Regions earnings available to common shareholders rose 11% from a year earlier to $611 million in the third quarter of 2026, as higher revenue and improving credit quality supported profitability. The bank announced the preliminary results on October 16 for the quarter ended September 30, reporting diluted earnings of $0.71 per share, up 16% year over year.
Key Takeaways
- Adjusted earnings reached $622 million, or $0.73 per diluted share.
- Interest income and capital markets fees increased while operating expenses stayed broadly stable.
- Loan losses declined, but average deposits fell 1.2% from the preceding quarter.
Table of Contents
- Regions earnings improve on reported and adjusted measures
- Interest income and capital markets fees lift revenue
- Business lending grows as deposits decline
- Credit losses fall while capital remains estimated
- Conclusion
Regions earnings improve on reported and adjusted measures
Regions’ third-quarter 2026 earnings announcement showed earnings available to common shareholders rising from $549 million in the second quarter. Diluted earnings increased from $0.64 per share. Adjusted earnings, a non-GAAP measure, rose from $583 million, while adjusted diluted earnings increased from $0.68.
Total revenue reached $1.973 billion, up 3.5% sequentially and 3.0% from a year earlier. Non-interest expenses were $1.118 billion, slightly below the second quarter and 1.4% higher year over year. Revenue therefore grew faster than expenses against both comparison periods.
Chief Executive Officer John Turner attributed the results to strong credit quality, momentum in fee-based businesses and investments in talent, technology and growth.
| Item | Details |
|---|---|
| Interest-bearing deposit cost | 1.70% in the third quarter of 2026. |
| Reported efficiency ratio | 56.2%, compared with 58.3% in the second quarter. |
| Allowance coverage of non-performing loans | 275%, up from 241% in the second quarter. |
| Return on average assets | Annualized 1.55%, compared with 1.42% in the second quarter. |
Interest income and capital markets fees lift revenue
Net interest income increased to $1.298 billion from $1.277 billion in the second quarter. Regions attributed the increase primarily to fixed-rate asset turnover, average loan growth, higher hedging income, credit interest recoveries and deposit-cost management, partly offset by higher non-deposit funding costs.
Net interest margin on a fully taxable-equivalent basis widened by two basis points to 3.68%. This measures the bank’s net interest earnings relative to its interest-earning assets.
Non-interest income rose 7.1% sequentially to $675 million. Capital markets income increased 27.4% to $107 million, supported by higher mergers-and-acquisitions advisory revenue, underwriting and placement fees, commercial swap income and syndication revenue.
The reported fee-income improvement also reflected smaller securities losses: $15 million in the third quarter versus $41 million in the second quarter. Adjusted non-interest income, which excludes specified items, increased a more modest 3.0%.
Business lending grows as deposits decline
Average loans increased 0.5% sequentially to $99.183 billion. Business lending expanded while consumer lending contracted slightly, with growth spanning commercial and industrial categories including government, wholesale and financial services.
Average deposits fell to $129.140 billion from $130.691 billion. Regions said a limited number of large commercial clients moved interest-bearing balances into off-balance-sheet investment products through its institutional investment services group.
Average non-interest-bearing deposits nevertheless increased slightly. The distinction matters: the overall deposit decline did not extend to every funding category.
Credit losses fall while capital remains estimated
Net charge-offs declined to $72 million from $102 million in the second quarter. The annualized charge-off rate fell 13 basis points to 0.29% of average loans, while non-performing loans declined to 0.59% of total loans from 0.67%.
The credit-loss provision remained unchanged sequentially at $68 million. Lower realized loan losses therefore did not translate into a smaller quarterly provision.
Regions estimated its quarter-end common equity Tier 1 capital ratio at 10.8%, compared with 10.7% in June. During the quarter, it repurchased approximately three million common shares for $95 million and declared $255 million in common dividends.
Conclusion
Regions delivered higher quarterly profit with stronger revenue and lower loan losses, despite declining deposits. Subsequent financial reporting will provide the next check on those trends; the September 30 capital ratios remain estimates.
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