Impacted by lower revenues, Regions Financial Corporation’s (RF - Analyst Report) fourth-quarter 2014 earnings from continuing operations came in at 14 cents per share, missing the Zacks Consensus Estimate by 7 cents. Moreover, results compared unfavorably with the prior-year quarter earnings of 17 cents per share.
Lower-than-expected results were driven by higher non-interest expenses and lower top-line. Moreover, absence of credible improvement in the mortgage market remains a concern. However, increase in loans and deposits were the positives for the quarter.
Income from continuing operations available to common shareholders was $198 million in the quarter, down from $233 million reported in the prior-year quarter.
For full-year 2014, Regions reported income available to common shareholders of $1.09 billion or 79 cents per share compared with $1.10 billion or 78 cents in the prior year. Results lagged the Zacks Consensus Estimate of 85 cents.
Performance in Detail
For full-year 2014, Regions reported total revenue of $5.1 billion, missing the Zacks Consensus Estimate of $5.2 billion. Moreover, revenues decreased 3.4% on a year-over-year basis.
Total revenue (net of interest expense) came in at $1.27 billion in the quarter, lagging the Zacks Consensus Estimate of $1.30 billion. Moreover, revenues decreased 6.6% on a year-over-year basis.
Regions reported adjusted pre-tax pre-provision income from continuing operations of $397 million in the fourth quarter, down 8.9% year over year. Excluding certain one-time items, pre-tax pre-provision income decreased 27.4% year over year to $299 million.
Net interest income was $820 million, down 1.4% on a year-over-year basis. Net interest margin on a fully taxable equivalent basis declined 9 basis points year over year to 3.17% in the quarter.
Regions’ non-interest income was $448 million, down 14.8% year over year. Reduced mortgage revenues along with lower service charges on deposit accounts and other income mainly led to the fall in non-interest income. Mortgage production came in at $1.17 billion in the quarter, down 5.7% year over year.
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