Regions Financial expects its deposits to decline again in the second quarter as clients continue to seek higher yields on their savings.
The Birmingham, Alabama-based company reported Friday that its total deposits fell by $3.3 billion during the first quarter to $128 billion — a 2.5% decline since last year's fourth quarter and a 9% drop from the first quarter of 2022.
The bank anticipates another decline of up to $2 billion between April and June.
Two-thirds of last quarter's decline was due to "seasonal activity," and the rest came from "a continuation of rate-seeking behavior," Chief Financial Officer David Jackson Turner told analysts.
The bank's wealth management business experienced the steepest runoff. That unit's deposits declined by 13% from last year's fourth quarter and by 24% from the year-earlier period.
But total deposits were "roughly unchanged" since the onset of the turmoil that was sparked by the collapse of Silicon Valley Bank and Signature Bank in March, Turner said during the company's earnings call. He attributed the continuing outflows partly to rapidly rising rates.
Regions said that it plans to increase interest-bearing deposit prices to keep existing clients and attract new customers.
During the earnings call, Regions executives assured investors that the $154.1 billion-asset bank has stable funding and available sources of liquidity. Some U.S. banks have faced
In March, Regions did not rely on the Fed's new
On Friday, Regions pointed to $53.9 billion in what it characterized as key liquidity sources. That includes $6.5 billion in cash, $20.7 billion in liquid securities, $13.2 billion available from the Federal Home Loan Bank system and $12.8 billion in available funding from the Federal Reserve's discount window.
"What we've learned over this is that it can move much quicker than we all had anticipated," CEO John Turner said. "We'll probably maintain a bit more cash than we historically have been."
For the first quarter, Regions reported total revenue of $1.9 billion, which was up 22% from the same period last year but down 2.5% from last year's fourth quarter.
Net income of $612 million was up 12% from the year-ago period but down 11% from the previous three-month period. Net interest income rose by 40% from the same period last year and by 1% from the fourth quarter.
Total loans of $98 billion rose by 10% from the same period last year, driven by 12% growth in the bank's commercial portfolio and a 5% increase in its consumer business. Loans grew 1% from the fourth quarter.
