Regions Reports Strong Earnings Growth in 2025, New Annual Records in Wealth Management and Treasury Management Income
BIRMINGHAM, Ala.--( BUSINESS WIRE)--Regions Financial Corp. (NYSE:RF) today reported fourth quarter 2025 earnings of $514 million and diluted EPS of $0.58. For the full-year 2025, earnings were $2.1 billion and diluted EPS was $2.30. Adjusted full-year earnings were $2.1 billion, a 7 percent increase year-over-year, and adjusted EPS was $2.33, up 9 percent year-over-year.
Financial Highlights
Soundness
Quarter Ended
Year Ended
($ amounts in millions, except per share data)
4Q25
3Q25
2025
2024
Earnings Summary
Net income
$
534
$
569
$
2,156
$
1,893
Net income available to common shareholders
514
548
2,061
1,774
Adj. net income avail. to common shareholders (1)
504
561
2,090
1,952
Diluted earnings per common share
0.58
0.61
2.30
1.93
Adj. diluted earnings per common share (1)
0.57
0.63
2.33
2.13
Profitability
Balance Sheet Summary
Average loans
$
95,651
$
96,647
$
96,124
$
97,036
Average deposits
129,850
129,575
129,146
126,615
Credit Quality
Allowance for credit losses ratio
1.76
%
1.78
%
1.76
%
1.78
%
Net charge-offs / average loans*
0.59
0.55
0.53
0.47
Selected Ratios
Return on average assets*
1.34
%
1.42
%
1.36
%
1.23
%
Growth
Return on average common equity*
11.58
12.56
12.09
11.24
Return on avg. tangible common equity* (1)
17.17
18.81
18.25
17.77
Adj. return on avg. tangible common equity* (1)
16.84
19.24
18.51
19.55
Net interest margin (FTE)*
3.70
3.59
3.61
3.54
Efficiency ratio
56.8
57.2
56.9
59.5
Adjusted efficiency ratio (1)
57.5
56.9
56.8
57.6
Common equity Tier 1 ratio (2)
10.8
10.9
10.8
10.9
Common equity Tier 1 ratio (incl. AOCI) (1)(2)
9.6
9.6
9.6
9.6
Effective Tax Rate
24.5
19.7
21.4
19.6
*Annualized
(1) Non-GAAP; refer to reconciliations in the financial supplement to this earnings release included as Exhibit 99.2 to the company's Current Report on Form 8-K that was furnished to the SEC on Jan. 16, 2026.(2) Current quarter is estimated
John Turner, Chairman, President and CEO of Regions Financial Corp.
While operating in a competitive environment, and in many of the strongest markets in the country, our teams delivered solid growth in 2025 by attracting more clients across our lines of business and generating record-breaking results in Wealth Management and Treasury Management. We see improving underlying trends in the nation's economy, further supporting the momentum we've built and strengthening our foundation for solid performance in 2026. We're in a great capital position while modernizing and enhancing our technology. And we're extremely well positioned to continue growing with our markets and delivering strong returns for our shareholders.
Diluted earnings per common share - 4Q25
($ amounts in millions, except per share data)
Diluted earnings per common share (GAAP) - 4Q25
$
0.58
Adjusted diluted earnings per common share (non-GAAP) - 4Q25 (1)
$
0.57
Additional selected items impacting 4Q25 earnings*:
Pre-tax additional selected items:
Salaries and employee benefits - severance charges
$
7
Visa Class B litigation escrow funding
5
Non-qualified benefit plan settlement charge
2
Total pre-tax impact of additional selected items
$
14
After-tax additional selected items:
Increase in state income tax reserves
$
26
Diluted earnings per share impact of additional selected items - 4Q25 **
$
(0.04
)
* Items impacting results or trends during the quarter, but are not considered non-GAAP adjustments.
** Based on income taxes at an approximate 25% incremental rate.
The additional selected items presented in the table above represent activities impacting the company's performance which are not included in its disclosed non-GAAP reconciliations. The $26 million of additional income tax expense was related primarily to an increase of state income tax reserves. This adjustment increased the company's effective tax rate by approximately 4 percent in the fourth quarter and 1 percent for the full year of 2025. The effective tax rate for full year 2026 is expected to return to the 20.5 to 21.5 percent range.
