RF 10-K & 10-Q changes, risk factors and insider trading
Regions Financial Corp. (also RF-PC, RF-PE, RF-PF) · NYSE · National Commercial Banks · CIK 1281761 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “The development and use of AI presents risks and challenges that may adversely impact our business.”
New heading “Industry competition, including competition from decentralized finance platforms, cryptocurrencies and blockchain technologies, could disrupt our business model and adversely affect our revenues, market share or liquidity.”
Removed heading “Risk Factor Summary”
Removed heading “Liquidity Risks”
Removed heading “Technology Risks”
Removed heading “Strategic Risks”
Removed heading “Operational Risks”
Removed heading “Reputational Risks”
Removed heading “Legal, Regulatory and Compliance Risks”
Removed heading “Talent Management Risks”
Removed heading “Estimates and Assumptions Risks”
Removed heading “Other External Risks”
Removed heading “Industry competition may adversely affect our degree of success.”
Removed heading “Other External Risks”
Removed heading “Our business and financial performance could be adversely affected by a U.S. government debt default or the threat of such a default.”
Largest changes
“Instability in geopolitical matters could have a material adverse effect on our results of operations and financial condition. The macroeconomic environment in the United States is susceptible to global events and volatility in financial markets.. Current and emerging sources of geopolitical risk include, among others, ongoing armed conflicts and military tensions (such as Russia’s invasion of Ukraine and various conflicts in the Middle East), heightened strategic competition between the United States and China and evolving tensions related to relations between China and Taiwan. …”see in full comparison
“Instability in geopolitical matters could have a material adverse effect on our results of operations and financial condition. The macroeconomic environment in the United States is susceptible to global events and volatility in financial markets. For example, trade negotiations between the United States and other nations remain uncertain and could adversely impact economic and market conditions for our and our clients and counterparties. …”see in full comparison
“Industry competition, including competition from decentralized finance platforms, cryptocurrencies and blockchain technologies, could disrupt our business model and adversely affect our revenues, market share or liquidity.”see in full comparison
“Our business and financial performance could be adversely affected by a U.S. government debt default or the threat of such a default.”see in full comparison
“We and our third-party vendors, clients or counterparties develop, deploy and incorporate AI technology in certain business processes, services and products. Our current and increasing development, deployment and use of AI presents a number of risks and challenges to our business. The legal and regulatory environment relating to AI is uncertain and rapidly evolving, both in the U.S. …”see in full comparison
“These dynamics can lead to higher and more volatile commodity and energy prices, strained global supply chains, increased inflationary pressures and weaker economic growth both globally and in the United States. Financial markets may experience abrupt swings in asset valuations, higher risk premiums and periods of reduced liquidity. Geopolitical events can also spur elevated cyber threats, including state-sponsored and opportunistic cyber-attacks aimed at critical infrastructures and financial systems. …”see in full comparison
Full comparison: every changed paragraph (130)
An investment in the Company involves risks, some of which, including market, credit, technology, strategic, operational, reputational, legal, regulatory and compliance, liquidity, talent management, estimate and assumption and other external risks, could be substantial and is inherent in our business. These risks also include the possibility that the value of the investment could decrease considerably, and dividends or other distributions concerning the investment could be reduced or eliminated. Discussed below are risk factors that could adversely affect our financial results and condition, as well as the value of, and return on investment in the Company.
Discussed below are risk factors that could adversely affect our financial results and condition, as well as the value of, and return on investment in the Company.
Risk Factor Summary
Market Risks
•Our businesses have been, and may continue to be, adversely affected by conditions in the financial markets and economic conditions generally.
•Fluctuations in market interest rates, including the level and shape of the yield curve, may adversely affect our performance.
Credit Risks
•If we experience greater credit losses in our loan portfolios than anticipated, our earnings may be materially adversely affected.
•Any future reductions in our credit ratings may increase our funding costs and place limitations on business activities.
•Changes in the soundness of other financial institutions could adversely affect us.
•We may suffer losses if the value of collateral declines in stressed market conditions.
Liquidity Risks
•Ineffective liquidity management could adversely affect our financial results and condition.
•Loss of deposits or a change in deposit mix could increase our funding costs.
•We rely on the mortgage secondary market to manage various risks.
Technology Risks
•We are at risk of a variety of systems failures or errors and cybersecurity incidents that could adversely affect customer experience and our business and financial performance.
•We are subject to complex and evolving laws, regulations, rules, standards and contractual obligations regarding privacy and cybersecurity, which could increase the cost of doing business, compliance risks and potential liability.
•We will continually encounter technological change and must effectively anticipate, develop and implement new technology.
Strategic Risks
•Industry competition may adversely affect our degree of success.
•Our operations are concentrated primarily in the South, Midwest and Texas, and adverse changes in the economic conditions in this region can adversely affect our financial results and condition.
•Weakness in the residential real estate markets could adversely affect our performance.
•Weakness in the commercial real estate markets could adversely affect our performance.
•Risks associated with home equity products where we are in a second lien position could materially adversely affect our performance.
•Weakness in commodity businesses could adversely affect our performance.
•An outbreak or escalation of hostilities between countries or within a country or region could have a material adverse effect on the U.S. economy and on our businesses.
Operational Risks
•We are subject to a variety of operational risks, including the risk of fraud or theft by internal or external parties, which may adversely affect our business and results of operations.
•We rely on other companies to provide key components of our business infrastructure.
•We depend on the accuracy and completeness of information about clients and counterparties.
•We are exposed to risk of environmental liability when we take title to property.
•We can be negatively affected if we fail to identify and address operational risks associated with the introduction of or changes to products, services and delivery platforms.
•Enhanced regulatory and other standards for the oversight of vendors and other service providers can result in higher costs and other potential exposures.
•We are, and may in the future be, subject to claims and litigation calling into question our right to use the intellectual property underlying certain technology in our business.
Reputational Risks
•We are subject to ESG risks that could adversely affect our business, reputation and the trading price of our common stock.
•Damage to our reputation could significantly harm our businesses.
Legal, Regulatory and Compliance Risks
•We are, and may in the future be, subject to litigation, investigations and governmental proceedings that may result in liabilities adversely affecting our financial condition, business or results of operations or in reputational harm.
•We are subject to extensive governmental regulation, which could have an adverse impact on our operations and our business model.
•We are subject to a variety of risks in connection with any sale of loans we may conduct.
•We may be subject to more stringent capital and liquidity requirements.
•Rulemaking changes and regulatory initiatives implemented by the CFPB may result in higher regulatory and compliance costs that may adversely affect our results of operations.
•We are subject to numerous laws designed to protect consumers, including the CRA and fair lending laws, and a failure to comply with these laws could lead to a wide variety of penalties and other sanctions.
•We may not be able to complete future acquisitions, may not be successful in realizing the benefits of any future acquisitions that are completed or may choose not to pursue acquisition opportunities we might find beneficial.
•Increases in FDIC insurance assessments may adversely affect our earnings.
•Unfavorable results from ongoing stress analyses may adversely affect our ability to retain customers or compete for new business opportunities.
•We are a holding company and depend on our subsidiaries for dividends, distributions and other payments.
•We may not pay dividends on shares of our capital stock.
•Anti-takeover and banking laws and certain agreements and charter provisions may adversely affect share value.
•Our amended and restated bylaws designate (i) the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our shareholders and (ii) the federal district courts of the United States as the sole and exclusive forum for any action asserting a cause of action arising under the Securities Act, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with our company or our company’s directors, officers or other employees.
•We face substantial legal and operational risks in our safeguarding and other processing of personal information.
•Differences in regulation can affect our ability to compete effectively.
Talent Management Risks
•Our businesses may be adversely affected if we are unable to hire and retain qualified employees.
•Our operations rely on our ability, and the ability of key external parties, to maintain appropriately-staffed workforces, and on the competence, trustworthiness, health and safety of employees.
Estimates and Assumptions Risks
•Our reported financial results depend on management’s selection of accounting methods and certain assumptions and estimates.
•If the models that we use in our business perform poorly or provide inadequate information, our business or results of operations may be adversely affected.
