Regions Financial in Birmingham, Ala., reported higher quarterly profit on stronger fee income.
The $122 billion-asset company reported that its second-quarter net income available to shareholders rose 14% from a year earlier, to $269 million, or 20 cents a share.
Noninterest income rose 5%, to $500 million, excluding a gain from an insurance policy payout tied to the company's recent settlement of a shareholder lawsuit over its 2006 purchase of AmSouth. Brokerage, investment banking and other capital markets activities provided the biggest boost to fee income.
Total loans rose by nearly 5%, to $80.1 billion, largely because of a 13% increase in commercial-and-industrial lending. However, net interest income fell slightly, to $820 million, as the net interest margin compressed by 8 basis points, to 3.16%.
Noninterest expense increased by 14%, to $934 million, after professional and legal costs more than doubled, to $71 million. Regions' also recorded $27 million in charges after deciding to sell certain properties it had originally purchased for future branches. Salaries and employee benefits increased by 8%.