Region Financial Corp (RF) is a regional bank headquartered in Birmingham, Alabama. In the recent quarter, RF beat earnings estimates with EPS of $0.80 compared to the forecast of $0.78. However, revenue growth was lower than expected at 7.9% versus the forecast of 8.2%. The document provides an analysis of RF's current performance, earnings surprise outcome, qualitative analysis of management statements discussing future risks and opportunities, and recommendations to consider buying RF stock.

1. REGION FINANCIAL
CORPORATION
Prepared by: Nawaf Almutairi
Financial Analysis

2. Region Financial Corp. (RF)
1- Current Performance of RF:
Recent Price $7.71 (finance.yahoo.com)
Market Value (bil) $10.90 Billion (finance.yahoo.com)
Dividend Yield 0.5% (finance.yahoo.com)
S&P 500 Sector $1518.20 (finance.yahoo.com)
P/E 10.75 (finance.yahoo.com)
P/B 0.7 (wikiinvest.com)
P/CF 6.12 (nasdaq.com)
2- Comparable
Performance
Forecast Actual
Current Q EPS 0.78 0.80 (nasdaq.com)
Comparable Q Revenue Growth 8.2% 7.9%
YOY Revenue Growth 35.77% 76.84%
Performance Relative to Competition N/A 0.78% increase in RF vs. 0.38%
increase in overall Southeast
banks.
Earnings Surprise (Y/N) 0.2 0.22 (10% Surprise)
(nasdaq.com)

3. 3- Earning Surprise Outcome:
Source: http://www.nasdaq.com/symbol/rf/earnings-surprise#.UTLeU6Kouqs
So far this earnings period, 200 companies in the S&P 500 index reported current quarter
results. Of those firms, 75 percent weary their estimates, while 15 percent wasted and 10 percent
matched. In a regular quarter, 62 percent of companies beat estimates, 18 percent match and 20
percent miss estimates, as per figures aggregated by Thomson Reuters. Unexpectedly, this increase
in the prices was high, and the reaction of the company was quiet excited. This was a positive
surprise for the company, as the market price was increased by 10%. The possible reason behind
this is that there was too much positive opinion of analysts during that period. The company was
highly discussed in a positive manner in the journals and articles. The company has also looked
upon the activities of the competitors in an effective manner. This was helpful for the company to
increase its earnings surprises for the quarter.
4- Qualitative Analysis of Management Statement:
RF (as one unit with its subsidiaries on an united premise, “Regions” or “Company”) is a
monetary holding company headquartered in Birmingham, Alabama, which manages all through
the South, Midwest and Texas. Regions gives customary business, retail and contract managing
an account aids, and also other monetary utilities in the fields of contribution managing an account,

4. holding administration, trust, common funds, securities business, protection and other
distinguishing offering financing. At this quarter, Regions had add up to merged holdings of
roughly $132.4 billion, add up to combined stores of give or take $94.6 billion and add up to
combined stockholders' value of give or take $16.7 billion. The US observed the low economic
growth in year 2011-2012; however, the company has made a steady growth on key fronts. The
company has observed no loss, and its performance was improved as compared to the previous
year. However, the company is still focusing upon the improvement strategies. The company
focuses upon the achievement of future opportunities. The company operates its busi9enss in 16
states. Here are some of the business regulations. These activities are helpful for the company in
order to grow continuously (apps.shareholders.com).
Acquisition program:
A considerable segment of the development of Regions from its initiation as a bank holding
company in 1971 has been with the procurement of other financial organizations, incorporating
business banks and thrift organizations, and the holdings and stores of the aforementioned financial
foundations. As a feature of its progressing key arrangement, Regions occasionally assesses
business blend chances. Any fate business blend or progression of business consolidations that
Regions may undertake may be material, as far as possessions gained or liabilities collected, to
Regions' financial condition. Truly, business fusions in the financial services industry have
ordinarily included the installment of a premium over book and market values. This practice might
bring about weakening of book worth and net pay for every allotment for the acquirer.
Supervision and Regulation:
Regions and its subsidiaries are subject to the extensive administrative skeleton material to bank
holding companies and their subsidiaries. Regulation of financial institutions such as Regions and
its subsidiaries is proposed fundamentally for the security of depositors, the Federal Deposit
Insurance Corporation's (“FDIC”) Deposit Insurance Fund (the “DIF”) and the saving money
system as an entire, and usually is not expected for the assurance of stockholders or different
investors. Described beneath are the material elements of selected laws and regulations pertinent
to Regions and its subsidiaries. The descriptions are not expected to be finish and are qualified in
their total by reference to the full content of the statutes and regulations described. Changes in

