NEW YORK (
(RF - Get Report) shares opened lower on Tuesday following a disappointing loan forecast from company's management at the Goldman Sachs financial services conference.
Following an initial decline of more than 2%, shares had recovered and were actually in positive territory -- up 0.4% to $9.67 -- just over an hour after the market opened.
Tuesday's forecast of 2-4% loan growth by Regions' management "would imply that it slowed a little bit from the trends that you saw in the third quarter," said Peter Winter, analyst at BMO Capital Markets. The fourth quarter lending forecast is also a bit of disappointment, Winter says, but he attributes the decline to a cautious attitude by management following severe loan losses coming out of the credit crisis.
"There's a real change in the philosophy of management that they've gone from a credit only relationship to really focusing on relationship management," Winter says.
Nonetheless, Winter, who has an "outperform" rating on Regions, continues to like the stock.
Regions also announced Tuesday it would close 30 branches, but Winter does not believe that announcement moved the stock.
"That's been a trend in banking where you see branch closings. Its a change in consumer habits. Banks are focused on expenses."
-- Written by Dan Freed in New York.
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