Dallas, Texas 10/02/2013 (Financialstrend) – Since the September 19 no taper announcement from FED the stock price of Regions Financial Corporation (NYSE:RF)slid close to 5% till it bottomed out at $9.07 on September 23. Since then it has made a slow but steady attempt at regaining some of its lost value. The biggest concern analyst’s note about the bank is the continuous reduction the organization is seeing in its non-interest income. With the interest and focus of analysts and investors centred on FED moves in mid September, the midyear stress test results of Regions almost went unnoticed. It was announced on September 17 and made for interesting reading specifically with respect to some of the capital redistribution that transpired during 2Q13.
The company went through repurchase of close to $175 million of common stock and retired a consolidated $598 million worth preferred stock notes and securities during the time period of 2rQ.
The financial institution’s market cap of over $13.1 billion makes it mandatory to follow certain stringent regulatory requirements, which are expected to eat into its profitability going forward. Specifically bothersome is the likelihood of reduced rate of fee income and increasing cost of compliance (around stress tests and costly information technology investments required to support the same).
With these constraints holding back its market performance, the stock has seen a small rally over the last few weeks. It went up by 1.5% during trading on October 1. It settled at $9.4 per share as of close of business. The gains have extended through the previous week trading. It went up by 2.29% over the past week trading and just about to remain positive when taking account of its 30 day trading track record. It ended in the red for the quarter with a close to 4% dip in value.
