Regions Financial narrows 4th-quarter loss narrows, but bad loans weigh results; shares fall

Regions narrows loss, but bad loans hurt results

BIRMINGHAM, Ala. — Regions Financial Corp. on Tuesday posted a smaller fourth-quarter loss as the regional bank continued to deal with problem loans, and booked a loss on the sale of investment securities.

For the final three months of 2009, Regions said its loss narrowed to $606 million, or 51 cents per share. That compared with a loss of $6.24 billion, or $9.01 per share, in the 2008 fourth quarter, when the bank recorded a $6 billion goodwill impairment charge to reflect declining value in its banking reporting unit.

The per-share results reflect a 73 percent increase in the number of outstanding shares year over year.

Analysts polled by Thomson Reuters, on average, expected a loss of 34 cents per share.

“We are obviously not pleased with the fourth quarter loss,” said Chairman and CEO Dowd Ritter. “But believe that we have taken the appropriate steps to reserve for credit-related problems, proactively improve operating efficiency, bolster our net interest margin, and strengthen customer service and relationships.”

Shares fell 32 cents, or 4.9 percent, to $6.23 in morning trading.

Net interest income, or earnings from deposits and loans, fell 8 percent to $850 million, from $924 million in the 2008 fourth quarter.

Non-interest income, or money earned from fees and charges, rose about 2 percent to $718 million, from $702 million in the year-ago period. Regions said the results reflected a $96 million loss on the sale of investment securities, and a $71 million leveraged lease termination gain which was more than offset in taxes.

Regions increased its provision for loan losses — money set aside to cover souring loans — to $1.18 billion, from $1.15 billion, in the final quarter of 2008.

Nonperforming assets, or loans considered seriously past due, rose to $4.41 billion, from $1.72 billion a year earlier.

Net charge-offs, or loans written off as uncollectable, fell 13 percent to $692 million, from $796 million in the 2008 fourth quarter.

The bank opened 246,000 new accounts in the period, as deposits rose to $98.68 billion, from $90.90 billion, a year earlier.

For the year, the company’s loss available to common shareholders was $1.26 billion, or $1.27 per share.