Regions Financial Corporation (RF): what the price assumes

In the published model solve dated 2026-Q2, anchored at $27.12, Regions Financial Corporation (RF) is priced for today's economics sustained for ~32.7 years. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-28.

Generated: 2026-10-02 · Exported: 2026-10-15 · Source: https://boothcheck.com/report/RF

Headline

FieldValue
TickerRF
CompanyRegions Financial Corporation
Current price$27.12/sh
CompositionCorporate Bank 37% / Consumer Bank 53% / Wealth Management 10%

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basisfinancials
Elite ROE must persist for32.7y before normalizing (held at the 12.8% elite tier)
Perpetuity-equivalent ROE13.2%
Return on equity now11.7%
ROE gap+1.5pp
Price-to-book1.32x

Solve inputs: computed at a 10.9% cost of equity; ROE searched up to the 12.8% ROE ceiling.

How unusual the bet is: within-range

ReferenceValue
vs own history+1.07σ
cohort percentile (of 121 peers)60
sustained it ~10 years at this level67%
implied end-window share0%

Valuation X-Ray

The price is supported by asset-based and earnings-power and growth-DCF value. A value/asset-supported name, not a pure growth bet. No applicable model is available for relative-multiple.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset0.85x3justifies
Earnings1.02x1expensive
Relative—0—
Growth0.85x1justifies

Families that justify the price: Asset, Earnings, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.9%); the inversion above states its own rate.

Per-Model Detail (n=5)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth——no—
Bank Fair Value (P/TBV)—$23.441.16xyesTBVPS $15.24 × 1.54x (ROE (TTM) 11.8% / CoE 9.3%, g=5.0% (sustainable: 65% retention × ROE, 5% cap; not the terminal-growth assumption), credit 1.52% allowance/loans → ×0.96, NPL 0.68% → ×0.99)
Relative ValuationRelative——noP/E 10x (static sector reference · 2026-04), scenarios: 8.4x / 10.0x / 11.6x (bear / base = reference held flat / bull), EV/EBITDA N/Ax
Simple DDMGrowth——no—
Two-Stage DDMGrowth$31.730.85xyesStage 1: 15% for 5yr, Stage 2: 3.5% perpetual
Simple Excess ReturnAsset$28.320.96xyesBV/sh $22.11, ROE (TTM) 11.8%, ke 9.3%
Two-Stage Excess ReturnAsset$31.880.85xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth——noRev $5.1B, growth 3% (input: historical growth; tapered), Terminal P/S: 3.9x / 4.6x / 5.3x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair ValueRelative——noEPS $2.46, growth 15% (input: historical EPS growth), PEG=0.67 (Undervalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings——no—
Residual IncomeAsset——no—
Graham NumberAsset$34.990.78xyes√(22.5 × EPS $2.46 × BVPS $22.11) — Graham's conservative floor
EV/EBITDA RelativeRelative——no—
FCF YieldEarnings——no—
SBC-Adj FCF YieldEarnings——no—
Ben Graham FormulaEarnings——noEPS $2.46 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset——no—
P/Sales SectorRelative——no—
PEG Fair ValueRelative——noEPS $2.46 × (PEG 1.5 × growth 15.5% (input: historical EPS growth)) → PE 23.2x
Earnings YieldEarnings$26.591.02xyesEPS $2.46 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Economic-Unit Decomposition (Sum Of The Parts)

The issuer is a funded financial business. Debt, interest, and cash flows are operating inputs, so industrial EV, net-debt, WACC, and free-cash-flow lenses do not apply; value the common-equity claim with book, earnings, capital, and payout economics.

UnitRoleValuation basisRevenueReported profitValue evidenceStatus
Corporate Bankfinancialequity2.8B reported-currency—withheldunresolved standalone equity facts required
Consumer Bankfinancialequity4.0B reported-currency—withheldunresolved standalone equity facts required
Wealth Managementfinancialequity0.7B reported-currency—withheldunresolved standalone equity facts required

No unit-level total common-equity value is stated. Each financial unit requires supported standalone common equity, normalized earnings, capital adequacy, and payout capacity. Consolidated debt, interest, and cash are operating balances, not an enterprise-to-equity bridge; company-level book, earnings, capital, and payout lenses remain the coherent cross-checks.

Solvency

FieldValue
Share count CAGR (buyback)-2.3%

Deposit/float-funded balance sheet: debt is funding, not corporate leverage, and GAAP operating cash flow follows loan flows. Net-debt, interest-coverage, and cash-burn lenses do not apply. The solvency frame for a financial is regulatory capital and payout capacity (CET1, stress buffer, dividends plus buybacks against earnings).

Bullet Takeaways

Regions trades at $28.60, about 1.4 times tangible book, earning a return on equity near 11.8 percent against a cost of equity near 9.3 percent. A bank that out-earns its capital cost deserves a premium to book, and the methods place fair value scattered both above and below the price.

The operating quality is the draw. First-quarter 2026 EPS rose 22 percent to $0.62, the net interest margin held at an industry-leading 3.67 percent, and credit stayed clean with net charge-offs at 0.54 percent of loans.

The income and capital-return story is steady: a CET1 ratio of 10.7 percent, $401 million of buybacks and $227 million of dividends in the quarter, and a dividend yielding near 3.7 percent.

Bull Case

Look at where the price lands against the methods, because for a bank that out-earns its cost of capital, the spread tells the story. Regions trades at $28.60 (June 28, 2026), roughly 1.4 times tangible book, while earning a trailing return on equity near 11.8 percent against a cost of equity near 9.3 percent. The two-stage excess-return model, which starts from book value and adds the present value of returns earned above the cost of equity, lands near $31.19, and the simple excess-return model lands near $27.71. The two-stage dividend-discount model lands near $33.02, and the Graham number near $34.25. Several of the methods built for banks sit at or above the price, which is the signature of a bank whose profitability justifies trading above book.

