Solid core performance and peer-leading margin position the company for consistent, sustainable performance.
BIRMINGHAM, Ala.–(BUSINESS WIRE)–Regions Financial Corp. (NYSE:RF) today reported earnings for the first quarter ended March 31, 2024. The company reported first quarter net income available to common shareholders of $343 million and earnings per diluted share of $0.37. First quarter results include the following notable items: an increase to the industry-wide FDIC special assessment accrual, severance-related charges, and the impact of certain securities repositioning. The company reported $1.7 billion in total revenue during the quarter, including $616 million in reported pre-tax pre-provision income(1) and $700 million in adjusted pre-tax pre-provision income(1).
«We continue to focus on the successful execution of our strategic plan, and that is reflected in our core performance,» said John Turner, Chairman and CEO of Regions Financial Corp.
Turner added, «Our results reflect the strength and diversity of our balance sheet, robust liquidity position, and proactive interest rate risk management practices. Our hedging strategies position us for success in a vast array of economic conditions and support our commitment to generating consistent, sustainable long-term performance as we once again generated top-quartile returns and a peer-leading net interest margin.»
SUMMARY OF FIRST QUARTER 2024 RESULTS:
|
|
|
Quarter Ended |
||||||||||
|
(amounts in millions, except per share data) |
|
3/31/2024 |
|
12/31/2023 |
|
3/31/2023 |
||||||
|
Net income |
|
$ |
368 |
|
|
$ |
391 |
|
|
$ |
612 |
|
|
Preferred dividends and other |
|
|
25 |
|
|
|
24 |
|
|
|
24 |
|
|
Net income available to common shareholders |
|
$ |
343 |
|
|
$ |
367 |
|
|
$ |
588 |
|
|
|
|
|
|
|
|
|
||||||
|
Weighted-average diluted shares outstanding |
|
|
923 |
|
|
|
931 |
|
|
|
942 |
|
|
Actual shares outstanding—end of period |
|
|
918 |
|
|
|
924 |
|
|
|
935 |
|
|
|
|
|
|
|
|
|
||||||
|
Diluted earnings per common share |
|
$ |
0.37 |
|
|
$ |
0.39 |
|
|
$ |
0.62 |
|
|
|
|
|
|
|
|
|
||||||
|
Selected items impacting earnings: |
|
|
|
|
|
|
||||||
|
Pre-tax adjusted items(1): |
|
|
|
|
|
|
||||||
|
Adjustments to non-interest expense(1) |
|
$ |
(34 |
) |
|
$ |
(147 |
) |
|
$ |
(2 |
) |
|
Adjustments to non-interest income(1) |
|
|
(50 |
) |
|
|
(1 |
) |
|
|
(1 |
) |
|
Net provision benefit/(expense) from sale of unsecured consumer loans*** |
|
|
— |
|
|
|
(8 |
) |
|
|
— |
|
|
Total pre-tax adjusted items(1) |
|
$ |
(84 |
) |
|
$ |
(156 |
) |
|
$ |
(3 |
) |
|
Diluted EPS impact* |
|
$ |
(0.07 |
) |
|
$ |
(0.13 |
) |
|
$ |
— |
|
|
|
|
|
|
|
|
|
||||||
|
Pre-tax additional selected items**: |
|
|
|
|
|
|
||||||
|
Incremental operational losses related to check warranty claims |
|
$ |
(22 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
Capital markets income (loss) – CVA/DVA |
|
|
(2 |
) |
|
|
(5 |
) |
|
|
(33 |
) |
|
|
|
|
|
|
|
|
||||||
|
* |
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 $8 million. |
Non-GAAP adjusted items(1) impacting the company’s earnings are identified to assist investors in analyzing Regions’ operating results on the same basis as that applied by management and provide a basis to predict future performance.
