BIRMINGHAM, Ala.–(BUSINESS WIRE)–Regions Financial Corp. (NYSE:RF) today reported earnings for the third quarter ended Sept. 30, 2023. The company reported third quarter net income available to common shareholders of $465 million and earnings per diluted share of $0.49. Compared to the third quarter of 2022, net income available to common shareholders increased 15 percent while total revenue remained relatively stable at $1.9 billion on both a reported and adjusted basis(1).
“We are pleased with our third quarter core performance,” said John Turner, President and CEO of Regions Financial Corp. “Our results reflect the strength and diversity of our balance sheet, robust liquidity position, and prudent risk management. Our protective hedging strategies 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 top-quartile returns through the cycle. Our confidence comes from having a strategic plan to drive soundness, profitability and growth and a talented team focused on executing it.”
SUMMARY OF THIRD QUARTER 2023 RESULTS:
|
|
|
Quarter Ended |
||||||||||
|
(amounts in millions, except per share data) |
|
9/30/2023 |
|
6/30/2023 |
|
9/30/2022 |
||||||
|
Net income |
|
$ |
490 |
|
|
$ |
581 |
|
|
$ |
429 |
|
|
Preferred dividends and other |
|
|
25 |
|
|
|
25 |
|
|
|
25 |
|
|
Net income available to common shareholders |
|
$ |
465 |
|
|
$ |
556 |
|
|
$ |
404 |
|
|
|
|
|
|
|
|
|
||||||
|
Weighted-average diluted shares outstanding |
|
|
940 |
|
|
|
939 |
|
|
|
940 |
|
|
Actual shares outstanding—end of period |
|
|
939 |
|
|
|
939 |
|
|
|
934 |
|
|
|
|
|
|
|
|
|
||||||
|
Diluted earnings per common share |
|
$ |
0.49 |
|
|
$ |
0.59 |
|
|
$ |
0.43 |
|
|
|
|
|
|
|
|
|
||||||
|
Selected items impacting earnings: |
|
|
|
|
|
|
||||||
|
Pre-tax adjusted items(1): |
|
|
|
|
|
|
||||||
|
Adjustments to non-interest expense(1) |
|
$ |
(4 |
) |
|
$ |
(1 |
) |
|
$ |
(182 |
) |
|
Adjustments to non-interest income(1) |
|
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
|
Net provision benefit from sale of unsecured consumer loans*** |
|
|
— |
|
|
|
— |
|
|
|
31 |
|
|
Total pre-tax adjusted items(1) |
|
$ |
(5 |
) |
|
$ |
(1 |
) |
|
$ |
(152 |
) |
|
Diluted EPS impact* |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(0.13 |
) |
|
|
|
|
|
|
|
|
||||||
|
Pre-tax additional selected items**: |
|
|
|
|
|
|
||||||
|
Provision in excess of net charge-offs**** |
|
$ |
(44 |
) |
|
$ |
(37 |
) |
|
$ |
(36 |
) |
|
Incremental provision for hurricane-related allowance for loan losses |
|
|
— |
|
|
|
— |
|
|
|
(20 |
) |
|
Capital markets income (loss) – CVA/DVA |
|
|
(3 |
) |
|
|
(9 |
) |
|
|
21 |
|
|
Residential MSR net hedge performance |
|
|
4 |
|
|
|
(4 |
) |
|
|
2 |
|
|
Pension settlement charges |
|
|
(7 |
) |
|
|
— |
|
|
|
— |
|
|
Incremental operational losses related to fraud |
|
|
(53 |
) |
|
|
(82 |
) |
|
|
— |
|
|
|
|
|
|
|
|
|
||||||
|
* |
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 net provision benefit of $31 million in third quarter of 2022 includes a $94 million reserve release offset by a $63 million fair value mark recorded through charge-offs. While reflected as a pre-tax adjusted item, the net provision benefit is not included in a non-GAAP reconciliation as it is not a non-GAAP metric and was not used in the determination of any non-GAAP metrics. |
|
**** |
The third quarter of 2022 provision in excess of net charge-offs excludes the $31 million net provision benefit from the sale of unsecured consumer loans and the $20 million provision for hurricane-related allowance for loan losses. |
Non-GAAP adjusted items(1) impacting the company’s earnings are identified to assist investors in analyzing Regions’ operating results on the same basis as that applied by management and provide a basis to predict future performance.
