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Regions Financial Q2 Earnings Beat on Solid NII & Fee Income, Stock Up
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Key Takeaways
RF reported Q2 adjusted EPS of 60 cents, beating estimates and rising from 53 cents last year.
NII rose 6.2% and fee income jumped 18.5%, offsetting loan declines and higher provisions.
Capital ratios improved and RF repurchased 7M shares for $144M during the quarter.
Regions Financial Corporation’s (RF - Free Report) second-quarter 2025 adjusted earnings per share of 60 cents beat the Zacks Consensus Estimate of 56 cents. This compares favorably with earnings of 53 cents per share in the year-ago quarter.
Shares of RF are trending 5.1% higher in the early market trading session today.
An increase in non-interest income and net interest income (NII) supported RF’s results. Also, Regions Financial’s strong capital position indicates adequate capital to deal with any unexpected losses. However, a lower loan balance, along with an increase in provision for credit losses and higher non-interest expenses, played spoilsport.
Net income (GAAP basis) available to common shareholders was $534 million, up 11.9% year over year.
Regions Financial’s Revenues & Expenses Rise Y/Y
Total quarterly revenues were $1.9 billion, which missed the Zacks Consensus Estimate by 2.9%. The top line rose 10.1% from the year-ago quarter.
Quarterly NII was $1.25 billion, up 6.2% year over year. Further, the net interest margin rose 14 basis points to 3.65%.
Non-interest income increased 18.5% year over year to $646 million.
Non-interest expenses increased 6.9% year over year to $1.07 billion. Adjusted non-interest expenses also moved up 4% year over year to $1.07 billion.
The efficiency ratio was 56% in the second quarter compared with 57.6% in the prior-year quarter. A decline in the efficiency ratio indicates an increase in profitability.
As of June 30, 2025, total loans decreased slightly on a sequential basis to $96.1 billion. Total deposits were $129.4 billion, which increased 1.4% from the previous quarter.
Regions Financial’s Credit Quality: Mixed Bag
Non-performing assets (excluding more than 90 days past due), as a percentage of loans, foreclosed properties and non-performing loans held for sale, decreased to 0.84% from the prior-year quarter’s 0.88%. Non-performing loans, excluding loans held for sale as a percentage of net loans, were 0.80%, down from 0.87% in the prior-year quarter.
A provision for credit losses of $126 million was recorded in the quarter, up 23.5% from the year-ago quarter.
Adjusted net charge-offs, as a percentage of average loans, were 0.47% compared with 0.42% in the prior-year period.
RF’s Capital Ratios Improve Y/Y
As of June 30, 2025, the Common Equity Tier 1 ratio and the Tier 1 capital ratio were 10.7% and 11.8%, respectively, compared with 10.4% and 11.7% in the year-earlier quarter.
Regions Financial’s Share Repurchase Update
In the reported quarter, the company repurchased 7 million shares for $144 million.
Our Viewpoint on RF
Regions Financial’s attractive core business and revenue-diversification strategies will likely yield stellar earnings in the upcoming period. The company’s robust capital planning process is intended to ensure the efficient use of capital to support lending activities and business growth opportunities and offer suitable shareholder returns. However, declining loans, along with higher expenses, are concerning.
Regions Financial Corporation Price, Consensus and EPS Surprise
Citizens Financial Group (CFG - Free Report) has reported second-quarter 2025 adjusted earnings per share of 92 cents, which surpassed the Zacks Consensus Estimate of 88 cents. The metric rose 12.2% from the year-ago quarter. (Find the latest earnings estimates and surprises on Zacks Earnings Calendar.)
CFG’s results have benefited from a rise in non-interest income and NII. The increase in loan balance was encouraging. However, a rise in expenses and declining deposit balances were major headwinds.
Hancock Whitney Corp.’s (HWC - Free Report) second-quarter 2025 adjusted earnings per share of $1.37 exceeded the Zacks Consensus Estimate of $1.34. Further, the bottom line rose 4.6% from the prior year quarter.
HWC's results benefited from an increase in non-interest income and NII. Also, higher loans were another positive. However, higher adjusted expenses and provisions, alongside lower deposit balances, were headwinds.