Total revenue
Quarter Ended
($ amounts in millions)
12/31/2025
9/30/2025
12/31/2024
4Q25 vs. 3Q25
4Q25 vs. 4Q24
Net interest income
$
1,281
$
1,257
$
1,230
$
24
1.9
%
$
51
4.1
%
Taxable equivalent adjustment
13
12
13
1
8.3
%
—
—
%
Net interest income, taxable equivalent basis
$
1,294
$
1,269
$
1,243
$
25
2.0
%
$
51
4.1
%
Net interest margin (FTE)*
3.70
%
3.59
%
3.55
%
Non-interest income:
Service charges on deposit accounts
$
163
$
160
$
155
$
3
1.9
%
$
8
5.2
%
Card and ATM fees
123
122
113
1
0.8
%
10
8.8
%
Wealth management income
143
139
126
4
2.9
%
17
13.5
%
Capital markets income
80
104
97
(24
)
(23.1
)%
(17
)
(17.5
)%
Mortgage income
32
38
35
(6
)
(15.8
)%
(3
)
(8.6
)%
Commercial credit fee income
30
28
28
2
7.1
%
2
7.1
%
Bank-owned life insurance
23
25
21
(2
)
(8.0
)%
2
9.5
%
Market value adjustments on employee benefit assets**
(5
)
12
(5
)
(17
)
(141.7
)%
—
—
%
Securities gains (losses), net
—
(27
)
(30
)
27
100.0
%
30
100.0
%
Other miscellaneous income
51
58
45
(7
)
(12.1
)%
6
13.3
%
Non-interest income
$
640
$
659
$
585
$
(19
)
(2.9
)%
$
55
9.4
%
Adjusted non-interest income (non-GAAP) (1)
$
640
$
684
$
615
$
(44
)
(6.4
)%
$
25
4.1
%
Total revenue
$
1,921
$
1,916
$
1,815
$
5
0.3
%
$
106
5.8
%
Adjusted total revenue (non-GAAP) (1)
$
1,921
$
1,941
$
1,845
$
(20
)
(1.0
)%
$
76
4.1
%
NM - Not Meaningful
* Annualized
** These market value adjustments relate to assets held for employee and director benefits that are effectively offset within salaries and employee benefits and other non-interest expense.
Total revenue remained relatively stable on both a reported and adjusted basis (1) compared to the third quarter of 2025. Net interest income increased 2 percent driven by new higher-yielding fixed-rate asset originations and reinvestments as well as other beneficial items related to earnings on assets held for employee benefits and credit-related interest recoveries. Although the federal funds rate was reduced in the quarter, deposit cost management and hedging benefits fully offset floating rate product resets. Total net interest margin was also positively impacted by lower cash balances contributing to an 11 basis point increase to 3.70 percent.
The company experienced strong fee income growth in 2025 with non-interest income increasing 12 percent on a reported basis and 5 percent on an adjusted basis (1) compared to 2024. After a particularly strong third quarter, non-interest income decreased 3 percent on a reported basis and 6 percent on an adjusted basis (1) during the fourth quarter. Service charges increased 2 percent due primarily to account openings and higher seasonal activity in the quarter. Wealth management income increased 3 percent and represented another record quarter, driven primarily by elevated sales activity and favorable market conditions. Card and ATM fees also increased 1 percent due to seasonally higher activity. The bank's Capital Markets division generated its second-highest level of full-year performance in 2025 despite a 23 percent decline in the fourth quarter attributable to lower loan syndication and securities underwriting activity, as well as postponed merger and acquisition advisory transactions. Additionally, commercial swap and real estate capital markets agency transaction volumes were further impacted by the temporary government shutdown. Market value adjustments on employee benefit assets also decreased $17 million during the quarter. Mortgage income declined 16 percent driven primarily by mortgage servicing rights valuation and net hedge performance. Other miscellaneous income also decreased during the quarter attributable primarily to the sale of certain low-income housing tax credit investments and small-business investment company income from the prior quarter that did not repeat.
