Regions Financial Corp. (RF:US), the 10th- largest U.S. bank by deposits, reported second-quarter profit that rose more than analysts estimated as provisions for loan- loss reserves declined.
Earnings available to common shareholders climbed to $284 million, or 20 cents a share, from $55 million, or 4 cents, a year earlier, the Birmingham, Alabama-based bank said today in a statement. Adjusted earnings were 20 cents, compared with the average estimate (RF:US) of 27 analysts surveyed by Bloomberg for per- share profit of 14 cents.
Regions posted its sixth profit in the past seven quarters as provisions for loan losses tumbled to $26 million from $398 million a year earlier. Chief Executive Officer Grayson Hall, 55, has said his goal is to return the bank to what he calls sustainable profitability. The company repaid the Treasury Department’s $3.5 billion in bailout funds earlier this year.
“We continued to make incremental progress on many key fronts and are pleased with the improvement of our financial performance despite considerable economic and political uncertainty and an uneven economic recovery,” Hall said in the statement.
Regions fell 0.3 percent to $6.39 yesterday in New York. The shares have risen 49 percent this year, the best performer in the KBW Bank Index. (BKX)
Non-interest income declined 6.6 percent to $507 million from a year earlier as service charges on deposit accounts fell 24 percent to $233 million. Net interest income fell to $838 million from $856 million a year earlier. Non-interest expense dropped to $842 million from $956 million.
Total loans decreased 6.1 percent to $76.2 billion from the year-earlier period as residential first mortgage, consumer credit card and investor real estate portfolios posted declines. Regions’s net interest margin, the difference between what a bank pays to borrow money and what it gets for loans, widened to 3.16 percent from 3.07 percent a year earlier.
Non-performing loans were $1.92 billion, the first time that figure fell below $2 billion in three years, according to the statement. Net charge-offs fell 52 percent to $265 million.
Net income more than tripled to $355 million from $109 million in the second quarter last year. Regions reported $4 million of net income from the sale of its Morgan Keegan & Co. brokerage unit in April. Net income was reduced by $71 million, or 5 cents a share, due to the repayment of Troubled Asset Relief Program funds.
To contact the reporter on this story: Laura Marcinek in New York at firstname.lastname@example.org.
To contact the editor responsible for this story: David Scheer at email@example.com.