Executives of Regions Financial Corp. preached gradual change in describing their plans to make the company profitable again.

O.B. Grayson Hall, Regions' president and chief executive, and his lieutenants did not offer any sweeping solutions during presentations to analysts and investors Thursday. But they outlined a series of tactics they said will help the Birmingham, Ala., company make more loans and replace revenue threatened by regulatory reforms.

Hall, who said he was encouraged by better-than-expected second-quarter revenue, emphasized that it would take time to right the ship. "We need more than one quarter to make a statement," he said. Regions posted its fifth consecutive quarterly loss in the April-to-June period despite some promising signs.

The most insight from executives involved plans to alter Regions' commercial loan mix over the next two years and to attach strings to free checking.

John Asbury, who oversees commercial lending, predicted that Regions' commercial book would be evenly split between commercial real estate and commercial and industrial loans by December 2013. At June 30, CRE made up 60% of that portfolio. Asbury also said the company would strike more balance between owner-occupied CRE, which analysts generally see as more resilient to economic downturns, and investment properties.

The $135.3 billion-asset company plans to start offering short-term loans with a duration of three months or less, along with prepaid credit cards. It also plans to return to indirect auto lending through 500 dealerships by yearend.

John Owen, who handles consumer operations, said Regions is moving away from free checking. It raised the minimum balance and minimum level of monthly transactions in April, which would affect about 1.1 million customers. "The vast majority of those customers continue to be free," Hall said. "The hurdles are still really low."

Executives discussed specific markets they are targeting for growth, including Midwest markets that analysts have described as prime for divestiture. Keith Herron, a regional president, also discussed efforts to hire bankers in St. Louis, where the company has 4.5% deposit market share, and Indianapolis, where it holds 4% of area deposits.

In Atlanta, the company is actively hiring bankers and looking to capitalize on the high number of bank failures over the past year. The plan for Florida involves finding ways to increase small-business lending and tap into affluent customers through its Morgan Keegan & Co. investment bank.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.