Non-interest expense
Quarter Ended
($ amounts in millions)
12/31/2025
9/30/2025
12/31/2024
4Q25 vs. 3Q25
4Q25 vs. 4Q24
Salaries and employee benefits
$
662
$
671
$
617
$
(9
)
(1.3
)%
$
45
7.3
%
Equipment and software expense
112
106
104
6
5.7
%
8
7.7
%
Net occupancy expense
74
72
67
2
2.8
%
7
10.4
%
Outside services
45
42
42
3
7.1
%
3
7.1
%
Marketing
29
28
28
1
3.6
%
1
3.6
%
Professional, legal and regulatory expenses
30
30
20
—
—
%
10
50.0
%
Credit/checkcard expenses
18
15
16
3
20.0
%
2
12.5
%
FDIC insurance assessments
3
15
20
(12
)
(80.0
)%
(17
)
(85.0
)%
Visa class B shares expense
8
8
6
—
—
%
2
33.3
%
Operational losses
9
18
16
(9
)
(50.0
)%
(7
)
(43.8
)%
Branch consolidation, property and equipment charges
—
(5
)
1
5
100.0
%
(1
)
(100.0
)%
Other miscellaneous expenses
108
103
101
5
4.9
%
7
6.9
%
Non-interest expense
$
1,098
$
1,103
$
1,038
$
(5
)
(0.5
)%
$
60
5.8
%
Adjusted non-interest expense (non-GAAP) (1)
$
1,112
$
1,111
$
1,029
$
1
0.1
%
$
83
8.1
%
Salaries and Employee Benefits Expense
Quarter Ended
($ amounts in millions)
12/31/2025
9/30/2025
12/31/2024
4Q25 vs. 3Q25
4Q25 vs. 4Q24
Salaries and employee benefits
$
662
$
671
$
617
$
(9
)
(1.3
)%
$
45
7.3
%
Less: Market value adjustments on 401(k) liabilities (*)
6
13
(1
)
(7
)
(53.8
)%
7
NM
Salaries and employee benefits less market value adjustments on employee benefit liabilities
$
656
$
658
$
618
$
(2
)
(0.3
)%
$
38
6.1
%
NM - Not Meaningful
* The company holds assets in order to effectively offset the market value adjustments on supplemental 401(k) liabilities and the market value adjustments on those assets are recorded in non-interest income.
Careful and successful expense management continued throughout the fourth quarter with non-interest expense remaining relatively stable on both a reported and adjusted basis (1) compared to the third quarter of 2025. Salaries and benefits decreased 1 percent, driven primarily by the offsetting decline in the market value adjustments related to employee benefit liabilities, as well as decreased revenue-based incentive compensation primarily within capital markets. FDIC insurance assessments decreased 80 percent attributable to an update by the FDIC of member banks' special insurance assessment. Partially offsetting these decreases, the company's ongoing investments were evident through increases in occupancy and equipment and software expenses. The company's fourth quarter efficiency ratio was 56.8 percent on a reported basis and 57.5 percent on an adjusted basis (1).
