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Regions Financial Corp. (RF)
:RF
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Regions Financial
(NYSE:RF)72Outperform
Positive Factors
Net Interest Margin
The net interest margin expanded more than expected as a result of favorable fixed asset repricing trends and stable deposit pricing.
Operating Leverage
Midpoint of guidance anticipates at least 125bps of positive operating leverage, relatively modest, but a positive given a backdrop of weak loan demand.
Negative Factors
Loan Growth
Expect loan growth to remain muted with +1% in '25; C&I is what drives the model (~50% of loans) and robust loan growth is needed to drive up EPS.
Regions Financial (RF) vs. S&P 500 (SPY)
Market Cap
$20.25B
Dividend Yield4.24%
Average Volume (3M)7.59M
Price to Earnings (P/E)11.6
Beta (1Y)1.30
Revenue Growth2.70%
EPS Growth-8.16%
CountryUS
Employees20,101
SectorFinancial
Sector Strength93
IndustryBanking
Share Statistics
EPS (TTM)1.93
Shares Outstanding905,465,100
10 Day Avg. Volume8,113,166
30 Day Avg. Volume7,589,341
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)3.18
Price to Cash Flow (P/CF)-23.80
P/FCF Ratio22.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$28.00Price Target Upside25.22% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering13
Regions Financial Business Overview & Revenue Model
Company DescriptionRegions Financial Corp. operates as a bank holding company. It provides traditional commercial, retail and mortgage banking services, as well as other financial services in the fields of investment banking, asset management, trust, mutual funds, securities brokerage, insurance and other specialty financing. The company operates through the following segments: Corporate Bank, Consumer Bank, and Wealth Management. The Corporate Bank segment represents the company's commercial banking functions including commercial and industrial, commercial real estate and investor real estate lending. The Consumer Bank segment holds the company's branch network, including consumer banking products and services related to residential first mortgages, home equity lines and loans, small business loans, indirect loans, consumer credit cards and other consumer loans. The Wealth Management segment offers individuals, businesses, governmental institutions and non-profit entities a range of solutions to help protect grow and transfer wealth. Regions Financial was founded in 1971 and is headquartered in Birmingham, AL.
How the Company Makes MoneyRegions Financial Corporation generates revenue through a variety of banking and financial services. The primary revenue streams include interest income from loans and leases, such as commercial and residential mortgages, consumer loans, and credit lines. Additionally, the company earns non-interest income through service charges and fees on deposit accounts, wealth management and investment services, and transaction processing. Regions Financial also benefits from its strategic partnerships and community banking presence, which help to enhance its service offerings and customer reach, thus contributing to its overall earnings.
Regions Financial Financial Statement Overview
Summary
Regions Financial demonstrates solid financial health with strong capital management, evidenced by a high equity ratio and no debt burden. The income statement reveals steady revenue growth despite a slight dip in net margins, while cash flow statements suggest proficient cash operations but a reduction in free cash flow, potentially impacting future growth investments. The company is well-positioned in the banking industry, albeit with some caution around margin pressures and cash flow contraction.Income Statement
The company demonstrated a stable gross profit margin of 100% due to its nature as a financial institution. However, net profit margin decreased to 26.6% in 2024 from 30.1% in 2023, reflecting increased costs or reduced efficiency. Revenue growth rate from 2023 to 2024 was a moderate 3.1%, indicating steady growth despite economic challenges. The EBIT and EBITDA margins were not available for 2024, which limits the analysis of operating efficiency.75