Total revenue
|
|
|
Quarter Ended |
||||||||||||||||||||||||
|
($ amounts in millions) |
|
9/30/2023 |
|
6/30/2023 |
|
9/30/2022 |
|
3Q23 vs. 2Q23 |
|
3Q23 vs. 3Q22 |
||||||||||||||||
|
Net interest income |
|
$ |
1,291 |
|
|
$ |
1,381 |
|
|
$ |
1,262 |
|
|
$ |
(90 |
) |
|
(6.5 |
)% |
|
$ |
29 |
|
|
2.3 |
% |
|
Taxable equivalent adjustment |
|
|
13 |
|
|
|
12 |
|
|
|
12 |
|
|
|
1 |
|
|
8.3 |
% |
|
|
1 |
|
|
8.3 |
% |
|
Net interest income, taxable equivalent basis |
|
$ |
1,304 |
|
|
$ |
1,393 |
|
|
$ |
1,274 |
|
|
$ |
(89 |
) |
|
(6.4 |
)% |
|
$ |
30 |
|
|
2.4 |
% |
|
Net interest margin (FTE) |
|
|
3.73 |
% |
|
|
4.04 |
% |
|
|
3.53 |
% |
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Non-interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Service charges on deposit accounts |
|
$ |
142 |
|
|
$ |
152 |
|
|
$ |
156 |
|
|
|
(10 |
) |
|
(6.6 |
)% |
|
|
(14 |
) |
|
(9.0 |
)% |
|
Card and ATM fees |
|
|
126 |
|
|
|
130 |
|
|
|
126 |
|
|
|
(4 |
) |
|
(3.1 |
)% |
|
|
— |
|
|
— |
% |
|
Wealth management income |
|
|
112 |
|
|
|
110 |
|
|
|
108 |
|
|
|
2 |
|
|
1.8 |
% |
|
|
4 |
|
|
3.7 |
% |
|
Capital markets income |
|
|
64 |
|
|
|
68 |
|
|
|
93 |
|
|
|
(4 |
) |
|
(5.9 |
)% |
|
|
(29 |
) |
|
(31.2 |
)% |
|
Mortgage income |
|
|
28 |
|
|
|
26 |
|
|
|
37 |
|
|
|
2 |
|
|
7.7 |
% |
|
|
(9 |
) |
|
(24.3 |
)% |
|
Commercial credit fee income |
|
|
24 |
|
|
|
28 |
|
|
|
26 |
|
|
|
(4 |
) |
|
(14.3 |
)% |
|
|
(2 |
) |
|
(7.7 |
)% |
|
Bank-owned life insurance |
|
|
20 |
|
|
|
19 |
|
|
|
15 |
|
|
|
1 |
|
|
5.3 |
% |
|
|
5 |
|
|
33.3 |
% |
|
Securities gains (losses), net |
|
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
|
|
(1 |
) |
|
NM |
|
|
|
— |
|
|
— |
% |
|
Market value adjustments on employee benefit assets* |
|
|
4 |
|
|
|
— |
|
|
|
(5 |
) |
|
|
4 |
|
|
NM |
|
|
|
9 |
|
|
180.0 |
% |
|
Other |
|
|
47 |
|
|
|
43 |
|
|
|
50 |
|
|
|
4 |
|
|
9.3 |
% |
|
|
(3 |
) |
|
(6.0 |
)% |
|
Non-interest income |
|
$ |
566 |
|
|
$ |
576 |
|
|
$ |
605 |
|
|
$ |
(10 |
) |
|
(1.7 |
)% |
|
$ |
(39 |
) |
|
(6.4 |
)% |
|
Total revenue |
|
$ |
1,857 |
|
|
$ |
1,957 |
|
|
$ |
1,867 |
|
|
$ |
(100 |
) |
|
(5.1 |
)% |
|
$ |
(10 |
) |
|
(0.5 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Adjusted total revenue (non-GAAP)(1) |
|
$ |
1,858 |
|
|
$ |
1,957 |
|
|
$ |
1,868 |
|
|
$ |
(99 |
) |
|
(5.1 |
)% |
|
$ |
(10 |
) |
|
(0.5 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
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 $1.9 billion decreased 5 percent on both a reported and adjusted basis(1) compared to the second quarter of 2023. Consistent with the company’s expectations, net interest income decreased during the quarter to $1.3 billion or 6.5 percent compared to the second quarter attributable to accelerating 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 asset yields. Total net interest margin decreased 31 basis points to 3.73 percent.
