Regional Banks Saddled With More Loan Losses In 1Q

SARA LEPRO

NEW YORK (AP) — Midsize and regional banks are finding themselves in the same predicament as big names like Goldman Sachs and JPMorgan: Facing more losses as more people fall behind on their loans.

Banks like KeyCorp, Huntington Bancshares Inc., Comerica Inc. and Zions Bancorp are reporting losses for the first quarter, while U.S. Bancorp, Regions Financial Inc. and M&T Bank Corp. said profits dropped sharply.

The disappointing reports have been a stark reminder of the troubles still plaguing the banking industry, but many bank stocks rose nonetheless Tuesday after Treasury Secretary Timothy Geithner told Congress that "the vast majority" of banks have more capital than they need.

Though Geithner's comments gave the market a boost, the underlying fundamentals in many of the earnings reports are still cause for concern.

Cleveland-based KeyCorp said it lost $488 million in the first quarter due to higher credit costs. A year earlier, it earned $218 million. The bank also chopped its dividend to a penny a share from 6.25 cents. Shares slid 14 cents to $7.26.