Regions Financial in Birmingham, Ala., got a boost from capital markets income and also saw its asset quality improve during the second quarter.

Net income for the $124.5 billion-asset Regions totaled $375 million, representing a 19% increase from the second quarter of last year. Earnings per share were 32 cents, missing by 1 cent the mean estimate of analysts polled by FactSet Research Systems.

Regions said that its capital markets income increased 50% to $57 million due to higher M&A advisory fees, interest-rate-swap income, and fees from securities underwriting and placement. Overall noninterest income increased 4.5% to $512 million. Card and ATM fees and wealth management income grew year over year, while mortgage income and bank-owned life insurance income declined.

Net interest income increased 5% to $926 million, and Regions’ net interest margin expanded 17 basis points to 3.49%.

Total loans declined slightly, or 0.2%, to $80 billion. Overall business lending declined by 0.4% to $48.8 billion, owing largely to loan payoffs and the bank’s effort to decrease its exposure in certain areas, like direct energy loans and multifamily investor real estate loans.

Total consumer loans increased slightly to $31.2 billion, as declines in home equity lending offset increases in mortgage, credit card and indirect consumer lending.

Total deposits declined 2.3% to $95.2 billion, with growth in consumer deposits offset by reductions in corporate, wealth management and other segments.

Noninterest expenses increased 4% to $911 million.

Net charge-offs also declined to 0.32% of total loans compared with 0.34% a year ago. The company’s allowance for loan losses declined 26 basis points to 1.04% of net loans.

“We continue to make prudent investments to ensure Regions is well-positioned to meet the needs of today’s customers, and also anticipate and meet the needs of tomorrow’s customers,” President and CEO John Turner said in a press release Friday. “Importantly, our deposit base remains strong, and asset quality continues to improve.”

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