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Regions Profits Rise 26% on Fee Income, Special Items

Regions Financial in Birmingham, Ala., reported a higher third-quarter profit, citing improved fee income from mortgage lending, capital markets and credit and debit cards. It also benefited from some special items and energy-market improvements.

The $125 billion-asset company's net income rose 26% to $304 million from a year earlier. Revenue rose 7.6% to $1.5 billion.

Several one-time items affected the quarter's results. Regions booked $47 million of insurance proceeds from a previously announced settlement related to Federal Housing Administration-insured mortgages. Regions also recorded a $10 million recovery tied to the 2010 Gulf of Mexico oil spill. Those items were partially offset by a $14 million loss from a debt extinguishment, $11 million of expenses tied to Visa class B shares, and $5 million of expenses tied to branch closures.

Net interest income was about break-even at $835 million. Adjusted total loans rose 2% to $82 billion. Consumer lending rose 4.2% to $31 billion.

Regions' allowance for loan and lease losses attributable to the energy industry declined to 7.9% of energy loans outstanding from 9.4% in the second quarter.

Noninterest income rose 21% to $599 million on improved fees from wealth management, cards and ATMs, mortgage banking, capital markets and bank-owned life insurance. Mortgage income rose 18% to $46 million.

Noninterest expense rose 2% to $912 million on higher salaries and employee benefits as well as legal and regulatory expenses. Regions' deposit-insurance insurance assessment dropped 37% to $29 million.

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