Regions Financial Q3 profit beats estimates on higher interest income
Overview
U.S. regional bank's Q3 adjusted revenue met analyst expectations; adjusted EPS beat consensus
Company reported record capital markets and treasury management income for the quarter
Asset quality improved with lower net charge-offs and declines in criticized and non-performing loans
Outlook
Regions did not provide specific financial guidance for the upcoming quarter or full year in its press release
Result Drivers
NET INTEREST INCOME - Co said net interest income rose 2% QoQ, driven by fixed-rate asset turnover, average loan growth, higher hedging income, credit interest recoveries, one additional day in the quarter and continued prudent management of deposit costs
CAPITAL MARKETS & TREASURY MANAGEMENT - Record capital markets income up 27% QoQ, driven by higher M&A advisory revenue, securities underwriting and placement fees, commercial swap income and syndication revenue; record treasury management income also contributed
CREDIT QUALITY IMPROVEMENT - Co said asset quality trends improved with net charge-offs down 13 bps QoQ, declines in criticized and non-performing loans, and allowance coverage of non-performing loans increased to 275%
Company press release:
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q3 Adjusted Revenue | Meet | $1.99 bln | $1.99 bln (17 Analysts) |
Q3 Adjusted EPS | Beat | $0.73 | $0.66 (21 Analysts) |
Q3 EPS | $0.71 | ||
Q3 Net Income | $631 mln | ||
Q3 Net Interest Income | $1.30 bln | ||
Q3 Credit Loss Provision | $68 mln | ||
Q3 Net Interest Margin | 3.68% |
Analyst Coverage
The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 6 "strong buy" or "buy", 14 "hold" and 3 "sell" or "strong sell"
The average consensus recommendation for the banks peer group is "buy."
Wall Street's median 12-month price target for Regions Financial Corporation is $31.50, about 15.3% above its October 15 closing price of $27.31
The stock recently traded at 10 times the next 12-month earnings vs. a P/E of 11 three months ago
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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)