$7.6 billion in total revenue reflects 5 percent year-over-year growth
BIRMINGHAM, Ala.–(BUSINESS WIRE)–Regions Financial Corp. (NYSE:RF) today reported earnings for the fourth quarter and full-year ended Dec. 31, 2023. The company reported fourth quarter net income available to common shareholders of $367 million and earnings per diluted share of $0.39. Fourth quarter results include the industry-wide FDIC special assessment, increased severance-related charges, and a net provision expense associated with an unsecured consumer loan portfolio sale. For the full-year 2023, the company reported net income available to common shareholders of $2.0 billion and record pre-tax pre-provision income(1) of $3.2 billion. Compared to 2022, total revenue increased 5 percent to a record $7.6 billion driven by growth in net interest income.
«I want to thank our 20,000 associates for their hard work and dedication throughout 2023. Their commitment and resilience allowed us to help our customers navigate through ongoing inflation and higher interest rates with confidence. We have positioned Regions to continue delivering solid results with a business plan focused on soundness, profitability and growth across economic cycles,» said John Turner, President and CEO of Regions Financial Corp.
Turner added, «We are pleased with our fourth quarter and full-year performance. Our results reflect the strength and diversity of our balance sheet, robust liquidity position, and prudent risk management. Our protective hedging strategies continue to position us for success in any rate environment and support our commitment to generating consistent, sustainable long-term performance. While the industry continues to face economic and regulatory uncertainty, we are confident in our ability to adapt to the changing landscape while continuing to deliver one of the best returns in our peer group. We remain confident in our strategic plan, and our strong performance in 2023 provides a solid foundation as we enter 2024.»
SUMMARY OF FOURTH QUARTER and FULL-YEAR 2023 RESULTS:
|
|
|
Quarter Ended |
|
Year Ended |
||||||||||||||||
|
(amounts in millions, except per share data) |
|
12/31/2023 |
|
9/30/2023 |
|
12/31/2022 |
|
|
2023 |
|
|
|
2022 |
|
||||||
|
Net income |
|
$ |
391 |
|
|
$ |
490 |
|
|
$ |
685 |
|
|
|
2,074 |
|
|
|
2,245 |
|
|
Preferred dividends and other |
|
|
24 |
|
|
|
25 |
|
|
|
25 |
|
|
|
98 |
|
|
|
99 |
|
|
Net income available to common shareholders |
|
$ |
367 |
|
|
$ |
465 |
|
|
$ |
660 |
|
|
$ |
1,976 |
|
|
$ |
2,146 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Weighted-average diluted shares outstanding |
|
|
931 |
|
|
|
940 |
|
|
|
941 |
|
|
|
938 |
|
|
|
942 |
|
|
Actual shares outstanding—end of period |
|
|
924 |
|
|
|
939 |
|
|
|
934 |
|
|
|
924 |
|
|
|
934 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Diluted earnings per common share |
|
$ |
0.39 |
|
|
$ |
0.49 |
|
|
$ |
0.70 |
|
|
$ |
2.11 |
|
|
$ |
2.28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Selected items impacting earnings: |
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Pre-tax adjusted items(1): |
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Adjustments to non-interest expense(1) |
|
$ |
