Regions Financial Corp. — Third Quarter 2026 Earnings Summary

Financial Performance

• Reported net income available to common shareholders was $611 million, compared to $549 million in the second quarter of 2026 and $570 million in the third quarter of 2025.
• Diluted earnings per share (EPS) were $0.71, an increase of 16% year-over-year compared to the third quarter of 2025.
• Adjusted net income available to common shareholders was $622 million, with adjusted diluted EPS of $0.73.
• Total revenue was $1,973 million, up 3% year-over-year and 3.5% sequentially.
• Net interest income was $1,298 million, up 3.3% year-over-year and 1.6% sequentially.
• Net interest margin (FTE) was 3.68%, up 2 basis points sequentially and up from 3.59% year-over-year.
• Non-interest income was $675 million, up 2.4% year-over-year and 7.1% sequentially.
• Non-interest expense was $1,118 million, relatively stable compared to the prior quarter and up 1.4% year-over-year.
• The efficiency ratio was 56.2% on a reported basis and 55.8% on an adjusted basis.
• Return on average assets was 1.55%, and return on average common equity was 14.16%.
• Adjusted return on average tangible common equity was 21.66%.

Guidance and Future Outlook

• Management stated the company is well-positioned to meet evolving customer needs and drive sustainable growth over time.
• The company noted that elevated long-term interest rates have slowed permanent financing in the multifamily sector, though production remains strong.
• Management continues to monitor economic uncertainty and portfolios with heightened risk or interest rate sensitivity.

Business Segments and Product Lines

• Capital markets income reached a record quarter, increasing 27% sequentially to $107 million, driven by higher M&A advisory revenue, securities underwriting, commercial swap income, and syndication revenue.
• Treasury Management income also reached a record quarter, contributing to a 2% increase in service charges on deposit accounts.
• Commercial credit fee income increased 25% sequentially to $35 million, driven by higher standby letter of credit income and commercial unused fees.
• Bank-owned life insurance (BOLI) income increased 33% to $32 million due to higher death benefit proceeds.
• Wealth management income decreased 3% sequentially to $146 million, reflecting lower production volumes following a record second quarter.
• Average loans increased 0.5% sequentially to $99.183 billion, driven by broad-based Commercial & Industrial (C&I) lending, including government, public sector, wholesale, and financial services.
• Investor real estate loans grew 2.1% in average balances, driven by strong production and increased bridge-financing activity in the multifamily sector.
• Average deposits declined 1.2% sequentially to $129.140 billion, primarily due to strategic reallocation of interest-bearing balances by a limited number of large commercial clients to off-balance sheet products.
• Non-interest bearing deposits increased, and underlying deposit trends remained healthy with growth in new accounts.

Market and Competitive Landscape

• The company reported a low-cost deposit base with peer-leading interest-bearing deposit costs of 1.70%.
• The company maintains a best-in-class hedging program creating a mostly neutral short-term interest rate position.
• Investment grade credits represented more than half of new loan balances.
• The company serves customers across the South, Midwest, and Texas, operating over 1,200 banking offices and 1,750 ATMs.

Risks and Challenges

• Net charge-offs were $72 million (annualized 29 basis points), a 13 basis point decrease from the prior quarter, though the company continues to monitor economic uncertainty.
• Business services criticized loans and non-performing loans declined, but the allowance for credit losses (ACL) to non-performing loans ratio increased to 275%.
• The company faces risks related to fluctuations in market interest rates, credit losses, and potential reductions in credit ratings.
• Operational risks include cyber-attacks, systems failures, and compliance with evolving laws regarding privacy and cybersecurity.
• The company is exposed to risks associated with residential and commercial real estate market weakness and home equity products.

Management Commentary and Tone

• John Turner, Chairman, President, and CEO, stated that the company is seeing benefits from investments in talent, technology, and strategic growth.
• Management emphasized a disciplined approach to risk management and a commitment to soundness, profitability, and growth.
• Strong credit quality, momentum in fee-based businesses, and economically vibrant markets in the company's footprint were cited as contributors to the results.
• The tone was confident, highlighting the franchise's modernization and expansion of capabilities.

Other Key Points

• The company repurchased approximately 3 million shares of common stock for a total of $95 million during the quarter.
• The company declared $255 million in dividends to common shareholders.
• Estimated Common Equity Tier 1 (CET1) ratio was 10.8%, and Tier 1 capital ratio was 11.9%.
• Total available liquidity was approximately $64 billion, sufficient to cover uninsured deposits at a ratio of approximately 170%.
• The allowance for credit losses ratio decreased 2 basis points to 1.61% due to portfolio composition changes, partially offset by interest rate increases and macroeconomic uncertainty.
• Professional, legal, and regulatory expenses increased 25% sequentially to $35 million, driven by higher legal settlement costs.
• Equipment and software expense increased 6% to $113 million, reflecting software as a service charges for technology and infrastructure investments.