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Regions Financial Q2 Earnings Beat on Solid NII & Fee Income, Stock Up
Key Takeaways
Regions Financial Corporation’s (RF - Free Report) second-quarter 2025 adjusted earnings per share of 60 cents beat the Zacks Consensus Estimate of 56 cents. This compares favorably with earnings of 53 cents per share in the year-ago quarter.
Shares of RF are trending 5.1% higher in the early market trading session today.
An increase in non-interest income and net interest income (NII) supported RF’s results. Also, Regions Financial’s strong capital position indicates adequate capital to deal with any unexpected losses. However, a lower loan balance, along with an increase in provision for credit losses and higher non-interest expenses, played spoilsport.
Net income (GAAP basis) available to common shareholders was $534 million, up 11.9% year over year.
Regions Financial’s Revenues & Expenses Rise Y/Y
Total quarterly revenues were $1.9 billion, which missed the Zacks Consensus Estimate by 2.9%. The top line rose 10.1% from the year-ago quarter.
Quarterly NII was $1.25 billion, up 6.2% year over year. Further, the net interest margin rose 14 basis points to 3.65%.
Non-interest income increased 18.5% year over year to $646 million.
Non-interest expenses increased 6.9% year over year to $1.07 billion. Adjusted non-interest expenses also moved up 4% year over year to $1.07 billion.
The efficiency ratio was 56% in the second quarter compared with 57.6% in the prior-year quarter. A decline in the efficiency ratio indicates an increase in profitability.
RF’s Loans Decline, Deposit Balance Rises Sequentially
As of June 30, 2025, total loans decreased slightly on a sequential basis to $96.1 billion. Total deposits were $129.4 billion, which increased 1.4% from the previous quarter.
Regions Financial’s Credit Quality: Mixed Bag
Non-performing assets (excluding more than 90 days past due), as a percentage of loans, foreclosed properties and non-performing loans held for sale, decreased to 0.84% from the prior-year quarter’s 0.88%. Non-performing loans, excluding loans held for sale as a percentage of net loans, were 0.80%, down from 0.87% in the prior-year quarter.
A provision for credit losses of $126 million was recorded in the quarter, up 23.5% from the year-ago quarter.
Adjusted net charge-offs, as a percentage of average loans, were 0.47% compared with 0.42% in the prior-year period.
RF’s Capital Ratios Improve Y/Y
As of June 30, 2025, the Common Equity Tier 1 ratio and the Tier 1 capital ratio were 10.7% and 11.8%, respectively, compared with 10.4% and 11.7% in the year-earlier quarter.
Regions Financial’s Share Repurchase Update
In the reported quarter, the company repurchased 7 million shares for $144 million.
Our Viewpoint on RF
Regions Financial’s attractive core business and revenue-diversification strategies will likely yield stellar earnings in the upcoming period. The company’s robust capital planning process is intended to ensure the efficient use of capital to support lending activities and business growth opportunities and offer suitable shareholder returns. However, declining loans, along with higher expenses, are concerning.
Regions Financial Corporation Price, Consensus and EPS Surprise
Regions Financial Corporation price-consensus-eps-surprise-chart | Regions Financial Corporation Quote
Currently, Regions Financial carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Banks
Citizens Financial Group (CFG - Free Report) has reported second-quarter 2025 adjusted earnings per share of 92 cents, which surpassed the Zacks Consensus Estimate of 88 cents. The metric rose 12.2% from the year-ago quarter. (Find the latest earnings estimates and surprises on Zacks Earnings Calendar.)
CFG’s results have benefited from a rise in non-interest income and NII. The increase in loan balance was encouraging. However, a rise in expenses and declining deposit balances were major headwinds.
Hancock Whitney Corp.’s (HWC - Free Report) second-quarter 2025 adjusted earnings per share of $1.37 exceeded the Zacks Consensus Estimate of $1.34. Further, the bottom line rose 4.6% from the prior year quarter.
HWC's results benefited from an increase in non-interest income and NII. Also, higher loans were another positive. However, higher adjusted expenses and provisions, alongside lower deposit balances, were headwinds.