Loans
Average Balances
($ amounts in millions)
4Q25
3Q25
4Q24
4Q25 vs. 3Q25
4Q25 vs. 4Q24
Commercial and industrial
$
48,769
$
49,588
$
49,357
$
(819
)
(1.7
)%
$
(588
)
(1.2
)%
Commercial real estate—owner-occupied
5,126
5,134
5,212
(8
)
(0.2
)%
(86
)
(1.7
)%
Investor real estate
9,116
9,138
8,656
(22
)
(0.2
)%
460
5.3
%
Business Lending
63,011
63,860
63,225
(849
)
(1.3
)%
(214
)
(0.3
)%
Residential first mortgage
19,822
19,944
20,107
(122
)
(0.6
)%
(285
)
(1.4
)%
Home equity
5,546
5,538
5,527
8
0.1
%
19
0.3
%
Consumer credit card
1,458
1,420
1,398
38
2.7
%
60
4.3
%
Other consumer*
5,814
5,885
6,151
(71
)
(1.2
)%
(337
)
(5.5
)%
Consumer Lending
32,640
32,787
33,183
(147
)
(0.4
)%
(543
)
(1.6
)%
Total Loans
$
95,651
$
96,647
$
96,408
$
(996
)
(1.0
)%
$
(757
)
(0.8
)%
Ending Balances
12/31/2025
12/31/2025
($ amounts in millions)
12/31/2025
9/30/2025
12/31/2024
vs. 9/30/2025
vs. 12/31/2024
Commercial and industrial
$
48,790
$
49,234
$
49,671
$
(444
)
(0.9
)%
$
(881
)
(1.8
)%
Commercial real estate—owner-occupied
5,108
5,120
5,174
(12
)
(0.2
)%
(66
)
(1.3
)%
Investor real estate
9,106
9,070
8,710
36
0.4
%
396
4.5
%
Business Lending
63,004
63,424
63,555
(420
)
(0.7
)%
(551
)
(0.9
)%
Residential first mortgage
19,765
19,881
20,094
(116
)
(0.6
)%
(329
)
(1.6
)%
Home equity
5,556
5,549
5,540
7
0.1
%
16
0.3
%
Consumer credit card
1,519
1,437
1,445
82
5.7
%
74
5.1
%
Other consumer*
5,793
5,834
6,093
(41
)
(0.7
)%
(300
)
(4.9
)%
Consumer Lending
32,633
32,701
33,172
(68
)
(0.2
)%
(539
)
(1.6
)%
Total Loans
$
95,637
$
96,125
$
96,727
$
(488
)
(0.5
)%
$
(1,090
)
(1.1
)%
NM - Not meaningful.
* Other consumer loans includes Regions' Home Improvement Financing portfolio.
Average and ending loans both decreased approximately 1 percent compared to the prior quarter. Average business loans decreased 1 percent during the quarter, while average consumer loans remained relatively stable. During the quarter the company continued to de-risk its business loan portfolio by exiting an additional $420 million of loans ($1.4 billion for the full year), while also experiencing another $670 million ($2.6 billion for the full year) of loan balances refinance into the capital markets. However, client sentiment continues to improve as both loan pipelines and commercial line commitments increased during 2025. Pipelines have increased over 50 percent and line commitments by approximately $2.5 billion.
Deposits
Average Balances
($ amounts in millions)
4Q25
3Q25
4Q24
4Q25 vs. 3Q25
4Q25 vs. 4Q24
Total interest-bearing deposits
$
90,391
$
90,037
$
87,069
$
354
0.4
%
$
3,322
3.8
%
Non-interest-bearing deposits
39,459
39,538
39,424
(79
)
(0.2
)%
35
0.1
%
Total Deposits
$
129,850
$
129,575
$
126,493
$
275
0.2
%
$
3,357
2.7
%
($ amounts in millions)
4Q25
3Q25
4Q24
4Q25 vs. 3Q25
4Q25 vs. 4Q24
Consumer Bank Segment
$
79,437
$
79,698
$
78,476
$
(261
)
(0.3
)%
$
961
1.2
%
Corporate Bank Segment
40,243
39,733
37,426
510
1.3
%
2,817
7.5
%
Wealth Management Segment
7,810
7,262
7,492
548
7.5
%
318
4.2
%
Other
2,360
2,882
3,099
(522
)
(18.1
)%
(739
)
(23.8
)%
Total Deposits
$
129,850
$
129,575
$
126,493
$
275
0.2
%
$
3,357
2.7
%
End of Period Deposits
12/31/2025
12/31/2025
($ amounts in millions)
12/31/2025
9/30/2025
12/31/2024
vs. 9/30/2025
vs. 12/31/2024
Consumer Bank Segment
$
80,193
$
79,689
$
78,637
$
504
0.6
%
$
1,556
2.0
%
Corporate Bank Segment
40,449
40,415
38,361
34
0.1
%
2,088
5.4
%
Wealth Management Segment
8,344
7,654
7,736
690
9.0
%
608
7.9
%
Other
2,142
2,576
2,869
(434
)
(16.8
)%
(727
)
(25.3
)%
Total Deposits
$
131,128
$
130,334
$
127,603
$
794
0.6
%
$
3,525
2.8
%
NM - Not meaningful.