Non-interest income decreased 2 percent on both a reported and adjusted basis(1) compared to the second quarter of 2023 primarily driven by decreases in service charges and capital markets income. Service charges income decreased 7 percent driven primarily by implementation of the no-cost Regions Overdraft Grace feature. The additional financial benefits and flexibility provided to Regions’ customers from account features and enhancements over the past three years, has resulted in an approximate 45 percent reduction in both the number of occurrences and fees assessed. Capital markets income decreased 6 percent attributable primarily to lower real estate capital markets income offset partially by growth in merger and acquisitions advisory services. Excluding the impact of CVA/DVA, capital markets income decreased 13 percent. Mortgage income increased during the quarter primarily attributable to higher servicing income associated with a bulk purchase of the rights to service $6.2 billion of residential mortgage loans that closed early in the third quarter.
Non-interest expense
|
|
|
Quarter Ended |
|||||||||||||||||||||
|
($ amounts in millions) |
|
9/30/2023 |
|
6/30/2023 |
|
9/30/2022 |
|
3Q23 vs. 2Q23 |
|
3Q23 vs. 3Q22 |
|||||||||||||
|
Salaries and employee benefits |
|
$ |
589 |
|
$ |
603 |
|
$ |
593 |
|
$ |
(14 |
) |
|
(2.3 |
)% |
|
$ |
(4 |
) |
|
(0.7 |
)% |
|
Equipment and software expense |
|
|
107 |
|
|
101 |
|
|
98 |
|
|
6 |
|
|
5.9 |
% |
|
|
9 |
|
|
9.2 |
% |
|
Net occupancy expense |
|
|
72 |
|
|
73 |
|
|
76 |
|
|
(1 |
) |
|
(1.4 |
)% |
|
|
(4 |
) |
|
(5.3 |
)% |
|
Outside services |
|
|
39 |
|
|
42 |
|
|
40 |
|
|
(3 |
) |
|
(7.1 |
)% |
|
|
(1 |
) |
|
(2.5 |
)% |
|
Professional, legal and regulatory expenses |
|
|
27 |
|
|
20 |
|
|
199 |
|
|
7 |
|
|
35.0 |
% |
|
|
(172 |
) |
|
(86.4 |
)% |
|
Marketing |
|
|
26 |
|
|
26 |
|
|
29 |
|
|
— |
|
|
— |
% |
|
|
(3 |
) |
|
(10.3 |
)% |
|
FDIC insurance assessments |
|
|
27 |
|
|
29 |
|
|
16 |
|
|
(2 |
) |
|
(6.9 |
)% |
|
|
11 |
|
|
68.8 |
% |
|
Credit/checkcard expenses |
|
|
16 |
|
|
15 |
|
|
13 |
|
|
1 |
|
|
6.7 |
% |
|
|
3 |
|
|
23.1 |
% |
|
Operational losses |
|
|
75 |
|
|
95 |
|
|
13 |
|
|
(20 |
) |
|
(21.1 |
)% |
|
|
62 |
|
|
476.9 |
% |
|
Branch consolidation, property and equipment charges |
|
|
1 |
|
|
1 |
|
|
3 |
|
|
— |
|
|
— |
% |
|
|
(2 |
) |
|
(66.7 |
)% |
|
Visa class B shares expense |
|
|
5 |
|
|
9 |
|
|
3 |
|
|
(4 |
) |
|
(44.4 |
)% |
|
|
2 |
|
|
66.7 |
% |
|
Other |
|
|
109 |
|
|
97 |
|
|
87 |
|
|
12 |
|
|
12.4 |
% |
|
|
22 |
|
|
25.3 |
% |
|
Total non-interest expense |
|
$ |
1,093 |
|
$ |
1,111 |
|
$ |
1,170 |
|
$ |
(18 |
) |
|
(1.6 |
)% |
|
$ |
(77 |
) |
|
(6.6 |
)% |
|
Total adjusted non-interest expense(1) |
|
$ |
1,089 |
|
$ |
1,110 |
|
$ |
988 |
|
$ |
(21 |
) |
|
(1.9 |
)% |
|
$ |
101 |
|
|
10.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
NM – Not Meaningful |
Non-interest expense decreased 2 percent on both a reported and adjusted basis(1) compared to the second quarter of 2023. Operational losses decreased 21 percent; however, during the quarter, the company continued to experience elevated fraud losses. Salaries and benefits also decreased 2 percent driven primarily by lower incentive compensation and payroll taxes.