Total revenue
|
|
Quarter Ended |
||||||||||||||||||||||||
|
($ amounts in millions) |
3/31/2024 |
|
12/31/2023 |
|
3/31/2023 |
|
1Q24 vs. 4Q23 |
|
1Q24 vs. 1Q23 |
||||||||||||||||
|
Net interest income |
$ |
1,184 |
|
|
$ |
1,231 |
|
|
$ |
1,417 |
|
|
$ |
(47 |
) |
|
(3.8 |
)% |
|
$ |
(233 |
) |
|
(16.4 |
)% |
|
Taxable equivalent adjustment |
|
13 |
|
|
|
13 |
|
|
|
13 |
|
|
|
— |
|
|
— |
% |
|
|
— |
|
|
— |
% |
|
Net interest income, taxable equivalent basis |
$ |
1,197 |
|
|
$ |
1,244 |
|
|
$ |
1,430 |
|
|
$ |
(47 |
) |
|
(3.8 |
)% |
|
$ |
(233 |
) |
|
(16.3 |
)% |
|
Net interest margin (FTE) |
|
3.55 |
% |
|
|
3.60 |
% |
|
|
4.22 |
% |
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Non-interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Service charges on deposit accounts |
$ |
148 |
|
|
$ |
143 |
|
|
$ |
155 |
|
|
$ |
5 |
|
|
3.5 |
% |
|
$ |
(7 |
) |
|
(4.5 |
)% |
|
Card and ATM fees |
|
116 |
|
|
|
127 |
|
|
|
121 |
|
|
|
(11 |
) |
|
(8.7 |
)% |
|
|
(5 |
) |
|
(4.1 |
)% |
|
Wealth management income |
|
119 |
|
|
|
117 |
|
|
|
112 |
|
|
|
2 |
|
|
1.7 |
% |
|
|
7 |
|
|
6.3 |
% |
|
Capital markets income |
|
91 |
|
|
|
48 |
|
|
|
42 |
|
|
|
43 |
|
|
89.6 |
% |
|
|
49 |
|
|
116.7 |
% |
|
Mortgage income |
|
41 |
|
|
|
31 |
|
|
|
24 |
|
|
|
10 |
|
|
32.3 |
% |
|
|
17 |
|
|
70.8 |
% |
|
Commercial credit fee income |
|
27 |
|
|
|
27 |
|
|
|
26 |
|
|
|
— |
|
|
NM |
|
|
|
1 |
|
|
3.8 |
% |
|
Bank-owned life insurance |
|
23 |
|
|
|
22 |
|
|
|
17 |
|
|
|
1 |
|
|
4.5 |
% |
|
|
6 |
|
|
35.3 |
% |
|
Securities gains (losses), net |
|
(50 |
) |
|
|
(2 |
) |
|
|
(2 |
) |
|
|
(48 |
) |
|
NM |
|
|
|
(48 |
) |
|
NM |
|
|
Market value adjustments on employee benefit assets* |
|
15 |
|
|
|
12 |
|
|
|
(1 |
) |
|
|
3 |
|
|
25.0 |
% |
|
|
16 |
|
|
NM |
|
|
Other |
|
33 |
|
|
|
55 |
|
|
|
40 |
|
|
|
(22 |
) |
|
(40.0 |
)% |
|
|
(7 |
) |
|
(17.5 |
)% |
|
Non-interest income |
$ |
563 |
|
|
$ |
580 |
|
|
$ |
534 |
|
|
$ |
(17 |
) |
|
(2.9 |
)% |
|
$ |
29 |
|
|
5.4 |
% |
|
Total revenue |
$ |
1,747 |
|
|
$ |
1,811 |
|
|
$ |
1,951 |
|
|
$ |
(64 |
) |
|
(3.5 |
)% |
|
$ |
(204 |
) |
|
(10.5 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Adjusted total revenue (non-GAAP)(1) |
$ |
1,797 |
|
|
$ |
1,812 |
|
|
$ |
1,952 |
|
|
$ |
(15 |
) |
|
(0.8 |
)% |
|
$ |
(155 |
) |
|
(7.9 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
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 decreased approximately 4 percent on a reported basis and 1 percent on an adjusted basis(1) compared to the fourth quarter of 2023. Consistent with the company’s expectations, net interest income decreased 4 percent to $1.2 billion compared to the fourth quarter attributable to higher deposit and funding costs, partially offset by the impact of higher market interest rates on new fixed-rate asset originations. Total net interest margin decreased 5 basis points to 3.55 percent.
Non-interest income decreased 3 percent on a reported basis but increased 6 percent on an adjusted basis(1) compared to the fourth quarter of 2023. The reported difference was attributable to a $50 million pre-tax loss on securities repositioning executed during the quarter. Service charges increased 3 percent as seasonally higher treasury management fees offset 1 less business day in the quarter. Capital markets income increased 90 percent to $91 million, attributable to increased real estate transactions, merger and acquisitions advisory services, and increased debt capital markets activity. A portion of both real estate capital markets activity and merger and acquisitions advisory services initiated in the prior year were delayed by clients due to market conditions and ultimately closed in the first quarter. Mortgage income also increased during the quarter primarily due to a $6 million update to the company’s mortgage pipeline valuation, as well as improved volumes and margins. Wealth management increased 2 percent attributable to better production and improved market conditions. Partially offsetting these increases were decreases in card and ATM fees, which were negatively impacted by higher costs associated with a rewards liability as well as seasonally lower transaction volume, and other non-interest income which was attributable primarily to prior quarter leasing gains and current quarter negative valuation adjustments on certain equity investments.
