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Birmingham, Alabama-based Regions Financial reported third-quarter net income totaling $490 million Friday, level with last year's result.
Net interest income for the three months ending Sept. 30 totaled $1.23 billion. That was down nearly 6% from the same period in 2023, but the $157.4 billion-asset bank benefited from tight expense control and a lower provision for credit losses. In that respect, Regions' third-quarter results mirrored those from the second quarter, when effective financial restraint combined with lower loan charge-offs helped drive a $501 million profit.
"During the third quarter, Regions continued its focus on delivering consistent, sustainable, long-term performance," Chairman and CEO John Turner said in a press release. "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."
Regions is projecting full-year 2024 spread income totaling $4.8 billion, down about 10% from the 2023 level. As with a number of other banks, however, Regions expects net interest income to increase in the fourth quarter and into 2025.
Period-end loans and deposits were largely in line with totals from a year ago. Fee revenue was up slightly, though after factoring out a $78 million securities loss, third-quarter noninterest income rose 15% from a year ago. Strong capital markets revenue helped drive Regions' fee income success. Capital markets revenues of $93 million were up 39% over the total from Sept. 30, 2023.
Prior to the start of earnings season, analysts were projecting a deal-driven uptick in capital markets revenue across the banking industry. That's what appears to be playing out, as a number of banks, most prominently Truist Financial, PNC Financial Services Group and Huntington Bancshares, have reported exceptional revenues from their investment-banking-related activities.
Regions also saw big gains from its wealth management business, which reported record revenue totaling $128 million in the third quarter, up more than 14% from a year ago. The number of wealth management relationships increased nearly 9% between August 2023 and August 2024.
Regions reported net charge-offs of $117 million, or 0.48% of average loans, in the third quarter. That was up from $101 million, 0.40% of average loans, during the same period a year ago. The company is forecasting full-year 2024 charge-offs toward the high end of its 40-to-50-basis-point target range. Nonperforming loans totaled $821 million at Sept. 30, up from $642 million a year ago.
Regions continued to demonstrate tight cost control. Noninterest expenses for the third quarter totaled $1.07 billion, down slightly from 2023. Spending this year included $14 million of expenses connected to Visa litigation escrow charges. While Regions is projecting what it termed a "slight increase" in fourth quarter noninterest expenses over the third-quarter total, its full-year adjusted operating costs are expected to total $4.25 billion, in line with the 2023 result.
Regions reported a Common Equity Tier 1 capital ratio of 10.6% at Sept. 30, up from 10.4% a year ago. The company expects to maintain capital at the current level "over the near term" Chief Financial Officer David Turner said on a conference call with analysts.
Regions reported increased usage of its digital channels, with the number of mobile banking users and log-ins growing substantially over the past 12 months.
