SunTrust Banks (STI)

The true bear reason is 1) no accountability whatsoever, 2) no head, including the Wells and his top 5 executives dare to tell heads of any department to do anything (most heads have been there 2-3 decades; they will not allow change to their world, 3) department heads are 100% concerned about protecting their empire which they've run for eons, 4) I would guess 50% have been there 25+ years 5) there is an unwritten agreement that"you don't mess with my department, I won't with yours, and perhaps the most compelling is that 5) all action taken by the executives is "for show". They shuffle the same people; there is no restructure. No one is allowed to penetrate the circle of departments that have been established for 2 decades.

Employees are not permitted to think, act, or ask. Every step is governed by old policy and procedure. Tired and insecure department heads hire only those willing to accept that reality. Third party providers which are hired by department heads like legal and HR continue to milk the bank. With their customer base, this bank could've truly left all other banks in the dust. I would guess a suitor hasn't acted because of the massive house cleaning to be done which was prolonged by the drop in the stock price and forced heads to keep working. So it's a ST sell. A classic business school case study.

As credit deteriorates, SunTrust will need to rebuild its reserves, hurting the bottom line. This is made particularly true given its low allowance for loan losses (only .90% of total loans).

The Fed has made it clear that any bank that has not repaid its TARP money will not be allowed to raise its dividend payments. Since Suntrust still hasn't repaid its $2.4 billion of TARP debt, investors should not have high hopes of a greater dividend yield from this stock.

The Fed has made it clear that any bank that has not repaid its TARP money will not be allowed to raise its dividend payments. Since Suntrust still hasn't repaid its $2.4 billion of TARP debt, investors should not have high hopes of a greater dividend yield from this stock.

The extremely formal culture prevents correct information to reach the high-ups. They hear only what their direct reports want them to hear, which is often far from the real issues facing the Bank. Therefore, how can hurdles be addressed and resolved? The internal issues are far more devastating than makeup of portfolio, underwriting, and external factors. I agree with same deck of cards for the most part. The customer base of STM and STB, if permitted to cross sell to each other's clients, would leap head and bounds over any Bank ever. The opportunity for amazing returns to the buyer would be realized even at a $50 stock price.

$12.5b showing signs of distress and deteriorating very fast

SunTrust's loan portfolio is perhaps dangerously over-concentrated in the Southeast.

Given the current interest rate environment, SunTrust’s in-store, deposit-gathering branch expansion will likely yield little material benefit.