We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Regions Financial (RF) Q2 Earnings Top, Provisions Rise
Read MoreHide Full Article
Regions Financial Corporation’s (RF - Free Report) second-quarter 2024 adjusted earnings per share of 52 cents beat the Zacks Consensus Estimate of 49 cents. This compares unfavorably with earnings of 59 cents reported in the year-ago quarter.
Shares of the company dropped 1.5% in the pre-market trading. However, a full day’s trading session will depict a clearer picture.
The results were adversely affected by a decline in net interest income (NII) and non-interest income and a rise in provisions. Nonetheless, a decline in non-interest expenses offers some support. Also, RF’s strong capital position indicates its availability of adequate capital to use to deal with any unexpected losses.
Net income available to common shareholders was $477 million, down 14.2% year over year.
Revenues and Expenses Decline
Total quarterly revenues were $1.73 billion, missing the Zacks Consensus Estimate of $1.76. However, the top line fell 11.5% from the year-ago quarter's figure.
Quarterly NII was $1.2 billion, down 14% year over year. Also, the net interest margin declined 53 basis points to 3.51%.
Non-interest income decreased 5.4% year over year to $545 million. The downside was caused by lower capital markets income and mortgage income.
Non-interest expenses fell 9.6% year over year to $1 billion. The decline was due to a reduction in salaries and employee benefits and operational losses. Occupancy expenses also declined as the company continued to focus on reducing occupied square footage.
The efficiency ratio was 57.6% in the second quarter compared with 56.4% registered in the prior-year quarter. A rise in this ratio indicates lower profitability.
Loan Balances Decrease, Deposits Increases
As of Jun 30, 2024, total loans dropped 1.3% on a sequential basis to $97.28 billion. Nonetheless, total deposits were $126.9 billion, which increased nearly 1.1% from the previous quarter's level.
Credit Quality Deteriorates
Non-performing assets (excluding 90+ past due), as a percentage of loans, foreclosed properties and non-performing loans held for sale, increased to 0.88% from the prior-year quarter’s 0.51%. Non-performing loans, excluding loans held for sale as a percentage of net loans, were 0.87%, up from 0.50% reported in the prior-year quarter. A provision for credit losses of $102 million was recorded in the quarter, up 13.6% from the year-ago quarter’s tally.
Adjusted net charge-offs, as a percentage of average loans, were 0.42% compared with 0.33% in the prior-year period.
Capital Ratios Improve
As of Jun 30, 2024, the Common Equity Tier 1 ratio and the Tier 1 capital ratio were 10.4% and 11.7%, respectively, compared with 10.1% and 11.4% recorded in the year-earlier quarter.
Share Repurchase Update
In the reported quarter, Regions Financial repurchased nearly 4.5 million shares for a total value of $87 million.
Dividend Hike
Concurrently, Regions Financial announced a quarterly cash dividend of 25 cents per share, marking an increase of 4% from the prior payout. The dividend will be paid out on Oct 1 to shareholders on record as of Sep 3, 2024.
Our Viewpoint
RF’s attractive core business and revenue-diversification strategies will likely yield stellar earnings in the upcoming period. Its robust capital planning process is intended to ensure the efficient use of capital to support lending activities, business growth opportunities and offer suitable shareholder returns. However, a lack of diversification in the loan portfolio and elevated expenses are major concerns.
Regions Financial Corporation Price, Consensus and EPS Surprise
WaFd, Inc.’s (WAFD - Free Report) third-quarter fiscal 2024 (ended Jun 30) adjusted earnings of 76 cents per share surpassed the Zacks Consensus Estimate of 59 cents. Also, the bottom line rose 4.1% sequentially.
WAFD’s results reflected a rise in NII and other income, which boosted the top line. Also, higher loan balances and lower provisions were other positives. However, a rise in expenses and a slight decline in the deposit balance acted as spoilsports.
Hancock Whitney Corp.’s (HWC - Free Report) second-quarter 2024 earnings per share of $1.31 beat the Zacks Consensus Estimate of $1.19. However, the bottom line compared unfavorably with $1.35 per share registered in the year-ago quarter.
