Regions Financial misses profit, revenue and net interest income expectations as deposits fall
Regions Financial Corp. on Friday reported third-quarter profit and revenue that missed expectations, as total loans increased but deposits fell and as the regional banking industry faced “economic and regulatory uncertainty.”
Regions Financial’s
RF,
third-quarter net income rose 15% to $465 million, or 49 cents a share, from $404 million, or 43 cents a share, in the year-ago period.
Regions Financial’s stock fell 4.3% in premarket trading.
The Birmingham, Ala.-based bank fell short of the FactSet consensus for earnings per share of 58 cents.
Total revenue fell 0.5% to $1.858 billion, below the FactSet consensus of $1.887 billion.
Total deposits dropped 6.8% to $126.20 billion.
Net interest income rose 2.4% to $1.304 billion but missed the FactSet consensus of $1.325 billion while non-interest income declined 6.4% to $566 million to match expectations.
The bank said it expected net interest income to drop from the previous quarter due to rising deposit and funding costs and a portion of the company’s forward-starting interest rate hedges kicking in. This was partially offset by higher market interest rates on asset yields, the bank said.
Total loans grew 4.3% to $98.79 billion, while allowance for credit losses increased 9.0% to $1.68 billion.
Regions’ stock has tumbled 19.0% over the past three months through Thursday while the SPDR S&P Regional Banking ETF
KRE,
has shed 13.3% and the S&P 500
SPX,
has given up 5.7%.
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