Regions reports third quarter 2024 earnings of $446 million, earnings per diluted share of $0.49

Business Wire

Fri, Oct 18, 2024, 3:00 AM 29 min read

BIRMINGHAM, Ala., October 18, 2024--(BUSINESS WIRE)--Regions Financial Corp. (NYSE:RF) today reported earnings for the third quarter ended September 30, 2024. The company reported third quarter net income available to common shareholders of $446 million and earnings per diluted share of $0.49. The company reported $1.8 billion in total revenue during the quarter, including $721 million in reported pre-tax pre-provision income⁽¹⁾ and $799 million in adjusted pre-tax pre-provision income⁽¹⁾. Third quarter results were impacted by the following notable items: the impact of additional strategic securities repositioning and issuance costs associated with the redemption of the company's Series B Preferred Stock. The net impact of these items reduced reported third quarter earnings per diluted share by $0.08.

"During the third quarter, Regions continued its focus on delivering consistent, sustainable, long-term performance as evidenced by our solid quarterly revenue growth, including another record within wealth management, and margin expansion despite a challenging lending and interest rate environment. We have a great strategic plan and a leadership team with a proven track record of successful execution. The investments we are making in talent, technology, products and services, along with our fast-growing markets, position us well to continue generating top-quartile returns," said John Turner, Chairman, President and CEO of Regions Financial Corp.

Turner added, "To that end, I am proud of how our teams have responded to serve and support communities impacted by the recent hurricanes. Our branch network fared well, with minimal impacts from the storms, and we immediately launched disaster-recovery financial services to help customers and associates with storm-related needs."

SUMMARY OF THIRD QUARTER 2024 RESULTS:

	Quarter Ended
(amounts in millions, except per share data)	9/30/2024			6/30/2024			9/30/2023
Net income	$	490		$	501		$	490
Preferred dividends and other*		44			24			25
Net income available to common shareholders	$	446		$	477		$	465

Weighted-average diluted shares outstanding		918			918			940
Actual shares outstanding—end of period		911			915			939

Diluted earnings per common share	$	0.49		$	0.52		$	0.49

Selected items impacting earnings:
Pre-tax adjusted items⁽¹⁾:
Adjustments to non-interest expense⁽¹⁾	$	—		$	28		$	(4	)
Adjustments to non-interest income⁽¹⁾		(78	)		(50	)		(1	)
Total pre-tax adjusted items⁽¹⁾	$	(78	)	$	(22	)	$	(5	)
After-tax preferred stock redemption expense*	$	(15	)	$	—		$	—
Diluted EPS impact**	$	(0.08	)	$	(0.01	)	$	—

Pre-tax additional selected items***:
Incremental operational losses related to check warranty claims	$	—		$	—		$	(53	)
Visa Class B litigation escrow funding		14			—			—

*		The third quarter 2024 amount includes $15 million of Series B preferred stock issuance costs, which reduced net income available to common shareholders when the shares were redeemed. Excluding the preceding adjusted item, total third quarter 2024 preferred dividends also includes $4 million representing a partial dividend payment for the newly issued Series F preferred stock.
**		Based on income taxes at an approximate 25% incremental rate. The second quarter 2024 adjustment to non-interest expense for a contingent reserve release related to a prior acquisition included a non-taxable component.
***		Items impacting results or trends during the period, but are not considered non-GAAP adjustments.

Non-GAAP adjusted items⁽¹⁾ impacting the company's earnings are identified to assist investors in analyzing Regions' operating results on the same basis as that applied by management and provide a basis to predict future performance.

