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Regions Financial Q3 Earnings Surpass on Y/Y Decline in Expenses
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Regions Financial Corporation’s (RF - Free Report) third-quarter 2024 adjusted earnings per share of 57 cents beat the Zacks Consensus Estimate of 53 cents. This compares favorably with earnings of 49 cents per share in the year-ago quarter.
Find the latest earnings estimates and surprises on the Zacks Earnings Calendar.
A decrease in non-interest expenses and an increase in non-interest income supported RF’s results. Also, Regions Financial’s strong capital position indicates its availability of adequate capital to use to deal with any unexpected losses. However, a decline in net interest income (NII), and lower loans and deposit balances were spoilsports.
The results exclude 8 cents per share of additional securities repositioning and issuance costs associated with the redemption of the company's Series B Preferred Stock. After considering this, net income (GAAP basis) available to common shareholders was $446 million, down 4.1% year over year.
Regions Financial’s Revenues & Expenses Decline Y/Y
Total quarterly revenues were $1.79 billion, surpassing the Zacks Consensus Estimate of $1.78. However, the top line fell 3.6% from the year-ago quarter.
Quarterly NII was $1.22 billion, down 5.7% year over year. Also, the net interest margin declined 19 basis points to 3.54%.
Non-interest income increased 1.1% year over year to $572 million.
Non-interest expenses fell 2.2% year over year to $1.07 billion. The decline was due to a decrease in equipment and software expenses, and operational losses.
The efficiency ratio was 59.3% in the third quarter compared with 58.5% in the prior-year quarter. A rise in this ratio indicates lower profitability.
As of Sept. 30, 2024, total loans decreased 0.2% on a sequential basis to $97 billion. Total deposits were $125.9 billion, which declined 0.7% from the previous quarter.
Regions Financial’s Credit Quality Mixed
Non-performing assets (excluding 90+ past due), as a percentage of loans, foreclosed properties and non-performing loans held for sale, increased to 0.87% from the prior-year quarter’s 0.67%. Non-performing loans, excluding loans held for sale as a percentage of net loans, were 0.85%, up from 0.65% in the prior-year quarter. A provision for credit losses of $113 million was recorded in the quarter, down 22% from the year-ago quarter.
Adjusted net charge-offs, as a percentage of average loans, were 0.48% compared with 0.40% in the prior-year period.
RF’s Capital Ratios Improve Y/Y
As of Sept. 30, 2024, the Common Equity Tier 1 ratio and the Tier 1 capital ratio were 10.6% and 11.9%, respectively, compared with 10.3% and 11.6% in the year-earlier quarter.
Regions Financial’s Share Repurchase Update
In the reported quarter, the company repurchased nearly 4 million shares for $101 million.
Our Viewpoint on RF
Regions Financial’s attractive core business and revenue-diversification strategies will likely yield stellar earnings in the upcoming period. The company’s robust capital planning process is intended to ensure the efficient use of capital to support lending activities and business growth opportunities, and offer suitable shareholder returns. However, a declining loans and deposit balance, along with lower NII, is concerning.
Regions Financial Corporation Price, Consensus and EPS Surprise
Synovus Financial Corp. (SNV - Free Report) reported third-quarter 2024 adjusted earnings per share of $1.23, which surpassed the Zacks Consensus Estimate of $1.09. The reported figure compared favorably with earnings of 84 cents a year ago.
Results benefited from strong growth in non-interest revenues, and a fall in expenses and provisions for credit losses. Also, an improving loans and deposit balance was a tailwind. However, a decline in NII and a rise in non-performing loans were major headwinds.
First Horizon Corporation’s (FHN - Free Report) third-quarter 2024 adjusted earnings per share (excluding notable items) of 42 cents surpassed the Zacks Consensus Estimate of 38 cents. The figure increased 55.6% year over year.
FHN’s results benefited from a rise in NII and non-interest income. Also, an increase in deposits and lower provisions were other positives. However, elevated expenses and a fall in loan balances were major headwinds.
