Big Regional Banks Report Losses Tied to Bad Loans
From Minnesota to Alabama, battered regional banks are warning that a turnaround from the economic malaise is nowhere in sight.</br></br>A series of large regional banks reported Tuesday that rising losses from bad loans plagued first-quarter results. That is forcing major institutions such as U.S. Bancorp and Regions Financial Corp. to put more money aside to fortify against more defaults.</br></br>The results showed how widespread the damage is as banks of all sizes pay a steep price for extending credit to shaky borrowers when times were good. Banks throughout the U.S. are feeling the pain, telling investors that a protracted recession means the situation will get worse before it gets better.</br></br>"No significant turnaround will occur this year," said Huntington Bancshares Inc. Chief Executive Stephen Steinour after the Columbus, Ohio, bank posted a $2.43 billion quarterly loss, or $6.79 a share, compared with year-earlier profit of $127.1 million, or 35 cents a share. Huntington took a nearly $300 million credit-loss provision as it faces potential losses from commercial loans.</br></br>The tight credit environment makes it more difficult for consumer and business borrowers to pay their debts. Falling stock markets and rising unemployment also demonstrate the depth of the economic stress, regional bank CEOs said.