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Regions Financial 8-K Report, Regulation FD Disclosure (Aug 19, 2024)

Reports
Regulation FD·Exhibits & Filings
Filing Date
Filed August 19, 2024
Period End
August 19, 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 August 19, 2024. Cited figures are marked; the original filing is the authoritative source.

Regions Financial Corporation filed this Form 8-K on August 19, 2024 under Item 7.01 (Regulation FD Disclosure) to furnish investor presentation materials, included as Exhibit 99.1, that executives will use at institutional investor meetings in August and September 2024.

The filing states the information is furnished and not deemed filed under Section 18 of the Exchange Act. The presentation reports second-quarter 2024 results: net income available to common shareholders of $477 milliona, diluted EPS of $0.52, total revenue of $1.7 billion, and pre-tax pre-provision income of $727 million, with an efficiency ratio of 57.6% and net charge-offs of 0.42% of average loans. Total assets were $154 billion as of June 30, 2024.

The presentation emphasizes that net interest income has troughed and is expected to grow in the second half of 2024. For 2024, the company expects net interest income of $4.7 to $4.8 billionb, operating at the upper end of that range, and a net interest margin in the low 3.50% range. Adjusted non-interest expense is guided to $4.15 to $4.2 billion, adjusted non-interest income to $2.3 to $2.4 billion, and full-year net charge-offs to 40 to 50 basis points, toward the upper end.

Management also notes a securities repositioning, with $50 millionc pre-tax losses in each of the first and second quarters and a further $910 million sale planned in the third quarter. The presentation highlights credit and capital positioning, including a rise in nonperforming loans to $847 million (0.87% of loans) in the second quarter and office CRE exposure with a 15.1% nonperforming loan ratio.

Common Equity Tier 1 was 10.4% and adjusted CET1 including AOCI was 8.2%. The company declared a quarterly common dividend of $0.25d per share, a 4% increase over the prior quarter.

02—Key points

Key Highlights

  1. Second-quarter 2024 net income available to common shareholders was $477 million, with diluted EPS of $0.52 and pre-tax pre-provision income of $727 million (adjusted $749 million).
  2. Management expects net interest income to grow in 2H24, with 3Q24 NII flat to up 2% versus 2Q24 and full-year 2024 NII at the upper end of $4.7-$4.8 billion.
  3. Full-year 2024 guidance includes adjusted non-interest expense of $4.15-$4.2 billion and adjusted non-interest income of $2.3-$2.4 billion, expected at the upper end.
  4. Net charge-offs were 0.42% of average loans in 2Q24, and full-year 2024 NCOs are expected toward the upper end of 40-50 basis points, driven by a few large credits.
  5. Nonperforming loans rose to $847 million (0.87% of loans) in 2Q24 from $906 million in 1Q24 on a slowing pace of downgrades and increased paydowns and loan sales, while the office CRE portfolio carried a 15.1% NPL ratio.
  6. Common Equity Tier 1 ratio was 10.4% and adjusted CET1 including AOCI was 8.2% at quarter-end; the board declared a $0.25 quarterly common dividend, up 4%.
  7. Securities repositioning sold $980 million of government/agency securities in 2Q24 at a $50 million pre-tax loss, with a further $910 million sold in 3Q24 at a similar loss.

03—Questions

Frequently Asked Questions

  1. What is the purpose of this 8-K filing?

    The filing furnishes Exhibit 99.1, the investor presentation materials that Regions executives will use at institutional investor meetings during August and September 2024. Under Item 7.01, the information is furnished rather than deemed filed for purposes of Section 18 of the Exchange Act.

  2. How did Regions perform in the second quarter of 2024?

    The presentation reports net income available to common shareholders of $477 million, diluted EPS of $0.52, total revenue of $1.7 billion, non-interest expense of $1.0 billion, and an efficiency ratio of 57.6%.

  3. What is the outlook for net interest income and margin?

    Management expects NII to grow in 2H24, with 2024 NII at the upper end of $4.7-$4.8 billion and a 2024 net interest margin in the low 3.50% range. Higher cash levels could reduce NIM modestly in the near term.

  4. How is credit quality trending?

    Net charge-offs were 0.42% of average loans in 2Q24, down from 0.50% in 1Q24. Nonperforming loans fell to $847 million from $906 million in 1Q24, though the allowance for credit losses was flat at $1.73 billion and the office portfolio's NPL ratio was 15.1%.

  5. What capital and dividend actions were disclosed?

    The company reported a CET1 ratio of 10.4% and an adjusted CET1 ratio including AOCI of 8.2%, declared 2Q common dividends of $220 million, and executed $87 million in share repurchases. The board declared a quarterly common dividend of $0.25 per share, a 4% increase over the prior quarter.

04—Continue

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