Regions Financial Shares Sink as Results Miss Estimates, Squeezed by High Interest Rates

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Key Takeaways

  • Regions Financial missed estimates for profit, sales, and interest income as high interest rates squeezed the bank’s finances.
  • Regions said its total deposits declined almost 7% from a year ago.
  • The news sent shares of Regions below the level they hit during the banking crisis earlier this year.

Regions Financial (RF) Corp. shares plummeted over 12% on Friday to their lowest level in almost three years after the regional bank posted worse-than-expected financial results as it struggled with the effects of high interest rates.

The Alabama-based bank reported third quarter fiscal 2023 earnings per share of $0.49, with revenue falling 0.5% from a year ago to $1.86 billion. Net interest income rose 2.3% year-over-year to $1.29 billion, but it was down 6.5% from the previous quarter. All three were below analysts’ estimates. Total deposits dropped 6.8% to $126.2 billion. 

The company now expects net interest income in the current quarter to be down 5% from the third quarter. It projects full-year overall revenue to grow 5% to 6% from 2022. 

CEO John Turner said that while the industry “continues to face economic and regulatory uncertainty,” Regions is “confident in our ability to adapt to the changing landscape.”

Regions was among several regional banks subject to heightened scrutiny and concern earlier this year after Silicon Valley Bank and Signature Bank collapsed and were taken over by regulators, which was later followed by the fall of First Republic Bank. At the time, Regions shares sank to levels not seen since November 2020. That low point was eclipsed by Friday’s selloff.

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