Total revenue

	Quarter Ended
($ amounts in millions)	9/30/2024			6/30/2024			9/30/2023			3Q24 vs. 2Q24					3Q24 vs. 3Q23
Net interest income	$	1,218		$	1,186		$	1,291		$	32		2.7	%	$	(73	)	(5.7	)%
Taxable equivalent adjustment		12			12			13			—		—	%		(1	)	(7.7	)%
Net interest income, taxable equivalent basis	$	1,230		$	1,198		$	1,304		$	32		2.7	%	$	(74	)	(5.7	)%
Net interest margin (FTE)		3.54	%		3.51	%		3.73	%

Non-interest income:
Service charges on deposit accounts	$	158		$	151		$	142		$	7		4.6	%	$	16		11.3	%
Card and ATM fees		118			120			126			(2	)	(1.7	)%		(8	)	(6.3	)%
Wealth management income		128			122			112			6		4.9	%		16		14.3	%
Capital markets income		92			68			64			24		35.3	%		28		43.8	%
Mortgage income		36			34			28			2		5.9	%		8		28.6	%
Commercial credit fee income		28			28			24			—		—	%		4		16.7	%
Bank-owned life insurance		28			30			20			(2	)	(6.7	)%		8		40.0	%
Market value adjustments on employee benefit assets*		13			2			4			11		NM			9		225.0	%
Securities gains (losses), net**		(78	)		(50	)		(1	)		(28	)	(56.0	)%		(77	)	NM
Other miscellaneous income		49			40			47			9		22.5	%		2		4.3	%
Non-interest income	$	572		$	545		$	566		$	27		5.0	%	$	6		1.1	%
Adjusted non-interest income (non-GAAP)	$	650		$	595		$	567		$	55		9.2	%	$	83		14.6	%
Total revenue	$	1,790		$	1,731		$	1,857		$	59		3.4	%	$	(67	)	(3.6	)%

Adjusted total revenue (non-GAAP)⁽¹⁾	$	1,868		$	1,781		$	1,858		$	87		4.9	%	$	10		0.5	%


NM - Not Meaningful
* These market value adjustments relate to assets held for employee and director benefits that are offset within salaries and employee benefits and other non-interest expense.
** The third quarter 2024 includes $75 million of securities losses associated with an additional securities repositioning transaction, and $3 million associated with the sale of certain employee benefit assets.

Total revenue increased 3 percent to approximately $1.8 billion on a reported basis and 5 percent to approximately $1.9 billion on an adjusted basis⁽¹⁾compared to the second quarter of 2024. Net interest income increased 3 percent to slightly over $1.2 billion compared to the second quarter as deposit cost pressures eased and asset yields benefited from the maturity and replacement of lower-yielding, fixed rate loans and securities at higher levels. Total net interest margin increased 3 basis points to 3.54 percent.

Non-interest income increased 5 percent on a reported basis and 9 percent on an adjusted basis⁽¹⁾ compared to the second quarter of 2024. With respect to adjusted items, the company incurred $78 million in securities losses, largely attributable to the execution of additional securities repositioning trades. Service charges increased 5 percent attributable primarily to an increase in treasury management revenue and an additional business day in the quarter. Wealth Management increased 5 percent driven by increased sales activity and continued strength in financial markets. Capital markets income increased 35 percent to $92 million, attributable primarily to increased merger and acquisition advisory services and debt capital markets activity. Favorable market value adjustments on employee assets and gains from the sale of certain low income housing tax credit investments also contributed to the third quarter increase.

Non-interest expense

	Quarter Ended
($ amounts in millions)	9/30/2024		6/30/2024		9/30/2023		3Q24 vs. 2Q24					3Q24 vs. 3Q23
Salaries and employee benefits	$	645	$	609	$	589	$	36		5.9	%	$	56		9.5	%
Equipment and software expense		101		100		107		1		1.0	%		(6	)	(5.6	)%
Net occupancy expense		69		68		72		1		1.5	%		(3	)	(4.2	)%
Outside services		41		40		39		1		2.5	%		2		5.1	%
Marketing		28		27		26		1		3.7	%		2		7.7	%
Professional, legal and regulatory expenses		21		25		27		(4	)	(16.0	)%		(6	)	(22.2	)%
Credit/checkcard expenses		14		15		16		(1	)	(6.7	)%		(2	)	(12.5	)%
FDIC insurance assessments		17		29		27		(12	)	(41.4	)%		(10	)	(37.0	)%
Visa class B shares expense		17		5		5		12		240.0	%		12		240.0	%
Operational losses		19		18		75		1		5.6	%		(56	)	(74.7	)%
Branch consolidation, property and equipment charges		—		1		1		(1	)	(100.0	)%		(1	)	(100.0	)%
Other		97		67		109		30		44.8	%		(12	)	(11.0	)%
Total non-interest expense	$	1,069	$	1,004	$	1,093	$	65		6.5	%	$	(24	)	(2.2	)%
Total adjusted non-interest expense⁽¹⁾	$	1,069	$	1,032	$	1,089	$	37		3.6	%	$	(20	)	(1.8	)%


