Regional banks are getting slaughtered today for good reason and rumour has it that Bank of America's BoD's are holding an emergency meeting late this morning. I guess having the CEO's buy stock within the corporation was only a temporary fix or should I say cover for PPT support.

Getting nasty - VHF

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U.S. bank results plummet as credit problems soar

Thursday January 22, 2009, 10:03 am EST

NEW YORK (Reuters) - A series of large U.S. regional banks on Thursday said rising credit losses led to lower fourth-quarter earnings, illustrating the breadth and depth of the nation's credit crisis and recession.

The Ohio lenders Fifth Third Bancorp (NasdaqGS:FITB - News), Huntington Bancshares Inc (NasdaqGS:HBAN - News) and KeyCorp (NYSE:KEY - News) posted quarterly losses, as did Southeast lender SunTrust Banks Inc (NYSE:STI - News). Profit fell at BB&T Corp (NYSE:BBT - News) and Comerica Inc (NYSE:CMA - News), while New York's M&T Bank Corp (NYSE:MTB - News) posted higher earnings.

Results fell short of analysts' average forecasts except at BB&T, which matched the consensus, and M&T, which topped forecasts, according to Reuters Estimates.

Comerica announced job cuts, and Huntington and SunTrust lowered their dividends.

"We are under no illusions as to the severity of this credit cycle," SunTrust Chief Executive James Wells said.

Banks are struggling as a troubled economy and tight credit make it harder for consumer and business borrowers to pay their debts and to refinance. Government efforts to jump-start lending are proving less successful than hoped as lenders preserve cash in anticipation of worse times ahead.

"The environment is extraordinarily difficult," Fifth Third Chief Executive Kevin Kabat said on a conference call.

OHIO BANKS SUFFER LOSSES

Fifth Third's net loss applicable to shareholders was $2.18 billion, or $3.82 per share, versus a profit of $16 million, or 3 cents, a year earlier. Nearly half the loss was to write off goodwill because the value of its banking business fell. The Cincinnati-based lender suffered disproportionate credit weakness in Michigan and Florida. Fifth Third took over deposits of a failed Florida lender, Freedom Bank (OTC BB:FBBF.OB - News), last fall.

Cleveland-based KeyCorp said its net loss from continuing operations was $524 million, or $1.13 per share, compared with a profit of $22 million, or 6 cents, a year earlier. Results included a $420 million goodwill writedown, and net charge-offs nearly tripled.

Huntington's net loss was $440.4 million, or $1.20 per share, compared with a loss of $239.3 million, or 65 cents. Much of the loss was tied to the Columbus-based lender's relationship with Franklin Credit Management Corp, a New Jersey lender to borrowers with troubled credit. Huntington cut its dividend to a penny per share from 13.25 cents.

OTHER LENDERS UNDER PRESSURE

Atlanta-based SunTrust posted a loss of $379.2 million, or $1.08 per share, compared with a profit of $3.3 million, or 1 cent, a year earlier. Soured consumer, commercial and real estate loans caused net charge-offs to more than triple. The bank cut its dividend to 10 cents per share from 54 cents, the second reduction in three months.

BB&T, based in Winston-Salem, North Carolina, said profit fell 31 percent to $284 million, or 51 cents per share. The bank nearly tripled reserves for credit losses, citing weakness in Florida, Georgia and the Washington, D.C., area.

Comerica profit fell 97 percent to $3 million, or 2 cents per share, as net charge-offs more than doubled. The Dallas lender is also cutting 5 percent of its workforce, or about 509 jobs, and freezing salaries for the top 20 percent of its workforce.

Buffalo-based M&T bucked the downward earnings trend. Profit rose 57 percent to $102.2 million, or 92 cents per share, though net charge-offs more than doubled. Warren Buffett's Berkshire Hathaway Inc (NYSE:BRK-A - News; NYSE:BRK-B - News) is among the bank's largest shareholders.

In morning trading, shares of Fifth Third fell 25 percent, Huntington fell 28.4 percent, KeyCorp rose 9 percent, SunTrust fell 4.8 percent, BB&T rose 4.3 percent, Comerica rose 13.1 percent and M&T rose 2.6 percent.