Regions Financial Corporation

Regions reported earnings of $549 million, or $0.64 per share; on an adjusted basis, earnings were $583 million, or $0.68 per share. Adjusted pretax pre-provision income was $831 million and adjusted return on tangible common equity was 20%. Average loans increased approximately 2% and ending loans grew 1%; average deposits increased modestly and ending deposits declined approximately 1%. Net interest income increased 2% linked quarter and net interest margin was 3.66%; interest-bearing deposit costs fell 3 basis points to 1.69%. Adjusted noninterest income increased 7% linked quarter and adjusted noninterest expense increased 4%. Annualized net charge-offs were 42 basis points, the allowance for credit losses ratio was 1.63%, CET1 was 10.7% estimated and about 9.5% including AOCI, and the company repurchased $59 million of stock and paid $226 million of common dividends. Guidance: full-year average loan growth is expected to be up low single digits, 2026 average deposits up low single digits, adjusted NII growth 2.5% to 4%, adjusted noninterest income growth 3% to 5% with results trending to the lower end, adjusted noninterest expense up 1.5% to 3.5%, net charge-offs 40 to 50 basis points, and NIM exiting the year at approximately 3.7%.

John Turner said the quarter reflected disciplined execution and the benefits of investments to position Regions for sound, profitable growth. He described the operating backdrop as constructive, with solid economic activity, healthy consumer spending, strong pipelines, and improving credit. He also emphasized strategic progress in digital banking, commercial lending modernization, deposit transformation, wealth management, and the planned Frazer Lanier acquisition to expand capital markets capabilities.

Anil Chadha highlighted balance-sheet growth, saying average loans rose about 2%, pipelines were up roughly 15% year over year, and average deposits were modestly higher with noninterest-bearing deposits in the low 30% range. He pointed to a 3.66% net interest margin, 1.69% interest-bearing deposit costs, and a 37% deposit beta over the falling-rate cycle, while guiding to roughly stable deposit costs if the Fed holds steady. He also cited improved credit metrics, including 42 basis points of net charge-offs, a 1.63% allowance ratio, CET1 at 10.7% and about 9.5% including AOCI, plus capital returns of $59 million of buybacks, $226 million of dividends, and a new quarterly dividend of $0.30 per share.

Analysts focused on whether softer fee trends and higher loan growth could still allow positive operating leverage, and management said yes, pointing to the full-year revenue and expense guides and stronger second-half comparables. Questions also centered on deposit competition, funding loan growth, and whether a rate hike would change betas; management said deposit pricing pressure has been consistent for 12 to 18 months, the CD book is repricing in a way that should keep deposit costs roughly flat, and any short-term loan-funding gaps would be met with other funding sources rather than expensive promotional deposits. Analysts pressed on credit quality, especially multifamily and AI-related second-order risks; management said credit is largely normalized, multifamily softness is limited to a few Texas markets, and they are actively stress-testing interconnected exposures across sectors.