Regions Financial Corporation Q1 FY2026 earnings call

• John thanked Dana for her service and leadership. - Strong first quarter earnings of $539 million or $0.62 per share, 11% and 15% increase vs adjusted prior year. - Grew loans and deposits, credit metrics improving. - Consumer fundamentals sound, labor markets not weak. - Progress on core transformation, including AI investments. - Strategic growth hiring initiative on track. - Balance sheet: Loans and deposits growth, net interest income, fee revenue, noninterest expense discussed. - Capital and liquidity: Equity ratio, proposed regulatory changes impact

Loans: Ending loans grew 2% while average loans increased ~1%. Growth driven by broad-based C&I lending. Deposits: Average balances increased modestly, ending balances up ~1%. Net interest income: Lower linked quarter, net interest margin 3.67%. Fee revenue: Adjusted noninterest revenue declined 2% linked quarter. Noninterest expense: Adjusted noninterest expense declined 4% linked quarter. Capital and liquidity: Ended quarter with estimated common equity Tier 1 ratio of 10.7%

• Net interest income expected 2.5% - 4% growth in 2026, net interest margin to exit year at low 3.70s. - Adjusted noninterest income expected to grow 3% - 5% vs 2025. - Full year 2026 net charge-offs expected between 40 - 50 basis points. - Capital: Once final rules, expect to manage fully implemented Basel III common equity Tier 1 ratio around midpoint of 9.25% - 9.75% range

• Competitive deposit backdrop with promotional offers. - Tighter asset spreads in certain loan types. - Macro uncertainty impacting allowance for credit losses. - Potential impact of Middle East conflict on allowance. - Volatility in capital markets affecting capital markets revenue

Q: Reiterated guidance despite softer start, track on NII and fees confidence?

A: Confident in hitting ranges, loan growth, deposit performance, fixed asset turnover help NII; consumer fee items cyclical, capital markets and treasury management good.

Q: Follow-up on capital management with proposed changes?

A: Uncertainty on timing of rule components, but capital distribution priorities unchanged.

Q: Margin outlook, deposit cost, loan utilization?

A: Deposit cost management key, fixed asset repricing, loan growth beneficial.

Q: Deposit competitive backdrop, margin impact?

A: Competitive deposit market, banks prudent in managing deposit base.

Q: Loan loss reserve, Middle East conflict impact?

A: Macro uncertainty led to allowance increase, resolution could release allowance.

Q: NDFI lending caution?

A: Cautious, learning, exposure limited.

Q: Credit quality trajectory, transportation book?

A: Expect NPA improvement, still working on some transportation credits.

Q: Securities repositioning, capital markets RWA?

A: Normal course, RWA changes need consideration of other constituents.

Q: Deposit costs, AI impact?

A: Customer base average deposit low, focus on payment efficiency.

Q: Hiring pipeline, M&A impact?

A: Hiring plans progressing, impact seen later in year