Delivers strong revenue and pre-tax
pre-provision income(1) growth over the prior year
Regions Financial Corp. (NYSE:RF) today reported earnings for
the second quarter ended June 30, 2022. The company reported second
quarter net income available to common shareholders of $558 million
and earnings per diluted share of $0.59. Compared to the second
quarter of 2021, strong revenue growth contributed to a 17 percent
increase in pre-tax pre-provision income on a reported basis and a
19 percent increase on an adjusted basis(1). The company's second
quarter adjusted pre-tax pre-provision income(1) represents its
highest level on record. Compared to the second quarter of 2021,
total revenue of $1.7 billion increased 10 percent on a reported
basis and 12 percent on an adjusted basis(1) driven by growth in
both net interest income and non-interest income. The company
generated year-to-date positive operating leverage of 1.9 percent
on a reported basis and 1.6 percent on an adjusted basis(1) versus
the comparable prior-year period.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20220722005053/en/
“Our solid second-quarter results reflect the strength of
Regions’ business plan and our team’s success in executing it,”
said John Turner, President and CEO of Regions Financial Corp. “The
financial health of consumers and businesses in the Regions
footprint continues to be good. Investments across our business
groups are paying off. Strategic acquisitions completed in 2020 and
2021 are further expanding our pipelines and building revenue
growth. We’re committed to keeping our customers at the center of
every decision. We remain vigilant at all times with effective risk
management and sound governance, and our teams have the depth of
experience to guide customers through a variety of economic
cycles.”
Among key performance indicators:
- Regions subsidiary Ascentium Capital’s production for the first
half of 2022 is up 31 percent year-over-year with pipelines
remaining strong.
- Regions subsidiary Sabal Capital Partners has closed $500
million in loans year-to-date, with full-year volume expected to
increase by approximately 11 percent.
- Regions subsidiary Clearsight Advisors is on track to exceed
full-year expectations and heads into the second half of the year
with a robust pipeline.
- Regions’ SBA lending is on target to grow full-year 2022
production by 45 percent compared to pre-pandemic levels.
- Regions has increased its number of Treasury Management clients
by 14 percent year-over-year.
- EnerBank grew loans by approximately 7 percent in the second
quarter compared to the previous quarter. The merger of EnerBank
with and into Regions Bank continues to result in the generation of
high-quality consumer loans and presents further growth
opportunities.
- Technology investments continue to drive a more seamless
customer experience. During the second quarter, Regions launched a
digital advisor tool from Regions Investment Solutions that gives
emerging and experienced investors an effective online option for
managing portfolios while receiving personalized support.
- Digital continues to support a better banking experience with
an 8 percent increase specifically in mobile users in 2Q22 compared
to 2Q21.
- Regions’ balance sheet remains strong, deliberately positioned
to withstand a variety of economic conditions.
- Overall asset quality continued to improve during the second
quarter with most metrics remaining well below historical levels.
The company has a robust credit risk management framework and a
disciplined and dynamic approach to managing concentration risk.
Together, these factors position Regions to weather changing
economic environments while delivering consistent, sustainable
long-term performance.
SUMMARY OF SECOND QUARTER 2022
RESULTS:
Quarter Ended
(amounts in millions, except per share
data)
6/30/2022
3/31/2022
6/30/2021
Net income
$
583
$
548
$
790
Preferred dividends and other*
25
24
42
Net income available to common
shareholders
$
558
$
524
$
748
Weighted-average diluted shares
outstanding
940
947
965
Actual shares outstanding—end of
period
934
933
955
Diluted earnings per common share
$
0.59
$
0.55
$
0.77
Selected items impacting
earnings:
Pre-tax adjusted items(1):
Adjustments to non-interest expense(1)
$
6
$
(1
)
$
(3
)
Adjustments to non-interest income(1)
—
1
19
Total pre-tax adjusted items(1)
$
6
$
—
$
16
After-tax preferred stock redemption
expense(1)*
$
—
$
—
$
(13
)
Diluted EPS impact**
$
—
$
—
$
—
Pre-tax additional selected items***:
CECL provision (in excess of) less than
net charge-offs
$
(22
)
$
82
$
384
Capital markets income - CVA/DVA
20
6
(4
)
Residential MSR net hedge performance
11
(5
)
(6
)
PPP loan interest income****
8
12
43
Ginnie Mae re-securitization gains
—
12
—
* The second quarter 2021 amount includes
$13 million of Series A preferred stock issuance costs, which
reduced net income available to common shareholders when the shares
were redeemed.