(147 |
) |
|
$ |
(4 |
) |
|
$ |
(5 |
) |
|
$ |
(154 |
) |
|
$ |
(182 |
) |
|
Adjustments to non-interest income(1) |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
50 |
|
|
|
(3 |
) |
|
|
50 |
|
|
Net provision benefit/(expense) from sale of unsecured consumer loans*** |
|
|
(8 |
) |
|
|
— |
|
|
|
— |
|
|
|
(8 |
) |
|
|
31 |
|
|
Total pre-tax adjusted items(1) |
|
$ |
(156 |
) |
|
$ |
(5 |
) |
|
$ |
45 |
|
|
$ |
(165 |
) |
|
$ |
(101 |
) |
|
Diluted EPS impact* |
|
$ |
(0.13 |
) |
|
$ |
— |
|
|
$ |
0.03 |
|
|
$ |
(0.13 |
) |
|
$ |
(0.09 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Pre-tax additional selected items**: |
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Incremental operational losses related to fraud |
|
$ |
— |
|
|
$ |
(53 |
) |
|
$ |
— |
|
|
$ |
(135 |
) |
|
$ |
— |
|
|
Provision release of hurricane-related allowance for loan losses |
|
|
— |
|
|
|
— |
|
|
|
20 |
|
|
|
— |
|
|
|
— |
|
|
Capital markets income (loss) – CVA/DVA |
|
|
(5 |
) |
|
|
(3 |
) |
|
|
(11 |
) |
|
|
(50 |
) |
|
|
36 |
|
|
Residential MSR net hedge performance |
|
|
5 |
|
|
|
4 |
|
|
|
(6 |
) |
|
|
2 |
|
|
|
2 |
|
|
Pension settlement charges |
|
|
(10 |
) |
|
|
(7 |
) |
|
|
(6 |
) |
|
|
(17 |
) |
|
|
(6 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
* |
Based on income taxes at an approximate 25% incremental rate. |
|
** |
Items impacting results or trends during the period, but are not considered non-GAAP adjustments. |
|
*** |
The fourth quarter of 2023 loan sale had an associated allowance of $27 million and incurred a $35 million fair value mark recorded through charge-offs, resulting in a net provision expense of $8 million. The third quarter of 2022 loan sale had an associated allowance of $94 million and incurred a $63 million fair value mark recorded through charge-offs, resulting in a net provision benefit of $31 million. |
Non-GAAP adjusted items(1) impacting the company’s earnings are identified to assist investors in analyzing Regions’ operating results on the same basis as that applied by management and provide a basis to predict future performance.
Total revenue
|
|
|
Quarter Ended |
||||||||||||||||||||||||
|
($ amounts in millions) |
|
12/31/2023 |
|
9/30/2023 |
|
12/31/2022 |
|
4Q23 vs. 3Q23 |
|
4Q23 vs. 4Q22 |
||||||||||||||||
|
Net interest income |
|
$ |
1,231 |
|
|
$ |
1,291 |
|
|
$ |
1,401 |
|
|
$ |
(60 |
) |
|
(4.6 |
) % |
|
$ |
(170 |
) |
|
(12.1 |
) % |
|
Taxable equivalent adjustment |
|
|
13 |
|
|
|
13 |
|
|
|
13 |
|
|
|
— |
|
|
— |
% |
|
|
— |
|
|
— |
% |
|
Net interest income, taxable equivalent basis |
|
$ |
1,244 |
|
|
$ |
1,304 |
|
|
$ |
1,414 |
|
|
$ |
(60 |
) |
|
(4.6 |
) % |
|
$ |
(170 |
) |
|
(12.0 |
) % |
|
Net interest margin (FTE) |
|
|
3.60 |
% |
|
|
3.73 |
% |
|
|
3.99 |
% |
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Non-interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Service charges on deposit accounts |
|
$ |
143 |
|
|
$ |
142 |
|
|
$ |
152 |
|
|
|
1 |
|
|
0.7 |
% |
|
|
(9 |
) |
|
(5.9 |
) % |
|
Card and ATM fees |
|
|
127 |
|
|
|
126 |
|
|
|
130 |
|
|
|
1 |
|
|
0.8 |
% |
|
|
(3 |
) |
|
(2.3 |
) % |
|
Wealth management income |
|
|
117 |
|
|
|
112 |
|
|
|
108 |
|
|
|
5 |
|
|
4.5 |
% |
|
|
9 |
|
|
8.3 |