The company's deposit base continues to be a source of strength and an industry differentiator in liquidity and margin performance. Ending and average deposits remained relatively stable during the quarter as average consumer deposits decreased modestly, slightly ahead of typical seasonal trends, while average commercial and wealth deposits continued to exhibit strength primarily across money market and interest-bearing checking.
Asset quality
As of and for the Quarter Ended
($ amounts in millions)
12/31/2025
9/30/2025
12/31/2024
Allowance for credit losses (ACL) at period end
$1,686
$1,713
$1,729
ACL/Loans, net
1.76%
1.78%
1.79%
Allowance for credit losses to non-performing loans, excluding loans held for sale
242%
226%
186%
Provision for credit losses
$115
$105
$120
Net loans charged-off
$142
$135
$119
Net loans charged-off as a % of average loans, annualized
0.59%
0.55%
0.49%
Non-performing loans, excluding loans held for sale/Loans, net
0.73%
0.79%
0.96%
NPAs (ex. 90+ past due)/Loans, foreclosed properties, and non-performing loans held for sale
0.75%
0.82%
0.97%
NPAs (inc. 90+ past due)/Loans, foreclosed properties, and non-performing loans held for sale*
0.94%
0.98%
1.15%
Total Criticized Loans—Business Services **
$3,342
$3,682
$4,716
* Excludes fully guaranteed residential first mortgages that are 90+ days past due and still accruing.
** Business services represents the combined total of commercial and investor real estate loans.
Overall asset quality metrics continued to improve during the most recent quarter. Net charge-offs were $142 million or an annualized 59 basis points of average loans, representing a 4 basis point increase compared to the third quarter. The majority of business services charges came from previously identified portfolios of interest with established reserves. Business services criticized loans improved again during the quarter, decreasing $340 million, or 9 percent, while non-performing loans decreased 8 percent with the ratio of non-performing loans as a percentage of total loans declining 6 basis point to 0.73 percent.
The company made material progress in resolving stressed loans in previously identified portfolios of interest during the quarter. This progress, combined with the improvements in business services criticized loans and total non-performing loans, drove a $27 million reduction in the allowance of credit losses. The allowance for credit losses ratio decreased 2 basis points to 1.76 percent, while the allowance for credit losses as a percentage of non-performing loans increased to 242 percent compared to the prior quarter.
Capital and liquidity
As of and for Quarter Ended
12/31/2025
9/30/2025
12/31/2024
Common Equity Tier 1 ratio (2)
10.8%
10.9%
10.8%
Common equity Tier 1 ratio (incl. AOCI) (non-GAAP) (1)(2)
9.6%
9.6%
8.8%
Tier 1 capital ratio (2)
11.9%
12.0%
12.2%
Total shareholders' equity to total assets
11.94%
11.91%
11.37%
Tangible common shareholders’ equity to tangible assets (non-GAAP) (1)
7.76%
7.74%
6.86%
Common book value per share
$20.36
$19.98
$17.77
Tangible common book value per share (non-GAAP) (1)
$13.75
$13.49
$11.42
Loans, net of unearned income, to total deposits
72.9%
73.8%
75.8%
Regions maintained a solid capital position in the fourth quarter with estimated capital ratios remaining well above current regulatory requirements. At quarter-end, the Common Equity Tier 1 (CET1) (2) and Tier 1 capital (2) ratios were estimated at 10.8 percent and 11.9 percent respectively. Including the impacts of accumulated other comprehensive income, CET1 (1)(2) was estimated at 9.6 percent.
During the fourth quarter, the company repurchased approximately 17 million shares of common stock for a total of $430 million through open-market purchases and declared $231 million in dividends to common shareholders.