NM - Not Meaningful

Non-interest expense increased 6 percent and 4 percent on a reported and adjusted basis⁽¹⁾, respectively, compared to the second quarter of 2024. Third quarter adjusted items offset each other, while the second quarter included a $37 million expense reduction associated with a contingent reserve release from a prior acquisition that did not repeat. Salaries and benefits increased 6 percent driven primarily by one additional day in the quarter, higher incentive compensation associated with revenue growth, and the offsetting impact of increased market value adjustments on employee benefit assets recorded in non-interest income. The company also recognized $14 million of expense during the quarter associated with its proportionate share of ongoing Visa litigation escrow related to their class B shares.

The company's third quarter efficiency ratio was 59.3 percent on a reported and 56.9 percent on an adjusted basis⁽¹⁾. The effective tax rate was 19.4 percent in the third quarter.

Loans and Leases

	Average Balances

($ amounts in millions)	3Q24		2Q24		3Q23		3Q24 vs. 2Q24					3Q24 vs. 3Q23
Commercial and industrial	$	49,847	$	50,046	$	51,721	$	(199	)	(0.4	)%	$	(1,874	)	(3.6	)%
Commercial real estate—owner-occupied		5,212		5,115		5,100		97		1.9	%		112		2.2	%
Investor real estate		8,759		8,839		8,617		(80	)	(0.9	)%		142		1.6	%
Business Lending		63,818		64,000		65,438		(182	)	(0.3	)%		(1,620	)	(2.5	)%
Residential first mortgage		20,147		20,191		19,914		(44	)	(0.2	)%		233		1.2	%
Home equity		5,530		5,557		5,688		(27	)	(0.5	)%		(158	)	(2.8	)%
Consumer credit card		1,359		1,331		1,245		28		2.1	%		114		9.2	%
Other consumer—exit portfolios		13		22		384		(9	)	(40.9	)%		(371	)	(96.6	)%
Other consumer*		6,173		6,180		6,116		(7	)	(0.1	)%		57		0.9	%
Consumer Lending		33,222		33,281		33,347		(59	)	(0.2	)%		(125	)	(0.4	)%
Total Loans	$	97,040	$	97,281	$	98,785	$	(241	)	(0.2	)%	$	(1,745	)	(1.8	)%



NM - Not meaningful.
* Other consumer loans includes Regions' Home Improvement Financing portfolio (formerly EnerBank).

Average loans and leases remained relatively stable compared to the prior quarter. Within the business portfolio, average loans remained relatively stable, while ending loans decreased 1 percent. Within the consumer portfolio, average loans remained relatively stable as modest growth in consumer credit card was offset by modest declines in other categories.

Deposits

	Average Balances

($ amounts in millions)	3Q24		2Q24		3Q23		3Q24 vs. 2Q24					3Q24 vs. 3Q23
Total interest-bearing deposits	$	86,260	$	86,385	$	80,472	$	(125	)	(0.1	)%	$	5,788		7.2	%
Non-interest-bearing deposits		39,690		40,516		44,748		(826	)	(2.0	)%		(5,058	)	(11.3	)%
Total Deposits	$	125,950	$	126,901	$	125,220	$	(951	)	(0.7	)%	$	730		0.6	%

