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A second wave of buying centered on the small regionals, such as Regions Financial (RF), Huntington Bancshares (HBAN) and Fifth Third (FITB), created flare-ups, like vicious sunspots, on an almost spontaneous basis.

Nothing's more difficult than stepping up and buying some Marshall & Ilsley (MI) or Huntington Bancshares (HBAN) or Fifth Third (FITB) or Regions (RF) when we read that it is precisely their kind of commercial real estate portfolios that are in the cross hairs of both the regulators and the defaulters.

I am a huge believer in Fifth Third Bank (FITB) and Huntington Bancshares (HBAN) and even Regions Financial (RF), with the last two having a lot of room to romp and the former in good shape to do an acquisition. Given that we are waiting for hundreds of banks to fail, there could be ample opportunity. (Query -- why haven't more failed yet? Answer -- the FDIC is letting the bad banks run and run and run, bad banks meaning banks that have to pay up for hot money via high interest CDs that we will all be on the hook for.)

Bought low, personal bank that has a fee for everything.

chart

First, the good: Regions Financial (RF), Huntington Bancshares (HBAN) and Fifth Third Bank (FITB) are three regional banks that I regard as great calls on the turn in the economy, and I would buy all three. Regions is the worst of the three, and that matters because right now people actually want the worst ones, because they could fly the most if things get better. Huntington didn't have a great quarter but has an energized management, and I think this one could be on track for a double. Fifth Third? What can I say, Goldman Sachs loves it, as it has built a gigantic book of reserves and is doing everything right. It reminds me of the old Fifth Third -- conservative, lean and mean.

That could mean that Zions (ZION), Regions Financial (RF) or even Suntrust (STI) could be in the crosshairs of commercial real estate. That's why you stick with the small regionals that have paid back TARP or had no need for it. That way you can sleep at night.

Undervalued with good future profit potential

"But we must collapse Fifth Third (FITB), KeyCorp (KEY), SunTrust (STI) and Regions Financial (RF) into other banks if we are going to move through this period. We aren't there yet." "FDIC and Treasury at Loggerheads," 6-10-09

Loser Ceo

holding

advised to pick, when will it turn around?

virtual

GRO/DIV

RF met our estimate at 69 cents on operating basis, but excluded one-time losses of 19 cents on EquiFirst subprime-mortgage operations, which were sold...secondary-mortgage-sale pricing fell precipitously in 1Q07...Period-end balances show lower loans and core deposits. Credit quality mixed...net-interest margin outlook's still negative, per new CFO Al Yother...NIM below 3.80% likely by 3Q07. EPS outlook is still heading lower than management's postmerger goals...Stock's [at] 12 to 13 times forward [price/earnings ratio], but upside seems limited.