Takeaways
- Regions Financial Services missed estimates for profits, sales and interest income as high interest rates weighed on the bank's finances.
- Regions said their total deposits fell nearly 7% from last year.
- The news sent Regions shares below the level reached during of the banking crisis earlier this year.
Shares of Regions Financial (RF) Corp. fell more than 12% on Friday to their lowest level in almost three years after the regional bank reported worse-than-expected financial results as it battled the effects of high interest rates .
The Alabama-based bank reported earnings per share of $0.49 for the third quarter of fiscal 2023, with revenue down 0.5% from a year ago to 1 .86 billion dollars. Net interest income increased 2.3% year over year to $1.29 billion, but was down 6.5% from the previous quarter. All three were below analysts' estimates. Total deposits fell 6.8% to $126.2 billion.
The company now expects Net interest revenues in the current quarter are down 5% from the third quarter. It expects overall revenue for the full year to increase 5-6% compared to 2022.
CEO John Turner said that while the industry “continues to navigate economic and regulatory uncertainty,” Regions is “confident in our ability to adapt to a changing landscape “.
The regions were part of several Regional banks came under increased scrutiny and concern earlier this year following the collapse of Silicon Valley Bank and Signature Bank and their takeover by regulators, followed by more later by the fall of the First Republic Bank. At the time, Regions shares fell to levels not seen since November 2020. That low point was overshadowed by Friday's selloff.
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Source: investopedia.com