5. pertinent law or regulation, and in their translation and provision by administrative agencies and
other legislative authorities, can't be anticipated, however they might have a material impact on
the business and results of Regions and its subsidiaries.
Future Risks:
The capital and credit markets since 2008 have encountered unprecedented levels of volatility and
disruption. In some cases, the markets transformed downward pressure on stock prices and credit
accessibility issuers without respect to those issuers' underlying financial strength. Granted that
the investment slowdown that the United States encountered has started to reverse and the markets
have ordinarily enhanced business activities across an extensive variety of industries press on to
face serious difficulties because of the absence of consumer spending and the absence of liquidity
in the worldwide credit markets. Uplifted unemployment levels have further increased these
difficulties.
A sustained weakness or debilitating in business and monetary conditions ordinarily or specifically
in the chief markets in which we work together might have one or a greater amount of the taking
after adverse effects on our business:
 A decrease in the interest for loans and different products and services offered by RF
 A decrease in the quality of our loans kept available to be purchased or different assets
secured by consumer or business land;
 An impedance of certain immaterial assets, such as goodwill;
 A decrease in interest livelihood from variable rate loans, because of potential reductions
in interest rates; and
 An increase in the amount of clients and counterparties who ended up being reprobate,
record for security under insolvency laws or default on their loans or different obligations
to us. An increase in the amount of delinquencies, bankruptcies or defaults might result in
a larger amount of nonperforming assets, net charge-offs, provision for credit losses, and
valuation adjustments on loans kept available to be purchased.
Throughout the past three years, the general business earth has had an adverse impact on the
business. Even though the general business earth has shown some enhancement, there could be no
assurance that it will press on to enhance. Depending if monetary conditions worsen or remain

6. volatile, our business, financial condition and results of operations might be adversely influenced.
The company looks all those risks and factors in order to enhance the shareholder’s values and
commitments. The company is working best in the favor of the shareholders
(apps.shareholders.com).
5- Quantitative Analysis of KeyQuarter Disappointments:
The key disappointments associates with RF are as follows. These issues have become a
reason for the low growth rate of the RF this quarter as compared to the previous one.
1- Further disruptions in the residential land business sectorput an adversely influence
our exhibition.
As of last quarter, investor land loans secured via arrive, single-family and apartment suite
properties, plus home value loans secured by second liens in Florida represented pretty nearly 8
percent of total sum credit portfolio. These actions will assist moderate the generally speaking
effects of the downward credit cycle, the weaknesses in these sections of credit portfolio are
wanted to proceed well into 2011 in near future. Likewise, it is envisioned that our non-performing
asset and charge-off levels will remain lifted.
The fundamentals inside the business land sector remain powerless, under proceeding
pressure from decreased asset values, rising vacancies and diminished rents. In this quarter, more
or less 19 percent of RF credit portfolio consisted of investor land loans. Investor land loans
secured via arrive, single-family and condominiums press on to be swayed by declining property
values, especially in areas where Regions has significant giving activities, incorporating Florida
and north Georgia. The properties securing pay-processing investor land loans are commonly not
totally leased at the beginning of the advance. The borrower's capacity to reimburse the advance
is instead dependent upon supplemental leasing with the existence of the credit or the borrower's
successful operation of a business. Frail financial conditions might weaken a borrower's business
operations and commonly slow the execution of new leases. Such financial conditions might also
accelerate existing lease turnover. As a result of these factors, opportunity rates for retail, office
and industrial space might stay at raised levels in next quarter. Elevated opportunity rates might
result in rents falling further over the following several quarters. The mixture of these factors might

7. result in further weakening in the fundamentals underlying the business land business and the
disintegration of one or more loans we have made. Any such disintegration might adversely
influence our financial condition and results of operations.
Recommendations: These portions of the credit portfolio have been under pressure for
over three years and, because of debilitating credit value, the company might increase the advance
loss provision and sum recompense for credit losses. Likewise, the company may executed several
measures to support the administration of these sections of the credit portfolio, incorporating
reassignment of encountered, crux relationship managers to focus on work-out strategies for
distressed borrowers.
6- Qualitative Analysis of Key Quarter Accomplishments
Regions' segment qualified data is presented based on Regions' key segments of business.
Every segment is a strategic business unit that serves specific needs of Regions' customers. The
Company's essential segment is Banking/Treasury, which represents the Company's extension
system, incorporating consumer and business saving money functions, and has separate
administration that is responsible for the operation of that business unit. This segment also includes
the Company's Treasury capacity, incorporating the Company's securities portfolio and other
wholesale financing activities.
Notwithstanding Banking/Treasury, Regions has designated as distinct reportable
segments the action of its Investment Banking/Brokerage/Trust and Insurance divisions.
Investment Banking/Brokerage/Trust includes trust activities and all business and investment
activities associated with Morgan Keegan. Insurance includes all business associated with business
insurance and credit existence products sold to consumer customers. The company has got a huge
success in term of surprising EPS. Throughout this classification, minor reclassifications were
produced from the Banking/Treasury segment to the Insurance segment to even more properly
present administration's current perspective of the segments. This quarter amounts presented
beneath have been adjusted to acclimate to the previous information presentation.
There are some of the future points to keep this success:
 The bank may focus upon the several portfolios in the future.

