Updated from 4 p.m. EDTRegions Financial ( RF) became the latest bank to shock investors with a surprise earnings pre-announcement on Thursday, sending its shares soaring nearly 40% in afternoon trading. Investors shrugged off Regions' other announcement that it would cut its quarterly dividend to a penny a share from 10 cents to preserve about $250 million a year. Regions shares closed up 34% at $6.70, after the estimates were disclosed in an 8-K filing with the Securities and Exchange Commission. The Birmingham, Ala.-based regional bank did not disclose specific profit figures, but said that Regions expects to report a profit for the first quarter. The statement comes in sharp contrast to an analysts' average estimate of a loss of 42 cents per share, according to Thomson Reuters. The filing referred to a presentation given to shareholders on Thursday by Chairman and CEO C. Dowd Ritter. The presentation attributed the expectation to "significant" deposit growth, "high" customer retention and record-setting growth in new account openings and mortgage applications. Ritter also said that the company has taken "substantial steps to reduce credit risk," including the sale or offering of $1.6 billion in problem assets and reduced exposure to other problematic areas, like commercial real estate. Additionally, Regions said it plans to repay government bailout funds "as soon as possible" and that its recent move to slash its dividend has helped preserve the necessary capital to get through the economic crisis. "This was a difficult decision for the Board, and we are committed to increasing the dividend as soon as it is prudent and can be supported by sustained earnings growth," Ritter said in a statement.
Wells Fargo ( WFC) and Goldman Sachs ( GS) also shook the markets by issuing preannouncements with major upside, and JPMorgan Chase ( JPM) topped expectations with its results on Thursday. Investors are waiting to see what Bank of America ( BAC) and Citigroup ( C) have in store, though CEOs of both companies have said their operations were profitable in the first two months of the year.