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Regions Financial 8-K Report, Regulation FD Disclosure (Apr 25, 2024)

Reports
Regulation FD·Exhibits & Filings
Filing Date
Filed April 25, 2024
Period End
April 25, 2024
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. Material agreement8-K · Aug ’18Aug ’18
  2. Leadership change8-K · Jun ’22Jun ’22
  3. Leadership change8-K · Aug ’26Aug ’26

01—Abstract

Summary

Summary of the 8-K filed April 25, 2024. Cited figures are marked; the original filing is the authoritative source.

Regions Financial Corporation furnished an investor presentation under Item 7.01 (Regulation FD) as Exhibit 99.1, to be used by executives at institutional investor meetings and events during April, May, and June 2024.

The filing is a furnished disclosure and is not deemed filed for purposes of Section 18 of the Exchange Act. The presentation itself covers first-quarter 2024 results and outlook. For 1Q24, the company reported net income available to common shareholders of $343 milliona and diluted EPS of $0.37, versus adjusted figures of $1.8 billion in total revenue and $700 million in pre-tax pre-provision income.

The reported efficiency ratio was 64.3% (60.6% adjusted), and net charge-offs to average loans were 0.50%. Net interest income was $1,184 millionb, down 3.8% quarter over quarter, with net interest margin of 3.55%. Non-interest income was $563 million, and the company recorded a $50 million pre-tax loss from securities repositioning.

The common equity Tier 1 ratio was estimated at 10.3%, and tangible common book value per share was $10.42c. For full-year 2024, the presentation expects net interest income of $4.7 to $4.8 billion, adjusted non-interest income of $2.3 to $2.4 billion, adjusted non-interest expense of about $4.1 billion, and net charge-offs of 40 to 50 basis points of average loans. The company expects net interest income and margin to bottom in the second quarter, and it expects full-year net interest margin of about 3.50%.

02—Key points

Key Highlights

  1. 1Q24 net income available to common shareholders was $343 million, or $0.37 diluted EPS, with pre-tax pre-provision income of $616 million reported and $700 million adjusted.
  2. Net interest income fell to $1,184 million, down 3.8% quarter over quarter, with net interest margin at 3.55%; the company expects NII and NIM to bottom in 2Q24.
  3. 2024 guidance: NII of $4.7 to $4.8 billion, adjusted non-interest income of $2.3 to $2.4 billion, adjusted non-interest expense of about $4.1 billion, and net charge-offs of 40 to 50 basis points.
  4. Sold about $1.3 billion of available-for-sale securities in 1Q24, realizing a $50 million pre-tax loss, and reinvested the proceeds at higher yields.
  5. Acquired $8.0 billion in unpaid principal balance of mortgage servicing rights in a bulk purchase completed in March 2024.
  6. Common equity Tier 1 ratio was estimated at 10.3% at 1Q24, and the company declared $220 million in common dividends and executed $102 million in share repurchases.
  7. Asset quality: the allowance for credit losses was $1,731 million (1.79% of loans), and non-performing loans rose to $906 million from $805 million in 4Q23.

03—Questions

Frequently Asked Questions

  1. Why did Regions file this 8-K?

    The company filed the 8-K under Item 7.01 (Regulation FD) to furnish the presentation materials that executives will use with institutional investors at meetings and events in April, May, and June 2024. The information is furnished and not deemed filed under Section 18 of the Exchange Act.

  2. How did first-quarter 2024 earnings compare with prior periods?

    Net income available to common shareholders was $343 million, down 6.5% from 4Q23 and down 41.7% from 1Q23. Diluted EPS was $0.37, down from $0.39 in 4Q23 and $0.62 in 1Q23 (as derived from the stated percentage changes in the filing).

  3. What is management's outlook for net interest income and margin?

    Management expects NII and NIM to bottom in 2Q24, with 2Q24 NII flat to down 2% versus 1Q24. Full-year 2024 NII is expected to be $4.7 to $4.8 billion and NIM about 3.50%, with 2Q NIM below 3.50% due to higher cash liquidity on the balance sheet.

  4. What are the main credit trends the presentation highlights?

    Net charge-offs were 0.50% of average loans in 1Q24, and full-year 2024 net charge-offs are expected to be 40 to 50 basis points. Non-performing loans increased to $906 million, attributed mainly to office, professional services, transportation, and manufacturing. The office portfolio allowance rose to 5.6%, and management expects non-performing loans to continue normalizing toward historical averages.

  5. What capital and liquidity position did Regions report?

    The common equity Tier 1 ratio was estimated at 10.3%, and the Tier 1 capital ratio was an estimated 11.6%. Tangible common book value per share was $10.42, down 3.2% from 4Q23. Total liquidity sources were $60.8 billion as of 1Q24, and the company expects to manage CET1 consistent with current levels in the near term.

04—Continue

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