Rise in NII & Fee Income to Aid Regions Financial in Q4 Earnings

Core Viewpoint - Regions Financial Corporation is expected to report year-over-year growth in earnings and revenues for the fourth quarter of 2024, with earnings estimated at 55 cents per share, reflecting a 5.8% increase from the previous year, while revenues are projected at $1.86 billion, indicating a 2.5% decrease from the prior year [1][3]. Earnings Performance - The third-quarter 2024 earnings surpassed the Zacks Consensus Estimate, driven by reduced expenses and increased non-interest income, although net interest income (NII) saw a decline [2]. - Regions Financial has a history of earnings surprises, exceeding estimates in three of the last four quarters with an average surprise of 4.41% [2]. Key Financial Estimates - The Zacks Consensus Estimate for NII in Q4 2024 is expected to grow modestly to $1.24 billion, a 0.7% increase from Q3 2024 [4]. - Average interest-earning assets are estimated at $1.39 billion, showing a slight sequential increase [6]. Non-Interest Income - The capital markets are expected to generate revenues between $80 million and $90 million, with a consensus estimate of $88.3 million, reflecting a 4% sequential decline [7][8]. - Mortgage income is projected at $32 million, indicating an 11.1% decrease from the previous quarter, while service charges on deposit accounts are expected to show a marginal increase [10][11]. Expense Management - Expenses are anticipated to be elevated due to increased salaries and technology investments, despite ongoing expense management efforts [12]. Asset Quality - The company is likely to have increased provisions for potential bad loans, with non-performing assets estimated at $859.1 million, a 1.7% rise from the prior quarter [13]. Earnings Prediction - The quantitative model suggests a high likelihood of Regions Financial beating the Zacks Consensus Estimate, supported by a positive Earnings ESP of +0.61% [14].