Regions Bank Profit Misses View As Mortgage Demand Wanes

(RTTNews) - Alabama bank Regions Financial Corp. (RF) reported Tuesday a profit for the third quarter that declined from last year, hurt by a drop in mortgage-related sales and fees amid rising interest rates.

Earnings per share missed analysts' expectations by a penny, while quarterly revenues matched their estimates.

Loan balances improved by $902 million to end the third quarter at $76 billion, with new loan production increasing 18 percent over the previous year to $8 billion as both the business and consumer loan portfolios grew.

However, non-interest income decreased to $495 million from $533 million in the prior-year quarter, driven primarily by an expected decline in mortgage income.

"This quarter's results demonstrate that our focus on meeting customers' needs is driving sustainable growth across our franchise as we increase loans and households served. This marks the second consecutive quarter that we achieved loan growth and expanded net interest income," President, Chairman and CEO Grayson Hall said in a statement.

The Birmingham, Alabama-based parent of Regions Bank reported a net income of $285 million or $0.20 per share for the third quarter, lower than $301 million or $0.21 per share in the prior-year quarter.

On average, 26 analysts polled by Thomson Reuters expected the company to report earnings of $0.21 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter declined to $1.32 billion from $1.35 billion in the same quarter last year, and matched fifteen Wall Street analysts' consensus estimate of $1.32 billion.

Net interest income for the quarter grew 2 percent to $824 million from $817 million in the year-ago quarter, and net interest margin on a fully taxable equivalent or FTE basis, increased 8 basis points to 3.24 percent from last year's 3.08 percent.

RF closed Monday's regular trading session at $10.04, down $0.01 on a volume of 20.36 million shares. In the past 52-week period, the stock has been trading in a range of $6.19 to $10.52.