Strong Foundation. Positive Results. Regions reports first quarter 2022 earnings of $524 million, earnings per diluted share of $0.55
BIRMINGHAM, Ala.–(BUSINESS WIRE)–Regions Financial Corp. (NYSE:RF) today announced earnings for the first quarter ended March 31, 2022. The company reported first quarter net income available to common shareholders of $524 million and earnings per diluted share of $0.55. Total revenue of $1.6 billion and pre-tax pre-provision income(1) of $666 million reflected a 5 percent increase in net interest income compared to the first quarter of 2021 attributable to higher interest rates as well as loan and deposit growth.
“Our solid first-quarter results are a reflection of Regions’ sound business strategy. Factors positioning us for further growth include our passion for delivering a first-class banking experience, an innovative mindset in digital banking and other services, our enhanced specialty capabilities, and exceptional teams that are building and deepening customer relationships in many of the fastest-growing markets in the country,” said John Turner, President and CEO of Regions Financial Corp. “We are proud that our results reflect Regions’ strong credit profile, our commitment to prudently managing expenses, and our growth in loan commitments, balances, and pipelines, as well as deposit accounts and balances. We will continue to differentiate Regions through a seamless customer experience, an always-on focus toward evolving and enhancing our services, and exceptional banking teams that are empowered through competitive tools and resources to expand our customer base and build even greater client loyalty.”
Regions’ Strategic Plan in Action:
With results including a year-to-year increase in net interest income, well-controlled expenses, solid credit metrics, and more, Regions is delivering quality fundamentals supported by key advantages. Those advantages include:
-
Strong in-market migration converting legacy “core” markets into growth markets:
- Nineteen of Regions’ top 25 MSAs are projected to grow faster than the U.S. national average.
- Twenty of the top 25 U.S. markets with net migration inflows are within Regions’ footprint, which includes vibrant markets across the Southeast, Texas, and portions of the Midwest.
- Regions’ deposit-weighted population growth by MSA for 2022-2027 is projected at 3.6% vs. the national average of 3.2%.
- Consistently onboarding talented and highly experienced, revenue-generating personnel in growth markets, further introducing the Regions brand to more businesses and consumers
-
Digital and data supporting a better banking experience:
- 5.5% increase in overall digital users in 1Q22 compared to 1Q21
- 9.5% increase specifically in mobile users in 1Q22 compared to 1Q21
- 4.6% increase in digital transactions as a percentage of total consumer customer transactions in 1Q22 compared to 1Q21
- Expansion of Regions’ Relationship Platform: Regions Bridge provides a single client relationship view to better serve customers across Wealth Management and Mortgage.
- New Fulfillment & Servicing Platforms for Real Estate Loans: Part of Regions’ path to a more omnichannel experience
