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He bought 43,363,404 shares of Regions for an average price of $5.41 a share in the fourth quarter of 2009. He added 32,452,110 more in the next quarter at an average price of $6.73. He initially made a profit, selling portions in the next two quarters when the price rose. When the stock backtracked to $6.47 in the fourth quarter of 2010, he bought 52,730,800 more shares. He trimmed some of the holding in the next two quarters when the price advanced slightly.
Year to date, Regions Financial stock is down 45%, suffering particularly in August and September. It trades for $3.85 on Wednesday, after trading above $30 in the years leading up to the financial crisis.
Regions Financial’s revenues have weakened each year since 2007. The Federal Deposit Insurance Corporation has said that banking institutions have posted weaker revenue but higher profits recently due to stronger balance sheets and better capital positions. Banks it insures posted $28.8 billion in net income from April to June, a 38% increase.
The Paragon Report said in September that Regions’ is benefiting from “improving credit which allows them to release loan loss provisions to earnings” and its “loan-loss provisions were reduced to $398 million from $651 million a year earlier. Net charge-offs were 2.71 percent of average loans, compared with 3 percent a year ago.”
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My guess is that fund liquidations are forcing stock sales. Fairholme needs time and time may have run out.