Despite swinging to a large loss this quarter, Regions Financial
Breaking down the numbers
Divesting itself of Morgan Keegan will raise $1.18 billion for Regions and should close before the next quarter begins to help Regions trim its riskier assets. The rest of Regions' operations continue to improve, tracking the broader banking sector's rebirth:
- Regions had an 11.3% Basel III capital ratio in the fourth quarter, well north of the 8.5% minimum requirement, and a 7.7% common ration, clear of the 7% minimum.
- Non-performing loan volumes continue their steep decline, down $800 million from the year-ago quarter. Total non-performing assets are now 24% lower than they were a year ago.
- Other loan segments improved, led by commercial and industrial loans, which saw $357 million worth of new business in the fourth quarter.
- Average commercial and industrial loan value is up an impressive 11%, and total new commitments are up 14% for the year.
- Regions continues to improve the cost of its deposits while maintaining stable total balances. Costs are down 24 basis points from the year-ago quarter, and total deposits are up about $500 million.
- Service charge revenues took a hit from the Durbin Amendment that lowered interchange fees, down $47 million from the third quarter. Mortgage income also declined by $9 million.
Making sense of things
Though Regions did post its first quarterly loss in a year, it seems likely to resume profitability in the next quarter as it digests its gain from the Morgan Keegan sale. Its improved continuing operations profits place it in good company with fellow regional Synovus
Looking for another hidden opportunity in the banking sector? Take a look at The Motley Fool's brand-new, free report on the stocks Warren Buffett and other super-investors are buying. You'll find another solid bank that Buffett might have his eye on -- grab your free copy now, while it's still available.
Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter for more news and insights. The Motley Fool owns shares of Huntington Bancshares. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.