Core Insights - The article emphasizes the importance of the Zacks Rank system and Style Scores in identifying strong stocks, particularly for value investors [1][2] Company Analysis - First BanCorp. (FBP) has a Zacks Rank of 2 (Buy) and an A for Value, with a current P/E ratio of 10.79, lower than the industry average of 11.42 [3] - FBP's Forward P/E has fluctuated between 8.83 and 12.46 over the past year, with a median of 10.60 [3] - FBP's P/CF ratio is 10.97, significantly lower than the industry's average of 17.07, indicating potential undervaluation [4] - Regions Financial (RF) also holds a Zacks Rank of 2 (Buy) and a Value Score of A, trading at a forward earnings multiple of 10.44, below the industry average of 11.42 [5] - RF's PEG ratio is 1.86, compared to the industry's average of 1.35, suggesting it may be undervalued [5] - Over the past year, RF's P/E ratio has ranged from 8.06 to 12.14, with a median of 10.44, while its PEG ratio has varied between 1.51 and 2.83 [6] - RF's P/B ratio stands at 1.32, lower than the industry's average of 1.93, further indicating potential undervaluation [6] - Both FBP and RF are highlighted as strong value stocks due to their attractive earnings outlook and valuation metrics [7]

Core Viewpoint - Analysts project that Regions Financial (RF) will report quarterly earnings of $0.56 per share, reflecting a year-over-year increase of 7.7% and revenues of $1.85 billion, up 7.1% from the same quarter last year [1]. Earnings Estimates - The consensus EPS estimate has been revised upward by 1.5% in the past 30 days, indicating a reassessment by covering analysts [2]. - Changes in earnings estimates are crucial for predicting investor reactions, with empirical studies showing a strong correlation between earnings estimate revisions and short-term stock performance [3]. Key Financial Metrics - Analysts expect the 'Net interest margin (FTE)' to reach 3.6%, up from 3.5% in the same quarter last year [5]. - The 'Efficiency Ratio' is projected at 56.9%, compared to 57.6% a year ago [5]. - The 'Common Equity Tier 1 ratio' is anticipated to be 10.7%, an increase from 10.4% year-over-year [5]. Asset and Income Projections - The 'Average Balance - Total earning assets' is expected to be $139.69 billion, up from $137.07 billion last year [6]. - 'Non-performing assets' are projected at $899.10 million, compared to $862.00 million a year ago [6]. - 'Total Non-Interest Income' is likely to reach $621.40 million, up from $545.00 million last year [8]. - 'Net Interest Income' is expected to be $1.20 billion, slightly up from $1.19 billion year-over-year [8]. Additional Financial Insights - The consensus estimate for 'Net interest income, taxable equivalent basis' stands at $1.24 billion, compared to $1.20 billion last year [9]. - 'Wealth management income' is estimated at $127.46 million, up from $122.00 million in the same quarter of the previous year [9]. - Regions Financial shares have returned +13.9% over the past month, outperforming the Zacks S&P 500 composite's +5% change [9].

Company Overview - Regions Financial (RF) is anticipated to report a year-over-year increase in earnings, with a projected quarterly earnings of $0.56 per share, reflecting a +7.7% change, and revenues expected to reach $1.85 billion, up 7% from the previous year [3][12]. Earnings Expectations - The upcoming earnings report is scheduled for July 18, and the stock may experience upward movement if the reported numbers exceed expectations, while a miss could lead to a decline [2][12]. - The consensus EPS estimate has been revised 1.28% higher in the last 30 days, indicating a positive reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP for Regions Financial is +0.83%, suggesting a likelihood of beating the consensus EPS estimate, although the stock currently holds a Zacks Rank of 3 [12]. - Historical performance shows that Regions Financial has beaten consensus EPS estimates in the last four quarters, with a notable surprise of +5.88% in the last reported quarter [13][14]. Industry Context - In the Southeast banking industry, Simmons First National (SFNC) is expected to report earnings of $0.40 per share, indicating a +21.2% year-over-year change, with revenues projected at $213.4 million, up 8.2% [18]. - Simmons First National has an Earnings ESP of -1.68% and a Zacks Rank of 3, making it challenging to predict a beat on the consensus EPS estimate [19].