% |
|
Capital markets income |
|
|
48 |
|
|
|
64 |
|
|
|
61 |
|
|
|
(16 |
) |
|
(25.0 |
) % |
|
|
(13 |
) |
|
(21.3 |
) % |
|
Mortgage income |
|
|
31 |
|
|
|
28 |
|
|
|
24 |
|
|
|
3 |
|
|
10.7 |
% |
|
|
7 |
|
|
29.2 |
% |
|
Commercial credit fee income |
|
|
27 |
|
|
|
24 |
|
|
|
25 |
|
|
|
3 |
|
|
12.5 |
% |
|
|
2 |
|
|
8.0 |
% |
|
Bank-owned life insurance |
|
|
22 |
|
|
|
20 |
|
|
|
17 |
|
|
|
2 |
|
|
10.0 |
% |
|
|
5 |
|
|
29.4 |
% |
|
Securities gains (losses), net |
|
|
(2 |
) |
|
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
|
(100.0 |
) % |
|
|
(2 |
) |
|
NM |
|
|
Market value adjustments on employee benefit assets* |
|
|
12 |
|
|
|
4 |
|
|
|
(9 |
) |
|
|
8 |
|
|
200.0 |
% |
|
|
21 |
|
|
233.3 |
% |
|
Insurance proceeds |
|
|
— |
|
|
|
— |
|
|
|
50 |
|
|
|
— |
|
|
— |
|
|
|
(50 |
) |
|
NM |
|
|
Other |
|
|
55 |
|
|
|
47 |
|
|
|
42 |
|
|
|
8 |
|
|
17.0 |
% |
|
|
13 |
|
|
31.0 |
% |
|
Non-interest income |
|
$ |
580 |
|
|
$ |
566 |
|
|
$ |
600 |
|
|
$ |
14 |
|
|
2.5 |
% |
|
$ |
(20 |
) |
|
(3.3 |
) % |
|
Total revenue |
|
$ |
1,811 |
|
|
$ |
1,857 |
|
|
$ |
2,001 |
|
|
$ |
(46 |
) |
|
(2.5 |
) % |
|
$ |
(190 |
) |
|
(9.5 |
) % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Adjusted total revenue (non-GAAP)(1) |
|
$ |
1,812 |
|
|
$ |
1,858 |
|
|
$ |
1,951 |
|
|
$ |
(46 |
) |
|
(2.5 |
) % |
|
$ |
(139 |
) |
|
(7.1 |
) % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
NM – Not Meaningful |
|
|
* |
These market value adjustments relate to assets held for employee and director benefits that are offset within salaries and employee benefits and other non-interest expense. |
Total revenue of approximately $1.8 billion decreased approximately 2 percent on both a reported and adjusted basis(1) compared to the third quarter of 2023. Consistent with the company’s expectations, net interest income decreased during the quarter to $1.2 billion or 5 percent compared to the third quarter attributable to higher deposit and funding costs and a portion of the company’s forward starting interest rate hedges becoming active, partially offset by the impact of higher market interest rates on new fixed-rate asset originations. Total net interest margin decreased 13 basis points to 3.60 percent.
Non-interest income increased 2 percent on a reported and 3 percent on an adjusted basis(1) compared to the third quarter of 2023 primarily driven by modest increases in most categories partially offset by lower capital markets income. Service charges increased 1 percent while treasury management produced another record year in 2023. Mortgage income increased during the quarter primarily attributable to higher servicing income associated with a bulk purchase of the rights to service $6.2 billion of residential mortgage loans that closed in the third quarter. Wealth management increased 4 percent primarily attributable to better production and improved markets contributing to another record year in 2023. Other non-interest income also increased driven primarily by gains associated with lease sales during the quarter. The decrease in capital markets income was primarily attributable to lower real estate capital markets income, as well as lower merger and acquisitions advisory services.
