April 18 (Reuters) - Regions Financial 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 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. (Reporting by Jaiveer Singh Shekhawat in Bengaluru; Editing by Tasim Zahid)