01—Abstract
Summary
Summary of the 8-K filed October 18, 2024. Cited figures are marked; the original filing is the authoritative source.
Regions Financial Corporation reported third quarter 2024 net income available to common shareholders of $446 milliona and diluted earnings per share of $0.49, according to the press release furnished as Exhibit 99.1 to this Form 8-K.
Total revenue was $1.8 billionb on a reported basis, with pre-tax pre-provision income of $721 million reported and $799 million adjusted. Results were affected by securities repositioning losses of $78 million and costs tied to the redemption of the Series B Preferred Stock, which together reduced diluted EPS by $0.08. Net interest income rose 2.7% from the second quarter to $1.218 billion, and net interest margin increased 3 basis points to 3.54 percent.
Total deposits were $126.4 billionc at quarter end, and the company reported a Common Equity Tier 1 ratio estimated at 10.6 percent. Tangible common book value per share reached $12.26, up from $10.61 in the prior quarter. Credit metrics were mixed.
Net charge-offs were $117 milliond, or 48 basis points of average loans, up from the prior quarter, and the filing states that net charge-offs are expected to remain toward the upper end of the company's 40 to 50 basis point range. Management says these expected losses are substantially reserved for within the allowance for credit losses, which stood at $1.728 billion at quarter end. Non-performing loans declined to 85 basis points of total loans.
The filing also includes a visual presentation with 2024 expectations, including net interest income of approximately $4.8 billion, adjusted non-interest income of $2.45 to $2.5 billion, and adjusted non-interest expense of approximately $4.25 billion. The filing's exhibits are furnished, not filed, under Section 18 of the Exchange Act.
02—Key points
Key Highlights
- Third quarter net income available to common shareholders was $446 million, with diluted EPS of $0.49, versus $0.52 in the second quarter of 2024.
- Total revenue was $1.79 billion reported and $1.87 billion adjusted, up 3.4% and 4.9% from the second quarter, respectively.
- Net interest margin rose 3 basis points to 3.54 percent, and net interest income increased 2.7% from the prior quarter to $1.218 billion.
- Securities repositioning losses of $78 million, plus $15 million of Series B preferred issuance costs, reduced diluted EPS by $0.08.
- Tangible common book value per share rose to $12.26 from $10.61 in the second quarter, and the Common Equity Tier 1 ratio was estimated at 10.6 percent.
- Net charge-offs were $117 million, or 48 basis points of average loans, and management expects them toward the upper end of the 40 to 50 basis point range.
- Total liquidity was approximately $62 billion as of September 30, 2024, and the filing states it covers uninsured deposits at a ratio of approximately 180 percent.
03—Questions
Frequently Asked Questions
How did Regions perform in the third quarter of 2024?
Regions reported net income available to common shareholders of $446 million and diluted EPS of $0.49. Reported pre-tax pre-provision income was $721 million, and adjusted pre-tax pre-provision income was $799 million.
What items affected third quarter results?
The company cited additional strategic securities repositioning, which produced $78 million of securities losses, and issuance costs of $15 million tied to redeeming its Series B Preferred Stock. Together these reduced diluted EPS by $0.08. A $14 million expense for Visa class B litigation escrow funding was also recorded.
How did asset quality trend?
Net charge-offs rose to $117 million, or 48 basis points of average loans, from 42 basis points in the second quarter. Non-performing loans declined to 0.85 percent of total loans, and the allowance for credit losses was $1.728 billion, or 1.79 percent of loans.
What guidance did management provide for 2024?
The visual presentation expects 2024 net interest income of approximately $4.8 billion, adjusted non-interest income of $2.45 to $2.5 billion, and adjusted non-interest expense of approximately $4.25 billion. It also expects net charge-offs toward the upper end of the 40 to 50 basis point range.
How did the company manage its capital and preferred stock?
Regions issued $500 million of Series F non-cumulative perpetual preferred stock on July 29, 2024, and used the proceeds to redeem its $500 million Series B preferred stock on September 16, 2024. It repurchased about 4 million common shares for $101 million and declared $229 million in common dividends during the quarter.
04—Continue