CFRA's Alexander Yokum shares his bull case for Wells Fargo and regional banks outlook

Regional Bank Performance & Outlook - Investors were concerned about net interest income downgrades, potentially impacting regional banks [2] - Optimism for regional banks in Q2, following a strong rally since April, may require more time to materialize [3] - Regional banks' exposure to struggling industries is a small percentage, around a couple percent, which they can manage [7] - Geographic influence and banks that managed the rising rate environment well are favored, positioning them for offense [8] Credit Quality & Consumer Spending - Credit quality remains remarkably strong despite tariff worries, with resilient consumer spending trends [4][5] - Consumer spending is strong, driven by employment, overriding concerns expressed in surveys [5] - Commercial credit quality is not expected to decline, with potential improvements for the average regional bank this quarter [7] Net Interest Income & Deposits - Net interest income is a key data point; concerns exist that Wells Fargo's print could negatively impact regionals [10] - Regional banks rely on net interest income due to limited capital markets benefits [11] - Stabilization or growth of non-interest bearing deposits is crucial; continued decline would be concerning as it indicates consumers and businesses are still seeking yield [11][12] Individual Bank Strategies - Mnt Bank, having been defensive and cut commercial real estate exposure, is well-positioned with excess capital [8][9] - Mnt Bank is expected to repurchase 15% of its shares by the end of 2026, providing a bid on shares [9]