Oct. 22 (Bloomberg) -- Regions Financial Corp. posted a 5.3 percent drop in profit, missing analysts’ estimates, as the bank failed to cut expenses and mortgage refinancings declined.
Net income at Alabama’s biggest bank dropped to $285 million, or 20 cents a share, from $301 million, or 21 cents, a year earlier, the Birmingham-based company said today in a statement. The average estimate of 27 analysts surveyed by Bloomberg was 21 cents. The shares fell as much as 3.1 percent in New York trading.
Regions, run by Chief Executive Officer Grayson Hall, 56, has said it was focusing on cutting costs as tepid economic growth restricts lending. Mortgage income declined $17 million from the second quarter and non-interest expenses totaled $884 million, unchanged from the previous quarter. Chief Financial Officer David Turner said in July the bank was “looking very hard” at all of its expenses.
“While its net interest margin came in higher than expected and loan balances increased, the company was unable to reduce expenses in the face of lower fee income,” Jason Goldberg, a Barclays Plc analyst, said in a note.
Regions fell 2.2 percent to $9.82 at 10:33 a.m. in New York. The shares had gained 41 percent this year through yesterday, the third-best performer in the 24-company KBW Bank Index.
Mortgage refinancings slumped after rates on 30-year loans jumped from historical lows of less than 3.5 percent earlier this year to an average of 4.32 percent at the end of September, data compiled by Freddie Mac show. Applications, which accounted for 82 percent of all requests for home loans last year, comprised 63 percent in the third quarter, according to the Mortgage Bankers Association.
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