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Regions Financial

(RF) - Get Regions Financial Corporation Report

posted a loss that was wider than expected as the Southeastern bank set aside an additional $1 billion to stop the bleeding in its loan portfolio.

Regions said early Tuesday that it posted a loss of $437 million, or 37 cents a share, vs. a profit of $79 million, or 11 cents a share a year ago. The loss was due to the company's efforts to "aggressively address loan portfolio stress" as well as a charge related to some branch consolidation, it said.

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The Southeastern regional bank was expected to post a loss of 25 cents a share, according to Thomson Reuters.

Regions took a $1.02 billion provision for the third quarter, it said. As part of that provision, $345 million was added to reserves. The rest was used for net charge-offs, driven by "value-related write downs" and "problem asset dispositions."

During the third quarter, Regions began to consolidate 121 branches. The company said expenses associated with the consolidation during the quarter totaled $41 million. It expects to have future annual net savings of $21 million as a result of the consolidation.

Nonperforming assets, excluding loans held for sale, rose $662 million in the quarter to a ratio of 3.99% of loans and other real estate, Regions said. Still that number was well below the second quarter's NPA increase of $1.1 billion, the company said.

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credit losses were nearing a peak. The Winston-Salem, N.C.-based bank's third-quarter profit sank 57% to $157 million, or 23 cents a share, also due to a large provision against loan losses.

Shares of Regions were falling modestly in early market action.

--Written by Laurie Kulikowski in New York.