Regions Financial Corp. Chief Executive Officer Dowd Ritter said the U.S. effort to bolster the financial system has been marred by shifting strategies and diversions in the Troubled Asset Relief Program.
“It’s become a way to look at social program implementation and to look at regulating things that have nothing to do with this economic situation,” Ritter said Tuesday in a telephone interview. “For those of us who live with this on a day-to-day basis, the rules change daily and the conditions and rationale for why many of us were encouraged by the government to take TARP funds have changed.”
Regions, Nashville’s largest bank by deposits and the 12th biggest in the U.S. by assets, said Tuesday in a statement that first-quarter net income fell to $77 million from $337 million a year earlier. The Birmingham-based bank posted a record net loss of $6.2 billion in the fourth quarter after writing down the value of acquisitions.
Regions has reported a profit decline or a loss in four straight quarters because of defaults by developers. The bank, which accepted $3.5 billion in U.S. aid, in January marked down $6 billion in goodwill, two years after its $10.5 billion purchase of AmSouth Bancorp created the third-largest lender in the U.S. Southeast behind Bank of America Corp. and SunTrust Banks Inc.
The earnings available to common shareholders were $26 million after the bank’s $51 million in preferred dividends.
Regions is among 19 institutions undergoing government-mandated “stress tests” to determine their financial strength. A preliminary report on the tests is expected May 4. Ritter said he couldn’t discuss Regions’ examination.
“Credit quality is still difficult, but the signals are there that this industry is going to work its way through this, frankly, without significant government involvement,” he said. “Our intention as a management and a board is to pay back the government the TARP money as soon as we are allowed.”
Regions gained 34 cents, or 5.9 percent, to $6.14 in New York Stock Exchange composite trading. The bank has declined 23 percent this year after a 66 percent slide in 2008.
Treasury Secretary Timothy Geithner said Tuesday the “vast majority” of U.S. banks have more capital than needed, stoking a rally in stocks as investors await test results.