Citizens Financial, Regions Shares Part Ways as One Beats, One Matches

(Bloomberg) -- Citizens Financial Group Inc. shares are jumping in pre-market trading after an earnings beat, while Regions Financial Corp. stock is dropping after its profit merely matched analysts’ expectation. Both banks anticipate loan growth will keep growing at low-single-digit percentage rates in 2019, after reporting similar growth in the fourth quarter of 2018.

Shares of SunTrust Banks Inc., which reported earnings-per-share that beat and fourth-quarter loan growth of 2.5 percent compared to the prior quarter, are also rising in pre-market trading.

Here are some highlights from bank earnings this morning:

Citizens Financial

  • 4Q adjusted EPS 98 cents vs est. 94c, with “funding/credit better than feared,” Piper’s Kevin Barker says; shares up 4.4% pre-market
  • Avg. interest-earning assets rose $1.6b q/q, reflecting $1.9b, or 2%, increase in loans, with strength in commercial, retail
  • For 2019, sees 3%-5% average loan, earning asset growth; sees NIM up low- to mid-single digit bps, reflecting benefit of balance sheet optimization; see slides, pg 20
  • "Capital Markets revenues held up reasonably well given weak debt capital markets conditions in fourth quarter 2018"
  • Call 9am 800-230-1074 password: 443614

Regions Financial

  • 4Q adjusted EPS matched estimates, as higher net interest income, lower expenses were offset by higher provision, lower fee income, SunTrust analyst Jennifer Demba writes in a note
  • Avg. loans up 1% q/q, 3% y/y; loan growth led by C&I, driven by specialized lending, governmental and institutional banking and REIT lending portfolios
    • Growth in consumer helped by mortgage, credit card; investor real estate growth driven by term real estate lending, mostly within office, industrial property types (slides pg 3)
  • Sees 2019 adjusted average loans growth low single digit, consistent with GDP forecast
  • Call 11am 855-325-2114 password: 6691007

SunTrust Banks Inc.

  • 4Q adjusted EPS $1.50 vs est. $1.43; shares jumping 4.9% pre-market
  • Avg. performing loans up 2.5%, on "broad-based growth across both business segments," with consumer up 2%, wholesale up 3%; loans rose 4% y/y, driven by C&I, consumer direct, and commercial real estate (CRE), partially offset by declines in home equity and commercial construction; see slides page 10
  • "Overall asset quality performance continues to be strong"
  • Call 8am 877-209-9920 password: SunTrust

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