Regions Financial Corporation (RF) delivered better-than-expected Q3 2021 results driven by strong customer relationships across all segments. Revenue and earnings came in above estimates as the company benefited from operating in high-growth markets. RF shares rose 3.48% to close at $24.09 on October 22.
Regions Financial Corporation is a financial holding company that provides banking and bank-related services to individual and corporate customers. It also offers wealth management and mortgage products and services.
Total revenue in Q3 landed at $1.61 billion, down 1.8% year-over-year and above consensus estimates of $1.56 billion. Net interest income was down 2.3% year-over-year to $965 million despite the company trying to offset pressure on asset yields from low interest rates through a rate hedging program. (See Top Smart Score Stocks on TipRanks)
Net income available to shareholders in Q3 totaled $624 million compared to $501 million in the same quarter last year. On the other hand, diluted EPS landed at $0.65 compared to $0.52 delivered the same quarter last year and above consensus estimates of 0.52 a share.
Going forward, Regional Financial Corporation remains focused on sustainable growth following a string of acquisitions. It has already acquired EnerBank, expected to enhance its prospects on lending to homeowners. The company has also reached an agreement to acquire Sabal Capital Partners, which is expected to expand its range of specialized services for business clients.
Regions Financial Corporation has also identified high growth markets benefiting from population and business growth, including Texas and Georgia. It is also increasing its focus on digital data and innovation to improve customer experience.
Recently, Jefferies analyst Ken Usdin reiterated a Buy rating on the stock and raised the price target to $26 from $25, implying 7.93% upside potential to current levels.
Consensus among analysts is a Hold based on 2 Buys, 3 Holds, and 1 Sell. The average Regions Financial price target of $24 implies that shares are fully valued at current levels.