REGIONS FINANCIAL CORP
For the period ended Mar 31, 2025. Filed May 6, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 6, 2025
RF$28.31-0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-05.
0001281761-24-000097
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-06.
0001281761-25-000045
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 293 previous paragraphs and 267 current paragraphs.
132 unchanged; 82 reworded; 52 added; 73 removed; 6 previous and 1 current paragraphs rearranged.
Tables are not compared: 33 previous and 26 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (52)
Current report
FIRST QUARTER OVERVIEW
Current report
Economic Environment in Regions' Banking Markets
Current report
Regions' March baseline forecast, utilized in calculating the ACL as of March 31, 2025, anticipated real GDP growth of 1.8 percent in 2025 and 1.7 percent in 2026. Coming into 2025, Regions' expectation was that above-trend pace of growth seen in 2023 and 2024 would not be sustained and that real GDP growth would settle back toward the pre-pandemic trend rate.
Current report
Though inflation was expected to remain above the FOMC’s 2.0 percent target rate through 2025, it was nonetheless expected to decelerate further which, in conjunction with a modestly higher unemployment rate, was seen as giving the FOMC the latitude to resume cutting the Fed funds rate. It was, however, noted that there was considerable uncertainty over the timing and magnitude of further cuts in the funds rate.
Current report
Though the trend rate of growth in nonfarm employment had for some time been slowing, that had been a function of a diminished rate of hiring, as the rate at which firms were laying workers off remained below pre-pandemic norms. While the pace of job growth was expected to decelerate further, significantly slower labor supply growth stemming from changes in immigration policy was expected to blunt upward pressure on the unemployment rate, which was expected to average 4.3 percent in the fourth quarter of 2025. Even with a slowing trend rate of job growth, aggregate labor earnings were expected to continue growing at a rate easily above inflation, thus acting as a support for consumer spending.
Current report
Management noted that considerable uncertainty around the scope and timing of changes to fiscal, regulatory, trade, and immigration policy would likely act as a source of volatility in the Company’s baseline forecasts, particularly around the paths of real GDP growth, inflation, and the unemployment rate. The March baseline forecast incorporated this uncertainty.
Current report
The economic environment, as described above, impacted Regions' forecast utilized in calculating the ACL as of March 31, 2025. See the "Allowance" section for further information.
Current report
Changes in trade policy announced subsequent to the end of the first quarter of 2025 have further increased the uncertainty around Regions’ economic forecasts. The pace of implementation, the duration, and the reactions of foreign nations to the changes in trade policy are unclear. Patterns of economic activity within the Regions footprint are expected to be broadly similar to those seen for the U.S. as a whole. While the footprint will not be immune to any disruptions in economic activity stemming from volatility around trade policy, it is expected that over time population, employment, and income growth within the footprint will continue to grow at a slightly above-average rate.
Current report
First Quarter Results
Current report
Debt securities available for sale constituted approximately 83 percent of the debt securities portfolio at March 31, 2025. Regions maintains a highly-rated debt securities portfolio consisting primarily of agency MBS. Regions’ investment policy emphasizes credit quality and liquidity.
Current report
Subsequent to March 31, 2025, the Company reclassified debt securities with an amortized cost, excluding items recognized in OCI, of $1.0 billion from available for sale to held to maturity. Additionally, the debt securities portfolio was increased by approximately $1.0 billion through the purchase of residential agency MBS given favorable market and bank funding dynamics.
Current report
GENERAL
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Loans, net of unearned income, decreased $994 million from year-end 2024, primarily due to decreases in the commercial and industrial portfolio class. Regions manages loan growth with a focus on risk management and risk-adjusted return on capital.
Current report
The commercial portfolio segment includes commercial and industrial loans for use in customers' normal business operations to finance working capital needs, equipment purchases, expansion projects and acquisitions. Regions' commercial and industrial loans generally mature within a five-year period with applicable amortization based on the underlying collateral or financing purpose. Typical loan structures consist of revolving and non-revolving lines of credit, amortizing term loans, guidance facilities, and single-pay loans, further tailored to meet the specific needs of the customer. These loans frequently have a covenant package combination inclusive of applicable debt service coverage, leverage, and liquidity measurements.
Current report
Underwriting of commercial and industrial loans includes the assessment of the financial performance and profile, management experience and capability, industry position and outlook, the applicability of the transactional structure, as well as the repayment enhancement provided by collateral, guarantees, and ownership or sponsorship. Any forward view of operating performance is tested against applicable stressors that may include revenue decline, margin compression, and interest rate hikes.
Current report
Commercial and industrial loans decreased $792 million since year-end 2024, due to credit utilization rates remaining below historic levels and customers carrying more liquidity. Throughout the first quarter, the decline in commercial and industrial loans was broad-based as shown in Table 4.
Current report
Underwriting for owner-occupied real estate and real estate construction loans is consistent with the underwriting of commercial loans, with particular attention to the enhancement provided by the underlying real estate collateral.
Current report
Real estate appraisals, for both commercial and IRE loans, are performed in accordance with regulatory guidelines. In some cases, reports from automated valuation services are used or internal evaluations are performed. An appraisal is ordered and reviewed prior to loan closing, and a new appraisal or evaluation is generally ordered when market conditions indicate a potential decline in the value of the collateral, or when the loan is either modified, renewed, or deteriorates to a certain level of credit weaknesses.
Current report
IRE loans generally mature within a three-to-seven-year period and consist of full, partial, and non-recourse guarantee structures. Typical term loan structures include annually testing operating covenants that require loan rebalancing based on minimum debt service coverage, debt yield, and/or LTV tests. Construction and land development loans generally mature in 12 to 24 months for acquisition and development, to 42 to 60 months for construction and contain full or partial recourse guarantee structures with 12 to 24 month extension options or roll-to-permanent financing options that often result in term loans.
Current report
Underwriting on IRE properties is based on the economic viability of the project with significant consideration given to the creditworthiness and experience of the sponsor, who is responsible for managing the property. The Company generally requires that the owner, who provides the capital to purchase the property, infuse their equity prior to any advances. Re-margining requirements (e.g., required equity infusions upon a decline in value or cash flow of the collateral) are often included in the loan agreement along with required guarantees of the sponsor.
Current report
Table 4—Commercial and Investor Real Estate Industry Exposure
Current report
Portfolios that are experiencing higher risk due to conditions such as inflationary pressures, higher interest rates, and adverse underlying market fundamentals (identified as portfolios of interest) include business offices and trucking (included within transportation and warehousing) at March 31, 2025 within Table 4 above. The senior housing portfolio, included within healthcare, was no longer considered a portfolio of interest during the first quarter of 2025 as senior housing fundamentals continue to improve. Demographic, economic, and sector trends have improved after an extended post-pandemic period, resulting in the remaining risk in the portfolio concentrated with a few specific borrowers as opposed to industry-wide risk. Recent and potential future interest rate cuts should ease pressure on borrowers across the entire loan portfolio.