Non-interest expense
|
|
|
Quarter Ended |
||||||||||||||||||||||
|
($ amounts in millions) |
|
12/31/2023 |
|
9/30/2023 |
|
12/31/2022 |
|
4Q23 vs. 3Q23 |
|
4Q23 vs. 4Q22 |
||||||||||||||
|
Salaries and employee benefits |
|
$ |
608 |
|
|
$ |
589 |
|
$ |
604 |
|
$ |
19 |
|
|
3.2 |
% |
|
$ |
4 |
|
|
0.7 |
% |
|
Equipment and software expense |
|
|
102 |
|
|
|
107 |
|
|
102 |
|
|
(5 |
) |
|
(4.7 |
)% |
|
|
— |
|
|
— |
% |
|
Net occupancy expense |
|
|
71 |
|
|
|
72 |
|
|
74 |
|
|
(1 |
) |
|
(1.4 |
)% |
|
|
(3 |
) |
|
(4.1 |
)% |
|
Outside services |
|
|
43 |
|
|
|
39 |
|
|
41 |
|
|
4 |
|
|
10.3 |
% |
|
|
2 |
|
|
4.9 |
% |
|
Professional, legal and regulatory expenses |
|
|
19 |
|
|
|
27 |
|
|
23 |
|
|
(8 |
) |
|
(29.6 |
)% |
|
|
(4 |
) |
|
(17.4 |
)% |
|
Marketing |
|
|
31 |
|
|
|
26 |
|
|
27 |
|
|
5 |
|
|
19.2 |
% |
|
|
4 |
|
|
14.8 |
% |
|
FDIC insurance assessments |
|
|
147 |
|
|
|
27 |
|
|
18 |
|
|
120 |
|
|
444.4 |
% |
|
|
129 |
|
|
NM |
|
|
Credit/checkcard expenses |
|
|
15 |
|
|
|
16 |
|
|
14 |
|
|
(1 |
) |
|
(6.3 |
)% |
|
|
1 |
|
|
7.1 |
% |
|
Operational losses |
|
|
29 |
|
|
|
75 |
|
|
18 |
|
|
(46 |
) |
|
(61.3 |
)% |
|
|
11 |
|
|
61.1 |
% |
|
Branch consolidation, property and equipment charges |
|
|
3 |
|
|
|
1 |
|
|
5 |
|
|
2 |
|
|
200.0 |
% |
|
|
(2 |
) |
|
(40.0 |
)% |
|
Visa class B shares expense |
|
|
6 |
|
|
|
5 |
|
|
7 |
|
|
1 |
|
|
20.0 |
% |
|
|
(1 |
) |
|
(14.3 |
)% |
|
Gain on early extinguishment of debt |
|
|
(4 |
) |
|
|
— |
|
|
— |
|
|
(4 |
) |
|
NM |
|
|
|
(4 |
) |
|
NM |
|
|
Other |
|
|
115 |
|
|
|
109 |
|
|
84 |
|
|
6 |
|
|
5.5 |
% |
|
|
31 |
|
|
36.9 |
% |
|
Total non-interest expense |
|
$ |
1,185 |
|
|
$ |
1,093 |
|
$ |
1,017 |
|
$ |
92 |
|
|
8.4 |
% |
|
$ |
168 |
|
|
16.5 |
% |
|
Total adjusted non-interest expense(1) |
|
$ |
1,038 |
|
|
$ |
1,089 |
|
$ |
1,012 |
|
$ |
(51 |
) |
|
(4.7 |
)% |
|
$ |
26 |
|
|
2.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
NM – Not Meaningful |
Non-interest expense increased 8 percent on a reported basis, but decreased 5 percent on an adjusted basis(1) compared to the third quarter of 2023. Fourth quarter adjusted items included $119 million for Regions’ FDIC insurance special assessment and $28 million associated with severance charges. Salaries and benefits increased 3 percent driven primarily by higher severance costs during the quarter partially offset by lower incentive compensation and reduced headcount. Excluding severance costs, salaries and benefits would have decreased 1 percent compared to the third quarter. As expected, operational losses decreased significantly compared to the prior quarter.
The company’s fourth quarter efficiency ratio was 65.0 percent on a reported basis and 56.9 percent on an adjusted basis(1). The effective tax rate was 17.0 percent in the fourth quarter compared to 20.9 percent in the third quarter. The effective tax rate reflects lower than expected pre-tax income for the year causing the impact of tax preferential items to increase during the quarter, as well as discrete income tax benefits related to prior year income tax filings.
