The shares trade for 1.2 times tangible book value, and for nine 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 first half of 2012. During the second quarter, the company redeemed all $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.The company's second-quarter net interest margin expanded to 3.16%, from 3.09% the previous quarter, and 3.07% a year earlier. Mosby estimates that Regions Financial's margin will expand by another nine basis points through the end of 2013. Mosby rates Regions a "Buy," and on Monday raised his price target for the shares to $9.25 from $9.00, saying he expected the company to improve its "quarterly earnings run rate to above $0.20 before year-end, pushing potential upside substantially higher." RF data by YCharts
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