REGIONS FINANCIAL CORP

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 should be read in conjunction with the consolidated financial statements and the related notes that appear in Part I, Item 1 of this report. In addition, this discussion and analysis updates the Annual Report on Form 10-K for the year ended December 31, 2025, 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, 2026 compared to the three months ended March 31, 2025 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, 2026 compared to December 31, 2025.

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 should be read in conjunction with the consolidated financial statements and the related notes that appear in Part I, Item 1 of this report. In addition, this discussion and analysis updates the Annual Report on Form 10-K for the year ended December 31, 2025, 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 and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025 for the consolidated statements of income. For the consolidated balance sheets, the emphasis of this discussion will be on the balances as of June 30, 2026 compared to December 31, 2025.

Previous wording

Regions reported net income available to common shareholders of $539 million or $0.62 per diluted share in the first quarter of 2026 compared to net income available to common shareholders of $465 million or $0.51 per diluted share in the first quarter of 2025.

Current wording

Regions reported net income available to common shareholders of $549 million or $0.64 per diluted share in the second quarter of 2026 compared to net income available to common shareholders of $534 million or $0.59 per diluted share in the second quarter of 2025.

Previous wording

Net interest income (taxable-equivalent basis) totaled $1.3 billion in the first quarter of 2026, which increased $55 million compared to the first quarter of 2025. The net interest margin (taxable-equivalent basis) was 3.67 percent in the first quarter of 2026, reflecting a 15 basis point increase from the same period in 2025. The increases in net interest income and margin were driven primarily by lower total funding costs which more than offset modest loan yield declines supported by hedges. Additionally, net interest income and margin benefited from fixed-rate asset turnover and securities repositioning executed in prior periods. Refer to the related discussion below Table 17 "Consolidated Average Daily Balances and Yield/Rate Analysis" for further detail.

Current wording

Net interest income (taxable-equivalent basis) totaled $1.3 billion in the second quarter of 2026, which increased $20 million compared to the second quarter of 2025. The net interest margin (taxable-equivalent basis) was 3.66 percent in the second quarter of 2026, reflecting a 1 basis point increase from the same period in 2025. The increases in net interest income and margin were driven primarily by lower total funding costs that overcame a modest decline in loan yields, which were also protected by the Company's hedging program. Additionally, net interest income and margin benefitted from fixed-rate asset turnover and securities repositionings executed in 2025 and 2026. Refer to the related discussion below Table 18 "Consolidated Average Daily Balances and Yield/Rate Analysis" for further detail.

Previous wording

The provision for credit losses totaled $91 million in the first quarter of 2026 compared to $124 million in the first quarter of 2025. Net charge-offs totaled $130 million, or 0.54 percent of average loans, in the first quarter of 2026, compared to $123 million, or 0.52 percent of average loans, in the first quarter of 2025. This increase reflected charge-offs that were already reserved for related to previously identified portfolios of interest. The allowance as a percent of total loans, net, decreased to 1.68 percent at March 31, 2026, compared to 1.76 percent at December 31, 2025 due to asset quality improvement. Refer to the "Allowance" section for further detail.

Current wording

The provision for credit losses totaled $68 million in the second quarter of 2026 compared to $126 million in the second quarter of 2025. Net charge-offs totaled $102 million, or 0.42 percent of average loans, in the second quarter of 2026, compared to $113 million, or 0.47 percent of average loans, in the second quarter of 2025. This decrease reflected continued progress on previously identified portfolios of interest that were already reserved for. The allowance as a percent of total loans, net, decreased to 1.63 percent at June 30, 2026, compared to 1.76 percent at December 31, 2025 due to asset quality improvement and resolutions of previously reserved for credits. Refer to the "Allowance" section for further detail.

Previous wording

Non-interest income was $625 million in the first quarter of 2026 compared to $590 million in the first quarter of 2025 primarily driven by a decline in securities losses associated with repositioning activity between the two periods. Additionally, investment management and trust fee income, capital markets income, bank-owned life insurance, and investment services income increased. See Table 22 "Non-Interest Income" for further details.

Current wording

Non-interest income was $630 million in the second quarter of 2026 compared to $646 million in the second quarter of 2025 primarily driven by securities losses associated with repositioning transactions in the second quarter of 2026 and a decline in mortgage income. Partially offsetting the losses were increases in service charges, investment management and trust fee income, investment services fee income, and higher market valuations on employee benefit assets. See Table 23 "Non-Interest Income" for further details.