Current report
The trucking portfolio, included within transportation and warehousing, remains a portfolio of interest as trucking companies have been working through one of the most prolonged downturns in the U.S. domestic freight market. Uncertainty with respect to tariffs and the resulting impact on consumer spending and business investment make the path forward difficult to predict. The trucking portfolio totaled $1.4 billion and represented 1.5 percent of total loans at March 31, 2025. The trucking portfolio included non-performing loans of $109 million and had associated charge-offs of $27 million in the three months ended March 31, 2025.
Current report
Baseline economic forecast
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In deriving any forecast, Regions benchmarks its internal forecast with external forecasts and external data available. Regions' March 2025 baseline forecast declined slightly compared to the December 2024 forecast resulting in an increase to the allowance. As job and wage growth are slowing, spending growth is becoming realigned with income growth. The baseline forecast anticipates further deceleration in the trend of job rate growth, but a slowdown in labor supply growth is expected to blunt upward pressure on the unemployment rate. Changes to trade and immigration policy have the potential to add to inflation pressure and core inflation is expected to remain above the FOMC's 2.0 percent target rate through 2026. The risks to the baseline forecast are considered to be weighted to the downside. Current economic uncertainty, including any effects of the recently announced tariffs combined with the pause on those tariffs, as well as shifting immigration reform policy, likely will influence future levels of the allowance. Refer to the Economic Environment in Regions' Banking Markets within the "First Quarter Overview" section for more information.
Current report
Portfolio, credit metrics, and specific reserves
Current report
The loan portfolio composition is evaluated each quarter and changes to the composition can influence modeled allowance results. In the first quarter of 2025, the loan portfolio balance declined as did the average remaining life of the portfolio, resulting in a reduction in the allowance.
Current report
Credit metrics are monitored throughout each quarter and are a key consideration in the allowance process. In the first quarter of 2025, overall asset quality deteriorated slightly. Commercial and investor real estate criticized balances increased approximately $202 million compared to the fourth quarter of 2024. The slight decline in credit quality resulted in an increase to the allowance.
Current report
Non-performing loans, excluding held for sale, decreased approximately $85 million compared to the fourth quarter of 2024. The decrease in non-performing loans was primarily due to charge-offs in previously identified portfolios of interest. The decrease in non-performing loans therefore resulted in a decline in specific reserves in the first quarter. See Table 11 for more details regarding non-performing assets.
Current report
The combined results from portfolio changes, credit metrics, and specific reserves was a net decrease to the allowance.
Current report
Qualitative adjustments
Current report
The qualitative framework also has specific adjustment components which are reserves meant to capture specific issues or events that management believes are not adequately captured in the model outcomes. Qualitative adjustments for the first quarter of 2025 were reduced from the fourth quarter of 2024 levels due to reduced risk in certain portfolios of interest and more of the remaining risk being captured in the loss forecasting models and specific reserve estimates, as well as additional portfolio stability resulting in less uncertainty in some portfolios.
Current report
The combined results from general imprecision and specific qualitative adjustments was a net increase to the allowance.
Current report
Overall allowance
Current report
Based upon the factors discussed above, the March 31, 2025 allowance remained stable compared to the fourth quarter of 2024 due to declines in specific reserves and a reduction in overall loan balances, offset by model increases associated with current economic uncertainty as well as incremental qualitative overlays.
Current report
As discussed in the Economic Environment in Regions' Banking Markets within the "First Quarter Overview" section, the economic environment has become more uncertain since March 31, 2025 which may impact the macroeconomic factors utilized in the baseline economic forecast for the second quarter of 2025 allowance estimation process. Also as discussed in the "Critical Accounting Estimates and Related Policies" section in the Annual Report on Form 10-K for the year ended December 31, 2024, it is difficult to estimate how potential changes in any one economic factor might affect the overall allowance because a wide variety of factors and inputs are considered in the allowance estimate. Changes in the factors and inputs may not occur at the same rate and may not be consistent across all product types. Additionally, changes in factors and inputs may be directionally inconsistent, such that improvement in one factor may offset deterioration in others. However, to consider the impact of a hypothetical alternate economic forecast, Regions estimated the allowance using a scenario that was one standard deviation unfavorable to the expected scenario for each macroeconomic variable. This unfavorable scenario resulted in an allowance approximately 15 percent higher than the allowance using the baseline scenario.
Current report
(1)Amounts have been calculated using whole dollar values.
Current report
(1)Amounts have been calculated using whole dollar values.
Current report
Total deposits at March 31, 2025 increased approximately $3.4 billion across most segments and categories compared to year-end 2024 levels. The increase in deposits reflects typical seasonal tax patterns and customer preference for liquidity in an uncertain economic environment. The mix of non-interest-bearing deposits remained stable at approximately 31 percent of total deposits at both March 31, 2025 and December 31, 2024. Regions' deposits are granular and diversified including insured and collateralized deposits, with consumer deposits making up more than 62 percent of the total deposit base at both March 31, 2025 and December 31, 2024.
Current report
(1)Amounts have been calculated using whole dollar values and the prevailing interest accrual methodology.
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Removed paragraphs (73)
Previous report
THIRD QUARTER OVERVIEW
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Third Quarter Results
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At the end of the third quarter of 2024 and subsequently after September 30, 2024, two powerful storms, Hurricanes Helene and Milton made landfall in the Southeastern United States, impacting states within the Company's footprint, especially Florida, North Carolina and South Carolina. The hurricanes caused significant flood and wind damage. Due to the proximity of the hurricanes to quarter-end and into early fourth quarter, Regions is still assessing all aspects of the impacts to business operations and customers. At this time the impacts to business operations, Regions' premises and the allowance for credit losses are expected to be immaterial.
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Expectations
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(1)The Company has provided forward-looking expectations with respect to certain measures on an adjusted basis, which are non-GAAP financial measures. Due to the complexity and inherent difficulty in forecasting the occurrence and the financial impact of various items that have not yet occurred, are out of the Company’s control or cannot be predicted without unreasonable effort, a reconciliation of these forward-looking non-GAAP measures to their most directly comparable GAAP financial measures has not been provided. For the same reasons, the Company is unable to address the probable significance of these items; however, such unavailable information could have a significant impact on GAAP and non-GAAP financial results. The reconciliation of these forward-looking non-GAAP financial measures to their comparable GAAP financial measures following the end of 2024 is expected to be consistent with the reconciliation of such measures presented in Table 18.
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(2)Expectation for CET1 is to continue to manage consistent with current levels over the near term.
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(3)Expectation for net interest income assumes stable or lower short-term interest rates; flat long-term rates held at September 30, 2024 levels.
