Regions Financial (RF) Q3 2024 earnings summary

Executive summary

• Net income available to common shareholders was $446 million ($0.49 per diluted share) for Q3 2024, with results impacted by $0.08 per share in one-time items related to securities repositioning and preferred stock redemption costs.

• Total revenue was $1.8 billion reported and $1.9 billion adjusted, up 3–5% sequentially but down 4% year-over-year; non-interest expense was $1.1 billion.

• Strategic execution drove solid core performance, with record wealth management revenue and margin expansion despite a challenging lending and interest rate environment.

• Consistent top-quartile returns, disciplined capital allocation, and robust liquidity highlighted.

• Proactive hedging and a diversified balance sheet position the company for various economic scenarios.

Financial highlights

• Net interest income was $1.2–$1.22 billion, up 2.7–3% sequentially but down 5–5.7% year-over-year; net interest margin increased to 3.54%.

• Non-interest income rose 5% sequentially (9% adjusted), with growth in service charges, wealth management, and capital markets; included $75–$78 million in securities losses.

• Non-interest expense increased 6% sequentially (4% adjusted), mainly from higher salaries, incentive compensation, and Visa litigation escrow expense.

• Provision for credit losses was $113 million, with net charge-offs at $117 million (0.48% of average loans), up 6 bps sequentially, driven by a few large credits.

• Efficiency ratio was 59.3% reported and 56.9% adjusted; effective tax rate was 19.4%.

Outlook and guidance

• 2024 net interest income expected to be approximately $4.8 billion, with Q4 NII to grow modestly; adjusted non-interest income forecasted at $2.45–$2.5 billion and adjusted non-interest expense around $4.25 billion.

• Average loans and deposits for 2024 expected to be stable to down modestly; net charge-offs projected at the upper end of 40–50 basis points.

• CET1 capital ratio expected to be managed consistent with current levels; 2024 NIM expected in the low 3.50% range.

• Margin expected in the lower 3.50% range in Q4, with a path to 3.60% in 2025; positive operating leverage targeted for 2025.

• Modest loan growth expected in 2025 as economic and political uncertainty abates.