Why Regions Financial Shares Are Falling Today

Regions Financial Corporation RF shares are trading lower after the company reported worse-than-expected Q3 financial results.

Adjusted revenues declined 0.5% Y/Y in Q3 FY23 to $1.858 billion, missing the consensus of $1.890 billion.

Total revenue decreased 5% compared to the second quarter of 2023. Net interest income decreased during the quarter to $1.3 billion or 6.5% sequentially, attributable to accelerating deposit and funding costs and a portion of the company's forward starting interest rate hedges becoming active, partially offset by the impact of higher market interest rates on asset yields.

The company reported adjusted EPS of $0.49, missing the consensus of $0.58.

Provision for credit losses stood at $145 million, higher than $135 million in the year-ago period. Net interest income rose 2.35% Y/Y to $1.30 billion.

Total deposits fell 7.6% Y/Y to $125.22 billion, while total loans rose 4.3% Y/Y to $98.79 billion in the quarter. 

The common equity Tier 1 ratio at the Q3 end totaled 10.3%, higher than 9.3% a year ago. The company had a total available liquidity of approximately $56.8 billion as of September 30, 2023.

"Our protective hedging strategies position us for success in any rate environment and support our commitment to generating consistent, sustainable long-term performance. While the industry continues to face economic and regulatory uncertainty, we are confident in our ability to adapt to the changing landscape while continuing to deliver top-quartile returns through the cycle," said John Turner, President and CEO of Regions Financial.

Price Action: RF shares are trading lower by 12.44% at $14.43 on the last check Friday.