Non-interest expense
|
|
Quarter Ended |
|||||||||||||||||||||||
|
($ amounts in millions) |
3/31/2024 |
|
12/31/2023 |
|
3/31/2023 |
|
1Q24 vs. 4Q23 |
|
1Q24 vs. 1Q23 |
|||||||||||||||
|
Salaries and employee benefits |
|
$ |
658 |
|
$ |
608 |
|
|
$ |
616 |
|
$ |
50 |
|
|
8.2 |
% |
|
$ |
42 |
|
|
6.8 |
% |
|
Equipment and software expense |
|
|
101 |
|
|
102 |
|
|
|
102 |
|
|
(1 |
) |
|
(1.0 |
)% |
|
|
(1 |
) |
|
(1.0 |
)% |
|
Net occupancy expense |
|
|
74 |
|
|
71 |
|
|
|
73 |
|
|
3 |
|
|
4.2 |
% |
|
|
1 |
|
|
1.4 |
% |
|
Outside services |
|
|
39 |
|
|
43 |
|
|
|
39 |
|
|
(4 |
) |
|
(9.3 |
)% |
|
|
— |
|
|
NM |
|
|
Professional, legal and regulatory expenses |
|
|
28 |
|
|
19 |
|
|
|
19 |
|
|
9 |
|
|
47.4 |
% |
|
|
9 |
|
|
47.4 |
% |
|
Marketing |
|
|
27 |
|
|
31 |
|
|
|
27 |
|
|
(4 |
) |
|
(12.9 |
)% |
|
|
— |
|
|
NM |
|
|
FDIC insurance assessments |
|
|
43 |
|
|
147 |
|
|
|
25 |
|
|
(104 |
) |
|
(70.7 |
)% |
|
|
18 |
|
|
72.0 |
% |
|
Credit/checkcard expenses |
|
|
14 |
|
|
15 |
|
|
|
14 |
|
|
(1 |
) |
|
(6.7 |
)% |
|
|
— |
|
|
NM |
|
|
Operational losses(1) |
|
|
42 |
|
|
29 |
|
|
|
13 |
|
|
13 |
|
|
44.8 |
% |
|
|
29 |
|
|
223.1 |
% |
|
Branch consolidation, property and equipment charges |
|
|
1 |
|
|
3 |
|
|
|
2 |
|
|
(2 |
) |
|
(66.7 |
)% |
|
|
(1 |
) |
|
(50.0 |
)% |
|
Visa class B shares expense |
|
|
4 |
|
|
6 |
|
|
|
8 |
|
|
(2 |
) |
|
(33.3 |
)% |
|
|
(4 |
) |
|
(50.0 |
)% |
|
Gain on early extinguishment of debt |
|
|
— |
|
|
(4 |
) |
|
|
— |
|
|
4 |
|
|
100.0 |
% |
|
|
— |
|
|
NM |
|
|
Other |
|
|
100 |
|
|
115 |
|
|
|
89 |
|
|
(15 |
) |
|
(13.0 |
)% |
|
|
11 |
|
|
12.4 |
% |
|
Total non-interest expense |
|
$ |
1,131 |
|
$ |
1,185 |
|
|
$ |
1,027 |
|
$ |
(54 |
) |
|
(4.6 |
)% |
|
$ |
104 |
|
|
10.1 |
% |
|
Total adjusted non-interest expense(1) |
|
$ |
1,097 |
|
$ |
1,038 |
|
|
$ |
1,025 |
|
$ |
59 |
|
|
5.7 |
% |
|
$ |
72 |
|
|
7.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
NM – Not Meaningful |
|
(1) The incremental increase in operational losses primarily due to check-related warranty claims totaled $22 million in the first quarter of 2024. |
Non-interest expense decreased 5 percent on a reported basis, but increased 6 percent on an adjusted basis(1) compared to the fourth quarter of 2023. First quarter adjusted items included an $18 million increase for Regions’ FDIC insurance special assessment accrual and $13 million associated with severance charges. Salaries and benefits increased 8 percent driven primarily by seasonal factors such as payroll tax and 401(k) match resets, one month of merit increases, and higher incentive compensation. Recognized severance charges are expected to lead to lower overall salaries and benefits expense beginning in the second quarter. Operational losses increased compared to the prior quarter attributable to check-related warranty claims from deposits that occurred last year. Despite this increase, current activity has normalized to expected levels and the company continues to expect operational losses to be approximately $100 million for all of 2024.
