Regions Financial reports Q2 EPS of $0.64, raises dividend 13%, completes Frazer Lanier deal

Net interest income increased 2% quarter-over-quarter to $1,277 million, while net interest margin decreased 1 basis point to 3.66%. The company expects third quarter 2026 NII to increase approximately 2% versus second quarter, and expects full-year 2026 NII to grow between 2.5% and 4%. Third quarter NIM is expected to be stable to modestly higher, exiting the year at approximately 3.70%.

Regions Financial reported second-quarter 2026 net income of $570 million, or $0.64 per diluted share, up from $559 million ($0.62 per share) in Q1 2026 and $563 million ($0.59 per share) in Q2 2025. Net income available to common shareholders was $549 million. The sequential improvement reflects higher net interest income and a lower provision for credit losses, partially offset by higher non-interest expense.

Total loans grew to $0.1M at June 30, 2026, up $1.3 billion (1.3%) from the prior quarter and $2.5 billion (2.6%) year-over-year. Business loans drove the increase, rising $1.5 billion quarter-over-quarter, led by commercial and industrial loans ($1.0 billion increase) and commercial investor real estate ($325 million increase). Consumer loans declined $197 million sequentially, reflecting continued runoff in residential first mortgage and other consumer portfolios.

Net interest income (taxable-equivalent) was $1.291 billion in Q2 2026, up $30 million from Q1 2026 but down $3 million year-over-year. The net interest margin (FTE) was 3.66%, down 1 basis point from Q1 2026 but up 1 basis point year-over-year. The sequential NII increase reflects loan growth and higher earning-asset yields, partially offset by higher deposit costs.

The provision for credit losses was $68 million in Q2 2026, down from $91 million in Q1 2026 and $126 million in Q2 2025. Net charge-offs were $102 million, or 0.42% of average loans (annualized), down from 0.54% in Q1 2026 and 0.47% in Q2 2025. The allowance for credit losses declined to $1.613 billion (1.63% of loans) from $1.647 billion (1.68%) in the prior quarter, reflecting improved credit trends.

Regions' estimated Common Equity Tier 1 ratio was 10.7% at June 30, 2026, unchanged from Q1 2026 but down from 10.8% a year earlier. Weighted-average basic shares outstanding declined to 854 million in Q2 2026 from 863 million in Q1 2026 and 898 million in Q2 2025, reflecting ongoing share repurchases. The company returned capital to shareholders through dividends and buybacks.

Regions reported net income available to common shareholders of $549 million and diluted EPS of $0.64 for Q2 2026. On an adjusted basis, earnings were $583 million with diluted EPS of $0.68. Adjusted diluted EPS increased 13 percent compared to Q2 2025.

Average loans grew 2 percent quarter-over-quarter, driven by 4 percent growth in business loans, particularly in C&I lending across power and utilities, manufacturing, government and public sector, and retail trade. Consumer loans declined 1 percent. Management noted that loan growth remained high quality, with investment grade credits representing more than half of new balances.

Credit quality improved in Q2 2026. Net charge-offs decreased 12 basis points quarter-over-quarter to an annualized 42 basis points of average loans. Non-performing loans as a percentage of total loans declined 4 basis points to 0.67 percent, and business services criticized loans declined 14 basis points to 5.01 percent of total business loans. The allowance for credit losses to non-performing loans ratio increased to 241 percent.

The Board declared a quarterly common stock dividend of $0.30 per share, a 13 percent increase over the previous quarter. Over the past 10 years, Regions has increased its common stock dividend at a 16 percent compound annual growth rate, ranking in the top quartile among peers.

Regions completed the acquisition of The Frazer Lanier Company on July 1, 2026, to expand municipal finance expertise and long-term growth opportunities within capital markets.

Regions Financial is hosting a live audio webcast on July 17, 2026, to review preliminary Q2 2026 results. The presentation materials are attached as Exhibit 99.3 and available on the company's investor relations website. An archived recording will be available for a limited time after the event.

Regions Financial disclosed preliminary financial results for the second quarter ended June 30, 2026. The 8-K references a press release and supplemental financial information attached as exhibits, but does not include the actual financial figures in the body of the filing.