BIRMINGHAM, Ala. ( TheStreet) -- Regions Financial ( RF) on Tuesday reported fourth-quarter net income available to common shareholders of $36 million, or 3 cents a share, which exceeded the estimate of a 13-cent loss per share, among analysts polled by Thomson Reuters. The shares were down 3% in early trading to $7.08. The lender swung to a profit after posting net losses to common shareholders of $209 million, or 17 cents a share, in the third quarter and $606 million, or 51 cents a share, during the fourth quarter of 2009. Earnings available to common shareholders exclude dividends paid on the $3.5 billion in preferred shares held by the government for bailout assistance provided in November 2008 through the Troubled Asset Relief Program, or TARP. CEO Grayson Hall said the fourth-quarter results showed "progress toward achieving our primary goal of returning Regions to sustainable profitability, but importantly show that we have done so while also continuing to reduce our risk profile." The operating improvement was driven by a reduction in credit costs, with a fourth-quarter provision for loan losses of $682 million, declining from $760 million the previous quarter and $1.2 billion a year earlier. Net charge-offs -- loan losses less recoveries -- also totaled $682 million during the fourth quarter, running counter to the trend for the largest U.S. banks, all of which released reserves during the fourth quarter, boosting their bottom lines. The fourth-quarter ratio of net charge-offs to average loans was an annualized 3.22%, and reserves covered 3.93% of total loans as of Dec. 31. Regions reported an adjusted net interest margin -- essentially the average yield on loans and investments less the average cost of funds -- of 3% for the fourth quarter, increasing from 2.96% the previous quarter and 3.72% a year earlier. With loan balances declining amid weak demand, the margin improvement was driven by solid growth in noninterest-bearing deposits, which totaled $25.7 billion as of Dec. 31, increasing 11% year over year. Total assets were $132.4 billion as of Dec. 31, declining 7% year over year. Nonperforming assets -- including nonaccrual loans and foreclosed properties -- totaled $3.9 billion, or 2.96% of total assets as of Dec. 31, improving from 3.17% in September and 3.10% in December 2009. Regions estimated a tangible common equity ratio of 6.04% as of Dec. 31, and said that "as the rules are currently being interpreted, Basel III is expected to have a minimal impact" to the company. As of Monday's close, two of the 22 analysts covering Regions Financial rated the shares buy, 17 recommended holding the shares and three analysts recommended investors sell the shares. William Wallace of Howe Barnes Hoefer and Arnett initiated his firm's coverage on Jan. 7 with a neutral rating, saying that the stock was "range-bound at best over the next few quarters, with "the likelihood of a meaningful common raise at some point in the future to repay TARP." -- Written by Philip van Doorn in Jupiter, Fla. >To contact the writer of this article, click here: Philip van Doorn. >To follow the writer on Twitter, go to http://twitter.com/PhilipvanDoorn. >To submit a news tip, send an email to: firstname.lastname@example.org.