($ amounts in millions)	3Q24		2Q24		3Q23		3Q24 vs. 2Q24					3Q24 vs. 3Q23
Consumer Bank Segment	$	78,904	$	79,809	$	80,036	$	(905	)	(1.1	)%	$	(1,132	)	(1.4	)%
Corporate Bank Segment		36,867		36,669		34,924		198		0.5	%		1,943		5.6	%
Wealth Management Segment		7,374		7,534		7,451		(160	)	(2.1	)%		(77	)	(1.0	)%
Other		2,805		2,889		2,809		(84	)	(2.9	)%		(4	)	(0.1	)%
Total Deposits	$	125,950	$	126,901	$	125,220	$	(951	)	(0.7	)%	$	730		0.6	%

	Ending Balances as of
							9/30/2024					9/30/2024
($ amounts in millions)	9/30/2024		6/30/2024		9/30/2023		vs. 6/30/2024					vs. 9/30/2023
Consumer Bank Segment	$	78,858	$	80,126	$	80,980	$	(1,268	)	(1.6	)%	$	(2,122	)	(2.6	)%
Corporate Bank Segment		36,955		36,529		34,650		426		1.2	%		2,305		6.7	%
Wealth Management Segment		7,520		7,383		7,791		137		1.9	%		(271	)	(3.5	)%
Other		3,043		2,578		2,778		465		18.0	%		265		9.5	%
Total Deposits	$	126,376	$	126,616	$	126,199	$	(240	)	(0.2	)%	$	177		0.1	%

The company's deposit base continues to be a source of strength and a differentiator in liquidity and margin performance. Total deposits continued to follow expected patterns in the third quarter. Ending deposits remained relatively stable with the second quarter, while average deposits decreased approximately 1 percent, consistent with normal summer spending patterns primarily among consumers.

Asset quality

	As of and for the Quarter Ended
($ amounts in millions)	9/30/2024	6/30/2024	9/30/2023
Allowance for credit losses (ACL) at period end	$1,728	$1,732	$1,677
ACL/Loans, net	1.79%	1.78%	1.70%
ALL/Loans, net	1.66%	1.66%	1.56%
Allowance for credit losses to non-performing loans, excluding loans held for sale	210%	204%	261%
Allowance for loan losses to non-performing loans, excluding loans held for sale	196%	191%	241%
Provision for credit losses	$113	$102	$145
Net loans charged-off	$117	$101	$101
Net loans charged-off as a % of average loans, annualized	0.48%	0.42%	0.40%
Non-performing loans, excluding loans held for sale/Loans, net	0.85%	0.87%	0.65%
NPAs (ex. 90+ past due)/Loans, foreclosed properties, and non-performing loans held for sale	0.87%	0.88%	0.67%
NPAs (inc. 90+ past due)/Loans, foreclosed properties, and non-performing loans held for sale*	1.06%	1.06%	0.81%
Total Criticized Loans—Business Services^**	$4,692	$4,863	$4,167

* Excludes guaranteed residential first mortgages that are 90+ days past due and still accruing.
** Business services represents the combined total of commercial and investor real estate loans.

Net charge-offs were $117 million or 48 basis points of average loans during the quarter. As expected, this represents an increase of 6 basis points from the prior quarter and reflects losses from previously identified portfolios of interest. Underlying asset quality metrics continue to show signs of stabilization. Non-performing loans as a percentage of total loans declined 2 basis points to 85 basis points and business services criticized loans declined $171 million or 4 percent compared to the prior quarter. Net charge-offs are expected to remain towards the upper end of the company's 40 to 50 basis point range attributable to a few large credits within those same portfolios. However, these expected losses are substantially reserved for within the allowance for credit losses as of quarter-end.

The allowance for credit loss ratio increased 1 basis point to 1.79 percent, while the allowance as a percentage of nonperforming loans increased 6 percentage points to 210 percent.