Loans and Leases
|
|
|
Average Balances |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
($ amounts in millions) |
|
4Q23 |
|
3Q23 |
|
4Q22 |
|
4Q23 vs. 3Q23 |
|
4Q23 vs. 4Q22 |
|||||||||||||
|
Commercial and industrial |
|
$ |
50,939 |
|
$ |
51,721 |
|
$ |
50,135 |
|
$ |
(782 |
) |
|
(1.5 |
)% |
|
$ |
804 |
|
|
1.6 |
% |
|
Commercial real estate—owner-occupied |
|
|
5,136 |
|
|
5,100 |
|
|
5,362 |
|
|
36 |
|
|
0.7 |
% |
|
|
(226 |
) |
|
(4.2 |
)% |
|
Investor real estate |
|
|
8,772 |
|
|
8,617 |
|
|
8,290 |
|
|
155 |
|
|
1.8 |
% |
|
|
482 |
|
|
5.8 |
% |
|
Business Lending |
|
|
64,847 |
|
|
65,438 |
|
|
63,787 |
|
|
(591 |
) |
|
(0.9 |
)% |
|
|
1,060 |
|
|
1.7 |
% |
|
Residential first mortgage |
|
|
20,132 |
|
|
19,914 |
|
|
18,595 |
|
|
218 |
|
|
1.1 |
% |
|
|
1,537 |
|
|
8.3 |
% |
|
Home equity |
|
|
5,663 |
|
|
5,688 |
|
|
6,017 |
|
|
(25 |
) |
|
(0.4 |
)% |
|
|
(354 |
) |
|
(5.9 |
)% |
|
Consumer credit card |
|
|
1,295 |
|
|
1,245 |
|
|
1,207 |
|
|
50 |
|
|
4.0 |
% |
|
|
88 |
|
|
7.3 |
% |
|
Other consumer—exit portfolios |
|
|
110 |
|
|
384 |
|
|
613 |
|
|
(274 |
) |
|
(71.4 |
)% |
|
|
(503 |
) |
|
(82.1 |
)% |
|
Other consumer* |
|
|
6,246 |
|
|
6,116 |
|
|
5,533 |
|
|
130 |
|
|
2.1 |
% |
|
|
713 |
|
|
12.9 |
% |
|
Consumer Lending |
|
|
33,446 |
|
|
33,347 |
|
|
31,965 |
|
|
99 |
|
|
0.3 |
% |
|
|
1,481 |
|
|
4.6 |
% |
|
Total Loans |
|
$ |
98,293 |
|
$ |
98,785 |
|
$ |
95,752 |
|
$ |
(492 |
) |
|
(0.5 |
)% |
|
$ |
2,541 |
|
|
2.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
NM – Not Meaningful |
|
|
* |
Other consumer loans includes EnerBank (Regions’ point of sale home improvement portfolio). |
Average loans and leases remained relatively stable compared to the prior quarter. Average business loans decreased 1 percent, offset by modest growth in consumer loans. Commercial loan line utilization levels ended the quarter at approximately 42.3 percent, decreasing 100 basis points over the prior quarter, while line commitments decreased 1 percent. The growth in consumer loans was driven by residential first mortgage and EnerBank partially offset by the sale of an unsecured consumer exit portfolio.