- Centralization of Data/Modernization: Leveraging modern Big Data Platforms to accelerate data-driven decision-making processes
|
SUMMARY OF FIRST QUARTER 2022 RESULTS: |
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|
|
|
Quarter Ended |
||||||||||
|
(amounts in millions, except per share data) |
|
3/31/2022 |
|
12/31/2021 |
|
3/31/2021 |
||||||
|
Net income |
|
$ |
548 |
|
|
$ |
438 |
|
|
$ |
642 |
|
|
Preferred dividends and other |
|
|
24 |
|
|
|
24 |
|
|
|
28 |
|
|
Net income available to common shareholders |
|
$ |
524 |
|
|
$ |
414 |
|
|
$ |
614 |
|
|
|
|
|
|
|
|
|
||||||
|
Weighted-average diluted shares outstanding |
|
|
947 |
|
|
|
958 |
|
|
|
968 |
|
|
Actual shares outstanding—end of period |
|
|
933 |
|
|
|
942 |
|
|
|
961 |
|
|
|
|
|
|
|
|
|
||||||
|
Diluted earnings per common share |
|
$ |
0.55 |
|
|
$ |
0.43 |
|
|
$ |
0.63 |
|
|
|
|
|
|
|
|
|
||||||
|
Selected items impacting earnings: |
|
|
|
|
|
|
||||||
|
Pre-tax adjusted items(1): |
|
|
|
|
|
|
||||||
|
Adjustments to non-interest expense(1) |
|
$ |
(1 |
) |
|
$ |
(16 |
) |
|
$ |
(10 |
) |
|
Adjustments to non-interest income(1) |
|
|
1 |
|
|
|
— |
|
|
|
4 |
|
|
Total pre-tax adjusted items(1) |
|
$ |
— |
|
|
$ |
(16 |
) |
|
$ |
(6 |
) |
|
|
|
|
|
|
|
|
||||||
|
Diluted EPS impact* |
|
$ |
— |
|
|
$ |
(0.01 |
) |
|
$ |
— |
|
|
|
|
|
|
|
|
|
||||||
|
Pre-tax additional selected items**: |
|
|
|
|
|
|
||||||
|
CECL provision (in excess of) less than net charge-offs*** |
|
$ |
82 |
|
|
$ |
(66 |
) |
|
$ |
225 |
|
|
Capital markets income – CVA/DVA |
|
|
6 |
|
|
|
— |
|
|
|
11 |
|
|
MSR net hedge performance |
|
|
(5 |
) |
|
|
(5 |
) |
|
|
7 |
|
|
PPP loan interest income**** |
|
|
12 |
|
|
|
39 |
|
|
|
40 |
|
|
Pension settlement charges |
|
|
— |
|
|
|
(3 |
) |
|
|
— |
|
|
Ginnie Mae re-securitization gains |
|
|
12 |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
||||||
|
* Based on income taxes at an approximate 25% incremental rate. |
||||||||||||
|
** Items impacting results or trends during the period, but are not considered non-GAAP adjustments. These items generally include market-related measures, impacts of new accounting guidance, or event driven actions. |
||||||||||||
|
*** Fourth quarter 2021 amount includes $145 million for the initial allowance for non-purchased credit deteriorated acquired EnerBank loans. |
||||||||||||
|
**** Interest income for the Small Business Administration’s Paycheck Protection Program (PPP) loans includes estimated funding costs. |
||||||||||||
Non-GAAP adjusted items(1) impacting the company’s earnings are identified to assist investors in analyzing Regions’ operating results on the same basis as that applied by management and provide a basis to predict future performance. Non-GAAP adjusted items(1) in the current quarter had minimal impact.
|
Total revenue |
||||||||||||||||||||||||||
|
|
|
Quarter Ended |
||||||||||||||||||||||||
|
($ amounts in millions) |
|
3/31/2022 |
|
12/31/2021 |
|
3/31/2021 |
|
1Q22 vs. 4Q21 |
|
1Q22 vs. 1Q21 |
||||||||||||||||
|
Net interest income |
|
$ |
1,015 |
|
|
$ |
1,019 |
|
|
$ |
967 |
|
|
$ |
(4 |
) |
|
(0.4 |
)% |
|
$ |
48 |
|
|
5.0 |
% |
|
Taxable equivalent adjustment |
|
|
11 |
|
|
|
10 |
|
|
|
11 |
|
|
|
1 |
|
|
10.0 |
% |
|
|
— |
|
|
NM |
|
|