Management's Discussion & Analysis (MD&A)
New heading “Other Miscellaneous Income”
New heading “NON-INTEREST EXPENSE”
New heading “Visa Class B Shares Expense”
New heading “Branch Consolidation, Property and Equipment Charges”
New heading “Economic forecast and qualitative adjustments”
New heading “Table 16—Macroeconomic Factors in the Forecast”
New heading “Portfolio, credit metrics, and specific reserves”
New heading “Overall allowance”
New heading “Table 17—Year-to-Date Allowance Analysis”
New heading “Table 18—Allowance Roll-forward”
Removed heading “Intangible Assets”
Removed heading “Card and ATM Fees”
Removed heading “Bank-owned Life Insurance”
Removed heading “Table 13—Portfolios of Interest”
Removed heading “Other Consumer—Exit Portfolios”
Removed heading “Base economic forecast”
Removed heading “Table 16— Macroeconomic Factors in the Forecast”
Removed heading “Portfolio credit metrics and specific reserves”
Removed heading “Qualitative adjustments”
Removed heading “OTHER EARNING ASSETS”
Removed heading “RESIDENTIAL MORTGAGE SERVICING RIGHTS AT FAIR VALUE”
Largest changes
“Though growth in aggregate labor earnings is slowing, it continues to outpace inflation. Growth in consumer spending has slowed partially reflecting payback for purchases of consumer durable goods that were pulled forward in 2025 as consumers looked to avoid tariff-related price increases. After slowing mid-year, growth in spending on discretionary services firmed up in the fall, but a significant decline in equity prices would likely lead to a pronounced pullback in such spending. …”see in full comparison
“After what is expected to be full-year 2024 growth of around 2.8 percent, Regions' baseline forecast anticipates real GDP growth of 2.2 percent in 2025. Though the economy grew at a robust pace in 2024, performance across individual sectors varied considerably. Interest rates rose over the latter part of 2024, reflecting persistent inflation pressures and uncertainty over looming policy changes. The Company's baseline forecast anticipates real GDP growth settling back toward the pre-pandemic trend rate of growth over coming quarters. …”see in full comparison
“Other identifiable intangible assets such as relationship assets and agency commercial real estate licenses are reviewed at least annually (usually in the fourth quarter) for events or circumstances which could impact the recoverability of the intangible asset. These events could include loss of customer relationships, increased competition, or adverse changes in the economy. To the extent an other identifiable intangible asset is deemed unrecoverable, an impairment loss would be recorded to reduce the carrying amount. …”see in full comparison
“Regions maintains a robust liquidity management framework designed to effectively manage liquidity risk in accordance with sound risk management principals and regulatory expectations. The framework establishes sustainable processes and tools to effectively identify, measure, mitigate, monitor, and report liquidity risks beginning with Regions’ Liquidity Management Policy and the Liquidity Risk Appetite Statements approved by the Board. …”see in full comparison
“The increase in the allowance related to economic and qualitative changes was driven by deterioration in the economic forecast combined with a net increase in qualitative adjustments. The baseline forecast deteriorated during 2025 as the result of a slight increase in the unemployment rate due to labor supply and continued uncertainty, and decreased GDP growth. …”see in full comparison
“The pace of job growth slowed over the course of 2024 reflecting a slower pace of hiring amongst firms as opposed to a rising pace of layoffs. The combination of slowing job growth and rapid growth in the supply of labor pushed the unemployment rate higher in 2024. While Regions' forecast anticipates further moderation in the pace of job growth, it also anticipates much slower growth in the supply of labor, in part reflecting likely changes to immigration policy. …”see in full comparison
Full comparison: every changed paragraph (211)
Management believes the following sections provide an overview of several of the most relevant matters necessary for an understanding of the financial aspects of Regions' business, particularly regarding its 20242025 results. Cross references to more detailed information regarding each topic within MD&A and the consolidated financial statements are included. ThisThe summary is intended to assist in understanding thefollowing information provided, but should be read in conjunction with the entire MD&A and accompanying consolidated financial statements,statements and related notes, as well as the other sections of this Annual Report on Form 10-K.
After what is expected to be full-year 2025 growth of 2.2 percent, Regions' baseline forecast anticipates real GDP growth of 2.7 percent for 2026. The economic environment faces challenges such as lingering trade policy uncertainty, a weaker pace of hiring, and persistent inflation pressures; however, the economy is supported by ample liquidity in the household and corporate sectors, elevated profit margins, expansionary fiscal policy, accommodative financial conditions, and accelerating trend productivity growth.
The pace of nonfarm job growth slowing has been a function of diminished hiring as opposed to a rising pace of layoffs. Lingering policy uncertainty, uncertainty around the economic outlook, and a drive for greater efficiency are likely weighing on hiring while a significant outflow of foreign born labor has left a gap in the supply of labor which is weighing on hiring. A slower pace of labor force growth will largely offset the slowing pace of job growth, leaving the unemployment rate little changed; the unemployment rate averaged 4.3 percent in 2025, which we expect will be the average for 2026 as well.
Though growth in aggregate labor earnings is slowing, it continues to outpace inflation. Growth in consumer spending has slowed partially reflecting payback for purchases of consumer durable goods that were pulled forward in 2025 as consumers looked to avoid tariff-related price increases. After slowing mid-year, growth in spending on discretionary services firmed up in the fall, but a significant decline in equity prices would likely lead to a pronounced pullback in such spending. Additionally, flagging consumer sentiment and uncertainty about the path of the labor market may weigh on spending growth. That said, overall household financial conditions remain healthy, with elevated household net worth and still-low monthly debt service burdens. Moreover, changes in the tax code will lead to a significant boost to after-tax household income in the first quarter of 2026 that is expected to support spending amongst lower-to-middle income households.
More favorable tax treatment seems to have bolstered business investment spending over recent months and the momentum is expected to carry forward in 2026. Corporate profit margins remain notably elevated, particularly relative to the years immediately prior to 2020, which has enabled firms to absorb some portion of the higher tariffs already put in place. However, there is some remaining uncertainty around how the costs of higher tariffs will impact longer-term decisions on capital spending, hiring, and pricing.
While increased emphasis on the downside risks to the labor market led the FOMC to cut the Federal funds rate three times in 2025, most recently by twenty-five basis points at their December 2025 meeting, the extent of further cuts in 2026 remains unclear. Several Committee members remain focused on the upside risks to inflation. While this does not rule out additional Federal funds rate cuts, it likely limits the scope for further cuts barring a more pronounced deterioration in labor market conditions.
After what is expected to be full-year 2024 growth of around 2.8 percent, Regions' baseline forecast anticipates real GDP growth of 2.2 percent in 2025. Though the economy grew at a robust pace in 2024, performance across individual sectors varied considerably. Interest rates rose over the latter part of 2024, reflecting persistent inflation pressures and uncertainty over looming policy changes. The Company's baseline forecast anticipates real GDP growth settling back toward the pre-pandemic trend rate of growth over coming quarters. There is considerable uncertainty around any forecast for 2025 made before the specific details of changes to fiscal, trade, immigration, and regulatory policy are made known.
The pace of job growth slowed over the course of 2024 reflecting a slower pace of hiring amongst firms as opposed to a rising pace of layoffs. The combination of slowing job growth and rapid growth in the supply of labor pushed the unemployment rate higher in 2024. While Regions' forecast anticipates further moderation in the pace of job growth, it also anticipates much slower growth in the supply of labor, in part reflecting likely changes to immigration policy. These two factors should leave the unemployment rate relatively unchanged from where it ended 2024, with an expected annual average rate of 4.2 percent for 2025.
Despite slowing job growth, aggregate labor earnings, the largest component of personal income, have continued to grow at a rate faster than inflation, which is expected to remain the case through 2025. This will continue to act as a support for consumer spending, and Regions' forecast anticipates growth in consumer spending will align more closely with growth in after-tax income than has been the case over the past few years. Nonetheless, the divide in spending patterns across the various income cohorts that has developed over recent quarters will likely persist in 2025.
Still-soft global economic growth and uncertainty around looming policy changes have acted as headwinds for the manufacturing sector. Business capital spending has been somewhat limited in range, but the Company's forecast anticipates faster growth over the back half of 2025, in part reflecting expectations there will be a push to enhance labor productivity. Additionally, what is anticipated to be a more conducive regulatory environment could trigger a meaningful pick-up in merger and acquisition activity in 2025.
Mortgage rates moved higher along with yields on longer-dated U.S. Treasury securities during the fourth quarter of 2024, dealing a setback to construction and sales of new single family homes. Builders have been able to facilitate sales via aggressive use of incentives, including mortgage rate buydowns, but have been more focused on paring down spec inventories. As such, construction starts of new single family homes tailed off over the second half of 2024 and Regions' forecast anticipates further declines in 2025.