Positive
Balance Sheet
The company maintains a solid equity base with an equity ratio of 82.5% in 2024, indicating strong financial health. The debt-to-equity ratio is effectively 0 due to no reported debt, showcasing low leverage. Return on Equity (ROE) decreased to 10.6% in 2024 from 11.9% in 2023, which is a decent return but shows a slight decline in profitability on equity.80
Positive
Cash Flow
Operating cash flow to net income ratio was 0.84 in 2024, showing robust cash generation capabilities. However, free cash flow decreased from $2.15 billion in 2023 to $1.60 billion in 2024, indicating a potential reduction in cash available for expansion or investment. Free cash flow to net income ratio stands at 0.84, reflecting a solid conversion despite the decline.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 7.11B | 6.90B | 7.17B | 6.44B | 6.28B | Gross Profit |
| 7.11B | 6.90B | 7.17B | 6.44B | 6.28B | EBIT |
| -4.79B | 3.83B | 3.19B | 3.21B | 1.31B | EBITDA |
| 0.00 | 2.84B | 3.23B | 3.59B | 1.74B | Net Income Common Stockholders |
| 1.89B | 2.07B | 2.25B | 2.52B | 1.09B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 2.44B | 2.63B | 39.16B | 57.89B | 45.11B | Total Assets |
| 21.68B | 152.19B | 155.22B | 162.94B | 147.39B | Total Debt |
| 6.49B | 2.33B | 2.28B | 2.41B | 3.57B | Net Debt |
| -2.42B | -305.00M | -8.94B | -27.00B | -14.39B | Total Liabilities |
| 3.80B | 134.70B | 139.27B | 2.41B | 3.57B | Stockholders Equity |
| 17.88B | 17.43B | 15.95B | 18.33B | 18.11B |
| Cash Flow | Free Cash Flow | |||
| 1.60B | 2.15B | 2.81B | 2.96B | 2.27B | Operating Cash Flow |
| 1.60B | 2.31B | 3.10B | 3.03B | 2.32B | Investing Cash Flow |
| -262.00M | -1.61B | -12.94B | -2.87B | -4.85B | Financing Cash Flow |
| 2.58B | -5.13B | -8.35B | 11.29B | 16.37B |
Regions Financial Technical Analysis
Negative
22.36
Price Trends
23.73
Negative
24.20
Negative
22.32
Positive
Market Momentum
-0.31
Positive
32.73
Neutral
15.61
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RF, the sentiment is Negative. The current price of 22.36 is below the 20-day moving average (MA) of 23.67, below the 50-day MA of 23.73, and above the 200-day MA of 22.32, indicating a neutral trend. The MACD of -0.31 indicates Positive momentum. The RSI at 32.73 is Neutral, neither overbought nor oversold. The STOCH value of 15.61 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RF.
Regions Financial Risk Analysis
Regions Financial disclosed 50 risk factors in its most recent earnings report. Regions Financial reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Regions Financial Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $22.55B | 12.72 | 9.83% | 3.83% | 10.13% | -1.25% | |
72 Outperform | $20.25B | 11.57 | 10.59% | 4.24% | 2.70% | -8.16% | |
72 Outperform | $28.93B | 13.86 | 11.78% | 3.34% | 11.21% | -2.26% | |
71 Outperform | $71.41B | 13.13 | 10.82% | 3.35% | 7.24% | 7.51% | |
71 Outperform | $20.01B | 15.13 | 6.22% | 3.73% | 1.99% | -2.45% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% | |
51 Neutral | $17.95B | 1,663.64 | >-0.01% | 4.83% | -11.11% | -133.79% |
* Financial Sector Average
Performance Comparison
RF
Regions Financial
22.36
3.85
20.80%
FITB
Fifth Third Bancorp
41.63
6.90
19.87%
HBAN
Huntington Bancshares
15.51
2.55
19.68%
KEY
KeyCorp
16.24
1.97
13.81%
PNC
PNC Financial
180.45
35.42
24.42%
CFG
Citizens Financial
43.59
11.37
35.29%
Regions Financial Earnings Call Summary
Earnings Call Date: Jan 17, 2025 | % Change Since: -7.83% | Next Earnings Date: Apr 17, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a generally positive outlook for Regions Financial, highlighted by record revenue in several business segments and strong earnings metrics. However, concerns remain around loan growth, noninterest income performance, and asset quality, which may impact future growth. The company is proactively addressing these issues with strategic investments and expense management.Highlights
Record Revenue in Key Business Segments
Regions Financial reported record revenue in capital markets, wealth management, and treasury management services for the year 2024.