Net interest income, taxable equivalent basis |
|
$ |
1,026 |
|
|
$ |
1,029 |
|
|
$ |
978 |
|
|
$ |
(3 |
) |
|
(0.3 |
)% |
|
$ |
48 |
|
|
4.9 |
% |
|
Net interest margin (FTE) |
|
|
2.85 |
% |
|
|
2.83 |
% |
|
|
3.02 |
% |
|
|
|
|
|
|
|
|
||||||
|
Adjusted net interest margin (FTE) (non-GAAP)(1) |
|
|
3.43 |
% |
|
|
3.34 |
% |
|
|
3.40 |
% |
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Non-interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Service charges on deposit accounts |
|
$ |
168 |
|
|
$ |
166 |
|
|
$ |
157 |
|
|
|
2 |
|
|
1.2 |
% |
|
|
11 |
|
|
7.0 |
% |
|
Card and ATM fees |
|
|
124 |
|
|
|
127 |
|
|
|
115 |
|
|
|
(3 |
) |
|
(2.4 |
)% |
|
|
9 |
|
|
7.8 |
% |
|
Wealth management income |
|
|
101 |
|
|
|
100 |
|
|
|
91 |
|
|
|
1 |
|
|
1.0 |
% |
|
|
10 |
|
|
11.0 |
% |
|
Capital markets income |
|
|
73 |
|
|
|
83 |
|
|
|
100 |
|
|
|
(10 |
) |
|
(12.0 |
)% |
|
|
(27 |
) |
|
(27.0 |
)% |
|
Mortgage income |
|
|
48 |
|
|
|
49 |
|
|
|
90 |
|
|
|
(1 |
) |
|
(2.0 |
)% |
|
|
(42 |
) |
|
(46.7 |
)% |
|
Commercial credit fee income |
|
|
22 |
|
|
|
23 |
|
|
|
22 |
|
|
|
(1 |
) |
|
(4.3 |
)% |
|
|
— |
|
|
— |
% |
|
Bank-owned life insurance |
|
|
14 |
|
|
|
14 |
|
|
|
17 |
|
|
|
— |
|
|
— |
% |
|
|
(3 |
) |
|
(17.6 |
)% |
|
Securities gains (losses), net |
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
— |
% |
|
|
(1 |
) |
|
(100.0 |
)% |
|
Market value adjustments on employee benefit assets* |
|
|
(14 |
) |
|
|
— |
|
|
|
7 |
|
|
|
(14 |
) |
|
NM |
|
|
|
(21 |
) |
|
(300.0 |
)% |
|
Gains on equity investment |
|
|
— |
|
|
|
— |
|
|
|
3 |
|
|
|
— |
|
|
— |
|
|
|
(3 |
) |
|
(100.0 |
)% |
|
Other |
|
|
48 |
|
|
|
53 |
|
|
|
38 |
|
|
|
(5 |
) |
|
(9.4 |
)% |
|
|
10 |
|
|
26.3 |
% |
|
Non-interest income |
|
$ |
584 |
|
|
$ |
615 |
|
|
$ |
641 |
|
|
$ |
(31 |
) |
|
(5.0 |
)% |
|
$ |
(57 |
) |
|
(8.9 |
)% |
|
Total revenue |
|
$ |
1,599 |
|
|
$ |
1,634 |
|
|
$ |
1,608 |
|
|
$ |
(35 |
) |
|
(2.1 |
)% |
|
$ |
(9 |
) |
|
(0.6 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Adjusted total revenue (non-GAAP)(1) |
|
$ |
1,598 |
|
|
$ |
1,634 |
|
|
$ |
1,604 |
|
|
$ |
(36 |
) |
|
(2.2 |
)% |
|
$ |
(6 |
) |
|
(0.4 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
NM – Not Meaningful |
||||||||||||||||||||||||||
|
* These market value adjustments relate to assets held for employee benefits that are offset within salaries and employee benefits expense. |
||||||||||||||||||||||||||
Total revenue of approximately $1.6 billion decreased 2 percent on both a reported and an adjusted basis(1) compared to the fourth quarter of 2021. Net interest income was relatively stable compared to the fourth quarter and benefited from average loan growth and rising interest rates but was offset by a lower contribution from the Paycheck Protection Program (PPP) forgiveness income and two fewer days. Deposit growth trends continued during the quarter, and average cash balances increased to new record levels, negatively impacting the reported net interest margin, which increased 2 basis points to 2.85 percent. Excluding the impact of PPP interest income and excess cash balances held at the Federal Reserve, the company’s adjusted net interest margin(1) increased 9 basis points to 3.43 percent.
