Regions Financial’s Q2 earnings match expectations but revenue misses

Regions Financial Corporation (NYSE: RF) reported second quarter 2019 earnings that were in line with estimates but revenues fell short of expectations. The stock was up 1.7% in premarket hours on Friday.  

Total revenue of $1.43 billion remained relatively unchanged from last year and missed the consensus estimate of $1.48 billion.   

Net income available to common shareholders grew 4% year-over-year to $374 million. Diluted EPS rose 16% to $0.37. Adjusted EPS totaled $0.39, in line with analysts’ estimates.  

Net interest income and other financing income increased 2%, helped by higher loan and securities yields and consumer loans balances. Net interest margin dropped by 4 basis points. Non-interest income fell 4% on a reported basis, but increased modestly on an adjusted basis. Non-interest expense fell by 5% on a reported basis and 2% on an adjusted basis.

Average loans and leases rose 5% on a reported basis and 6% on an adjusted basis. Total average deposit balances decreased less than 1% from the year-ago period as reductions in low-cost deposits were partially offset by growth in time and corporate treasury deposits.

Annualized net charge-offs increased 12 basis points from last year, while the allowance for loan and lease losses as a percent of total loans fell 2 basis points. Total non-accrual loans, excluding loans held for sale, were down by 10 basis points as a percent of loans outstanding. 

During the quarter, the company repurchased 12.8 million shares of common stock for a total of $190 million and declared $141 million in dividends to common shareholders. Regions Financial’s stock has gained 10% so far this year.   

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