Regions Financial in Birmingham, Ala., saw profits fall on a year-over-year basis in the third quarter, as noninterest income declined even while the bank benefited from rising interest rates.
Net income for the $123 billion-asset Regions totaled $296 million in the third quarter, down 3% from the year-ago quarter. Earnings per share totaled 25 cents, in line with analysts’ median estimate, according to FactSet Research Systems.
Net interest income increased 8% to $921 million, and the net interest margin expanded 30 basis points to 3.36%.
The company also noted its earnings had been affected by the recent hurricanes that hit its market area. It estimated the impact on card and ATM fees was around $1 million and the impact on occupancy expenses related to the hurricane was $5 million. The company also recorded $40 million in an incremental provision for estimated hurricane-related loan losses.
Total loans declined 2% to $79.6 billion. Business lending declined 4% from the year-ago quarter, while consumer lending increased 1%. In particular, consumer lending benefited from growth in credit cards, residential mortgages, and indirect consumer lending through some of Regions’ third-party relationships.
Noninterest income fell 14% from the year-ago period to $515 million. Regions said the prior year period had included $47 million of insurance proceeds. In addition, mortgage income fell 30% to $32 million, and capital markets fee income fell 17% to $35 million.
Noninterest expenses declined 3.5% to $880 million, largely due to lower salaries and benefits, professional fees and other real estate related expenses, as Regions reduced staffing levels and consolidated branches.
Deposits declined 1% to $96.9 billion.