Regions Financial in Birmingham, Ala., reported gains in loans and overall revenues in the third quarter, but its net income declined from the same period last year due to increases in its premium for federal deposit insurance and provision for loan losses.
The $125 billion-asset company said Tuesday that its net income from continuing operations was $246 million, down 17% from the third quarter of 2014. Earnings per share fell 18%, to 18 cents, 2 cents below estimates of analysts polled by Bloomberg.
Loan balances climbed 6% year over year, to nearly $81 billion, as lending increased in all business lines except home equity. Net interest income increased 2%, to $836 million, though its net interest margin declined by five basis points, to 3.13%. Noninterest income was flat, at $497 million, as gains in income from wealth management and capital markets were largely offset by a decline in fees from deposit service charges. Total revenues were up 1%, to $1.1 billion.
Overall profits were lowered by a 150% increase in the loan-loss provision, to $60 million, and a 130% increase in its Federal Deposit Insurance Corp. assessment, to $46 million. The company attributed the higher loss provision to some weakness in its energy loan portfolio. It also said that the higher FDIC assessment was a one-time event and that fee would level off at between $22 million and $25 million in future quarters.