01—Abstract
Summary
Summary of the 10-Q filed August 6, 2024. Cited figures are marked; the original filing is the authoritative source.
Regions Financial Corporation's Form 10-Q for the quarter ended June 30, 2024 reports net income of $501 milliona for the second quarter of 2024, compared with $581 million in the second quarter of 2023.
Net income available to common shareholders was $477 millionb, or $0.52 per diluted share, versus $556 million, or $0.59 per diluted share, a year earlier. For the first six months, net income was $869 million ($0.89 per diluted share) compared with $1.193 billion ($1.22 per diluted share) in the prior-year period. Net interest income fell to $1.186 billion in the quarter from $1.381 billion, and the net interest margin (taxable-equivalent) was 3.51 percent versus 4.04 percent a year earlier, driven mainly by higher deposit and funding costs.
Credit quality and capital were steady in the filing. The provision for credit losses was $102 millionc in the quarter, and net charge-offs were $101 million, or 0.42 percent of average loans. Total non-performing loans were $847 million at June 30, 2024, and the allowance for credit losses stood at $1.732 billion.
The CET1 ratio was estimated at 10.42 percent, and the stress capital buffer remains floored at 2.5 percent. Total shareholders' equity was $17.2 billiond, down from $17.4 billion at year-end 2023, as accumulated other comprehensive loss grew to $3.265 billion. Balance sheet funding shifted toward borrowings.
Total long-term borrowings rose to $5.083 billion from $2.330 billion, including a $750 million senior notes issuance in June 2024 and $2.0 billion of FHLB advances, and short-term borrowings were $513 million. Total deposits declined to $126.6 billion from $127.8 billion.
The filing also reports $1.1 billion of securities gains and losses in the period: the company recorded $100 million in pre-tax losses on securities sales during the first half of 2024 as part of a portfolio repositioning. The company also disclosed a July 2024 offering of $500 million in Series F preferred stock and a quarterly common dividend increase to $0.25 per share.
02—Key points
Key Highlights
- Second-quarter 2024 net income was $501 million, down from $581 million a year earlier; diluted EPS was $0.52 versus $0.59.
- Net interest income fell to $1.186 billion from $1.381 billion, and the net interest margin (taxable-equivalent) declined to 3.51 percent from 4.04 percent, reflecting higher deposit and funding costs.
- Non-interest income was $545 million, down from $576 million, largely due to $50 million of second-quarter securities losses tied to portfolio repositioning.
- Non-performing loans were $847 million at June 30, 2024, up $39 million from year-end 2023, while net charge-offs were 0.42 percent of average loans in the quarter.
- The CET1 ratio was estimated at 10.42 percent, and the company reported that it exceeded all minimum capital levels in the 2024 Federal Reserve stress test.
- Long-term borrowings increased to $5.083 billion from $2.330 billion, including $750 million of 5.722% senior notes due 2030 issued in June 2024.
- The Board declared a quarterly common dividend increase to $0.25 per share, payable October 1, 2024, and the company repurchased 10 million shares for $189 million in the first half of 2024.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed August 6, 2024Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Interest Expense | $576.00M$358.00M | +60.9% |
| Net Income | $501.00M$581.00M | −13.8% |
| EPS (Basic) | $0.52$0.59 | −11.9% |
| EPS (Diluted) | $0.52$0.59 | −11.9% |
| Shares Outstanding (Basic) | 917.00M939.00M | −2.3% |
| Shares Outstanding (Diluted) | 918.00M939.00M | −2.2% |
05—Questions
Frequently Asked Questions
How did Regions' profitability change in the second quarter of 2024?
Net income was $501 million versus $581 million a year earlier, and net income available to common shareholders was $477 million, or $0.52 per diluted share, compared with $556 million, or $0.59 per diluted share. The decline was driven mainly by lower net interest income, which fell to $1.186 billion from $1.381 billion, partly offset by lower non-interest expense of $1.004 billion versus $1.111 billion.
What drove the decline in net interest income and margin?
The filing attributes the decreases in net interest income and net interest margin primarily to higher deposit and funding costs, partially offset by higher asset yields. Interest expense on deposits rose to $502 million in the quarter from $260 million a year earlier, and the net interest margin (taxable-equivalent) was 3.51 percent versus 4.04 percent.
How did credit quality and the allowance for credit losses look at June 30, 2024?
The provision for credit losses was $102 million in the quarter, compared with $118 million a year earlier, and net charge-offs were $101 million, or 0.42 percent of average loans. Non-performing loans, excluding held for sale, were $847 million, and the total allowance for credit losses was $1.732 billion. The filing states that overall asset quality improved in the second quarter.
How did Regions fund its balance sheet during the first half of 2024?
Total deposits decreased to $126.6 billion from $127.8 billion at year-end 2023, and borrowings increased. Long-term borrowings rose to $5.083 billion from $2.330 billion, reflecting $2.0 billion in FHLB advances and a $750 million senior notes issuance in June 2024, while short-term borrowings were $513 million.
What capital and shareholder return actions did Regions report?
The CET1 ratio was estimated at 10.42 percent at June 30, 2024, and the stress capital buffer is floored at 2.5 percent. During the first six months of 2024, the company repurchased shares for $189 million and paid cash dividends of $0.24 per share in each of the first two quarters. On July 17, 2024, the Board declared an increase in the quarterly common dividend to $0.25 per share.
06—Continue