Strong Earnings and Return Metrics
The company reported full year earnings of $1.8 billion with an earnings per share of $1.93 and a return on average tangible common equity of 18%.
Deposit Growth and Market Share
Regions grew deposits by $12.5 billion since 2019, maintaining top 5 market share in 70% of core markets and achieving 30% branch small business deposit growth.
Positive Net Interest Income and Margin
Net interest income grew 1% in the fourth quarter, and the net interest margin increased by 1 basis point to 3.55%.
Capital Management and Shareholder Returns
Regions executed $58 million in share repurchases and paid $226 million in common dividends during the quarter.
Lowlights
Decline in Average Loans
Average and ending loans declined modestly on a sequential quarter and full year basis due to excess liquidity and low utilization rates.
Noninterest Income Decline
Adjusted noninterest income declined 5% from the previous quarter due to lower mortgage servicing rights and episodic capital markets activities.
Asset Quality Concerns
Annualized net charge-offs increased to 49 basis points, with expectations of elevated net charge-offs in the first half of 2025.
Company Guidance
During the Regions Financial Corporation's Q4 2024 earnings call, the executives provided detailed guidance on several key metrics. The company reported full-year earnings of $1.8 billion, translating to earnings per share of $1.93 and achieving a top quartile return on average tangible common equity of 18%. They highlighted a projected loan growth of approximately 1% for 2025, with C&I lending expected to pick up notably. The company also anticipates average deposits to remain stable, offset by declines in commercial deposits due to excess liquidity. Net interest income is forecasted to increase by 2% to 5% in 2025, underpinned by a 35% deposit beta and strategic hedging. Noninterest income is expected to grow between 2% and 4%, driven by investments in capital markets and wealth management. The guidance included managing Common Equity Tier 1 to a range of 9.25% to 9.75%, considering potential regulatory changes. Additionally, Regions plans to expand its workforce by adding approximately 140 bankers over the next couple of years, focusing on priority growth markets to drive revenue and efficiency. Asset quality remained stable with the allowance for credit losses ratio at 1.79%, and full-year net charge-offs projected toward the higher end of the 40 to 50 basis points range.Regions Financial Corporate Events
Business Operations and Strategy
Regions Financial to Present at RBC Conference 2025
Neutral
Feb 27, 2025
Regions Financial Corporation announced that its executives will present the company’s operations and performance to institutional investors at various meetings in February and March 2025. These presentations, including at the RBC Global Financial Institutions Conference, will highlight Regions’ strategic priorities, such as diversified revenue streams and disciplined expense management. The company aims to maintain its strong market position by focusing on credit risk management, capital, and liquidity management, and by investing in high-growth markets. This initiative is part of Regions’ ongoing efforts to sustain long-term performance and enhance stakeholder value.
Business Operations and StrategyFinancial Disclosures
Regions Financial Reports Strong Earnings for 2024
Positive
Jan 17, 2025
Regions Financial Corp. announced its earnings for the quarter and year ending December 31, 2024, reporting a net income of $1.8 billion for the full year and $508 million for the fourth quarter. Despite incurring strategic securities repositioning and severance charges, the company achieved record revenue in several business sectors. The results highlight Regions’ strategic execution and commitment to growth, supported by strong market conditions and a dedicated team of associates.
Executive/Board Changes
Regions Financial Welcomes New Board Member for 2025
Positive
Dec 11, 2024
Roger W. Jenkins, the CEO of Murphy Oil Corporation, has been appointed to the Boards of Directors of Regions Financial Corporation and its subsidiary, Regions Bank, effective January 1, 2025. His extensive experience in leadership and governance aligns with Regions’ strategic goals, enhancing the company’s commitment to sound governance and growth, thus potentially benefiting stakeholders through increased oversight and strategic direction.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.