Though the FOMC cut the Fed funds rate at their final meeting of 2024, it signaled a slower pace of rate cuts in 2025. Inflation pressures have proven to be more persistent than had been anticipated, and while having some concerns about cooling labor market conditions, FOMC members perceive growing upside risks to their inflation forecasts. Regions' baseline forecast anticipates two twenty-five basis point funds rate cuts in 2025, though the timing of any cuts remains somewhat uncertain, particularly given the perceived inflation impacts of looming changes to fiscal, trade, and immigration policy. To the extent there is less relief on the rates front than anticipated, potential downside risks from certain pockets of commercial real estate and the volume of debt in the non-financial corporate sector coming up for refinancing over coming quarters will continue to loom over the outlook.
Patterns of economic activity within the Regions footprint are expected to be broadly similar to those seen for the U.S. as a whole. As was the Companycase anticipated,nationally, the pace of domesticjob in-migrationgrowth intowithin the Regions footprint slowed over the course of 2025, in 2024, likelypart reflecting a less dynamic labor market and challenging housing market conditions. Still, this left theslowing pace of domesticnet in-migration infrom linethe withrest pre-pandemicof norms,the U.S. and growthabroad. in total population in the footprint continued to easily outpace the national average, and that also remains the case withStill, growth in nonfarm payrolls.employment has continued to run ahead of the national average. Some of the metro areas which had seen the largest cumulative increases over the prior few years have begun to see house prices decline, but underlying demand, in part reflecting persistently above-average population growth, will help stem the extent of any such declines. Also, given the extent to which house prices have risen over recent years in these markets, the declines in house prices do not threaten to push large numbers of owners into negative equity positions.
The economic environment, as described above, impacted Regions' forecast utilized in calculating the ACLallowance as of December 31, 2024.2025. See the "Allowance" section for further information.
Net interest income (taxable-equivalent basis) totaled $5.0 billion in 2025 compared to $4.9 billion in 2024 compared to $5.4 billion in 2023.2024. The net interest margin (taxable-equivalent basis) was 3.543.61 percent in 2024,2025, reflecting a 367 basis point decreaseincrease from 2023.2024. The decreasesincreases in net interest income and net interest margin were primarily driven by higher funding costs, which included an increase in deposit costs due to continued re-mixing. Partially offsetting the increase inlower funding costs wasand higherhedge assetperformance yieldsimprovements benefitingas short-term interest rates declined. Net interest income and margin also benefitted from thesecurities maturityreinvestment andactivities, continuedexecuted replacementthrough ofmultiple, lower-yielding,distinct fixed-ratedebt loanssecurities andrepositioning securities.transactions. See Table 2 "Volume and Yield/Rate Variances" for further details.
The provision for credit losses totaled $487$470 million in 20242025 compared to $553 million in 2023. The provision for credit losses was higher than net charge-offs by $29$487 million in 2024. TheIn decrease2025, innet charge-offs exceeded the provision for credit losses wasby driven$43 primarilymillion compared to 2024 when the provision for credit losses exceeded net charge-offs by asset$29 quality normalization.million. Refer to the "Allowance for Credit Losses" section of Management's Discussion and Analysis for further detail.
Non-interest income increased year-over-year, totaling $2.5 billion in 2025 compared to $2.3 billion 2024. The improvement was primarily driven by a decline in securities losses associated with less repositioning activity in 2025 compared to 2024. Additionally, most categories of non-interest income increased including investment management and trust fee income, investment services income, other miscellaneous income, and service charges on deposit accounts. See Table 3 "Non-Interest Income" for further details.
Non-interest incomeexpense improvedwas slightly, totaling $2.3$4.3 billion in both 20242025 and 2023.$4.2 billion in 2024. The improvementslight increase was driven by increasesan increase in mostsalaries categories,and ledbenefits, byother capitalmiscellaneous marketsexpenses, income.and Theseprofessional, legal and regulatory expenses. The increases were largelypartially offset by netdeclines securitiesin lossesFDIC insurance assessments and decreasedoperational card and ATM fees.losses. See Table 34 "Non-Interest IncomeExpense" for further details.
Non-interest expense was $4.2 billion in 2024 and $4.4 billion in 2023. The decrease was driven by declines in operational losses, FDIC insurance assessments primarily related to the special assessment initially recognized in 2023, and miscellaneous expenses. The declines were partially offset by an increase in salaries and employee benefits. See Table 4 "Non-Interest Expense" for further details.
As a Category IV bank, Regions was not required to participate in the 2025 stress test. Nonetheless, like other Category IV banking organizations, the Company did receive results from the Federal Reserve during the second quarter of 2025. From the fourth quarter of 2025 through the third quarter of 2026, the Company's SCB will remain floored at 2.5 percent. In February 2026, the Federal Reserve voted to maintain SCB requirements at current levels through the third quarter of 2027 to allow time for public feedback on proposed changes to supervisory stress testing models. As such, Regions' SCB will remain floored at 2.5 percent through the third quarter of 2027. See Note 14 "Shareholders' Equity and Accumulated Other Comprehensive Income (Loss)" to the consolidated financial statements for further details regarding CCAR results.
Regions participates in supervisory stress testing conducted by the Federal Reserve and its SCB is currently floored at 2.5 percent. See Note 14 "Shareholders' Equity and Accumulated Other Comprehensive Income (Loss)" to the consolidated financial statements for further details regarding CCAR results.
On April 20, 2022, the Board authorized the repurchase of up to $2.5 billion of the Company's common stock, permitting purchases from the second quarter of 2022 through the fourth quarter of 2024.2024, which was subsequently extended through the fourth quarter of 2025. As of December 31, 2024,2025, Regions repurchased approximately 3478 million shares of common stock under this program, which reduced shareholders' equity by $614$1.7 million.billion. On December 10, 2024,2025, the Board authorized anthe extensionrepurchase of up to $3.0 billion of the Company's common stock repurchasefor programthe period beginning January 1, 2026 and extending through December 31, 2027. This authorization supersedes the fourthprior quartershare ofrepurchase program, which expired on December 31, 2025.
Regions and Regions Bank are required to comply with regulatory capital requirements established by Federal and State banking agencies. Under the Basel III Rules, Regions is designated as a standardized approach bank. The Basel III Rules maintain the minimum guidelines for Regions to be considered well-capitalized for Tier 1 capital and Total capital at 6.0% and 10.0%, respectively. At December 31, 2024,2025, Regions’ Tier 1 capital and Total capital ratios were estimated to be 12.17%11.99% and 14.06%,13.89%, respectively.
During 2024,2025, total loans decreased by $1.7$1.1 billion or 1.71.1 percent compared to 2023.2024. The decrease was primarily driven by a decline in the commercial portfolio of $1.2$947 billion.million and the consumer portfolio of $539 million, partially offset by an increase in commercial investor real estate mortgage loans of $605 million. The decline in commercial loans, specifically commercial and industrial loans, iswas due to lowerstrategic linerunoff ofin creditleveraged utilizationlending, continued portfolio resolutions, and loans refinancedrefinancing off the Company's balance sheet through the debt capital markets. The decline in consumer loans was primarily related to a decrease in Regions' home improvement financing portfolio balances. The increase in commercial investor real estate mortgage loans was a result of increases in fundings and new term loans. Refer to the "Portfolio Characteristics" section for further discussion.
Net charge-offs totaled $513 million, or 0.53 percent of average loans, in 2025, compared to $458 million, or 0.47 percent of average loans, in 2024, compared to $397 million, or 0.40 percent in 2023, driven by an increase in commercial and industrial and commercial investor real estate mortgage net charge-offs.charge-offs from resolutions within previously identified portfolios of interest with established reserves. The allowance was 1.791.76 percent of total loans, net of unearned income at December 31, 2024,2025, ana increasedecrease from 1.731.79 percent at December 31, 2023.2024. The coverage ratio of allowance to non-performing loans excluding loans held for sale was 242 percent at December 31, 2025, compared to 186 percent at December 31, 2024, compared to 211 percent at December 31, 2023.2024.
•"Portfolio Characteristics" section of MD&A
•“Allowance for Credit Losses” discussion within the “Critical Accounting Policies and Estimates” section of MD&A
•“Loans,” "Portfolio Characteristics", “Allowance for Credit Losses,Allowance,” and “Non-performing Assets” discussions within the “Balance Sheet Analysis” section of MD&A
At the end of 2024,2025, Regions Bank had $7.8 billion in cash on deposit with the Federal Reserve Bank and the loan-to-deposit ratio was 7673 percent. Cash and cash equivalents at the parent company totaled $2.4$726 billion.million. Cash at the Federal Reserve increasedwas fromstable compared to December 31, 2023.2024.
In preparing financial information, management is required to make significant estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses for the periods shown. The accounting principles followed by Regions and the methods of applying these principles conform with GAAP, regulatory guidance, where applicable, and general banking practices. Estimates and assumptions most significant to Regions are related primarily to the allowance, fair value measurements, intangiblegoodwill, assetsresidential (goodwill and other identifiable intangible assets), MSRs measured at fair value,MSRs, and income taxes, and are summarized in the following discussion and in the notes to the consolidated financial statements.
The allowance is sensitive to a number of internal factors, such as changes in the mix and level of loan balances outstanding, portfolio performance and assigned risk ratings. The allowance is also sensitive to external factors such as the general health of the economy, as evidenced by changes in interest rates, inflation, GDP, unemployment rates, changes in real estate demand and values, volatility in commodity prices, bankruptcy filings, and the effects of weather and natural disasters such as droughts, floods and hurricanes.
Similar to the scenariosscenario above, it is difficult to estimate how potential changes in credit risk factors might affect the overall allowance because of the wide variety of credit risk factors that are considered in estimating the allowance. Changes in risk ratings may not occur at the same rate and may not be consistent across product or industry types. Regions conducted a separate sensitivity analysis considering deteriorating conditions for commercial and investor real estate portfolio factors by stressing key portfolio drivers relative to the baseline portfolio conditions. Regions stressed risk ratings by one downgrade for commercial and investor real estate loans. This scenario resulted in an allowance approximately 20 percent higher for the commercial and investor real estate portfolios.
A portion of the Company’s assets and liabilities is carried at fair value, with changes in fair value recorded either in earnings or accumulated other comprehensive income (loss). TheseThe most significant of these include debt securities available for sale, mortgage loans held for sale, equity investments (with and without readily determinable market values), residential MSRs, commercial MSRs through non-DUS agency programs and derivative assets and liabilities. From time to time, the estimation of fair value also affects other loans held for sale, which are recorded at the lower of cost or fair value. Fair value determination is also relevant for certain other assets such as foreclosed property and other real estate, which are recorded at the lower of the recorded investment in the loan/property or fair value, less estimated costs to sell the property. For example, the fair value of other real estate is determined based on recent appraisals by third parties and other market information, less estimated selling costs. Adjustments to the appraised value are made if management becomes aware of changes in the fair value of specific properties or property types. The determination of fair value also impacts certain other assets that are periodically evaluated for impairment using fair value estimates, including goodwill and other identifiable intangible assets.goodwill.
Goodwill
Intangible Assets
Regions’Goodwill intangible assets consist primarilyconsists of the excess of cost over the fair value of net assets of acquired businesses (“goodwill”) and other identifiable intangible assets (primarily relationship assets and agency commercial real estate licenses). Goodwill totaled $5.7 billion at both December 31, 20242025 and December 31, 2023.2024. Goodwill is allocated to each of Regions’ reportable segments (each a reporting unit: Corporate Bank, Consumer Bank, and Wealth Management). Goodwill is tested for impairment on an annual basis as of October 1 or more often if events and circumstances indicate impairment may exist (refer to Note 1 "Summary of Significant Accounting Policies" to the consolidated financial statements for further discussion).
The Company completed its annual goodwill impairment test as of October 1, 2024,2025, by performing a qualitative assessment of goodwill at the reporting unit level to determine whether any indicators of impairment existed. In performing the qualitative assessment, the Company evaluated events and circumstances since the last impairment analysis, recent operating performance including reporting unit performance, changes in market capitalization, regulatory actions and assessments, changes in the business climate, company-specific factors, and trends in the banking industry. After assessing the totality of the events and circumstances, the Company determined that it is more likely than not that the fair value of the Corporate Bank, Consumer Bank, and Wealth Management reporting units exceed their respective carrying values. Therefore, a quantitative impairment test was not required. Refer to Note 9 "Goodwill and Other Intangible Assets" to the consolidated financial statements for additional discussion of goodwill.
Specific factors as of the date of filing the consolidated financial statements that could negatively impact the assumptions used in assessing goodwill for impairment include: a protracted decline in the Company’s market capitalization; adverse business trends resulting from litigation and/or regulatory actions; higher loan losses; forecasts of high unemployment levels; future increased minimum regulatory capital requirements above current thresholds (refer to Note 12 "Regulatory Capital Requirements and Restrictions" toin theItem consolidated8. financial“Financial statementsStatements and Supplementary Data" for a discussion of current minimum regulatory requirements); future federal rules and regulations (e.g., such as those resulting from the Dodd-Frank Act); and/or significant volatility in interest rates.
Other identifiable intangible assets such as relationship assets and agency commercial real estate licenses are reviewed at least annually (usually in the fourth quarter) for events or circumstances which could impact the recoverability of the intangible asset. These events could include loss of customer relationships, increased competition, or adverse changes in the economy. To the extent an other identifiable intangible asset is deemed unrecoverable, an impairment loss would be recorded to reduce the carrying amount. These events or circumstances, if they occur, could be material to Regions’ operating results for any particular reporting period but the potential impact cannot be reasonably estimated. As of December 31, 2024, the Company’s review indicated there was no impairment in the value of the other identifiable intangible assets.
Residential Mortgage Servicing Rights
Regions has elected to measure and report both its residential MSRs and commercial MSRs through non-DUS agency programs using the fair value method. Although sales of residential MSRs do occur, residential MSRs do not trade in an active market with readily observable market prices and the exact terms and conditions of sales may not be readily available, and are therefore Level 3 valuations in the fair value hierarchy previously discussed in the "Fair Value Measurements" section. Specific characteristics of the underlying loans greatly impact the estimated value of the related residential and commercial MSRs. As a result, Regions stratifies its portfolios on the basis of certain risk characteristics, including loan type and contractual note rate, as applicable. Regions values its residential and commercial MSRs using discounted cash flow modeling techniques. These techniques require management to make estimates regarding future net servicing cash flows, taking into consideration historical and forecasted mortgage loan prepayment rates, discount rates, escrow balances and servicing costs. Changes in interest rates, prepayment speeds or other factors impact the fair value of residential MSRs which impacts earnings.
Refer to Note 6 "Servicing of Financial Assets" to the consolidated financial statements for additional information including quantitative disclosures reflecting the effect that changes in management's assumptions would have on the fair value of residential MSRs.
Accrued income taxes are reported as a component of either other assets or other liabilities, as appropriate, in the consolidated balance sheets and reflect management’s estimate of income taxes to be paidreceived or received.paid. The Company is subject to income tax in the U.S. and multiple state and local jurisdictions. The tax laws and regulations in each jurisdiction are complex and may be subject to different interpretations by the Company and the relevant government taxing authorities. Therefore, the Company is required to exercise judgment in determining tax accruals and evaluating the Company’s tax positions, including evaluating uncertain tax positions.UTBs.
Net interest income is Regions’ principal source of income and is one of the most important elements of Regions’ ability to meet its overall performance goals. Both net interest income and net interest margin are influenced by both long-term and short-term market interest rates. Long-term and short-term rates were higher for most of 2024 compared to 2023. Late in the third quarter of 2024, the FOMC decreased the Fed funds rate by approximately 50 basis points and by an additional 25 basis points at the November and December meetings, for a total of 100 basis points. See the "Executive Overview" for a discussion of recent FOMC activity.
Net interest income (taxable-equivalent basis) decreased by $503 million in 2024 compared to 2023, and net interest margin decreased by 36 basis points to 3.54 percent in 2024. This represents a normalization from elevated post-pandemic levels. The decreases in net interest income and net interest margin were driven primarily by higher funding costs in a prolonged high rate environment. In 2024, funding costs, which includes deposits and wholesale borrowings utilized during the year, increased to 1.73 percent compared to 1.19 percent in 2023. The increase in funding costs was driven by higher deposit costs due to continued deposit remixing as depositors moved into higher interest earning products, albeit at a slower pace than the remixing experienced in 2023. Deposit costs increased to 1.56 percent for 2024 compared to 0.99 percent for 2023.
Partially offsetting the increase in funding costs were higher asset yields benefiting from the maturity and continued replacement of lower-yielding, fixed-rate loans and securities. The Company's loan yields are primarily influenced by short-term interest rates such as 30-day term SOFR, which averaged 5.19 percent in 2024 compared to 4.98 percent in 2023. Additionally, fixed-rate lending production, which contains significant residential mortgage fixed-rate exposure, benefited from higher middle and long-term rates. The Company also continued its reinvestment strategy in the securities portfolio and executed multiple, distinct debt securities repositioning transactions. As a result, the debt securities yield increased to 2.89 percent in 2024 from 2.38 percent in 2023. See Table 6 for more information.
(3)Interest income on debt securities includes hedging income of $20 million and $7 million,million and hedging expense of $1 million, and hedging income of $41 million for the years ended December 31, 2025, 2024, 2023 and 2022,2023, respectively. Hedging income for the year ended December 31, 2022 reflects strategies designed to accelerate hedge notional maturities through the use of pay fixed swaps. Benefits migrated to cash flow hedges from loans in the first quarter of 2023.
(5)Interest income on loans, net of unearned income, includes hedging expense of $242 million, $420 million and $236 million and hedging income of $140 million for the years ended December 31, 2025, 2024, 2023 and 2022,2023, respectively. Interest income on loans, net of unearned income, also includes net loan fees of $142$122 million, $130$142 million and $109$130 million for the years ended December 31, 2024,2025, 20232024 and 2022 ,2023, respectively.
(6)Total deposit costs may be calculated by dividing total interest expense on deposits by the sum of interest-bearing deposits and non-interest-bearing deposits.deposits The rates for total deposit costsand equaled 1.37%, 1.56% , 0.99% and 0.14%0.99% for the years ended December 31, 2025, 2024, 2023 and 2022,2023, respectively.
Net interest income is Regions’ principal source of income and is one of the most important elements of Regions’ ability to meet its overall performance goals. Annual changes in net interest income are due to changes in the interest rate environment, product pricing, balance sheet mix, and balance sheet growth.
Over recent years, changes in the interest rate environment and the impact on product pricing and mix has been the primary contributor to changes in net interest income. Long-term and short-term rates were lower for most of 2025 compared to 2024 due to the Federal funds rate being cut several times late in 2024 and again in late 2025. In 2025 specifically, the FOMC decreased the Federal funds rate by 25 basis points at the September, October and December meetings, for a total decrease of 75 basis points. See the "Executive Overview" for a discussion of recent FOMC activity.
Net interest income (taxable-equivalent basis) increased by $172 million in 2025 compared to 2024, and net interest margin increased by 7 basis points to 3.61 percent in 2025. The increases in net interest income and net interest margin were driven primarily by lower funding costs, which includes deposits and wholesale borrowings. Funding costs declined to 1.54 percent compared to 1.73 percent in 2024, driven by deposit cost reductions in a declining rate environment and deposit balance growth, creating a more optimal funding mix. Also contributing to the more optimal funding mix in 2025 was deposit remixing, as certain time deposits matured and were replaced with lower cost product types, money market in particular. Deposit costs decreased to 1.37 percent for 2025 compared to 1.56 percent for 2024.
Also benefiting net interest income and net interest margin in 2025 were the Company's continued securities reinvestment activities, executed through multiple, distinct debt securities repositioning transactions. As a result, the debt securities yield increased to 3.47 percent in 2025 from 2.89 percent in 2024. See Table 5 for more information.
Partially offsetting the decrease in funding costs were lower loan balances and lower loan yields. The Company's loan yields are primarily influenced by short-term interest rates such as 30-day term SOFR, which averaged 4.28 percent in 2025 compared to 5.19 percent in 2024. While floating-rate loan yields declined, the decline was mitigated by the Company's use of financial derivative instruments as hedges in order to provide interest income benefits in periods of lower interest rates. In addition, loan yields were also supported in 2025 from legacy fixed rate asset maturities and their replacement in the current elevated interest rate environment.
Balance sheet growth, combined with the mix of earning assets and interest-bearing liabilities, are key drivers of changes to the interest rate spread. The interest rate spread increased by 22 basis points to 2.90 percent in 2025. Average earning assets in 2025 totaled $139.4 billion, an increase of $2.0 billion as compared to the prior year, primarily due to an increase in interest-bearing deposits in other banks and debt securities, partially offset by a decline in loans, net of unearned income. The net effect of the change in earning asset mix had a relatively neutral impact on spread. The mix of funding sources, both interest-bearing and non-interest bearing liabilities, can also affect the interest spread. In 2025 and 2024, the Company's total deposit balances grew while the mix remained relatively stable, with non-interest-bearing deposits comprising approximately 30 percent of deposits throughout the years. The changes to funding mix had a favorable impact on the interest rate spread. See the "Loans", "Debt Securities", and "Deposits" sections for further details.
Annual changes in net interest income are due to changes in the interest rate environment, product pricing, balance sheet mix, and balance sheet growth. Over recent years, changes in the interest rate environment and the impact on product pricing and mix has been the primary contributor to changes in net interest income.
The mix of earning assets can affect the interest rate spread. Regions’ primary types of earning assets are loans and investment securities. Certain types of earning assets have historically generated larger spreads; for example, loans typically generate larger spreads than other assets, such as securities or interest-bearing deposits in other banks. Average earning assets in 2024 totaled $137.5 billion, a decrease of $383 million as compared to the prior year, primarily due to a modest decline in loans, net of unearned income, partially offset by growth in debt securities and interest-bearing deposits in other banks. See the "Loans" and "Debt Securities" sections for further details.
The mix of interest-bearing liabilities can also affect the interest spread. Funding for Regions’ earning assets comes from interest-bearing and non-interest-bearing sources. As previously discussed, in 2024 the Company continued to experience a remixing of deposits into higher-interest-bearing categories, albeit at a slower pace. Higher balances within these categories contributed to the overall increase in funding costs.
The provision for credit losses is used to maintain the allowance for loan losses and the reserve for unfunded credit losses at a level that inmanagement management's judgmentdetermines is appropriate to absorb expected credit losses over the contractual life of the loan and credit commitment portfolio at the balance sheet date. DuringIn 2024,2025, net charge-offs exceeded the provision for credit losses totaledby $487$43 million and net charge-offs were $458 million. This comparescompared to a2024 when the provision for credit losses of $553 million andexceeded net charge-offs ofby $397$29 million in 2023.million.
NM- Not meaningful.
What changed in the latest 10-Q
Risk Factors
There are no material changes to the risk factors set forth in Regions' Annual Report on Form 10-K for the year ended December 31, 2025.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Table 17—Credit Ratings”
New heading “Market Value Adjustments on Employee Benefit Assets”
New heading “Outside Services”
New heading “FDIC Insurance Assessments”
New heading “Operational Losses”
Removed heading “Equipment and Software Expense”
Removed heading “Professional, Legal and Regulatory Expenses”
Removed heading “Other Miscellaneous Expenses”
Largest changes
“Regions' internally-developed March baseline forecast anticipates steadier real GDP, with growth of 2.5 percent for 2026 supported by tax legislation enacted in 2025 expected to boost after-tax personal income and improve cash flows for businesses. Inflation as measured by CPI is expected to remain above the FOMC's 2.0 percent target rate into 2027. The Federal funds rate is approaching what many consider to be a "neutral" rate, which limits the room for rate cuts in 2026. …”see in full comparison
“Cash reserves, liquid assets and secured borrowing capabilities aid in the management of liquidity in normal and stressed conditions, and/or meeting the need of contingent events such as obligations related to potential litigation. As part of its normal management practice, Regions maintains collateral and operational readiness to utilize secured funding sources such as the FHLB and the Federal Reserve Bank on a same-day basis (subject to any practical constraints affecting these market participants). …”see in full comparison
“Regions' internally-developed June 2026 baseline forecast, which was similar to the March 2026 baseline forecast, reflects slightly lower real GDP which is expected to grow 2.0 percent in 2026. While consumer spending was supported by tax legislation enacted in 2025, it is expected to be partially offset by higher prices. Corporate profit margins remain healthy and are supportive of growth in business investment, which is expected to support real GDP growth. Inflation as measured by CPI is expected to remain above the FOMC's 2.0 percent target rate into 2027. …”see in full comparison
“Cash reserves, liquid assets and secured borrowing capabilities aid in the management of liquidity in normal and stressed conditions, and/or meeting the need of contingent events such as obligations related to potential litigation. See the "Liquidity" section in Regions' Annual Report on Form 10-K for the year ended December 31, 2025 for additional details, including operational readiness, related to funding sources.”see in full comparison
“On May 12, 2026, Fitch upgraded the Company's long-term bank deposits rating from A to A+ and affirmed the short-term rating of F1 reflecting reduced probability of default for deposits due to depositor preference in the United States.”see in full comparison
Full comparison: every changed paragraph (126)
The following discussion and analysis is part of Regions Financial Corporation’s (“Regions” or the “Company”) Quarterly Report on Form 10-Q filed with the SEC and should be read in conjunction with the consolidated financial statements and the related notes that appear in Part I, Item 1 of this report. In addition, this discussion and analysis updates the Annual Report on Form 10-K for the year ended December 31, 2025, which was previously filed with the SEC. This financial information is presented to aid in understanding Regions’ financial position and results of operations and should be read together with the financial information contained in Regions’ Annual Report on Form 10-K. See Note 1 "Basis of Presentation" and Note 13 "Recent Accounting Pronouncements" to those consolidated financial statements for further detail. The emphasis of this discussion will be on the three and six months ended MarchJune 31,30, 2026 compared to the three and six months ended MarchJune 31,30, 2025 for the consolidated statements of income. For the consolidated balance sheets, the emphasis of this discussion will be on the balances as of MarchJune 31,30, 2026 compared to December 31, 2025.
