April 18 (Reuters) - Regions Financial ( RF ) reported a

near 42% fall in its quarterly profit on Friday as higher

deposit and funding costs hurt its interest income from

customers, joining a list of U.S. banks facing the same issue.

The Birmingham, Alabama-headquartered bank's net income

fell to $343 million, or 37 cents per share, in the three months

ended March 31 from $588 million, or 62 cents per share, in the

year-ago period.

Several major and regional lenders in the U.S. have seen

sluggish loan growth as a high-interest rate environment is

putting off potential buyers.

Banks are also being forced to offer higher deposit

rates as many customers are moving their money from safe haven

bank accounts to higher-yielding alternatives like money-market

funds for better returns.

Regions Financial ( RF ) expects its Net Interest Income (NII)-the

difference between what a bank earns on loans and pays out on

deposits-to be in the range of $4.7 billion to $4.8 billion in

2024. It reported an NII of $5.32 billion in 2023.

The bank said the NII available to common shareholders

in the first quarter fell 16.4% to $1.18 billion.

Its net interest margin in the quarter contracted to 3.55%

versus 4.22% in the year-ago period.