The company’s third quarter efficiency ratio was 58.5 percent on a reported and 58.2 percent on an adjusted basis(1). The effective tax rate was 20.9 percent in the third quarter.
Loans and Leases
|
|
|
Average Balances |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
($ amounts in millions) |
|
3Q23 |
|
2Q23 |
|
3Q22 |
|
3Q23 vs. 2Q23 |
|
3Q23 vs. 3Q22 |
|||||||||||||
|
Commercial and industrial |
|
$ |
51,721 |
|
$ |
52,039 |
|
$ |
49,120 |
|
$ |
(318 |
) |
|
(0.6 |
)% |
|
$ |
2,601 |
|
|
5.3 |
% |
|
Commercial real estate—owner-occupied |
|
|
5,100 |
|
|
5,197 |
|
|
5,441 |
|
|
(97 |
) |
|
(1.9 |
)% |
|
|
(341 |
) |
|
(6.3 |
)% |
|
Investor real estate |
|
|
8,617 |
|
|
8,482 |
|
|
7,879 |
|
|
135 |
|
|
1.6 |
% |
|
|
738 |
|
|
9.4 |
% |
|
Business Lending |
|
|
65,438 |
|
|
65,718 |
|
|
62,440 |
|
|
(280 |
) |
|
(0.4 |
)% |
|
|
2,998 |
|
|
4.8 |
% |
|
Residential first mortgage |
|
|
19,914 |
|
|
19,427 |
|
|
18,125 |
|
|
487 |
|
|
2.5 |
% |
|
|
1,789 |
|
|
9.9 |
% |
|
Home equity |
|
|
5,688 |
|
|
5,785 |
|
|
6,050 |
|
|
(97 |
) |
|
(1.7 |
)% |
|
|
(362 |
) |
|
(6.0 |
)% |
|
Consumer credit card |
|
|
1,245 |
|
|
1,217 |
|
|
1,176 |
|
|
28 |
|
|
2.3 |
% |
|
|
69 |
|
|
5.9 |
% |
|
Other consumer—exit portfolios |
|
|
384 |
|
|
450 |
|
|
716 |
|
|
(66 |
) |
|
(14.7 |
)% |
|
|
(332 |
) |
|
(46.4 |
)% |
|
Other consumer* |
|
|
6,116 |
|
|
5,984 |
|
|
6,177 |
|
|
132 |
|
|
2.2 |
% |
|
|
(61 |
) |
|
(1.0 |
)% |
|
Consumer Lending |
|
|
33,347 |
|
|
32,863 |
|
|
32,244 |
|
|
484 |
|
|
1.5 |
% |
|
|
1,103 |
|
|
3.4 |
% |
|
Total Loans |
|
$ |
98,785 |
|
$ |
98,581 |
|
$ |
94,684 |
|
$ |
204 |
|
|
0.2 |
% |
|
$ |
4,101 |
|
|
4.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
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 modestly, offset by a 1 percent increase in consumer loans. Commercial loan line utilization levels ended the quarter at approximately 43.3 percent, decreasing 20 basis points over the prior quarter, while line commitments decreased 1 percent. The growth in consumer loans was driven by both residential first mortgage and EnerBank.
