- Price
- $27.45
- Fair value
- $33.40
- Discount
- 17.8%
- Uncertainty
- Medium
- LSEG rating
- 2.78
- Moat
- Narrow
- Next earnings
- 2027-01-19
- Next earnings is estimate
- Yes
- Company name
- Regions Financial
- Sector
- Regional bank
- About
- Regions Financial is a U.S. bank holding company with its head office in Birmingham, Alabama. Its bank, Regions Bank, operates more than 1,200 banking offices across the South, the Midwest and Texas. It had total assets of $163 billion at September 30, 2026. It reports three segments: Corporate Bank (loans, treasury management and capital markets for businesses), Consumer Bank (deposits, mortgages, home equity loans and cards for households) and Wealth Management. Most of its revenue is net interest income, the difference between the interest it earns on loans and securities and the interest it pays on deposits and debt. A large base of low-cost consumer and small business deposits in growing Southern markets is its main advantage, and its interest-bearing deposit cost was 1.70% in Q3 2026.
- Thesis
- The market prices Regions for the effect of higher interest rates on its securities and for slow loan and deposit growth. Rates rose in Q3 2026, and the accumulated other comprehensive loss in equity, which holds unrealized losses on securities and hedges, grew to $3.20 billion at September 30, 2026, from $1.92 billion at June 30, 2026. Tangible common book value per share fell 8% in the quarter to $12.65. Average deposits fell 1.2% in Q3 2026, and average loans grew only 0.5%. The bank's own results are strong: adjusted EPS was $0.73, up 16% from a year earlier, the return on tangible common equity was 21% and net charge-offs fell to 0.29% of loans. For the gap to close, three things must be true. Net interest income must grow 1% to 2% in Q4 2026 with a margin near 3.70%, as management expects. Credit must stay strong, with net charge-offs near the lower end of the 2026 range of 0.40% to 0.50% and fewer criticized business loans. Tangible book value must rise again as securities pay down and rates become stable. The Q4 2026 report, estimated for about January 19, 2027, and the 2027 guidance give the tests. If these checks pass, the gap can close over the next three to six quarters. The main reason it may not close is a further rise in long-term rates, which cuts book value and slows loan demand.
- Risks
- Higher long-term interest rates increase unrealized losses on securities and hedges. The accumulated other comprehensive loss grew by $1.28 billion in Q3 2026, and tangible common book value per share fell 8%. More rate increases can cut book value further and limit buybacks.
Average deposits fell 1.2% in Q3 2026, and short-term borrowings rose to $4.50 billion from $3.00 billion. More competition for deposits raises funding costs and lowers the net interest margin.
Business criticized loans were 4.71% of business loans at September 30, 2026. A weaker economy in its Southern markets, or problems in office or other commercial real estate, can raise loan losses above the 2026 range of 0.40% to 0.50%.
Regions changed its CFO in March 2026 and its Chief Administrative Officer in September 2026. Legal settlement costs also raised expenses in Q3 2026.
- Balance sheet
- Regions funds itself mostly with deposits. At September 30, 2026, total assets were $163.2 billion and deposits were $129.5 billion. Loans were 77.1% of deposits. Other funding was $4.50 billion of short-term borrowings and $5.98 billion of long-term borrowings. Cash and deposits at other banks were $10.3 billion, and total available liquidity was about $64 billion. Capital is the real limit for a bank. The estimated CET1 ratio was 10.8% and the Tier 1 capital ratio was 11.9%. Total shareholders' equity was $17.8 billion, after an unrealized loss of $3.20 billion in accumulated other comprehensive income. Tangible common book value was $12.65 per share. The allowance for credit losses was 1.61% of loans and 275% of non-performing loans.
As of 2026-09-30.
- Checkpoints
- Jan 19, 2027 (estimate): Q4 2026 results: margin and credit. Pending. Watch: Net interest income up 1% to 2% from Q3 2026 with a margin near 3.70%, and full-year net charge-offs near 0.40% of loans, pass; a lower margin or higher losses fail.
Jan 19, 2027 (estimate): 2027 guidance: loan growth and operating leverage. Pending. Watch: 2027 guidance for loan growth, positive operating leverage and stable credit passes; guidance for flat loans or higher losses fails.
- Recent events
- 2026-10-16: Regions reported Q3 2026 results. Net income available to common shareholders was $611 million, or $0.71 per diluted share, and adjusted EPS was $0.73, up 16% from a year earlier. Net interest income rose 1.6% to $1.30 billion and the net interest margin was 3.68%. Net charge-offs fell to an annualized 0.29% of loans. The estimated CET1 ratio was 10.8%. Tangible common book value per share fell to $12.65 from $13.78 because of higher unrealized losses after rates rose. Regions bought back $95 million of shares.
2026-08-11: Regions said that David Keenan, its Chief Administrative Officer, will retire on January 4, 2027. Katherine Danella became Chief Administrative Officer and John Jordan became Head of the Consumer Banking Group on September 1, 2026.
2026-07-17: Regions reported Q2 2026 results. Net income available to common shareholders was $549 million, or $0.64 per diluted share, and adjusted EPS was $0.68. The net interest margin was 3.66% and net charge-offs were an annualized 0.42% of loans.
2026-03-31: Anil Chadha became Chief Financial Officer after David Turner retired. Mr. Chadha was Controller and head of Corporate Finance at Regions.