Regions Financial (NYSE:RF) EPS Lowered on High Credit Costs

Saying Regions Financial (NYSE:RF) will be one of the slower banks to return to profitability, FBR lowered their full year 2011 and 2012 EPS estimates on them.

FBR says, "We reduced our FY11 and FY12 EPS from $0.14 and $0.80 to $(0.25) and $0.35, respectively. With the stock trading at 1.25x projected FYE11 TBV and a projected EPS loss for FY11, we view the shares as fairly valued given our belief that Regions Financial's return to normalized profitability will be among the slowest due to high credit costs stemming from exposure to Southeast CRE. While we do believe Regions is taking the right actions to stabilize the company and place it on a path to improved profitability, repayment of the $3.5 billion of TARP does not appear to be a near-term event, which we believe will remain an overhang for the stock."

FBR Capital reiterates a "Market Perform" on Regions Financial (RF), which was trading at $6.91, down $0.11, or 1.57 percent, as of 12:54 PM EST. FBR has a price target of $7.50 on the bank.