- Regions Financial reports first-quarter earnings from continued operations of 14 cents a share.
- The consensus EPS estimate was eight cents.
- Transitional quarter with sale of Morgan Keegan and common equity raise, preparing for April TARP repayment.
- Reserve release of $215 million fuels beat.
NEW YORK (TheStreet) - Regions Financial (RF) on Tuesday reported that its first-quarter provision for loan losses declined 60% sequentially and 76% year-over-year, fueling operating results that far exceeded analysts' expectations.
The Birmingham, Ala., lender reported first-quarter earnings from continuing operations available to common shareholders of $185 million, or 14 cents a share, improving from losses of $135 million, or 11 cents a share, in the fourth quarter, and a loss of $2 million, or less than a penny a share, in the first quarter of 2011.
The consensus among analysts polled by Thomson Reuters was for Regions to post first-quarter operating EPS of 8 cents.On a GAAP basis, Regions reported first-quarter net income available to common shareholders of $145 million, or 11 cents a share, compared to a fourth-quarter loss of $602 million, or 11 cents a share, mainly from write-downs associated with the then-pending sale of the company's Morgan Keegan subsidiary, which was completed during the first quarter. During the first quarter of 2011, GAAP net income to common shareholders was $17 million, or a penny a share. The first quarter represented quite a transition for Regions, with not only the Morgan Keegan sale, but also a $900 million common equity raise, in preparation for the company's the full repayment in early April of $3.5 billion in federal bailout funds received through the Troubled Assets Relief Program, or TARP, in November 2008. The main factor in the first-quarter earnings beat was a sharp decline in credit costs, with a first-quarter provision for loan losses of $117 million, declining from $295 million the previous quarter, and $482 million a year earlier. Loan loss reserves declined by $215 million, directly boosting operating earnings. Average loan balances declined 2% sequentially and 6% year-over-year, to $77.2 billion during the first quarter, with all real estate loan categories seeing declines. A highlight for Regions was that average non-real estate commercial and industrial loan balances increased 2% sequentially and 8% year-over-year, to $24.7 billion during the first quarter. Regions said it was in a "strong capital position," with an estimated Tier 1 common equity ratio of 9.6% as of March 31 -- increasing to an estimated 10.6% following the TARP repayment -- which CEO Grayson Hall said had the company well positioned "to continue growing profitable customer relationships, expanding our market share and helping our customers become more successful financially,"
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
24/7 market commentary from Jim Cramer and 20+ veteran Wall Street gurus. Get access to the latest trading ideas on stocks, options, and ETFs as well as a real-time forum to see the pros exchanging their investment ideas.
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV