$7.6 billion in total revenue reflects 5
percent year-over-year growth
Regions Financial Corp. (NYSE:RF) today reported earnings for
the fourth quarter and full-year ended Dec. 31, 2023. The company
reported fourth quarter net income available to common shareholders
of $367 million and earnings per diluted share of $0.39. Fourth
quarter results include the industry-wide FDIC special assessment,
increased severance-related charges, and a net provision expense
associated with an unsecured consumer loan portfolio sale. For the
full-year 2023, the company reported net income available to common
shareholders of $2.0 billion and record pre-tax pre-provision
income(1) of $3.2 billion. Compared to 2022, total revenue
increased 5 percent to a record $7.6 billion driven by growth in
net interest income.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20240119201719/en/
"I want to thank our 20,000 associates for their hard work and
dedication throughout 2023. Their commitment and resilience allowed
us to help our customers navigate through ongoing inflation and
higher interest rates with confidence. We have positioned Regions
to continue delivering solid results with a business plan focused
on soundness, profitability and growth across economic cycles,"
said John Turner, President and CEO of Regions Financial Corp.
Turner added, "We are pleased with our fourth quarter and
full-year performance. Our results reflect the strength and
diversity of our balance sheet, robust liquidity position, and
prudent risk management. Our protective hedging strategies continue
to position us for success in any rate environment and support our
commitment to generating consistent, sustainable long-term
performance. While the industry continues to face economic and
regulatory uncertainty, we are confident in our ability to adapt to
the changing landscape while continuing to deliver one of the best
returns in our peer group. We remain confident in our strategic
plan, and our strong performance in 2023 provides a solid
foundation as we enter 2024."
SUMMARY OF FOURTH QUARTER and FULL-YEAR 2023 RESULTS:
Quarter Ended
Year Ended
(amounts in millions, except per share
data)
12/31/2023
9/30/2023
12/31/2022
2023
2022
Net income
$
391
$
490
$
685
2,074
2,245
Preferred dividends and other
24
25
25
98
99
Net income available to common
shareholders
$
367
$
465
$
660
$
1,976
$
2,146
Weighted-average diluted shares
outstanding
931
940
941
938
942
Actual shares outstanding—end of
period
924
939
934
924
934
Diluted earnings per common share
$
0.39
$
0.49
$
0.70
$
2.11
$
2.28
Selected items impacting
earnings:
Pre-tax adjusted items(1):
Adjustments to non-interest expense(1)
$
(147
)
$
(4
)
$
(5
)
$
(154
)
$
(182
)
Adjustments to non-interest income(1)
(1
)
(1
)
50
(3
)
50
Net provision benefit/(expense) from sale
of unsecured consumer loans***
(8
)
—
—
(8
)
31
Total pre-tax adjusted items(1)
$
(156
)
$
(5
)
$
45
$
(165
)
$
(101
)
Diluted EPS impact*
$
(0.13
)
$
—
$
0.03
$
(0.13
)
$
(0.09
)
Pre-tax additional selected items**:
Incremental operational losses related to
fraud
$
—
$
(53
)
$
—
$
(135
)
$
—
Provision release of hurricane-related
allowance for loan losses
—
—
20
—
—
Capital markets income (loss) -
CVA/DVA
(5
)
(3
)
(11
)
(50
)
36
Residential MSR net hedge performance
5
4
(6
)
2
2
Pension settlement charges
(10
)
(7
)
(6
)
(17
)
(6
)
*
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.
***
The fourth quarter of 2023 loan sale had
an associated allowance of $27 million and incurred a $35 million
fair value mark recorded through charge-offs, resulting in a net
provision expense of $8 million. The third quarter of 2022 loan
sale had an associated allowance of $94 million and incurred a $63
million fair value mark recorded through charge-offs, resulting in
a net provision benefit of $31 million.
Non-GAAP adjusted items(1) impacting the company's earnings are
identified to assist investors in analyzing Regions' operating
results on the same basis as that applied by management and provide
a basis to predict future performance.