Previous wording

Non-interest expense was $1.1 billion in the first quarter of 2026 which increased $29 million compared to the first quarter of 2025. The increase was primarily driven by an increase in salaries and benefits, equipment and software, and professional, legal and regulatory expenses. These increases were partially offset by a decline in Visa class B shares expense and other miscellaneous expenses. See Table 23 "Non-Interest Expense" for further details.

Current wording

Non-interest expense was $1.1 billion in the second quarter of 2026 which increased $48 million compared to the second quarter of 2025. The increase was primarily driven by an increase in salaries and benefits and outside services expenses. These increases were partially offset by a decline in FDIC insurance expense, operational losses, and Visa class B shares expense. See Table 24 "Non-Interest Expense" for further details.

Previous wording

Regions' effective tax rate was 21.6 percent in the first quarter of 2026 compared to 21.1 percent in the first quarter of 2025. See the "Income Taxes" section for further details.

Current wording

Regions' effective tax rate was 20.7 percent in the second quarter of 2026 compared to 20.3 percent in the second quarter of 2025. See the "Income Taxes" section for further details.

Previous wording

Cash and cash equivalents increased approximately $236 million from year-end 2025 to March 31, 2026 primarily due to an increase in borrowed funds and, to a lesser degree, an increase in deposits. The increases were partially offset by an increase in loans. See the "Borrowed Funds", "Liquidity","Deposits" and "Loans" sections for more information.

Current wording

Cash and cash equivalents decreased approximately $981 million from year-end 2025 to June 30, 2026 primarily due to an increase in loans and a decrease in deposits which was partially offset by an increase in borrowed funds. See the "Loans", "Deposits, "Borrowed Funds" and "Liquidity" sections for more information.

Previous wording

As of March 31, 2026, debt securities held to maturity and debt securities available for sale represented 17 percent and 83 percent, respectively, of the total debt securities portfolio.

Current wording

As of June 30, 2026, debt securities held to maturity and debt securities available for sale represented 16 percent and 84 percent, respectively, of the total debt securities portfolio.

Previous wording

Subsequent to March 31, 2026, the Company executed a debt securities repositioning involving the sale of shorter-duration commercial agency MBS and U.S. Treasuries and replacement with longer-duration commercial and residential agency MBS and U.S. Treasuries with higher market yields. In total the Company sold approximately $900 million of debt securities available for sale and realized approximately $40 million in pre-tax losses.

Current wording

Debt securities decreased $507 million from December 31, 2025 to June 30, 2026 due to the timing of securities purchases and less favorable market valuation adjustments resulting from changes in interest rates. During the second quarter of 2026, the Company executed a debt securities repositioning involving the sale of shorter-duration commercial agency MBS and U.S. Treasuries, which were replaced with longer-duration commercial and residential agency MBS and U.S. Treasuries with higher market yields. In total the Company sold approximately $900 million of debt securities available for sale and realized approximately $40 million in pre-tax losses.

Previous wording

Loans, net of unearned income, represented 70 percent of interest-earning assets as of March 31, 2026. 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 approximately 70 percent of interest-earning assets as of June 30, 2026. The following table presents the distribution of Regions' loan portfolio by segment and class, net of unearned income:

Previous wording

Loans, net of unearned income, increased $2.3 billion from year-end 2025 due to an increase across almost all commercial and investor real estate loan classes as discussed below. These increases were partially offset by a slight decline in consumer loans. Regions manages loan growth with a focus on risk management and risk-adjusted return on capital.

Current wording

Loans, net of unearned income, increased $3.6 billion from year-end 2025 due to an increase across all commercial and investor real estate loan classes as discussed below. These increases were partially offset by a slight decline in consumer loans. Regions manages loan growth with a focus on risk management and risk-adjusted return on capital.

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 Table 4. The Company manages the related risks to this portfolio by setting certain lending limits for each significant industry. 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. See the "Portfolio Characteristics" section in Regions' Annual Report on Form 10-K for the year ended December 31, 2025 for more information on details surrounding the commercial portfolio segment and underwriting criteria.

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. 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. See the "Portfolio Characteristics" section in Regions' Annual Report on Form 10-K for the year ended December 31, 2025 for more information on details surrounding the commercial portfolio segment and underwriting criteria, underwriting for owner-occupied real estate and real estate construction and real estate appraisals for commercial and IRE loans.

