Regions Financial records 3Q loss on loan troubles

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BIRMINGHAM, Ala. -Regions Financial Corp. on Tuesday reported a third-quarter loss that was deeper than Wall Street expected, as soured commercial real estate loans offset growth in retail accounts and deposits.

Regions Financial reported a loss of $437 million, or 37 cents per share, compared with net income of $79.5 million, or 11 cents per share, in the year-ago period.

Analysts surveyed by Thomson Reuters had forecast a loss of 25 cents per share in the latest period.

The Birmingham, Ala.-based regional bank said its provision for loan losses grew to nearly $1.03 billion, up $113 million from the previous quarter.

Charge-offs, or loans written off as not being repaid, totaled $680 million, or about 2.86 percent of average loans on an annualized basis. The previous quarter's charge-off rate was 2.06 percent.

Loans in Regions' commercial real estate portfolio made up the bulk of the latest quarter's net increase in bad loans. The company also has been hit recently by troubles in its portfolios of homebuilder loans, home-equity loans in Florida and condominium loans.

Regions Financial attributed the quarterly loss in part to "the company's efforts to aggressively address loan portfolio stress."

Non-performing assets, excluding loans held for sales, rose by $662 million, less than the previous quarter's increase of $1.1 billion.

Regions said it has enjoyed strong account and deposit growth, with 270,0000 new retail and deposit accounts opened during the third quarter, up 29 percent from a year ago.

However, net interest income — the difference between what a bank makes from lending money and how much it costs to borrow money — fell 8 percent to $845 million from $922 million. Non-interest income, or money derived from fees and other charges, rose 7 percent to $772 million from $719 million.

Shares of Regions added 24 cents, or 4.1 percent, to $5.94 in morning trading. The stock has ranged from $2.35 to $12.96 over the past year.

2009-10-20 10:46:29