EW YORK (Dow Jones)--From Minnesota to Alabama, battered regional banks are warning a turnaround from the economic malaise is nowhere in sight.
A series of large regional banks reported Tuesday that rising losses from bad loans plagued first-quarter results. And, that's forced names like U.S. Bancorp (USB), Regions Financial Corp. (RF), and others to put more money aside to fortify against another wave of defaults.
It demonstrates not just massive U.S. institutions like Bank of America Corp. (BAC) are reeling as the industry pays for extending credit to shaky borrowers. Smaller players scattered across the country are also feeling the pain, telling investors a protracted recession means things will get worse before they get better.
"No significant turnaround will occur this year," Huntington Bancshares Inc. (HBAN) Chief Executive Stephen Steinour said after the Columbus, Ohio-based bank posted a $2.43 billion quarterly loss. He announced a nearly $300 million credit loss provision as the bank faces a stream of potential losses from commercial loans.
Huntington is just one example of a bank struggling as a troubled economy and tight credit environment make it more difficult for consumer and business borrowers to pay their debt. Falling stock markets and rising unemployment also illustrate the breadth and depth of the economic stress, regional bank CEOs said.
Investors have been paying particular attention to regional banks after BofA and Citigroup Inc. (C) reported better-than-expected results through largely one-time gains and accounting changes. Regionals, which typically focus on bread-and-butter operations like lending and deposits, offer a purer snapshot of the industr