BIRMINGHAM, Ala.--(BUSINESS WIRE)-- Regions Financial Corporation (NYSE:RF) today reported earnings for the quarter and year ended December 31, 2012.
Key points:
- Reported net income available to common shareholders of $261 million or $0.18 per diluted share as compared to $301 million or $0.21 per diluted share in the third quarter
- Reported net income from continuing operations available to common shareholders of $273 million or $0.19 per diluted share
- Adjusted net income available to common shareholders from continuing operations1 was $311 million or $0.22 per diluted share as compared to $312 million or $0.22 per diluted share in the third quarter
- Reported full year 2012 net income from continuing operations available to common shareholders of $1.1 billion or $0.76 per diluted share
- Adjusted pre-tax pre-provision income1 (PPI) from continuing operations totaled $493 million, a 5 percent increase from the prior quarter
- Net interest income was stable and totaled $818 million; the resulting net interest margin was 3.10 percent
- Non-interest revenue was $536 million, a 1 percent increase on a linked quarter basis. Total revenue was $1.35 billion, stable linked quarter
- Non-interest expenses totaled $902 million, reflecting a 4 percent increase linked quarter. Adjusted non-interest expenses1 decreased $20 million, or 2 percent linked quarter.
- Asset quality improvement continues
- Non-performing assets declined $296 million or 13 percent linked quarter; inflows of non-performing loans amounted to $350 million, down 24% linked quarter
- Net charge-offs of $180 million decreased 31 percent linked quarter to 96 basis points; loan loss provision of $37 million was $143 million less than net charge-offs
- Business services criticized loans declined $639 million linked quarter or 12 percent
- Allowance for loan losses as a percentage of loans declined 15 basis points linked quarter to 2.59 percent, while the ratio of allowance for loan losses to non-performing loans increased 5 basis points to 1.14x
- Balance sheet
- Funding mix continued to improve as low-cost deposits grew $2.1 billion linked quarter and higher cost time deposits declined $1.5 billion
- Deposit costs declined to 22 basis points, down 6 basis points from third quarter and 18 basis points from the prior year
- Loan growth in the middle market commercial and industrial and indirect auto portfolios continued, with average loans up 1.5 percent and 6.7 percent linked quarter, respectively. Average total loans decreased 1.4 percent linked quarter due to continued business and consumer deleveraging.
- Loan yields were up 3 basis points linked quarter to 4.21 percent
- Capital and liquidity positions remain strong
- Solid capital position with an estimated Tier 1 ratio of 12.0 percent and Tier 1 Common ratio1 of 10.8 percent at December 31, 2012
- Successfully issued depositary shares representing preferred stock of $500 million, redeemed $345 million of trust preferred securities, and extinguished a $203 million liability associated with an investment by a third party in a subsidiary
- Tangible common book value per share1 was $7.11, an increase of $0.09 from the prior quarter
- Liquidity position remains strong with a low loan-to-deposit ratio of 78 percent
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