How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in Regions Financial (RF) ten years ago? It may not have been easy to hold on to RF for all that time, but if you did, how much would your investment be worth today?
Regions Financial's Business In-Depth
With that in mind, let's take a look at Regions Financial's main business drivers.
Regions Financial Corporation is a Birmingham, AL-based financial holding company, providing retail and commercial and mortgage banking, as well as other financial services in the asset management, wealth management, securities brokerage, trust services, mergers and acquisitions (M&A) advisory services and other specialty financing.
The company has four business segments.
The Corporate Bank (44% of total average assets as of Dec 31, 2020) segment includes the company’s commercial banking functions including commercial and industrial, commercial real estate, investor real estate lending, equipment lease financing and capital market activities.
The Consumer Bank (25%) segment comprises the company’s branch network, including consumer banking products and services as well as the corresponding deposit relationships.
The Wealth Management (2%) segment consists of wealth management products and services. This segment provides services such as investment advice, assistance in managing assets and estate planning to individuals and institutional clients.
Other (29%) includes the company’s treasury function, the securities portfolio, wholesale funding activities, interest rate risk management activities and other corporate functions that are not related to a strategic business unit.
In December 2021, Regions Financial acquired Clearsight Advisors, Inc. In the same month, Regions Financial’s subsidiary, Regions Bank, acquired Sabal Capital Partners, LLC. In October 2021, Regions Financial completed the acquisition of the specialized home improvement lender, EnerBank USA, from its parent CMS Energy Corporation.
In April 2020, it acquired equipment finance lender, Ascentium Capital LLC, from Warburg Pincus. Also, in August 2019, Regions Financial closed acquisition of Highland Associates — a leading institutional investment firm. In July 2018, the company divested Regions Insurance Group to BB Insurance Holdings — a wholly owned subsidiary of BB&&T Corporation.
As of Mar 31, 2022, Regions Financial reported $164 billion in assets, $87.9 billion in net loans, $141 billion in deposits and $16.9 billion in shareholders' equity.
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For Regions Financial, if you bought shares a decade ago, you're likely feeling really good about your investment today.
According to our calculations, a $1000 investment made in May 2012 would be worth $3,462.03, or a 246.20% gain, as of May 30, 2022. Investors should keep in mind that this return excludes dividends but includes price appreciation.
The S&P 500 rose 215.54% and the price of gold increased 13.78% over the same time frame in comparison.
Analysts are forecasting more upside for RF too.
Shares of Regions Financial have underperformed the industry over the past year. The company has a decent earnings surprise history, having beaten the Zacks Consensus Estimate in three of the trailing four quarters, while missing in one. First-quarter results were driven by a rise in loan and deposit balances. Economic recovery and a strong lending pipeline are expected to drive decent loan growth, thereby supporting net interest income (NII) in the upcoming quarters. Regions Financial’s inorganic growth moves aimed to diversify its revenues bode well. Yet, pressure on margins due to low rates is likely to hamper the company’s top-line growth. Lack of diversification in commercial loans and declining mortgage income are concerning. Also, a rising expense base is expected to continue negatively impacting the bottom line in the near term.
The stock is up 5.60% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 11 higher, for fiscal 2022. The consensus estimate has moved up as well.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Regions Financial Corporation (RF) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research