iShares US Regional Banks ETF

IAT

Market cap $540M

IAT faces elevated volatility after credit concerns at Zions Bancorp and Western Alliance Bancorp triggered a sector-wide selloff. Zions Bancorp and Western Alliance Bancorp show no signs of liquidity issues so far, and their bad loans are only a small part of tangible equity. Complacent lending in a booming late-cycle market often signals systemic credit issues that could trigger a chain reaction across the economy.

iShares U.S. Regional Banks ETF (IAT) is rated a sell due to structural disadvantages facing regional banks in the digital age. IAT appears cheap on PEG and EPS growth, but its weighted ROE of 11% is below the estimated 12.6% cost of equity. Recent bad loans and bankruptcies highlight ongoing risks, and aggressive lending could worsen outcomes in a downturn.

The iShares U.S. Regional Banks ETF (IAT) was launched on May 1, 2006, and is a passively managed exchange traded fund designed to offer broad exposure to the Financials - Regional Banks segment of the equity market.

After holding steady for much of 2025, the U.S. Federal Reserve finally instituted the first rate cut of 25 basis points, which could help jumpstart more mergers and acquisitions (M&A) activity. Likewise, this and further rate cuts could benefit exchange traded funds (ETFs) that provide exposure to M&A dealmaking.

The first rate cut of the year gives investors the opportunity to position their portfolios to capture future upside in certain sectors, should further cuts occur. History has an uncanny ability to repeat itself, and it's telling us that we should target the financial sector.

I reiterate my buy rating on IAT, supported by its compelling valuation and potential Fed rate cuts boosting regional banks. IAT offers a high dividend yield and value tilt, with a low PEG ratio near one and exposure to small and midsize US banks. Technical momentum is mixed but improving, with a rising 200-day moving average and a recent golden cross pattern signaling potential upside.

Designed to provide broad exposure to the Financials - Regional Banks segment of the equity market, the iShares U.S. Regional Banks ETF (IAT) is a passively managed exchange traded fund launched on May 1, 2006.

US banks' net interest margins are poised to expand, but higher-for-longer interest rates and uncertainty created by tariffs will push credit costs higher and limit earnings growth in 2025. Banks' earnings should remain healthy through the first half of the year, buoyed by continued margin expansion, steady loan growth and benign credit quality.

Designed to provide broad exposure to the Financials - Regional Banks segment of the equity market, the iShares U.S. Regional Banks ETF (IAT) is a passively managed exchange traded fund launched on 05/01/2006.

Looking for broad exposure to the Financials - Regional Banks segment of the equity market? You should consider the iShares U.S. Regional Banks ETF (IAT), a passively managed exchange traded fund launched on 05/01/2006.