Regions: Financial Loser

NEW YORK (TheStreet) -- Regions Financial (RF) was the loser among the largest U.S. financial names on Tuesday, with shares sliding 3% to close at $6.44.

Investors continued to worry over the coming bank earnings season, set to begin at 7 a.m. EST on Friday, when JPMorgan Chase (JPM) reports its second-quarter results, followed at 8AM by Wells Fargo (WFC). JPMorgan analyst Steven Alexopoulos said that there is a "storm brewing" for regional banks, as net interest margins face years of further pressure, as short-term rates interest rates remain near zero, and the Federal Reserve works to bring down long-term rates.

Following another in a seemingly endless stream of summit meetings, European finance ministers late on Monday announced that 30 million euro would be made available to prop up Spain's banks by the end of July. The yield on Spanish 10-year paper declined from 6.98% at Monday's close to 6.73%.

The KBW Bank Index (I:BKX) declined 1% to close at 44.55, with all 24 index components showing declines for the session, except for JPMorgan Chase (JPM), which was up 1% to close at $34.25.

JPMorgan's shares are trading at historically low multiples to book value and forward earnings. The shares now trade for less than their reported March 31 tangible book value of $34.91, and for six times the consensus 2013 earnings estimate of $5.30 a share, among analysts polled by Thomson Reuters. The consensus 2012 EPS estimate is $4.30.

Analysts are expecting JPMorgan on Friday to report second-quarter earnings of 79 cents a share, declining from EPS of $1.31 the previous quarter and $1.27 a year earlier. Investors are eager for more clarity on the company's trading losses, after CEO James Dimon in May disclosed a hedge trading loss by its Chief investment Office (CIO) estimated at "slightly more than $2 billion."

Regions Financial's shares have now returned 50% year-to-date, after declining 38% during 2011. RF data by YCharts

The shares trade for eight times the consensus 2013 EPS estimate of 77 cents, among analysts polled by Thomson Reuters. The consensus 2012 EPS estimate is 61 cents.

After selling its Morgan Keegan brokerage subsidiary and completing a $900 million common share offering during the first quarter, Regions in early April repaid $3.5 billion in government bailout funds received during 2008 through the Troubled Assets Relief Program, or TARP.

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