01—Abstract
Summary
Summary of the 10-Q filed November 5, 2024. Cited figures are marked; the original filing is the authoritative source.
Regions Financial Corporation's Form 10-Q for the quarter ended September 30, 2024 reports third-quarter 2024 net income of $490 milliona and net income available to common shareholders of $446 million, or $0.49 per diluted share, compared with $465 million, or $0.49 per diluted share, in the third quarter of 2023.
Net interest income (taxable-equivalent basis) was $1.2 billionb, down $74 million year over year, and the net interest margin was 3.54 percent, a 19 basis point decrease. The provision for credit losses was $113 million, net charge-offs were $117 million (0.48 percent of average loans), and non-interest income included $75 million of securities losses tied to third-quarter portfolio repositioning. Total assets rose to $157.4 billion from $152.2 billion at year-end 2023, funded in part by $3.7 billion of net long-term borrowing growth and $1.5 billion of short-term FHLB borrowings.
Capital and shareholder-return activity was active during the period. Regions issued $500 millionc of Series F preferred stock and redeemed all $500 million of its Series B preferred stock. The Board declared a quarterly common dividend of $0.25 per share, up $0.01, and the company repurchased 14 million common shares for $290 million in the first nine months of 2024.
The CET1 ratio was estimated at 10.58 percent at September 30, 2024, compared with 10.26 percent at December 31, 2023. Moody's revised its outlook on Regions' senior unsecured debt to stable from negative.
Management's 2024 expectations include net interest income of approximately $4.8 billiond, adjusted non-interest expense of approximately $4.25 billion, and net charge-offs of 40 to 50 basis points of average loans, expected toward the upper end. The filing also notes that Hurricanes Helene and Milton affected the Southeastern footprint, with impacts to operations, premises and the allowance expected to be immaterial at this time.
02—Key points
Key Highlights
- Third-quarter 2024 net income of $490 million; net income available to common shareholders of $446 million, or $0.49 per diluted share, versus $0.49 a year earlier.
- Net interest income (taxable-equivalent) of $1.2 billion, down $74 million year over year; net interest margin of 3.54 percent, down 19 basis points.
- Provision for credit losses of $113 million versus $145 million a year earlier; net charge-offs of $117 million, or 0.48 percent of average loans.
- Third-quarter securities losses of $78 million (net) included $75 million tied to portfolio repositioning; non-interest income totaled $572 million.
- CET1 ratio estimated at 10.58 percent at September 30, 2024, up from 10.26 percent at December 31, 2023.
- Series F preferred stock issued for $500 million and Series B preferred stock fully redeemed for $500 million in the third quarter; quarterly common dividend raised to $0.25 per share.
- Total deposits fell to $126.4 billion from $127.8 billion, while long-term borrowings rose to $6.0 billion from $2.3 billion, with $1.5 billion of short-term borrowings outstanding.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2024filed November 5, 2024Financial Statements
Q3 FY2024 against Q3 FY2023
| Line item | Q3 FY2024Q3 FY2023 | Change |
|---|---|---|
| Net Income | $490.00M$490.00M | 0.0% |
| EPS (Basic) | $0.49$0.49 | 0.0% |
| EPS (Diluted) | $0.49$0.49 | 0.0% |
| Shares Outstanding (Basic) | 914.00M939.00M | −2.7% |
| Shares Outstanding (Diluted) | 918.00M940.00M | −2.3% |
05—Questions
Frequently Asked Questions
How did Regions' core earnings trend in the third quarter of 2024?
Net income was $490 million, flat with the third quarter of 2023, and diluted EPS was $0.49 in both periods. Net interest income declined $74 million year over year to about $1.2 billion on a taxable-equivalent basis, with the net interest margin falling to 3.54 percent from 3.73 percent. The filing attributes the margin decline mainly to higher deposit and funding costs, partially offset by higher asset yields.
What drove the change in credit quality metrics?
The provision for credit losses fell to $113 million from $145 million a year earlier, and management described continued signs of overall asset quality stabilization. Net charge-offs rose to $117 million, or 0.48 percent of average loans, from $101 million, or 0.40 percent, driven by higher commercial and investor real estate net charge-offs. Non-performing loans, excluding held for sale, were $821 million at September 30, 2024, compared with $805 million at December 31, 2023.
What did Regions do with its capital and preferred stock in 2024?
Regions issued $500 million of Series F non-cumulative perpetual preferred stock with a 6.950% initial dividend rate and redeemed all 500,000 shares of its Series B preferred stock for $500 million. It repurchased 14 million common shares for $290 million in the first nine months of 2024 under its $2.5 billion authorization. The Board raised the quarterly common dividend to $0.25 per share, and the CET1 ratio was estimated at 10.58 percent.
What are management's 2024 expectations?
Management expects net interest income of approximately $4.8 billion, adjusted non-interest income of $2.45 to $2.5 billion, adjusted non-interest expense of approximately $4.25 billion, and average loans and average deposits that are stable to down modestly. Net charge-offs are expected to be 40 to 50 basis points of average loans, toward the upper end of that range, and the effective tax rate is expected to be approximately 20 percent.
What does the filing say about the Southeastern hurricanes and funding changes?
The filing states that Hurricanes Helene and Milton made landfall in the Southeastern United States, with significant flood and wind damage in Florida, North Carolina and South Carolina, and that impacts to operations, premises and the allowance for credit losses are expected to be immaterial at this time. On funding, long-term borrowings rose by about $3.7 billion from year-end 2023, reflecting FHLB advances and senior note issuances of $750 million due 2030 and $1.0 billion due 2035.
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