Two Chattanooga Banks Report Higher Profits
Two Chattanooga banks on Tuesday reported higher profits for the third quarter, but investors remained wary that record-low interest rates will cut into interest income from loans and deposits.
Regions Financial Corp., the Birmingham, Ala.-based holding company which operates 23 bank branches in the Chattanooga market, tripled its third quarter earnings from a year ago.
Cornerstone Bancshares, the parent of Cornerstone Community Bank in Chattanooga, said Tuesday its profits were up 12.4 percent so far this year.
Regions earned $301 million, or 21 cents per share, for the three months ended Sept. 30. That was nearly three times the size of the company's earnings in the year-ago period, when net income was $101 million, or 8 cents per share.
The third-quarter results beat the consensus estimate among analysts polled by Thomson Reuters by a penny, as mortgage banking income grew to $106 million, from $90 million the previous quarter, and $68 million a year earlier.
But investors were surprised to see the company's net interest margin decline by eight basis points from the previous quarter, to 3.08 percent.
Shares of Regions stock plunged Tuesday by more than 7.6 percent, or 54 cents per share, to close at $6.54 a share -- the lowest price in more than three months.
Cornerstone Bancshares said its third quarter income totaled $364,000 -- the highest quarterly profits so far this year and the seventh consecutive quarter of positive earnings.
Net income so far this year for Cornerstone increased 12.4 percent to more than $1.03 million, while non-accruing loans decreased by 6.9 percent to under $8 million.
With its continued improved results, bank regulators in August terminated the consent order limiting Cornerstone's activities.
"We continue to make steady progress in the right direction," Cornerstone CEO Frank Hughes said. "While we still have a ways to go, it's nice that the regulators have also recognized our efforts and improvements made across the board."
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