Non-interest income decreased 5 percent on both a reported and an adjusted basis(1) compared to the fourth quarter of 2021. Service charges, mortgage income, and wealth management income remained relatively stable. Mortgage income includes approximately $12 million in gains associated with previously repurchased Ginnie Mae loans sold during the first quarter. Capital markets income decreased 12 percent as merger and acquisition advisory fees were muted by seasonality as well as timing of transactions. Additionally, debt and real estate capital markets were impacted by interest rate uncertainty, geopolitical tensions and volatility in credit spreads. Card & ATM fees decreased 2 percent due to seasonally lower spend and fewer days in the quarter. Other non-interest income declined 9 percent primarily due to an increase in the value of equity investments in the prior quarter that did not repeat. Additionally, market value adjustments on employment benefit assets that are offset in salaries and benefits decreased during the quarter.
|
Non-interest expense |
|||||||||||||||||||||||
|
|
|
Quarter Ended |
|||||||||||||||||||||
|
($ amounts in millions) |
|
3/31/2022 |
|
12/31/2021 |
|
3/31/2021 |
|
1Q22 vs. 4Q21 |
|
1Q22 vs. 1Q21 |
|||||||||||||
|
Salaries and employee benefits |
|
$ |
546 |
|
$ |
575 |
|
$ |
546 |
|
$ |
(29 |
) |
|
(5.0 |
)% |
|
$ |
— |
|
|
— |
% |
|
Equipment and software expense |
|
|
95 |
|
|
96 |
|
|
90 |
|
|
(1 |
) |
|
(1.0 |
)% |
|
|
5 |
|
|
5.6 |
% |
|
Net occupancy expense |
|
|
75 |
|
|
76 |
|
|
77 |
|
|
(1 |
) |
|
(1.3 |
)% |
|
|
(2 |
) |
|
(2.6 |
)% |
|
Outside services |
|
|
38 |
|
|
41 |
|
|
38 |
|
|
(3 |
) |
|
(7.3 |
)% |
|
|
— |
|
|
— |
% |
|
Professional, legal and regulatory expenses |
|
|
17 |
|
|
33 |
|
|
29 |
|
|
(16 |
) |
|
(48.5 |
)% |
|
|
(12 |
) |
|
(41.4 |
)% |
|
Marketing |
|
|
24 |
|
|
32 |
|
|
22 |
|
|
(8 |
) |
|
(25.0 |
)% |
|
|
2 |
|
|
9.1 |
% |
|
FDIC insurance assessments |
|
|
14 |
|
|
13 |
|
|
10 |
|
|
1 |
|
|
7.7 |
% |
|
|
4 |
|
|
40.0 |
% |
|
Credit/checkcard expenses |
|
|
26 |
|
|
15 |
|
|
14 |
|
|
11 |
|
|
73.3 |
% |
|
|
12 |
|
|
85.7 |
% |
|
Branch consolidation, property and equipment charges |
|
|
1 |
|
|
— |
|
|
5 |
|
|
1 |
|
|
NM |
|
|
|
(4 |
) |
|
(80.0 |
)% |
|
Visa class B shares expense |
|
|
5 |
|
|
8 |
|
|
4 |
|
|
(3 |
) |
|
(37.5 |
)% |
|
|
1 |
|
|
25.0 |
% |
|
Other |
|
|
92 |
|
|
94 |
|
|
93 |
|
|
(2 |
) |
|
(2.1 |
)% |
|
|
(1 |
) |
|
(1.1 |
)% |
|
Total non-interest expense |
|
$ |
933 |
|
$ |
983 |
|
$ |
928 |
|
$ |
(50 |
) |
|
(5.1 |
)% |
|
$ |
5 |
|
|
0.5 |
% |
|
Total adjusted non-interest expense(1) |
|
$ |
932 |
|
$ |
967 |
|
$ |
918 |
|
$ |
(35 |
) |
|
(3.6 |
)% |
|
$ |
14 |
|
|
1.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
NM – Not Meaningful |
|||||||||||||||||||||||
Non-interest expense decreased 5 percent on a reported basis and 4 percent on an adjusted basis(1) compared to the fourth quarter of 2021. Salaries and benefits decreased 5 percent driven primarily by lower incentive compensation, which was offset by a seasonal increase in payroll taxes and 401(k) expenses. Professional and legal fees decreased $16 million due primarily to elevated expenses associated with the company’s fourth quarter acquisitions. Marketing expenses decreased 25 percent attributable primarily to the timing of marketing campaigns. Partially offsetting these reductions, credit and checkcard expenses increased $11 million during the quarter.
