$7.2 billion in total revenue reflects 12
percent year-over-year growth.
Regions Financial Corp. (NYSE:RF) today reported earnings for
the fourth quarter and full-year ended December 31, 2022. The
company reported fourth quarter net income available to common
shareholders of $660 million and earnings per diluted share of
$0.70. For the full-year 2022, the company reported net income
available to common shareholders of $2.1 billion and record pre-tax
pre-provision income(1) of $3.1 billion. Compared to full-year
2021, total revenue increased 12 percent to a record $7.2 billion
on both a reported and adjusted basis(1) driven by growth in net
interest income. Strong revenue growth contributed to a 17 percent
increase in pre-tax pre-provision income(1) on a reported basis and
a 21 percent increase on an adjusted basis(1) compared to the prior
year. The company generated full-year positive operating leverage
of 3.5 percent on a reported basis and 6.6 percent on an adjusted
basis(1).
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"I want to congratulate and thank our 20,000 associates for
their hard work and dedication throughout the year," said John
Turner, President and CEO of Regions Financial Corp. "We have built
a strong, diverse and inclusive team, and Regions' associates do a
great job serving our customers and communities. Our associates
volunteered over 62,000 hours in the communities we serve during
2022, and we, along with the Regions Foundation, continued to
foster inclusive prosperity through more than $20 million in
combined community giving."
Turner added, "Regions continued its focus on delivering
consistent, sustainable financial performance, generating record
pre-tax pre-provision income(1) for 2022. During the year, we
continued to make banking easier for our customers and our
associates through innovations and account enhancements that
improve the customer experience and better enable our teams to
deliver tailored financial solutions. Our strategic investments
continue to provide opportunities to broaden and deepen
relationships with our customers. Additionally, our attractive
footprint, combined with our innovative and comprehensive product
set, has supported continued customer acquisition and revenue
growth while delivering benefits for all stakeholders. While
uncertainty remains, we have deliberately positioned the company to
withstand an array of economic conditions, and our strong
performance in 2022 provides a solid foundation as we enter
2023."
SUMMARY OF FULL-YEAR AND FOURTH QUARTER 2022 RESULTS:
Quarter Ended
Year Ended
(amounts in millions, except per share
data)
12/31/2022
9/30/2022
12/31/2021
2022
2021
Net income
$
685
$
429
$
438
2,245
2,521
Preferred dividends and other
25
25
24
99
121
Net income available to common
shareholders
$
660
$
404
$
414
$
2,146
$
2,400
Weighted-average diluted shares
outstanding
941
940
958
942
963
Actual shares outstanding—end of
period
934
934
942
934
942
Diluted earnings per common share
$
0.70
$
0.43
$
0.43
$
2.28
$
2.49
Selected items impacting
earnings:
Pre-tax adjusted items(1):
Adjustments to non-interest expense(1)
$
(5
)
$
(182
)
$
(16
)
$
(182
)
$
(49
)
Adjustments to non-interest income(1)
50
(1
)
—
50
26
Net provision benefit from sale of
unsecured consumer loans***
$
—
$
31
$
—
$
31
$
—
Total pre-tax adjusted items(1)
$
45
$
(152
)
$
(16
)
$
(101
)
$
(23
)
Diluted EPS impact*
$
0.03
$
(0.13
)
$
(0.01
)
$
(0.09
)
$
(0.03
)
Pre-tax additional selected items**:
CECL provision (in excess of) less than
net charge-offs****
$
(62
)
$
(36
)
$
(66
)
$
(38
)
$
728
(Incremental provision) for and release of
hurricane-related allowance for loan losses
20
(20
)
—
—
—
Capital markets income - CVA/DVA
(11
)
21
—
36
8
Residential MSR net hedge performance
(6
)
2
(5
)
2
(19
)
PPP loan interest income*****
1
4
39
24
153
Pension settlement charges
(6
)
—
(3
)
(6
)
(11
)
Ginnie Mae re-securitization gains
—
—
—
12
—
*
Based on income taxes at an approximate
25% incremental rate. The third quarter of 2022 adjustments to
non-interest expense included $179 million associated with a
regulatory settlement. A civil monetary penalty of $50 million was
included in the settlement amount that was 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 third quarter of 2022 net provision
benefit of $31 million included 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
both the third and fourth quarters of 2022 also exclude the $20
million provision for and subsequent release of 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)
for full-year 2022 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 third quarter
settlement was partially mitigated by a $50 million insurance
reimbursement received and included in non-interest income in the
fourth quarter. Full-year adjusted items also include a $31 million
net provision benefit from the sale of certain unsecured consumer
loans in the third quarter.
