Regions Financial Corp (RF) announced their second-quarter profit on Friday, with results that met expectations. The regional bank reported a slight increase in revenue, while deposits experienced a significant drop of over 8%.
Profit and Revenue Details
Net income for the second quarter stood at $556 million, equivalent to earnings per share of 59 cents. This figure is slightly lower compared to the year-ago period’s net income of $588 million and 59 cents per share. However, it still aligns with the consensus forecast provided by FactSet.
Total revenue recorded a growth of 12%, amounting to $1.96 billion. This surpassed the FactSet consensus of $1.95 billion. Notably, net interest income displayed significant growth, increasing by 24.5% to reach $1.39 billion, surpassing the expected figure of $1.38 billion.
Loan and Deposit Performance
Total loans experienced a strong upswing, rising by 8.6% to reach $98.58 billion. This was primarily driven by the robust performance of commercial and industrial loans, investor real estate loans, and residential first mortgages. However, this growth was slightly offset by weakness in home equity loans.
On the other hand, total deposits observed a notable decline of 8.2%, totaling $126.96 billion. The drop in deposits was mainly led by a significant decrease of 24.4% in wealth management deposits.
Stock Performance
Despite the financial results, the stock market remained largely unaffected during pre-market hours. The stock’s inactivity suggests that investors are likely waiting for more information before making any significant moves.
Over the past three months, Regions Financial Corp’s stock has demonstrated strong performance, rallying by 10.8%. In comparison, the SPDR S&P Regional Banking exchange-traded fund (KRE) witnessed a gain of 9.4%, and the broader S&P 500 (SPX) saw an increase of 9.7%.
Regions Financial Corp’s report highlights their ability to meet profit expectations, despite the challenges faced by a drop in deposits. The bank’s focus on diversifying its loan portfolio has helped them to maintain solid revenue growth. However, market activity is currently muted, indicating that investors are awaiting further developments before making any definitive decisions.