Regions Financial On Target With Its Conservative Approach

I've been making the argument for a little while now that the more conservative approach favored by Regions Financial (NYSE:RF) is the right one for the present circumstances, and also that the company's efficiency initiatives and hedging program would give the bank a solid chance of posting peer-leading pre-provision profit growth through this more challenging part of the cycle. Since my last update, the shares have modestly outperformed the bank's regional peers (by about 1% to 2%), though the trailing twelve-month performance is more ordinary - which makes sense to me as Regions' relatively better positioning is only starting to emerge here of late.

The ongoing increase in criticized loans is a worry to me, but Regions has been proactive and comparatively open in addressing its credit quality. I continue to believe that Regions is undervalued today, though Regions could certainly help its case with better revenue growth, and I believe M&A is at least a possible source of upside.

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Regions Financial On Target With Its Conservative Approach