Regions Financial Q1 2026 Earnings Rise on Credit Gains

Regions Financial reported Q1 2026 earnings on April 17, citing loan growth, a steady net interest margin, and improving credit that supported profit gains and prompted guidance for net interest income growth in fiscal 2026.

Quarter Results, Revenue, and Profitability

Regions Financial Corp. (RF) disclosed net income available to common shareholders of $539 million, an 11% increase year over year, with diluted earnings per share of $0.62, up 22%. Total revenue rose 5% to $1.873 billion. The results beat EPS expectations but fell short of revenue estimates, according to the April 17 press release and 8-K filing.

Earnings reflected strength in interest income and operating leverage. Net interest income reached $1.25 billion, up 4.5% year over year, with a tax-equivalent net interest margin of 3.67%, rising 15 basis points. Non-interest income declined 2% despite a 5% increase in capital-markets fees. Adjusted pre-tax, pre-provision income grew 4% to $805 million, and return on average tangible common equity was 18.26%.

Loan, Deposit Growth, and Credit Improvement

Balance-sheet momentum continued as average loans and leases increased 1% sequentially to $96.4 billion, with ending loans at $97.9 billion as of March 31. Deposits expanded modestly, and the cost of interest-bearing deposits was 1.72%.

Credit quality improved during the quarter. Net charge-offs fell to $130 million, or 0.54% of average loans, down five basis points from the prior quarter. Nonperforming loans totaled $692 million, or 0.71% of total loans, improving two basis points. The allowance for credit losses stood at $1.647 billion, equal to 1.68% of loans and 238% of nonperforming loans. Business-services criticized loans declined 16 basis points sequentially to 5.15% of business loans. John Turner, chairman, president, and CEO, said, "Growth in loans and deposits accelerated during the first quarter, credit metrics continued to improve."

The combination of narrower loss rates and steady interest income supported profitability despite a decline in fee revenue, highlighting the bank’s reliance on net interest margins for near-term earnings.

Capital Returns and Outlook

Regions estimated its common equity Tier 1 (CET1) ratio at 10.7% at quarter-end. The company repurchased $401 million of common stock, about 14 million shares, and paid $227 million in dividends during the quarter.

Management issued guidance for fiscal 2026, projecting net interest income growth of 2.5% to 4% compared with 2025. It expects average loan balances to rise in the low single digits and forecasts net charge-offs between 40 and 50 basis points. The company anticipates a strong rebound in net interest income in the second quarter and expects earnings per share growth alongside stable revenue increases for the year. These targets position net interest income trends as the primary near-term driver of performance while balancing capital returns with capital ratios.