, executive vice president and chief credit officer, and Jorge Arrieta, senior vice president and controller. SunTrust's announcement follows the August departure of chief financial officer John W. Spiegel after a 40-year career with the bank. Spiegel was succeeded by treasurer Mark A. Chancy.
SunTrust said that the expected restatement results from errors in data used to calculate how much to set aside for bad loans related to the company's indirect auto-loan portfolio. The errors, which affect this year's first-quarter and second-quarter numbers, were uncovered during final preparation of third-quarter results. According to Bloomberg, this is the second time in six years that SunTrust has needed to restate earnings because of errors in allowances for loan losses.
The seventh-largest U.S. bank announced that it expects to lift first-quarter earnings by $17.4 million, or 7 cents per share, and second-quarter earnings by $4.8 million, or 1 cent per share.
The banking giant also said that its audit committee and its independent counsel, Wilmer Cutler Pickering Hale and Dorr LLP, have launched an independent review of the errors, loan-loss reserve issues, and related matters. This review could result in additional restatements, added SunTrust, including further adjustments to first-quarter and second-quarter results.