$2 billion in total revenue reflects 12 percent
year-over-year growth.
Regions Financial Corp. (NYSE:RF) today reported earnings for
the second quarter ended June 30, 2023. The company reported second
quarter net income available to common shareholders of $556 million
and earnings per diluted share of $0.59. Compared to the second
quarter of 2022, total revenue increased 12 percent to $2 billion
on both a reported and adjusted basis(1) driven by growth in net
interest income. Strong revenue growth contributed to a 6 percent
increase in pre-tax pre-provision income(1) on a reported basis and
7 percent on an adjusted basis(1) compared to the second quarter of
2022.
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"We are very pleased with our second quarter performance," said
John Turner, President and CEO of Regions Financial Corp. "Our
associates continue to execute our strategy and deliver excellent
customer service, creating consistent, sustainable, long-term
performance. This quarter, we were excited to announce the addition
of Regions' Overdraft Grace feature, which complements the other
enhancements we've introduced over the last two years and provides
customers with more financial tools and flexibility. Reflecting the
growth in our business, and underscoring our focus on capital
allocation and sustainable shareholder returns, we are also pleased
that our Board of Directors raised the quarterly common stock
dividend by 20 percent to $0.24 per share at its most recent
meeting. I am very proud of the work our associates have done and
believe we are well-positioned to deliver solid financial
performance in any environment."
SUMMARY OF SECOND QUARTER 2023 RESULTS:
Quarter Ended
(amounts in millions, except per share
data)
6/30/2023
3/31/2023
6/30/2022
Net income
$
581
$
612
$
583
Preferred dividends and other
25
24
25
Net income available to common
shareholders
$
556
$
588
$
558
Weighted-average diluted shares
outstanding
939
942
940
Actual shares outstanding—end of
period
939
935
934
Diluted earnings per common share
$
0.59
$
0.62
$
0.59
Selected items impacting
earnings:
Pre-tax adjusted items(1):
Adjustments to non-interest expense(1)
$
(1
)
$
(2
)
$
6
Adjustments to non-interest income(1)
—
(1
)
—
Total pre-tax adjusted items(1)
$
(1
)
$
(3
)
$
6
Diluted EPS impact*
$
—
$
—
$
—
Pre-tax additional selected items**:
Provision (in excess of) less than net
charge-offs
$
(37
)
$
(52
)
$
(22
)
Capital markets income (loss) -
CVA/DVA
(9
)
(33
)
20
Residential MSR net hedge performance
(4
)
(3
)
11
Incremental operational losses related to
check fraud
(82
)
—
—
*
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.
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.
Total revenue
Quarter Ended
($ amounts in millions)
6/30/2023
3/31/2023
6/30/2022
2Q23 vs. 1Q23
2Q23 vs. 2Q22
Net interest income
$
1,381
$
1,417
$
1,108
$
(36
)
(2.5
)%
$
273
24.6
%
Taxable equivalent adjustment
12
13
11
(1
)
(7.7
)%
1
9.1
%
Net interest income, taxable equivalent
basis
$
1,393
$
1,430
$
1,119
$
(37
)
(2.6
)%
$
274
24.5
%
Net interest margin (FTE)
4.04
%
4.22
%
3.06
%
Non-interest income:
Service charges on deposit accounts
$
152
$
155
$
165
(3
)
(1.9
)%
(13
)
(7.9
)%
Card and ATM fees
130
121
133
9
7.4
%
(3
)
(2.3
)%
Wealth management income
110
112
102
(2
)
(1.8
)%
8
7.8
%
Capital markets income
68
42
112
26
61.9
%
(44
)
(39.3
)%
Mortgage income
26
24
47
2
8.3
%
(21
)
(44.7
)%
Commercial credit fee income
28
26
23
2
7.7
%
5
21.7
%
Bank-owned life insurance
19
17
16
2
11.8
%
3
18.8
%
Securities gains (losses), net
—
(2
)
—
2
100.0
%
—
NM
Market value adjustments on employee
benefit assets*
—
(1
)
(17
)
1
100.0
%
17
100.0
%
Other
43
40
59
3
7.5
%
(16
)
(27.1
)%
Non-interest income
$
576
$
534
$
640
$
42
7.9
%
$
(64
)
(10.0
)%
Total revenue
$
1,957
$
1,951
$
1,748
$
6
0.3
%
$
209
12.0
%
Adjusted total revenue
(non-GAAP)(1)
$
1,957
$
1,952
$
1,748
$
5
0.3
%
$
209
12.0
%
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 $2 billion remained relatively
stable on both a reported and adjusted basis(1) compared to the
first quarter of 2023. Consistent with the company's expectations,
net interest income decreased during the quarter to $1.4 billion or
3 percent compared to the first quarter attributable to
accelerating deposit and funding costs partially offset by higher
market interest rates and the company's asset sensitive balance
sheet. Total net interest margin decreased 18 basis points to 4.04
percent.
