Regions Financial Reports $611 Million in Third-Quarter Earnings, Up 11%

Regions Financial reported third-quarter earnings available to common shareholders of $611 million, or $0.71 a diluted share, as the Birmingham-based lender posted stronger revenue, steady expenses and lower charge-offs than a year earlier.

The result was up 11% from the third quarter of 2025. On an adjusted basis, earnings were $622 million, or $0.73 a diluted share. Those adjusted figures were also up 11% from a year earlier, while diluted earnings per share on a reported basis rose 16% from $0.61 in the year-ago quarter to $0.71.

The quarter mattered because it showed Regions still finding more than one way to grow profit in a rate environment that remains uneven for large regional banks. Interest income continued to expand, fee lines tied to corporate and treasury activity hit fresh highs, and credit costs remained manageable. That mix gave the company room to improve returns even though deposit balances were a little lower than in the prior quarter.

Revenue growth came from wider lending spreads and stronger fee income

In its third-quarter earnings release, Regions said total revenue rose to $1.973 billion, up from $1.907 billion in the second quarter and $1.916 billion a year earlier. Average loans reached $99.183 billion, versus $98.722 billion in the previous quarter, while average deposits were $129.140 billion compared with $130.691 billion in the second quarter.

Net interest income increased to $1.298 billion from $1.277 billion in the second quarter and $1.257 billion in the third quarter of 2025. On a taxable-equivalent basis, net interest income was $1.314 billion. Net interest margin improved to 3.68% from 3.66% in the prior quarter and 3.59% a year earlier. Regions said the quarter benefited from fixed-rate asset turnover, average loan growth, higher hedging income, credit interest recoveries, one additional day in the quarter and continued control of deposit costs, partly offset by higher non-deposit funding costs.

Deposit pricing remained a central support. Interest-bearing deposit costs were 1.70% in the quarter, a figure management highlighted as evidence that the bank’s low-cost deposit base is still helping protect earnings power. For regional banks, that matters because funding pressure has been one of the clearest constraints on margin recovery over the last several quarters.

Fee income added another tailwind. Non-interest income rose to $675 million from $630 million in the second quarter and $659 million a year earlier. Regions said capital markets income set a quarterly record, helped by higher M&A advisory revenue, securities underwriting and placement fees, commercial swap income and syndication revenue. Treasury management also reached a record quarter, while service charges on deposit accounts increased to $171 million from $167 million in the second quarter. Commercial credit fee income climbed 25% from the prior quarter. Wealth management income eased to $146 million from a record $150 million in the second quarter, but the broader fee picture still improved.

Adjusted comparisons also pointed to a firmer underlying revenue trend. Adjusted total revenue was $1.988 billion, compared with $1.947 billion in the second quarter, while adjusted non-interest income rose to $690 million from $670 million. Securities losses from repositioning trades were $15 million in the third quarter, down from $40 million in the second quarter, which reduced one drag on reported results.

Credit quality stayed solid and expenses remained under control

According to the earnings exhibit filed with the Securities and Exchange Commission, Regions recorded a $68 million provision for credit losses in the third quarter, unchanged from the second quarter and down from $105 million a year earlier. Net loans charged off were $72 million, compared with $102 million in the second quarter and $135 million in the year-ago period. On an annualized basis, net charge-offs fell to 0.29% of average loans from 0.42% in the prior quarter and 0.55% a year earlier.

Other asset-quality measures also improved. Non-performing loans, excluding loans held for sale, declined to 0.59% of loans from 0.67% in the second quarter and 0.79% a year earlier. Business criticized loans fell to 4.71% of total business loans from 5.01% in the previous quarter and 5.81% a year earlier. The allowance for credit losses ended the quarter at $1.609 billion, or 1.61% of loans, compared with 1.63% in the second quarter. Coverage of non-performing loans increased to 275% from 241% in the prior quarter.

Those trends suggest that Regions entered the second half of the year with better loss content in the book than many investors might have expected after a prolonged stretch of elevated rate sensitivity across the industry. Management said changes in portfolio mix, including growth in higher-quality loans and runoff in some higher-risk portfolios, contributed to the modest reduction in the allowance ratio. At the same time, the company acknowledged that higher interest rates and broader macroeconomic uncertainty remained offsets, which helps explain why the provision did not fall further even as charge-offs improved.

Costs were stable enough to let more of the revenue growth drop to the bottom line. Non-interest expense was $1.118 billion, compared with $1.121 billion in the second quarter and $1.103 billion a year earlier. Salaries and employee benefits were $694 million, down slightly from $697 million in the prior quarter. Equipment and software expense rose to $113 million from $107 million, while other miscellaneous expenses fell to $83 million from $93 million. Regions’ reported efficiency ratio improved to 56.2% from 58.3% in the second quarter, and the adjusted efficiency ratio improved to 55.8% from 56.9%.

Profitability ratios moved higher with those operating trends. Return on average assets rose to 1.55% from 1.42% in the second quarter. Return on average common equity increased to 14.16% from 12.73%, and return on average tangible common equity climbed to 21.27% from 19.01%. On an adjusted basis, return on average tangible common equity was 21.66%.

Loan growth, capital strength and shareholder payouts rounded out the quarter

Growth was not explosive, but it was broad enough to matter. Regions said average loans increased 0.5% from the second quarter and ending loans rose 0.6%, driven primarily by commercial and industrial lending. That is a useful marker for a bank whose earnings outlook still depends in part on whether business clients are willing to borrow even as financing conditions remain selective.

Capital remained comfortably above regulatory minimums. The company’s estimated Common Equity Tier 1 ratio was 10.8% at Sept. 30, up from 10.7% at the end of the second quarter. Estimated Tier 1 capital was 11.9%. Those levels gave Regions room to continue returning capital while still supporting balance-sheet growth and absorbing credit risk if economic conditions weaken.

Shareholder distributions continued alongside that capital build. During the quarter, Regions repurchased about 3 million common shares for a total of $95 million through open-market purchases and declared $255 million in dividends to common shareholders. Together, those distributions underscored a familiar message in the bank’s quarter: profitability is improving, credit metrics are stable, and the company still has flexibility to keep rewarding investors while funding its business.

By quarter-end, Regions had combined stronger spread income, record contributions from some fee businesses, lower net charge-offs and a healthy capital cushion. The third quarter ended with $611 million in earnings available to common shareholders, a 10.8% CET1 ratio, 3 million shares repurchased and $255 million in common dividends declared.