Regions Bank's wealth management business turned in a mixed third quarter, according to the bank's holding company's financial results released Tuesday.
The Birmingham, Ala.-based bank generated $90 million in third-quarter revenue from its brokerage, trust and insurance services operations, down $21 million, or 18.9%, from the same period a year ago and flat from the previous quarter.
The year-over-year decline was largely due to the $24 million sale of a non-core portion of a wealth management business in the third quarter of 2013, according to the earnings release. If it weren't for the $24 million gain from the sale last year, overall wealth management income would have been up by $3 million, or 2.7%.
Retail brokerage was the clear bright star among the bank's wealth management lines of business, generating $12 million, a 20% jump from the revenue it produced in the same quarter last year. Revenue from brokerage services was also up from the previous quarter, growing 9.1%.
In contrast, revenue from investment management and trust services fell 6% year-over-year to $47 million, unchanged from the second quarter. Insurance fees and commissions, the other major contributor to the bank's wealth management income, generated $31 million, up 14.8% year-over-year but down 3.1% from the prior quarter.
The rapid growth of brokerage services compared to trust and insurance services is due to the fact that the brokerage unit is relatively new. The unit was formed in 2013 to focus on the needs of mass-affluent customers and is in a high-growth mode, with 160 to 170 financial advisors expected by the end of this year, Jim Nonnengard, head of the bank's brokerage unit, told Bank Investment Consultant last year.
Overall, Regions Financial Corp., the parent of Regions Bank, earned $305 million, or $0.22 per diluted common share, in the third quarter, up from $285 million, or $0.20 per diluted common share, a year ago.
"Our results demonstrate that, even in a challenging environment, we are growing the franchise through a disciplined focus on banking fundamentals," Grayson Hall, the company's chairman, president and CEO, said in a statement.