The company’s first quarter efficiency ratio was 64.3 percent on a reported basis and 60.6 percent on an adjusted basis(1). The effective tax rate was 20.7 percent in the first quarter.
Loans and Leases
|
|
|
Average Balances |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
($ amounts in millions) |
|
1Q24 |
|
4Q23 |
|
1Q23 |
|
1Q24 vs. 4Q23 |
|
1Q24 vs. 1Q23 |
|||||||||||||
|
Commercial and industrial |
|
$ |
50,090 |
|
$ |
50,939 |
|
$ |
51,158 |
|
$ |
(849 |
) |
|
(1.7 |
)% |
|
$ |
(1,068 |
) |
|
(2.1 |
)% |
|
Commercial real estate—owner-occupied |
|
|
5,131 |
|
|
5,136 |
|
|
5,305 |
|
|
(5 |
) |
|
(0.1 |
)% |
|
|
(174 |
) |
|
(3.3 |
)% |
|
Investor real estate |
|
|
8,833 |
|
|
8,772 |
|
|
8,404 |
|
|
61 |
|
|
0.7 |
% |
|
|
429 |
|
|
5.1 |
% |
|
Business Lending |
|
|
64,054 |
|
|
64,847 |
|
|
64,867 |
|
|
(793 |
) |
|
(1.2 |
)% |
|
|
(813 |
) |
|
(1.3 |
)% |
|
Residential first mortgage |
|
|
20,188 |
|
|
20,132 |
|
|
18,957 |
|
|
56 |
|
|
0.3 |
% |
|
|
1,231 |
|
|
6.5 |
% |
|
Home equity |
|
|
5,605 |
|
|
5,663 |
|
|
5,921 |
|
|
(58 |
) |
|
(1.0 |
)% |
|
|
(316 |
) |
|
(5.3 |
)% |
|
Consumer credit card |
|
|
1,315 |
|
|
1,295 |
|
|
1,214 |
|
|
20 |
|
|
1.5 |
% |
|
|
101 |
|
|
8.3 |
% |
|
Other consumer—exit portfolios |
|
|
35 |
|
|
110 |
|
|
527 |
|
|
(75 |
) |
|
(68.2 |
)% |
|
|
(492 |
) |
|
(93.4 |
)% |
|
Other consumer* |
|
|
6,223 |
|
|
6,246 |
|
|
5,791 |
|
|
(23 |
) |
|
(0.4 |
)% |
|
|
432 |
|
|
7.5 |
% |
|
Consumer Lending |
|
|
33,366 |
|
|
33,446 |
|
|
32,410 |
|
|
(80 |
) |
|
(0.2 |
)% |
|
|
956 |
|
|
2.9 |
% |
|
Total Loans |
|
$ |
97,420 |
|
$ |
98,293 |
|
$ |
97,277 |
|
$ |
(873 |
) |
|
(0.9 |
)% |
|
$ |
143 |
|
|
0.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
NM – Not meaningful. |
|
|
* |
Other consumer loans includes EnerBank (Regions’ point of sale home improvement portfolio). |
Average loans and leases declined by 1 percent compared to the prior quarter. Average business loans decreased 1 percent, while average consumer loans remained relatively stable. Approximately $870 million of commercial loans were refinanced off the company’s balance sheet during the quarter through the debt capital markets. Within consumer, growth included residential first mortgage, EnerBank and consumer credit card loan categories.
