Monday, August 10, 2015


On July 21, Regions Financial (RF) posted its Q2 earning results. Total revenue (net of interest expense) was $1.41B, an increase of 8.6% YoY. Net interest income was $820M, .04% down YoY. Loans totaled $80B, 4% up YoY. On the deposits side, average deposit balances totaled $97B, $1.3B from the last quarter. Net interest income on a fully taxable basis was $839M, 1% up from last quarter. The outstanding performance that the firm has experienced is due in part from higher loan balances, and a decrease in the cost of wholesale borrowing.

On the expense side, total reported expenses were $934M, up 13.9% YoY. The increase is due to elevated professional, legal and regulatory expenses. The company has a favorable funding mix along with firm future strategies. On August 3rd, RF announced the acquisition of The A.I. Group, Inc. A.I. Group provides employee benefits consulting and insurance brokerage services focused on mid-sized and large employers throughout the US. This acquisition builds on RF expansion on the insurance field. As of August 8th, the stock is trading ~2% up YTD. In my opinion the stock has room for modest growth taking into consideration the interest rate increase in the near future. The company is still a valuable possession and requires continues monitoring as it reaches its price target. 

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