** Based on income taxes at an approximate
25% incremental rate.
*** Items impacting results or trends
during the period, but are not considered non-GAAP adjustments.
These items generally include market-related measures, impacts of
new accounting guidance, or event driven actions.
**** Interest income for the Small
Business Administration's Paycheck Protection Program (PPP) loans
includes estimated funding costs.
Non-GAAP adjusted items(1) impacting the company's earnings are
identified to assist investors in analyzing Regions' operating
results on the same basis as that applied by management and provide
a basis to predict future performance. Non-GAAP adjusted items(1)
in the current quarter had minimal impact.
Total
revenue
Quarter Ended
($ amounts in millions)
6/30/2022
3/31/2022
6/30/2021
2Q22 vs. 1Q22
2Q22 vs. 2Q21
Net interest income
$
1,108
$
1,015
$
963
$
93
9.2
%
$
145
15.1
%
Taxable equivalent adjustment
11
11
12
—
—
%
(1
)
(8.3
)%
Net interest income, taxable equivalent
basis
$
1,119
$
1,026
$
975
$
93
9.1
%
$
144
14.8
%
Net interest margin (FTE)
3.06
%
2.85
%
2.81
%
Adjusted net interest margin (FTE)
(non-GAAP)(1)
3.44
%
3.43
%
3.31
%
Non-interest income:
Service charges on deposit accounts
$
165
$
168
$
163
(3
)
(1.8
)%
2
1.2
%
Card and ATM fees
133
124
128
9
7.3
%
5
3.9
%
Wealth management income
102
101
96
1
1.0
%
6
6.3
%
Capital markets income
112
73
61
39
53.4
%
51
83.6
%
Mortgage income
47
48
53
(1
)
(2.1
)%
(6
)
(11.3
)%
Commercial credit fee income
23
22
23
1
4.5
%
—
—
%
Bank-owned life insurance
16
14
33
2
14.3
%
(17
)
(51.5
)%
Securities gains (losses), net
—
—
1
—
—
%
(1
)
(100.0
)%
Market value adjustments on employee
benefit assets*
(17
)
(14
)
8
(3
)
(21.4
)%
(25
)
(312.5
)%
Other
59
48
53
11
22.9
%
6
11.3
%
Non-interest income
$
640
$
584
$
619
$
56
9.6
%
$
21
3.4
%
Total revenue
$
1,748
$
1,599
$
1,582
$
149
9.3
%
$
166
10.5
%
Adjusted total revenue
(non-GAAP)(1)
$
1,748
$
1,598
$
1,563
$
150
9.4
%
$
185
11.8
%
NM - Not Meaningful
* These market value adjustments relate to
assets held for employee benefits that are offset within salaries
and employee benefits expense.
Total revenue of approximately $1.7 billion represented an
increase of 9 percent on both a reported and adjusted basis(1)
compared to the first quarter of 2022. Net interest income grew 9
percent compared to the first quarter, benefiting from increases in
interest rates, average loan growth and securities purchases. Lower
cash balances supported the net interest margin, which increased 21
basis points to 3.06 percent. Excluding the impact of PPP interest
income and excess cash balances held at the Federal Reserve, the
company's adjusted net interest margin(1) was 3.44 percent.
