Regions Bank - the banking subsidiary of
Regions Financial Corp.
) - recently announced an agreement with PrimeVest Financial
Services. According to the agreement, registered broker-dealer
and Registered Investment Advisor (RIA) firm PrimeVest, which
operates under the Cetera Financial Group, will offer advisory
and investment solutions besides providing comprehensive support
to Regions' customers.
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Under the terms of the deal, the customers of Regions Bank will
enjoy the benefits of an array of financial advisory services,
such as managed accounts, mutual funds, annuities, insurance,
financial and retirement planning tools. These services will be
provided by licensed financial consultants in Regions Bank
The PrimeVest services, to be offered under Regions Investment
Solutions brand, will be implemented in a phased manner in some
select branches of the bank beginning 2013. For this purpose, the
bank has started hiring financial consultants.
Management at Regions' believes that with PrimeVest's established
track record of helping banks meet the customers' requirements
through customized programs, it can improve the investment
offerings for mass market as well as elite customers. The
partnership will also provide Regions' customers an access to
complete financial planning, investment and insurance services
throughout its footprint.
PrimeVest, on its part, believes that the partnership is a
remarkable prospect to combine its dedicated service with
Earlier in April, Regions sold its securities brokerage arm -
Morgan Keegan & Company, Inc. - to
Raymond James Financial Inc.
). Management believes the latest deal will help negate the void
left by this divestiture to some extent.
Further, in June, Regions merged three of its units into a single
wealth management group. The company pooled its trust, insurance
and private banking units into one group to look after affluent
clients. We believe this deal with PrimeVest is an extension of
its restructuring process.
Further, in our point of view, the deal would make it possible
for Regions to explore opportunities consistent with its
strategic and capital planning initiatives. This will aid in
diversifying revenue streams and will help gaining profitable
customers, which in turn, will raise fee income.
The formation will facilitate Regions to enhance its strategic
plan by focusing on the main and profitable customer segments.
The company aims at increasing non-interest revenues and creating
strong customer relationships while providing greater value.
However, the stringent regulatory and sluggish macroeconomic
environments remain the major areas of concern.
Regions currently retains a Zacks #3 Rank, which translates into
a short-term Hold rating. However, we believe Regions' favorable
funding mix and improved core business performance strategies
will yield profitable earnings in the upcoming quarters. These
factors may ultimately result in upward estimate revisions,
thereby leading to a better Zacks Rank. In the same sector,
M&T Bank Corporation
) retains a Zacks #1 Rank.