Previous wording

Commercial and industrial loans increased $2.0 billion since year-end 2025 and was driven primarily by power and utilities, manufacturing, healthcare and asset-based lending. Approximately half of the growth came from higher line utilization while the remainder was driven by new loans, primarily with existing clients. Throughout the first quarter 2026, the increase in commercial and industrial loans was broad-based as shown in Table 4.

Current wording

Commercial and industrial loans increased $3.1 billion since year-end 2025 driven primarily by increases in energy and utilities, manufacturing, real estate, and healthcare. Growth was driven by higher line utilization rates and new loan production. In the first six months of 2026, the increase in commercial and industrial loans was broad-based as shown in Table 4.

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’ 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 $538 million in comparison to year-end 2025 balances due to increases in fundings to previously approved projects and new term loans for apartments and data centers. See the "Investor Real Estate" section in Regions' Annual Report on Form 10-K for the year ended December 31, 2025 for more information on details surrounding the investor real estate portfolio segment and underwriting criteria.

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 $863 million in comparison to year-end 2025 balances due to increases in fundings to previously approved projects and new term loans for apartments and medical office buildings. See the "Investor Real Estate" section in Regions' Annual Report on Form 10-K for the year ended December 31, 2025 for more information on details surrounding the investor real estate portfolio segment and underwriting criteria.

Previous wording

While business offices portfolio remains a portfolio of interest, credit quality is improving. The office portfolio totaled $907 million and represented 0.9 percent of total loans at March 31, 2026, declining from $1.0 billion and 1.1 percent of loans at December 31, 2025. The office portfolio included non-performing loans of $98 million and had associated charge-offs of $1 million in the three months ended March 31, 2026. Approximately 97 percent of the office portfolio was secured, with approximately 61 percent of secured balances located in the South region of the U.S, of which 87 percent were Class A properties. Approximately 56 percent of the office portfolio will mature in the next 12 months. Additionally, the IRE office portfolio had a weighted-average LTV of approximately 64 percent at March 31, 2026, based upon appraisal at origination or most recent received, and a stressed weighted-average LTV of approximately 88 percent as of April 7, 2026, based upon GreenStreet's Commercial Property Price Index. While the office portfolio remains stressed, well-located, highly amenitized properties are observing improvements to property fundamentals. No new loan originations are being contemplated in this portfolio.

Current wording

While the business offices portfolio remains a portfolio of interest, credit quality is improving. The office portfolio totaled $858 million and represented 0.9 percent of total loans at June 30, 2026, declining from $1.0 billion and 1.1 percent of loans at December 31, 2025. The office portfolio included non-performing loans of $121 million and had associated charge-offs of $1 million in the six months ended June 30, 2026. Approximately 99 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 87 percent were Class A properties. Approximately 60 percent of the office portfolio will mature in the next 12 months. Additionally, the IRE office portfolio had a weighted-average LTV of approximately 64 percent at June 30, 2026, based upon appraisal at origination or most recent received, and a stressed weighted-average LTV of approximately 84 percent as of April 7, 2026, based upon GreenStreet's Commercial Property Price Index. While the office portfolio remains stressed, well-located, highly amenitized properties are observing improvements to property fundamentals. No new loan originations are being contemplated in this portfolio.

Previous wording

The trucking portfolio 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. While 2026 began with positive indicators including stable freight volumes and a constructive pricing environment, the conflict in the Middle East has created uncertainty related to operating costs, supply chain disruptions, and supply and demand dynamics. The trucking portfolio totaled $1.1 billion and represented 1.2 percent of total loans at March 31, 2026, declining from $1.2 billion and 1.3 percent of loans at December 31, 2025. The trucking portfolio included non-performing loans of $51 million and had associated charge-offs of $22 million in the three months ended March 31, 2026. New originations in the sector have been curtailed and those that occur are either secured or targeted towards larger companies.

Current wording

The trucking portfolio 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. While the freight cycle has improved and spot-market fundamentals are strong, the industry remains vulnerable to economic uncertainty. The trucking portfolio totaled $1.1 billion and represented 1.1 percent of total loans at June 30, 2026, declining from $1.2 billion and 1.3 percent of loans at December 31, 2025. The trucking portfolio included non-performing loans of $45 million and had associated charge-offs of $29 million in the six months ended June 30, 2026. New originations in the sector have been curtailed and those that occur are either secured or targeted towards larger companies.