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For more information related to the Company's 2024 expectations, refer to the related sub-sections discussed in more detail within Management's Discussion and Analysis of this Form 10-Q.
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The commercial portfolio segment includes commercial and industrial loans to commercial customers for use in normal business operations to finance working capital needs, equipment purchases and other expansion projects. Commercial and industrial loans decreased $1.3 billion since year-end 2023, due to lower line of credit utilization and loans refinanced off the Company's balance sheet through the debt capital markets. In the nine months ended September 30, 2024, the decline in commercial and industrial loans was broad-based as shown in Table 4.
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Table 4—Commercial Industry Exposure
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Included within Table 5 above, the multi-family (listed as apartments), business offices, and senior housing (listed as healthcare) portfolios are considered portfolios of interest due to conditions such as inflationary pressures, higher interest rates, and adverse underlying market fundamentals resulting in rising vacancies and reductions in net effective rents. However, the level of heightened systemic risk for the multi-family and senior housing portfolios has started to decline since the second quarter of 2024. Additionally, within the commercial portfolio, the trucking sector of the transportation and warehousing portfolio is also considered a portfolio of interest as trucking companies have been working through the most prolonged downturns in the U.S. domestic freight market. Recent and future rate cuts should ease pressure on borrowers across the entire loan portfolio. See Table 6 below for more details on these portfolios, as well as the allowance discussion following Table 9 .
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Table 6— Portfolios of Interest
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(2) Senior housing herein represents the CRE portfolio and excludes approximately $135 million in non-real estate commercial loans in the senior housing sector. There has been limited new client activity in this sector for several years.
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Other Consumer—Exit Portfolios
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Exit portfolios primarily include lending initiatives through third parties consisting of loans made through automotive dealerships. Regions ceased originating new loans related to these businesses prior to 2020 and therefore the portfolio balances have been in run-off.
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In deriving any forecast, Regions benchmarks its internal forecast with external forecasts and external data available. Regions' September 2024 baseline forecast showed some deterioration compared to the June 2024 forecast. Job and wage growth are slowing, but growth in labor earnings is expected to continue to outpace inflation. The trend rate of job growth is slowing, but thus far this has been a function of a slowing rate of hiring as opposed to an increasing rate of layoffs. Regions' baseline forecast anticipates further deceleration in the rate of job growth in the months ahead. The labor force participation rate has risen, which has contributed to an increase in the unemployment rate, but the participation rate is nonetheless expected to remain below pre-pandemic norms, which will limit further increases in the unemployment rate over the forecast horizon. Growth in consumer spending is slowing, but this reflects growth in spending becoming realigned with income growth after the pandemic-related distortions in spending patterns over the past few years. Business investment in machinery and equipment, as well as intellectual property products, is expected to grow at a slow but steady rate over the coming quarters; sustained growth in these areas is necessary to support faster growth in labor productivity over time. Core inflation is expected to slow further but remain above the FOMC's 2.0 percent target rate through 2025. The risks to the baseline forecast are considered to be balanced.
Previous report
Credit metrics are monitored throughout each quarter in order to understand external macro-views, trends and industry outlooks, as well as Regions' internal specific views of credit metrics and trends. In the third quarter of 2024, overall asset quality continued show signs of stabilization. Commercial and investor real estate criticized balances decreased approximately $171 million, which included a slight increase in classified balances of $98 million compared to the second quarter of 2024. Non-performing loans, excluding held for sale, decreased approximately $26 million compared to the second quarter of 2024. The decreases in criticized and non-performing loans were primarily due to upgrades and payoffs across several categories. Total net charge-offs increased by 6 basis points to 0.48 percent of average loans compared to the second quarter of 2024, driven by one large investor real estate borrower. See Table 12 for more details regarding non-performing assets.
Previous report
Based upon the factors discussed above, the September 30, 2024 allowance remained relatively stable compared to the second quarter of 2024. Based on the overall analysis performed, management deemed an allowance of $1.7 billion to be appropriate to absorb expected credit losses in the loan and credit commitment portfolios as of September 30, 2024.
Previous report
(2)Amounts have been calculated using whole dollar values.
Previous report
Total deposits at September 30, 2024 decreased approximately $1.4 billion across most segments and categories compared to year-end 2023 levels due to seasonal consumer spending patterns. Slight growth in corporate deposits was overcome by declines in all other segments. As expected, the pace of deposit remixing from non-interest-bearing into interest-bearing products has continued to slow during 2024. Furthermore, competitive rates declined ahead of the 50 basis point reduction in the Fed funds rate late in the third quarter of 2024.
Previous report
Regions' deposits are granular and diversified including insured and collateralized deposits, with consumer deposits making up more than 62 percent of the total deposit base. Furthermore, corporate deposits include those that are operational in nature (where the primary use is certain operational services such as clearing, custody, payments or other cash management activities). A significant amount of the Company's deposit base is insured by the FDIC or collateralized, with approximately $9.8 billion in deposits collateralized in public funds or in trusts at September 30, 2024. The amount of estimated uninsured deposits totaled $48.9 billion at September 30, 2024, therefore over 60 percent of total deposits were insured by the FDIC. The granularity of the Company's deposits was evidenced by an average deposit account balance of approximately $18 thousand at September 30, 2024. The estimates of uninsured deposits and average account size were based on methodologies used in the Company's Call Report, which is prepared on an unconsolidated bank basis.
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On June 3, 2024, Regions issued $750 million of 5.722% fixed rate to floating rate senior notes due June 2030. The notes will initially bear interest at 5.722% per annum and, commencing on June 6, 2029 in conjunction with the call date, the notes will bear interest at a floating rate per annum equal to Compounded SOFR plus 1.49%.
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On September 3, 2024, Regions issued $1.0 billion of 5.502% fixed rate to floating rate senior notes due September 2035. The notes will initially bear interest at 5.502% per annum and, commencing on September 6, 2034 in conjunction with the call date, the notes will bear interest at a floating rate per annum equal to Compounded SOFR plus 2.06%.
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In the third quarter of 2024, the Company's 7.75% subordinated notes matured.
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See the "Third Quarter Overview" section for details on expectations for CET1.
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RATINGS
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Table 17 "Credit Ratings" reflects the debt ratings information of Regions Financial Corporation and Regions Bank by S&P, Moody’s, Fitch and DBRS.
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Table 17—Credit Ratings
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(1) As of March 31, 2024, DBRS withdrew their rating on Regions Financial Corporations' subordinated debt.
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On September 16, 2024, Moody's affirmed the Company's senior unsecured debt rating and revised its outlook to stable from negative citing its very strong deposit franchise, sound profitability and conservative asset risk profile.
