Regions Financial's quarterly profit falls on lower interest income

First Foundation

19/07/2024 12:45

July 19 (Reuters) - Regions Financial  RF.N  reported a
14% fall in its second-quarter profit on Friday, as the lender
earned less from customers' interest payments.
    Some customers have been avoiding taking on debt as the U.S.
Federal Reserve has continued to keep interest rates high to
curb inflationary pressures.
    Regions' net interest income (NII) — the difference between
what a bank earns on loans and pays out on deposits — fell 14%
to $1.2 billion in the quarter ended June 30.
    The lender said third-quarter NII would be flat to up 2%
compared to the second quarter. Regions kept its FY24 NII
forecast intact and said it expects the income from interests to
"modestly increase" over the second half of 2024.
    Regions' also said it sees commercial real
estate-multifamily portfolio stress to be temporary in nature
unless faced with economic recession or a significant increase
in long-term interest rates.
    High rates and problems related to CRE loans at regional
lender New York Community Bancorp  NYCB.N  earlier this year,
and more recently at First Foundation  FFWM.N , have put the
spotlight on default risks, forcing lenders to set aside more in
rainy day funds.
    Regions' provision for credit losses, however, came in at
$102 million in the quarter, down from $118 million a year ago.
    It posted profit of $477 million, or 52 cents per share, in
the second quarter, compared with $556 million, or 59 cents per
share, a year earlier.
    Shares of the company were down 1.1% before the bell. The
stock has fallen nearly 5% in the three months ended June,
compared with a little over 2% rise in the S&P 500 Financial
index  .SPSY  during the same period.

 (Reporting by Pritam Biswas in Bengaluru; Editing by Shilpi
Majumdar)
 ((Pritam.Biswas@thomsonreuters.com;))