Capital and liquidity

	As of and for Quarter Ended
	9/30/2024	6/30/2024	9/30/2023
Common Equity Tier 1 ratio⁽²⁾	10.6%	10.4%	10.3%
Tier 1 capital ratio⁽²⁾	11.9%	11.7%	11.6%
Tangible common stockholders’ equity to tangible assets (non-GAAP)⁽¹⁾	7.37%	6.55%	5.82%
Tangible common book value per share (non-GAAP)^(1)*	$12.26	$10.61	$9.16
Loans, net of unearned income, to total deposits	76.6%	77.0%	78.4%

* Tangible common book value per share includes the impact of quarterly earnings and changes to market value adjustments within accumulated other comprehensive income, as well as continued capital returns.

Regions maintains a solid capital position with estimated capital ratios remaining well above current regulatory requirements. The Common Equity Tier 1⁽²⁾ and Tier 1⁽²⁾ ratios were estimated at 10.6 percent and 11.9 percent, respectively, at quarter-end.

Tangible common book value per share ended the quarter at $12.26, a 16 percent increase quarter over quarter and a 34 percent increase year over year.

During the third quarter, the company repurchased approximately 4 million shares of common stock for a total of $101 million through open market purchases and declared $229 million in dividends to common shareholders.

On July 29, 2024, the company issued $500 million of Series F non-cumulative perpetual preferred stock. On September 16, 2024, the company used the proceeds from the Series F issuance to redeem its $500 million Series B preferred stock.

The company's liquidity position also remains robust as of September 30, 2024, with total available liquidity of approximately $62 billion, which includes cash held at the Federal Reserve, FHLB borrowing capacity, unencumbered securities, and capacity at the Federal Reserve's facilities such as the Discount window or Standing Repo Facility. These sources are sufficient to cover uninsured deposits at a ratio of approximately 180 percent as of quarter end (this ratio excludes intercompany and secured deposits).

(1)		Non-GAAP; refer to pages 12, 16, 17 and 18 of the financial supplement to this earnings release for reconciliations.
(2)		Current quarter Common Equity Tier 1, and Tier 1 capital ratios are estimated.

Conference Call

In addition to the live audio webcast at 10 a.m. ET on Oct. 18, 2024, an archived recording of the webcast will be available at the Investor Relations page of ir.regions.com following the live event.

About Regions Financial Corporation

Regions Financial Corporation (NYSE:RF), with $157 billion in assets, is a member of the S&P 500 Index and is one of the nation’s largest full-service providers of consumer and commercial banking, wealth management, and mortgage products and services. Regions serves customers across the South, Midwest and Texas, and through its subsidiary, Regions Bank, operates approximately 1,250 banking offices and more than 2,000 ATMs. Regions Bank is an Equal Housing Lender and Member FDIC. Additional information about Regions and its full line of products and services can be found at www.regions.com.

Forward-Looking Statements

This release may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. The words "future," "anticipates," "assumes," "intends," "plans," "seeks," "believes," "predicts," "potential," "objectives," "estimates," "expects," "targets," "projects," "outlook," "forecast," "would," "will," "may," "might," "could," "should," "can," and similar terms and expressions often signify forward-looking statements. Forward-looking statements are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control. Forward-looking statements are not based on historical information, but rather are related to future operations, strategies, financial results or other developments. Forward-looking statements are based on management’s current expectations as well as certain assumptions and estimates made by, and information available to, management at the time the statements are made. Those statements are based on general assumptions and are subject to various risks, and because they also relate to the future they are likewise subject to inherent uncertainties and other factors that may cause actual results to differ materially from the views, beliefs and projections expressed in such statements. Therefore, we caution you against relying on any of these forward-looking statements. These risks, uncertainties and other factors include, but are not limited to, those described below:

