Analyst Note| Eric Compton, CFA |
No-moat Regions Financial reported solid second-quarter earnings, beating the FactSet consensus estimate of $0.53 per share with reported earnings of $0.77 per share. This equates to a return on tangible common equity of roughly 27%. The biggest swing factor was once again the firm's provisioning for credit losses. Similar to peers, despite our more positive adjustments after last quarter, the bank is outperforming our projections here. The bank recorded a net provisioning benefit of $337 million, more than double the benefit last quarter. We think the bank could still release more reserves going forward. Management also improved its full-year net charge-off guidance, as charge-offs increasingly appear that they will come in below normal as the credit environment remains very positive.