Regions Financial(US:RF)2025-11-04 16:33Financial Performance - Regions reported net income available to common shareholders of $548 million or $0.61 per diluted share in Q3 2025, up from $446 million or $0.49 per diluted share in Q3 2024, representing a 23% increase in net income [225]. - Non-interest income was $659 million in Q3 2025, up from $572 million in Q3 2024, driven by a decline in securities losses and increases in capital markets income and investment management fees [228]. - Non-interest expense increased to $1.1 billion in Q3 2025, up $34 million from Q3 2024, primarily due to higher salaries and benefits and professional expenses [229]. - Total non-interest expense for the third quarter of 2025 was $1,103 million, reflecting a 3.2% increase from $1,069 million in the third quarter of 2024 [410]. - The company's liquidity policy mandates a minimum cash balance of $500 million, with cash and cash equivalents totaling $1.0 billion as of September 30, 2025 [394]. Interest Income and Expenses - Net interest income totaled $1.3 billion in Q3 2025, an increase of $39 million compared to Q3 2024, with a net interest margin of 3.59%, reflecting a 5 basis point increase year-over-year [226]. - Regions' net interest income for the three months ended September 30, 2025, was $1.269 billion, resulting in a net interest margin of 3.59% [335]. - Total interest-bearing liabilities amounted to $96.3 billion with a net interest spread of 2.87% for the three months ended September 30, 2025 [335]. - Interest-bearing deposits totaled $89,525 million with an interest expense of $1,345 million, resulting in a yield of 2.01% for the nine months ended September 30, 2025 [340]. - The average balance of loans, net of unearned income, was $96,284 million, generating interest income of $4,141 million with a yield of 5.70% [340]. Loan and Credit Quality - The provision for credit losses was $105 million in Q3 2025, down from $113 million in Q3 2024, while net charge-offs increased to $135 million or 0.55% of average loans [227]. - Total non-performing loans decreased by $170 million to $758 million as of September 30, 2025, compared to year-end 2024 levels [301]. - The allowance for loan losses totaled $1.7 billion at both September 30, 2025, and December 31, 2024 [277]. - Total commercial non-performing loans increased to $566 million as of September 30, 2025, from $450 million at December 31, 2024 [299]. - The consumer credit card segment had a non-performing loan rate of 8.41% as of September 30, 2025 [299]. Capital and Equity - Regions' CET1 ratio was estimated at 10.9% as of September 30, 2025, in compliance with regulatory capital requirements [231]. - Shareholders' equity increased to $19.0 billion at September 30, 2025, up from $17.9 billion at December 31, 2024, driven by a net income increase of $1.6 billion [330]. - Common equity Tier 1 capital ratio for Regions Financial Corporation was 10.86% and for Regions Bank was 11.66% as of September 30, 2025, exceeding the minimum requirement of 4.50% [318]. Deposits and Liquidity - Total deposits increased by approximately $2.7 billion to $130.334 billion at September 30, 2025, driven primarily by growth in money market and non-interest-bearing deposits [308]. - Non-interest-bearing deposits accounted for approximately 31% of total deposits at both September 30, 2025, and December 31, 2024 [308]. - Total liquidity sources amount to $68.5 billion, including $26.2 billion in unencumbered investment securities and $23.1 billion in Federal Reserve Bank borrowing availability [386]. - Regions maintains a variety of liquidity sources to fund its obligations, including customer deposits and borrowed funds, ensuring a balanced liquidity base [383]. Economic Outlook - The September baseline forecast anticipates real GDP growth of 1.8 percent for 2025 and 2026, with real private domestic demand expected to rise by 2.2 percent in 2025 [283]. - The unemployment rate is projected to remain around 4.4% throughout the forecast period [290]. - Economic uncertainty and potential disruptions are weighted to the downside in the baseline forecast [288]. Operational Efficiency - Salaries and employee benefits increased by 4.0% to $671 million in the third quarter of 2025 from $645 million in the same period of 2024 [410]. - Operational losses decreased in the nine months ended September 30, 2025, compared to the same period in 2024, primarily due to improvements in check fraud [416]. - Visa class B shares expense decreased to $5 million in Q3 2025 from $14 million in Q3 2024, reflecting a reduction in escrow funding expense related to ongoing litigation [415].