Regions Financial Earnings: Barely Seeing Any Effects From Banking Industry Turmoil

No-moat-rated Regions Financial reported first-quarter results that show some slight pressure on the earnings outlook, but we view the pressure as quite manageable. We had already expected fourth-quarter results would be the peak for profitability in the current rate cycle, and while the drop-off from that peak has accelerated a bit, it is nothing categorically different. Regions is known for its strong deposit franchise, and results show that it is barely affected by the recent banking industry turmoil. As we incorporate the latest results, we do not expect a material change to our $19 fair value estimate, although we may increase it slightly, since near-term results are coming in better than our updated “shocked” projections from late March. Regions has been one of the more fully priced regionals under our coverage, and heading into earnings, we believed the shares were fully valued. We think other banks are trading at larger dislocations to fair value.