Current and future economic and market conditions in the United States generally or in the communities we serve (in particular the Southeastern United States), including the effects of possible declines in property values, increases in interest rates and unemployment rates, inflation, financial market disruptions and potential reductions of economic growth, which may adversely affect our lending and other businesses and our financial results and conditions.
Possible changes in trade, monetary and fiscal policies of, and other activities undertaken by, governments, agencies, central banks and similar organizations, which could have a material adverse effect on our businesses and our financial results and conditions.
Changes in market interest rates or capital markets could adversely affect our revenue and expense, the value of assets (such as our portfolio of investment securities) and obligations, as well as the availability and cost of capital and liquidity.
Volatility and uncertainty about the direction of interest rates and the timing of any changes, which may lead to increased costs for businesses and consumers and potentially contribute to poor business and economic conditions generally.
Possible changes in the creditworthiness of customers and the possible impairment of the collectability of loans and leases, including operating leases.
Changes in the speed of loan prepayments, loan origination and sale volumes, charge-offs, credit loss provisions or actual credit losses where our allowance for credit losses may not be adequate to cover our eventual losses.
Possible acceleration of prepayments on mortgage-backed securities due to declining interest rates, and the related acceleration of premium amortization on those securities.
Possible changes in consumer and business spending and saving habits and the related effect on our ability to increase assets and to attract deposits, which could adversely affect our net income.
Loss of customer checking and savings account deposits as customers pursue other, higher-yield investments, or the need to price interest-bearing deposits higher due to competitive forces. Either of these activities could increase our funding costs.
Possible downgrades in our credit ratings or outlook could, among other negative impacts, increase the costs of funding from capital markets.
The loss of value of our investment portfolio could negatively impact market perceptions of us.
Our ability to manage fluctuations in the value of assets and liabilities and off-balance sheet exposure so as to maintain sufficient capital and liquidity to support our businesses.
The effects of social media on market perceptions of us and banks generally.
Market replacement of LIBOR and the related effect on our legacy LIBOR-based financial products and contracts, including, but not limited to, derivative products, debt obligations, deposits, investments, and loans.
The effects of problems encountered by other financial institutions that adversely affect us or the banking industry generally could require us to change certain business practices, reduce our revenue, impose additional costs on us, or otherwise negatively affect our businesses.
Volatility in the financial services industry (including failures or rumors of failures of other depository institutions), along with actions taken by governmental agencies to address such turmoil, could affect the ability of depository institutions, including us, to attract and retain depositors and to borrow or raise capital.
Our ability to effectively compete with other traditional and non-traditional financial services companies, including fintechs, some of which possess greater financial resources than we do or are subject to different regulatory standards than we are.
Our inability to develop and gain acceptance from current and prospective customers for new products and services and the enhancement of existing products and services to meet customers’ needs and respond to emerging technological trends in a timely manner could have a negative impact on our revenue.
Our inability to keep pace with technological changes, including those related to the offering of digital banking and financial services, could result in losing business to competitors.
Our ability to execute on our strategic and operational plans, including our ability to fully realize the financial and nonfinancial benefits relating to our strategic initiatives.
The risks and uncertainties related to our acquisition or divestiture of businesses and risks related to such acquisitions, including that the expected synergies, cost savings and other financial or other benefits may not be realized within expected timeframes, or might be less than projected; and difficulties in integrating acquired businesses.
The success of our marketing efforts in attracting and retaining customers.
Our ability to achieve our expense management initiatives.
Changes in commodity market prices and conditions could adversely affect the cash flows of our borrowers operating in industries that are impacted by changes in commodity prices (including businesses indirectly impacted by commodities prices such as businesses that transport commodities or manufacture equipment used in the production of commodities), which could impair the ability of those borrowers to service any loans outstanding to them and/or reduce demand for loans in those industries.
The effects of geopolitical instability, including wars, conflicts, civil unrest, and terrorist attacks and the potential impact, directly or indirectly, on our businesses.
Political uncertainty in the United States, including uncertainty around elections, could directly or indirectly impact our businesses.
Fraud, theft or other misconduct conducted by external parties, including our customers and business partners, or by our employees.
Any inaccurate or incomplete information provided to us by our customers or counterparties.