Strategic Priorities - Regions is focused on credit risk management, interest rate risk management, capital and liquidity management, and operational & compliance risk management[4] - Regions strategically invests in top quartile organic loan & deposit growth, leveraging superior growth of the core footprint with 3.5% projected population growth[4] Capital Strength and Risk Management - Regions' 2024 CCAR capital degradation is 1.8%, lower than the peer median of 2.5%[8] - Regions proactively hedges interest rate risk, protecting Net Interest Margin (NIM) against falling interest rates[9] - Regions' Pro forma Post-Stress CET1 is 75.9% which is higher than peers[12] Profitability and Growth - Regions has consistently strong growth metrics, supporting a higher P/E multiple[15] - Regions' Peer Leading Return on Average Tangible Common Shareholders' Equity (ROATCE) has been ranked 1 for 4 straight years[16] - Regions' 5-Year Earnings Per Share (EPS) Compound Annual Growth Rate (CAGR) outperforms most peers[17] - Regions' 5 Year Tangible Book Value (TBV) growth plus dividends is 18.7%[31] Deposit Advantage and Market Presence - Regions has a strong brand presence and attractive footprint in the Southeast[32] - Regions' deposit-weighted population growth by MSA for 2024-2029 is projected at 3.5%, compared to the national average of 2.4%[34] - Regions has top 5 market share in approximately 70% of MSAs across its 15-state footprint[35] - Regions' FY24 total deposit cost is below the peer median, contributing to a ~60bps advantage in Net Interest Margin (NIM)[37] - Regions' deposit growth in priority markets since 2019 is $12.5 billion[45] Investments in Technology and Talent - Regions is investing in core modernization, loan and deposit systems, and enhanced digital experiences[48] - Regions is expanding talent in key areas, including middle market and small business relationship managers, treasury management bankers, and branch sales bankers[48]

Summary of Regions Financial (RF) Conference Call Company Overview - **Company**: Regions Financial Corporation (RF) - **Date of Conference**: June 10, 2025 - **Key Speakers**: John Turner (CEO), David Turner (CFO), Kate Donella (Head of Consumer Banking) Core Industry Insights - **Focus on Long-term Performance**: The company emphasizes sustainable long-term performance through soundness, profitability, and growth [6][7] - **Credit Risk Management**: Improved credit risk management practices have led to better outcomes, reflected in strong CCAR results [6][7] - **Market Position**: Regions Financial has a strong market presence, with top five market share in 70 markets, growing at 1.5 times the national average [9][12] Financial Performance - **Shareholder Returns**: The company has delivered over 10% CAGR in dividend growth, placing it at the top of its peer group [8] - **Earnings Growth**: Regions has shown consistent growth in earnings per share, ranking as a top quartile performer over five and ten years [7][8] - **Deposit Growth**: The company has achieved $12.5 billion in deposit growth over the last five years in priority markets, with a total deposit opportunity of $1.5 trillion [12] Strategic Initiatives - **Investment in Human Capital**: Plans to add 170 bankers over the next three years, reallocating 600 branch bankers to focus on high-opportunity markets [13][14] - **Technology Investments**: Continued investment in technology to enhance customer service and operational efficiency [14][45] - **Wealth Management Growth**: The wealth management segment has grown at an 8.3% CAGR over the last six years, with plans to hire more wealth bankers [49] Market Sentiment and Economic Outlook - **Customer Sentiment**: Customers are in a "wait and see" mode due to economic uncertainties, particularly regarding tariffs and immigration reform [15][17] - **Loan Demand**: There is currently low loan growth due to uncertainty, with customers preferring to manage liquidity before borrowing [74] Regulatory Environment - **Regulatory Changes**: Anticipation of a more favorable regulatory environment, with increased transparency and dialogue with regulators [55][56] - **M&A Activity**: The company is not interested in depository M&A but is open to non-bank acquisitions, particularly in mortgage servicing and wealth management [61][63] Financial Guidance - **Net Interest Income (NII)**: Guidance for NII growth of 1% to 4% year-on-year, with potential for improvement based on market conditions [70][72] - **Fee Income Growth**: Expected growth in fee income of 1% to 3%, with challenges in mortgage and capital markets segments [76] - **Expense Management**: Guidance for flat to 2% increase in expenses, aiming for positive operating leverage [79] Key Risks and Considerations - **Tariff Impact**: Uncertainty regarding tariffs may affect credit risk and loan demand, though current credit health appears stable [24][26] - **Economic Clarity**: Customers need more clarity on economic conditions to unlock loan demand [34] Conclusion Regions Financial is positioned for growth through strategic investments in human capital and technology, while navigating economic uncertainties and regulatory changes. The focus remains on enhancing shareholder returns and maintaining strong market presence in priority growth areas.

