RF - Regions Financial Q2 earnings in-line; sees deposits modestly lower in H2

2023-07-21 08:01:23 ET

Regions Financial ( NYSE: RF ) expects deposits to be "modestly lower" over the second half of 2023 and loans to increase about 3%-4%, the bank said Friday when announcing Q2 earnings.

The company expects Q3 net interest income to drop ~5% Y/Y. The bank reaffirmed its expectation that 2023 net interest income will rise 12%-14% from 2022.

Noninterest expense is expected to increase ~6.5% vs. prior guidance of 4.5%-5.5%. The company revised its guidance for adjusted operating leverage to "positive" vs. its prior view of ~2%.

Q2 GAAP EPS of $0.59, matching the consensus, fell from $0.62 in Q1 2023 and stayed even with a year ago.

Q2 adjusted pretax preprovision income of $847M fell 8.6% Q/Q and rose 6.7% Y/Y.

Q2 net interest income (taxable equivalent basis) fell to $1.39B from $1.43B in the prior quarter and rose from $1.12B in the year-ago period. Net interest margin (FTE) slipped to 4.04% from 4.22% in Q1 and from 3.06% in Q2 2022.

Its provision for credit losses fell to $118M from $135M in Q1 and rose from $60M in Q2 2022.

Regions Finanical ( RF ) said net loans charged-off as a percentage of average loans, annualized, slipped to 0.33% from 0.35% in the prior quarter and increased from 0.17% in the year-ago period.

Total deposits of $125.5B at June 30, 2023 dropped to $129.0B at March 31.

Average total loan balances of $98.6B rose from $97.3B in the previous quarter.

Q2 adjusted noninterest expense of $1.11B rose from $1.03B in Q1 and from $954M in Q2 2022.

Conference call at 10:00 AM ET.

Earlier, Regions Financial ( RF ) GAAP EPS of $0.59 in-line, revenue of $1.96B beats by $10M

More on Regions Financial:

• Previous income statements from Regions
• Regions Financial: Still an Undervalued Dividend Opportunity Among Regional Banks
• Compare Regions key metrics with those of its peers

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