Regions Financial in Birmingham, Ala., reported an increase in its first-quarter profit, as higher market interest rates and investment securities balances offset lower average loan balances.

Net income at the $126 billion-asset Regions climbed 8% year over year to $278 million and earnings per share increased 15% to 23 cents, beating by a penny the average estimates of analysts as compiled by FactSet Research Systems.

Regions bank branch

In a news release Tuesday, the company said that average loans and leases declined 2% to $80.2 billion, as gains in the consumer lending portfolio were offset by a decline in commercial loans. The company’s direct energy and multifamily portfolios fell most sharply, by 21% and 23%.

Net interest income and other financing income remained relatively flat at $881 million. The net interest margin increased 6 basis points from a year earlier to 3.25%.

Noninterest income increased 1% to $510 million.

Noninterest expenses increased 1% to $877 million. They included $1 million in expenses associated with the consolidation of 27 branches set to close in the second quarter, as well as $4 million in severance pay also related to ongoing efficiency efforts.

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