The company’s first quarter efficiency ratio was 57.9 percent on both a reported and adjusted basis(1). The effective tax rate was approximately 22 percent.
|
Loans and Leases |
|||||||||||||||||||||||
|
|
|
Average Balances |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
($ amounts in millions) |
|
1Q22 |
|
4Q21 |
|
1Q21 |
|
1Q22 vs. 4Q21 |
|
1Q22 vs. 1Q21 |
|||||||||||||
|
Commercial and industrial |
|
$ |
43,993 |
|
$ |
42,254 |
|
$ |
42,816 |
|
$ |
1,739 |
|
|
4.1 |
% |
|
$ |
1,177 |
|
|
2.7 |
% |
|
Commercial real estate—owner-occupied |
|
|
5,506 |
|
|
5,649 |
|
|
5,678 |
|
|
(143 |
) |
|
(2.5 |
) % |
|
|
(172 |
) |
|
(3.0 |
)% |
|
Investor real estate |
|
|
7,082 |
|
|
7,185 |
|
|
7,222 |
|
|
(103 |
) |
|
(1.4 |
) % |
|
|
(140 |
) |
|
(1.9 |
)% |
|
Business Lending |
|
|
56,581 |
|
|
55,088 |
|
|
55,716 |
|
|
1,493 |
|
|
2.7 |
% |
|
|
865 |
|
|
1.6 |
% |
|
Residential first mortgage |
|
|
17,496 |
|
|
17,413 |
|
|
16,606 |
|
|
83 |
|
|
0.5 |
% |
|
|
890 |
|
|
5.4 |
% |
|
Home equity |
|
|
6,163 |
|
|
6,334 |
|
|
7,085 |
|
|
(171 |
) |
|
(2.7 |
) % |
|
|
(922 |
) |
|
(13.0 |
)% |
|
Consumer credit card |
|
|
1,142 |
|
|
1,155 |
|
|
1,151 |
|
|
(13 |
) |
|
(1.1 |
) % |
|
|
(9 |
) |
|
(0.8 |
)% |
|
Other consumer—exit portfolios |
|
|
987 |
|
|
1,160 |
|
|
1,884 |
|
|
(173 |
) |
|
(14.9 |
) % |
|
|
(897 |
) |
|
(47.6 |
)% |
|
Other consumer |
|
|
5,445 |
|
|
5,398 |
|
|
2,313 |
|
|
47 |
|
|
0.9 |
% |
|
|
3,132 |
|
|
135.4 |
% |
|
Consumer Lending |
|
|
31,233 |
|
|
31,460 |
|
|
29,039 |
|
|
(227 |
) |
|
(0.7 |
) % |
|
|
2,194 |
|
|
7.6 |
% |
|
Total Loans |
|
$ |
87,814 |
|
$ |
86,548 |
|
$ |
84,755 |
|
$ |
1,266 |
|
|
1.5 |
% |
|
$ |
3,059 |
|
|
3.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
NM – Not Meaningful |
|||||||||||||||||||||||
Average loans and leases increased 1 percent compared to the prior quarter driven primarily by growth in commercial and industrial lending. Average business lending increased 3 percent reflecting broad-based growth in corporate, middle market, and real estate lending across the company’s diversified and specialized portfolios. While still below pre-pandemic levels, commercial loan line utilization levels ended the quarter at approximately 43.9 percent, increasing 160 basis points over the prior quarter. Loan production continues to be strong with loan commitment growth of approximately $1.6 billion during the quarter. Average consumer lending decreased 1 percent attributable to lower exit portfolios, home equity and credit card balances, partially offset by growth in residential first mortgage and other consumer credit which includes EnerBank. Additionally, during the quarter, residential first mortgage was impacted by the re-securitization and sale of approximately $285 million of Ginnie Mae loans that had been previously repurchased from their pools.
