Investors are breathing a collective sigh of relief on Alabama-based regional bank Regions Financial
The quarter wasn't impressive by any means. Income from continuing operations fell 26% to $0.48, net interest margin condensed to 3.53%, non-performing assets grew, and net charge-offs increased. But when you add in one-time charges related to a recent acquisition, earnings beat analyst projections, and management expects to post a "new run-rate of $700 million" from merger cost savings and related operations improvements for the year.
Regions booked a $91.2 million gain related to its share of the Visa
Again, the quarter wasn't stellar by any means, but I'll take it. After all, peers such as Wachovia
Regions was definitely ahead of the game when it agreed to sell its EquiFirst subprime division last year, right before major cracks in the residential housing market began to surface. Calling many Sun Belt states home doesn't hurt, either, as this region should continue to experience favorable population trends and subsequent economic growth, coming at the expense of cold Northern regions.
It isn't out of the woods yet -- the credit market climate remains tepid, to say the least -- but today's stock jump (more than 10% at one point) suggests the market is becoming more comfortable, and that Regions will be able to ride out any future uncertainty.
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Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. Feel free to email him with feedback and to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.