Updated Friday, August 22, 2014 as of 9:49 AM ET

Regions Second-Quarter Earnings Fall 8.8% as Expenses Rise

Bloomberg -- Regions Financial Corp., Alabama’s largest bank, said second-quarter profit fell 8.8 percent as expenses increased on costs related to early debt repayment and mortgage revenue declined.

Earnings available to common shareholders dropped to $259 million, or 18 cents a share, from $284 million, or 20 cents, a year earlier, the Birmingham-based lender said today in a statement.

Non-interest expenses rose 5 percent to $884 million in the quarter, including $56 million in early debt-repayment costs. The bank said it expects full-year expenses to be lower than 2012, according to a slide presentation today. Regions is “relentlessly” focusing on costs, Chief Financial Officer David Turner said last month.

“By continuing to execute on our business priorities, our company is well-positioned to capitalize on opportunities as the economy continues to improve,” Chief Executive Officer Grayson Hall, 56, said in the statement.

Twenty-seven analysts surveyed by Bloomberg estimated per- share earnings of 21 cents. Regions said “several liability management activities” reduced per-share earnings by 3 cents, according to the statement.

Shares of the company fell 2.1 percent to $10.20 at 8:07 a.m. in New York. They gained 46 percent this year through yesterday, the third-best performer in the 24-company KBW Bank Index, which increased 30 percent.

NET INCOME

Excluding the costs related to the early termination of debt, non-interest expenses fell 2 percent from a year earlier and from the first quarter. Net income dropped 25 percent to $267 million.

Revenue declined 3 percent from a year earlier to $1.31 billion, led by a 23 percent slump in mortgage income, which fell to $69 million, and a decrease in net interest income, which dropped 3.6 percent to $808 million. Mortgage revenue was the lowest since the fourth quarter of 2011.

Regions’ net interest margin, the difference between what a bank pays on deposits and charges for loans, widened to 3.16 percent from 3.13 percent in the first quarter and was unchanged from a year earlier.

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