Regions Financial: Tepid 2Q Led by Moderate NII; NIM and Non-Interest Income Guidance Weaker

Research evidence excerpt

Regions Financial: Tepid 2Q Led by Moderate NII; NIM and Non-Interest Income Guidance Weaker

J P M O R G A N North America Equity Research

20 July 2026

Regions Financial Neutral

RF, RF US

Tepid 2Q Led by Moderate NII; NIM and Non-Interest Price (17 Jul 26):$31.65

Income Guidance Weaker Price Target (Dec-26):$31.50

Regions posted tepid core 2Q EPS of $0.68 by our estimates, reported EPS was Banks — Large-Cap

AC$0.64. In contrast to other banks, Regions did well on deposit cost trends but this Vivek Juneja

was offset by a shift to higher cost borrowings, and hence total funding costs were (1-212) 622-6465

up a tad qoq. With runoffs done, loans are growing, which is positive for net interest vivek.juneja@jpmorgan.com

income. Non-interest income continues to be a laggard for Regions - it acquired Andrew J Dietrich

another small boutique (Frazer Lanier) to grow capital markets fees. Expenses are (1-212) 622-4244

being managed while the bank is modernizing its systems with a new deposit aj.dietrich@jpmorgan.com

system coming on next year. Regions is one of our only banks where core efficiency Sai M Nettem

ratio weakened yoy. Deposit competition remains intense in Regions’ markets, (1-212) 622-2666

sai.nettem@jpmorgan.com

which are seeing more competition because of new entrants, drawn by good J.P. Morgan Securities LLC

demographics and macro economic outlook.

• 2Q results were marked by: 1) moderate qoq growth in net interest income Quarterly Forecasts (FYE Dec)

but slight decline qoq in net interest margin (NIM); 2) modest growth qoq in Adj. EPS ($)

period end loans and modest decline qoq in period end deposits; 3) weak yoy 2025A 2026E 2027E

growth in core non-interest income; 4) moderate increase yoy in core non- Q1 0.54 0.62A