Jefferies analyst Ken Usdin rates Regions a "buy," with a price target of $11, and in his third-quarter earnings preview for regional banks on Thursday wrote that a slight "beat" to the consensus estimate is likely "to be driven by net interest margin expansion." He expects the margin to expand because of redemptions and maturities of debt securities, CD repricing, which is still heading lower, with the federal funds rate stuck in a range of zero to 0.25% since late 2008, and a "positive mix-shift to loans from securities."
Usdin expects Regions Financial's net interest income to increase to $838 million in the third quarter from $821 million the previous quarter, with the bank's net interest margin expanding by seven basis points to 3.23%. Jefferies estimates the company to report third-quarter EPS of 22 cents.
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