2. Regions Financial
Shares of Regions Financial ( RF) of Birmingham, Ala., closed at $6.75 Friday, returning 57% year-to-date, following a 38% decline during 2011.

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The shares trade for 1.1 times tangible book value, and for 8.8 times the consensus 2013 EPS estimate of 77 cents. The consensus 2012 EPS estimate is 60 cents.

After selling its Morgan Keegan brokerage subsidiary and completing a $900 million common share offering during the first quarter, Regions in early April repaid $3.5 billion in government bailout funds received during 2008 through the Troubled Assets Relief Program, or TARP.

Regions will report its second-quarter results on July 24, with analysts expecting a 14-cent profit, matching the company's first-quarter results. During the second quarter of 2011, the company earned four cents a share.

Deutsche Bank analyst Matt O'Connor rates Regions a "Hold," and said on Thursday that his firm expects Regions "to report 2Q12 EPS of $0.16 (ex a $0.05 charge related to the repayment of TARP)," and that although the company's management "still expects improvement in net interest margin through 2012," the margin expansion "will be back-end loaded given that leverage to lower deposit costs will take place in 2H12 (and 4Q12 in particular)."

Jefferies analyst Ken Usdin also has a "Hold" rating on Regions, with a $7.50 price target, estimating the company will report second-quarter earnings of 17 cents, with full-year EPS estimates of 70 cents for 2012 and 85 cents for 2013. Usdin said on Wednesday that "we believe RF can beat, as consensus looks too conservative in its loan loss provision forecast," and that "while last quarter's reserve release magnitude ($215mm) is likely unsustainable, net release should continue with RF's loan loss reserve still high at 3.4% of loans."

Usdin added that net interest income for the second quarter "could disappoint, as earning assets could be down by $1B+ and margin expansion might not emerge until the back half of the year," but also said that "even with flat net interest income, pre-provision earnings should grow from the first quarter , as $30mm-$40mm of expenses roll off due to normal seasonality."

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