Regions Financial (RF) Dips on Investigation into Delayed Sour Loan Disclosure
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Regions Financial Corp. (NYSE: RF) trading lower Monday morning following reports the company's Board is investigating into whether executives delayed disclosing that some loans were defaulting during the financial crisis.
Regions began the investigation following Federal Reserve concerns.
The Board is trying to determine when some of the loans went "nonaccrual," -- when interest payments are overdue and collection of principal is unlikely. When this occurs, an article from the WSJ noted, banks need to increase reserves for loan losses, which cuts into a bank's profits.
Separately, the U.S. Securities and Exchange Commission charged that Regions' investment-bank unit defrauded investors. A settlement of about $200 million is likely.
The Birmingham, AL-based financial institution, most prominently known in the Southeastern U.S., hasn't reported an annual profit since 2007. Additionally, approval to repay $3.5 billion in TARP funds hasn't been granted.
Regions is the 12th largest U.S. bank by assets.
Shares are about 2.6 percent lower in the early session Monday.
Regions began the investigation following Federal Reserve concerns.
The Board is trying to determine when some of the loans went "nonaccrual," -- when interest payments are overdue and collection of principal is unlikely. When this occurs, an article from the WSJ noted, banks need to increase reserves for loan losses, which cuts into a bank's profits.
Separately, the U.S. Securities and Exchange Commission charged that Regions' investment-bank unit defrauded investors. A settlement of about $200 million is likely.
The Birmingham, AL-based financial institution, most prominently known in the Southeastern U.S., hasn't reported an annual profit since 2007. Additionally, approval to repay $3.5 billion in TARP funds hasn't been granted.
Regions is the 12th largest U.S. bank by assets.
Shares are about 2.6 percent lower in the early session Monday.
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