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. Total residential first mortgage loans decreased $144 million in comparison to year-end 2025 balances as payoffs and paydowns outpaced production.

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 $267 million in comparison to year-end 2025 balances as payoffs and paydowns outpaced 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. 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. Substantially all of this portfolio was originated through Regions' branch network. See the "Portfolio Characteristics" section in Regions' Annual Report on Form 10-K for the year ended December 31, 2025 for more information on home equity line draw and repayment structures.

Previous wording

Other consumer loans primarily include indirect and direct consumer loans, overdrafts and other revolving loans. Other consumer loans decreased $190 million from year-end 2025 driven by a decline in consumer home improvement lending due to seasonality.

Current wording

Other consumer loans primarily include indirect and direct consumer loans, overdrafts and other revolving loans. Other consumer loans decreased $297 million from year-end 2025 driven by a decline in consumer home improvement lending.

Previous wording

Management reviews the allowance on a quarterly basis using updated information, including changes to economic conditions, the loan portfolio and credit information. The following table provides an analysis of the changes in the allowance for the three months ended March 31, 2026:

Current wording

Management reviews the allowance on a quarterly basis using updated information, including changes to economic conditions, the loan portfolio and credit information. The following table provides an analysis of the changes in the allowance for the three and six months ended June 30, 2026:

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. Regions' qualitative framework has a general imprecision component which is meant to acknowledge that model and forecast errors are inherent in any modeling estimate. At March 31, 2026, the general imprecision component increased compared to December 31, 2025 driven by crude oil price volatility and the unknown duration of the conflict in the Middle East.

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. The general imprecision component remained stable for the three months ended June 30, 2026.

Previous wording

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. Specific qualitative adjustments at March 31, 2026 were relatively stable compared to December 31, 2025.

Current wording

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. Specific qualitative adjustments declined in the three months ended June 30, 2026.

Previous wording

In the three months ended March 31, 2026, overall asset quality continued to improve. The ratio of net charge-offs to average loans decreased 5 basis points for the three months ended March 31, 2026 compared to the three months ended December 31, 2025 with the majority of business services charge-offs related to previously identified portfolios of interest for which specific reserves had already been established. While commercial and investor real estate criticized balances increased approximately $42 million from December 31, 2025 to March 31, 2026, the percentage as a total of business loans declined 16 basis points. See Table 10 for more details on business criticized loans and net charge-offs. Non-performing loans, excluding held for sale, decreased approximately $6 million from December 31, 2025 to March 31, 2026. See Table 12 for more details regarding non-performing assets. The combination of credit quality improvements and specific reserve releases due to charge-offs resulted in a decrease in the allowance at March 31, 2026 compared to December 31, 2025.

Current wording

Overall credit metrics continued to improve through the three months ended June 30, 2026. The ratio of net charge-offs to average loans decreased 12 basis points in the three months ended June 30, 2026 compared to the first three months of 2026, reflecting continued progress on previously identified portfolios of interest for which specific reserves had already been established. Therefore, specific reserve releases due to charge-offs resulted in a decrease in the allowance. Commercial and investor real estate criticized balances as a percent of total related loans, and non-performing loan balances decreased in the three months ended June 30, 2026. See Table 10 for more details on net charge-offs, non-performing loans and criticized loans. The combination of credit quality improvements and specific reserve releases due to charge-offs resulted in a decrease in the allowance in the three months ended June 30, 2026. Regarding impacts to the allowance as a result of portfolio changes, high quality loan portfolio growth and other credit quality considerations resulted in an increase in the modeled allowance results for the three months ended June 30, 2026.

Previous wording

Based upon the factors discussed above, the March 31, 2026 allowance decreased $39 million compared to December 31, 2025. The allowance reduction resulted from overall credit quality improvement in the portfolio and meaningful progress in resolving loans within previously identified portfolios of interest, partially offset by an allowance increase for qualitative adjustments due to economic uncertainty.

Current wording

Based upon the factors discussed above, the June 30, 2026 allowance decreased $34 million in the three months ended June 30, 2026. The allowance reduction resulted from overall credit quality improvement in the portfolio and continued progress resolving loans within previously identified portfolios of interest, partially offset by an increase for high quality loan growth.