Tangible common book value per share (1) ended the quarter at $13.75, a 2 percent increase quarter-over-quarter and a 20 percent increase year-over-year.
The company's liquidity position also remained robust with total available liquidity as of Dec. 31, 2025, of approximately $67.9 billion, which includes cash held at the Federal Reserve, FHLB borrowing capacity, unencumbered securities, and capacity at the Federal Reserve's facilities such as the Discount Window or Standing Repo Facility. These sources are sufficient to cover uninsured deposits at a ratio of approximately 182 percent as of quarter-end (excluding intercompany and secured deposits).
(1) Non-GAAP; refer to reconciliations on pages 13, 17, 18, 19, 20 and 21 of the financial supplement to this earnings release included as Exhibit 99.2 to the company's Current Report on Form 8-K that was furnished to the Securities and Exchange Commission on Jan. 16, 2026.
(2) Current quarter Common Equity Tier 1 and Tier 1 capital ratios are estimated.
Conference Call
The company will hold a live audio webcast to discuss fourth quarter 2025 results on Jan. 16, 2026 at 10 a.m. ET. To access this live audio webcast, visit the Investor Relations page at ir.regions.com. An archived recording of the webcast will be available at the Investor Relations page at ir.regions.com following the live event.
About Regions Financial Corporation
Regions Financial Corporation (NYSE:RF), with $160 billion in assets, is a member of the S&P 500 Index and is one of the nation’s largest full-service providers of consumer and commercial banking, wealth management, and mortgage products and services. Regions serves customers across the South, Midwest and Texas, and through its subsidiary, Regions Bank, operates approximately 1,250 banking offices and more than 1,750 ATMs. Regions Bank is an Equal Housing Lender and Member FDIC. Additional information about Regions and its full line of products and services can be found at www.regions.com.
Forward-Looking Statements
This release and the accompanying earnings call may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. In addition, the company, through its senior management, may from time to time make forward-looking public statements concerning the matters described herein. The words “future,” “anticipates,” “assumes,” “intends,” “plans,” “seeks,” “believes,” “predicts,” “potential,” “objectives,” “estimates,” “expects,” “targets,” “projects,” “outlook,” “forecast,” “would,” “will,” “may,” “might,” “could,” “should,” “can,” and similar terms, expressions, and graphics often signify forward-looking statements. Forward-looking statements are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control. Forward-looking statements are not based on historical information, but rather are related to future operations, strategies, financial results or other developments. Forward-looking statements are based on management’s current expectations as well as certain assumptions and estimates made by, and information available to, management at the time the statements are made. Those statements are based on general assumptions and are subject to various risks, and because they also relate to the future they are likewise subject to inherent uncertainties and other factors that may cause actual results to differ materially from the views, beliefs and projections expressed in such statements. Therefore, we caution you against relying on any of these forward-looking statements. These risks, uncertainties and other factors include, but are not limited to, those described below:
The foregoing list of factors is not exhaustive. For discussion of these and other factors that may cause actual results to differ from expectations, look under the captions “Forward-Looking Statements” and “Risk Factors” in Regions’ Annual Report on Form 10-K for the year ended December 31, 2024 and in Regions’ subsequent filings with the SEC.
You should not place undue reliance on any forward-looking statements, which speak only as of the date made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible to predict all of them. We assume no obligation and do not intend to update or revise any forward-looking statements that are made from time to time, either as a result of future developments, new information or otherwise, except as may be required by law.