8.  The bank may enhance its management activities in all areas to enhance this success
further.
 The bank may also encourage the insurance segment, as it might enhance the further
income for the organization.
7- Miscellaneous Notes
Leverage Requirements:
Not Basel I or Basel II includes leverage necessity as a worldwide standard; nonetheless,
the Federal Reserve has established least leverage degree guidelines for bank holding companies
to be considered decently-capitalized. These guidelines accommodate a least degree of Tier 1
capital to normal aggregate assets, less goodwill and certain other impalpable assets (the “Leverage
degree”), of 3.0 percent for bank holding companies that meet certain specified criteria,
incorporating having the highest administrative evaluating. All other bank holding companies for
the most part are solicited to uphold a Leverage degree of at least 4 percent. Regions' Leverage
degree at last quarter was 9.30 percent.
The guidelines also give that bank holding companies encountering interior development
or making acquisitions can be needed to uphold strong capital positions substantially above the
least supervisory levels without significant dependence on impalpable assets. Moreover, the
Federal Reserve has demonstrated that it will consider a “substantial Tier 1 capital leverage
degree” (deducting all intangibles) and different indicators of capital strength in assessing
proposals for expansion or new activities.
Historically, regulation and checking of bank and bank holding company liquidity has been
addressed as a supervisory matter, both in the U.S. what's more universally, without needed
equation based measures. The Basel III last structure requires banks and bank holding companies
to measure their liquidity against specific liquidity tests that, in spite of the fact that similar in
some respects to liquidity measures historically connected by banks and regulators for
administration and supervisory purposes, going forward can be needed by regulation. One test,
pointed to as the liquidity scope degree (“LCR”), is designed to ensure that the banking element
maintains a sufficient level of unencumbered high caliber fluid assets equivalent to the element's

9. wanted net cash outflow for a 30-day time skyline (or, if more amazing, 25 percent of its needed
aggregate cash outflow) under an intense liquidity stress scenario. The other, pointed to as the net
stable financing degree (“NSFR”), is designed to push more medium-and lifelong subsidizing of
the assets and activities of banking entities over an one-year time skyline. These requirements will
incent banking entities to increase their holdings of U.S. Treasury securities and other sovereign
indebtedness as a segment of assets and increase the use of lifelong deferred payment as a financing
source. The LCR might be achieved subject to an observation period starting in this quarter, yet
might not be presented as a prerequisite until next quarter (The Wire Street, 2013).
Recommendation for Financial Management in Future:
 The division should advance, achieve and convey an incorporated financial administration
control skeleton.
 The division should advance a comprehensive financial administration educating strategy.
 The branch should strengthen and standardize the observing and audit practices around the
approvals of sections 34 and 33 of the Financial Administration Act.
 The branch should ensure that everything financial files are decently looked after with all
supporting and apropos informative content on document.
 The branch should adjust its current financial system access controls to construct in a
formal official endorsement process when one distinctive is supporting more than one
component of the same transaction.
 The branch should strengthen financial system user record administration controls,
specifically identified with representative departures and occasional reviews of user
profiles. All controls should be generally recorded to permit smooth learning transfer and
succession arranging.
 The Chief Financial Officer should unmistakably distinguish crux financial risks should at
the section level, assess those risks in terms of advancing moderation strategies to maintain
them adequately, and convey the risks to senior administration and all included in financia l
administration. The Chief Financial Officer should normally reassess and overhaul nexus
financial risks to ensure those recognized are present.

10. 8- The Bottom Line
It is strongly recommended to buy this stock.
The Street Ratings have emphasized RF as a purchase with an evaluations score of B-. The
association's strengths might be viewed in different territories, for example its robust stock cost
exhibition, wonderful record of wages for every allotment development, urging development in
net pay, alluring valuation levels and developing profit margins. Granted that no association is
immaculate, presently we do not see any huge weaknesses, which are prone to diminish. In this
way, it is recommended to buy this stock.
References
Apps.shareholsers.com., United States Securities and Exchange Commission. Regions Financial
Corporation. Form 10-K

11. Finance.yahoo.com., (2013). Regional Finance Corporation. Retrieved Mar 3, 2013 from:
http://finance.yahoo.com/q?s=RF&ql=1
Nasdaq.com., (2013). Regional Finance Corporation. Retrieved Mar 3, 2013 from:
http://www.nasdaq.com/symbol/rf/guru-analysis/dreman#anchor5
The Wire Street., (2013). Regions Financial Corporation Stock Buy Recommendation Reiterated.
Retrieved Mar 3, 2013 from:
http://www.thestreet.com/story/11856815/1/regions-financial-corporation-stock-buy-
recommendation-reiterated-rf.html?puc=yahoo&cm_ven=YAHOO
wikinvest.com., (2012). Regional Finance Corporation. Retrieved Mar 3, 2013 from:
http://www.wikinvest.com/stock/Regions_Financial_Corporation_(RF)/Data/P:B