Previous wording

Net charge-offs increased $7 million for the three months ended March 31, 2026 compared to the same period in 2025. Economic and qualitative 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 for 2026 and beyond.

Current wording

Net charge-offs decreased $4 million for the six months ended June 30, 2026 compared to the same period in 2025. Economic and qualitative 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 for 2026 and beyond.

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; however, includes Ginnie Mae repurchased loans with partial guarantees. Total 90+ days or more past due guaranteed loans excluded were $94 million at March 31, 2026 and $79 million at December 31, 2025.

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; however, includes Ginnie Mae repurchased loans with partial guarantees. Total 90+ days or more past due guaranteed loans excluded were $100 million at June 30, 2026 and $79 million at December 31, 2025.

Previous wording

Non-performing loans (excluding loans held for sale) at March 31, 2026 decreased $6 million as compared to year-end 2025. 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.

Current wording

Non-performing loans, excluding loans held for sale, decreased $30 million at June 30, 2026 as compared to year-end 2025. 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 provide an analysis of non-accrual loans (excluding loans held for sale) by portfolio segment:

Current wording

The following table provides an analysis of non-accrual loans (excluding loans held for sale) by portfolio segment:

Previous wording

(1) Other deposits represent non-customer balances primarily consisting of wholesale funding (for example, selected deposits and brokered time deposits). Other deposits include brokered deposits totaling $1.5 billion at March 31, 2026 and $1.3 billion at December 31, 2025.

Current wording

(1) Other deposits represent non-customer balances primarily consisting of wholesale funding (for example, selected deposits and brokered time deposits). Other deposits include brokered deposits totaling $1.6 billion at June 30, 2026 and $1.3 billion at December 31, 2025.

Previous wording

Total deposits at March 31, 2026 increased approximately $752 million compared to year-end 2025 levels. Growth was driven by a significant increase in money market accounts and, to a lesser degree, savings and non-interest-bearing deposits partially offset by a decline in time deposits and interest-bearing checking. Deliberate product management resulted in a shift from time deposits into money market accounts. Growth in consumer deposits reflects normal seasonal patterns related to tax refunds and payments. The mix of non-interest-bearing deposits at March 31, 2026 was approximately 30 percent of total deposits at March 31, 2026, which remained stable in comparison to December 31, 2025.

Current wording

Total deposits at June 30, 2026 decreased approximately $418 million compared to year-end 2025 levels reflecting normal seasonal patterns associated with tax refunds and payments. The decline was driven by a decrease in interest-bearing checking, money market, and time deposits. Deliberate product management resulted in a shift from time deposits into other products. The mix of non-interest-bearing deposits was approximately 31 percent of total deposits at June 30, 2026, which remained stable in comparison to December 31, 2025.

Previous wording

Short-term borrowings totaled $3.2 billion at March 31, 2026, consisting of federal funds purchased of $1.2 billion and FHLB advances of $2.0 billion. At December 31, 2025, short-term borrowing totaled $750 million comprised entirely of FHLB advances. The levels of these borrowings can fluctuate depending on the Company's funding needs and the sources utilized. See the "Liquidity" section for further discussion and detail of Regions' borrowing capacity with the FHLB.

Current wording

Short-term borrowings totaled $3.0 billion at June 30, 2026, consisting of federal funds purchased of $200 million and FHLB advances of $2.8 billion. At December 31, 2025, short-term borrowings totaled $750 million comprised entirely of FHLB advances. The levels of these borrowings can fluctuate depending on the Company's funding needs and the sources utilized. See the "Liquidity" section for further discussion and detail of Regions' borrowing capacity with the FHLB.

Previous wording

Long-term borrowings decreased by approximately $1.0 billion from year-end 2025 reflecting the repayment of FHLB advances.

Current wording

Long-term borrowings increased by approximately $494 million from year-end 2025 reflecting the issuance of senior notes partially offset by the repayment of FHLB advances. In the second quarter, Regions Bank issued $1.5 billion of 4.755% fixed rate to floating rate senior notes due July 2029. The notes will initially bear interest at 4.755% per annum and, commencing on July 27, 2028, in conjunction with the call date, the notes will bear interest at a floating rate per annum equal to Compounded SOFR plus 0.807%.