| Deposits | |||||||||||||||||||||||
|
|
|
Average Balances |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
($ amounts in millions) |
|
1Q22 |
|
4Q21 |
|
1Q21 |
|
1Q22 vs. 4Q21 |
|
1Q22 vs. 1Q21 |
|||||||||||||
|
Customer low-cost deposits |
|
$ |
132,829 |
|
$ |
130,177 |
|
$ |
117,775 |
|
$ |
2,652 |
|
|
2.0 |
% |
|
$ |
15,054 |
|
|
12.8 |
% |
|
Customer time deposits |
|
|
5,905 |
|
|
6,505 |
|
|
5,158 |
|
|
(600 |
) |
|
(9.2 |
)% |
|
|
747 |
|
|
14.5 |
% |
|
Corporate treasury time deposits |
|
|
— |
|
|
— |
|
|
4 |
|
|
— |
|
|
NM |
|
|
|
(4 |
) |
|
(100.0 |
)% |
|
Corporate treasury other deposits |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
NM |
|
|
|
— |
|
|
NM |
|
|
Total Deposits |
|
$ |
138,734 |
|
$ |
136,682 |
|
$ |
122,937 |
|
$ |
2,052 |
|
|
1.5 |
% |
|
$ |
15,797 |
|
|
12.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
($ amounts in millions) |
|
|
1Q22 |
|
|
4Q21 |
|
|
1Q21 |
|
1Q22 vs. 4Q21 |
|
1Q22 vs. 1Q21 |
||||||||||
|
Consumer Bank Segment |
|
$ |
83,054 |
|
$ |
80,930 |
|
$ |
72,949 |
|
$ |
2,124 |
|
|
2.6 |
% |
|
$ |
10,105 |
|
|
13.9 |
% |
|
Corporate Bank Segment |
|
|
42,609 |
|
|
42,659 |
|
|
40,285 |
|
|
(50 |
) |
|
(0.1 |
)% |
|
|
2,324 |
|
|
5.8 |
% |
|
Wealth Management Segment |
|
|
10,407 |
|
|
10,054 |
|
|
9,281 |
|
|
353 |
|
|
3.5 |
% |
|
|
1,126 |
|
|
12.1 |
% |
|
Other |
|
|
2,664 |
|
|
3,039 |
|
|
422 |
|
|
(375 |
) |
|
(12.3 |
)% |
|
|
2,242 |
|
|
NM |
|
|
Total Deposits |
|
$ |
138,734 |
|
$ |
136,682 |
|
$ |
122,937 |
|
$ |
2,052 |
|
|
1.5 |
% |
|
$ |
15,797 |
|
|
12.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total average deposit balances increased 2 percent to a new record high in the first quarter of 2022. Consumer and Wealth Management deposits increased compared to the fourth quarter, while corporate deposits remained relatively stable.