Total revenue
Quarter Ended
($ amounts in millions)
12/31/2023
9/30/2023
12/31/2022
4Q23 vs. 3Q23
4Q23 vs. 4Q22
Net interest income
$
1,231
$
1,291
$
1,401
$
(60
)
(4.6
) %
$
(170
)
(12.1
) %
Taxable equivalent adjustment
13
13
13
—
—
%
—
—
%
Net interest income, taxable equivalent
basis
$
1,244
$
1,304
$
1,414
$
(60
)
(4.6
) %
$
(170
)
(12.0
) %
Net interest margin (FTE)
3.60
%
3.73
%
3.99
%
Non-interest income:
Service charges on deposit accounts
$
143
$
142
$
152
1
0.7
%
(9
)
(5.9
) %
Card and ATM fees
127
126
130
1
0.8
%
(3
)
(2.3
) %
Wealth management income
117
112
108
5
4.5
%
9
8.3
%
Capital markets income
48
64
61
(16
)
(25.0
) %
(13
)
(21.3
) %
Mortgage income
31
28
24
3
10.7
%
7
29.2
%
Commercial credit fee income
27
24
25
3
12.5
%
2
8.0
%
Bank-owned life insurance
22
20
17
2
10.0
%
5
29.4
%
Securities gains (losses), net
(2
)
(1
)
—
(1
)
(100.0
) %
(2
)
NM
Market value adjustments on employee
benefit assets*
12
4
(9
)
8
200.0
%
21
233.3
%
Insurance proceeds
—
—
50
—
—
(50
)
NM
Other
55
47
42
8
17.0
%
13
31.0
%
Non-interest income
$
580
$
566
$
600
$
14
2.5
%
$
(20
)
(3.3
) %
Total revenue
$
1,811
$
1,857
$
2,001
$
(46
)
(2.5
) %
$
(190
)
(9.5
) %
Adjusted total revenue
(non-GAAP)(1)
$
1,812
$
1,858
$
1,951
$
(46
)
(2.5
) %
$
(139
)
(7.1
) %
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 $1.8 billion decreased
approximately 2 percent on both a reported and adjusted basis(1)
compared to the third quarter of 2023. Consistent with the
company's expectations, net interest income decreased during the
quarter to $1.2 billion or 5 percent compared to the third quarter
attributable to higher deposit and funding costs and a portion of
the company's forward starting interest rate hedges becoming
active, partially offset by the impact of higher market interest
rates on new fixed-rate asset originations. Total net interest
margin decreased 13 basis points to 3.60 percent.
Non-interest income increased 2 percent on a reported and 3
percent on an adjusted basis(1) compared to the third quarter of
2023 primarily driven by modest increases in most categories
partially offset by lower capital markets income. Service charges
increased 1 percent while treasury management produced another
record year in 2023. Mortgage income increased during the quarter
primarily attributable to higher servicing income associated with a
bulk purchase of the rights to service $6.2 billion of residential
mortgage loans that closed in the third quarter. Wealth management
increased 4 percent primarily attributable to better production and
improved markets contributing to another record year in 2023. Other
non-interest income also increased driven primarily by gains
associated with lease sales during the quarter. The decrease in
capital markets income was primarily attributable to lower real
estate capital markets income, as well as lower merger and
acquisitions advisory services.
Non-interest expense
Quarter Ended
($ amounts in millions)
12/31/2023
9/30/2023
12/31/2022
4Q23 vs. 3Q23
4Q23 vs. 4Q22
Salaries and employee benefits
$
608
$
589
$
604
$
19
3.2
%
$
4
0.7
%
Equipment and software expense
102
107
102
(5
)
(4.7
)%
—
—
%
Net occupancy expense
71
72
74
(1
)
(1.4
)%
(3
)
(4.1
)%
Outside services
43
39
41
4
10.3
%
2
4.9
%
Professional, legal and regulatory
expenses
19
27
23
(8
)
(29.6
)%
(4
)
(17.4
)%
Marketing
31
26
27
5
19.2
%
4
14.8
%
FDIC insurance assessments
147
27
18
120
444.4
%
129
NM
Credit/checkcard expenses
15
16
14
(1
)
(6.3
)%
1
7.1
%
Operational losses
29
75
18
(46
)
(61.3
)%
11
61.1
%
Branch consolidation, property and
equipment charges
3
1
5
2
200.0
%
(2
)
(40.0
)%
Visa class B shares expense
6
5
7
1
20.0
%
(1
)
(14.3
)%
Gain on early extinguishment of debt
(4
)
—
—
(4
)
NM
(4
)
NM
Other
115
109
84
6
5.5
%
31
36.9
%
Total non-interest expense
$
1,185
$
1,093
$
1,017
$
92
8.4
%
$
168
16.5
%
Total adjusted non-interest expense(1)
$
1,038
$
1,089
$
1,012
$
(51
)
(4.7
)%
$
26
2.6
%
NM - Not Meaningful
Non-interest expense increased 8 percent on a reported basis,
but decreased 5 percent on an adjusted basis(1) compared to the
third quarter of 2023. Fourth quarter adjusted items included $119
million for Regions' FDIC insurance special assessment and $28
million associated with severance charges. Salaries and benefits
increased 3 percent driven primarily by higher severance costs
during the quarter partially offset by lower incentive compensation
and reduced headcount. Excluding severance costs, salaries and
benefits would have decreased 1 percent compared to the third
quarter. As expected, operational losses decreased significantly
compared to the prior quarter.