Deposits
|
|
|
Average Balances |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
($ amounts in millions) |
|
4Q23 |
|
3Q23 |
|
4Q22 |
|
4Q23 vs. 3Q23 |
|
4Q23 vs. 4Q22 |
|||||||||||||
|
Total interest-bearing deposits |
|
$ |
83,247 |
|
$ |
80,472 |
|
$ |
79,900 |
|
$ |
2,775 |
|
|
3.4 |
% |
|
$ |
3,347 |
|
|
4.2 |
% |
|
Non-interest-bearing deposits |
|
|
43,167 |
|
|
44,748 |
|
|
53,107 |
|
|
(1,581 |
) |
|
(3.5 |
)% |
|
|
(9,940 |
) |
|
(18.7 |
)% |
|
Total Deposits |
|
$ |
126,414 |
|
$ |
125,220 |
|
$ |
133,007 |
|
$ |
1,194 |
|
|
1.0 |
% |
|
$ |
(6,593 |
) |
|
(5.0 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
($ amounts in millions) |
|
4Q23 |
|
3Q23 |
|
4Q22 |
|
4Q23 vs. 3Q23 |
|
4Q23 vs. 4Q22 |
|||||||||||||
|
Consumer Bank Segment |
|
$ |
79,384 |
|
$ |
80,036 |
|
$ |
83,555 |
|
$ |
(652 |
) |
|
(0.8 |
)% |
|
$ |
(4,171 |
) |
|
(5.0 |
)% |
|
Corporate Bank Segment |
|
|
36,291 |
|
|
34,924 |
|
|
38,176 |
|
|
1,367 |
|
|
3.9 |
% |
|
|
(1,885 |
) |
|
(4.9 |
)% |
|
Wealth Management Segment |
|
|
7,690 |
|
|
7,451 |
|
|
9,065 |
|
|
239 |
|
|
3.2 |
% |
|
|
(1,375 |
) |
|
(15.2 |
)% |
|
Other |
|
|
3,049 |
|
|
2,809 |
|
|
2,211 |
|
|
240 |
|
|
8.5 |
% |
|
|
838 |
|
|
37.9 |
% |
|
Total Deposits |
|
$ |
126,414 |
|
$ |
125,220 |
|
$ |
133,007 |
|
$ |
1,194 |
|
|
1.0 |
% |
|
$ |
(6,593 |
) |
|
(5.0 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
Ending Balances as of |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
12/31/2023 |
|
12/31/2023 |
|||||||||||||
|
($ amounts in millions) |
|
12/31/2023 |
|
9/30/2023 |
|
12/31/2022 |
|
vs. 9/30/2023 |
|
vs. 12/31/2022 |
|||||||||||||
|
Consumer Bank Segment |
|
$ |
80,031 |
|
$ |
80,980 |
|
$ |
83,487 |
|
$ |
(949 |
) |
|
(1.2 |
)% |
|
$ |
(3,456 |
) |
|
(4.1 |
)% |
|
Corporate Bank Segment |
|
|
36,883 |
|
|
34,650 |
|
|
37,145 |
|
|
2,233 |
|
|
6.4 |
% |
|
|
(262 |
) |
|
(0.7 |
)% |
|
Wealth Management Segment |
|
|
7,694 |
|
|
7,791 |
|
|
9,111 |
|
|
(97 |
) |
|
(1.2 |
)% |
|
|
(1,417 |
) |
|
(15.6 |
)% |
|
Other |
|
|
3,180 |
|
|
2,778 |
|
|
2,000 |
|
|
402 |
|
|
14.5 |
% |
|
|
1,180 |
|
|
59.0 |
% |
|
Total Deposits |
|
$ |
127,788 |
|
$ |
126,199 |
|
$ |
131,743 |
|
$ |
1,589 |
|
|
1.3 |
% |
|
$ |
(3,955 |
) |
|
(3.0 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
The company’s deposit base continues to be a source of strength and a differentiator in liquidity and margin performance. Total ending and average deposits increased modestly during the fourth quarter and included continued remixing out of non-interest-bearing products into interest-bearing products. Declines in average Consumer deposits were offset by stability or growth in other segments.
