Regions Financial Corp. swung to a fourth-quarter loss, with the regional lender booking a hefty write-down following a long-planned deal to sell its brokerage unit.
The operator of banks in 16 states across the southern and midwestern U.S., this month agreed to sell its regional brokerage Morgan Keegan & Co. to wealth manager Raymond James Financial Inc. for $930 million, putting to rest a six-month auction process.
Regions has faced a long road to recovery after taking heavy losses from soured real-estate loans during the financial crisis. The lender still must repay $3.5 billion in government aid, and has cautioned it will have to raise more capital to make the repayment despite the Morgan Keegan sale.
For the fourth quarter, Regions reported a loss of $548 million, compared with a year-earlier profit of $89 million. On a per-share basis, the lender reported a loss of 48 cents, in line with the 50-cent to 34-cent per-share loss it had predicted for the period due to a $731 million writedown related to the company's investment banking, brokerage and trust segment.
Excluding the heavy impairment charge, the company turned in a profit from continuing operations of 9 cents a share, hitting the high end of the 7-cent to 9-cent per-share profit range it had forecast for the quarter.
Net interest income for the quarter slipped 1.6% to $849 million while non-interest income, excluding securities gains, declined 15% to $500 million. Analysts polled by Thomson Reuters expected $1.57 billion in operating revenue for the quarter.
Loan-loss provisions totaled $295 million, compared with $682 million a year earlier and $355 million in the third quarter. Net charge-offs, or loans lenders don't think are collectible, fell to 2.16% of average loans, compared with 3.22% and 2.52%, respectively.
Shares were off 1.2% to $4.86 in premarket trade. The stock is down 33% over the past 12 months.