Non-interest income increased 10 percent on both a reported and
an adjusted basis(1) compared to the first quarter of 2022. Capital
markets income increased $39 million. Excluding the impact of
CVA/DVA, capital markets income increased $25 million driven
primarily by higher fees from merger and acquisition advisory
services and real estate loan syndications. Card & ATM fees
increased 7 percent primarily due to increased transactions and
higher spend volumes in the quarter. Service charges, mortgage
income, and wealth management income remained relatively stable
from the prior quarter. Seasonally higher mortgage production
overcame approximately $12 million in gains associated with
previously repurchased Ginnie Mae loans sold during the prior
quarter. Excluding those gains, mortgage income increased 31
percent. Other non-interest income increased $11 million primarily
due to cash distributions associated with equity previously
obtained from a customer's bankruptcy. Additionally, market value
adjustments on employee benefit assets that are offset in salaries
and benefits remained elevated this quarter.
Non-interest
expense
Quarter Ended
($ amounts in millions)
6/30/2022
3/31/2022
6/30/2021
2Q22 vs. 1Q22
2Q22 vs. 2Q21
Salaries and employee benefits
$
575
$
546
$
532
$
29
5.3
%
$
43
8.1
%
Equipment and software expense
97
95
89
2
2.1
%
8
9.0
%
Net occupancy expense
75
75
75
—
—
%
—
—
%
Outside services
38
38
39
—
—
%
(1
)
(2.6
)%
Professional, legal and regulatory
expenses
24
17
15
7
41.2
%
9
60.0
%
Marketing
22
24
29
(2
)
(8.3
)%
(7
)
(24.1
)%
FDIC insurance assessments
13
14
11
(1
)
(7.1
)%
2
18.2
%
Credit/checkcard expenses
13
26
17
(13
)
(50.0
)%
(4
)
(23.5
)%
Branch consolidation, property and
equipment charges
(6
)
1
—
(7
)
NM
(6
)
NM
Visa class B shares expense
9
5
6
4
80.0
%
3
50.0
%
Other
88
92
85
(4
)
(4.3
)%
3
3.5
%
Total non-interest expense
$
948
$
933
$
898
$
15
1.6
%
$
50
5.6
%
Total adjusted non-interest expense(1)
$
954
$
932
$
895
$
22
2.4
%
$
59
6.6
%
NM - Not Meaningful
Non-interest expense increased 2 percent on both a reported and
adjusted basis(1) compared to the first quarter of 2022. Salaries
and benefits increased 5 percent driven primarily by higher base
salaries due to annual merit increases, which became effective on
April 1, 2022, as well as elevated variable-based and incentive
compensation. These increases were partially offset by seasonal
decreases in payroll taxes and 401(k) expenses.
The company's second quarter efficiency ratio was 53.9 percent
on a reported basis and 54.2 percent on an adjusted basis(1). The
effective tax rate was 21.2 percent.
Loans and
Leases
Average Balances
($ amounts in millions)
2Q22
1Q22
2Q21
2Q22 vs. 1Q22
2Q22 vs. 2Q21
Commercial and industrial
$
46,538
$
43,993
$
43,140
$
2,545
5.8
%
$
3,398
7.9
%
Commercial real estate—owner-occupied
5,477
5,506
5,634
(29
)
(0.5
)%
(157
)
(2.8
)%
Investor real estate
7,428
7,082
7,282
346
4.9
%
146
2.0
%
Business Lending
59,443
56,581
56,056
2,862
5.1
%
3,387
6.0
%
Residential first mortgage
17,569
17,496
16,795
73
0.4
%
774
4.6
%
Home equity
6,082
6,163
6,774
(81
)
(1.3
)%
(692
)
(10.2
)%
Consumer credit card
1,145
1,142
1,108
3
0.3
%
37
3.3
%
Other consumer—exit portfolios
836
987
1,599
(151
)
(15.3
)%
(763
)
(47.7
)%
Other consumer
5,689
5,445
2,219
244
4.5
%
3,470
156.4
%
Consumer Lending
31,321
31,233
28,495
88
0.3
%
2,826
9.9
%
Total Loans
$
90,764
$
87,814
$
84,551
$
2,950
3.4
%
$
6,213
7.3
%
NM - Not meaningful.
Average loans and leases increased 3 percent compared to the
prior quarter driven primarily by growth in commercial and
industrial lending. Average business lending increased 5 percent
reflecting broad-based growth in corporate, middle market, and real
estate lending across the company's diversified and specialized
portfolios. While still below pre-pandemic levels, commercial loan
line utilization levels ended the quarter at approximately 44.4
percent, increasing 50 basis points over the prior quarter. Loan
production remains strong with loan commitment growth of
approximately $5.5 billion during the quarter. Average consumer
lending increased modestly mostly attributable to residential first
mortgage and other consumer credit, which includes EnerBank,
partially offset by lower home equity and consumer exit
portfolios.
Deposits
Average Balances
($ amounts in millions)
2Q22
1Q22
2Q21
2Q22 vs. 1Q22
2Q22 vs. 2Q21
Customer low-cost deposits
$
133,992
$
132,829
$
126,315
$
1,163
0.9
%
$
7,677
6.1
%
Customer time deposits
5,600
5,905
4,813
(305
)
(5.2
)%
787
16.4
%
Corporate treasury time deposits
—
—
1
—
NM
(1
)
(100.0
)%
Corporate treasury other deposits
—
—
3
—
NM
(3
)
(100.0
)%
Total Deposits
$
139,592
$
138,734
$
131,132
$
858
0.6
%
$
8,460
6.5
%
($ amounts in millions)
2Q22
1Q22
2Q21
2Q22 vs. 1Q22
2Q22 vs. 2Q21
Consumer Bank Segment
$
85,224
$
83,054
$
78,200
$
2,170
2.6
%
$
7,024
9.0
%
Corporate Bank Segment
41,920
42,609
42,966
(689
)
(1.6
)%
(1,046
)
(2.4
)%
Wealth Management Segment
10,020
10,407
9,519
(387
)
(3.7
)%
501
5.3
%
Other
2,428
2,664
447
(236
)
(8.9
)%
1,981
443.2
%
Total Deposits
$
139,592
$
138,734
$
131,132
$
858
0.6
%
$
8,460
6.5
%
Total average deposit balances increased 1 percent in the second
quarter of 2022 as continued growth in Consumer deposits was
partially offset by declines in Corporate and Wealth Management.
While average deposit balances grew, ending balances declined
reflecting a return to seasonal second quarter patterns related to
income tax payments seen prior to the pandemic, as well as some
expected attrition within Corporate and Wealth Management beginning
late in the quarter.
Asset
quality
As of and for the Quarter
Ended
($ amounts in millions)
6/30/2022
3/31/2022
6/30/2021
ACL/Loans, net
1.62%
1.67%
2.00%
ALL/Loans, net
1.52%
1.59%
1.90%
Allowance for credit losses to
non-performing loans, excluding loans held for sale
410%
446%
253%
Allowance for loan losses to
non-performing loans, excluding loans held for sale
386%
423%
240%
Provision for (benefit from) credit
losses
$60
$(36)
$(337)
Net loans charged-off
$38
$46
$47
Net loans charged-off as a % of average
loans, annualized
0.17%
0.21%
0.23%
Non-performing loans, excluding loans held
for sale/Loans, net
0.39%
0.37%
0.79%
NPAs (ex. 90+ past due)/Loans, foreclosed
properties, and non-performing loans held for sale
0.41%
0.39%
0.93%
NPAs (inc. 90+ past due)/Loans, foreclosed
properties, and non-performing loans held for sale*
0.52%
0.53%
1.09%
Total Criticized Loans—Business
Services**
$2,310
$2,539
$3,222
* 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 remained strong during the second quarter;
however, strong loan growth drove a modest increase to the
allowance for credit losses. The resulting allowance for credit
losses was equal to 1.62 percent of total loans and 410 percent of
total non-performing loans, excluding loans held for sale.
Annualized net charge-offs decreased 4 basis points to 0.17 percent
of average loans. Total non-performing loans, excluding loans held
for sale, increased modestly but remain below pre-pandemic levels,
while total business services criticized loans and total
delinquencies improved. Overall asset quality continues to reflect
broad-based strength across most commercial and consumer loan
portfolios, as well as elevated recoveries associated with strong
collateral asset values.