HWC’s results were aided by an increase in non-interest income. However, a decline in NII and higher expenses and provisions were the undermining factors.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Regions Financial (RF) Q2 Earnings Top, Provisions Rise
Regions Financial Corporation’s (RF - Free Report) second-quarter 2024 adjusted earnings per share of 52 cents beat the Zacks Consensus Estimate of 49 cents. This compares unfavorably with earnings of 59 cents reported in the year-ago quarter.
Shares of the company dropped 1.5% in the pre-market trading. However, a full day’s trading session will depict a clearer picture.
The results were adversely affected by a decline in net interest income (NII) and non-interest income and a rise in provisions. Nonetheless, a decline in non-interest expenses offers some support. Also, RF’s strong capital position indicates its availability of adequate capital to use to deal with any unexpected losses.
Net income available to common shareholders was $477 million, down 14.2% year over year.
Revenues and Expenses Decline
Total quarterly revenues were $1.73 billion, missing the Zacks Consensus Estimate of $1.76. However, the top line fell 11.5% from the year-ago quarter's figure.
Quarterly NII was $1.2 billion, down 14% year over year. Also, the net interest margin declined 53 basis points to 3.51%.
Non-interest income decreased 5.4% year over year to $545 million. The downside was caused by lower capital markets income and mortgage income.
Non-interest expenses fell 9.6% year over year to $1 billion. The decline was due to a reduction in salaries and employee benefits and operational losses. Occupancy expenses also declined as the company continued to focus on reducing occupied square footage.
The efficiency ratio was 57.6% in the second quarter compared with 56.4% registered in the prior-year quarter. A rise in this ratio indicates lower profitability.
Loan Balances Decrease, Deposits Increases
As of Jun 30, 2024, total loans dropped 1.3% on a sequential basis to $97.28 billion. Nonetheless, total deposits were $126.9 billion, which increased nearly 1.1% from the previous quarter's level.
Credit Quality Deteriorates
Non-performing assets (excluding 90+ past due), as a percentage of loans, foreclosed properties and non-performing loans held for sale, increased to 0.88% from the prior-year quarter’s 0.51%. Non-performing loans, excluding loans held for sale as a percentage of net loans, were 0.87%, up from 0.50% reported in the prior-year quarter. A provision for credit losses of $102 million was recorded in the quarter, up 13.6% from the year-ago quarter’s tally.
Adjusted net charge-offs, as a percentage of average loans, were 0.42% compared with 0.33% in the prior-year period.
Capital Ratios Improve
As of Jun 30, 2024, the Common Equity Tier 1 ratio and the Tier 1 capital ratio were 10.4% and 11.7%, respectively, compared with 10.1% and 11.4% recorded in the year-earlier quarter.
Share Repurchase Update
In the reported quarter, Regions Financial repurchased nearly 4.5 million shares for a total value of $87 million.
Dividend Hike
Concurrently, Regions Financial announced a quarterly cash dividend of 25 cents per share, marking an increase of 4% from the prior payout. The dividend will be paid out on Oct 1 to shareholders on record as of Sep 3, 2024.
Our Viewpoint
RF’s attractive core business and revenue-diversification strategies will likely yield stellar earnings in the upcoming period. Its robust capital planning process is intended to ensure the efficient use of capital to support lending activities, business growth opportunities and offer suitable shareholder returns. However, a lack of diversification in the loan portfolio and elevated expenses are major concerns.
Regions Financial Corporation Price, Consensus and EPS Surprise
Regions Financial Corporation price-consensus-eps-surprise-chart | Regions Financial Corporation Quote
Currently, Regions Financial carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Banks
WaFd, Inc.’s (WAFD - Free Report) third-quarter fiscal 2024 (ended Jun 30) adjusted earnings of 76 cents per share surpassed the Zacks Consensus Estimate of 59 cents. Also, the bottom line rose 4.1% sequentially.
WAFD’s results reflected a rise in NII and other income, which boosted the top line. Also, higher loan balances and lower provisions were other positives. However, a rise in expenses and a slight decline in the deposit balance acted as spoilsports.
Hancock Whitney Corp.’s (HWC - Free Report) second-quarter 2024 earnings per share of $1.31 beat the Zacks Consensus Estimate of $1.19. However, the bottom line compared unfavorably with $1.35 per share registered in the year-ago quarter.
HWC’s results were aided by an increase in non-interest income. However, a decline in NII and higher expenses and provisions were the undermining factors.