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In general, ratings agencies base their ratings on many quantitative and qualitative factors, including capital adequacy, liquidity, asset quality, business mix, probability of government support, and level and quality of earnings. Any downgrade in credit ratings by one or more ratings agencies may impact Regions in several ways, including, but not limited to, Regions’ access to the capital markets or short-term funding, borrowing cost and capacity, collateral requirements, and acceptability of its letters of credit, thereby potentially adversely impacting Regions’ financial condition and liquidity. See the “Risk Factors” section of Regions' Annual Report on Form 10-K for the year ended December 31, 2023 for more information.
Previous report
A security rating is not a recommendation to buy, sell or hold securities, and the ratings are subject to revision or withdrawal at any time by the assigning rating agency. Each rating should be evaluated independently of any other rating. Additional information on the credit rating ranking within the overall classification system is located on the website of each credit rating agency.
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NON-GAAP MEASURES
Previous report
The table below presents computations of earnings and certain other financial measures, which excludes certain adjustments that are included in the financial results presented in accordance with GAAP. These non-GAAP financial measures include "adjusted non-interest expense", "adjusted non-interest income", "adjusted total revenue", and "adjusted total revenue, taxable-equivalent basis". Regions believes that excluding certain items provides a meaningful base for period-to-period comparison, which management believes will assist investors in analyzing the operating results of the Company and predicting future performance. These non-GAAP financial measures are also used by management to assess the performance of Regions’ business because management does not consider the activities related to the adjustments to be indications of ongoing operations. Regions believes that presentation of these non-GAAP financial measures will permit investors to assess the performance of the Company on the same basis as that applied by management. Management and the Board utilize these non-GAAP financial measures as follows:
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•Preparation of Regions’ operating budgets
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•Monthly financial performance reporting
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•Monthly close-out reporting of consolidated results
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•Presentations to investors of Company performance
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•Metrics for incentive compensation
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Non-interest expense (GAAP) is presented excluding adjustments to arrive at adjusted non-interest expense (non-GAAP). Net interest income (GAAP) is presented with taxable-equivalent adjustments to arrive at net interest income on a taxable-equivalent basis (GAAP). Non-interest income (GAAP) is presented excluding adjustments to arrive at adjusted non-interest income (non-GAAP). Net interest income (GAAP) and adjusted non-interest income (non-GAAP) are added together to arrive at adjusted total revenue (non-GAAP). Net interest income on a taxable-equivalent basis (GAAP) and adjusted non-interest income (non-GAAP) are added together to arrive at adjusted total revenue on a taxable-equivalent basis (non-GAAP).
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Reworded paragraphs (82)
Previous wording
The following discussion and analysis is part of Regions Financial Corporation’s (“Regions” or the “Company”) Quarterly Report on Form 10-Q filed with the SEC and updates Regions’ Annual Report on Form 10-K for the year ended December 31, 2023, which was previously filed with the SEC. This financial information is presented to aid in understanding Regions’ financial position and results of operations and should be read together with the financial information contained in Regions’ Annual Report on Form 10-K. See Note 1 "Basis of Presentation" and Note 13 "Recent Accounting Pronouncements" to the consolidated financial statements for further detail. The emphasis of this discussion will be on the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023 for the consolidated statements of income. For the consolidated balance sheets, the emphasis of this discussion will be on the balances as of September 30, 2024 compared to December 31, 2023.
Current wording
The following discussion and analysis is part of Regions Financial Corporation’s (“Regions” or the “Company”) Quarterly Report on Form 10-Q filed with the SEC and updates Regions’ Annual Report on Form 10-K for the year ended December 31, 2024, which was previously filed with the SEC. This financial information is presented to aid in understanding Regions’ financial position and results of operations and should be read together with the financial information contained in Regions’ Annual Report on Form 10-K. See Note 1 "Basis of Presentation" and Note 13 "Recent Accounting Pronouncements" to those consolidated financial statements for further detail. The emphasis of this discussion will be on the three months ended March 31, 2025 compared to the three months ended March 31, 2024 for the consolidated statements of income. For the consolidated balance sheets, the emphasis of this discussion will be on the balances as of March 31, 2025 compared to December 31, 2024.
Previous wording
Regions is a financial holding company headquartered in Birmingham, Alabama operating in the South, Midwest and Texas. In addition, Regions operates several offices delivering specialty capabilities in New York, Washington D.C., Chicago, Salt Lake City, and other locations nationwide. Regions provides financial solutions for a wide range of clients including retail and mortgage banking services, commercial banking services and wealth and investment services. Further, Regions and its subsidiaries deliver specialty capabilities including merger and acquisition advisory services, capital markets solutions, home improvement lending and others.
Current wording
Regions is a financial holding company headquartered in Birmingham, Alabama operating in the South, Midwest and Texas. In addition, Regions operates several offices delivering specialty capabilities in New York, Washington D.C., Chicago, Salt Lake City, and other locations nationwide. Regions provides financial solutions for a wide range of clients including retail and mortgage banking services, commercial banking services and wealth and investment services. Further, Regions and its subsidiaries deliver other specialty capabilities including merger and acquisition advisory services, capital markets solutions, home improvement lending, investment advisory services, equipment financing for commercial clients and small business customers, low income housing tax credit corporate fund syndication and asset management, financing to CRA-qualified customers, investment and insurance products, broker-dealer services to commercial clients, and others.
Previous wording
Regions conducts its banking operations through Regions Bank, an Alabama state-chartered commercial bank that is a member of the Federal Reserve System. At September 30, 2024, Regions operated 1,261 total branch outlets. Regions carries out its strategies and derives its profitability from three reportable business segments: Corporate Bank, Consumer Bank, and Wealth Management, with the remainder in Other. See Note 11 "Business Segment Information" to the consolidated financial statements for more information regarding Regions’ segment reporting structure.
Current wording
Regions conducts its banking operations through Regions Bank, an Alabama state-chartered commercial bank that is a member of the Federal Reserve System. At March 31, 2025, Regions operated 1,249 total branch outlets. Regions carries out its strategies and derives its profitability from three reportable business segments: Corporate Bank, Consumer Bank, and Wealth Management, with the remainder in Other. See Note 11 "Business Segment Information" to the consolidated financial statements for more information regarding Regions’ segment reporting structure.
Previous wording
Economic conditions, competition, new legislation and related rules impacting regulation of the financial services industry and the monetary and fiscal policies of the Federal government significantly affect most, if not all, financial institutions, including Regions. Lending and deposit activities and fee income generation are influenced by levels of business spending and investment, consumer income, consumer spending and savings, capital market activities, and competition among financial institutions, as well as customer preferences, interest rate conditions and prevailing market rates on competing products in Regions’ market areas.
