With a hat tip to the Calculated Risk blog
, who uses the term liberally, another bank has made a visit to the so-called confessional.
Birmingham, Ala.-based Regions Financial Corp. said Thursday
it will boost loan loss reserves to approximately $360 million in the fourth quarter of 2007, an increase of $270 million one quarter earlier. The company cited "weakening credit quality," primarily in its residential construction loan portfolio.
We are experiencing a sharp slowdown in real estate demand, especially in parts of Florida and Georgia, and are responding aggressively to counter its effects,â€? said Dowd Ritter, chairman and chief executive officer. â€œWe are closely monitoring the impact of the declines in housing demand and values on our borrowers and are acting quickly to address current areas of weakness.â€?
Residential builder loans represent approximately 8 percent, or $7.5 billion, of Regions' total portfolio of $95 billion. In addition to increasing the loan loss provision, the company said it reassign key managers to focus on work-out strategies for distressed borrowers.
The bank also said it will record approximately $131 million of additional pre-tax charges during the fourth quarter, including $42 million it said was related to its mortgage servicing business.
For more information, visit http://www.regions.com
Disclosure: At time of post, the author held no positions in RF.