Inability of our framework to manage risks associated with our businesses, such as credit risk and operational risk, including third-party vendors and other service providers, which inability could, among other things, result in a breach of operating or security systems as a result of a cyber-attack or similar act or failure to deliver our services effectively.
Our ability to identify and address operational risks associated with the introduction of or changes to products, services, or delivery platforms.
Dependence on key suppliers or vendors to obtain equipment and other supplies for our businesses on acceptable terms.
The inability of our internal controls and procedures to prevent, detect or mitigate any material errors or fraudulent acts.
Our ability to identify and address cyber-security risks such as data security breaches, malware, ransomware, "denial of service" attacks, "hacking" and identity theft, including account take-overs, a failure of which could disrupt our businesses and result in the disclosure of and/or misuse or misappropriation of confidential or proprietary information, disruption or damage to our systems, increased costs, losses, or adverse effects to our reputation.
The effects of the failure of any component of our business infrastructure provided by a third party could disrupt our businesses, result in the disclosure of and/or misuse of confidential information or proprietary information, increase our costs, negatively affect our reputation, and cause losses.
The effects of any developments, changes or actions relating to any litigation or regulatory proceedings brought against us or any of our subsidiaries.
The costs, including possibly incurring fines, penalties, or other negative effects (including reputational harm) of any adverse judicial, administrative, or arbitral rulings or proceedings, regulatory enforcement actions or other legal actions to which we or any of our subsidiaries are a party, and which may adversely affect our results.
Changes in laws and regulations affecting our businesses, including legislation and regulations relating to bank products and services, such as changes to debit card interchange fees, special FDIC assessments, any new long-term debt requirements, as well as changes in the enforcement and interpretation of such laws and regulations by applicable governmental and self-regulatory agencies, including as a result of the changes in U.S. presidential administration, control of the U.S. Congress, and changes in personnel at the bank regulatory agencies, which could require us to change certain business practices, increase compliance risk, reduce our revenue, impose additional costs on us, or otherwise negatively affect our businesses.
Our capital actions, including dividend payments, common stock repurchases, or redemptions of preferred stock, must not cause us to fall below minimum capital ratio requirements, with applicable buffers taken into account, and must comply with other requirements and restrictions under law or imposed by our regulators, which may impact our ability to return capital to shareholders.
Our ability to comply with stress testing and capital planning requirements (as part of the CCAR process or otherwise) may continue to require a significant investment of our managerial resources due to the importance of such tests and requirements.
Our ability to comply with applicable capital and liquidity requirements (including, among other things, the Basel III capital standards), including our ability to generate capital internally or raise capital on favorable terms, and if we fail to meet requirements, our financial condition and market perceptions of us could be negatively impacted.
Our ability to recruit and retain talented and experienced personnel to assist in the development, management and operation of our products and services may be affected by changes in laws and regulations in effect from time to time.
Our ability to receive dividends from our subsidiaries, in particular Regions Bank, could affect our liquidity and ability to pay dividends to shareholders.
Fluctuations in the price of our common stock and inability to complete stock repurchases in the time frame and/or on the terms anticipated.
The effects of anti-takeover laws and exclusive forum provision in our certificate of incorporation and bylaws.
The effect of new tax legislation and/or interpretation of existing tax law, which may impact our earnings, capital ratios and our ability to return capital to shareholders.
Changes in accounting policies or procedures as may be required by the FASB or other regulatory agencies could materially affect our financial statements and how we report those results, and expectations and preliminary analyses relating to how such changes will affect our financial results could prove incorrect.
Any impairment of our goodwill or other intangibles, any repricing of assets or any adjustment of valuation allowances on our deferred tax assets due to changes in tax law, adverse changes in the economic environment declining operations of the reporting unit or other factors.
The effects of man-made and natural disasters, including fires, floods, droughts, tornadoes, hurricanes and environmental damage (especially in the Southeastern United States), which may negatively affect our operations and/or our loan portfolios and increase our cost of conducting business. The severity and frequency of future earthquakes, fires, hurricanes, tornadoes, droughts, floods and other weather-related events are difficult to predict and may be exacerbated by global climate change.
The impact of pandemics on our businesses, operations and financial results and conditions. The duration and severity of any pandemic as well as government actions or other restrictions in connection with such events could disrupt the global economy, adversely affect our capital and liquidity position, impair the ability of borrowers to repay outstanding loans and increase our allowance for credit losses, impair collateral values and result in lost revenue or additional expenses.
The effects of any damage to our reputation resulting from developments related to any of the items identified above.
Other risks identified from time to time in reports that we file with the SEC.