Capital and
liquidity
As of and for Quarter
Ended
6/30/2022
3/31/2022
6/30/2021
Common Equity Tier 1 ratio(2)
9.2%
9.4%
10.4%
Tier 1 capital ratio(2)
10.6%
10.8%
11.9%
Tangible common stockholders’ equity to
tangible assets (non-GAAP)(1)
5.76%
5.93%
7.58%
Tangible common book value per share
(non-GAAP)(1)*
$9.55
$10.06
$11.94
Loans, net of unearned income, to total
deposits
67.6%
63.3%
63.9%
* 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 Tier 1(2) and Common Equity Tier 1(2) ratios were
estimated at 10.6 percent and 9.2 percent, respectively, at
quarter-end.
The company received its results from the Federal Reserve
Supervisory Stress Test and exceeded all minimum capital levels
under the provided scenarios. As a result, Regions' preliminary
Stress Capital Buffer requirement will remain floored at 2.5
percent. Regions' robust capital planning process is designed to
ensure the efficient use of capital to support lending activities,
business growth opportunities and appropriate shareholder
returns.
During the second quarter, the company also repurchased 1
million shares of common stock for a total of $15 million through
open market purchases and declared $159 million in dividends to
common shareholders. Earlier this week, the Board of Directors
declared a quarterly common stock dividend of $0.20 per share, an
18 percent increase over the previous quarter.
(1)
Non-GAAP; refer to pages 6, 7, 11, 12, 13
and 23 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 July 22,
2022, an archived recording of the webcast will be available at the
Investor Relations page of www.regions.com following the live
event.
About Regions Financial Corporation
Regions Financial Corporation (NYSE:RF), with $161 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 1,300
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.
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 unemployment rates,
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 earnings.
- Possible 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.
- The impact of pandemics, including the ongoing COVID-19
pandemic, on our businesses, operations, and financial results and
conditions. The duration and severity of any pandemic, including
the COVID-19 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 low 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.
- 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, 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.
- Our capital actions, including dividend payments, common stock
repurchases, or redemptions of preferred stock, must not cause us
to fall below minimum capital ratio requirements, with applicable
buffers taken into account, and must comply with other requirements
and restrictions under law or imposed by our regulators, which may
impact our ability to return capital to shareholders.
- Our ability to comply with stress testing and capital planning
requirements (as part of the CCAR process or otherwise) may
continue to require a significant investment of our managerial
resources due to the importance of such tests and
requirements.
- Our ability to comply with applicable capital and liquidity
requirements (including, among other things, the Basel III capital
standards), including our ability to generate capital internally or
raise capital on favorable terms, and if we fail to meet
requirements, our financial condition and market perceptions of us
could be negatively impacted.
- The effects of any developments, changes or actions relating to
any litigation or regulatory proceedings brought against us or any
of our subsidiaries.
- The costs, including possibly incurring fines, penalties, or
other negative effects (including reputational harm) of any adverse
judicial, administrative, or arbitral rulings or proceedings,
regulatory enforcement actions, or other legal actions to which we
or any of our subsidiaries are a party, and which may adversely
affect our results.
- 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.
- Our ability to execute on our strategic and operational plans,
including our ability to fully realize the financial and
nonfinancial benefits relating to our strategic initiatives.
- The risks and uncertainties related to our acquisition or
divestiture of businesses, including our recently completed
acquisitions of EnerBank, Sabal, and Clearsight, and risks related
to such acquisitions, including that the expected synergies, cost
savings and other financial or other benefits may not be realized
within the expected timeframes, or might be less than projected;
difficulties in integrating the businesses; and the inability of
Regions to effectively cross-sell products following these
acquisitions.
- The success of our marketing efforts in attracting and
retaining customers.
- Our ability to recruit and retain talented and experienced
personnel to assist in the development, management and operation of
our products and services may be affected by changes in laws and
regulations in effect from time to time.
