Year-over-year revenue growth of 16 percent
propels pre-tax pre-provision income(1).
Regions Financial Corp. (NYSE:RF) today reported earnings for
the third quarter ended September 30, 2022. The company reported
third quarter net income available to common shareholders of $404
million and earnings per diluted share of $0.43. Compared to the
third quarter of 2021, total revenue increased 16 percent to $1.9
billion on both a reported and adjusted basis(1) driven by growth
in net interest income. Strong revenue growth contributed to a 3
percent increase in pre-tax pre-provision income(1) on a reported
basis and a 27 percent increase on an adjusted basis(1) compared to
the third quarter of 2021. The company's third quarter adjusted
pre-tax pre-provision income(1) represents its highest level on
record.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20221021005049/en/
“During the third quarter, Regions continued its focus on
delivering consistent, sustainable long-term performance as
evidenced by another quarterly record in adjusted pre-tax
pre-provision income(1),” said John Turner, President and CEO of
Regions Financial Corp. “Our markets continue to provide
opportunities to attract new customers while deepening and
expanding relationships with our existing customer base. Our
strategic investments are paying off, and we are better able to
serve customers and clients in an uncertain economic environment.
Additionally, we are pleased to have resolved our previously
disclosed regulatory matter and look forward to building further on
our commitment to help customers reach their financial goals.”
Turner added, “To that end, I am proud of how our teams
responded to serve affected customers and meet the needs of fellow
Regions associates and our surrounding communities impacted by
Hurricane Ian. Our associates mobilized resources to quickly
restore essential financial services in hard-hit areas, and we
continue to work with customers on disaster-recovery needs.”
SUMMARY OF THIRD QUARTER 2022
RESULTS:
Quarter Ended
(amounts in millions, except per share
data)
9/30/2022
6/30/2022
9/30/2021
Net income
$
429
$
583
$
651
Preferred dividends and other
25
25
27
Net income available to common
shareholders
$
404
$
558
$
624
Weighted-average diluted shares
outstanding
940
940
962
Actual shares outstanding—end of
period
934
934
955
Diluted earnings per common share
$
0.43
$
0.59
$
0.65
Selected items impacting
earnings:
Pre-tax adjusted items(1):
Adjustments to non-interest expense(1)
$
(182
)
$
6
$
(20
)
Adjustments to non-interest income(1)
(1
)
—
3
Net provision benefit from sale of
unsecured consumer loans***
$
31
$
—
$
—
Total pre-tax adjusted items(1)
$
(152
)
$
6
$
(17
)
Diluted EPS impact*
$
(0.13
)
$
—
$
(0.01
)
Pre-tax additional selected items**:
CECL provision (in excess of) less than
net charge-offs****
$
(36
)
$
(22
)
$
185
Incremental provision for
hurricane-related allowance for loan losses
(20
)
—
—
Capital markets income - CVA/DVA
21
20
1
Residential MSR net hedge performance
2
11
(15
)
PPP loan interest income*****
4
8
31
Pension settlement charges
—
—
(8
)
* Based on income taxes at an approximate
25% incremental rate. The third quarter of 2022 regulatory
settlement included a $50 million civil monetary penalty that is
not tax deductible.
** 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.
*** The net provision benefit of $31
million 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 CECL
provision (in excess of) less than 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.
***** 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 include $179 million in professional, legal
and regulatory fees associated with a third quarter settlement with
the Consumer Financial Protection Bureau regarding one type of
overdraft fee the company discontinued in 2021. The amount adjusted
this quarter is less than the previously announced $191 million
settlement as approximately $12 million was accrued by the company
in the second quarter. The settlement is expected to be partially
mitigated by a $50 million insurance reimbursement in the fourth
quarter. Current quarter adjusted items also include a $31 million
net provision benefit from the sale of certain unsecured consumer
loans.
Additional selected items impacting the company's earnings this
quarter include an incremental provision for estimated
hurricane-related loan losses of $20 million.
