Regions: A Buyback to Bank On

10/28/2016 8:00 am EST


David Fried

Editor, The Buyback Letter

Our latest featured stock is a leading regional bank in the southeastern U.S., has about $126 billion in assets, is a member of the S&P 500 Index and is the 17th largest bank in the U.S. (based on assets), observes David Fried, editor of The Buyback Letter.

A full-service consumer and commercial bank, Regions Financial Corp. (RF) provides wealth management, mortgage, and insurance products and services.

Regions serves customers in 16 states across the South, Midwest and Texas, and through its subsidiary, Regions Bank, operates some 1,600 banking offices and 2,000 ATMs.

Analysts taking the long view have noted that while Regions (like other financial institutions) faced major problems during the 2008-09 meltdown and recovery was slow.

However, management has done a good job of returning to banking basics and strengthening the loan portfolio while also expanding the bank’s customer and asset base.

Strong cost-cutting initiatives and shareholder-friendly dividend and repurchase activities have rewarded shareholders. 

Q2 profit was $275 million, with earnings of 20 cents per share. Results met Wall Street expectations. The company remains focused on its plan to consolidate 100-150 branches and reduce $300 million in expenses by 2018 to achieve efficiency.

During Q2, Regions was recognized by the advisory firm Reputation Institute and American Banker magazine as having the best overall reputation among top U.S. banks.

Regions was also recognized for the second consecutive year as having the best reputation among customers.

In addition, Regions was recently ranked among the top 10% of companies rated in the 2016 Temkin Web Experience Ratings, placing the bank in the category of companies ranked "very strong" in online experience.

We last bought shares of Regions Financial in May, and the stock has floated to the top of our list again. RF has reduced shares outstanding by 5.5% in the past 12 months.

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