Current wording
Economic conditions, competition, new legislation and related rules impacting regulation of the financial services industry and the monetary and fiscal policies of the Federal government significantly affect most, if not all, financial institutions, including Regions. Lending and deposit activities and fee income generation are influenced by levels of business spending and investment, consumer income, consumer spending and savings, capital market activities, and competition among financial institutions, as well as customer preferences, interest rate conditions, inflation and prevailing market rates on competing products in Regions’ market areas.
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Regions reported net income available to common shareholders of $446 million or $0.49 per diluted share in the third quarter of 2024 compared to net income available to common shareholders of $465 million or $0.49 per diluted share in the third quarter of 2023.
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Regions reported net income available to common shareholders of $465 million or $0.51 per diluted share in the first quarter of 2025 compared to net income available to common shareholders of $343 million or $0.37 per diluted share in the first quarter of 2024.
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Net interest income (taxable-equivalent basis) totaled $1.2 billion in the third quarter of 2024, which decreased $74 million compared to the third quarter of 2023. The net interest margin (taxable-equivalent basis) was 3.54 percent in the third quarter of 2024, reflecting a 19 basis point decrease from the same period in 2023. The decreases in net interest income and net interest margin were primarily driven by increases in deposit and funding costs and partially offset by higher asset yields. Refer to the related discussion below Table 19 "Consolidated Average Daily Balances and Yield/Rate Analysis" for further detail.
Current wording
Net interest income (taxable-equivalent basis) totaled $1.2 billion in the first quarter of 2025, which increased $9 million compared to the first quarter of 2024. The net interest margin (taxable-equivalent basis) was 3.52 percent in the first quarter of 2025, reflecting a 3 basis point decrease from the same period in 2024. The slight increase in net interest income was driven by the replacement of fixed rate loans and securities in a high interest rate environment including securities repositioning activities, coupled with hedging benefits and the ability to manage funding costs lower as short-term interest rates declined. The decline in net interest margin was primarily driven by a shift in earning asset mix to hold higher levels of cash with the Federal Reserve. Refer to the related discussion below Table 16 "Consolidated Average Daily Balances and Yield/Rate Analysis" for further detail.
Previous wording
The provision for credit losses totaled $113 million in the third quarter of 2024 compared to $145 million in the third quarter of 2023. The current quarter provision reflects continued signs of overall asset quality stabilization experienced during 2024. Net charge-offs totaled $117 million, or 0.48 percent of average loans, in the third quarter of 2024, compared to $101 million, or 0.40 percent in the third quarter of 2023. This increase reflected higher commercial and investor real estate net charge-offs. The allowance as a percent of total loans, net, increased to 1.79 percent at September 30, 2024, compared to 1.73 percent at December 31, 2023. Refer to the "Allowance for Credit Losses" section for further detail.
Current wording
The provision for credit losses totaled $124 million in the first quarter of 2025 compared to $152 million in the first quarter of 2024. Net charge-offs totaled $123 million, or 0.52 percent of average loans, in the first quarter of 2025, compared to $121 million, or 0.50 percent in the first quarter of 2024. This slight increase reflected charge-offs in previously identified portfolios of interest. The allowance as a percent of total loans, net, increased to 1.81 percent at March 31, 2025, compared to 1.79 percent at December 31, 2024. Refer to the "Allowance for Credit Losses" section for further detail.
Previous wording
Non-interest income was $572 million in the third quarter of 2024 compared to $566 million in third quarter of 2023. The increase was primarily driven by an increase in capital markets income, service charges on deposit accounts and investment services fee income. Non-interest income also includes $75 million in securities losses associated with portfolio repositioning executed in the third quarter of 2024. See Table 24 "Non-Interest Income" for further details.
Current wording
Non-interest income was $590 million in the first quarter of 2025 compared to $563 million in the first quarter of 2024. The increase was primarily driven by an increase in service charge income and lower securities losses. These increases were partially offset by a decline in capital markets income and unfavorable market valuation adjustments on employee benefit assets, which are offset in non-interest expense. See Table 21 "Non-Interest Income" for further details.
Previous wording
Non-interest expense was $1.1 billion in the third quarter of 2024 which decreased $24 million compared to the third quarter of 2023. The decrease was driven by a decline in operational losses, other miscellaneous expenses and FDIC insurance assessments. The decreases were partially offset by an increase in salaries and employee benefits expense. See Table 25 "Non-Interest Expense" for further details.
Current wording
Non-interest expense was $1.0 billion in the first quarter of 2025 which decreased $92 million compared to the first quarter of 2024. The decrease was primarily driven by a decline in salaries and benefits, operational losses, and FDIC insurance expense. See Table 22 "Non-Interest Expense" for further details.
Previous wording
Regions' effective tax rate was 19.4 percent in the third quarter of 2024 compared to 20.9 percent in the third quarter of 2023. See the "Income Taxes" section for further details.
Current wording
Regions' effective tax rate was 21.1 percent in the first quarter of 2025 compared to 20.7 percent in the first quarter of 2024. See the "Income Taxes" section for further details.
Previous wording
Regions and Regions Bank are required to comply with regulatory capital requirements established by Federal and State banking agencies, which include quantitative requirements including the CET1 ratio. At September 30, 2024, Regions’ CET1 ratio was estimated to be 10.58 percent. For additional information on Regions' regulatory capital requirements see the "Regulatory Requirements" section.
Current wording
Regions and Regions Bank are required to comply with regulatory capital requirements established by Federal and State banking agencies, which include quantitative requirements including the CET1 ratio. At March 31, 2025, Regions’ CET1 ratio was estimated to be 10.8 percent. For additional information on Regions' regulatory capital requirements see the "Regulatory Requirements" section.
Previous wording
The Board authorized, on April 20, 2022, the repurchase of up to $2.5 billion of the Company's common stock, permitting purchases from the second quarter of 2022 through the fourth quarter of 2024. During the nine months ended September 30, 2024, the Company repurchased 14 million shares of common stock totaling $290 million.
Current wording
The Board has authorized the repurchase of up to $2.5 billion of the Company's common stock through the fourth quarter of 2025. See Note 6 "Shareholders' Equity and Accumulated Other Comprehensive Income (Loss)" for more information.
Previous wording
Cash and cash equivalents increased approximately $3.7 billion from December 31, 2023 to September 30, 2024 resulting from an increase in cash balances on deposit with the Federal Reserve Bank driven primarily by FHLB advances utilized in the first nine months of 2024. Cash balances were also impacted by a decline in loans. See the "Loans", "Liquidity" and "Borrowed Funds" sections for more information.
Current wording
Cash and cash equivalents increased approximately $3.6 billion from year-end 2024 to March 31, 2025 resulting from an increase in cash balances on deposit with the Federal Reserve Bank driven primarily by an increase in deposits and a decline in loans, partially offset by a decline in short-term borrowings. See the "Deposits", "Liquidity", and "Loans" sections for more information.