Total revenue
Quarter Ended
($ amounts in millions)
12/31/2022
9/30/2022
12/31/2021
4Q22 vs. 3Q22
4Q22 vs. 4Q21
Net interest income
$
1,401
$
1,262
$
1,019
$
139
11.0
%
$
382
37.5
%
Taxable equivalent adjustment
13
12
10
1
8.3
%
3
30.0
%
Net interest income, taxable equivalent
basis
$
1,414
$
1,274
$
1,029
$
140
11.0
%
$
385
37.4
%
Net interest margin (FTE)
3.99
%
3.53
%
2.83
%
Non-interest income:
Service charges on deposit accounts
$
152
$
156
$
166
(4
)
(2.6
)%
(14
)
(8.4
)%
Card and ATM fees
130
126
127
4
3.2
%
3
2.4
%
Wealth management income
108
108
100
—
—
%
8
8.0
%
Capital markets income
61
93
83
(32
)
(34.4
)%
(22
)
(26.5
)%
Mortgage income
24
37
49
(13
)
(35.1
)%
(25
)
(51.0
)%
Commercial credit fee income
25
26
23
(1
)
(3.8
)%
2
8.7
%
Bank-owned life insurance
17
15
14
2
13.3
%
3
21.4
%
Securities gains (losses), net
—
(1
)
—
1
100.0
%
—
NM
Market value adjustments on employee
benefit assets*
(9
)
(5
)
—
(4
)
(80.0
)%
(9
)
NM
Insurance proceeds
50
—
—
50
NM
50
NM
Other
42
50
53
(8
)
(16.0
)%
(11
)
(20.8
)%
Non-interest income
$
600
$
605
$
615
$
(5
)
(0.8
)%
$
(15
)
(2.4
)%
Total revenue
$
2,001
$
1,867
$
1,634
$
134
7.2
%
$
367
22.5
%
Adjusted total revenue
(non-GAAP)(1)
$
1,951
$
1,868
$
1,634
$
83
4.4
%
$
317
19.4
%
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 $2 billion represented an
increase of 7 percent on a reported basis and 4 percent on an
adjusted basis(1) compared to the third quarter of 2022.
Representing a record, net interest income increased to $1.4
billion during the quarter. The 11 percent increase compared to the
third quarter was driven primarily by higher interest rates,
continued strong average loan growth and lower than anticipated
deposit costs. Lower cash balances also supported the net interest
margin, which increased 46 basis points to 3.99 percent.
Non-interest income decreased 1 percent on a reported basis and
9 percent on an adjusted basis(1) compared to the third quarter of
2022. Capital markets income decreased 34 percent. Excluding the
impact of CVA/DVA, capital markets income remained relatively
stable as growth in advisory transactions was offset by declines in
customer hedging, syndications and real estate capital markets.
Mortgage income decreased 35 percent as higher interest rates led
to lower production volumes partially offset by higher mortgage
servicing income. Card & ATM fees increased 3 percent driven
primarily by seasonally higher interchange as well as a card
rewards liability adjustment in the previous quarter that did not
repeat. Service charges decreased 2 percent attributable to 3 fewer
business days in the quarter. Despite volatile market conditions,
wealth management income remained stable compared to the prior
quarter. Market value adjustments on employee benefit assets (which
are offset in salaries and benefits and other non-interest expense)
decreased further during the quarter.
Non-interest expense
Quarter Ended
($ amounts in millions)
12/31/2022
9/30/2022
12/31/2021
4Q22 vs. 3Q22
4Q22 vs. 4Q21
Salaries and employee benefits
$
604
$
593
$
575
$
11
1.9
%
$
29
5.0
%
Equipment and software expense
102
98
96
4
4.1
%
6
6.3
%
Net occupancy expense
74
76
76
(2
)
(2.6
)%
(2
)
(2.6
)%
Outside services
41
40
41
1
2.5
%
—
—
%
Professional, legal and regulatory
expenses
23
199
33
(176
)
(88.4
)%
(10
)
(30.3
)%
Marketing
27
29
32
(2
)
(6.9
)%
(5
)
(15.6
)%
FDIC insurance assessments
18
16
13
2
12.5
%
5
38.5
%
Credit/checkcard expenses
14
13
15
1
7.7
%
(1
)
(6.7
)%
Branch consolidation, property and
equipment charges
5
3
—
2
66.7
%
5
NM
Visa class B shares expense
7
3
8
4
133.3
%
(1
)
(12.5
)%
Other
102
100
94
2
2.0
%
8
8.5
%
Total non-interest expense
$
1,017
$
1,170
$
983
$
(153
)
(13.1
)%
$
34
3.5
%
Total adjusted non-interest expense(1)
$
1,012
$
988
$
967
$
24
2.4
%
$
45
4.7
%
NM - Not Meaningful
Non-interest expense decreased 13 percent on a reported basis
but increased 2 percent on an adjusted basis(1) compared to the
third quarter of 2022. Reported professional, legal and regulatory
expenses decreased $176 million attributable primarily to the
previously disclosed regulatory matter that was settled during the
prior quarter. Salaries and benefits increased 2 percent due
primarily to an increase in associate headcount and higher benefits
expense.
