Net income: $446 million in the third quarter.
Earnings per share (EPS): $0.49 in the third quarter.
Total revenue growth: increased sequentially on both a reported and adjusted basis.
Net interest income: increased 3% in the consolidated quarter.
Adjusted non-interest income: +9% driven by service fees, capital markets and asset management.
Adjusted noninterest expense: increased 4% compared to the prior quarter.
Average loan amount: Maintained a stable level compared to the previous quarter.
Loan terminations: Slightly lower quarter-over-quarter.
Average deposit amount: Decreased slightly, but final deposit amount remained stable.
Net charge-offs: $113 million, with a net charge-off ratio of 48 basis points.
Common Equity Tier 1 Ratio: Estimated 10.6% for the quarter.
Stock Repurchases: $101 million was repurchased during the quarter.
Common Dividends: $229 million paid during the quarter.
Release date: October 18, 2024
For a complete record of financial statements, see Complete Record of Financial Statements.
good points
Regions Financial Corp. (NYSE:RF) reported strong third-quarter earnings of $446 million and earnings per share of $0.49.
Total revenue increased on both a reported and adjusted basis due to improvements in net interest income and fee income.
Net interest income increased 3% sequentially, exceeding expectations due to stable deposit trends and asset yield expansion.
Adjusted non-interest income increased by 9%, with strong growth in service fees, capital markets and wealth management.
The company maintains a strong capital base with an estimated common stock Tier 1 ratio of 10.6%, allowing it to buy back its own shares and pay dividends.
Minus points
Although average loan amounts remained stable, closed loan amounts decreased slightly sequentially due to modest customer demand and repayments.
Average deposits decreased slightly, reflecting normal summer spending and competitive interest rate pressures.
Although overall credit metrics have stabilized, certain portfolios within corporate banks remain under stress.
Adjusted noninterest expense increased 4% compared to the prior quarter due to higher salaries and benefits.
Net charge-offs increased to 48 basis points, with full-year 2024 net charge-offs expected to be at the high end of a range of 40 to 50 basis points.
Q&A highlights
Q: Can you provide insight into NII’s momentum and margin expectations in the coming quarters? A: CFO David Turner said margins are expected to hold and NII is expected to increase slightly. I am. Fourth-quarter margins are expected to be in the low 3.50% range, with growth expected in 2025 due to asset growth, controlled deposit costs, and favorable derivatives reset.
Q: What is the outlook for loan growth? And what are the factors that could drive increased demand? A: CEO John Turner said customers should be cautious. However, he is optimistic that demand for financing is currently stable and that the mid-market commercial and energy portfolios are experiencing some growth. Loan growth is expected to increase even more significantly in 2025 as economic and political uncertainties resolve.
Q: How confident are you in managing expenses and to what extent do you expect positive operating leverage? A: CFO David Turner has emphasized a focus on managing payroll and benefits. Demonstrated confidence in expense management. We are committed to generating positive operating leverage in 2025 by carefully managing expenses and reinvesting in growth opportunities.
Q: What is the outlook for credit performance and charge-offs? A: CEO John Turner expects charge-offs to remain in the 40-50 basis point range, consistent with historical performance. He said it is expected. The company expects credit performance to remain stable, with strong consumer credit performance.
Q: How do you plan to manage deposit pricing given the potential for rate cuts? A: David Turner, CFO It said deposit costs are expected to fall. The company is well positioned to manage deposit costs and continue to grow net interest income.
For a complete record of financial statements, see Complete Record of Financial Statements.
This article first appeared on GuruFocus.