Previous wording

Funding from the FHLB and Federal Reserve Bank is secured by pledged assets, primarily certain loan portfolios which are also subject to blanket lien arrangements with the FHLB and Federal Reserve Bank. As of March 31, 2026, Regions' blanket lien arrangements with these entities covered a total loan balance of approximately $94.5 billion and included loans from various loan portfolios. However, borrowing capacity with the FHLB and Federal Reserve Bank is contingent on a subset of the blanket lien portfolios which are eligible and pledged according to the parameters for each counterparty.

Current wording

Funding from the FHLB and Federal Reserve Bank is secured by pledged assets, primarily certain loan portfolios which are also subject to blanket lien arrangements with the FHLB and Federal Reserve Bank. As of June 30, 2026, Regions' blanket lien arrangements with these entities covered a total loan balance of approximately $95.9 billion and included loans from various loan portfolios. However, borrowing capacity with the FHLB and Federal Reserve Bank is contingent on a subset of the blanket lien portfolios which are eligible and pledged according to the parameters for each counterparty.

Previous wording

Shareholders’ equity was $18.8 billion at March 31, 2026 as compared to $19.0 billion at December 31, 2025. During the first three months of 2026, net income increased shareholders' equity by $559 million, dividends on common stock reduced shareholders' equity by $227 million, and dividends on preferred stock reduced shareholders' equity by $20 million. Changes in OCI decreased shareholders' equity by $183 million, primarily due to available for sale securities and derivative instruments as a result of changes in market interest rates during the three months ended March 31, 2026. Common stock repurchased during the first three months of 2026 decreased shareholders' equity by $401 million. These shares were immediately retired upon repurchase and therefore were not included in treasury stock.

Current wording

Shareholders’ equity was $18.8 billion at June 30, 2026 as compared to $19.0 billion at December 31, 2025. During the first six months of 2026, net income increased shareholders' equity by $1.1 billion, dividends on common stock reduced shareholders' equity by $453 million, and dividends on preferred stock reduced shareholders' equity by $41 million. Changes in OCI decreased shareholders' equity by $387 million during the six months ended June 30, 2026. See the Consolidated Statements of Other Comprehensive Income for additional details. Common stock repurchased during the first six months of 2026 decreased shareholders' equity by $460 million. These shares were immediately retired upon repurchase and therefore were not included in treasury stock.

Previous wording

Total equity included noncontrolling interest of $65 million and $60 million at March 31, 2026 and December 31, 2025, respectively. The noncontrolling interest represents the unowned portion of a low income housing tax credit fund syndication, an unconsolidated VIE of which Regions held a significant interest at March 31, 2026 and December 31, 2025.

Current wording

Total equity included noncontrolling interest of $71 million and $60 million at June 30, 2026 and December 31, 2025, respectively. The noncontrolling interest represents the unowned portion of a low income housing tax credit fund syndication, an unconsolidated VIE of which Regions held a significant interest at June 30, 2026 and December 31, 2025.

Previous wording

Subsequent to March 31, 2026, the Company purchased 1.4 million shares for approximately $40 million through May 6, 2026. These shares were immediately retired upon repurchase and therefore were not included in treasury stock.

Current wording

Subsequent to June 30, 2026, the Company purchased approximately 1 million shares for $31 million through August 5, 2026. These shares were immediately retired upon repurchase and therefore were not included in treasury stock.

Previous wording

(3)Interest income on debt securities includes hedging income of $1 million and $2 million for the three months ended March 31, 2026 and 2025, respectively.

Current wording

(3)Interest income on debt securities includes hedging income of $1 million and $6 million for the three months ended June 30, 2026 and 2025, respectively.

Previous wording

(5)Interest income on loans, net of unearned income, includes hedging expense of $36 million and $67 million for the three months ended March 31, 2026, and 2025, respectively. Interest income on loans, net of unearned income, also includes net loan fees of $28 million and $29 million for the three months ended March 31, 2026 and 2025, respectively.

Current wording

(5)Interest income on loans, net of unearned income, includes hedging expense of $34 million and $60 million for the three months ended June 30, 2026, and 2025, respectively. Interest income on loans, net of unearned income, also includes net loan fees of $29 million and $32 million for the three months ended June 30, 2026 and 2025, respectively.

Previous wording

(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 and equaled 1.20% and 1.40% for the three months ended March 31, 2026 and 2025, respectively.

Current wording

(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 and equaled 1.18% and 1.39% for the three months ended June 30, 2026 and 2025, respectively.