Why Regions Financial (RF) Stock Is Up Today

NEW YORK (TheStreet) -- Shares of Regions Financial  (RF) were up 2.21% to $10.17 in afternoon trading Wednesday after the bank introduced a new program to help first time home buyers.

The bank designed the program, called The Regions First Time Home Buyers Program, to help prospective first-time homeowners get past some of the obstacles that prevent them from purchasing a home. To that end, the program features a fixed rate mortgage with no closing costs to the borrower, with the exception of prepaid items. Regions pays the closing costs does not roll them into the loan amount.

The program also contains mandatory home buyer counseling designed to help customers understand budgeting and plan their finances after they purchase a home. Other features of the program include 95% loan-to-value for purchase of primary residences on homes, down payment options that permit family member assistance, and options for borrowers who do not have traditional credit history.

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"We think this program is ideal for so many first time home buyers," said Logan Pichel, Head of Regions Consumer Lending, in a statement. "Many times, first time home buyers have limited funds available for closing, and this program can help free up more of their funds for down payments, savings or emergencies."

Separately, 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 number of 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 growth in earnings per share, increase in net income, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • REGIONS FINANCIAL CORP has improved earnings per share by 16.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, REGIONS FINANCIAL CORP increased its bottom line by earning $0.78 versus $0.75 in the prior year. This year, the market expects an improvement in earnings ($0.85 versus $0.78).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Commercial Banks industry average. The net income increased by 12.4% when compared to the same quarter one year prior, going from $267.00 million to $300.00 million.
  • The gross profit margin for REGIONS FINANCIAL CORP is currently very high, coming in at 91.74%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 22.12% is above that of the industry average.
  • The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 12.9%. Since the same quarter one year prior, revenues slightly dropped by 3.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • You can view the full analysis from the report here: RF Ratings Report

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