Regions Financial: Job Growth Loser

NEW YORK (TheStreet) -- Regions Financial (RF) was the loser among the largest U.S. financial names on Monday, with shares sliding over 3% to close at $6.21

The broad indexes saw 1% declines, following the U.S. Labor Department's report on Friday that nonfarm payrolls increased by 120,000 in March, far short of the 200,000 gain expected by economists surveyed by Thomson Reuters. The unemployment rate fell to 8.2% from 8.3% the previous month.

The KBW Bank Index (I:BKX) declined 2% to close at 47.92, with all 24 index components showing session declines of at least 1%.

Regions Financial's shares have now returned 45% year-to-date, following a 38% decline during 2011.

The shares trade for eight times the consensus 2013 earnings estimate of 75 cents, among analysts polled by Thomson Reuters. The consensus 2012 EPS estimate is 48 cents.

Regions on Wednesday repaid $3.5 billion in federal bailout funds that had been received in 2008 through the Troubled Assets Relief Program, or TARP, which will save the company $175 million a year in dividends, on an annual basis.

The Birmingham, Ala., lender raised the money for the TARP repayment partly through the sale of its Morgan Keegan brokerage subsidiary to Raymond James Financial (RJF), and also through a $900 million offering of common shares.

The company is set to report its latest financial results on April 24, and the consensus estimate among analysts polled by Thomson Reuters is for a first-quarter profit of seven cents a share.

Deutsche Bank analyst Matt O'Connor rate

s Regions a "Buy," and last Monday raised his price target for shares by a dollar, to $7.50.

O'Connor's first-quarter EPS estimate for Regions matches the consensus, and "reflects lower net interest income given lower earning assets (continued run-off of RF's investor real estate and home equity portfolios) and higher mortgage prepayments in the securities book. However, offsets to these [net interest margin] headwinds are opportunities lower funding costs, reduce excess cash levels and continued pricing discipline on loans."

Interested in more on Regions Financial? See TheStreet Ratings' report card for this stock.

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-- Written by Philip van Doorn in Jupiter, Fla.

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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.