| Asset quality | ||||||
|
|
|
As of and for the Quarter Ended |
||||
|
($ amounts in millions) |
|
3/31/2022 |
|
12/31/2021 |
|
3/31/2021 |
|
ACL/Loans, net |
|
1.67% |
|
1.79% |
|
2.44% |
|
ALL/Loans, net |
|
1.59% |
|
1.69% |
|
2.33% |
|
Allowance for credit losses to non-performing loans, excluding loans held for sale |
|
446% |
|
349% |
|
280% |
|
Allowance for loan losses to non-performing loans, excluding loans held for sale |
|
423% |
|
328% |
|
268% |
|
Provision for (benefit from) credit losses |
|
$(36) |
|
$110 |
|
$(142) |
|
Net loans charged-off |
|
$46 |
|
$44 |
|
$83 |
|
Net loan charge-offs as a % of average loans, annualized |
|
0.21% |
|
0.20% |
|
0.40% |
|
Non-performing loans, excluding loans held for sale/Loans, net |
|
0.37% |
|
0.51% |
|
0.87% |
|
NPAs (ex. 90+ past due)/Loans, foreclosed properties, and non-performing loans held for sale |
|
0.39% |
|
0.54% |
|
0.90% |
|
NPAs (inc. 90+ past due)/Loans, foreclosed properties, and non-performing loans held for sale* |
|
0.53% |
|
0.70% |
|
1.09% |
|
Total Criticized Loans—Business Services** |
|
$2,539 |
|
$2,905 |
|
$3,756 |
|
* Excludes guaranteed residential first mortgages that are 90+ days past due and still accruing. |
||||||
|
** Business services represents the combined total of commercial and investor real estate loans. |
||||||
Positive asset quality performance and waning pandemic concerns partially offset by loan growth and general economic volatility associated primarily with inflation and geopolitical unrest resulted in a net $36 million benefit to the provision for credit losses during the first quarter of 2022. The resulting allowance for credit losses was equal to 1.67 percent of total loans and 446 percent of total non-performing loans, excluding loans held for sale. Annualized net charge-offs increased 1 basis point to 0.21 percent of average loans during the first quarter. Total non-performing loans, excluding loans held for sale, and total business services criticized loans improved during the quarter. Overall asset quality continues to reflect broad-based improvement across most commercial and consumer loan portfolios, as well as elevated recoveries associated with strong collateral asset values.
|
Capital and liquidity |
||||||
|
|
|
As of and for Quarter Ended |
||||
|
|
|
3/31/2022 |
|
12/31/2021 |
|
3/31/2021 |
|
Common Equity Tier 1 ratio(2) |
|
9.4% |
|
9.6% |
|
10.3% |
|
Tier 1 capital ratio(2) |
|
10.8% |
|
11.0% |
|
11.9% |
|
Tangible common stockholders’ equity to tangible assets (non-GAAP)(1) |
|
5.93% |
|
6.83% |
|
7.43% |
|
Tangible common book value per share (non-GAAP)(1)* |
|
$10.06 |
|
$11.38 |
|
$11.46 |
|
Loans, net of unearned income, to total deposits |
|
63.3% |
|
63.1% |
|
65.4% |
|
* Tangible common book value per share includes the impact of quarterly earnings and changes to market value adjustments within accumulated other comprehensive income, as well as continued capital returns. |
||||||
Regions maintains a solid capital position as estimated capital ratios remain well above current regulatory requirements. The Tier 1(2) and Common Equity Tier 1(2) ratios were estimated at 10.8 percent and 9.4 percent respectively at quarter-end.
During the first quarter, the company repurchased 9 million shares of common stock for a total of $215 million through open market purchases and declared $159 million in dividends to common shareholders.
(1) Non-GAAP; refer to pages 5, 6, 9, 10 and 19 of the financial supplement to this earnings release for reconciliations.
(2) Current quarter Common Equity Tier 1, and Tier 1 capital ratios are estimated.
Conference Call
In addition to the live audio webcast at 10 a.m. ET on April 22, 2022, an archived recording of the webcast will be available at the Investor Relations page of www.regions.com following the live event. A replay of the earnings call will also be available beginning Friday, April 22, 2022, at 1:30 p.m. ET through Sunday, May 22, 2022. To listen by telephone, please dial 855-859-2056, and use access code 8966427.