Regions conducts its banking operations through Regions Bank, an Alabama state-chartered commercial bank that is a member of the Federal Reserve System. At MarchJune 31,30, 2026, Regions operated 1,246 total branch outlets. Regions carries out its strategies and derives its profitability from three reportable business segments: Corporate Bank, Consumer Bank, and Wealth Management, with the remainder in Other. See Note 11 "Business Segment Information" to the consolidated financial statements for more information regarding Regions’ segment reporting structure.
FIRSTSECOND QUARTER OVERVIEW
Regions utilized its internal MarchJune baseline forecast to calculate the ACL as of MarchJune 31,30, 2026. Refer to the "Economic forecast and qualitative adjustments" discussion in the "Allowance" section for further detail.
FirstSecond Quarter Results
Regions reported net income available to common shareholders of $539$549 million or $0.62$0.64 per diluted share in the firstsecond quarter of 2026 compared to net income available to common shareholders of $465$534 million or $0.51$0.59 per diluted share in the firstsecond quarter of 2025.
Net interest income (taxable-equivalent basis) totaled $1.3 billion in the firstsecond quarter of 2026, which increased $55$20 million compared to the firstsecond quarter of 2025. The net interest margin (taxable-equivalent basis) was 3.673.66 percent in the firstsecond quarter of 2026, reflecting a 151 basis point increase from the same period in 2025. The increases in net interest income and margin were driven primarily by lower total funding costs whichthat moreovercame than offseta modest decline in loan yieldyields, declineswhich supportedwere also protected by hedges.the Company's hedging program. Additionally, net interest income and margin benefitedbenefitted from fixed-rate asset turnover and securities repositioningrepositionings executed in prior2025 periods.and 2026. Refer to the related discussion below Table 1718 "Consolidated Average Daily Balances and Yield/Rate Analysis" for further detail.
The provision for credit losses totaled $91$68 million in the firstsecond quarter of 2026 compared to $124$126 million in the firstsecond quarter of 2025. Net charge-offs totaled $130$102 million, or 0.540.42 percent of average loans, in the firstsecond quarter of 2026, compared to $123$113 million, or 0.520.47 percent of average loans, in the firstsecond quarter of 2025. This increasedecrease reflected charge-offscontinued progress on previously identified portfolios of interest that were already reserved for related to previously identified portfolios of interest.for. The allowance as a percent of total loans, net, decreased to 1.681.63 percent at MarchJune 31,30, 2026, compared to 1.76 percent at December 31, 2025 due to asset quality improvement.improvement and resolutions of previously reserved for credits. Refer to the "Allowance" section for further detail.
Non-interest income was $625$630 million in the firstsecond quarter of 2026 compared to $590$646 million in the firstsecond quarter of 2025 primarily driven by a decline in securities losses associated with repositioning activitytransactions betweenin the twosecond periods.quarter Additionally,of 2026 and a decline in mortgage income. Partially offsetting the losses were increases in service charges, investment management and trust fee income, capital markets income, bank-owned life insurance, and investment services incomefee increased.income, and higher market valuations on employee benefit assets. See Table 2223 "Non-Interest Income" for further details.
Non-interest expense was $1.1 billion in the firstsecond quarter of 2026 which increased $29$48 million compared to the firstsecond quarter of 2025. The increase was primarily driven by an increase in salaries and benefits, equipmentbenefits and software,outside and professional, legal and regulatoryservices expenses. These increases were partially offset by a decline in FDIC insurance expense, operational losses, and Visa class B shares expense and other miscellaneous expenses.expense. See Table 2324 "Non-Interest Expense" for further details.
Regions' effective tax rate was 21.620.7 percent in the firstsecond quarter of 2026 compared to 21.120.3 percent in the firstsecond quarter of 2025. See the "Income Taxes" section for further details.
Regions and Regions Bank are required to comply with regulatory capital requirements established by Federal and State banking agencies, which include quantitative requirements including the CET1 ratio. At MarchJune 31,30, 2026, Regions’ CET1 ratio was estimated to be 10.7 percent. For additional information on Regions' regulatory capital requirements see the "Regulatory Requirements" section.
On July 15, 2026, the Board declared a $0.035 increase, or 13 percent, to the quarterly common stock dividend to $0.30 which will be payable on October 1, 2026, to shareholders of record at close of business on September 1, 2026.
Cash and cash equivalents increaseddecreased approximately $236$981 million from year-end 2025 to MarchJune 31,30, 2026 primarily due to an increase in borrowedloans funds and, toand a lesser degree, an increasedecrease in deposits.deposits Thewhich increases werewas partially offset by an increase in loans.borrowed funds. See the "Borrowed FundsLoans", "LiquidityDeposits, ","DepositsBorrowed Funds" and "LoansLiquidity" sections for more information.
As of MarchJune 31,30, 2026, debt securities held to maturity and debt securities available for sale represented 1716 percent and 8384 percent, respectively, of the total debt securities portfolio.
Debt securities decreased $313 million from December 31, 2025 to March 31, 2026 due to the timing of securities purchases and less favorable market valuation adjustments resulting from changes in interest rates.
The average life of the debt securities portfolio at both March 31, 2026 and December 31, 2025 was estimated to be 5.9 years, with a duration of approximately 3.9 years, inclusive of fair value hedges (see Table 19).
SubsequentDebt securities decreased $507 million from December 31, 2025 to MarchJune 31,30, 2026 due to the timing of securities purchases and less favorable market valuation adjustments resulting from changes in interest rates. During the second quarter of 2026, the Company executed a debt securities repositioning involving the sale of shorter-duration commercial agency MBS and U.S. TreasuriesTreasuries, andwhich replacementwere replaced with longer-duration commercial and residential agency MBS and U.S. Treasuries with higher market yields. In total the Company sold approximately $900 million of debt securities available for sale and realized approximately $40 million in pre-tax losses.
The average life of the debt securities portfolio at both June 30, 2026 and December 31, 2025 was estimated to be 5.9 years, with a duration of approximately 3.9 years, inclusive of fair value hedges (see Table 20).
Loans, net of unearned income, represented approximately 70 percent of interest-earning assets as of MarchJune 31,30, 2026. The following table presents the distribution of Regions' loan portfolio by segment and class, net of unearned income:
Loans, net of unearned income, increased $2.3$3.6 billion from year-end 2025 due to an increase across almost all commercial and investor real estate loan classes as discussed below. These increases were partially offset by a slight decline in consumer loans. Regions manages loan growth with a focus on risk management and risk-adjusted return on capital.
Over half of the Company’s total loans are included in the commercial portfolio segment. These balances are spread across numerous industries, as noted in Table 4. The Company manages the related risks to this portfolio by setting certain lending limits for each significant industry. The commercial portfolio segment includes commercial and industrial loans for use in customers' normal business operations to finance working capital needs, equipment purchases, expansion projects and acquisitions. See the "Portfolio Characteristics" section in Regions' Annual Report on Form 10-K for the year ended December 31, 2025 for more information on details surrounding the commercial portfolio segment and underwriting criteria.criteria, underwriting for owner-occupied real estate and real estate construction and real estate appraisals for commercial and IRE loans.
Commercial and industrial loans increased $2.0$3.1 billion since year-end 2025 and was driven primarily by powerincreases in energy and utilities, manufacturing, healthcarereal estate, and asset-basedhealthcare. lending.Growth Approximatelywas halfdriven of the growth came fromby higher line utilization whilerates the remainder was driven byand new loans,loan primarilyproduction. with existing clients. ThroughoutIn the first quartersix months of 2026, the increase in commercial and industrial loans was broad-based as shown in Table 4.
