Cost and margin pressures drove down quarterly profits at Regions Financial in Birmingham, Ala.

The $122 billion-asset company reported a 26% drop in net income to $234 million. Earnings per share of 16 cents missed the average estimate of analysts that Bloomberg polled by 2 cents.

Noninterest expenses rose 11%, to $905 million, from a year earlier. The company reported a $43 million loss on early extinguishment of debt. Additionally, costs associated with branch consolidation nearly tripled during the first quarter to $22 million.

Despite these rising expenses, the company's adjusted efficiency ratio improved 120 basis points to 64.9% from the first quarter of 2014; the adjusted figure excludes the branch and debt-management costs as well as gains on the sale of troubled debt restructured loans from the prior year.

Net interest income of $815 million fell just short of the $816 million the company posted during the same period in 2014. Net interest margin dropped 8 basis points to 3.18%. Low interest rates contributed to the stagnation in interest-based earnings.

However, Regions posted 3% higher noninterest income, at $470 million. A 48% spike in mortgage fees and an 8% increase in wealth management income helped to mitigate a drop in service charges because of economic and regulatory hurdles.

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