RF Q2

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 3^rd, 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 8^th, 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.