Deposits
|
|
Average Balances |
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
($ amounts in millions) |
1Q24 |
|
4Q23 |
|
1Q23 |
|
1Q24 vs. 4Q23 |
|
1Q24 vs. 1Q23 |
||||||||||||||
|
Total interest-bearing deposits |
$ |
86,200 |
|
$ |
83,247 |
|
$ |
79,450 |
|
$ |
2,953 |
|
|
3.5 |
% |
|
$ |
6,750 |
|
|
8.5 |
% |
|
|
Non-interest-bearing deposits |
|
40,926 |
|
|
43,167 |
|
|
49,592 |
|
|
(2,241 |
) |
|
(5.2 |
)% |
|
|
(8,666 |
) |
|
(17.5 |
)% |
|
|
Total Deposits |
$ |
127,126 |
|
$ |
126,414 |
|
$ |
129,042 |
|
$ |
712 |
|
|
0.6 |
% |
|
$ |
(1,916 |
) |
|
(1.5 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
($ amounts in millions) |
1Q24 |
|
4Q23 |
|
1Q23 |
|
1Q24 vs. 4Q23 |
|
1Q24 vs. 1Q23 |
||||||||||||||
|
Consumer Bank Segment |
$ |
79,150 |
|
$ |
79,384 |
|
$ |
82,200 |
|
$ |
(234 |
) |
|
(0.3 |
)% |
|
$ |
(3,050 |
) |
|
(3.7 |
)% |
|
|
Corporate Bank Segment |
|
37,064 |
|
|
36,291 |
|
|
36,273 |
|
|
773 |
|
|
2.1 |
% |
|
|
791 |
|
|
2.2 |
% |
|
|
Wealth Management Segment |
|
7,766 |
|
|
7,690 |
|
|
8,463 |
|
|
76 |
|
|
1.0 |
% |
|
|
(697 |
) |
|
(8.2 |
)% |
|
|
Other |
|
3,146 |
|
|
3,049 |
|
|
2,106 |
|
|
97 |
|
|
3.2 |
% |
|
|
1,040 |
|
|
49.4 |
% |
|
|
Total Deposits |
$ |
127,126 |
|
$ |
126,414 |
|
$ |
129,042 |
|
$ |
712 |
|
|
0.6 |
% |
|
$ |
(1,916 |
) |
|
(1.5 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
Ending Balances as of |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
3/31/2024 |
|
3/31/2024 |
|||||||||||||
|
($ amounts in millions) |
|
3/31/2024 |
|
12/31/2023 |
|
3/31/2023 |
|
vs. 12/31/2023 |
|
vs. 3/31/2023 |
|||||||||||||
|
Consumer Bank Segment |
|
$ |
81,129 |
|
$ |
80,031 |
|
$ |
83,296 |
|
$ |
1,098 |
|
|
1.4 |
% |
|
$ |
(2,167 |
) |
|
(2.6 |
)% |
|
Corporate Bank Segment |
|
|
37,043 |
|
|
36,883 |
|
|
35,185 |
|
|
160 |
|
|
0.4 |
% |
|
|
1,858 |
|
|
5.3 |
% |
|
Wealth Management Segment |
|
|
7,792 |
|
|
7,694 |
|
|
7,941 |
|
|
98 |
|
|
1.3 |
% |
|
|
(149 |
) |
|
(1.9 |
)% |
|
Other |
|
|
3,018 |
|
|
3,180 |
|
|
2,038 |
|
|
(162 |
) |
|
(5.1 |
)% |
|
|
980 |
|
|
48.1 |
% |
|
Total Deposits |
|
$ |
128,982 |
|
$ |
127,788 |
|
$ |
128,460 |
|
$ |
1,194 |
|
|
0.9 |
% |
|
$ |
522 |
|
|
0.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
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 first 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 the other segments.
Asset quality
|
|
|
As of and for the Quarter Ended |
||||
|
($ amounts in millions) |
|
3/31/2024 |
|
12/31/2023 |
|
3/31/2023 |
|
Allowance for credit losses (ACL) at period end |
|
$1,731 |
|
$1,700 |
|
$1,596 |
|
ACL/Loans, net |
|
1.79% |
|
1.73% |
|
1.63% |
|
ALL/Loans, net |
|
1.67% |
|
1.60% |
|
1.50% |
|
Allowance for credit losses to non-performing loans, excluding loans held for sale |
|
191% |
|
211% |
|
288% |
|
Allowance for loan losses to non-performing loans, excluding loans held for sale |
|
179% |
|
196% |
|
266% |
|
Provision for credit losses |
|
$152 |
|
$155 |
|
$135 |
|
Net loans charged-off |
|
$121 |
|
$132 |
|
$83 |
|
Adjusted net loan charge-offs (non-GAAP)(1) |
|
$121 |
|
$97 |
|
$83 |
|
Net loans charged-off as a % of average loans, annualized |
|
0.50% |
|
0.54% |
|
0.35% |
|
Adjusted net loan charge-offs as a % of average loans, annualized (non-GAAP) (1) |
|
0.50% |
|
0.39% |
|
0.35% |
|
Non-performing loans, excluding loans held for sale/Loans, net |
|
0.94% |
|
0.82% |
|
0.56% |
|
NPAs (ex. 90+ past due)/Loans, foreclosed properties, and non-performing loans held for sale |
|
0.95% |
|
0.84% |
|
0.58% |
|
NPAs (inc. 90+ past due)/Loans, foreclosed properties, and non-performing loans held for sale* |
|
1.10% |
|
1.01% |
|
0.71% |
|
Total Criticized Loans—Business Services** |
|
$4,978 |
|
$4,659 |
|
$3,725 |
|
* |
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 first quarter was primarily attributable to office, professional services, transportation, and manufacturing industries. Total reported and adjusted(1) net charge-offs for the quarter were $121 million, or 50 basis points of average loans. The increase in adjusted net charge-offs versus the prior quarter was attributable primarily to a large restaurant credit and a commercial manufacturing credit.