Previous wording
The following table details the carrying values of debt securities, including both available for sale and held to maturity:
Current wording
The following table details the carrying values of debt securities, including both held to maturity and available for sale:
Previous wording
Debt securities available for sale, comprising 21 percent of earning assets, constituted approximately 91 percent of the securities portfolio at September 30, 2024. They are an important tool used to manage interest rate sensitivity and provide a primary source of liquidity for the Company, as much of the portfolio is highly liquid. Additionally, some of the securities portfolio is eligible to be used as collateral for funding of various types of borrowings. See the "Liquidity" section for more information on these arrangements. Regions maintains a highly-rated securities portfolio consisting primarily of agency MBS. See Note 3 "Debt Securities" to the consolidated financial statements for additional information. Also see the "Market Risk-Interest Rate Risk" section for more information.
Current wording
Debt securities, which comprise approximately 19 percent of earning assets, are an important tool used to manage interest rate sensitivity and provide a primary source of liquidity for the Company, as much of the portfolio is highly liquid. Additionally, some of the debt securities portfolio is eligible to be used as collateral for funding of various types of borrowings. See the "Liquidity" section for more information on these arrangements. Also see the "Market Risk-Interest Rate Risk" section for more information. See also Note 3 "Debt Securities" for additional information.
Previous wording
Debt securities held to maturity constituted approximately 9 percent of the securities portfolio at September 30, 2024. In the third quarter of 2024, the Company reclassified securities with an amortized cost, excluding items recognized in OCI, of $2.5 billion from available for sale into held to maturity to reduce the volatility in AOCI in preparation for expected, upcoming changes to regulatory guidance as discussed in the "Regulatory Requirements" section. See also Note 3 "Debt Securities" for additional information.
Current wording
Debt securities held to maturity constituted approximately 17 percent of the debt securities portfolio at March 31, 2025. The Company reclassified debt securities with an amortized cost, excluding items recognized in OCI, of $1.0 billion in the first quarter of 2025, from available for sale into held to maturity to reduce the volatility in AOCI in preparation for expected, upcoming changes to regulatory guidance as discussed in the "Regulatory Requirements" section.
Previous wording
Debt securities increased $2.6 billion from December 31, 2023 to September 30, 2024 as the Company purchased $750 million of residential agency MBS securities with proceeds from a debt issuance in the second quarter of 2024 and an additional $1.0 billion of residential agency MBS securities and U.S Treasury securities with proceeds from a debt issuance in the third quarter of 2024 (see Table 15—Long-Term Borrowings). Additionally, three distinct securities repositioning transactions occurred over the nine months ended September 30, 2024 involving the sale of mostly shorter-duration commercial agency MBS and replacement with residential agency MBS with favorable prepayment profiles. The intent was to maintain the securities portfolio duration that would otherwise shorten naturally. In the first quarter of 2024, the Company sold approximately $1.3 billion of debt securities available for sale, realizing $50 million in pre-tax losses. In the second quarter of 2024, the Company sold approximately $983 million of debt securities available for sale, realizing $50 million in pre-tax losses. In the third quarter of 2024, the Company sold approximately $1.3 billion of debt securities available for sale, realizing $75 million in pre-tax losses. Proceeds from the sales were reinvested at higher market yields.
Current wording
Debt securities increased $486 million from December 31, 2024 to March 31, 2025 due to higher unrealized holding gains as a result of lower rates during the first quarter of 2025. Of note, the Company executed a debt securities repositioning in the first quarter of 2025 involving the sale of shorter-duration commercial and residential agency MBS and replacement with residential agency MBS with favorable prepayment profiles. The intent was to maintain the debt securities portfolio duration that would otherwise shorten naturally while efficiently deploying capital. Proceeds from the sales were reinvested at higher market yields. The Company sold approximately $478 million of debt securities available for sale and realized approximately $25 million in pre-tax losses.
Previous wording
The average life of the debt securities portfolio at September 30, 2024 was estimated to be 5.8 years, with a duration of approximately 4.7 years. These metrics compare with an estimated average life of 5.5 years and a duration of approximately 4.5 years for the portfolio at December 31, 2023.
Current wording
The average life of the debt securities portfolio at March 31, 2025 was estimated to be 6.0 years, with a duration of approximately 4.2 years, inclusive of fair value hedges (see Table 18). These metrics compare with an estimated average life of 6.1 years and a duration of approximately 4.5 years for the portfolio at December 31, 2024.
Previous wording
Loans, net of unearned income, represented 70 percent of interest-earning assets as of September 30, 2024. The following table presents the distribution of Regions' loan portfolio by segment and class, net of unearned income:
Current wording
Loans, net of unearned income, represented 69 percent of interest-earning assets as of March 31, 2025. The following table presents the distribution of Regions' loan portfolio by segment and class, net of unearned income:
Previous wording
The following sections describe the composition of the portfolio segments and classes disclosed in Table 3, explain changes in balances from year-end 2023 and highlight the related risk characteristics. Regions believes that its loan portfolio is well diversified by product, client, and geography throughout its footprint. However, the loan portfolio may be exposed to certain concentrations of credit risk which exist in relation to individual borrowers or groups of borrowers, certain types of collateral, certain types of industries and certain loan products. See Note 4 "Loans and the Allowance for Credit Losses" to the consolidated financial statements for additional discussion. See the "Third Quarter Overview" section for details on expectations for loans in 2024.
Current wording
The following sections describe the composition of the portfolio segments and classes disclosed in Table 3, explain changes in balances from year-end 2024 and highlight the related risk characteristics. Regions believes that its loan portfolio is well diversified by product, client, and geography throughout its footprint. However, the loan portfolio may be exposed to certain concentrations of credit risk which exist in relation to individual borrowers or groups of borrowers, certain types of collateral, certain types of industries, and certain loan products. See Note 4 "Loans and the Allowance for Credit Losses" to the consolidated financial statements for additional discussion.
Previous wording
Over half of the Company’s total loans are included in the commercial portfolio segment. These balances are spread across numerous industries, as noted in the table below. The Company manages the related risks to this portfolio by setting certain lending limits for each significant industry.
Current wording
Over half of the Company’s total loans are included in the commercial portfolio segment. These balances are spread across numerous industries, as noted in Table 4. The Company manages the related risks to this portfolio by setting certain lending limits for each significant industry.
Previous wording
The commercial portfolio also includes owner-occupied commercial real estate mortgage loans to operating businesses, which are loans for long-term financing on land and buildings, and are repaid by cash generated by business operations. Owner-occupied commercial real estate construction loans are made to commercial businesses for the development of land or construction of a building where the repayment is derived from revenues generated from the business of the borrower.
