Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Regions Financial Corporation (RF - Analyst Report) announced that it will redeem its issued and outstanding 6.625% Trust Preferred Securities (TruPS) worth $498 million. These TruPS were issued by Regions Financing Trust II. The redemption is scheduled on May 31, 2013.

Regions has fixed the price of redemption of these TruPS at $1,000 per share. The company will pay this redemption price along with the accrued and unpaid distributions due on the securities till the date of redemption to its shareholders.

Regions’ decision to redeem TruPS follows the Federal Reserve’s approval of the company’s planned capital actions under 2013 Comprehensive Capital Analysis and Review (CCAR) in March. Earlier, the company authorized a new share repurchase program of up to $350 million of its shares. The board also announced a threefold hike in its quarterly cash dividend on common stock. The new dividend of 3 cents will be paid on Jul 1, to shareholders of record as of Jun 14.

TruPS redemption is viewed as a positive step for the banks, enabling them to reduce interest expenses, as these securities demand higher rates than other securities. Further, according to the Dodd-Frank Act, banks are not allowed to consider these securities as regulatory capital beginning 2013.

Many other major banks including Bank of America Corporation (BAC - Analyst Report), Wells Fargo & Company (WFC - Analyst Report) and U.S. Bancorp (USB - Analyst Report) also received clearance from the Fed to move ahead with their planned capital actions. The Fed’s approval of capital plans for most of the major U.S. banks reflects stability in the banking system to a great extent. Moreover, such accomplishments for banks will definitely boost shareholders' confidence.

Currently, Regions carries a Zacks Rank #2 (Buy).
 

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%