The increase to the allowance for credit losses compared to the fourth quarter was attributable primarily to adverse risk migration and continued credit quality normalization, as well as higher qualitative adjustments for incremental risk in certain portfolios previously identified as under stress.
The allowance for credit loss ratio increased 6 basis points to 1.79 percent of total loans, while the allowance as a percentage of nonperforming loans decreased to 191 percent.
Capital and liquidity
|
|
|
As of and for Quarter Ended |
||||
|
|
|
3/31/2024 |
|
12/31/2023 |
|
3/31/2023 |
|
Common Equity Tier 1 ratio(2) |
|
10.3% |
|
10.3% |
|
9.9% |
|
Tier 1 capital ratio(2) |
|
11.6% |
|
11.6% |
|
11.2% |
|
Tangible common stockholders’ equity to tangible assets (non-GAAP)(1) |
|
6.42% |
|
6.79% |
|
6.31% |
|
Tangible common book value per share (non-GAAP)(1)* |
|
$10.42 |
|
$10.77 |
|
$10.01 |
|
Loans, net of unearned income, to total deposits |
|
75.1% |
|
77.0% |
|
76.3% |
| * |
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 10.3 percent and 11.6 percent, respectively, at quarter-end.
During the first quarter, the company repurchased 5.5 million shares of common stock for a total of $102 million through open market purchases and declared $220 million in dividends to common shareholders.
The company’s liquidity position also remains robust as of March 31, 2024, with total available liquidity of approximately $60.8 billion, which includes cash held at the Federal Reserve, FHLB borrowing capacity, unencumbered securities, and capacity at the Federal Reserve’s Discount Window. These sources are sufficient to cover uninsured deposits at a ratio of 182 percent as of quarter end (this ratio excludes intercompany and secured deposits).
| (1) |
Non-GAAP; refer to pages 11, 14, 15 and 17 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 Apr. 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 $155 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 (such as our portfolio of investment securities) and obligations, as well as the availability and cost of capital and liquidity.
- Volatility and uncertainty about the direction of interest rates and the timing of any changes, which may lead to increased costs for businesses and consumers and potentially contribute to poor business and economic conditions generally.
- 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.
- 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.
- 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 downgrades in our credit ratings or outlook could, among other negative impacts, increase the costs of funding from capital markets.
- The loss of value of our investment portfolio could negatively impact market perceptions of us.
- Our ability to manage fluctuations in the value of assets and liabilities and off-balance sheet exposure so as to maintain sufficient capital and liquidity to support our businesses.
- The effects of social media on market perceptions of us and banks generally.
- Market replacement of LIBOR and the related effect on our LIBOR-based financial products and contracts, including, but not limited to, derivative products, debt obligations, deposits, investments, and loans.
- The effects of problems encountered by other financial institutions that adversely affect us or the banking industry generally could require us to change certain business practices, reduce our revenue, impose additional costs on us, or otherwise negatively affect our businesses.
- Volatility in the financial services industry (including failures or rumors of failures of other depository institutions), along with actions taken by governmental agencies to address such turmoil, could affect the ability of depository institutions, including us, to attract and retain depositors and to borrow or raise capital.
- Our ability to effectively compete with other traditional and non-traditional financial services companies, including fintechs, some of which possess greater financial resources than we do or are subject to different regulatory standards than we are.
- Our inability to develop and gain acceptance from current and prospective customers for new products and services and the enhancement of existing products and services to meet customers’ needs and respond to emerging technological trends in a timely manner could have a negative impact on our revenue.
- Our inability to keep pace with technological changes, including those related to the offering of digital banking and financial services, could result in losing business to competitors.
Contacts
Media Contact:
Jeremy King
(205) 264-4551
Investor Relations Contact:
Dana Nolan
(205) 264-7040
