Big banks disappointing last week, on top of Energy companies dramatically lowering their numbers. On Tuesday, both Morgan Stanley and Regions Financial, a large Alabama-based company, disappointed.
Regions Financial reported a surprising miss on fourth-quarter earnings of 14 cents a share, below consensus of 21 cents a share. Some of that could be attributed to legal accruals and a charge for closing 50 branches a year, but loan growth seems to have been decent, fee income weaker, and there was higher expenses, and a lower tax rate.
They expect 2015 loan growth to total 4-to-6 percent, and deposit growth of 2 percent—similar to 2014. Net interest margins are lower, as they are for all banks, and could decline another 10-to-12 basis points if the 10-year Treasury yield remains in the 1.75-2 percent range.
We had weak earnings from energy stocks, now the financial sector is weaker than expected. Not a good start to earnings season!