Total
revenue
Quarter Ended
($ amounts in millions)
9/30/2022
6/30/2022
9/30/2021
3Q22 vs. 2Q22
3Q22 vs. 3Q21
Net interest income
$
1,262
$
1,108
$
965
$
154
13.9
%
$
297
30.8
%
Taxable equivalent adjustment
12
11
11
1
9.1
%
1
9.1
%
Net interest income, taxable equivalent
basis
$
1,274
$
1,119
$
976
$
155
13.9
%
$
298
30.5
%
Net interest margin (FTE)
3.53
%
3.06
%
2.76
%
Adjusted net interest margin (FTE)
(non-GAAP)(1)
3.68
%
3.44
%
3.30
%
Non-interest income:
Service charges on deposit accounts
$
156
$
165
$
162
(9
)
(5.5
)%
(6
)
(3.7
)%
Card and ATM fees
126
133
129
(7
)
(5.3
)%
(3
)
(2.3
)%
Wealth management income
108
102
95
6
5.9
%
13
13.7
%
Capital markets income
93
112
87
(19
)
(17.0
)%
6
6.9
%
Mortgage income
37
47
50
(10
)
(21.3
)%
(13
)
(26.0
)%
Commercial credit fee income
26
23
23
3
13.0
%
3
13.0
%
Bank-owned life insurance
15
16
18
(1
)
(6.3
)%
(3
)
(16.7
)%
Securities gains (losses), net
(1
)
—
1
(1
)
—
%
(2
)
(200.0
)%
Market value adjustments on employee
benefit assets*
(5
)
(17
)
5
12
70.6
%
(10
)
(200.0
)%
Other
50
59
79
(9
)
(15.3
)%
(29
)
(36.7
)%
Non-interest income
$
605
$
640
$
649
$
(35
)
(5.5
)%
$
(44
)
(6.8
)%
Total revenue
$
1,867
$
1,748
$
1,614
$
119
6.8
%
$
253
15.7
%
Adjusted total revenue
(non-GAAP)(1)
$
1,868
$
1,748
$
1,611
$
120
6.9
%
$
257
16.0
%
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 represented an
increase of 7 percent on both a reported and adjusted basis(1)
compared to the second quarter of 2022. Net interest income grew 14
percent compared to the second quarter driven primarily by higher
interest rates, continued strong average loan growth and lower than
anticipated deposit costs. Lower cash balances also helped support
the net interest margin, which increased 47 basis points to 3.53
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 3.68 percent.
Non-interest income decreased 5 percent on both a reported and
an adjusted basis(1) compared to the second quarter of 2022.
Capital markets income decreased 17 percent. Excluding the impact
of CVA/DVA, capital markets income decreased $20 million driven
primarily by delayed advisory transactions attributable to
continued market volatility. Mortgage income decreased 21 percent
as higher interest rates led to lower production volumes partially
offset by higher mortgage servicing income. Service charges income
and card & ATM fees both decreased 5 percent primarily due to
the implementation of previously disclosed overdraft-related policy
enhancements and decreased transaction volume in debit card. In
addition to this year's policy changes, the company has routinely
made enhancements to its overdraft processes that benefit customers
such that total overdraft-related revenues were approximately 35%
lower in 2021 versus 2011. However, this decline was offset by
strategic growth and diversification of revenue through fee based
services including mortgage, capital markets, wealth management and
card and ATM fees. Despite volatile markets, wealth management
income increased 6 percent compared to the prior quarter, while
market value adjustments on employee benefit assets that are offset
in salaries and benefits and other non-interest expense improved
$12 million.
Non-interest
expense
Quarter Ended
($ amounts in millions)
9/30/2022
6/30/2022
9/30/2021
3Q22 vs. 2Q22
3Q22 vs. 3Q21
Salaries and employee benefits
$
593
$
575
$
552
$
18
3.1
%
$
41
7.4
%
Equipment and software expense
98
97
90
1
1.0
%
8
8.9
%
Net occupancy expense
76
75
75
1
1.3
%
1
1.3
%
Outside services
40
38
38
2
5.3
%
2
5.3
%
Professional, legal and regulatory
expenses
199
24
21
175
NM
178
NM
Marketing
29
22
23
7
31.8
%
6
26.1
%
FDIC insurance assessments
16
13
11
3
23.1
%
5
45.5
%
Credit/checkcard expenses
13
13
16
—
—
%
(3
)
(18.8
)%
Branch consolidation, property and
equipment charges
3
(6
)
—
9
150.0
%
3
NM
Visa class B shares expense
3
9
4
(6
)
(66.7
)%
(1
)
(25.0
)%
Loss on early extinguishment of debt
—
—
20
—
—
%
(20
)
(100.0
)%
Other
100
88
88
12
13.6
%
12
13.6
%
Total non-interest expense
$
1,170
$
948
$
938
$
222
23.4
%
$
232
24.7
%
Total adjusted non-interest expense(1)
$
988
$
954
$
918
$
34
3.6
%
$
70
7.6
%
NM - Not Meaningful
Non-interest expense increased 23 percent on a reported basis
and 4 percent on an adjusted basis(1) compared to the second
quarter of 2022. Reported professional, legal and regulatory
expenses increased $175 million attributable primarily to the
previously disclosed regulatory matter that was settled during the
quarter. Salaries and benefits increased 3 percent driven primarily
by higher base salaries as full-time equivalent headcount increased
by 277 positions, as well as there being one additional work day in
the quarter. Over 70 percent of the associate additions are
customer facing within the company's three lines of business.