About Regions Financial Corporation
Regions Financial Corporation (NYSE:RF), with $164 billion in assets, is a member of the S&P 500 Index and is one of the nation’s largest full-service providers of consumer and commercial banking, wealth management, and mortgage products and services. Regions serves customers across the South, Midwest and Texas, and through its subsidiary, Regions Bank, operates approximately 1,300 banking offices and more than 2,000 ATMs. Regions Bank is an Equal Housing Lender and Member FDIC. Additional information about Regions and its full line of products and services can be found at www.regions.com.
Forward-Looking Statements
This release may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not based on historical information, but rather are related to future operations, strategies, financial results or other developments. Forward-looking statements are based on management’s current expectations as well as certain assumptions and estimates made by, and information available to, management at the time the statements are made. Those statements are based on general assumptions and are subject to various risks, and because they also relate to the future they are likewise subject to inherent uncertainties and other factors that may cause actual results to differ materially from the views, beliefs and projections expressed in such statements. Therefore, we caution you against relying on any of these forward-looking statements. These risks, uncertainties and other factors include, but are not limited to, those described below:
- Current and future economic and market conditions in the United States generally or in the communities we serve (in particular the Southeastern United States), including the effects of possible declines in property values, increases in unemployment rates, financial market disruptions and potential reductions of economic growth, which may adversely affect our lending and other businesses and our financial results and conditions.
- Possible changes in trade, monetary and fiscal policies of, and other activities undertaken by, governments, agencies, central banks and similar organizations, which could have a material adverse effect on our earnings.
- Possible changes in market interest rates or capital markets could adversely affect our revenue and expense, the value of assets and obligations, and the availability and cost of capital and liquidity.
- The impact of pandemics, including the ongoing COVID-19 pandemic, on our businesses, operations, and financial results and conditions. The duration and severity of any pandemic, including the COVID-19 pandemic, could disrupt the global economy, adversely affect our capital and liquidity position, impair the ability of borrowers to repay outstanding loans and increase our allowance for credit losses, impair collateral values, and result in lost revenue or additional expenses.
- Any impairment of our goodwill or other intangibles, any repricing of assets, or any adjustment of valuation allowances on our deferred tax assets due to changes in tax law, adverse changes in the economic environment, declining operations of the reporting unit or other factors.
- The effect of new tax legislation and/or interpretation of existing tax law, which may impact our earnings, capital ratios, and our ability to return capital to shareholders.
- Possible changes in the creditworthiness of customers and the possible impairment of the collectability of loans and leases, including operating leases.
- Changes in the speed of loan prepayments, loan origination and sale volumes, charge-offs, credit loss provisions or actual credit losses where our allowance for credit losses may not be adequate to cover our eventual losses.
- Possible acceleration of prepayments on mortgage-backed securities due to low interest rates, and the related acceleration of premium amortization on those securities.
- Loss of customer checking and savings account deposits as customers pursue other, higher-yield investments, which could increase our funding costs.
- Possible changes in consumer and business spending and saving habits and the related effect on our ability to increase assets and to attract deposits, which could adversely affect our net income.
- Our ability to effectively compete with other traditional and non-traditional financial services companies, including fintechs, some of whom possess greater financial resources than we do or are subject to different regulatory standards than we are.
- Our inability to develop and gain acceptance from current and prospective customers for new products and services and the enhancement of existing products and services to meet customers’ needs and respond to emerging technological trends in a timely manner could have a negative impact on our revenue.
- Our inability to keep pace with technological changes, including those related to the offering of digital banking and financial services, could result in losing business to competitors.
- Changes in laws and regulations affecting our businesses, including legislation and regulations relating to bank products and services, as well as changes in the enforcement and interpretation of such laws and regulations by applicable governmental and self-regulatory agencies, including as a result of the changes in U.S. presidential administration, control of the U.S. Congress, and changes in personnel at the bank regulatory agencies, which could require us to change certain business practices, increase compliance risk, reduce our revenue, impose additional costs on us, or otherwise negatively affect our businesses.
Contacts
Media Contact:
Jeremy King
(205) 264-4551
Investor Relations Contact:
Dana Nolan
(205) 264-7040