REGIONS FINANCIAL CORP

Regions Financial Corporation is a financial holding company headquartered in Birmingham, Alabama, operating primarily in the South, Midwest, and Texas, with additional offices in New York, Washington D.C., Chicago, Salt Lake City, and other locations nationwide. The company provides financial solutions for a wide range of clients including retail and mortgage banking services, commercial banking services, and wealth and investment services. At December 31, 2025, Regions had total consolidated assets of approximately $158.8 billion ¹, total consolidated deposits of approximately $131.1 billion ², and total consolidated shareholders' equity of approximately $19.0 billion ³. The company operates 1,786 ATMs ⁴ and 1,247 total branch outlets ⁵ primarily across the South, Midwest, and Texas.

All aspects of Regions' business are highly competitive, with subsidiaries competing with other financial institutions in their operating states, large banks in major financial centers, and other financial intermediaries such as savings and loan associations, credit unions, fintechs, finance companies, mutual funds, insurance companies, brokerage and investment banking firms, mortgage companies, and financial service operations of major commercial and retail corporations. Regions expects competition to remain intense, and its success will depend in part on market acceptance and regulatory approval of new products and services. The company believes its affiliates effectively compete with other financial services companies in their relevant market areas, and that it can effectively adapt its products, technologies, and strategic partnerships to evolving customer preferences, including competition from decentralized finance platforms, cryptocurrencies, and blockchain-enabled financial products and services.

Regions generates revenue through traditional commercial, retail, and mortgage banking services, as well as other financial services including asset management, wealth management, securities brokerage, merger-and-acquisition advisory services, and other specialty financing. The company operates under three reportable segments: Corporate Bank, Consumer Bank, and Wealth Management, with the remainder in Other. Regions' profitability depends to a large extent on net interest income, which is the difference between the interest income received on interest-earning assets (primarily loans, leases, investment securities, and cash balances held at the Federal Reserve Bank) and the interest expense incurred in connection with interest-bearing liabilities (primarily deposits and borrowings).

The Corporate Bank segment provides commercial banking services, including merger and acquisition advisory services, capital markets solutions, equipment financing for commercial clients and small business customers, and broker-dealer services to commercial clients. The Consumer Bank segment provides retail and mortgage banking services, including home improvement lending, investment and insurance products, and financing to CRA-qualified customers. The Wealth Management segment provides wealth and investment services, including investment advisory services, and low income housing tax credit corporate fund syndication and asset management. Other includes specialty capabilities such as investment advisory services and other miscellaneous income streams.

Regions conducts its banking operations through Regions Bank, an Alabama state-chartered commercial bank that is a member of the Federal Reserve System. At December 31, 2025, Regions operated 1,786 ATMs ⁶ and 1,247 total branch outlets ⁷ across 16 states, with the largest concentrations in Florida (270 branches) ⁸, Tennessee (194 branches) ⁹, Alabama (184 branches) ¹⁰, Georgia (117 branches) ¹¹, Mississippi (97 branches) ¹², Texas (85 branches) ¹³, Louisiana (79 branches) ¹⁴, Arkansas (55 branches) ¹⁵, Missouri (48 branches) ¹⁶, Illinois (40 branches) ¹⁷, Indiana (40 branches) ¹⁸, South Carolina (18 branches) ¹⁹, Kentucky (9 branches) ²⁰, North Carolina (6 branches) ²¹, Iowa (4 branches) ²², and Utah (1 branch) ²³.

Regions and its subsidiaries had 19,969 full-time equivalent employees ²⁴ as of December 31, 2025, supporting consumer and commercial banking, wealth management, and mortgage products and services primarily across the Southeast, Midwest, and Texas. The company emphasizes a commitment to 'Build the Best Team' as one of its strategic priorities, with a focus on attracting, retaining, and developing talent through internal talent management programs, professional development opportunities, and competitive compensation including base salaries, incentive compensation, and long-term stock-based incentive compensation. Regions offers a 401(k) plan with a dollar-for-dollar company match on employee contributions up to 5 percent of pay ²⁵ and a base contribution of 2 percent of pay ²⁶ for all associates who do not participate in the grandfathered pension program.