Non-interest income increased 8 percent on both a reported and
adjusted basis(1) compared to the first quarter of 2023 primarily
driven by increases in capital markets income and card and ATM
fees. The increase in capital markets income was driven primarily
by improvement in CVA/DVA valuation adjustments. Excluding the
impact of CVA/DVA, capital markets income increased 3 percent as
growth, primarily in real estate capital markets, was partially
offset by declines in mergers and acquisitions, debt underwriting
and loan syndication income. Card & ATM fees increased 7
percent driven primarily by seasonally higher transaction and spend
volumes, as well as a card rewards liability adjustment in the
prior quarter that did not repeat.
Non-interest expense
Quarter Ended
($ amounts in millions)
6/30/2023
3/31/2023
6/30/2022
2Q23 vs. 1Q23
2Q23 vs. 2Q22
Salaries and employee benefits
$
603
$
616
$
575
$
(13
)
(2.1
)%
$
28
4.9
%
Equipment and software expense
101
102
97
(1
)
(1.0
)%
4
4.1
%
Net occupancy expense
73
73
75
—
—
%
(2
)
(2.7
)%
Outside services
42
39
38
3
7.7
%
4
10.5
%
Professional, legal and regulatory
expenses
20
19
24
1
5.3
%
(4
)
(16.7
)%
Marketing
26
27
22
(1
)
(3.7
)%
4
18.2
%
FDIC insurance assessments
29
25
13
4
16.0
%
16
123.1
%
Credit/checkcard expenses
15
14
13
1
7.1
%
2
15.4
%
Operational losses
95
13
13
82
NM
82
NM
Branch consolidation, property and
equipment charges
1
2
(6
)
(1
)
(50.0
)%
7
116.7
%
Visa class B shares expense
9
8
9
1
12.5
%
—
—
%
Other
97
89
75
8
9.0
%
22
29.3
%
Total non-interest expense
$
1,111
$
1,027
$
948
$
84
8.2
%
$
163
17.2
%
Total adjusted non-interest expense(1)
$
1,110
$
1,025
$
954
$
85
8.3
%
$
156
16.4
%
NM - Not Meaningful
Non-interest expense increased 8 percent on both a reported and
adjusted basis(1) compared to the first quarter of 2023.
Commensurate with trends experienced by banks across the industry,
the increase in operational losses was attributable to a spike in
check fraud. Importantly, the company has effective countermeasures
in place, and losses have returned to normalized levels. Excluding
the incremental increase in operational losses, non-interest
expense remained relatively stable. FDIC insurance assessments
increased 16 percent attributable to changes in various inputs
including normalizing credit conditions and an increase in average
assets. Partially offsetting these increases, salaries and benefits
decreased 2 percent primarily due to a seasonal decrease in payroll
taxes and lower benefit costs.
The company's second quarter efficiency ratio was 56.4 percent
on both a reported and adjusted basis(1). The effective tax rate
was 20.2 percent in the second quarter. Compared to the first
quarter, the lower effective tax rate was attributable to
deductions for equity compensation that occurred during the current
quarter.
Loans and Leases
Average Balances
($ amounts in millions)
2Q23
1Q23
2Q22
2Q23 vs. 1Q23
2Q23 vs. 2Q22
Commercial and industrial
$
52,039
$
51,158
$
46,538
$
881
1.7
%
$
5,501
11.8
%
Commercial real estate—owner-occupied
5,197
5,305
5,477
(108
)
(2.0
)%
(280
)
(5.1
)%
Investor real estate
8,482
8,404
7,428
78
0.9
%
1,054
14.2
%
Business Lending
65,718
64,867
59,443
851
1.3
%
6,275
10.6
%
Residential first mortgage
19,427
18,957
17,569
470
2.5
%
1,858
10.6
%
Home equity
5,785
5,921
6,082
(136
)
(2.3
)%
(297
)
(4.9
)%
Consumer credit card
1,217
1,214
1,145
3
0.2
%
72
6.3
%
Other consumer—exit portfolios
450
527
836
(77
)
(14.6
)%
(386
)
(46.2
)%
Other consumer*
5,984
5,791
5,689
193
3.3
%
295
5.2
%
Consumer Lending
32,863
32,410
31,321
453
1.4
%
1,542
4.9
%
Total Loans
$
98,581
$
97,277
$
90,764
$
1,304
1.3
%
$
7,817
8.6
%
NM - Not meaningful.
