UPDATE 3-Regions Financial has $6.2 bln loss on writeoff

The Birmingham, Alabama-based lender said it took a $6 billion non-cash
goodwill writedown because the value of its banking and Treasury operations had
fallen below book value.

This resulted in a fourth-quarter net loss of $9.01 per share, compared
with a profit of $70.6 million, or 10 cents per share, a year earlier.

Regions' operating loss was 35 cents per share as the lender more than
tripled the amount it set aside for bad loans. On that basis, analysts on
average expected a loss of 20 cents per share, Reuters Estimates said.

"There is no quick fix for credit quality issues currently plaguing the
financial services industry," Chief Executive Dowd Ritter said in a statement.

Shares of Regions fell 61 cents, or 10 percent, to $5.46 in morning
trading amid broad declines in the banking sector.

The lender's $5.9 billion merger with Memphis-based Union Planters Corp
in 2004 and $10 billion purchase of Birmingham's AmSouth Bancorp Inc in 2006
transformed it into a big regional lender, now with $146.2 billion of assets and
1,900 branches in 16 U.S. states across the South, Midwest and Texas.

Regions set aside $1.15 billion in the fourth quarter for credit losses,
up from $358 million a year earlier, reflecting falling real estate values and
rising unemployment.

Net charge-offs surged to $796 million from $107.5 million. The bank's
most stressed portfolios included residential homebuilders; home equity loans,
mainly in Florida; and condominiums. It also reported "emerging stress" in
Florida residential first mortgage and retail commercial real estate.

Regional banks are expected to report dismal quarterly results this
month, buffeted by the same credit trends that caused Bank of America Corp and
Citigroup Inc to post huge quarterly losses last week and JPMorgan Chase & Co
to report sharply lower profit.

Regions nevertheless said it remained well capitalized, in part
reflecting a recent $3.5 billion infusion from the U.S. Treasury Department's
Troubled Asset Relief Program.

Through Friday, Regions shares had fallen 70 percent in the last year,
compared with a 61 percent decline in the KBW Bank Index.

(Reporting by Jonathan Stempel; Editing by Steve Orlofsky and John Wallace)

((jon.stempel@thomsonreuters.com +1 646 223 6317; Reuters Messaging:
jon.stempel.reuters.com@reuters.net)) Keywords: REGIONSFINANCIAL/

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