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Regions Financial Annual Report, Year Ended Dec 31, 2005

Filing Date
Filed March 9, 2006
Period End
December 31, 2005
In the record · 2016–202610-K1210-Q328-K207

RF filed 12 annual reports (10-K), 32 quarterly reports (10-Q) and 207 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · Mar ’20Mar ’20
  2. Leadership change8-K · Jun ’22Jun ’22
  3. FY2024 annual report10-K · Feb ’25Feb ’25

01—Abstract

Summary

Summary of the 10-K filed March 9, 2006. Cited figures are marked; the original filing is the authoritative source.

Regions Financial Corporation's Form 10-K for fiscal year 2005 reports net income of $1.00 billiona, or $2.15 per diluted share, compared with $823.8 million in 2004.

Net income available to common shareholders was $1,000,544 thousandb in 2005, up 22% from 2004, and included $115.4 million (net of tax) in merger and storm-related expenses, or $.24 per diluted share. Total consolidated assets were approximately $84.8 billion, deposits $60.4 billion and stockholders' equity $10.6 billion at December 31, 2005. The results reflect a full year of the July 2004 Union Planters merger, which added $35.7 billion in assets, $22.3 billion in loans and $22.9 billion in deposits.

Net interest income rose to $2.8 billionc from $2.1 billion, and the net interest margin widened to 3.91% from 3.66%, which management attributed mainly to balance sheet positioning in a rising rate environment. Non-interest income totaled $1.8 billion, with brokerage and investment banking income of $548.7 million and service charges on deposit accounts up 24%. Non-interest expense increased to $3.0 billion, including $176.8 million of merger and storm-related charges.

Net charge-offs were $136.2 milliond, or 0.23% of average loans, versus 0.29% in 2004, and non-performing assets fell $45.4 million to $406.9 million. Regions' Tier 1 capital ratio was 8.60% and its leverage ratio 7.42%, both above the well-capitalized thresholds. Management expects modest loan growth and moderate compression of the net interest margin in 2006 as short-term rate increases slow.

The company also cited an effect from Hurricane Katrina, with about $1.2 billion of loans in the most affected areas and an allowance of approximately $61 million identified for that portfolio. In January 2006 the board raised the quarterly dividend to $.35 per share from $.34, the 35th consecutive annual increase.

02—Key points

Key Highlights

  1. Net income of $1.00 billion ($2.15 per diluted share) in 2005, up from $823.8 million in 2004; per-share diluted earnings were reduced by $.24 from $115.4 million in after-tax merger and storm-related expenses.
  2. Net interest income grew 33% to $2.82 billion, and the net interest margin rose to 3.91% from 3.66%, aided by a slightly asset-sensitive balance sheet during rising rates.
  3. Non-interest income totaled $1.81 billion, up 9%, while non-interest expense rose 23% to $3.05 billion, including $176.8 million of merger and storm-related charges.
  4. Asset quality improved: net charge-offs were 0.23% of average loans (0.29% in 2004) and non-performing assets declined $45.4 million to $406.9 million.
  5. Capital remained strong, with a Tier 1 capital ratio of 8.60%, total risk-based capital ratio of 12.76% and leverage ratio of 7.42% at December 31, 2005.
  6. Union Planters merger, completed July 1, 2004, drove year-over-year comparisons; the core system conversion of more than 700 branches was completed ahead of schedule.
  7. Quarterly dividend was raised to $.35 per share in January 2006 from $.34, and 72,140 shareholders of record were reported at year-end.

03—Questions

Frequently Asked Questions

  1. How did Regions perform financially in 2005?

    Net income was $1,000,544 thousand ($1.00 billion), or $2.15 per diluted share, compared with $823.8 million in 2004. Net income available to common shareholders rose 22%, and results included $115.4 million in after-tax merger and storm-related expenses.

  2. What drove the increase in net interest income?

    Net interest income rose to $2.8 billion from $2.1 billion. The filing attributes the increase mainly to the full-year effect of the Union Planters merger and to balance sheet positioning during 2005's rising rate environment, which lifted the net interest margin to 3.91% from 3.66%.

  3. How is credit quality trending?

    Net charge-offs were $136.2 million, or 0.23% of average loans, compared with 0.29% in 2004. Non-performing assets fell $45.4 million to $406.9 million. Management expects charge-offs to increase slightly in 2006, with possible effects from Hurricane Katrina and the 2006 hurricane season.

  4. What outlook does management give for 2006?

    Management anticipates modest overall loan growth and moderate compression of the net interest margin as short-term rate increases slow. It expects commercial loan losses to approximate 2005 levels and net real estate and consumer losses to rise slightly above 2005 levels.

  5. What is the dividend and capital position?

    Total dividends declared in 2005 were $628.6 million, or $1.36 per share. In January 2006 the quarterly dividend was increased to $.35 from $.34, the 35th consecutive annual increase. Tier 1 capital was 8.60% and the leverage ratio 7.42%, both above well-capitalized requirements.

04—Continue

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