NEW YORK (TheStreet) -- Regions Financial
(RF - Get Report) was rising 2.55% to $10.84 on Tuesday after the company reported fourth-quarter earnings.
Regions Financial reported a net income of $219 million for the fourth-quarter, earnings $1.1 billion for the year. The fourth-quarter also included multiple items that reduced the net income by $75 million, or five cents per share, after tax. Earnings fell 16% compared to the same quarter one year earlier, when Regions Financial reported a net income of $261 million, because of the one-time charges, but the full-year net income rose 10% compared to $1.05 billion in 2012.
The one-time charges included $46 million from the transfer of almost $700 million worth of troubled loans to held-for-sale status, as well as $3 million from the consolidation of 30 offices. The company also took a $14 million charge thanks to its sale of brokerage branch Morgan Keegan to Raymond James Financial (RJF). Finally, Regions Financial also dealt with a $58 million regulatory charge, but received a $40 million gain from adjustments tied to the valuation of its debt portfolio.
Regions Financial's earnings per share were at 16 cents in the fourth quarter and 77 cents for the year, compared to 18 cents and 71 cents, respectively, in 2012. Its tangible book value climbed 6% to $7.54 from $7.11 at the end of 2012.
TheStreet Ratings team rates REGIONS FINANCIAL CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate REGIONS FINANCIAL CORP (RF) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to its closing price of one year ago, RF's share price has jumped by 42.00%, exceeding the performance of the broader market during that same time frame. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- The gross profit margin for REGIONS FINANCIAL CORP is currently very high, coming in at 92.56%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, RF's net profit margin of 20.76% significantly trails the industry average.
- REGIONS FINANCIAL CORP's earnings per share declined by 9.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, REGIONS FINANCIAL CORP turned its bottom line around by earning $0.75 versus -$0.02 in the prior year. This year, the market expects an improvement in earnings ($0.82 versus $0.75).
- RF, with its decline in revenue, slightly underperformed the industry average of 1.2%. Since the same quarter one year prior, revenues slightly dropped by 5.7%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Commercial Banks industry and the overall market, REGIONS FINANCIAL CORP's return on equity is below that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: RF Ratings Report