Regions Financial in Birmingham, Ala., has enjoyed a 33% surge in its stock price in the past year—largely due to improved asset quality—but a dark cloud still hangs over the $119 billion-asset company. Regions remains on the hook for litigation tied to Morgan Keegan, a brokerage and investment bank it sold last year to Raymond James Financial.

Regions agreed to indemnify Raymond James for all legal costs associated to the business. One analyst — Christopher Marinac at FIG Partners — estimates that those expenses could eventually shave 14 cents a share off Regions' earnings.

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