Regions: Financial Winner

NEW YORK (TheStreet) -- Regions Financial (RF) was the winner among major U.S. financial names on Friday, with shares rising 3% to close at $5.31.

The broad indexes were mixed after Fitch Ratings downgraded Italy, Spain, Slovenia, Belgium and Cyprus while maintaining Ireland's rating. Italy's rating was cut to notches to A-, and Spain's rating was cut two notches, to AA-.

The Bureau of Economic Analysis reported early Friday that the total output of goods and services in the U.S. expanded 2.8% during the fourth quarter.

The The KBW Bank Index (I:BKX) rose 1% to close at 42.87, with 19 of the 24 index components showing gains to round out the week.

Regions Financial's shares were up 8% for the week, and have now returned 23% year-to-date, after falling 38% last year.

The Birmingham, Ala., lender has been one of the most volatile names among the largest U.S. banks, in part because it still owes $3.5 billion in federal bailout funds received through the troubled assets relief program, or TARP, but also because of uncertainty leading to its Jan. 11 agreement to sell its Morgan Keegan subsidiary to Raymond James Financial (RJF), for "total consideration of $1.18 billion."

After Regions on Tuesday reported a fourth-quarter net loss to common shareholders of $602 million, or 48 cents a share, mainly driven by a non-cash goodwill impairment charge of $731 million, springing from the Morgan Keegan deal, Deutsche Bank analyst Matt O'Connor reiterated his "Buy" rating for Regions, with a $5 price target, saying that "there were no big surprises in underlying trends or other large gains/losses."

Regions estimated that its Tier 1 common equity ratio increased to 8.5% as of Dec. 31, from 8.2% the previous quarter, and O'Connor estimated that the company's Tier 1 common ratio would "exceed 9% by the end of 2012."

When the Morgan Keegan deal was announced, O'Connor said his earnings estimates included "the impact of $1b common issuance to repay TARP. The analyst estimates that Regions will earn 44 cents a year in 2012.

The shares trade for 0.9 times tangible book value, according to HighlineFI, and for 11 times the consensus 2012 EPS estimate of 46 cents, among analysts polled by Thomson Reuters.