Core Insights - Zacks Premium offers tools for investors to enhance their stock market engagement and confidence through daily updates, research reports, and stock screens [1] - The Zacks Style Scores provide a framework for evaluating stocks based on value, growth, and momentum, aiding in identifying securities likely to outperform the market [2] Zacks Style Scores Overview - Stocks are rated A, B, C, D, or F based on their value, growth, and momentum characteristics, with higher scores indicating a better chance of outperforming [3] - The Value Score identifies attractive stocks using ratios like P/E, PEG, and Price/Sales, appealing to value investors [4] - The Growth Score focuses on a company's financial health and future outlook, assessing projected and historical earnings, sales, and cash flow [5] - The Momentum Score leverages price trends and earnings estimate changes to identify favorable investment opportunities [6] - The VGM Score combines value, growth, and momentum scores to highlight stocks with the best overall potential [6] Zacks Rank and Style Scores Interaction - The Zacks Rank is a proprietary model based on earnings estimate revisions, which has shown a strong historical performance with 1 (Strong Buy) stocks averaging a +25.41% annual return since 1988 [7][8] - To maximize returns, investors should consider stocks with a Zacks Rank of 1 or 2 alongside Style Scores of A or B [9] - Stocks with lower ranks but high Style Scores may still face downward price pressure due to negative earnings outlooks [10] Company Spotlight: Regions Financial - Regions Financial Corporation is a financial holding company based in Birmingham, AL, offering a range of banking and financial services [11] - The company holds a Zacks Rank of 3 (Hold) and a VGM Score of A, indicating solid performance potential [11] - Regions Financial has a Value Style Score of B, supported by a forward P/E ratio of 9.67, making it attractive to value investors [12] - Recent earnings estimates for fiscal 2025 have been revised upward, with the Zacks Consensus Estimate increasing to $2.24 per share, alongside an average earnings surprise of 6.7% [12]

Group 1 - Regions Financial is a regional bank with a focus on the South, Midwest, and Texas regions [1] - The bank has a strong track record of profitability while maintaining limited loan losses [1] - The investment group European Small Cap Ideas provides exclusive access to actionable research on European investment opportunities [1] Group 2 - The focus of the European Small Cap Ideas is on high-quality small-cap investment opportunities emphasizing capital gains and dividend income [1] - The group offers two model portfolios: the European Small Cap Ideas portfolio and the European REIT Portfolio [1] - Additional features include weekly updates, educational content, and an active chat room for discussions on portfolio developments [1]

Core Insights - Zacks Premium offers various tools to help investors navigate the stock market confidently, including daily updates, research reports, and stock screens [1][2] Zacks Style Scores - The Zacks Style Scores are indicators that rate stocks based on value, growth, and momentum methodologies, aiding investors in selecting stocks likely to outperform the market in the next 30 days [3][4] - Stocks are rated from A to F, with A indicating the highest potential for outperformance [4] Value Score - The Value Score focuses on identifying undervalued stocks using ratios like P/E, PEG, and Price/Sales to find attractive investment opportunities [4] Growth Score - The Growth Score assesses a company's future prospects by analyzing projected and historical earnings, sales, and cash flow to identify stocks with sustainable growth potential [5] Momentum Score - The Momentum Score capitalizes on price trends, using factors like one-week price changes and monthly earnings estimate changes to identify favorable investment timings [6] VGM Score - The VGM Score combines the three Style Scores, providing a comprehensive rating based on value, growth, and momentum, and is used alongside the Zacks Rank for stock selection [7] Zacks Rank - The Zacks Rank is a proprietary model that utilizes earnings estimate revisions to help investors build successful portfolios, with 1 (Strong Buy) stocks historically yielding an average annual return of +25.41% since 1988 [8][9] - Stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B are recommended for the highest probability of success [11] Company Spotlight: Regions Financial - Regions Financial Corporation is a financial holding company based in Birmingham, AL, offering a range of banking and financial services [13] - The company currently holds a Zacks Rank of 3 (Hold) with a VGM Score of B and a Value Style Score of B, supported by a forward P/E ratio of 9.46 [13][14] - Recent upward revisions in earnings estimates and a Zacks Consensus Estimate of $2.24 per share for fiscal 2025, along with an average earnings surprise of 6.7%, make Regions Financial a noteworthy consideration for investors [14]

