This preferred stock is issued by a large regional bank and pays above average yields. The bank will report earnings on October 22.
Regions Financial Corporation (RF-PC)
From Income Securities Investor
Regions Financial Corp.; 5.70% Fixed-to-Floating Rate, Non-Cumulative Perpetual; Par $25.00; Annual Fixed Rate Cash Dividend $1.425; Current Indicated Yield 5.20%; Call Date
05/15/29 at $25.00; Yield to Call 4.50%; Pay Cycle 2m; Ratings, Moody’s Ba1, S&P BB+; CUSIP 7591EP704; Symbol RF-PC
Regions Financial Corporation (RF) is a major regional bank holding company headquartered in Birmingham, AL with almost $130 billion in total deposits. RF is one of the nation’s largest full-service providers of consumer, commercial mortgage, and wealth management products and services. The company’s geographic footprint serves customers throughout the South, Midwest and Texas.
RF reported Q219 net income from continuing operations of $374.0 million or $0.37 per share, essentially in line with analysts’ estimates. Revenues of $1.43 billion were a touch short of analysts’ expectations. RF’s fixed-to-floating rate preferred offers a 5.70% fixed rate of coupon protection for 10 years, before adjusting to LIBOR plus 3.148% if not called on 05/15/29, or any dividend payment date thereafter. This issue has reference rate language protecting investors in the event LIBOR is no longer quoted, which will be the case in 2022.
Dividends are qualified and taxed at the 15%-20% rate. This preferred investment is suitable for medium-risk taxable portfolios. Buy up to $28.75 for a current yield of 4.96% and a yield to call of 3.87%.
Martin Fridson, CFA, Income Securities Investor, www.isinewsletter.com, 800-472-2680, September 2019