A new year is rapidly approaching and that means it's a perfect time to sit down with some of the stocks you own -- or, perhaps, are thinking about buying -- to figure out what 2012 may bring.

Today I'm going to take a look at Regions Financial (NYSE: RF), the Birmingham-based regional bank that got clobbered by Mr. Market in 2011. Could 2012 promise sunnier times for Regions? Let's dig in.

The tale of the tape

Market Cap $5.1 billion
Trailing Price-to-Book Value 0.36
Trailing Price-to-Earnings 22.8
Forward Price-to-Earnings 10.9
Expected 5-Year Growth 7%

Source: S&P Capital IQ.

The keys for 2012
Investors will obviously want to keep an eye on all facets of Regions as it forges ahead, but I think there are three areas that deserve extra focus: valuation, the economy, and Morgan Keegan.

As you can see from the table above, Regions' stock has been beaten down to the point of potential deep value territory. With the stock valued at just a bit more than a third of its book value, the market seems to believe that there are more significant impairments ahead. For investors in the stock, though, it also means the potential for big gains if the rest of the market is wrong in that assessment.

However, it's also notable that Regions is far from the only bank that carries a multiple in value investing territory. Fellow Southeastern-U.S. regional bank Synovus Financial (NYSE: SNV) trades at 0.60 times its book value, while Hudson City Bancorp (Nasdaq: HCBK) and KeyCorp (NYSE: KEY) fetch respective multiples of 0.58 and 0.71. The giant megabanks are right there, too, with Citigroup (NYSE: C) changing hands at 0.43 times book and Bank of America (NYSE: BAC) at a mere 0.25 times its book.

In the wake of the banking and financial crisis, Regions is solidifying its focus on core banking activities, particularly when it comes to the business-lending segment. That's not a bad idea. However, as we look ahead to 2012, the broader economy and the banking environment will play a much bigger part in whether Regions is able to continue showing improvement in its financials. The bank has some control over whether it's able to grow its loan book or if it can further reduce its costs, but if the economy sputters along or takes a turn for the worse, it would apply a serious headwind to Regions' efforts.

Finally, Regions is hoping that it can score a big windfall by selling its investment banking and brokerage arm, Morgan Keegan. There were hopes that the bank would be able to sell the unit for $1 billion, or even $1.5 billion. However, a sale has been slow in coming and Morgan Keegan has been losing brokers as they get fed up with the uncertain future for the unit. Because it's a source of uncertainty for investors as well as a potential source of new capital for the bank, Regions' success in wrapping up a sale will be a very notable issue for investors to watch.

Like banks for 2012? You're not alone
As I noted above, Regions is cheap and it's not alone in the banking sector. The bruising of the industry has lured some of the smartest investors in, and it seems quite possible that they're on to something. To read more about what's drawing in top stock-jocks, grab a free copy of The Motley Fool's special report, "The Stocks Only the Smartest Investors Are Buying."

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.