The company's fourth quarter efficiency ratio was 65.0 percent
on a reported basis and 56.9 percent on an adjusted basis(1). The
effective tax rate was 17.0 percent in the fourth quarter compared
to 20.9 percent in the third quarter. The effective tax rate
reflects lower than expected pre-tax income for the year causing
the impact of tax preferential items to increase during the
quarter, as well as discrete income tax benefits related to prior
year income tax filings.
Loans and Leases
Average Balances
($ amounts in millions)
4Q23
3Q23
4Q22
4Q23 vs. 3Q23
4Q23 vs. 4Q22
Commercial and industrial
$
50,939
$
51,721
$
50,135
$
(782
)
(1.5
)%
$
804
1.6
%
Commercial real estate—owner-occupied
5,136
5,100
5,362
36
0.7
%
(226
)
(4.2
)%
Investor real estate
8,772
8,617
8,290
155
1.8
%
482
5.8
%
Business Lending
64,847
65,438
63,787
(591
)
(0.9
)%
1,060
1.7
%
Residential first mortgage
20,132
19,914
18,595
218
1.1
%
1,537
8.3
%
Home equity
5,663
5,688
6,017
(25
)
(0.4
)%
(354
)
(5.9
)%
Consumer credit card
1,295
1,245
1,207
50
4.0
%
88
7.3
%
Other consumer—exit portfolios
110
384
613
(274
)
(71.4
)%
(503
)
(82.1
)%
Other consumer*
6,246
6,116
5,533
130
2.1
%
713
12.9
%
Consumer Lending
33,446
33,347
31,965
99
0.3
%
1,481
4.6
%
Total Loans
$
98,293
$
98,785
$
95,752
$
(492
)
(0.5
)%
$
2,541
2.7
%
NM - Not Meaningful
*
Other consumer loans includes EnerBank
(Regions' point of sale home improvement portfolio).
Average loans and leases remained relatively stable compared to
the prior quarter. Average business loans decreased 1 percent,
offset by modest growth in consumer loans. Commercial loan line
utilization levels ended the quarter at approximately 42.3 percent,
decreasing 100 basis points over the prior quarter, while line
commitments decreased 1 percent. The growth in consumer loans was
driven by residential first mortgage and EnerBank partially offset
by the sale of an unsecured consumer exit portfolio.
Deposits
Average Balances
($ amounts in millions)
4Q23
3Q23
4Q22
4Q23 vs. 3Q23
4Q23 vs. 4Q22
Total interest-bearing deposits
$
83,247
$
80,472
$
79,900
$
2,775
3.4
%
$
3,347
4.2
%
Non-interest-bearing deposits
43,167
44,748
53,107
(1,581
)
(3.5
)%
(9,940
)
(18.7
)%
Total Deposits
$
126,414
$
125,220
$
133,007
$
1,194
1.0
%
$
(6,593
)
(5.0
)%
($ amounts in millions)
4Q23
3Q23
4Q22
4Q23 vs. 3Q23
4Q23 vs. 4Q22
Consumer Bank Segment
$
79,384
$
80,036
$
83,555
$
(652
)
(0.8
)%
$
(4,171
)
(5.0
)%
Corporate Bank Segment
36,291
34,924
38,176
1,367
3.9
%
(1,885
)
(4.9
)%
Wealth Management Segment
7,690
7,451
9,065
239
3.2
%
(1,375
)
(15.2
)%
Other
3,049
2,809
2,211
240
8.5
%
838
37.9
%
Total Deposits
$
126,414
$
125,220
$
133,007
$
1,194
1.0
%
$
(6,593
)
(5.0
)%
Ending Balances as of
12/31/2023
12/31/2023
($ amounts in millions)
12/31/2023
9/30/2023
12/31/2022
vs. 9/30/2023
vs. 12/31/2022
Consumer Bank Segment
$
80,031
$
80,980
$
83,487
$
(949
)
(1.2
)%
$
(3,456
)
(4.1
)%
Corporate Bank Segment
36,883
34,650
37,145
2,233
6.4
%
(262
)
(0.7
)%
Wealth Management Segment
7,694
7,791
9,111
(97
)
(1.2
)%
(1,417
)
(15.6
)%
Other
3,180
2,778
2,000
402
14.5
%
1,180
59.0
%
Total Deposits
$
127,788
$
126,199
$
131,743
$
1,589
1.3
%
$
(3,955
)
(3.0
)%
The company's deposit base continues to be a source of strength
and a differentiator in liquidity and margin performance. Total
ending and average deposits increased modestly during the fourth
quarter and included continued remixing out of non-interest-bearing
products into interest-bearing products. Declines in average
Consumer deposits were offset by stability or growth in other
segments.
