Quarterly profit at Regions Financial in Birmingham, Ala., took a hit after another large instance of check fraud.
The $153.6 billion-asset company disclosed in a press release that it incurred $53 million of losses in the third quarter tied to a check fraud scheme that occurred in the prior quarter.
Regions didn’t discover the scheme until the third quarter; executives said during a conference call to discuss quarterly earnings that it can take 50 to 60 days to discover that something is wrong.
The disclosure comes after Regions reported an $82 million loss in the second quarter from a separate check fraud scheme.
Fraud losses should normalize above historic levels, at roughly $25 million each quarter, in part reflecting new procedures designed to identify fraud, executives said during the call. Those measures required more investment in software.
“Fraud has increased dramatically in the industry – it’s hit us very hard,” David Turner Jr., Regions’ chief financial office, said during the call.
“It’s affecting all of us, but it seems to have gotten us in a kind of concentrated” manner in recent quarters, Turner added. “I feel confident we put in controls, and we’ll be putting in more [measure for] monitoring it going forward.”
Overall, profit fell by 16% from the second quarter but increased by 15% from a year earlier, to $465 million.