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Regions Financial's (RF) Q4 Earnings Beat, Revenues Dip Y/Y
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Regions Financial Corporation’s (RF - Free Report) fourth-quarter 2023 adjusted earnings per share of 52 cents surpassed the Zacks Consensus Estimate of 48 cents. The bottom line declined from 67 cents reported in the prior-year quarter.
The results have been aided by a rise in deposit balances. However, increasing expenses and a decline in net interest income (NII) and total loan balances affected the bottom line.
Net income available to common shareholders was $367 million, down from $660 million reported a year ago.
Earnings per share of $2.11 for 2023 missed the Zacks Consensus Estimate of $2.20. The figure declined 7.5% from the previous year's level. Net income available to common shareholders was $2.07 billion, down 7.6% from the 2022 level.
Revenues Fall, Expenses Rise
Total quarterly revenues were $1.81 billion, which outpaced the Zacks Consensus Estimate of $1.80 billion. However, the top line fell 9.5% from the year-ago quarter's figure.
For 2023, revenues totaled $7.58 billion, which beat the Zacks Consensus Estimate of $7.57 billion. The top line rose 5% from the 2022 level.
Quarterly NII was $1.23 billion, down 12.1% year over year. Also, the net interest margin declined 39 basis points to 3.60%.
Non-interest income dipped 3.3% year over year to $580 million. This was due to a decline in almost all components of fee income except wealth management and mortgage income.
Non-interest expenses rose 16.5% year over year to $1.19 billion. The rise was majorly due to FDIC special assessment fees and severance-related costs.
The efficiency ratio was 65% in the fourth quarter compared with 50.5% in the prior-year quarter. A rise in this ratio indicates lower profitability.
As of Dec 31, 2023, total loans decreased 1% on a sequential basis to $98.38 billion. Nonetheless, total deposits were $127.79 billion, up 1.3% from the previous quarter's level.
Credit Quality Deteriorates
Non-performing assets (excluding 90+ past due), as a percentage of loans, foreclosed properties and non-performing loans held for sale increased to 0.84% from the prior-year quarter’s 0.53%. Non-performing loans, excluding loans held for sale as a percentage of net loans, were 0.82%, up from 0.52% reported in the prior-year quarter. A provision for credit losses of $155 million was recorded in the quarter compared with $112 million in the prior-year quarter.
Adjusted net charge-offs, as a percentage of average loans, were 0.39% compared with 0.29% in the prior-year period.
Capital Ratios Improve
As of Dec 31, 2023, the Common Equity Tier 1 ratio and the Tier 1 capital ratio were 10.2% and 11.5%, respectively, compared with 9.6% and 10.9% recorded in the year-earlier quarter.
Our Viewpoint
RF’s attractive core business and revenue-diversification strategies will likely yield stellar earnings in the upcoming period. However, a lack of diversification in loan portfolio remains a headwind.
Regions Financial Corporation Price, Consensus and EPS Surprise
Bank of HawaiiCorporation (BOH - Free Report) is slated to announce fourth-quarter 2023 results on Jan 22.
Over the past month, the Zacks Consensus Estimate for BOH’s quarterly earnings has moved up 2.3% to 89 cents per share. The estimate indicates a 40.7% decrease from the prior-year quarter's actuals.
East West Bancorp (EWBC - Free Report) is scheduled to release fourth-quarter 2023 numbers on Jan 23.
Over the past 30 days, the Zacks Consensus Estimate for EWBC’s quarterly earnings has moved down 1.6% to $1.89 per share. The figure implies a 20.3% decline from the prior-year quarter's actuals.
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Regions Financial's (RF) Q4 Earnings Beat, Revenues Dip Y/Y
Regions Financial Corporation’s (RF - Free Report) fourth-quarter 2023 adjusted earnings per share of 52 cents surpassed the Zacks Consensus Estimate of 48 cents. The bottom line declined from 67 cents reported in the prior-year quarter.
The results have been aided by a rise in deposit balances. However, increasing expenses and a decline in net interest income (NII) and total loan balances affected the bottom line.
Net income available to common shareholders was $367 million, down from $660 million reported a year ago.
Earnings per share of $2.11 for 2023 missed the Zacks Consensus Estimate of $2.20. The figure declined 7.5% from the previous year's level. Net income available to common shareholders was $2.07 billion, down 7.6% from the 2022 level.
Revenues Fall, Expenses Rise
Total quarterly revenues were $1.81 billion, which outpaced the Zacks Consensus Estimate of $1.80 billion. However, the top line fell 9.5% from the year-ago quarter's figure.
For 2023, revenues totaled $7.58 billion, which beat the Zacks Consensus Estimate of $7.57 billion. The top line rose 5% from the 2022 level.
Quarterly NII was $1.23 billion, down 12.1% year over year. Also, the net interest margin declined 39 basis points to 3.60%.
Non-interest income dipped 3.3% year over year to $580 million. This was due to a decline in almost all components of fee income except wealth management and mortgage income.
Non-interest expenses rose 16.5% year over year to $1.19 billion. The rise was majorly due to FDIC special assessment fees and severance-related costs.
The efficiency ratio was 65% in the fourth quarter compared with 50.5% in the prior-year quarter. A rise in this ratio indicates lower profitability.
As of Dec 31, 2023, total loans decreased 1% on a sequential basis to $98.38 billion. Nonetheless, total deposits were $127.79 billion, up 1.3% from the previous quarter's level.
Credit Quality Deteriorates
Non-performing assets (excluding 90+ past due), as a percentage of loans, foreclosed properties and non-performing loans held for sale increased to 0.84% from the prior-year quarter’s 0.53%. Non-performing loans, excluding loans held for sale as a percentage of net loans, were 0.82%, up from 0.52% reported in the prior-year quarter. A provision for credit losses of $155 million was recorded in the quarter compared with $112 million in the prior-year quarter.
Adjusted net charge-offs, as a percentage of average loans, were 0.39% compared with 0.29% in the prior-year period.
Capital Ratios Improve
As of Dec 31, 2023, the Common Equity Tier 1 ratio and the Tier 1 capital ratio were 10.2% and 11.5%, respectively, compared with 9.6% and 10.9% recorded in the year-earlier quarter.
Our Viewpoint
RF’s attractive core business and revenue-diversification strategies will likely yield stellar earnings in the upcoming period. However, a lack of diversification in loan portfolio remains a headwind.
Regions Financial Corporation Price, Consensus and EPS Surprise
Currently, Regions Financial carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Release Dates of Other Banks
Bank of HawaiiCorporation (BOH - Free Report) is slated to announce fourth-quarter 2023 results on Jan 22.
Over the past month, the Zacks Consensus Estimate for BOH’s quarterly earnings has moved up 2.3% to 89 cents per share. The estimate indicates a 40.7% decrease from the prior-year quarter's actuals.
East West Bancorp (EWBC - Free Report) is scheduled to release fourth-quarter 2023 numbers on Jan 23.
Over the past 30 days, the Zacks Consensus Estimate for EWBC’s quarterly earnings has moved down 1.6% to $1.89 per share. The figure implies a 20.3% decline from the prior-year quarter's actuals.