Asset quality
As of and for the Quarter
Ended
($ amounts in millions)
12/31/2023
9/30/2023
12/31/2022
Allowance for credit losses (ACL) at
period end
$1,700
$1,677
$1,582
ACL/Loans, net
1.73%
1.70%
1.63%
ALL/Loans, net
1.60%
1.56%
1.51%
Allowance for credit losses to
non-performing loans, excluding loans held for sale
211%
261%
317%
Allowance for loan losses to
non-performing loans, excluding loans held for sale
196%
241%
293%
Provision for credit losses
$155
$145
$112
Net loans charged-off
$132
$101
$69
Adjusted net loan charge-offs
(non-GAAP)(1)
$97
$101
$69
Net loans charged-off as a % of average
loans, annualized
0.54%
0.40%
0.29%
Adjusted net loan charge-offs as a % of
average loans, annualized (non-GAAP) (1)
0.39%
0.40%
0.29%
Non-performing loans, excluding loans held
for sale/Loans, net
0.82%
0.65%
0.52%
NPAs (ex. 90+ past due)/Loans, foreclosed
properties, and non-performing loans held for sale
0.84%
0.67%
0.53%
NPAs (inc. 90+ past due)/Loans, foreclosed
properties, and non-performing loans held for sale*
1.01%
0.81%
0.75%
Total Criticized Loans—Business
Services**
$4,659
$4,167
$3,149
*
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 non-performing loans
increased driven primarily by downgrades within loan categories
previously identified as under stress. The increase in
non-performing loans in the fourth quarter was primarily
attributable to office, transportation, consumer discretionary
manufacturing, and restaurant lending. Total reported net
charge-offs for the quarter were $132 million, or 54 basis points
of average loans; however, excluding the fair value mark associated
with the sale of a consumer unsecured exit portfolio, adjusted net
charge-offs(1) declined 1 basis point to 39 basis points of average
loans.
The increase to the allowance for credit losses compared to the
third quarter was attributable primarily to adverse risk migration
and continued credit quality normalization, as well as higher
qualitative adjustments for incremental risk in certain higher risk
portfolios.
The allowance for credit loss ratio increased 3 basis points to
1.73 percent of total loans, while the allowance as a percentage of
nonperforming loans decreased to 211 percent. Excluding the
consumer unsecured exit portfolio sold in the fourth quarter, the
allowance for credit loss ratio would have increased 6 basis
points.
Capital and liquidity
As of and for Quarter
Ended
12/31/2023
9/30/2023
12/31/2022
Common Equity Tier 1 ratio(2)
10.2%
10.3%
9.6%
Tier 1 capital ratio(2)
11.5%
11.6%
10.9%
Tangible common stockholders’ equity to
tangible assets (non-GAAP)(1)
6.79%
5.82%
5.63%
Tangible common book value per share
(non-GAAP)(1)*
$10.77
$9.16
$9.00
Loans, net of unearned income, to total
deposits
77.0%
78.4%
73.6%
*
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 10.2 percent and 11.5 percent, respectively, at
quarter-end.
During the fourth quarter, the company repurchased 16 million
shares of common stock for a total of $252 million through open
market purchases and declared $223 million in dividends to common
shareholders.
The company's liquidity position also remains robust as of Dec.
31, 2023, with total primary liquidity of approximately $38.2
billion, which includes cash held at the Federal Reserve, FHLB
borrowing capacity and unencumbered securities. The loan-to-deposit
ratio totaled 77 percent at the end of the quarter.
(1)
Non-GAAP; refer to pages 13, 17, 18, 19,
20 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 Jan. 19, 2024, an archived recording of the webcast
will be available at the Investor Relations page of ir.regions.com
following the live event.
About Regions Financial Corporation Regions Financial
Corporation (NYSE:RF), with $152 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 1,250 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, or the need to
price interest-bearing deposits higher due to competitive forces.
Either of these activities 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.
- Changing 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 changes to debit card interchange fees, 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/20240119201719/en/
Media Contact: Jeremy King (205) 264-4551
Investor Relations Contact: Dana Nolan (205) 264-7040
Regions Financial (NYSE:RF)
Historical Stock Chart
Von Nov 2024 bis Dez 2024
Regions Financial (NYSE:RF)
Historical Stock Chart
Von Dez 2023 bis Dez 2024
