Regions Financial Corporation
) announced that its capital deployment plan, submitted under the
2013 Comprehensive Capital Analysis and Review (CCAR) or the
stress test, has received approval from the Federal Reserve. This
was followed by the authorization of a new share repurchase
program by the company.
Regions authorized the equity repurchase of upto $350 million of
its shares. However, the timing and the exact amount of shares to
be repurchased will depend on various factors including market
conditions, the company's capital position and internal capital
The buyback can be executed through open market operations,
accelerated share repurchase transactions or privately negotiated
In Jan 2013, along with Regions, 18 other banks submitted the
capital plans to the Federal Reserve for the stress test. Of the
18, Federal Reserve approved capital plans of 16 banks including
Bank of America Corporation
The Bank of New York Mellon Corporation
Citigroup received the Fed's approval to repurchase shares worth
$1.2 billion through first-quarter 2014. Further, BofA received a
nod for the repurchase of up to $5.0 billion of common stock and
the redemption of approximately $5.5 billion in preferred stock.
Another major bank, BNY Mellon got approval from the Fed to
repurchase $1.35 million of its shares. Moreover, it is
contemplating a 15% hike in its quarterly dividend from 13 cents
Regions' favorable funding mix, improved core business
performance and strategic initiatives are expected to yield
decent earnings in the near future. Also, the share buyback plan
is expected to boost investors' confidence in the stock. However,
regulatory restrictions and sluggish economic conditions remain
the causes of concern.
Regions currently retains a Zacks Rank #2 (Buy).
BANK OF AMER CP (BAC): Free Stock Analysis
BANK OF NY MELL (BK): Free Stock Analysis
CITIGROUP INC (C): Free Stock Analysis Report
REGIONS FINL CP (RF): Free Stock Analysis
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