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Regions Financial Q3 Earnings Surpass on Y/Y Decline in Expenses
Regions Financial Corporation’s (RF - Free Report) third-quarter 2024 adjusted earnings per share of 57 cents beat the Zacks Consensus Estimate of 53 cents. This compares favorably with earnings of 49 cents per share in the year-ago quarter.
Find the latest earnings estimates and surprises on the Zacks Earnings Calendar.
A decrease in non-interest expenses and an increase in non-interest income supported RF’s results. Also, Regions Financial’s strong capital position indicates its availability of adequate capital to use to deal with any unexpected losses. However, a decline in net interest income (NII), and lower loans and deposit balances were spoilsports.
The results exclude 8 cents per share of additional securities repositioning and issuance costs associated with the redemption of the company's Series B Preferred Stock. After considering this, net income (GAAP basis) available to common shareholders was $446 million, down 4.1% year over year.
Regions Financial’s Revenues & Expenses Decline Y/Y
Total quarterly revenues were $1.79 billion, surpassing the Zacks Consensus Estimate of $1.78. However, the top line fell 3.6% from the year-ago quarter.
Quarterly NII was $1.22 billion, down 5.7% year over year. Also, the net interest margin declined 19 basis points to 3.54%.
Non-interest income increased 1.1% year over year to $572 million.
Non-interest expenses fell 2.2% year over year to $1.07 billion. The decline was due to a decrease in equipment and software expenses, and operational losses.
The efficiency ratio was 59.3% in the third quarter compared with 58.5% in the prior-year quarter. A rise in this ratio indicates lower profitability.
RF’s Loans & Deposit Balance Declines Sequentially
As of Sept. 30, 2024, total loans decreased 0.2% on a sequential basis to $97 billion. Total deposits were $125.9 billion, which declined 0.7% from the previous quarter.
Regions Financial’s Credit Quality Mixed
Non-performing assets (excluding 90+ past due), as a percentage of loans, foreclosed properties and non-performing loans held for sale, increased to 0.87% from the prior-year quarter’s 0.67%. Non-performing loans, excluding loans held for sale as a percentage of net loans, were 0.85%, up from 0.65% in the prior-year quarter. A provision for credit losses of $113 million was recorded in the quarter, down 22% from the year-ago quarter.
Adjusted net charge-offs, as a percentage of average loans, were 0.48% compared with 0.40% in the prior-year period.
RF’s Capital Ratios Improve Y/Y
As of Sept. 30, 2024, the Common Equity Tier 1 ratio and the Tier 1 capital ratio were 10.6% and 11.9%, respectively, compared with 10.3% and 11.6% in the year-earlier quarter.
Regions Financial’s Share Repurchase Update
In the reported quarter, the company repurchased nearly 4 million shares for $101 million.
Our Viewpoint on RF
Regions Financial’s attractive core business and revenue-diversification strategies will likely yield stellar earnings in the upcoming period. The company’s robust capital planning process is intended to ensure the efficient use of capital to support lending activities and business growth opportunities, and offer suitable shareholder returns. However, a declining loans and deposit balance, along with lower NII, is concerning.
Regions Financial Corporation Price, Consensus and EPS Surprise
Regions Financial Corporation price-consensus-eps-surprise-chart | Regions Financial Corporation Quote
Currently, Regions Financial carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Banks
Synovus Financial Corp. (SNV - Free Report) reported third-quarter 2024 adjusted earnings per share of $1.23, which surpassed the Zacks Consensus Estimate of $1.09. The reported figure compared favorably with earnings of 84 cents a year ago.
Results benefited from strong growth in non-interest revenues, and a fall in expenses and provisions for credit losses. Also, an improving loans and deposit balance was a tailwind. However, a decline in NII and a rise in non-performing loans were major headwinds.
First Horizon Corporation’s (FHN - Free Report) third-quarter 2024 adjusted earnings per share (excluding notable items) of 42 cents surpassed the Zacks Consensus Estimate of 38 cents. The figure increased 55.6% year over year.
FHN’s results benefited from a rise in NII and non-interest income. Also, an increase in deposits and lower provisions were other positives. However, elevated expenses and a fall in loan balances were major headwinds.