- Fraud or misconduct by our customers, employees or business
partners.
- Any inaccurate or incomplete information provided to us by our
customers or counterparties.
- Inability of our framework to manage risks associated with our
businesses, such as credit risk and operational risk, including
third-party vendors and other service providers, which could, among
other things, result in a breach of operating or security systems
as a result of a cyber attack or similar act or failure to deliver
our services effectively.
- Dependence on key suppliers or vendors to obtain equipment and
other supplies for our businesses on acceptable terms.
- The inability of our internal controls and procedures to
prevent, detect or mitigate any material errors or fraudulent
acts.
- The effects of geopolitical instability, including wars,
conflicts, civil unrest, and terrorist attacks and the potential
impact, directly or indirectly, on our businesses.
- The effects of man-made and natural disasters, including fires,
floods, droughts, tornadoes, hurricanes, and environmental damage
(specifically in the Southeastern United States), which may
negatively affect our operations and/or our loan portfolios and
increase our cost of conducting business. The severity and
frequency of future earthquakes, fires, hurricanes, tornadoes,
droughts, floods and other weather-related events are difficult to
predict and may be exacerbated by global climate change.
- Changes in commodity market prices and conditions could
adversely affect the cash flows of our borrowers operating in
industries that are impacted by changes in commodity prices
(including businesses indirectly impacted by commodities prices
such as businesses that transport commodities or manufacture
equipment used in the production of commodities), which could
impair their ability to service any loans outstanding to them
and/or reduce demand for loans in those industries.
- Our ability to identify and address cyber-security risks such
as data security breaches, malware, ransomware, “denial of service”
attacks, “hacking” and identity theft, including account
take-overs, a failure of which could disrupt our businesses and
result in the disclosure of and/or misuse or misappropriation of
confidential or proprietary information, disruption or damage to
our systems, increased costs, losses, or adverse effects to our
reputation.
- Our ability to achieve our expense management initiatives.
- 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.
- Possible downgrades in our credit ratings or outlook could,
among other negative impacts, increase the costs of funding from
capital markets.
- 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.
- The effects of the failure of any component of our business
infrastructure provided by a third party could disrupt our
businesses, result in the disclosure of and/or misuse of
confidential information or proprietary information, increase our
costs, negatively affect our reputation, and cause losses.
- Our ability to receive dividends from our subsidiaries, in
particular Regions Bank, could affect our liquidity and ability to
pay dividends to shareholders.
- Changes in accounting policies or procedures as may be required
by the FASB or other regulatory agencies could materially affect
our financial statements and how we report those results, and
expectations and preliminary analyses relating to how such changes
will affect our financial results could prove incorrect.
- Fluctuations in the price of our common stock and inability to
complete stock repurchases in the time frame and/or on the terms
anticipated.
- The effects of anti-takeover and exclusive forum laws and
provision in our certificate of incorporation and bylaws.
- The effects of any damage to our reputation resulting from
developments related to any of the items identified above.
- Other risks identified from time to time in reports that we
file with the SEC.
The foregoing list of factors is not exhaustive. For discussion
of these and other factors that may cause actual results to differ
from expectations, look under the captions “Forward-Looking
Statements” and “Risk Factors” of Regions’ Annual Report on Form
10-K for the year ended December 31, 2021 and the "Risk Factors" of
Regions' Quarterly Report on Form 10-Q for the quarter ended March
31, 2022, as filed with the SEC.
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, including the scope and duration of the
COVID-19 pandemic (including the impact of additional variants and
resurgences), the effectiveness, availability and acceptance of any
vaccines or therapies, and the direct and indirect impact of the
COVID-19 pandemic on our customers, third parties and us.
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. You should not place undue reliance on
any forward-looking statements, which speak only as of the date
made. Factors or events that could cause our actual results to
differ may emerge from time to time, and it is not possible to
predict all of them. We assume no obligation and do not intend to
update or revise any forward-looking statements that are made from
time to time, either as a result of future developments, new
information or otherwise, except as may be required by law.