Marketing expenses increased 32 percent due to the timing of
marketing campaigns.
The company's third quarter efficiency ratio was 62.3 percent on
a reported basis and 52.6 percent on an adjusted basis(1). The
effective tax rate was 23.7 percent compared to 21.2 percent in the
second quarter. The increase in tax rate was attributable primarily
to the nondeductible nature of a portion of the regulatory
settlement.
Loans and
Leases
Average Balances
($ amounts in millions)
3Q22
2Q22
3Q21
3Q22 vs. 2Q22
3Q22 vs. 3Q21
Commercial and industrial
$
49,120
$
46,538
$
41,892
$
2,582
5.5
%
$
7,228
17.3
%
Commercial real estate—owner-occupied
5,441
5,477
5,682
(36
)
(0.7
)%
(241
)
(4.2
)%
Investor real estate
7,879
7,428
7,311
451
6.1
%
568
7.8
%
Business Lending
62,440
59,443
54,885
2,997
5.0
%
7,555
13.8
%
Residential first mortgage
18,125
17,569
17,198
556
3.2
%
927
5.4
%
Home equity
6,050
6,082
6,523
(32
)
(0.5
)%
(473
)
(7.3
)%
Consumer credit card
1,176
1,145
1,128
31
2.7
%
48
4.3
%
Other consumer—exit portfolios
716
836
1,363
(120
)
(14.4
)%
(647
)
(47.5
)%
Other consumer
6,177
5,689
2,253
488
8.6
%
3,924
174.2
%
Consumer Lending
32,244
31,321
28,465
923
2.9
%
3,779
13.3
%
Total Loans
$
94,684
$
90,764
$
83,350
$
3,920
4.3
%
$
11,334
13.6
%
NM - Not meaningful
Average loans and leases increased 4 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. Commercial loan line utilization levels ended the
quarter at approximately 43.1 percent, decreasing 130 basis points
compared to the prior quarter, but reflects a $4.4 billion increase
in commitments. Average consumer lending increased 3 percent
primarily within residential first mortgage and other consumer
credit, which includes EnerBank, partially offset by lower home
equity and consumer exit portfolios. Ending consumer loans
decreased modestly during the quarter reflecting the sale of $1.2
billion of certain unsecured consumer loans on the last day of the
quarter. The decision to sell these loans reflects the company's
strategic management of capital allocation and risk-adjusted
returns.
Deposits
Average Balances
($ amounts in millions)
3Q22
2Q22
3Q21
3Q22 vs. 2Q22
3Q22 vs. 3Q21
Customer low-cost deposits
$
130,167
$
133,992
$
127,369
$
(3,825
)
(2.9
)%
$
2,798
2.2
%
Customer time deposits
5,351
5,600
4,527
(249
)
(4.4
)%
824
18.2
%
Corporate treasury time deposits
—
—
1
—
NM
(1
)
(100.0
)%
Total Deposits
$
135,518
$
139,592
$
131,897
$
(4,074
)
(2.9
)%
$
3,621
2.7
%
($ amounts in millions)
3Q22
2Q22
3Q21
3Q22 vs. 2Q22
3Q22 vs. 3Q21
Consumer Bank Segment
$
84,741
$
85,224
$
79,098
$
(483
)
(0.6
)%
$
5,643
7.1
%
Corporate Bank Segment
39,058
41,920
42,525
(2,862
)
(6.8
)%
(3,467
)
(8.2
)%
Wealth Management Segment
9,467
10,020
9,873
(553
)
(5.5
)%
(406
)
(4.1
)%
Other
2,252
2,428
401
(176
)
(7.2
)%
1,851
461.6
%
Total Deposits
$
135,518
$
139,592
$
131,897
$
(4,074
)
(2.9
)%
$
3,621
2.7
%
Total average deposit balances decreased 3 percent in the third
quarter of 2022. Average Consumer deposits remained relatively
stable declining less than 1 percent. Trends have largely returned
to pre-pandemic seasonal patterns after two years of elevated
levels attributable to stimulus and higher savings rates. Corporate
and Wealth Management deposits experienced declines of 7 and 6
percent, respectively, as expected attrition continued in the
quarter.
