Regional Banks Report Improving Results

Regions Bank improved its bottom line, but not without significant pain.

The Birmingham-based financial institution posted net income of $155 million, or 13 cents a share, beating analyst estimates and improving from its $155 million ago loss one year ago.

However, Regions wrote off $511 million in bad debts, more than the $355 million it had set aside for the third quarter. Still, the $511 million figure is down 33% from one year ago.

A soft economy, low interest rates and stunted loan growth has challenged Regions margins, but the quarterly profit was the fourth straight positive quarter in a row.

"This quarter’s results demonstrate that we are making solid progress in executing our business plan and that our efforts are paying off," said Grayson Hall, Regions president and CEO. "Although we are realistic about the challenges posed by an uncertain economy and faltering consumer and business confidence, we believe that focusing on the customer, enhancing enterprise-wide risk management and building sustainable performance are keys to our long term success."

Third quarter net interest income decreased to $858 million from $868 million last year. Non-interest income also slipped, falling to $745 million from $750 million.

BANCORPSOUTH
Tupelo, Miss.-based BancorpSouth, which continues to work through a weak lending environment and non-performing loans, reported third-quarter net income of $11.9 million, up from $11.3 million in the 2010 quarter. Revenue for the third quarter was $170.1 million, down from the $179.4 million in the 2010 period.

Benefiting the bottom line was a reduction in the bank’s provision for credit losses.

"BancorpSouth’s earnings for the third quarter of 2011 benefited from a reduction in our provision for credit losses to $25.1 million for the quarter compared with $54.9 million for the third quarter of 2010 and $32.2 million for the second quarter of 2011,” said Aubrey Patterson, BancorpSouth chairman and CEO, said in a statement. “While this reduction reflected continued improvement in our credit quality, we remain focused on working through our problem credits and reducing our non-performing loans.

However, the 14 cents per share earnings were off the consensus of analyst estimates of 16 cents per share.

For the first nine months of 2011 the company, posted net income of $24.3 million, a sharp increase compared to the $7.1 million in the 2010 period. Revenue (non-interest and interest revenue) for the first nine months of 2011 totaled $532.9 million, up compared to $521.1 million for the 2010 period.

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Talk Business editor Roby Brock and Michael Tilley with The City Wire are the authors of this report.