SunTrust’s directors buy up company stock

Several of SunTrust Banks’ directors made heavy purchases of the Atlanta bank’s stock over the past month as it recovered a bit from a big slump.

Among the five corporate insiders who reported large trades over the past month were former Coca-Cola CEO M. Douglas Ivester and Alston D. “Pete” Correll, the former Georgia-Pacific CEO who now heads Grady Memorial Hospital’s board.

Ivester, on SunTrust’s board of directors, doubled his direct holdings of SunTrust’s stock after buying 30,000 shares in the open market on Wednesday for a total of about $1,151,400.

Correll, another board member, was the largest purchaser in recent weeks, spending more than $2.9 million to buy 75,000 shares on July 24.

However, one SunTrust insider reported stock sales during the same period when other SunTrust insiders were buying. SunTrust Vice Chairman William R. Reed Jr. reported two sales totaling 12,000 SunTrust shares on the behalf of his wife. The two sales, on Aug. 5 and Aug. 11, totaled $552,000.

“I find it notable that Bill is the only seller,” said bank industry analyst Christopher Marinac, with Atlanta-based firm FIG Partners.

Reed’s sales “very well might be for personal reasons,” said Marinac. But he called Reed “a very astute banker” who may be reacting to continued gloom for the banking industry.

A spokesman for SunTrust declined to comment on the corporate insiders’ trades.

The transactions were reported in recent filings to the Securities and Exchange Commission.

Two other directors, G. Gilmer Minor III and David H. Hughes, bought shares late last month. Minor bought 4,000 shares for $151,953 on July 25, and Hughes bought 10,000 shares for $370,000 on July 29.

Despite Reeds’ contrarian sales, Marinac said the “unusual cluster” of purchases by other corporate insiders is a bullish sign that they view SunTrust’s stock as a bargain. “A lot of it has to do with the fact that the stock’s fallen so much,” he said.

Like other bank stocks hammered by investor worries over mounting problem loans and a weakening economy, SunTrust’s shares lost more than half their value over the past year before rebounding somewhat since mid-July. SunTrust’s shares rose $2.38 in Friday’s trading, to $42.71, but were still down 46 percent from a year ago.

Marinac said the decline took SunTrust’s share price to a recent historic low compared to its tangible book value per share, which he called the “Rock of Gibraltar” measure of any company’s net worth. At its recent low in mid-July, SunTrust’s stock price was lower than its tangible book value per share. In contrast, SunTrust’s share price peaked at 350 percent of its tangible book value in 1998, he said.

“There’s a lot of value here” over the long run, said Marinac, although he added that SunTrust’s shares could drop more if economic or industry conditions worsen.

Name;Role;Date of trade;Shares sold/bought;Price;Total value of trade

M. Douglas Ivester;Director;Aug. 20;30,000 shares bought;$38.38;$1,151,400

William R. Reed Jr.*;Vice chairman;Aug. 11;6,000 shares sold;$47.00;$282,000

William R. Reed Jr.*;Vice chairman;Aug. 5;6,000 shares sold;$45.00;$270,000

David H. Hughes;Director;July 29;10,000 shares bought;$37.00;$370,000

G. Gilmer Minor III;Director;July 25;4,000 shares bought;$37.99;$151,953

Alston D. “Pete” Correll;Director;July 24;75,000 shares bought;$39.13;$2,934,900

* transactions reported on behalf of spouse

Source: Company filings to the Securities and Exchange Commission