Asset
quality
As of and for the Quarter
Ended
($ amounts in millions)
9/30/2022
6/30/2022
9/30/2021
ACL/Loans, net
1.63%
1.62%
1.80%
ALL/Loans, net
1.50%
1.52%
1.71%
Allowance for credit losses to
non-performing loans, excluding loans held for sale
311%
410%
283%
Allowance for loan losses to
non-performing loans, excluding loans held for sale
287%
386%
269%
Provision for (benefit from) credit
losses
$135
$60
$(155)
Net loans charged-off
$110
$38
$30
Adjusted net loan charge-offs
(non-GAAP)(1)
$47
$38
$30
Net loans charged-off as a % of average
loans, annualized
0.46%
0.17%
0.14%
Adjusted net loan charge-offs as a % of
average loans, annualized (non-GAAP) (1)
0.19%
0.17%
0.14%
Non-performing loans, excluding loans held
for sale/Loans, net
0.52%
0.39%
0.64%
NPAs (ex. 90+ past due)/Loans, foreclosed
properties, and non-performing loans held for sale
0.54%
0.41%
0.66%
NPAs (inc. 90+ past due)/Loans, foreclosed
properties, and non-performing loans held for sale*
0.65%
0.52%
0.80%
Total Criticized Loans—Business
Services**
$2,771
$2,310
$3,054
* 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 broadly stable during the
quarter. Certain commercial segments are exhibiting signs of
deterioration contributing to a quarter-over-quarter increase in
non-performing loans. Total net charge-offs for the quarter were
$110 million, or 46 basis points of average loans. Excluding
charge-offs related to the unsecured consumer loan sale, net
charge-offs would have been $47 million, or 19 basis points of
average loans, which was in-line with expectations.
Provision expense was $135 million this quarter. The increase
compared to the second quarter was attributable primarily to strong
loan and commitment growth, normalizing credit from historically
low levels, and a $20 million reserve build for potential losses
associated with Hurricane Ian. These increases were partially
offset by a net provision benefit of $31 million associated with
the unsecured consumer loan sale.
The allowance for credit loss ratio is up 1 basis point to 1.63
percent of total loans, while the allowance as a percentage of
nonperforming loans remains strong at 311 percent. Overall asset
quality continues to reflect broad-based stability across most
commercial and consumer loan portfolios.
Capital and
liquidity
As of and for Quarter
Ended
9/30/2022
6/30/2022
9/30/2021
Common Equity Tier 1 ratio(2)
9.3%
9.2%
10.8%
Tier 1 capital ratio(2)
10.6%
10.6%
12.3%
Tangible common stockholders’ equity to
tangible assets (non-GAAP)(1)
5.01%
5.76%
7.79%
Tangible common book value per share
(non-GAAP)(1)*
$8.15
$9.55
$12.32
Loans, net of unearned income, to total
deposits
70.0%
67.6%
63.1%
* 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 9.3 percent, respectively, at
quarter-end. The company's liquidity position also remains robust
including cash held at the Federal Reserve totaling $13.5 billion
and a loan to deposit ratio of 70 percent at quarter end. Relative
to pre-pandemic conditions, Regions currently has limited need for
wholesale funding.
During the third quarter, the company declared $187 million in
dividends to common shareholders and did not repurchase shares of
common stock.
(1)
Non-GAAP; refer to pages 12, 13, 17, 18,
19 and 21 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 October
21, 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 $158 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 June
30, 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. Net loan charge-offs (GAAP) are presented
excluding adjustments to arrive at adjusted net loan-charge offs
(non-GAAP). Adjusted net loan charge-offs as a percentage of
average loans (non-GAAP) are calculated as adjusted net loan
charge-offs (non-GAAP) divided by average loans (GAAP) and
annualized. 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.
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/20221021005049/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