Deposits
|
|
|
Average Balances |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
($ amounts in millions) |
|
3Q23 |
|
2Q23 |
|
3Q22 |
|
3Q23 vs. 2Q23 |
|
3Q23 vs. 3Q22 |
|||||||||||||
|
Total interest-bearing deposits |
|
$ |
80,472 |
|
$ |
78,361 |
|
$ |
79,712 |
|
$ |
2,111 |
|
|
2.7 |
% |
|
$ |
760 |
|
|
1.0 |
% |
|
Non-interest-bearing deposits |
|
|
44,748 |
|
|
47,178 |
|
|
55,806 |
|
|
(2,430 |
) |
|
(5.2 |
)% |
|
|
(11,058 |
) |
|
(19.8 |
)% |
|
Total Deposits |
|
$ |
125,220 |
|
$ |
125,539 |
|
$ |
135,518 |
|
$ |
(319 |
) |
|
(0.3 |
)% |
|
$ |
(10,298 |
) |
|
(7.6 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
($ amounts in millions) |
|
3Q23 |
|
2Q23 |
|
3Q22 |
|
3Q23 vs. 2Q23 |
|
3Q23 vs. 3Q22 |
|||||||||||||
|
Consumer Bank Segment |
|
$ |
80,036 |
|
$ |
80,999 |
|
$ |
84,741 |
|
$ |
(963 |
) |
|
(1.2 |
)% |
|
$ |
(4,705 |
) |
|
(5.6 |
)% |
|
Corporate Bank Segment |
|
|
34,924 |
|
|
34,860 |
|
|
39,058 |
|
|
64 |
|
|
0.2 |
% |
|
|
(4,134 |
) |
|
(10.6 |
)% |
|
Wealth Management Segment |
|
|
7,451 |
|
|
7,470 |
|
|
9,467 |
|
|
(19 |
) |
|
(0.3 |
)% |
|
|
(2,016 |
) |
|
(21.3 |
)% |
|
Other |
|
|
2,809 |
|
|
2,210 |
|
|
2,252 |
|
|
599 |
|
|
27.1 |
% |
|
|
557 |
|
|
24.7 |
% |
|
Total Deposits |
|
$ |
125,220 |
|
$ |
125,539 |
|
$ |
135,518 |
|
$ |
(319 |
) |
|
(0.3 |
)% |
|
$ |
(10,298 |
) |
|
(7.6 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
Ending Balances as of |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
9/30/2023 |
|
9/30/2023 |
|||||||||||||
|
($ amounts in millions) |
|
9/30/2023 |
|
6/30/2023 |
|
9/30/2022 |
|
vs. 6/30/2023 |
|
vs. 9/30/2022 |
|||||||||||||
|
Consumer Bank Segment |
|
$ |
80,980 |
|
$ |
81,554 |
|
$ |
85,455 |
|
$ |
(574 |
) |
|
(0.7 |
)% |
|
$ |
(4,475 |
) |
|
(5.2 |
)% |
|
Corporate Bank Segment |
|
|
34,650 |
|
|
35,332 |
|
|
38,293 |
|
|
(682 |
) |
|
(1.9 |
)% |
|
|
(3,643 |
) |
|
(9.5 |
)% |
|
Wealth Management Segment |
|
|
7,791 |
|
|
7,176 |
|
|
9,400 |
|
|
615 |
|
|
8.6 |
% |
|
|
(1,609 |
) |
|
(17.1 |
)% |
|
Other |
|
|
2,778 |
|
|
2,897 |
|
|
2,230 |
|
|
(119 |
) |
|
(4.1 |
)% |
|
|
548 |
|
|
24.6 |
% |
|
Total Deposits |
|
$ |
126,199 |
|
$ |
126,959 |
|
$ |
135,378 |
|
$ |
(760 |
) |
|
(0.6 |
)% |
|
$ |
(9,179 |
) |
|
(6.8 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
The company’s deposit base continues to be a source of strength and a differentiator in liquidity and margin performance. Consistent with the company’s expectations, total ending and average deposits remained relatively stable during the third quarter of 2023 compared to the second quarter of 2023, while also experiencing continued remixing out of non-interest-bearing products into interest-bearing products. Declines in average Consumer deposits were partially offset by stability or growth in the other segments.
