Archive for the ‘Regions Financial Corp’ Category

February 22nd, 2010

Top Level Unrest At Regions Financial Corp.- Esteves Out, Turner In.

Sliding in at close of business Monday was this 8K from Regions Financial Corp.


The filing announced CFO Irene Esteves’ departure from Regions Financial Corp. David Turner, executive vice president at the company will be taking over from Ms Esteves.


What is interesting is that ex CFO Ms Esteves joined the company as recently as 2008. Her compensation package for a company like Regions which has borrowed $3.5 billion under the TARP program was extremely generous, to say the least.


Having joined the company less than 2 years back in 2008, she had been paid handsomely for relocating to Birmingham, Alabama. In 2008, in the midst of all the housing turmoil, Regions purchased her home at the then fair market value.In addition to the benefits under the relocation program, Regions Financial paid her $560,000 to cover the loss on sale of her home as well as a $200,000 relocation allowance grossed up for applicable taxes. Her offer letter also included a ‘guaranteed bonus’ of ‘at least’ $1000,000 for 2008 and 2009.


Of course, there is no further discussion in today’s 8k of all these allowances and bonuses and whether there is any plan to recover any money. But that’s the financial industry for you.


Under InvesGuard’s data model, we had previously raised a red flag for the unreasonable amount of perquisites and allowances provided to Ms Esteves. Regions Financial Corp already has a low score on its ‘Board of Directors and Senior Management’ and unfortunately this additional incident will bring it down even further.


More details on InvesGuard’s scores are available only to subscribers. If you would like to buy InvesGuard’s report for Regions Financial Corp. please email with ‘Regions’ in the subject.


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October 21st, 2009

Regions Financial Corporation Q3 2009 Earnings.

Regions Financial (RF) announced its Q3 earnings yesterday. Besides expected continued losses, the call emphasized consolidation, staff reduction and expense reduction. For a transcript of the Tuesday RF Q3 earnings call transcript, go here.


What also stood out was the jump in the Commercial real estate net charge offs. It has been known for some time that after consumer real estate, it was the turn of commercial real estate to brake economic growth. Now we are seeing effects of that translated into actual dollar terms appearing on
financial statements.


On the home builder and condominium portfolio, which have declined by $498 million, CEO Dowd Ritter expects the source of these losses to decline through 2010. He also expects gross level of NPA’s to peak by the end of this year or into the first quarter of next year.


The operating expense run rate for the next year or a period after that, is expected to hover around $1 billion.


As expected with a bank battling this credit crisis, Regions Financial (RF) is trying to pare down its operating expenses with its full force being directed towards “personnel related measures”. The plan is to consolidate 121 branches and more over the next two quarters. Look out for increased job cuts.


What is most surprising to me is the irony in its personnel related cost cutting measures and the pretty pay package of new CFO, Irene Esteves. (When you click on the link, scroll down to Senior Management Effectiveness and click on the datapoint to open it.) Regions Financial is a TARP recipient to the extent of $3.5 billion which raises the question on how RF is going to pay the ‘guaranteed’ million dollar bonus to its CFO for 2008 as well as 2009.


Of course with the dismal outlook, the company has been unable to set up a TARP repayment date. But the company responds, “…we are taking every action necessary to be prepared for that.”


Our weak governance score for Regions Financial is underlined by the less than sterling financial outlook for the company. Don’t forget to register with us to access all the tabs on this company. Tabs provide more details on Regions’ Board of Directors and its Internal Control Environment. Registration is simple and above all, it’s FREE!


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