Summary of Regions Financial Corporation Q1 2026 Earnings Call

1Key Financial Results and Metrics

Earnings: Reported net income of $539 million, or $0.62 per share, marking an 11% and 15% increase year-over-year, respectively.

Pre-tax Pre-provision Income: Adjusted to $805 million, up 4% year-over-year.

Return on Tangible Common Equity: Achieved 18%.

Loan Growth: Ending loans grew by 2%, with average loans up approximately 1%. Growth was driven by C&I lending across various sectors.

Deposits: Average balances increased modestly, with ending balances up 1%, reflecting seasonal patterns. Noninterest-bearing deposits remained stable at low 30% range.

Net Interest Income: Decreased linked quarter due to fewer days and absence of nonrecurring items, with a net interest margin of 3.67%, slightly below expectations.

Credit Quality: Net charge-offs decreased to 54 basis points, with total nonperforming loans stable at 71 basis points.

2Strategic Updates and Business Highlights

Core Transformation: Continued investment in technology, including a commercial lending system and digital origination platform set for launch in summer 2026.

Growth Initiatives: Focus on targeted hiring across business lines and investments in products and services.

Wealth Management: Revenue up 9% year-over-year, expected to remain a strong contributor to fee revenue growth.

Treasury Management: Grew 6% linked quarter, with ongoing investments in talent and innovation.

3Forward Guidance and Outlook

Loan Growth: Full year average loans expected to increase by low single digits compared to 2025.

Deposits: Anticipated to grow by low single digits for the year.

Net Interest Income: Expected to grow between 2.5% and 4% for the full year, with a net interest margin projected to exit the year in the low 3.70s.

Noninterest Income: Guidance for adjusted noninterest income growth remains at 3% to 5% for 2026.

4Bad News, Challenges, or Points of Concern

Net Interest Margin Pressure: Experienced tighter asset spreads and loan remixing, impacting margin performance.

Competitive Deposit Environment: Increased competition for deposits, particularly in the Southeast, could pressure deposit pricing and costs.

Macroeconomic Uncertainty: Ongoing geopolitical risks, particularly related to the Middle East, could impact credit quality and economic outlook.

Declining Fee Revenue: Adjusted noninterest revenue declined 2% linked quarter, driven by lower card and ATM fees and other noninterest income.

5Notable Q&A Insights

Confidence in Revenue Guidance: Management expressed confidence in achieving net interest income and fee revenue guidance despite a softer start to the year.

Loan Utilization Rates: Utilization rates increased by 200 basis points, with expectations for continued borrowing activity from middle-market customers.

Capital Management: Management plans to maintain CET1 ratio around 9.25% to 9.75%, with a focus on managing capital distribution priorities.

Credit Quality Outlook: Continued improvement in credit quality expected, with NPAs potentially decreasing further, although significant reductions beyond 71 basis points are not anticipated.

AI Impact on Deposits: Management believes that while AI may influence customer behavior, the majority of their customer base is not yield-seeking, which may mitigate risks to deposit stability. Overall, Regions Financial Corporation reported solid first-quarter results, with a positive outlook on loan growth and strategic initiatives, though it faces challenges from competitive pressures and macroeconomic uncertainties.