Use of Non-GAAP Financial Measures
Management uses pre-tax pre-provision income (non-GAAP), adjusted pre-tax pre-provision income (non-GAAP), the adjusted efficiency ratio (non-GAAP), the adjusted fee income ratio (non-GAAP), return on average tangible common shareholders' equity (non-GAAP), adjusted return on average tangible common shareholders' equity (non-GAAP), common equity Tier 1 ratio (inclusive of AOCI) (non-GAAP), as well as adjusted net income available to common shareholders (non-GAAP) and adjusted diluted EPS (non-GAAP) to monitor performance and believes these measures provide meaningful information to investors. Non-interest expense (GAAP) is presented excluding certain adjustments to arrive at adjusted non-interest expense (non-GAAP), which is the numerator for the adjusted efficiency ratio. Non-interest income (GAAP) is presented excluding certain adjustments to arrive at adjusted non-interest income (non-GAAP), which is the numerator for the adjusted fee income ratio. Adjusted non-interest income (non-GAAP) and adjusted non-interest expense (non-GAAP) are used to determine adjusted pre-tax pre-provision income (non-GAAP). Net interest income (GAAP) on a taxable-equivalent basis and non-interest income are added together to arrive at total revenue on a taxable-equivalent basis. Adjustments are made to arrive at adjusted total revenue on a taxable-equivalent basis (non-GAAP), which is the denominator for the adjusted fee income and adjusted efficiency ratios. Net income available to common shareholders (GAAP) is presented excluding certain adjustments, net of tax, to arrive at adjusted net income available to common shareholders (non-GAAP), which is the numerator for adjusted diluted EPS (non-GAAP). Return on average tangible common shareholders' equity (non-GAAP) is calculated by dividing net income available to common shareholders (GAAP) by the average tangible common shareholders’ equity (non-GAAP). Net income available to common shareholders (GAAP) is presented excluding certain adjustments, net of tax, to arrive at adjusted net income available to common shareholders (non-GAAP), which is the numerator for adjusted return on average tangible common shareholders’ equity. Adjusted return on average tangible common shareholders' equity is calculated by dividing the adjusted net income available to common shareholders (non-GAAP) by the average tangible common shareholders’ equity (non-GAAP). Adjusted common equity Tier 1 ratio (non-GAAP) is calculated by dividing the adjusted common equity tier 1 (non-GAAP), which is arrived at by excluding the AOCI loss on securities and AOCI loss on defined benefit pension plans and other post employment benefits from common equity Tier 1, by the company’s total risk-weighted assets (GAAP).
Regions believes that the exclusion of these adjustments provides a meaningful basis for period-to-period comparisons, 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. It is possible that the activities related to the adjustments may recur; however, 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. Tangible common book value per share is calculated by dividing tangible common shareholders' equity (non-GAAP) by tangible assets (non-GAAP). The numerator for tangible book value per share (non-GAAP), tangible common shareholders' equity (non-GAAP), is calculated by excluding intangible assets and the deferred tax liability related to intangible assets from common shareholders' equity (GAAP). The denominator for tangible book value per share (non-GAAP), tangible assets (non-GAAP), is calculated by excluding intangible assets and the deferred tax liability related to intangible assets from total assets (non-GAAP).
Tangible common shareholders’ equity ratios have become a focus of some investors and management believes they may assist investors in analyzing the capital position of the company absent the effects of intangible assets and preferred stock. Analysts and banking regulators have assessed Regions’ capital adequacy using the tangible common shareholders’ equity measure. Because tangible common shareholders’ equity is not formally defined by GAAP or prescribed in any amount by federal banking regulations it is currently considered to be a non-GAAP financial measure and other entities may calculate it differently than Regions’ disclosed calculations. Since analysts and banking regulators may assess Regions’ capital adequacy using tangible common shareholders’ equity to tangible assets, management believes that it is useful to provide investors the ability to assess Regions’ capital adequacy on this same basis.
Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied and are not audited. Although these non-GAAP financial measures are frequently used by stakeholders in the evaluation of a company, they have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analyses of results as reported under GAAP. In particular, a measure of earnings that excludes selected items does not represent the amount that effectively accrues directly to stockholders. Additionally, our non-GAAP financial measures may not be comparable to similar non-GAAP financial measures used by other companies and there is no certainty that we will not incur expenses in the future that are similar to those excluded in the calculations of non-GAAP financial measures presented herein.
Management and the Board of Directors utilize non-GAAP measures as follows:
See the company's Financial Supplement, included as Exhibit 99.2 to the company's Current Report on Form 8-K furnished to the Securities and Exchange Commission on Jan. 16, 2026, for reconciliations of and additional information regarding the company's non-GAAP financial measures.