The foregoing list of factors is not exhaustive. For discussion of these and other factors that may cause actual results to differ from expectations, look under the captions "Forward-Looking Statements" and "Risk Factors" in Regions’ Annual Report on Form 10-K for the year ended December 31, 2023 and in Regions’ subsequent filings with the SEC.

You should not place undue reliance on any forward-looking statements, which speak only as of the date made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible to predict all of them. We assume no obligation and do not intend to update or revise any forward-looking statements that are made from time to time, either as a result of future developments, new information or otherwise, except as may be required by law.

Use of non-GAAP financial measures

Management uses pre-tax pre-provision income (non-GAAP) and adjusted pre-tax pre-provision income (non-GAAP), as well as the adjusted efficiency ratio (non-GAAP) and the adjusted fee income ratio (non-GAAP) to monitor performance and believes these measures provide meaningful information to investors. Non-interest expense (GAAP) is presented excluding certain adjustments to arrive at adjusted non-interest expense (non-GAAP), which is the numerator for the adjusted efficiency ratio. Non-interest income (GAAP) is presented excluding certain adjustments to arrive at adjusted non-interest income (non-GAAP), which is the numerator for the adjusted fee income ratio. Adjusted non-interest income (non-GAAP) and adjusted non-interest expense (non-GAAP) are used to determine adjusted pre-tax pre-provision income (non-GAAP). Net interest income (GAAP) on a taxable-equivalent basis and non-interest income are added together to arrive at total revenue on a taxable-equivalent basis. Adjustments are made to arrive at adjusted total revenue on a taxable-equivalent basis (non-GAAP), which is the denominator for the adjusted fee income and adjusted efficiency ratios. Net loan charge-offs (GAAP) are presented excluding adjustments to arrive at adjusted net loan-charge offs (non-GAAP). Adjusted net loan charge-offs as a percentage of average loans (non-GAAP) are calculated as adjusted net loan charge-offs (non-GAAP) divided by average loans (GAAP) and annualized. Regions believes that the exclusion of these adjustments provides a meaningful basis for period-to-period comparisons, which management believes will assist investors in analyzing the operating results of the Company and predicting future performance. These non-GAAP financial measures are also used by management to assess the performance of Regions’ business. It is possible that the activities related to the adjustments may recur; however, management does not consider the activities related to the adjustments to be indications of ongoing operations. Regions believes that presentation of these non-GAAP financial measures will permit investors to assess the performance of the Company on the same basis as that applied by management.

Tangible common stockholders’ equity ratios have become a focus of some investors and management believes they may assist investors in analyzing the capital position of the Company absent the effects of intangible assets and preferred stock. Analysts and banking regulators have assessed Regions’ capital adequacy using the tangible common stockholders’ equity measure. Because tangible common stockholders’ equity is not formally defined by GAAP or prescribed in any amount by federal banking regulations it is currently considered to be a non-GAAP financial measure and other entities may calculate it differently than Regions’ disclosed calculations. Since analysts and banking regulators may assess Regions’ capital adequacy using tangible common stockholders’ equity, management believes that it is useful to provide investors the ability to assess Regions’ capital adequacy on this same basis.

Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied and are not audited. Although these non-GAAP financial measures are frequently used by stakeholders in the evaluation of a company, they have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analyses of results as reported under GAAP. In particular, a measure of earnings that excludes selected items does not represent the amount that effectively accrues directly to stockholders.

Management and the Board of Directors utilize non-GAAP measures as follows: