Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



We Know Why Regions Financial Jumped After Announcing Earnings

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

After announcing earnings this morning, Regions Financial's (NYSE: RF  ) shot up as much as 4.5%. One factor alone was not responsible for today's early gain: Many positive items can be found in the bank's first quarter. Here are a few highlights.

Exceeding expectations
Analysts were expecting the bank to post $0.20 earnings per share on $1.3 billion in revenue. The bank exceeded the earnings estimate, checking in at $0.23 per share , and met revenue expectations, though revenue was down from the fourth quarter.

Despite this decline in revenue, Regions managed to increase net income, both year over year and quarter over quarter. The bank's $327 million in net income was a 25.3% increase from the fourth quarter, and a 125.5% increase from the first quarter last year.

Increase in net interest margin
Regions continues to be one of the few banks reporting increasing net interest margin quarter to quarter. Similar to the fourth quarter, which saw a two basis points increase in this all important number, NIM increased a modest three basis points from the end of last year. In the current low interest rate environment, interest rate spreads have had a major impact at banks much larger than Regions, so any improvement, no matter how slight, should be noted.

Loan growth amid consumer deleveraging
Overall, loan balances remained steady from the first quarter last year, but there was still some growth in certain parts of the loan portfolio. Middle market commercial and industrial loans increased 3.5% from the previous quarter, while auto loans grew by 6% during the same time frame. 

The loan growth in these two areas helped to offset the decline in the bank's real estate portfolio, which now accounts for 10% of its total loan portfolio, down from 13% a year ago. Nevertheless, the decline has started to slow, primarily because of a new home equity product that allows consumers to refinance higher cost debt at today's low rates.

A strong quarter
One quarter does not make a year, but if the first quarter is any indication, Regions Financial could be on its way to a strong 2013, especially considering its strong performance in this year's Fed stress test. With hopes for a higher dividend as a result, now could be a great time to consider the Alabama bank for your portfolio.

With big finance firms still trading at deep discounts to their historic norms, investors everywhere are wondering if this is the new normal, or whether finance stocks are a screaming buy today. The answer depends on the company, so to help figure out whether Regions Financial is a buy today, I invite you to read our premium research report on the company today. Click here now for instant access!

Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2380177, ~/Articles/ArticleHandler.aspx, 9/29/2016 11:25:50 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,298.15 -41.09 -0.22%
S&P 500 2,164.70 -6.67 -0.31%
NASD 5,297.25 -21.30 -0.40%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/29/2016 11:10 AM
RF $9.95 Up +0.12 +1.22%
Regions Financial CAPS Rating: ****