Asset quality
|
|
|
As of and for the Quarter Ended |
||||
|
($ amounts in millions) |
|
9/30/2023 |
|
6/30/2023 |
|
9/30/2022 |
|
Allowance for credit losses (ACL) at period end |
|
$1,677 |
|
$1,633 |
|
$1,539 |
|
ACL/Loans, net |
|
1.70% |
|
1.65% |
|
1.63% |
|
ALL/Loans, net |
|
1.56% |
|
1.53% |
|
1.50% |
|
Allowance for credit losses to non-performing loans, excluding loans held for sale |
|
261% |
|
332% |
|
311% |
|
Allowance for loan losses to non-performing loans, excluding loans held for sale |
|
241% |
|
308% |
|
287% |
|
Provision for credit losses |
|
$145 |
|
$118 |
|
$135 |
|
Net loans charged-off |
|
$101 |
|
$81 |
|
$110 |
|
Adjusted net loan charge-offs (non-GAAP)(1) |
|
$101 |
|
$81 |
|
$47 |
|
Net loans charged-off as a % of average loans, annualized |
|
0.40% |
|
0.33% |
|
0.46% |
|
Adjusted net loan charge-offs as a % of average loans, annualized (non-GAAP) (1) |
|
0.40% |
|
0.33% |
|
0.19% |
|
Non-performing loans, excluding loans held for sale/Loans, net |
|
0.65% |
|
0.50% |
|
0.52% |
|
NPAs (ex. 90+ past due)/Loans, foreclosed properties, and non-performing loans held for sale |
|
0.67% |
|
0.51% |
|
0.54% |
|
NPAs (inc. 90+ past due)/Loans, foreclosed properties, and non-performing loans held for sale* |
|
0.81% |
|
0.64% |
|
0.65% |
|
Total Criticized Loans—Business Services** |
|
$4,167 |
|
$4,039 |
|
$2,771 |
|
* |
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 normalized further during the quarter. Business services criticized loans increased 3 percent, while total delinquencies and non-performing loans as a percentage of total loans increased 15 basis points each. Total net charge-offs for the quarter were $101 million, or 40 basis points of average loans, due to elevated losses associated with a consumer point of sale program the company has previously discontinued, as well as lower commercial recoveries relative to the second quarter.
The increase to the allowance for credit losses compared to the second quarter was attributable primarily to adverse risk migration and continued credit quality normalization, as well as a build in model or qualitative adjustments for incremental risk in certain portfolios.
The allowance for credit loss ratio increased 5 basis points to 1.70 percent of total loans, while the allowance as a percentage of nonperforming loans decreased to 261 percent.
Capital and liquidity
|
|
|
As of and for Quarter Ended |
||||
|
|
|
9/30/2023 |
|
6/30/2023 |
|
9/30/2022 |
|
Common Equity Tier 1 ratio(2) |
|
10.3% |
|
10.1% |
|
9.3% |
|
Tier 1 capital ratio(2) |
|
11.6% |
|
11.4% |
|
10.6% |
|
Tangible common stockholders’ equity to tangible assets (non-GAAP)(1) |
|
5.82% |
|
6.09% |
|
5.01% |
|
Tangible common book value per share (non-GAAP)(1)* |
|
$9.16 |
|
$9.72 |
|
$8.15 |
|
Loans, net of unearned income, to total deposits |
|
78.4% |
|
78.1% |
|
70.0% |
|
* |
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 third quarter, the company declared $225 million in dividends to common shareholders and did not repurchase any shares of Regions’ common stock.
The company’s liquidity position also remains robust as of Sept. 30, 2023, with total available liquidity of approximately $56.8 billion, which includes cash held at the Federal Reserve, FHLB borrowing capacity, unencumbered securities, borrowing capacity at the Federal Reserve’s discount window, and the Federal Reserve’s Bank Term Lending Plan facility. The loan-to-deposit ratio totaled 78 percent at the end of the quarter.
|
(1) |
Non-GAAP; refer to pages 12, 16, 17, 18 and 20 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 Oct. 20, 2023, 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 $154 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, which 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.
- Rising 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.
- The effects of social media on market perceptions of us and banks generally.
- 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 whom 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.
- Changes in laws and regulations affecting our businesses, including legislation and regulations relating to bank products and services, such as special FDIC assessments, any new long-term debt requirements, as well as changes in the enforcement and interpretation of such laws and regulations by applicable governmental and self-regulatory agencies, including as a result of the changes in U.S. presidential administration, control of the U.S. Congress, and changes in personnel at the bank regulatory agencies, which could require us to change certain business practices, increase compliance risk, reduce our revenue, impose additional costs on us, or otherwise negatively affect our businesses.
Contacts
Media Contact:
Jeremy King
(205) 264-4551
Investor Relations Contact:
Dana Nolan
(205) 264-7040
