Strength in Regions Banks wealth management business helped offset sagging mortgage income, the banks holding company announced Tuesday.
The Birmingham, Ala.-based bank generated $50 million in investment management and trust fee income in the third quarter, up from $48 million, or 4.2%, year-over-year. Fee income from investment services generated an additional $10 million, a significant $66.7% jump from the same quarter last year. Insurance commission and fees, however, slipped 3.6% to $27 million from a year ago.
In total, the wealth management business generated $111 million in third-quarter revenue, up 35.4% from $82 million last year. The increase was due in large part to the divestiture of a non-core portion of the wealth management business, which resulted in a pre-tax gain of $24 million, according to the companys earnings release.
Wealth management is one of the businesses that the company started investing in this year, adding more than 100 financial consultants, the companys CFO David J. Turner, Jr., said during the earnings conference call. Wealth management is relatively new and we will continue to make investments to grow that revenue and feel very confident that revenue comes fairly quickly, he said.
Regions Bank formed the new brokerage unit early this year and aims to have 160 to 170 financial advisors by the end of 2014, Jim Nonnengard, head of Regions Investment Services, told Bank Investment Consultant in July.
Overall, Regions Financial Corp. earned $285 million in the third quarter, down 5.3% from $301 million in the same quarter last year.