Underwriting for owner-occupied real estate and real estate construction loans is consistent with the underwriting of commercial loans, with particular attention to the enhancement provided by the underlying real estate collateral.
Real estate appraisals, for both commercial and IRE loans, are performed in accordance with regulatory guidelines. In some cases, reports from automated valuation services are used or internal evaluations are performed. An appraisal is ordered and reviewed prior to loan closing, and a new appraisal or evaluation is generally ordered when market conditions indicate a potential decline in the value of the collateral, or when the loan is either modified, renewed, or deteriorates to a certain level of credit weaknesses.
Loans for real estate development are repaid through cash flows related to the operation, sale or refinance of the property. This portfolio segment includes extensions of credit to real estate developers or investors where repayment is dependent on the sale of real estate or income generated from the real estate collateral. A portion of Regions’ IRE portfolio segment consists of loans secured by residential product types (land, single-family and condominium loans) within Regions’ markets. Additionally, this category includes loans made to finance income-producing properties such as apartment buildings, office and industrial buildings, and retail shopping centers. Total IRE loans increased $538$863 million in comparison to year-end 2025 balances due to increases in fundings to previously approved projects and new term loans for apartments and datamedical centers.office buildings. See the "Investor Real Estate" section in Regions' Annual Report on Form 10-K for the year ended December 31, 2025 for more information on details surrounding the investor real estate portfolio segment and underwriting criteria.
Portfolios that are experiencing higher risk due to conditions such as inflationary pressures, higher interest rates, and adverse underlying market fundamentals (identified as portfolios of interest) include business offices and trucking (included within transportation and warehousing) at MarchJune 31,30, 2026 within Table 4 above.
While the business offices portfolio remains a portfolio of interest, credit quality is improving. The office portfolio totaled $907$858 million and represented 0.9 percent of total loans at MarchJune 31,30, 2026, declining from $1.0 billion and 1.1 percent of loans at December 31, 2025. The office portfolio included non-performing loans of $98$121 million and had associated charge-offs of $1 million in the threesix months ended MarchJune 31,30, 2026. Approximately 9799 percent of the office portfolio was secured, with approximately 6162 percent of secured balances located in the South region of the U.S, of which 87 percent were Class A properties. Approximately 5660 percent of the office portfolio will mature in the next 12 months. Additionally, the IRE office portfolio had a weighted-average LTV of approximately 64 percent at MarchJune 31,30, 2026, based upon appraisal at origination or most recent received, and a stressed weighted-average LTV of approximately 8884 percent as of April 7, 2026, based upon GreenStreet's Commercial Property Price Index. While the office portfolio remains stressed, well-located, highly amenitized properties are observing improvements to property fundamentals. No new loan originations are being contemplated in this portfolio.
The trucking portfolio remains a portfolio of interest as trucking companies have been working through one of the most prolonged downturns in the U.S. domestic freight market. While 2026 began with positive indicators including stablethe freight volumescycle has improved and aspot-market constructivefundamentals pricingare environment,strong, the conflictindustry inremains the Middle East has created uncertainty relatedvulnerable to operatingeconomic costs, supply chain disruptions, and supply and demand dynamics.uncertainty. The trucking portfolio totaled $1.1 billion and represented 1.21.1 percent of total loans at MarchJune 31,30, 2026, declining from $1.2 billion and 1.3 percent of loans at December 31, 2025. The trucking portfolio included non-performing loans of $51$45 million and had associated charge-offs of $22$29 million in the threesix months ended MarchJune 31,30, 2026. New originations in the sector have been curtailed and those that occur are either secured or targeted towards larger companies.
Home equity lines are secured by a first or second mortgage on the borrower's residence and allow customers to borrow against the equity in their homes. Substantially all of this portfolio was originated through Regions' branch network. See the "Portfolio Characteristics" section in Regions' Annual Report on Form 10-K for the year ended December 31, 2025 for more information on home equity line draw and repayment structures.
Since December 2016, home equity lines of credit are originated with a 10-year draw period and a 20-year repayment term. During the 10-year draw period customers do not have an interest-only payment option, except on a very limited basis. From May 2009 to December 2016, home equity lines of credit had a 10-year draw period and a 10-year repayment term. Prior to May 2009, the predominant structure was a 20-year draw period with a balloon payment upon maturity, which means there are no principal payments required until the balloon payment is due for interest-only lines of credit.
The following table presents information regarding the future principal payment reset dates for the Company's home equity lines of credit as of MarchJune 31,30, 2026. The balances presented are based on maturity date for lines with a balloon payment and draw period expiration date for lines that convert to a repayment period.
Other consumer loans primarily include indirect and direct consumer loans, overdrafts and other revolving loans. Other consumer loans decreased $190$297 million from year-end 2025 driven by a decline in consumer home improvement lending due to seasonality.lending.
The allowance represents management's best estimate of expected losses over the life of the loan and credit commitment portfolios and consists of two components: the allowance for loan losses and the reserve for unfunded credit commitments. Unfunded credit commitments includes items such as letters of credit, financial guarantees and binding unfunded loan commitments. The allowance totaled $1.6 billion at MarchJune 31,30, 2026 and $1.7 billion at December 31, 2025.
Management reviews the allowance on a quarterly basis using updated information, including changes to economic conditions, the loan portfolio and credit information. The following table provides an analysis of the changes in the allowance for the three and six months ended MarchJune 31,30, 2026:
Table 9 below reflects a range of macroeconomic factors utilized in the baseline economic forecast over the two-year R&S forecast period as of June 30, 2026. The unemployment rate is the most significant macroeconomic factor among the allowance models and was expected to remain relatively consistent over the forecast period.
Regions' internally-developed June 2026 baseline forecast, which was similar to the March 2026 baseline forecast, reflects slightly lower real GDP which is expected to grow 2.0 percent in 2026. While consumer spending was supported by tax legislation enacted in 2025, it is expected to be partially offset by higher prices. Corporate profit margins remain healthy and are supportive of growth in business investment, which is expected to support real GDP growth. Inflation as measured by CPI is expected to remain above the FOMC's 2.0 percent target rate into 2027. The longer the conflict in the Middle East persists, the greater the risk that core inflation could increase. Labor markets have firmed slightly in 2026 and the current baseline forecast anticipates a moderate pace of job growth resulting in a modest decrease in the allowance for the three months ended June 30, 2026.
Regions' internally-developed March baseline forecast anticipates steadier real GDP, with growth of 2.5 percent for 2026 supported by tax legislation enacted in 2025 expected to boost after-tax personal income and improve cash flows for businesses. Inflation as measured by CPI is expected to remain above the FOMC's 2.0 percent target rate into 2027. The Federal funds rate is approaching what many consider to be a "neutral" rate, which limits the room for rate cuts in 2026. Significant softening in labor market conditions would support further rate cuts, but persistent inflation pressures could preclude further cuts. Labor supply growth is expected to remain weak and unemployment is expected to average 4.4 percent in 2026. Regions' March 2026 baseline forecast remained stable compared to the December 2025 baseline forecast, which resulted in minimal impact to the allowance. However, events in the Middle East and the related impact on energy prices cast uncertainty on the March 2026 forecast, which is captured in the general imprecision component discussed below.
Table 9 below reflects a range of macroeconomic factors utilized in the baseline economic forecast over the two-year R&S forecast period as of March 31, 2026. The unemployment rate is the most significant macroeconomic factor among the allowance models and was expected to remain relatively consistent over the forecast period.
While it is the intent of Regions' quantitative allowance methodologies to reflect all risk factors, including incremental risk in portfolios identified as under stress, any estimate involves assumptions and uncertainties resulting in some level of imprecision. Regions' qualitative framework has a general imprecision component which is meant to acknowledge that model and forecast errors are inherent in any modeling estimate. At March 31, 2026, theThe general imprecision component increasedremained comparedstable to December 31, 2025 driven by crude oil price volatility andfor the unknownthree durationmonths ofended theJune conflict30, in the Middle East.2026.
The qualitative framework also has specific adjustment components which are reserves meant to capture specific issues or events that management believes are not adequately captured in the model outcomes. Specific qualitative adjustments atdeclined Marchin 31,the 2026three weremonths relativelyended stableJune compared30, to December 31, 2025.2026.