The company's fourth quarter efficiency ratio was 50.5 percent
on a reported basis and 51.6 percent on an adjusted basis(1). The
effective tax rate was 21.5 percent in the fourth quarter.
Loans and Leases
Average Balances
($ amounts in millions)
4Q22
3Q22
4Q21
4Q22 vs. 3Q22
4Q22 vs. 4Q21
Commercial and industrial
$
50,135
$
49,120
$
42,254
$
1,015
2.1
%
$
7,881
18.7
%
Commercial real estate—owner-occupied
5,362
5,441
5,649
(79
)
(1.5
)%
(287
)
(5.1
)%
Investor real estate
8,290
7,879
7,185
411
5.2
%
1,105
15.4
%
Business Lending
63,787
62,440
55,088
1,347
2.2
%
8,699
15.8
%
Residential first mortgage
18,595
18,125
17,413
470
2.6
%
1,182
6.8
%
Home equity
6,017
6,050
6,334
(33
)
(0.5
)%
(317
)
(5.0
)%
Consumer credit card
1,207
1,176
1,155
31
2.6
%
52
4.5
%
Other consumer—exit portfolios
613
716
1,160
(103
)
(14.4
)%
(547
)
(47.2
)%
Other consumer*
5,533
6,177
5,398
(644
)
(10.4
)%
135
2.5
%
Consumer Lending
31,965
32,244
31,460
(279
)
(0.9
)%
505
1.6
%
Total Loans
$
95,752
$
94,684
$
86,548
$
1,068
1.1
%
$
9,204
10.6
%
NM - Not meaningful.
* Other consumer loans includes
EnerBank.
Average loans and leases increased 1 percent compared to the
prior quarter driven primarily by growth in commercial and
industrial lending, investor real estate, residential first
mortgages and EnerBank. Average business lending increased 2
percent reflecting broad-based growth in financial services,
wholesale durables, information services, and multi-family.
Commercial loan line utilization levels ended the quarter at
approximately 43.4 percent, increasing 30 basis points over the
prior quarter, while line commitments grew approximately $800
million during the quarter. Total average consumer lending
decreased 1 percent driven primarily by a $1.2 billion unsecured
consumer loan sale executed at the end of the third quarter.
Deposits
Average Balances
($ amounts in millions)
4Q22
3Q22
4Q21
4Q22 vs. 3Q22
4Q22 vs. 4Q21
Customer low-cost deposits
$
127,544
$
130,167
$
130,177
$
(2,623
)
(2.0
)%
$
(2,633
)
(2.0
)%
Customer time deposits
5,462
5,351
6,505
111
2.1
%
(1,043
)
(16.0
)%
Corporate treasury other deposits
1
—
—
1
NM
1
NM
Total Deposits
$
133,007
$
135,518
$
136,682
$
(2,511
)
(1.9
)%
$
(3,675
)
(2.7
)%
($ amounts in millions)
4Q22
3Q22
4Q21
4Q22 vs. 3Q22
4Q22 vs. 4Q21
Consumer Bank Segment
$
83,555
$
84,741
$
80,930
$
(1,186
)
(1.4
)%
$
2,625
3.2
%
Corporate Bank Segment
38,176
39,058
42,659
(882
)
(2.3
)%
(4,483
)
(10.5
)%
Wealth Management Segment
9,065
9,467
10,054
(402
)
(4.2
)%
(989
)
(9.8
)%
Other
2,211
2,252
3,039
(41
)
(1.8
)%
(828
)
(27.2
)%
Total Deposits
$
133,007
$
135,518
$
136,682
$
(2,511
)
(1.9
)%
$
(3,675
)
(2.7
)%
In line with expectations, total average deposit balances
decreased 2 percent in the fourth quarter of 2022. Average Consumer
deposits declined 1 percent. Corporate and Wealth Management
deposits experienced declines of 2 and 4 percent, respectively, as
expected attrition continued in the quarter.
