Bruce Berkowitz's Fairholme Capital Management LLC sold more than half its holdings in Regions Financial Corp. in the third quarter as shares of the tenth-largest U.S. bank by deposits plunged to a far greater degree than the broad market.

Fairholme held 60.6 million shares, or a 4.8% stake, as of Sept. 30, the Miami firm said Wednesday in a regulatory filing.

Fairholme was the biggest holder of Regions as of June 30, with 123.9 million shares, according to an August filing and data compiled by Bloomberg.

Regions, of Birmingham, Ala., slid 48% this year, with most of the drop in the third quarter, amid investor concern that a weak economy and extended low interest rates will hurt the bank's earnings.

Regions is this year's second-worst performer in the 24-company KBW bank index after Bank of America Corp.

The Fairholme Fund, which had about 70% of its investments tied to financial companies as of May 31, has fallen 30% this year through Oct. 10, Bloomberg data shows.

Tom Pinto, a spokesman for Fairholme, did not reply to a request for comment. Evelyn Mitchell, a Regions spokeswoman, declined to comment on Fairholme's share sale.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.