More red ink expected at SunTrust, Synovus

Analysts expect: The consensus is for a loss of about 35 cents per share.

Issues to be addressed: Credit problems, including residential real estate and development loans. Analysts will be watching the pace of new problems and the amount of bad loans charged off.

Wild cards: Repayment of TARP and impact of the Gulf oil spill.

SunTrust has said it can and will repay its $4.5 billion in Troubled Asset Relief Program loans when appropriate. But analysts say SunTrust may be forced by regulators to raise cash through a stock sale before they repay TARP. That’s something the Atlanta-based regional bank has said it doesn’t want to do because stock offerings dilute the holdings of current shareholdings. Expect bank Chairman and CEO James M. Wells III to at least address TARP repayment in some fashion.

Another issue is the BP oil spill in the Gulf of Mexico. SunTrust hasn’t directly mentioned the spill's effect, if any, on its loan portfolio. It is unclear if the spill will hurt property values and borrowers’ ability to repay their loans. About 37 percent of the company’s home equity loans and 27 percent of its mortgage portfolio is in Florida, according to Sterne Agee & Leach.

Synvous

Analysts expect: The consensus is for a loss of about 31 cents per share.

Issues to be addressed: Residential construction loans and selling off foreclosed property.

Synovus has been hard hit by soured residential construction loans, particularly in Atlanta. But the bank has also been aggressive in selling off blocks of bad loans. On July 12, Synovus sold off 135 stalled subdivisions in the metro area, and has generally sold about $300 million in bad loans each quarter since early 2009.

Wild cards: The health of the bank’s CEO, Sea Island, the Gulf spill.

Synovus Chairman and CEO Richard Anthony has been diagnosed Wegener’s Syndrome and has been on leave since June. Synovus officials might give an update about Anthony’s condition and whether he will soon return to the Columbus-based bank.

Bank officials might also address Sea Island, which has defaulted on its redevelopment loans. The Atlanta Journal-Constitution reported Sunday that in June, Goldman Sachs & Co. received a second round of bids for the posh Coastal Georgia resort, and that it is moving closer to selecting a buyer.

Synovus also has more than $1 billion in loans along the Gulf Coast. Analysts expect bank officials to address how well those loans are holding up.