Asset quality
As of and for the Quarter
Ended
($ amounts in millions)
12/31/2022
9/30/2022
12/31/2021
ACL/Loans, net
1.63%
1.63%
1.79%
ALL/Loans, net
1.51%
1.50%
1.69%
Allowance for credit losses to
non-performing loans, excluding loans held for sale
317%
311%
349%
Allowance for loan losses to
non-performing loans, excluding loans held for sale
293%
287%
328%
Provision for credit losses
$112
$135
$110
Net loans charged-off
$69
$110
$44
Adjusted net loan charge-offs
(non-GAAP)(1)
$69
$47
$44
Net loans charged-off as a % of average
loans, annualized
0.29%
0.46%
0.20%
Adjusted net loan charge-offs as a % of
average loans, annualized (non-GAAP) (1)
0.29%
0.19%
0.20%
Non-performing loans, excluding loans held
for sale/Loans, net
0.52%
0.52%
0.51%
NPAs (ex. 90+ past due)/Loans, foreclosed
properties, and non-performing loans held for sale
0.53%
0.54%
0.54%
NPAs (inc. 90+ past due)/Loans, foreclosed
properties, and non-performing loans held for sale*
0.75%
0.65%
0.70%
Total Criticized Loans—Business
Services**
$3,149
$2,771
$2,905
* 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.
Despite continued normalization in certain credit metrics,
overall asset quality remained broadly stable during the quarter.
Non-performing loans remained stable at 0.52 percent of total
loans, while total delinquencies and criticized loans increased
modestly. Total net charge-offs for the quarter were $69 million,
or 29 basis points of average loans. Excluding the impact of the
third quarter consumer loan sale, full-year adjusted net
charge-offs(1) were 22 basis points.
Provision expense totaled $112 million for the quarter. The
increase to the allowance for credit losses compared to the third
quarter was attributable primarily to economic conditions,
normalizing credit quality from historically low levels, and loan
growth. These increases were partially offset by the elimination of
the $20 million of hurricane-related reserves established in the
prior quarter. The unique factors related to this event are not
expected to result in significant losses.
The allowance for credit loss ratio remains strong at 1.63
percent of total loans, while the allowance as a percentage of
nonperforming loans remains strong at 317 percent.
Capital and liquidity
As of and for Quarter
Ended
12/31/2022
9/30/2022
12/31/2021
Common Equity Tier 1 ratio(2)
9.6%
9.3%
9.6%
Tier 1 capital ratio(2)
10.9%
10.6%
11.0%
Tangible common stockholders’ equity to
tangible assets (non-GAAP)(1)
5.63%
5.01%
6.83%
Tangible common book value per share
(non-GAAP)(1)*
$9.00
$8.15
$11.38
Loans, net of unearned income, to total
deposits
73.6%
70.0%
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 10.9 percent and 9.6 percent, respectively, at
quarter-end. The company's liquidity position also remains robust
including cash held at the Federal Reserve totaling $9.2 billion
and a loan to deposit ratio of 74 percent at quarter-end. Relative
to pre-pandemic conditions, Regions currently has limited need for
wholesale funding.
During the fourth quarter, the company declared $187 million in
dividends to common shareholders and did not repurchase any shares
of Regions' common stock.
(1)
Non-GAAP; refer to pages 13, 17, 18, 19
and 22 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 January
20, 2023, 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 $155 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 more than 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.
About Regions Foundation
Regions Foundation supports community investments that
positively impact the communities served by Regions Bank. The
Foundation engages in a grantmaking program focused on priorities
including economic and community development; education and
workforce readiness; and financial wellness. The Foundation is a
nonprofit 501(c)(3) corporation funded primarily through
contributions from Regions Bank.
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.
- 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.
- 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.
- 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 and risks related to such acquisitions,
including that the expected synergies, cost savings and other
financial or other benefits may not be realized within expected
timeframes, or might be less than projected; and difficulties in
integrating acquired businesses.
- 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.
- Our ability to identify and address operational risks
associated with the introduction of or changes to products,
services, or delivery platforms.
- 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 laws and exclusive forum 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 Reports on Form 10-Q for the subsequent quarters
of 2022, as filed with the SEC.
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/20230120005043/en/
Media Contact: Jeremy King (205) 264-4551
Investor Relations Contact: Dana Nolan (205) 264-7040
Grafico Azioni Regions Financial (NYSE:RF)
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Da Mar 2024 a Apr 2024
Grafico Azioni Regions Financial (NYSE:RF)
Storico
Da Apr 2023 a Apr 2024