The operating quality behind that profitability is genuinely strong. First-quarter 2026 earnings were $539 million, or $0.62 per share, up 22 percent year over year, with total revenue up 5 percent and pre-tax pre-provision income up 8 percent. The net interest margin held at 3.67 percent, an industry-leading level that reflects Regions' low-cost deposit franchise across the Southeast, where nonfarm employment has run ahead of the national average (FY2025 10-K, accession 0001281761-26-000019). Net interest income improved to $1.25 billion as funding costs declined. A high margin sourced from sticky, low-cost deposits is the most durable advantage a regional bank can have.

The credit and capital picture rounds out the case. Asset quality improved in the quarter: net charge-offs were 0.54 percent of average loans, non-performing loans 0.71 percent, and the provision for credit losses fell to $91 million from $124 million. CET1 stood at a healthy 10.7 percent, and Regions returned capital aggressively, repurchasing $401 million of stock and paying $227 million in dividends in the quarter, with the dividend yielding near 3.7 percent. Management guides net interest income growth of 2.5 to 4 percent for 2026. The bull case is a well-run, high-margin regional bank with clean credit and steady capital return, with the bank-style valuation methods supporting the price.

Bear Case

The qualitative observation that should temper enthusiasm is simple: Regions is a good bank, but a good bank trading at 1.4 times tangible book is no longer cheap, and the price has caught up to the quality. The premium to book is the market already paying for the industry-leading margin and clean credit. That leaves little room for a positive surprise and a lot of room for disappointment if any of the supports weaken. The price-to-tangible-book of 1.4 times is the number to sit with: it means the easy gains from buying a profitable bank below book are gone, and from here returns depend on the bank continuing to execute flawlessly.

The specific fundamental risks cluster around credit and rates. Regions, like every regional bank, faces the risk of greater credit losses in its loan portfolios than anticipated (FY2025 10-K, accession 0001281761-26-000019), and net charge-offs already rose modestly, with the quarter noting a $55 million increase in charge-offs. The bank carries residential and commercial real estate exposure whose value depends on collateral and the housing market. Credit looks pristine today, but credit always looks pristine before it does not, and provisions can swing a bank's earnings violently. The net interest margin that anchors the bull case is itself rate-dependent: a sharp drop in rates compresses asset yields faster than deposit costs fall, while deposit competition can force funding costs back up.

Third, the methods are more mixed than the headline suggests. The bank price-to-tangible-book model lands near $22.97, below the price, and the relative-valuation method near $26.80, also below, both saying the stock is fairly valued to slightly rich on a conservative read. Analysts carry a Hold consensus with an average target near $31, and a notable share rate the stock a sell, a level of caution that fits a bank trading above book with limited upside. The bear case is not that Regions is bad; it is that the price already pays for the quality, so the asymmetry favors the downside if credit normalizes or the margin slips.

Valuation

Regions is valued the way a bank should be, off book value, return on equity, and the spread over cost of equity, not off a discounted-cash-flow projection. At $28.60 the price implies a price-to-tangible-book of about 1.4 times against a trailing ROE near 11.8 percent and a cost of equity near 9.3 percent. A bank earning well above its capital cost should trade above book, and the question the methods resolve is how far above.

The bank-appropriate methods cluster around the price. The two-stage excess-return model lands near $31.19, the two-stage dividend-discount near $33.02, the simple excess-return near $27.71, and the discounted-future-market-cap near $27.05. The more conservative lenses land below: the bank price-to-tangible-book model near $22.97, using tangible book of about $14.88 per share at a 1.54 times multiple driven by the ROE-to-cost-of-equity spread, and relative valuation near $26.80 at a sector-median P/E around 10 times. The blended X-ray central estimate sits near $31.19, modestly above the price.

The honest framing is that Regions is roughly fairly valued: the bank methods bracket the price, the conservative P/TBV and relative methods sit just below, and the premium to book reflects real quality already recognized. The number to weigh is the 1.4 times tangible book against the ROE-to-cost-of-equity spread; if the margin and credit hold, the price is justified, and if either deteriorates, the conservative methods near $23 to $27 set the floor.

Catalysts

First-quarter 2026 results, reported in late April, were strong. Earnings were $539 million, or $0.62 per diluted share, up 22 percent from $0.51 a year earlier, with total revenue up 5 percent and pre-tax pre-provision income up 8 percent. Net interest income improved to $1.25 billion as deposit and borrowing costs declined, and the net interest margin held at an industry-leading 3.67 percent. Total deposits edged up to $131.9 billion. Credit improved, with net charge-offs at 0.54 percent of average loans, non-performing loans at 0.71 percent, and the provision for credit losses falling to $91 million from $124 million.

The capital story was active: CET1 stood at 10.7 percent, and Regions repurchased $401 million of stock and paid $227 million in common dividends in the quarter. The board's dividend of $0.26 per share yields near 3.7 percent. Management guided full-year 2026 net interest income growth of 2.5 to 4 percent.

Near-term catalysts to watch: the path of net interest income and margin as rates move and deposit competition evolves, credit-quality trends including any uptick in charge-offs or commercial real estate stress, the pace of buybacks (estimated near $160 million per quarter by one broker), and loan-growth momentum. Analyst sentiment is a Hold consensus with an average price target near $31, and a meaningful share of ratings sit at sell, reflecting a stock seen as roughly fairly valued above tangible book.

Peer Cohorts (Per Segment, With Filing Citations)

Corporate Bank (reported)

Consumer Bank (reported)

Wealth Management (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

View the full interactive RF report on boothcheck