Regions Financial ( NYSE: RF ) Q3 earnings, excluding notable items, trailed the consensus as expenses and the provision for credit losses rose from the previous quarter and the year-ago periods, according to its results posted Friday. For 2022 guidance , the bank sees increased loan and net interest income growth boosting adjusted revenue growth.
2022 average loan balance guidance growth of ~9% Y/Y vs. previous guidance of ~8% growth.
Expects net interest income growth of 20%-22%, vs. prior guidance of ~16%-18%; excluding PPP loans, it expects NII to rise 23%-25% versus its prior view of +19%-21%.
For Q4, NII is expected to increase 7%-9%.
FY2022 adjusted revenue is expected to rise 11%-12% vs. prior view of 7.5%-8.5%. It expects capital markets to generate revenue in the $80M-$90M range, ex CVA/DVA, in Q4.
Regions ( RF ) reaffirmed guidance for adjusted noninterest expenses to rise 4.5%-5.5% in 2022, but boosted its expected adjusted operating leverage to 6% vs. 3.00% previously.
During Q3, the company took a $179M charge related to a settlement with the Consumer Financial Protection Bureau over one type of overdraft fee the bank discontinued last year. It also
Q3 EPS of $0.54, excluding charges from the CFPB settlement and a benefit from the sale of unsecured consumer loans, trailed the $0.59 consensus and dropped from $0.59 in Q2 and $0.66 in Q3 2021. Including the settlement charge and the loan sale gain, Q3 2022 EPS was $0.43.
Regions ( RF ) stock has slipped 0.5% in Friday premarket trading.
Q3 NII (taxable equivalent basis) of $1.27B rose from $1.12B in the prior quarter and from $1.12B in the year-ago quarter. Adjusted net interest margin (FTE) increased to 3.68% from 3.44% in Q2 and from 3.30% in the year-ago quarter.
Noninterest income of $605M fell from $640M in the prior quarter and dropped from $649M in the year-ago quarter.
Adjusted total revenue of $1.87B, beating the $1.81B consensus, grew from $1.75B in Q2 and from $1.61B in Q3 2021.
Total average loans increased to $94.7B from $90.8B in the previous quarter. Total average deposits of $135.5B fell from $139.6B in Q2.
Provision for credit losses was $135M vs. $60M in the previous quarter and a benefit of $155M in the year-ago period. Adjusted net loans charged-off as a percentage of average loans (annualized) was 0.19% vs. 0.17% in Q2 and 0.14% in Q3 2021.
Q3 adjusted noninterest expense of $988M increased from $954M in Q2 and from $918M in Q3 2021.
Conference call at 10:00 AM ET.
Earlier, Regions Financial ( RF ) GAAP EPS of $0.43 misses by $0.11, revenue of $1.86B beats by $50M
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Regions Financial Q3 earnings miss, hurt by higher expenses, credit loss provision