Portfolio, creditCredit metrics, and specific reserves and portfolio changes
InOverall credit metrics continued to improve through the three months ended MarchJune 31,30, 2026, overall asset quality continued to improve.2026. The ratio of net charge-offs to average loans decreased 512 basis points forin the three months ended MarchJune 31,30, 2026 compared to the first three months ended December 31, 2025 with the majority of business2026, servicesreflecting charge-offscontinued relatedprogress toon previously identified portfolios of interest for which specific reserves had already been established. WhileTherefore, commercialspecific reserve releases due to charge-offs resulted in a decrease in the allowance. Commercial and investor real estate criticized balances increased approximately $42 million from December 31, 2025 to March 31, 2026, the percentage as a totalpercent of businesstotal loansrelated declinedloans, 16and basisnon-performing points.loan balances decreased in the three months ended June 30, 2026. See Table 10 for more details on businessnet criticizedcharge-offs, non-performing loans and netcriticized charge-offs. Non-performing loans, excluding held for sale, decreased approximately $6 million from December 31, 2025 to March 31, 2026. See Table 12 for more details regarding non-performing assets.loans. The combination of credit quality improvements and specific reserve releases due to charge-offs resulted in a decrease in the allowance atin Marchthe 31,three 2026months comparedended June 30, 2026. Regarding impacts to Decemberthe 31,allowance 2025.as a result of portfolio changes, high quality loan portfolio growth and other credit quality considerations resulted in an increase in the modeled allowance results for the three months ended June 30, 2026.
Based upon the factors discussed above, the MarchJune 31,30, 2026 allowance decreased $39$34 million comparedin tothe Decemberthree 31,months 2025.ended June 30, 2026. The allowance reduction resulted from overall credit quality improvement in the portfolio and meaningfulcontinued progress in resolving loans within previously identified portfolios of interest, partially offset by an allowance increase for qualitativehigh adjustmentsquality dueloan to economic uncertainty.growth.
Furthermore, in the six months ended June 30, 2026, the allowance decreased $73 million driven primarily by overall credit quality improvement in the portfolio, including declines in criticized loans as a percent of loan balances and non-performing loan balances, and continued resolutions of loans within previously identified portfolios of interest.
Net charge-offs increaseddecreased $7$4 million for the threesix months ended MarchJune 31,30, 2026 compared to the same period in 2025. Economic and qualitative trends such as interest rates, unemployment, volatility in commodity prices, collateral valuations and inflationary pressure will impact the future levels of net charge-offs and may result in volatility of certain credit metrics for 2026 and beyond.
The following table presents non-performing assets as of MarchJune 31,30, 2026 and December 31, 2025 :
(2)Excludes residential first mortgage loans that are 100% guaranteed by the FHA and all guaranteed loans sold to Ginnie Mae where Regions has the right but not the obligation to repurchase; however, includes Ginnie Mae repurchased loans with partial guarantees. Total 90+ days or more past due guaranteed loans excluded were $94$100 million at MarchJune 31,30, 2026 and $79 million at December 31, 2025.
Non-performing loansloans, (excluding loans held for sale)sale, decreased $30 million at MarchJune 31,30, 2026 decreased $6 million as compared to year-end 2025. The same economic trends that impact net charge-offs, as discussed above, will impact the future level of non-performing loans. Circumstances related to individually large credits could also result in volatility.
The following table provideprovides an analysis of non-accrual loans (excluding loans held for sale) by portfolio segment:
Goodwill totaled $5.7 billion at both MarchJune 31,30, 2026 and December 31, 2025. Refer to Note 1 "Summary of Significant Accounting Policies" and Note 9 "Goodwill and Other Intangible Assets" to the consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2025 for the methodologies and assumptions used in the goodwill impairment analysis.
Deposits are Regions’ primary source of funds, providing funding for over 90 percent of average earning assets at both MarchJune 31,30, 2026 and December 31, 2025. The following table summarizes deposits by category and by segment:
(1) Other deposits represent non-customer balances primarily consisting of wholesale funding (for example, selected deposits and brokered time deposits). Other deposits include brokered deposits totaling $1.5$1.6 billion at MarchJune 31,30, 2026 and $1.3 billion at December 31, 2025.
Total deposits at MarchJune 31,30, 2026 increaseddecreased approximately $752$418 million compared to year-end 2025 levels.levels Growthreflecting normal seasonal patterns associated with tax refunds and payments. The decline was driven by a significant increasedecrease in interest-bearing checking, money market accounts and, to a lesser degree, savingsmarket, and non-interest-bearing deposits partially offset by a decline in time deposits and interest-bearing checking.deposits. Deliberate product management resulted in a shift from time deposits into moneyother market accounts. Growth in consumer deposits reflects normal seasonal patterns related to tax refunds and payments.products. The mix of non-interest-bearing deposits at March 31, 2026 was approximately 3031 percent of total deposits at MarchJune 31,30, 2026, which remained stable in comparison to December 31, 2025.
Short-term borrowings totaled $3.2$3.0 billion at MarchJune 31,30, 2026, consisting of federal funds purchased of $1.2$200 billionmillion and FHLB advances of $2.0$2.8 billion. At December 31, 2025, short-term borrowingborrowings totaled $750 million comprised entirely of FHLB advances. The levels of these borrowings can fluctuate depending on the Company's funding needs and the sources utilized. See the "Liquidity" section for further discussion and detail of Regions' borrowing capacity with the FHLB.
(3) On July 27, 2028, the Notes will bear floating rate interest equal to Compounded SOFR plus 0.807%.
Long-term borrowings increased by approximately $494 million from year-end 2025 reflecting the issuance of senior notes partially offset by the repayment of FHLB advances. In the second quarter, Regions Bank issued $1.5 billion of 4.755% fixed rate to floating rate senior notes due July 2029. The notes will initially bear interest at 4.755% per annum and, commencing on July 27, 2028, in conjunction with the call date, the notes will bear interest at a floating rate per annum equal to Compounded SOFR plus 0.807%.
Long-term borrowings decreased by approximately $1.0 billion from year-end 2025 reflecting the repayment of FHLB advances.
Funding from the FHLB and Federal Reserve Bank is secured by pledged assets, primarily certain loan portfolios which are also subject to blanket lien arrangements with the FHLB and Federal Reserve Bank. As of MarchJune 31,30, 2026, Regions' blanket lien arrangements with these entities covered a total loan balance of approximately $94.5$95.9 billion and included loans from various loan portfolios. However, borrowing capacity with the FHLB and Federal Reserve Bank is contingent on a subset of the blanket lien portfolios which are eligible and pledged according to the parameters for each counterparty.
RATINGS
RF insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 2 filings (2 insiders, 2 trade dates, 7,015 shares, about $195.8K). Net open-market shares: -7,015 (purchases minus sales); net value about -$195.8K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-10 | Chadha Anil D |
Open-market sale | 1 | $29.90 | $23 |
| 2026-07-01 | Santone Angela R. |
Shares withheld for tax | 10,286 | $30.80 | $316.8K |
| 2026-07-01 | Santone Angela R. |
Option exercise | 28,411 | — | — |
| 2026-05-07 | Willman Brian R |
Open-market sale | 7,014 | $27.91 | $195.8K |
| 2026-05-06 | Davis Noopur |
Option exercise | 7,904 | — | — |
| 2026-05-06 | Prokopanko James T |
Option exercise | 63,055 | — | — |
| 2026-05-06 | Rhodes William C Iii |
Option exercise | 7,904 | — | — |
| 2026-05-06 | Golodryga Zhanna |
Option exercise | 7,904 | — | — |
| 2026-05-06 | Johnson Joia M |
Option exercise | 7,904 | — | — |
| 2026-05-06 | Jenkins Roger W. |
Option exercise | 7,904 | — | — |
Well-known investors holding RF (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 2,687,455 | $81.2M | 0.03% | Reduced 12% |
| Two Sigma Investments | 2026-06-30 | 2,065,972 | $62.4M | 0.05% | Reduced 32% |
| Renaissance Technologies | 2026-06-30 | 2,144,021 | $56.0M | — | Sold out |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 1,319,866 | $34.5M | — | Sold out |
| Millennium Management (Israel Englander) | 2026-06-30 | 443,435 | $13.4M | 0.01% | Reduced 83% |
| D. E. Shaw & Co. | 2026-06-30 | 424,373 | $12.8M | 0.01% | Reduced 9% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 370,446 | $11.2M | 0.01% | Added 32% |
| Bridgewater Associates | 2026-06-30 | 325,788 | $9.8M | 0.04% | Added 78% |
| Gotham Asset Management (Joel Greenblatt) | 2026-06-30 | 27,519 | $831.1K | 0.0% | Reduced 1% |