Asset quality
|
|
|
As of and for the Quarter Ended |
||||
|
($ amounts in millions) |
|
12/31/2023 |
|
9/30/2023 |
|
12/31/2022 |
|
Allowance for credit losses (ACL) at period end |
|
$1,700 |
|
$1,677 |
|
$1,582 |
|
ACL/Loans, net |
|
1.73% |
|
1.70% |
|
1.63% |
|
ALL/Loans, net |
|
1.60% |
|
1.56% |
|
1.51% |
|
Allowance for credit losses to non-performing loans, excluding loans held for sale |
|
211% |
|
261% |
|
317% |
|
Allowance for loan losses to non-performing loans, excluding loans held for sale |
|
196% |
|
241% |
|
293% |
|
Provision for credit losses |
|
$155 |
|
$145 |
|
$112 |
|
Net loans charged-off |
|
$132 |
|
$101 |
|
$69 |
|
Adjusted net loan charge-offs (non-GAAP)(1) |
|
$97 |
|
$101 |
|
$69 |
|
Net loans charged-off as a % of average loans, annualized |
|
0.54% |
|
0.40% |
|
0.29% |
|
Adjusted net loan charge-offs as a % of average loans, annualized (non-GAAP) (1) |
|
0.39% |
|
0.40% |
|
0.29% |
|
Non-performing loans, excluding loans held for sale/Loans, net |
|
0.82% |
|
0.65% |
|
0.52% |
|
NPAs (ex. 90+ past due)/Loans, foreclosed properties, and non-performing loans held for sale |
|
0.84% |
|
0.67% |
|
0.53% |
|
NPAs (inc. 90+ past due)/Loans, foreclosed properties, and non-performing loans held for sale* |
|
1.01% |
|
0.81% |
|
0.75% |
|
Total Criticized Loans—Business Services** |
|
$4,659 |
|
$4,167 |
|
$3,149 |
|
* |
Excludes guaranteed residential first mortgages that are 90+ days past due and still accruing. |
|
** |
Business services represents the combined total of commercial and investor real estate loans. |
Overall asset quality continued to normalize during the quarter. Business services criticized loans and non-performing loans increased driven primarily by downgrades within loan categories previously identified as under stress. The increase in non-performing loans in the fourth quarter was primarily attributable to office, transportation, consumer discretionary manufacturing, and restaurant lending. Total reported net charge-offs for the quarter were $132 million, or 54 basis points of average loans; however, excluding the fair value mark associated with the sale of a consumer unsecured exit portfolio, adjusted net charge-offs(1) declined 1 basis point to 39 basis points of average loans.
The increase to the allowance for credit losses compared to the third quarter was attributable primarily to adverse risk migration and continued credit quality normalization, as well as higher qualitative adjustments for incremental risk in certain higher risk portfolios.
The allowance for credit loss ratio increased 3 basis points to 1.73 percent of total loans, while the allowance as a percentage of nonperforming loans decreased to 211 percent. Excluding the consumer unsecured exit portfolio sold in the fourth quarter, the allowance for credit loss ratio would have increased 6 basis points.
Capital and liquidity
|
|
|
As of and for Quarter Ended |
||||
|
|
|
12/31/2023 |
|
9/30/2023 |
|
12/31/2022 |
|
Common Equity Tier 1 ratio(2) |
|
10.2% |
|
10.3% |
|
9.6% |
|
Tier 1 capital ratio(2) |
|
11.5% |
|
11.6% |
|
10.9% |
|
Tangible common stockholders’ equity to tangible assets (non-GAAP)(1) |
|
6.79% |
|
5.82% |
|
5.63% |
|
Tangible common book value per share (non-GAAP)(1)* |
|
$10.77 |
|
$9.16 |
|
$9.00 |
|
Loans, net of unearned income, to total deposits |
|
77.0% |
|
78.4% |
|
73.6% |
|
* |
Tangible common book value per share includes the impact of quarterly earnings and changes to market value adjustments within accumulated other comprehensive income, as well as continued capital returns. |
Regions maintains a solid capital position with estimated capital ratios remaining well above current regulatory requirements. The Common Equity Tier 1(2) and Tier 1(2) ratios were estimated at 10.2 percent and 11.5 percent, respectively, at quarter-end.
During the fourth quarter, the company repurchased 16 million shares of common stock for a total of $252 million through open market purchases and declared $223 million in dividends to common shareholders.
The company’s liquidity position also remains robust as of Dec. 31, 2023, with total primary liquidity of approximately $38.2 billion, which includes cash held at the Federal Reserve, FHLB borrowing capacity and unencumbered securities. The loan-to-deposit ratio totaled 77 percent at the end of the quarter.
|
(1) |
Non-GAAP; refer to pages 13, 17, 18, 19, 20 and 22 of the financial supplement to this earnings release for reconciliations. |
|
(2) |
Current quarter Common Equity Tier 1, and Tier 1 capital ratios are estimated. |
Conference Call
In addition to the live audio webcast at 10 a.m. ET on Jan. 19, 2024, an archived recording of the webcast will be available at the Investor Relations page of ir.regions.com following the live event.
