Regions Probes Executives on Sour Loans

NEW YORK ( TheStreet) -- Regions Financial's ( RF) board is investigating whether the bank's executives delayed public disclosure of loans that were going bad during the financial crisis, The Wall Street Journal reported.

The newspaper cited court documents and people familiar with the matter.

Regions' audit committee began its probe after the Federal Reserve expressed concerns about past practices, the people, the Journal reported.

Investigators are looking at so-called extend-and-pretend cases, in which a bank gives a borrower more time and delays reclassifying a souring loan, the Journal explained, as well as at "troubled-debt restructurings," where a bank breaks up a nonperforming loan and labels a portion of it as performing, the newspaper said.

Separately, Regions may be forced to pay about $200 million to settle Securities and Exchange Commission civil charges that Regions' investment-bank unit -- Morgan Keegan -- defrauded investors in subprime securities, the Journal reported, citing people familiar with the previously announced charges.

Regions is the 12th-largest U.S. bank by assets. It is still receiving government aid from the financial crisis.

-- Written by Joseph Woelfel

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