Post Earnings Coverage as Regions Financial's Q4 EPS Beat Expectations
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LONDON, UK / ACCESSWIRE / January 30, 2017 / Active Wall St. announces its post-earnings coverage on Regions Financial Corp. (NYSE: RF). The Company reported its financial results for the fourth quarter fiscal 2016 (Q4 FY16) and full year 2016 (FY16) on January 20, 2017. The Birmingham, Alabama-based bank's quarterly adjusted total revenue on tax-equivalent (TE) and net income from continuing operations available to common shareholders grew 2.1% and 2.2% y-o-y, respectively. Register with us now for your free membership at:
One of Regions Financial's competitors within the Regional - Southeast Banks space, IBERIABANK Corp. (NASDAQ: IBKC), reported its Q4 2016 results on Thursday, January 26, 2017. AWS will be initiating a research report on IBERIABANK in the coming days.
Today, AWS is promoting its earnings coverage on RF; touching on IBKC. Get our free coverage by signing up to:
In Q4 FY16, Regions Financial reported total revenue (TE) of $1.40 billion, up 1.9% from $1.37 billion in the prior year's same quarter. The Company adjusted total revenue (TE) for Q4 FY15 came in at $1.39 billion, which was above $1.36 billion recorded in Q4 FY15. The Company's quarterly adjusted total revenue (TE) was in-line with market consensus estimates.
The Company's Q4 FY16 net interest income, on fully taxable equivalent (FTE) basis, was $874 million, up 2.1% from $856 million in the prior-year's same quarter. Furthermore, adjusted non-interest income grew 2.0% to $512 million in Q4 FY16 from $502 million in the previous year. The Company attributed the growth in non-interest income growth to mortgage income, service charges and card & ATM income offset by lower net revenue from affordable housing investments. Additionally, net interest margin (on a FTE basis) grew eight basis points y-o-y to 3.16% in Q4 FY16 from 3.08% in Q4 FY15.
The consumer and commercial banking services provider's net income from continuing operations available to common shareholders for Q4 FY16 came in at $278 million, or $0.23 per diluted share, up from $272 million, or $0.21 per diluted share, in Q4 FY15. Further, net income numbers for Q4 FY16 beat market consensus estimates of $0.22 per diluted share.
For full-year FY16, Regions Financial's adjusted total revenue (TE) came in at $5.57 billion compared to $5.33 billion in the previous year. The Company's net income from continuing operations available to common shareholders stood at $1.09 billion, or $0.87 per diluted share, versus $1.01 billion, or $0.76 per diluted share in FY15.
Performance Metrics
Regions Financial's average total loans balance stood at $80.59 billion in Q4 FY16 compared to $80.76 billion in Q4 FY15. Average total deposits for the reported quarter came in at $98.50 billion, up 1.0% y-o-y from $97.49 million in Q4 FY15. Furthermore, net charge-offs increased 6%, during the quarter and represented 0.41% of average loans compared to 0.38% in the previous year comparable quarter.
The company's non-GAAP return on average tangible common stockholders' equity stood at 9.96% as on December 31, 2016, compared to 9.61% as on December 31, 2015. Additionally, non-GAAP tangible common book value per share came in at $8.95 as on December 31, 2016, up from $8.52 per share as on December 31, 2015. For the year ended December 31, 2016, adjusted GAAP operating leverage came in at 2.6%.
As on December 31, 2016, the Company's Basel III common equity Tier 1 ratio stood at 11.1% versus 10.9% as on December 31, 2015. The Company's tier 1 capital ratio was 11.9% as on December 31, 2016, compared to 11.7% in the year ago date. The bank's non-performing assets (excluding loans 90 days past due) as a percentage of loans, foreclosed properties and non-performing loans held for sale rose 24 basis points from 1.37% in the prior-year's comparable quarter to 1.13% in Q4 FY16. Additionally, the Company's loan-to-deposit ratio at the end of the quarter stood at 81%.
Share Repurchase
The Company informed Wall Street that it had returned $1.2 billion to shareholders through the combination of share repurchases and dividends to common shareholders.
Outlook
In its guidance for full year FY17, the Company expects low single digits growth in average loan and average deposits. Net interest income and other financing income are forecasted to rise by 2% to 4%, while adjusted non-interest income growth is anticipated to be in the range of 3% to 5% in FY17. Additionally, adjusted operating leverage for FY16 is projected to be between 2% and 4%, whereas net charge-offs is expected to be in the range of 35 bps to 50 bps.
Stock Performance
Last Friday, January 27, 2017, the stock closed the trading session at $14.54, declining 1.09% from its previous closing price of $14.70. A total volume of 9.36 million shares have exchanged hands. Regions Financial's stock price surged 35.88% in the last three months, 60.52% in the past six months, and 86.17% in the previous twelve months. The stock is trading at a PE ratio of 17.09 and has a dividend yield of 1.79%.
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