Use of non-GAAP financial measures
Management uses pre-tax pre-provision income (non-GAAP) and
adjusted pre-tax pre-provision income (non-GAAP), as well as the
adjusted efficiency ratio (non-GAAP) and the adjusted fee income
ratio (non-GAAP) to monitor performance and believes these measures
provide meaningful information to investors. Non-interest expense
(GAAP) is presented excluding certain adjustments to arrive at
adjusted non-interest expense (non-GAAP), which is the numerator
for the adjusted efficiency ratio. Non-interest income (GAAP) is
presented excluding certain adjustments to arrive at adjusted
non-interest income (non-GAAP), which is the numerator for the
adjusted fee income ratio. Adjusted non-interest income (non-GAAP)
and adjusted non-interest expense (non-GAAP) are used to determine
adjusted pre-tax pre-provision income (non-GAAP). Net interest
income (GAAP) on a taxable-equivalent basis and non-interest income
are added together to arrive at total revenue on a
taxable-equivalent basis. Adjustments are made to arrive at
adjusted total revenue on a taxable-equivalent basis (non-GAAP),
which is the denominator for the adjusted fee income and adjusted
efficiency ratios. Regions believes that the exclusion of these
adjustments provides a meaningful basis for period-to-period
comparisons, which management believes will assist investors in
analyzing the operating results of the Company and predicting
future performance. These non-GAAP financial measures are also used
by management to assess the performance of Regions’ business. It is
possible that the activities related to the adjustments may recur;
however, management does not consider the activities related to the
adjustments to be indications of ongoing operations. Regions
believes that presentation of these non-GAAP financial measures
will permit investors to assess the performance of the Company on
the same basis as that applied by management.
The allowance for credit losses (ACL) as a percentage of total
loans is an important ratio, especially during periods of economic
stress. Management believes this ratio provides investors with
meaningful additional information about credit loss allowance
levels when the impact of SBA's Paycheck Protection Program loans,
which are fully backed by the U.S. government, and any related
allowance are excluded from total loans and total allowance which
are the denominator and numerator, respectively, used in the ACL
ratio. This adjusted ACL ratio represents a non-GAAP financial
measure.
Tangible common stockholders’ equity ratios have become a focus
of some investors and management believes they may assist investors
in analyzing the capital position of the Company absent the effects
of intangible assets and preferred stock. Analysts and banking
regulators have assessed Regions’ capital adequacy using the
tangible common stockholders’ equity measure. Because tangible
common stockholders’ equity is not formally defined by GAAP or
prescribed in any amount by federal banking regulations it is
currently considered to be a non-GAAP financial measure and other
entities may calculate it differently than Regions’ disclosed
calculations. Since analysts and banking regulators may assess
Regions’ capital adequacy using tangible common stockholders’
equity, management believes that it is useful to provide investors
the ability to assess Regions’ capital adequacy on this same
basis.
Non-GAAP financial measures have inherent limitations, are not
required to be uniformly applied and are not audited. Although
these non-GAAP financial measures are frequently used by
stakeholders in the evaluation of a company, they have limitations
as analytical tools, and should not be considered in isolation, or
as a substitute for analyses of results as reported under GAAP. In
particular, a measure of earnings that excludes selected items does
not represent the amount that effectively accrues directly to
stockholders.
Management and the Board of Directors utilize non-GAAP measures
as follows:
- Preparation of Regions' operating budgets
- Monthly financial performance reporting
- Monthly close-out reporting of consolidated results (management
only)
- Presentation to investors of company performance
- Metrics for incentive compensation
Regions’ Investor Relations contact is Dana Nolan at (205)
264-7040; Regions’ Media contact is Jeremy King at (205)
264-4551.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220722005053/en/
Media Contact: Jeremy King (205) 264-4551
Investor Relations Contact: Dana Nolan (205) 264-7040
Grafico Azioni Regions Financial (NYSE:RF)
Storico
Da Mar 2024 a Apr 2024
Grafico Azioni Regions Financial (NYSE:RF)
Storico
Da Apr 2023 a Apr 2024