According to a SEC filing Tuesday, SunTrust Banks Inc. expects the repricing of certain mortgage-related assets to hurt its third-quarter earnings by 20 cents per share.
“Current indications are that the negative marks from the loan warehouse and trading assets, offset by the positive mark on the debt portfolio, would have an estimated ($0.20) impact on 3Q 2007 EPS; the actual impact will not be known until the third quarter is completed.”
The loss would be reflected in the third quarter, and may be even higher than anticipated as secondary mortgage market woes continue to deteriorate.
SunTrust has been relatively unharmed by recent market woes compared to other banks and mortgage lenders, and this is the first real bit of bad news the company has announced in relation to their mortgage business.
Two weeks ago the bank said it would lay off 2,400 employees, but assured the media that it had “nothing to do with the current mortgage and credit market related issues.”
Shares of SunTrust shrugged off the seemingly negative news, rising about 1.5% in late afternoon trading.