Regions reports 54 percent drop in net revenue

The Birmingham, Ala.-based financial company posted earnings per diluted share, excluding merger-related charges, of 39 cents, down 43 percent from 2007 and down 29 percent from the first quarter of this year.

Net interest income for the quarter totaled $989.5 million, down 11 percent from a year earlier.

The company said pre-tax earnings reflect the continuing trouble in the credit market; results include a provision for loan losses of $309 million, $128 million more than in the first quarter.

“Credit quality deterioration is today’s overriding issue for financial services companies, and Regions is not immune,” said Chairman and CEO Dowd Ritter in the release. “While we are prudently managing our credit risk and taking steps to strengthen our capital position, we are also focusing on growing revenue and managing costs to maintain a strong foundation for long-term growth and profitability.”

One of those steps is a dividend reduction. Regions will reduce its quarterly cash dividend to 10 cents from 38 cents as of Oct. 10 – a decision the company said will retain nearly $780 million of capital.

Shares of Regions Financial (NYSE: RF) closed Wednesday at $11.80, compared to a 52-week range of $6.41 to $33.50.