SOURCE: The Bedford Report

The Bedford Report

June 28, 2011 08:16 ET

Regions Financial and Synovus Seek TARP Exit Strategies

The Bedford Report Provides Stock Research on Regions Financial & Synovus

NEW YORK, NY--(Marketwire - Jun 28, 2011) - Several regional banks who still owe Troubled Asset Relief Program (TARP) money are currently trading near 52 week lows. Analysts argue that repaying TARP money is pivotal to a bank's recovery, as it leads to fewer capital constraints being placed on the firm. The Bedford Report examines the outlook for companies in the regional banking sector and provides equity research on Regions Financial Corporation (NYSE: RF) and Synovus Financial Corporation (NYSE: SNV). Access to the full company reports can be found at:

www.bedfordreport.com/RF

www.bedfordreport.com/SNV

Erik Oja, a bank analyst with Standard & Poor's Equity Research argues that "The Fed needs to see real increase in credit quality before it would approve" paying TARP money back. Both Synovus and Regions Financial continue to owe significant amounts of TARP money.

Synovus received $968 million in TARP funds as the company suffered significant residential and commercial real estate loan losses through the recession as the housing market deteriorated and businesses defaulted on commercial developments. Analysts at Wunderlich Securities argue that the bank "will be greatly constrained by the potential need to raise significant amounts of common equity in order to exit the TARP program."

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Regions Financial still owes the $3.5 billion it received from the Treasury Department. Earlier this month Regions said that it enlisted Goldman Sachs to explore "different options" for Regions subsidiary, Morgan Keegan's future. A research note from JP Morgan argues that a sale of Morgan Keegan would significantly reduce the amount of capital Regions would have to raise to be allowed to repay its TARP funds.

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