BIRMINGHAM, ALA. (
) -- Shares of
slumped early Tuesday after the regional bank announced a shake-up in its risk management unit.
Regions said late Monday that Chief Risk Officer Bill Wells has resigned. It also announced two other executive departures: Michael Willoughby, Regions' director of credit risk, has retired and Tom Neely, head of problem asset management, has left the company, the bank said.
The bank added it has commenced an executive search to find a new head of risk management.
Regions CEO Grayson Hall was quick to say that the management departures were not "the result of any determination with regard to additional problem loan migration, loan loss reserves or charge-offs," according to a statement.
"We appreciate the valuable contributions these executives have made to Regions, particularly during the past two years, in an extremely difficult credit environment," Hall said. "We are committed to having a strong leadership team in Risk Management and to continuing to de-risk our balance sheet."
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Regions has had a difficult time in the past few years due to the mortgage malaise and resulting housing/construction loan crisis. The southern regional bank posted yet another loss for the three months ending September 30 as other peers, like
seem to be getting their act together. Analysts expect Regions to post a loss of 76 cents a share for the year, according to
Following a disappointing third-quarter earnings report from the company, FIG Partners analyst Christopher Marinac said the company is in a quandary over whether to raise capital over the short-term to "position for TARP repayment in the next few quarters" or "hold off on new shares, consider its independence, and allow another financial institution to payoff TARP via an M&A transaction."
Regions still owes $3.5 billion in TARP money.
Sandler O'Neill & Partners analyst Kevin Fitzsimmons noted Tuesday that Regions' management had sounded much more somber in its third-quarter earnings call after an upbeat second quarter.
Fitzsimmons writes in a note that the "re-acceleration" of nonperforming loans last quarter was "disappointing," and attributed to "a deliberate decision to increasingly scrutinize the guarantor support on CRE loans."
However, Regions was upbeat regarding its asset disposition, Fitzsimmons writes. In the third quarter, the bank sold or transferred to held-for-sale roughly $1 billion of troubled assets.
Regions' management is still scheduled to present Tuesday afternoon at the Bank of America Merrill Lynch Financial Services Conference.
Until a new risk officer is found, Wells' prior responsibilities will be split between Barb Godin, Regions' head of credit operations and John Haley, head of Risk Analytics.
Godin will assume leadership of the bank's divisions including problem asset management, credit risk and business services credit, Regions said. Haley will also be responsible for regulatory affairs, enterprise risk, market risk, operational risk and compliance risk, it said.
Godin and Haley will report to Chief Financial Officer David Turner until a successor to Wells is named.
Regions shares were falling 4.6% to $5.92 shortly after the market opened.
-- Written by Laurie Kulikowski in New York.
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