- 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.
With noninterest bearing deposits increasing 5% sequentially and 8% from a year earlier to $29.7 billion as of March 31, Regions managed to preserve its net interest margin, which was 3.09% during the first quarter, increasing from 3.08% the previous quarter, and matching the margin a year earlier. Jefferies analyst Ken Usdin rates Regions a "Hold," with a $7.00 price target, and said that "better credit (both charge-offs and reserve release) drove the beat," while "pre-provision earnings looked a little light (high expenses), but some of this may be seasonal. " Usdin also noted that "unlike others, RF is not juicing the balance sheet with residential mortgage growth." With the company selling most of the mortgages it originates, Regions booked $77 million in mortgage income during the first quarter, increasing from $57 million the previous quarter, and $45 million a year earlier. Regions Financial's shares closed at $6.07 Monday, returning 42% year-to-date, following a 38% decline during 2011.The shares trade for just below their reported March 31 tangible book value of $6.42, and for eight times the consensus 2013 EPS estimate of 74 cents. The consensus 2012 EPS estimate is 48 cents. Interested in more on Regions Financial? See TheStreet Ratings' report card for this stock. -- Written by Philip van Doorn in Jupiter, Fla. To contact the writer, click here: Philip van Doorn. To follow the writer on Twitter, go to http://twitter.com/PhilipvanDoorn.