About Regions Financial Corporation
Regions Financial Corporation (NYSE:RF), with $152 billion in assets, is a member of the S&P 500 Index and is one of the nation’s largest full-service providers of consumer and commercial banking, wealth management, and mortgage products and services. Regions serves customers across the South, Midwest and Texas, and through its subsidiary, Regions Bank, operates approximately 1,250 banking offices and more than 2,000 ATMs. Regions Bank is an Equal Housing Lender and Member FDIC. Additional information about Regions and its full line of products and services can be found at www.regions.com.
Forward-Looking Statements
This release may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. The words “future,” “anticipates,” “assumes,” “intends,” “plans,” “seeks,” “believes,” “predicts,” “potential,” “objectives,” “estimates,” “expects,” “targets,” “projects,” “outlook,” “forecast,” “would,” “will,” “may,” “might,” “could,” “should,” “can,” and similar terms and expressions often signify forward-looking statements. Forward-looking statements are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control. Forward-looking statements are not based on historical information, but rather are related to future operations, strategies, financial results or other developments. Forward-looking statements are based on management’s current expectations as well as certain assumptions and estimates made by, and information available to, management at the time the statements are made. Those statements are based on general assumptions and are subject to various risks, and because they also relate to the future they are likewise subject to inherent uncertainties and other factors that may cause actual results to differ materially from the views, beliefs and projections expressed in such statements. Therefore, we caution you against relying on any of these forward-looking statements. These risks, uncertainties and other factors include, but are not limited to, those described below:
- Current and future economic and market conditions in the United States generally or in the communities we serve (in particular the Southeastern United States), including the effects of possible declines in property values, increases in interest rates and unemployment rates, inflation, financial market disruptions and potential reductions of economic growth, which may adversely affect our lending and other businesses and our financial results and conditions.
- Possible changes in trade, monetary and fiscal policies of, and other activities undertaken by, governments, agencies, central banks and similar organizations, which could have a material adverse effect on our businesses and our financial results and conditions.
- Changes in market interest rates or capital markets could adversely affect our revenue and expense, the value of assets and obligations, and the availability and cost of capital and liquidity.
- Volatility and uncertainty related to inflation and the effects of inflation, which may lead to increased costs for businesses and consumers and potentially contribute to poor business and economic conditions generally.
- The impact of pandemics, including the COVID-19 pandemic, on our businesses, operations, and financial results and conditions. The duration and severity of any pandemic could disrupt the global economy, adversely affect our capital and liquidity position, impair the ability of borrowers to repay outstanding loans and increase our allowance for credit losses, impair collateral values, and result in lost revenue or additional expenses.
- Any impairment of our goodwill or other intangibles, any repricing of assets, or any adjustment of valuation allowances on our deferred tax assets due to changes in tax law, adverse changes in the economic environment, declining operations of the reporting unit or other factors.
- The effect of new tax legislation and/or interpretation of existing tax law, which may impact our earnings, capital ratios, and our ability to return capital to shareholders.
- Possible changes in the creditworthiness of customers and the possible impairment of the collectability of loans and leases, including operating leases.
- Changes in the speed of loan prepayments, loan origination and sale volumes, charge-offs, credit loss provisions or actual credit losses where our allowance for credit losses may not be adequate to cover our eventual losses.
- Possible acceleration of prepayments on mortgage-backed securities due to declining interest rates, and the related acceleration of premium amortization on those securities.
- Loss of customer checking and savings account deposits as customers pursue other, higher-yield investments, or the need to price interest-bearing deposits higher due to competitive forces. Either of these activities could increase our funding costs.
- Possible changes in consumer and business spending and saving habits and the related effect on our ability to increase assets and to attract deposits, which could adversely affect our net income.
- Changing interest rates could negatively impact the value of our portfolio of investment securities.
- The loss of value of our investment portfolio could negatively impact market perceptions of us.
Contacts
Media Contact:
Jeremy King
(205) 264-4551
Investor Relations Contact:
Dana Nolan
(205) 264-7040