* Other consumer loans includes EnerBank
(Regions' point of sale home improvement portfolio).
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. Growth in average business lending was
broad-based across the telecommunications, multifamily, and energy
industries. Approximately 84 percent of this quarter's business
loan growth was driven by existing clients accessing and expanding
their credit lines. Commercial loan line utilization levels ended
the quarter at approximately 43.5 percent, decreasing 20 basis
points over the prior quarter, while line commitments grew
approximately $1.5 billion during the quarter.
Deposits
Average Balances
($ amounts in millions)
2Q23
1Q23
2Q22
2Q23 vs. 1Q23
2Q23 vs. 2Q22
Total interest-bearing deposits
$
78,361
$
79,450
$
80,681
$
(1,089
)
(1.4
)%
$
(2,320
)
(2.9
)%
Non-interest-bearing deposits
47,178
49,592
58,911
(2,414
)
(4.9
)%
(11,733
)
(19.9
)%
Total Deposits
$
125,539
$
129,042
$
139,592
$
(3,503
)
(2.7
)%
$
(14,053
)
(10.1
)%
($ amounts in millions)
2Q23
1Q23
2Q22
2Q23 vs. 1Q23
2Q23 vs. 2Q22
Consumer Bank Segment
$
80,999
$
82,200
$
85,224
$
(1,201
)
(1.5
)%
$
(4,225
)
(5.0
)%
Corporate Bank Segment
34,860
36,273
41,920
(1,413
)
(3.9
)%
(7,060
)
(16.8
)%
Wealth Management Segment
7,470
8,463
10,020
(993
)
(11.7
)%
(2,550
)
(25.4
)%
Other
2,210
2,106
2,428
104
4.9
%
(218
)
(9.0
)%
Total Deposits
$
125,539
$
129,042
$
139,592
$
(3,503
)
(2.7
)%
$
(14,053
)
(10.1
)%
Ending Balances as of
6/30/2023
6/30/2023
($ amounts in millions)
6/30/2023
3/31/2023
6/30/2022
vs. 3/31/2023
vs. 6/30/2022
Consumer Bank Segment
$
81,554
$
83,296
$
84,987
$
(1,742
)
(2.1
)%
$
(3,433
)
(4.0
)%
Corporate Bank Segment
35,332
35,185
41,456
147
0.4
%
(6,124
)
(14.8
)%
Wealth Management Segment
7,176
7,941
9,489
(765
)
(9.6
)%
(2,313
)
(24.4
)%
Other
2,897
2,038
2,331
859
42.1
%
566
24.3
%
Total Deposits
$
126,959
$
128,460
$
138,263
$
(1,501
)
(1.2
)%
$
(11,304
)
(8.2
)%
Consistent with the company's expectations, total ending
deposits declined approximately 1 percent, while total average
deposit balances decreased approximately 3 percent in the second
quarter of 2023 compared to the first quarter of 2023. Following
primarily seasonal tax payment patterns, average Consumer and
Wealth Management deposits declined 1 percent and 12 percent,
respectively, while average Corporate deposits declined 4
percent.
