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10 Bank Stock Value Picks

Stocks in this article: BACCJPMRFCOFPNCBPOPDRLOFGBFIN

9. Regions Financial
Shares of Regions Financial (RF) of Birmingham, Ala., closed at $7.00 Friday, returning 63% year-to-date, following a 38% decline during 2011.

The shares trade for 1.1 times tangible book value, and for 8.8 times the consensus 2013 EPS estimate of 80 cents. The consensus 2012 EPS estimate is 71 cents.

Regions went through a major transition during the second quarter, redeeming $3.5 billion in preferred stock held by the government for bailout assistance received in 2008 through the Troubled Assets Relief Program, after selling its Morgan Keegan subsidiary and raising $900 million in common equity during the first quarter.

The company reported second-quarter earnings available to common shareholders of $284 million, or 20 cents a share, increasing from $145 million, or 11 cents a share during the first quarter, and $55 million, or four cents a share, during the second quarter of 2011. The second-quarter earnings were reduced by $71 million, or five cents a share, from the accelerated discount accretion on the redeemed TARP preferred shares.

Guggenheim analyst Marty Mosby rates Regions a "Buy," and on Friday raised his price target for the shares to $9.00 from $8.50, "based on the strong recovery of earnings reported in 2Q12," and on "our detailed analysis that ties returns on tangible common equity to a relative premium to tangible book value and growth in tangible book value." The analyst expects said that "a reduction of seasonal expenses coupled with the net benefit from repaying TARP pushed RF's annualized earnings power above $0.80 during 2Q12."

RF Chart RF data by YCharts

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

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