TAMPA, FL - Regions Financial Corp.'s revenues fell 9 percent in the fourth quarter, a significant portion of which had to do with the bank's troubles in Florida. The Birmingham, Ala.-based banking company posted a net loss of $6.22 billion, or $9.01 a share, on revenues of $1.63 billion in the quarter ended Dec. 31. During a time when its Regions Bank subsidiary unleashed a wave of foreclosures against development projects in South Florida, the bank sold or transferred to "hold for sale" status about $1 billion in nonperforming loans and foreclosed properties. Those moves cost it $479 million.
In its earnings report, Regions said its most stressed portfolios were in homebuilding, home equity, mainly second mortgages in Florida, and condo loans. The bank placed 39 percent of its second mortgage portfolio in Florida, but the state accounted for 73 percent of its second mortgage charge-offs in the fourth quarter.
Regions had $3.66 billion in Florida second mortgages at year-end, up from $3.58 billion on Sept. 30. Charge-offs for those loans in the fourth quarter were $39.9 million, or 4.37 percent of the total, compared with $37.8 million, or 4.28 percent of the total, in the third quarter.
The other states were where Regions had second mortgages charged off 1 percent of their value in the fourth quarter. In Regions' $2.1 billion first mortgage Florida portfolio, 1.17 percent of the loans were charged off in the fourth quarter, double the rate of other states.
For both types of Florida mortgages, Regions said 2.2 percent were at least 90 days delinquent at year-end. The rate was 0.9 percent for other states. In an investor presentation, Regions said its mortgage debts in Florida were caused by high unemployment and further property devaluations. However, the bank has started to proactively contact homeowners and bolster its collection functions in Florida to mitigate those losses. That includes establishing a Florida workout team focused on home equity loans.
Of Regions' $4.8 billion in homebuilder loans, 25 percent was charged off in the fourth quarter. Condo loans were nearly as bad, as 24 percent of Regions' $1 billion portfolio was charged off in the period. The major foreclosures Regions filed in against developers in South Florida in the fourth quarter targeted up to $251 million in mortgages. They include: A total of $98.2 million against the unfinished condos Cabana on Collins, Terra Beachside Villas I and Terra Beachside Villas II in Miami Beach. A $57.5 million mortgage on Azura, a 92-home community in Boca Raton. A $29.1 million mortgage on Solabella, a Miami Gardens townhome project. Cornerstone CW and Cornerstone CW Commercial for a $10.85 mortgage on 46 acres in Miami Gardens. Enclave at Black Point Marina for an $18.7 million mortgage on 240 unfinished homesites near Homestead. Pier Seventeen Marina and Yacht Club for $12.5 million due on an undeveloped boat storage facility in Fort Lauderdale. Amas Development-Hidden Harbour for a $14 million mortgage on 45 unsold homes in Dania Beach. An $11 million mortgage for West Cutler gardens, a Miami condo conversion.
Source: South Florida Business Journal