Oct. 22--Regions Financial Corp. is closing five branches in the Knoxville market as part of a 6 percent reduction in offices the lender plans for early 2010.

Kevin Crateau, Regions' marketing director for East Tennessee, said Tuesday the offices being closed are at North Peters Road and Kingston Pike, Walker Springs Road at Kingston Pike, downtown Maryville, Chapman Highway at Colonial Village and 1185 Keowee Ave. in Sequoyah Hills.

Crateau called the impact on employees and customers from the closings "minimal."

"We are looking at putting employees in other positions at other branches," Crateau said. "This will have no impact on customers with the remaining branches we have. Most of those affected are in very close proximity to existing branches."

Crateau noted that the offices being closed overlap within short distances existing Regions branches. He said Regions will have 32 offices remaining in the Knoxville market, where the bank employs 444 people.

According to the most recent Federal Deposit Insurance Corp. market share statistics, Regions is the third largest bank in the Knoxville area, behind First Tennessee and SunTrust.

Regions also is closing two offices in Chattanooga, one location in the Tri-Cities area and six branches in Nashville, where it is the Nashville market's largest lender.

Regions disclosed the closings that are among 121 offices to be shuttered companywide after news Tuesday that it lost a larger-than-expected $437 million, or 37 cents per share, in the third quarter.

The bank attributed the loss to beefing up its loan loss provision for bad real estate loans and a $41 million charge related to the branch closures, a move that Regions said would save $21 million per year. Analysts had expected an average loss of 25 cents per share in the quarter, according to Thomson Reuters.

After the closures, Regions will continue to be the largest bank in the Nashville metropolitan statistical area, with 68 branches. Many were acquired through the purchase of AmSouth Bank in 2006.

Like other banks, Regions continues to grapple with bad construction and mortgage loans, particularly in hard-hit areas such as Florida.

And like other lenders, it also has begun seeing growing problems with commercial real estate loans, as high unemployment and lackluster consumer spending make it tougher for owners of shopping centers, hotels and apartment complexes.

"As you have unemployment getting higher, you have people who can't afford their apartments," said Marty Mosby, a bank analyst at FTN Equity Capital Markets. "You see stores closing.