In an attempt to enhance shareholder value, Regions Financial Corp’s (RF) board of directors announced a threefold hike in its quarterly cash dividend on common stock. The new dividend of 3 cents will be paid on Jul 1, to shareholders of record as of Jun 14.
Additionally, the board declared a quarterly cash dividend of $15.9375 per share (equivalent to approximately $0.398438 per depositary share) associated with the outstanding shares of its 6.375% Non-Cumulative Perpetual Series A Preferred Stock.
Each outstanding share of the Series A Preferred Stock is represented by depositary shares, each of which carries a 1/40th interest in a share of Series A Preferred Stock. This will be paid on Jun 15, to stockholders of record at the close of business as of Jun 1.
These actions follow the Federal Reserve’s approval of Regions’ 2013 capital plan under the Comprehensive Capital Analysis and Review (CCARF) in March. Earlier, following the approval of the capital plan, the company authorized a new share repurchase program of up to $350 million of its shares.
The latest boost in the company’s dividend reflects its commitment to return value to shareholders through its strong cash generation capabilities. Regions’ current capital position may allow it to further enhance shareholder value. The company’s cash and due from banks was $1.8 billion as of Mar 31, 2013.
Regions’ favorable funding mix, improved core business performance and strategic initiatives are expected to yield decent earnings in the near future. However, regulatory restrictions and sluggish economic conditions remain matters of concern.
Regions currently carries a Zacks Rank #2 (Buy). Other better performing banks in the Southeast include American National Bankshares Inc. (AMNB), BNC Bancorp (BNCN) and Crescent Financial Bancshares, Inc. (CRFN). All these stocks carry a Zacks Rank #1 (Strong Buy).
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