Current wording
The commercial portfolio also includes owner-occupied commercial real estate mortgage loans to operating businesses, which are loans for long-term financing on real estate assets, and are repaid by cash generated by business operations. Owner-occupied commercial real estate construction loans are made to commercial businesses for the development of land or construction of a building where the repayment is derived from revenues generated from the business of the borrower. These owner-occupied real estate and real estate construction loans generally mature within a 10 year period and with amortization periods reflecting the longer life of the underlying collateral. Typical structure is an amortizing term loan, though construction loans are short-term, monitored, non-revolving draw facilities. These loans frequently have a covenant package combination consistent with the underwriting of commercial loans, inclusive of applicable debt service coverage, leverage, and liquidity measurements.
Previous wording
Loans for real estate development are repaid through cash flows related to the operation, sale or refinance of the property. This portfolio segment includes extensions of credit to real estate developers or investors where repayment is dependent on the sale of real estate or income generated from the real estate collateral. A portion of Regions’ investor real estate portfolio segment consists of loans secured by residential product types (land, single-family and condominium loans) within Regions’ markets. Additionally, this category includes loans made to finance income-producing properties such as apartment buildings, office and industrial buildings, and retail shopping centers. Total investor real estate loans decreased $38 million in comparison to year-end 2023 balances.
Current wording
Loans for real estate development are repaid through cash flows related to the operation, sale or refinance of the property. This portfolio segment includes extensions of credit to real estate developers or investors where repayment is dependent on the sale of real estate or income generated from the real estate collateral. A portion of Regions’ IRE portfolio segment consists of loans secured by residential product types (land, single-family and condominium loans) within Regions’ markets. Additionally, this category includes loans made to finance income-producing properties such as apartment buildings, office and industrial buildings, and retail shopping centers. Total IRE loans increased $123 million in comparison to year-end 2024 balances.
Previous wording
The following tables provide detail of Regions' commercial lending balances in selected industries.
Current wording
The following tables provide detail of Regions' commercial and IRE lending balances in selected industries.
Previous wording
(1)"Real estate" includes REITs, which are unsecured commercial and industrial products that are real estate related. This portfolio, which accounts for approximately 17 percent and 18 percent of the total commercial exposure at September 30, 2024 and December 31, 2023, respectively, is well diversified, generally has low leverage with strong access to liquidity, and the REITs included in this portfolio are primarily investment or near investment grade.
Current wording
(1)"Real estate" includes REITs, which are unsecured commercial and industrial products that are real estate related. This portfolio is well diversified, generally has low leverage with strong access to liquidity, and the REITs included in this portfolio are primarily investment or near investment grade.
Previous wording
The Company's total non-owner-occupied commercial real estate lending consists of both unsecured commercial and industrial loans that are real estate related (including REITs) and investor real estate loans and are considered to be well diversified across property types. The following table provides detail of these loans:
Current wording
The Company's total non-owner-occupied commercial real estate lending consists of both unsecured commercial and industrial loans that are real estate related (including REITs) and investor real estate loans and are considered to be well diversified across property types. The following tables provide detail of these loans:
Previous wording
(1) Approximately 90 percent of the office portfolio was secured, with approximately 62 percent of secured balances located in the South region of the U.S of which 91% was Class A properties. Additionally, the IRE office portfolio had a weighted-average LTV of approximately 66 percent at September 30,
Current wording
The business offices portfolio remains a portfolio of interest due to rising vacancies and reductions in net effective rents. The office portfolio totaled $1.4 billion and represented 1.5 percent of total loans at March 31, 2025. The office portfolio included non-performing loans of $184 million and had associated charge-offs of $20 million in the three months ended March 31, 2025. Approximately 88 percent of the office portfolio was secured, with approximately 60 percent of secured balances located in the South region of the U.S, of which 90 percent were Class A properties. Approximately 50 percent of the office portfolio will mature in the next 12 months. Additionally, the IRE office portfolio had a weighted-average LTV of approximately 70 percent at March 31, 2025, based upon appraisal at origination or most recent received, and a stressed weighted-average LTV of approximately 85 percent as of April 4, 2025, based upon GreenStreet's Commercial Property Price Index. No new loan originations are being contemplated in this portfolio.
Previous wording
Residential first mortgage loans represent loans to consumers to finance a residence. These loans are typically financed over a 15 to 30 year term and, in most cases, are extended to borrowers to finance their primary residence.
Current wording
Residential first mortgage loans represent loans to consumers to finance a residence. These loans are typically financed over a 15 to 30 year term and, in most cases, are extended to borrowers to finance their primary residence. Total residential first mortgage loans decreased $94 million in comparison to year-end 2024 balances due to lower seasonal production.
Previous wording
Home equity lines are secured by a first or second mortgage on the borrower's residence and allow customers to borrow against the equity in their homes. Home equity lines decreased $91 million in comparison to year-end 2023 balances, as payoffs and paydowns continue to outpace production. Substantially all of this portfolio was originated through Regions' branch network.
Current wording
Home equity lines are secured by a first or second mortgage on the borrower's residence and allow customers to borrow against the equity in their homes. Home equity lines decreased $20 million in comparison to year-end 2024 balances. Substantially all of this portfolio was originated through Regions' branch network.
Previous wording
Other consumer loans primarily include indirect and direct consumer loans, overdrafts and other revolving loans. Other consumer loans decreased $87 million from year-end 2023 driven by a slight decline in consumer home improvement lending.
Current wording
Other consumer loans primarily include indirect and direct consumer loans, overdrafts and other revolving loans. Other consumer loans decreased $122 million from year-end 2024 driven by a decline in consumer home improvement lending due to seasonality.
Previous wording
Regions considers factors such as periodic updates of FICO scores, unemployment, and home prices as credit quality indicators for consumer loans. FICO scores are obtained at origination and refreshed FICO scores are obtained by the Company quarterly for most consumer loans. For more information on credit quality indicators refer to Note 4 "Loans and the Allowance for Credit Losses".
Current wording
Regions considers factors such as periodic updates of FICO scores, accrual status, days past due status, unemployment rates, home prices, and geography as credit quality indicators for the consumer loan portfolio. FICO scores are obtained at origination and refreshed FICO scores are obtained by the Company quarterly for most consumer loans. For more information on credit quality indicators refer to Note 4 "Loans and the Allowance for Credit Losses".
Previous wording
The allowance consists of two components: the allowance for loan losses and the reserve for unfunded credit commitments. Unfunded credit commitments includes items such as letters of credit, financial guarantees and binding unfunded loan commitments. The allowance totaled $1.7 billion at September 30, 2024 and December 31, 2023, which represents management's best estimate of expected losses over the life of the loan and credit commitment portfolios.
Current wording
The allowance represents management's best estimate of expected losses over the life of the loan and credit commitment portfolios and consists of two components: the allowance for loan losses and the reserve for unfunded credit commitments. Unfunded credit commitments includes items such as letters of credit, financial guarantees and binding unfunded loan commitments. The allowance totaled $1.7 billion at both March 31, 2025 and December 31, 2024.