Asset quality
As of and for the Quarter
Ended
($ amounts in millions)
6/30/2023
3/31/2023
6/30/2022
Allowance for credit losses (ACL) at
period end
$
1,633
$
1,596
$
1,514
ACL/Loans, net
1.65
%
1.63
%
1.62
%
ALL/Loans, net
1.53
%
1.50
%
1.52
%
Allowance for credit losses to
non-performing loans, excluding loans held for sale
332
%
288
%
410
%
Allowance for loan losses to
non-performing loans, excluding loans held for sale
308
%
266
%
386
%
Provision for credit losses
$
118
$
135
$
60
Net loans charged-off
$
81
$
83
$
38
Net loans charged-off as a % of average
loans, annualized
0.33
%
0.35
%
0.17
%
Non-performing loans, excluding loans held
for sale/Loans, net
0.50
%
0.56
%
0.39
%
NPAs (ex. 90+ past due)/Loans, foreclosed
properties, and non-performing loans held for sale
0.51
%
0.58
%
0.41
%
NPAs (inc. 90+ past due)/Loans, foreclosed
properties, and non-performing loans held for sale*
0.64
%
0.71
%
0.52
%
Total Criticized Loans—Business
Services**
$
4,039
$
3,725
$
2,310
* 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 continued to normalize during the quarter.
Business services criticized loans and total delinquencies
increased 8 percent and 7 percent, respectively, while
non-performing loans decreased 11 percent. Total net charge-offs
for the quarter were $81 million, or 33 basis points of average
loans, and provision expense totaled $118 million.
The increase to the allowance for credit losses compared to the
first quarter was attributable primarily to continued credit
normalization, economic outlook changes, and loan growth.
The allowance for credit loss ratio increased 2 basis points to
1.65 percent of total loans, and the allowance as a percentage of
nonperforming loans increased to 332 percent.
Capital and liquidity
As of and for Quarter
Ended
6/30/2023
3/31/2023
6/30/2022
Common Equity Tier 1 ratio(2)
10.1
%
9.9
%
9.2
%
Tier 1 capital ratio(2)
11.4
%
11.2
%
10.6
%
Tangible common stockholders’ equity to
tangible assets (non-GAAP)(1)
6.09
%
6.31
%
5.76
%
Tangible common book value per share
(non-GAAP)(1)*
$
9.72
$
10.01
$
9.55
Loans, net of unearned income, to total
deposits
78.1
%
76.3
%
67.6
%
* 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 Common Equity Tier 1(2) and Tier 1(2) ratios were
estimated at 10.1 percent and 11.4 percent, respectively, at
quarter-end.
As a Category IV bank, Regions did not participate in this
year's supervisory capital stress test; however, the company did
receive its preliminary Stress Capital Buffer reflecting planned
capital changes including plans to increase its common stock
dividend. From the fourth quarter of 2023 through the third quarter
of 2024, the company's preliminary Stress Capital Buffer will
remain at 2.5 percent.
During the second quarter, the company declared $187 million in
dividends to common shareholders and did not repurchase any shares
of Regions' common stock. Earlier this week, the Board of Directors
declared a quarterly common stock dividend of $0.24 per share, a 20
percent increase over the second quarter. This increase is in
addition to the 18 percent increase last year, representing two
consecutive years of robust dividend growth well supported by
underlying financial performance.
The company's liquidity position also remains robust as of June
30, 2023, with total available liquidity of approximately $53
billion, which includes cash held at the Federal Reserve, FHLB
borrowing capacity, unencumbered securities, borrowing capacity at
the Federal Reserve's discount window, and the Federal Reserve's
Bank Term Lending Plan facility. The loan-to-deposit ratio totaled
78 percent at the end of the quarter.
(1)
Non-GAAP; refer to pages 12, 16, 17, 18
and 20 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 21,
2023, an archived recording of the webcast will be available at the
Investor Relations page of https://ir.regions.com/ following the
live event.
About Regions Financial Corporation
Regions Financial Corporation (NYSE:RF), with $156 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.
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.
- 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.
- The impact of pandemics, including the COVID-19 pandemic, on
our businesses, operations, and financial results and conditions.
The duration and severity of any 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 declining 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.
- Rising interest rates could negatively impact the value of our
portfolio of investment securities.
- The loss of value of our investment portfolio could negatively
impact market perceptions of us.
- The effects of social media on market perceptions of us and
banks generally.
- Volatility in the financial services industry (including
failures or rumors of failures of other depository institutions),
along with actions taken by governmental agencies to address such
turmoil, could affect the ability of depository institutions,
including us, to attract and retain depositors and to borrow or
raise capital.
- 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, such as special FDIC assessments, any new long-term debt
requirements, 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” in Regions’ Annual Report on Form
10-K for the year ended December 31, 2022 and in Regions’
subsequent filings 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/20230721405397/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 Feb 2025 a Mar 2025
Grafico Azioni Regions Financial (NYSE:RF)
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Da Mar 2024 a Mar 2025
