Regions Financial (NYSE:RF) reported second-quarter 2026 earnings of $549 million, or $0.64 per share, with adjusted earnings of $583 million, or $0.68 per share, executives said on the company’s earnings call.
Chairman, President and CEO John Turner said the Birmingham, Alabama-based regional bank delivered adjusted pre-tax, pre-provision income of $831 million and an adjusted return on tangible common equity of 20%. Turner said the quarter reflected “disciplined execution across the franchise” and the benefits of investments intended to support profitable growth.
Loan Growth Strengthens as Pipelines Build
CFO Anil Chadha said average loans increased approximately 2% during the quarter, while ending loans rose 1%. Growth was driven by broad-based commercial and industrial lending, including power and utilities, manufacturing, government and public sector, and retail trade. Investor real estate also grew from a smaller base, led by multifamily, supported by production and bridge financing tied to maturing credits.
Chadha said more than half of the quarter’s loan growth consisted of investment-grade credits. He added that loan pipelines were up roughly 15% from a year ago and remained diversified across industries, markets and client segments. Consumer loan balances were relatively stable as new production roughly matched paydowns, primarily in residential mortgage and home improvement financing.
Regions maintained its outlook for full-year average loan growth to be up low single digits compared with 2025.
During the question-and-answer session, Turner described the loan demand environment as “constructive,” saying demand was broad-based across industry sectors and geographies. He also said line utilization increased by about 100 basis points during the quarter, reflecting ongoing investment by customers.
Deposits Rise Modestly, Net Interest Income Improves
Average deposits increased modestly in the second quarter, while ending deposits declined approximately 1%, which Chadha attributed to normal seasonal patterns related to tax refunds and payments. Turner said average deposits included more than 1% growth in non-interest-bearing deposits, supported by household and operating account growth.
Chadha said Regions’ non-interest-bearing deposit mix remained in the low 30% range, consistent with the bank’s target and reflective of the operational nature of its deposit base. He said the company continued to see deposits shift from certificates of deposit into money market accounts across consumer and wealth management segments, driven by its product management strategy.
Net interest income increased 2% from the prior quarter. Chadha said the increase was driven by favorable repricing dynamics, disciplined deposit cost management and loan balance growth. The net interest margin was 3.66%, and interest-bearing deposit costs declined three basis points to 1.69%.
Regions expects third-quarter net interest income to increase approximately 2% and said it is progressing toward the middle of its full-year net interest income growth outlook of 2.5% to 4%. Chadha said the bank expects its net interest margin to exit 2026 at approximately 3.7% based on current expectations for loan growth.
Fee Revenue Gains Led by Wealth Management
Adjusted non-interest income increased 7% from the prior quarter, with growth across several core fee categories partly offset by lower bank-owned life insurance and commercial credit fees. Wealth management income rose 6% and reached another record quarter, driven by higher production and favorable market conditions.
Card and ATM fees increased 8%, primarily due to seasonally higher transaction volumes. Capital markets income, excluding credit valuation adjustment, increased modestly as improvements in loan syndications, M&A advisory fees and real estate capital markets offset lower commercial swap income.
Turner said higher long-term interest rates have affected capital markets and residential mortgage activity, but other fee businesses remained solid. Regions continues to expect adjusted non-interest income to grow 3% to 5% for full-year 2026 compared with 2025, though Chadha said results are now expected to trend toward the lower end of that range.
Turner also highlighted the company’s announced acquisition of Frazer Lanier Company after quarter-end. He described Frazer Lanier as a full-service investment banking firm with strong municipal securities capabilities and said the transaction is intended to expand Regions’ capital markets platform and municipal finance expertise.
Credit Metrics Improve, Reserves Decline
Asset quality improved during the quarter. Chadha said annualized net charge-offs declined 12 basis points to 42 basis points of average loans. Business services criticized loans and non-performing loans both declined, with the business services criticized ratio falling 14 basis points to 5.01% and the non-performing loan ratio declining four basis points to 67 basis points.
The allowance for credit losses declined $34 million, primarily due to continued resolution of previously reserved charge-offs, partially offset by reserve builds related to high-quality loan growth. The allowance for credit losses ratio declined to 1.63%.
Regions maintained its expectation that full-year 2026 net charge-offs will be between 40 and 50 basis points. In response to an analyst question, Turner said credit has continued to improve and “normalize,” citing reductions in business office, trucking and communications portfolios of interest. He said Regions is seeing “a little softness” in multifamily in a couple of Texas markets, but added that there was nothing “particularly concerning” at this point.
Capital Returns Include Dividend Increase
Regions ended the quarter with an estimated common equity tier 1 ratio of 10.7%. The company repurchased $59 million of shares and paid $226 million in common dividends during the quarter.
Chadha said the board approved a 13% increase in the quarterly common stock dividend to $0.30 per share. He said Regions has increased its dividend at a 16% compound annual growth rate over the past 10 years, placing it within the top quartile of its peer set.
The company also received its 2026 supervisory capital stress test results from the Federal Reserve. Chadha said Regions’ stress capital buffer will remain at the regulatory floor of 2.5%, and he said the results reinforced the resilience of the bank’s earnings profile, balance sheet and capital position.
Executives reiterated that Regions expects adjusted non-interest expense to rise 1.5% to 3.5% for full-year 2026 and expects to deliver full-year adjusted positive operating leverage. Chadha said confidence in that outlook is supported by expected revenue growth in the second half of the year and continued expense discipline.
About Regions Financial (NYSE:RF)
Regions Financial Corporation (NYSE: RF) is a U.S. bank holding company headquartered in Birmingham, Alabama, that provides a broad range of banking and financial services. Its primary banking subsidiary, Regions Bank, serves retail and commercial customers through a combination of branch and ATM networks, digital channels and relationship-based delivery. The company offers deposit accounts, consumer and commercial loans, mortgage origination and servicing, and payment and treasury services.
In addition to core banking, Regions offers wealth management, trust and brokerage services, insurance solutions, and capital markets capabilities to corporate and institutional clients.
