Regions Financial Corp. swung to a surprise first-quarter profit as the lender's provisions for loan losses continued to decline and revenue increased more than expected.
It was the second surprise profit in a row for Regions. The company also posted an unexpected profit in the fourth quarter, after a long series of quarterly losses, on better-than-expected revenue growth and as loan-loss provisions shrunk 42%.
The Birmingham, Ala.-based lender has struggled with real-estate exposure in beaten-down Southern markets, many of which were hurt further in the aftermath of last year's Gulf of Mexico oil spill.
Regions reported a profit of $69 million, or 5 cents a share, compared with a loss of $196 million, or 16 cents a share, a year earlier. After the payment of preferred dividends, the per-share profit was a penny, versus a loss of 21 cents a year earlier. Revenue increased 3.8% to $1.71 billion. Analysts polled by Thomson Reuters most recently forecast a loss of 10 cents on revenue of $1.63 billion.
Loan-loss provisions were reduced to $482 million from $770 million a year earlier and $682 million in the fourth quarter. Net charge-offs, or loans lenders don't think are collectible, were down at 2.37% of average loans from 3.16% a year earlier and 3.22% in the quarter earlier.
Nonperforming loans, those near default, declined to 4.78% from 5.13% a year earlier and 4.69% in the prior quarter.
Shares closed Monday at $6.98 and were inactive premarket. The stock is down 16% in the past year.
