Regions Financial Corp

Discover Financial’s employee compensation expenses rose 7% in 1H17 compared to 1H16.

Discover Financial Services (DFS) posted earnings per share of $1.40 in 2Q17, which missed the analysts’ estimate of $1.45. DFS reported revenues of $2.42 billion in 2Q17, beating the analysts’ estimate of $2.40 billion.

Trump’s domestic growth-friendly policies Returns have been surging for the financial sector (XLF) (VFH) as the market expects to benefit from the Trump administration’s projected policies. Markets are highly confident with the expectation of more rate hikes, for example, and of widespread deregulation. Banks’ earnings have thus been getting a huge boost, and the market has been […]

Interest rates are the most important driver for a bank, as they determine banks’ net interest margins.

Banks have seen compliance costs rise since the Dodd-Frank Act regulations took effect. For small banks, it’s been harder to absorb these costs.

With ~50% of analysts recommending that investors buy, analysts appear positive about the sector in the long term and a rate hike in December.

Capital One Financial (COF) delivered better-than-expected third quarter earnings on October 22 after markets closed.

The price-to-book value ratios of Synovus, BB&T, SunTrust Banks, Regions Financial, and Capital Bank Financial are 1.43x, 1.19x, 0.93x, 0.77x, and 1.37x.

First Horizon outperformed its peers based on the forward PE ratio and PBV ratio. The ETFs outperformed First Horizon based on the price movement.

First Horizon National has a market cap of $3.23 billion. After the earnings report in 3Q15, it fell by 1.2% to close at $13.80 per share as of October 16, 2015.

REITs are the most overvalued sector in XLF on a price-to-book multiple basis. On average, REITs traded at a price-to-book multiple of 3.57x as of Monday, July 6.

While the risks of a contagion spreading here are small, US stock markets here could be affected by what happens to European stocks because of the crisis in Greece.

In this series, we’ll review the banking sector’s two primary indicators—loan and deposit growth. Total loans are generally made up of commercial and industrial loans, consumer loans, and real estate loans.

When manufacturing expands, it’s a positive indicator for overall economic growth. Generally, it results in positive GDP growth.

The yield curve has steepened a bit compared to where it was a week or even a month ago. Investors should consider the yield curve slope an indicator of bank performance.

When interest rates rise, banks typically increase the interest they charge for loans faster than what they pay on deposits. This gives an immediate boost to their margins.

Banks benefit from a steeper yield curve, which allows banks to lend on higher long-term rates and borrow on lower short-term rates. This boosts banks’ margins.

Lower interest rates on a sustained basis have negatively impacted the performance of the US banking sector. Banks are not able to use much deposit pricing strategies to boost margins.

According to the Fed’s data, total loans for all US commercial banks increased 7.9% in the week ending May 6. Loan growth is vital to banks’ income growth.

During 1Q15, Regions Financial (RF) repurchased $102 million of common stock—completing its $350 million 2014 repurchase program.

In the quarter, Region Financial’s deposit balances increased 4.4% from the same quarter last year, while checking accounts grew 5.7%.

Regions Financial’s (RF) Wealth Management revenue increased 10% YoY. Going forward, It intends to focus on growing its wealth management business.

Regions Financial (RF) reported its first quarter earnings on April 21. While the revenue for the quarter increased by 1% YoY, the net income declined 26%.

A growing economy definitely benefits the banking sector. The impact will be positive for big banks and also for regional banks.

Higher nonperforming loans (or NPLs) indicate poor asset quality. KeyCorp’s nonperforming loans to end-of-period loans ratio is 0.73.

SunTrust Bank (STI) paid common dividends totaling $371 million or $0.70 per share in 2014.

This article focuses on SunTrust’s Consumer Banking and Private Wealth Management segment.

The Wholesale Banking segment’s net interest income increased in 2014 compared to 2013.

SunTrust’s Mortgage Banking segment reported a net loss of $56 million for 2014 compared to a net loss of $527 million for 2013.

The loan portfolio of SunTrust Bank (STI) has three segments: commercial, residential, and consumer.

SunTrust Bank’s net interest income in 2014 remained stable compared to 2013 as strong loan growth offset the decline in net interest margin.

SunTrust Bank’s return on equity is 8%, which is 18% lower than the industry average.

SunTrust provides a broad range of consumer and wholesale banking, mortgage banking, and private wealth management services.

BB&T is more widely represented in ETFs focused on the banking sector. The SPDR S&P Bank ETF (KBE) has BB&T comprising ~1.6% of its portfolio.

BB&T’s loan and deposit growth is marginally below the industry average. Its ROE and price-to-book ratio are close to the peer average.

Dividend yield is a company’s annual dividend per share. It’s expressed as a percentage of its share price. Dividend yields are important if you want a regular stream of income.

Deposits are the cheapest funding source. Since deposits fund a major chunk of BB&T’s assets, the overall funding costs are low.

BB&T is focused on expanding its corporate banking services. It’s adding new industry verticals for lending and investment banking services.

BB&T’s (BBT) Specialized Lending consists of businesses and subsidiaries that provide specialty finance products. The segment’s net income decreased 5.9%.

BB&T’s (BBT) Residential Mortgage Banking segment’s net interest income for 2014 decreased, primarily due to lower average loan balances.

BB&T’s (BBT) Residential Mortgage Banking segment retains and services mortgage loans originated by the Community Banking segment.

BB&T’s Community Banking segment offers a variety of loan and deposit products and other financial services. The segment’s net interest income decreased in 2014.

BB&T Corporation’s (BBT) operations are divided into six business segments. Community Banking contributes 46% to the total revenue.

BB&T Corporation (BBT) is a financial holding company. It conducts its operations primarily through its bank subsidiary—Branch Bank.

Regions Financial’s stock price hasn’t recovered since it fell during the crisis. It has the lowest price-to-book ratio of ~0.8 in its peer group.

Earnings are growing, but at a slow pace. Regions Financial’s (RF) net income increased by 1% in 2014—compared to 2013.

Regions Financial’s (RF) return on equity, or ROE, over the last five-year period improved from -4.4% in 2010 to 6.6% in 2014.

A substantial portion of Regions Financial’s growth has been through the acquisition of other financial institutions. The bank was formed in 1971.

Regions Financial’s loan portfolio can broadly be classified into business and consumer loans. Business loans account for ~62% of the total loan portfolio.

For a bank, the net interest margin is the difference between the interest income generated and the interest paid out as a percentage of interest-earning assets.

Regions Financial Corporation is a leading regional bank in the southeastern US. It’s the 17th largest bank in the US—based on assets.

The Baupost Group initiated a position in RF Micro Devices Inc. (RFMD) that accounted for 1.25% of the fund’s total portfolio. Baupost also started a new position in RFMD’s peer and merger partner, TriQuint Semiconductor (TQNT).