BIRMINGHAM, Ala. (AP) — Regions Financial Corp. on Tuesday reported a loss for its fourth quarter, due mainly to an impairment charge related to the regional bank's investment banking and brokerage unit.
For the three months ended Dec. 31, Regions reported a net loss after paying preferred dividends of $602 million, or 48 cents per share, reversing a year-earlier profit of $36 million, or 3 cents per share.
Adjusted for discontinued operations and certain charges, Regions said it earned 9 cents per share in the quarter. Analysts, on average, were expecting profit of 6 cents per share, according to data provided by FactSet. Analysts typically do not one-time items in their estimates.
The results included a $731 million charge related to Morgan Keegan & Co., the investment banking and brokerage division that Regions said earlier this month it would sell to Raymond James Financial Inc. for $930 million.
Regions said its net interest income for the quarter, its earnings from traditional banking operations like deposits and loans, was $849 million, down about 2 percent from $863 million in the 2010 period.
Noninterest income, or earnings from service charges, investments and other operations, plunged 45 percent to $507 million, largely due to a massive drop in gains from securities.
Regions said service charges income slipped to $263 million from $290 million the prior year. New regulations limiting the fees charged to merchants for processing debit card transactions sliced about $47 million from this revenue line, the bank said. It took actions like charging fees on certain bank accounts, restarting its credit card business and expanding services like check cashing and reloadable prepaid cards in an effort to offset the impact of the law.
The bank reported that credit quality was improving, like many other lenders have said recently.
Regions cut how much money it sets aside to cover unpaid loan balances by more than half, to $295 million, from $682 million a year ago. It was able to do that because it wrote off $430 million in loans deemed uncollectible, down from $682 in the 2010 quarter. Meanwhile, loans considered past due and in danger of default dropped 25 percent to $2.37 billion.
For the year, Regions posted a net loss available to common shareholders of $429 million, or 34 cents per share, improving from a net loss of $763 million, or 62 cents per share, for all of 2010.
In premarket trading, shares of the Birmingham, Ala., company slipped 1 cent to $4.91. The stock closed Monday at $4.92, up 14 percent since the start of 2012 but down 33 percent in the past 52 weeks.
There are no comments yet