Financial Performance - Regions reported net income of $465 million or $0.51 per diluted share for Q1 2025, up from $343 million or $0.37 per diluted share in Q1 2024, representing a 35.7% increase in net income [219]. - Non-interest income rose to $590 million in Q1 2025, up from $563 million in Q1 2024, driven by increased service charge income [222]. - Non-interest expenses decreased to $1.0 billion in Q1 2025, down $92 million from Q1 2024, primarily due to lower salaries and benefits [223]. - The effective tax rate for Q1 2025 was 21.1%, up from 20.7% in Q1 2024, with income tax expense increasing to $131 million from $96 million [394]. - Capital markets income decreased by 12.1% to $80 million in Q1 2025 from $91 million in Q1 2024, driven by lower merger and acquisition fees [384]. Interest Income and Expenses - Net interest income for Q1 2025 was $1.2 billion, an increase of $9 million compared to Q1 2024, with a net interest margin of 3.52%, down 3 basis points year-over-year [220]. - The net interest margin decreased by 3 basis points to 3.52% for the three months ended March 31, 2025, compared to 3.55% in the same period of 2024 [329]. - Total earning assets reached $138.864 billion, generating net interest income of $1,737 million with a yield of 5.01% for the three months ended March 31, 2025 [322]. - The total interest-bearing liabilities amounted to $95.013 billion, with an interest expense of $531 million, resulting in an interest rate of 2.27% for the same period [322]. - The Company’s balance sheet is naturally asset sensitive, with net interest income increasing with higher interest rates [334]. Loan Portfolio and Credit Quality - The total loan portfolio amounted to $95,733 million as of March 31, 2025, down from $96,727 million at the end of 2024, representing a decrease of approximately 1.03% [236]. - The commercial portfolio segment, which includes over half of the total loans, totaled $54,044 million as of March 31, 2025, down from $54,845 million at year-end 2024 [250][251]. - The allowance for loan losses and reserve for unfunded credit commitments totaled $1.7 billion as of March 31, 2025, unchanged from December 31, 2024 [272]. - Non-performing loans decreased to $843 million as of March 31, 2025, down from $928 million at December 31, 2024 [292]. - The provision for loan losses for Q1 2025 is $123 million, down from $162 million in Q1 2024 [289]. Deposits and Liquidity - Total deposits increased by approximately $3.4 billion to $130.971 billion at March 31, 2025, reflecting seasonal tax patterns and customer preference for liquidity [301]. - Non-interest-bearing deposits accounted for approximately 31% of total deposits, remaining stable compared to December 31, 2024 [301]. - Regions has $68.0 billion in total liquidity sources, including $11.0 billion in cash at the Federal Reserve Bank [369]. - The balance with the Federal Reserve Bank increased from approximately $7.8 billion at December 31, 2024, to $11.0 billion, driven by increased deposits and a decline in loan balances [371]. - Regions maintains a variety of liquidity sources to fund its obligations, including cash reserves and secured borrowing capabilities [366]. Capital and Shareholder Equity - Shareholders' equity rose to $18.5 billion at March 31, 2025, up from $17.9 billion at December 31, 2024, driven by a net income increase of $490 million [318]. - Regions' CET1 ratio was estimated at 10.8% as of March 31, 2025, in compliance with regulatory capital requirements [224]. - Regions' common equity Tier 1 capital ratio was 10.79% at March 31, 2025, slightly down from 10.80% at December 31, 2024 [312]. - The Company purchased 1.3 million shares for approximately $27 million, which were immediately retired [320]. - Long-term borrowings increased by approximately $26 million from year-end 2024, totaling $6.019 billion at March 31, 2025 [307]. Economic Outlook - The baseline economic forecast for March 2025 declined slightly compared to December 2024, leading to an increase in the allowance due to slowing job and wage growth [274]. - The unemployment rate is projected to remain stable at around 4.1% to 4.3% from Q1 2025 to Q1 2027 [277]. - Real GDP is expected to grow at an annualized rate, starting at 1.4% in Q1 2025 and reaching 2.3% by Q3 2026 [277].

Core Viewpoint - Regions Financial Corporation's first-quarter 2025 adjusted earnings per share of 54 cents exceeded the Zacks Consensus Estimate of 51 cents, showing an improvement from 44 cents in the same quarter last year [1] Financial Performance - Total quarterly revenues were $1.78 billion, missing the Zacks Consensus Estimate by 2.2%, but increased by 2.1% year over year [3] - Net interest income (NII) was $1.19 billion, up 0.8% year over year, while the net interest margin declined by 3 basis points to 3.52% [3] - Non-interest income rose by 4.8% year over year to $590 million [3] - Non-interest expenses decreased by 8.1% year over year to $1.04 billion, with adjusted non-interest expenses down 5.7% to $1.03 billion [4] Loan and Deposit Trends - Total loans decreased by 0.3% sequentially to $96.1 billion, while total deposits increased by 0.9% to $127.7 billion [5] Credit Quality - Non-performing assets as a percentage of loans decreased to 0.92% from 0.95% year over year, and non-performing loans as a percentage of net loans fell to 0.88% from 0.94% [6] - A provision for credit losses of $124 million was recorded, down 18.4% from the previous year [6] Capital Ratios - As of March 31, 2025, the Common Equity Tier 1 ratio was 10.8%, and the Tier 1 capital ratio was 12.2%, both showing improvement from the previous year [8] Share Repurchase Activity - The company repurchased 10.4 million shares for $242 million during the reported quarter [9] Future Outlook - The company's core business and revenue-diversification strategies are expected to yield strong earnings in the future, although declining loans present a concern [11]