Regions Financial (NYSE:RF) reported earnings for its third quarter this morning, and meeting EPS expectations, it has been down as much as 9% in early trading this morning. Earnings per share came in at $0.21, but the sell-off was prompted in part by reduced margins for the Alabama bank. Loan yields and net interest margins fell 11 and 8 basis points, respectively, but other metrics showed improvement during the quarter.

What I was watching
In addition to the standard metrics referenced above, I was also watching for continued improvement of the bank's balance sheet. Total nonperforming loans were down 2% from the same quarter last year, now down to a respectable 2.74% of total assets. The sell-off this morning gave back some of the gains the bank has experienced over the past year, but it may also present a buying opportunity for investors looking for an opportunity in regional banks.

What to expect going forward
As employment growth continues, Regions should be helped more than some other regional banks because of its location in the Southeast U.S. While consumer loans declined by 1.3% during the quarter, this was offset by a growth of 1.5% in the commercial and industrial loan segment, producing a slight net gain in total loans. This was probably not what the bank was expecting, but a slight gain is better than a loss. Going forward, one could expect these numbers to improve with improving employment numbers in the region and nationwide, but only time will tell.