Previous wording
(1)See Note 1 "Summary of Significant Accounting Policies" in the Annual Report on Form 10-K for the year ended December 31, 2023 for additional information.
Current wording
Regions' quarterly allowance estimation process utilizes loss forecasting models for pooled loans, specific reserves for significant individually evaluated non-performing loans, and qualitative adjustments for items not captured by the models including specific adjustments and general imprecision. Key inputs to Regions' loss forecasting models include, but are not limited to, loan risk ratings (commercial and investor real estate loans), maturity date, days past due and FICO scores (consumer loans), collateral values securing loans, and Regions' internally prepared baseline economic forecast. Changes in any of these factors, assumptions, or the availability of new information, could require the allowance to be adjusted in future periods, perhaps materially. Outputs from the loss forecasting models, in combination with Regions' qualitative framework and other analyses, inform management in its estimation of Regions' expected credit losses to ensure the overall allowance estimate is appropriate from both a bottom-up and top-down perspective. Actual losses could vary, perhaps materially, from management’s estimates. See Note 1 "Summary of Significant Accounting Policies" in the Annual Report on Form 10-K for the year ended December 31, 2024 for more information.
Previous wording
The table below reflects a range of macroeconomic factors utilized in the Base forecast over the two-year R&S forecast period as of September 30, 2024. The unemployment rate is the most significant macroeconomic factor among the allowance models and is expected to remain relatively consistent over the forecast period.
Current wording
Table 8 below reflects a range of macroeconomic factors utilized in the baseline economic forecast over the two-year R&S forecast period as of March 31, 2025. The unemployment rate is the most significant macroeconomic factor among the allowance models and as of the March 2025 baseline forecast was expected to remain relatively consistent over the forecast period. The unemployment rate expectations for the R&S forecast period that will be determined in the second quarter of 2025 are uncertain and may vary, perhaps materially, from those currently shown in Table 8 .
Previous wording
While it is the intent of Regions' quantitative allowance methodologies to reflect all risk factors, including incremental risk in portfolios identified as under stress, any estimate involves assumptions and uncertainties resulting in some level of imprecision. The qualitative framework has a general imprecision component which is meant to acknowledge that model and forecast errors are inherent in any modeling estimate. In the third quarter of 2024, the general imprecision remained stable.
Current wording
While it is the intent of Regions' quantitative allowance methodologies to reflect all risk factors, including incremental risk in portfolios identified as under stress, any estimate involves assumptions and uncertainties resulting in some level of imprecision. Regions' qualitative framework has a general imprecision component which is meant to acknowledge that model and forecast errors are inherent in any modeling estimate. In the first quarter of 2025, the general imprecision component increased due to increased uncertainty of economic policy changes, including impacts from potential new tariffs as discussed above.
Previous wording
Details regarding the allowance and net charge-offs, including an analysis of activity from previous year's totals, are included in Table 10 "Allowance for Credit Losses". Net charge-offs increased $74 million year-over-year, primarily driven by increases in commercial and industrial and commercial investor real estate mortgage net charge-offs. As noted, economic trends such as interest rates, unemployment, volatility in commodity prices, collateral valuations and inflationary pressure will impact the future levels of net charge-offs and may result in volatility of certain credit metrics in 2024 and beyond. See the "Third Quarter Overview" section for details on expectations for net charge-offs in 2024.
Current wording
Net charge-offs increased $2 million year-over-year. As noted, economic trends such as interest rates, unemployment, volatility in commodity prices, collateral valuations and inflationary pressure will impact the future levels of net charge-offs and may result in volatility of certain credit metrics in 2025 and beyond.
Previous wording
Allocation of the allowance for credit losses by portfolio segment and class is summarized as follows:
Current wording
Allocation of the allowance by portfolio segment and class is summarized as follows:
Previous wording
(2)Excludes residential first mortgage loans that are 100% guaranteed by the FHA and all guaranteed loans sold to Ginnie Mae where Regions has the right but not the obligation to repurchase. Total 90+ days or more past due guaranteed loans excluded were$46 million at September 30, 2024 and $34 million at December 31, 2023.
Current wording
(2)Excludes residential first mortgage loans that are 100% guaranteed by the FHA and all guaranteed loans sold to Ginnie Mae where Regions has the right but not the obligation to repurchase. Total 90+ days or more past due guaranteed loans excluded were $53 million at March 31, 2025 and $55 million at December 31, 2024.
Previous wording
Non-performing loans at September 30, 2024 increased $20 million as compared to year-end 2023 levels. The same economic trends that impact net charge-offs, as discussed above, will impact the future level of non-performing assets. Circumstances related to individually large credits could also result in volatility.
Current wording
Non-performing loans at March 31, 2025 decreased $59 million as compared to year-end 2024 levels. The same economic trends that impact net charge-offs, as discussed above, will impact the future level of non-performing loans. Circumstances related to individually large credits could also result in volatility.
Previous wording
The following table summarizes deposits by category and by segment:
Current wording
Deposits are Regions’ primary source of funds, providing funding for 92 percent of average earning assets at both March 31, 2025 and December 31, 2024. The following table summarizes deposits by category and by segment:
Showing the first 40 of 82 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Details regarding the allowance and net charge-offs, including an analysis of activity from previous year's totals, are included below:
Rearranged previous paragraphs (6)
Previous report — wording carried elsewhere
2024, based upon appraisal at origination or most recent received, and a stressed weighted-average LTV of approximately 88 percent as of October 4, 2024, based upon GreenStreet's Commercial Property Price Index. No new loan originations are currently being contemplated in this portfolio.
Previous report — wording carried elsewhere
(2)Debt securities are included on an amortized cost basis with yield and net interest margin calculated accordingly.
Previous report — wording carried elsewhere
(4)Loans, net of unearned income include non-accrual loans for all periods presented.
Previous report — wording carried elsewhere
(5)Interest income on loans, net of unearned income, includes hedging expense of $343 million and $129 million for the nine months ended September 30, 2024 and 2023, respectively. Interest income on loans, net of unearned income, also includes net loan fees of $105 million and $93 million for the nine months ended September 30, 2024 and 2023, respectively.
Previous report — wording carried elsewhere
(6)Total deposit costs may be calculated by dividing total interest expense on deposits by the sum of interest-bearing deposits and non-interest-bearing deposits. The rates for total deposit costs equaled 1.58% and 0.85% for the nine months ended September 30, 2024 and 2023, respectively.
Previous report — wording carried elsewhere
(7)The computation of taxable-equivalent net interest income is based on the statutory federal income tax rate of 21%, adjusted for applicable state income taxes net of the related federal tax benefit.