Regions may raise $700M to repay TARP: Analysts

Regions Financial Corp., the 10th-biggest U.S. bank by deposits, may sell $700 million of shares to repay a government bailout after analysts predicted it would have to raise more, according to Deutsche Bank AG. “Until now, we have been assuming Regions Financial raises $1 billion of common,” Matt O'Connor and Robert Placet, Deutsche Bank analysts, wrote yesterday in a note to clients. Regions owes $3.5 billion, the most of any U.S. bank under the Treasury Department's Troubled Asset Relief Program. It may have $500 million to $700 million of excess cash and could tap $1 billion from its bank subsidiary with regulators' approval, the analysts wrote. The Birmingham, Alabama-based bank also will get $1.18 billion from the sale of its Morgan Keegan brokerage. The lender, which hasn't reported an annual profit since 2007, posted a fourth-quarter loss tied to the sale of Memphis, Tennessee-based Morgan Keegan to Raymond James Financial Inc. The Deutsche Bank analysts boosted their 2013 profit estimate to 80 cents a share from 75 cents and increased their price target on the stock to $6.50 from $6. Regions climbed 2.3 percent to $5.78 in New York trading Wednesday. The shares have dropped 26 percent in the past year, compared with a 20 percent decline for the 24-company KBW Bank Index. --Bloomberg News--