For the fiscal year ended December 31, 2025, Regions reported total consolidated assets of approximately $158.8 billion ²⁷, total consolidated deposits of approximately $131.1 billion ²⁸, and total consolidated shareholders' equity of approximately $19.0 billion ²⁹. The company's net interest income is influenced by the pricing and mix of interest-earning assets and interest-bearing liabilities, which are impacted by external factors such as the local economy, competition, demand for loans and deposits, the monetary policy of the FOMC, and interest rate markets. The FOMC reduced the Federal funds rate in 2024 and 2025, ending with a range of 3.50 percent and 3.75 percent ³⁰.

Regions' Stress Capital Buffer (SCB) will remain floored at 2.5 percent ³¹ through the third quarter of 2027, as the Federal Reserve voted in February 2026 to maintain SCB requirements at current levels to allow time for public feedback on proposed changes to supervisory stress testing models. The company's SCB is determined through the Federal Reserve's CCAR supervisory stress tests, and as a Category IV banking organization, Regions was not required to participate in the 2025 stress test but did receive results from the Federal Reserve during the second quarter of 2025. From the fourth quarter of 2025 through the third quarter of 2026, the company's SCB will remain floored at 2.5 percent ³².

Regions is focused on growth through its specialty capabilities, including merger and acquisition advisory services, capital markets solutions, home improvement lending, investment advisory services, equipment financing for commercial clients and small business customers, low income housing tax credit corporate fund syndication and asset management, financing to CRA-qualified customers, investment and insurance products, and broker-dealer services to commercial clients. The company also delivers specialty capabilities from offices in New York, Washington D.C., Chicago, Salt Lake City, and other locations nationwide, indicating a strategy of geographic expansion beyond its core footprint in the South, Midwest, and Texas.

Regions is subject to regulatory capital requirements based on Basel III, including risk-based requirements comparing three measures of capital to risk-weighted assets, as well as leverage requirements consisting of the Tier 1 leverage ratio. The capital rules require firms to maintain a buffer consisting solely of CET1 capital, in addition to minimum risk-based requirements, with failure to satisfy the buffer requirement resulting in graduated constraints on capital distributions including dividends and share repurchases, and discretionary executive compensation. The SCB is subject to a 2.5 percent floor ³³.

Regions operates 1,786 ATMs ³⁴ and 1,247 total branch outlets ³⁵ primarily across the South, Midwest, and Texas, and the company provides an array of digital products and services to customers. The continued move toward digital banking and financial services, combined with customer expectations regarding digital offerings, will require Regions to invest greater resources in technological improvements. The company has established a customized learning experience platform to measure, build, and communicate skills inside the company, and offers technology associates courses on-demand in application development, information technology operations, security, and technology architecture.

Regions offers a 401(k) plan with a dollar-for-dollar company match on employee contributions up to 5 percent of pay ³⁶ and a base contribution of 2 percent of pay ³⁷ for all associates who do not participate in the grandfathered pension program. The company also provides long-term stock-based incentive compensation to executive and leadership ranks, tying the interests of leaders to those of shareholders. The company's capital allocation is subject to oversight by the Federal Reserve, with dividend policies and share repurchases reviewed based on capital plans submitted as part of the CCAR process, and may be constrained in certain scenarios.

Regions faces structural headwinds from the potential for higher levels of competition for deposits in a persistently elevated rate environment, which would increase the cost of funding. Additionally, elevated interest rates would increase debt service requirements for some borrowers and may adversely affect those borrowers' ability to pay as contractually obligated, ultimately resulting in additional delinquencies or charge-offs. Conversely, should interest rates move lower, net interest income is well supported by a mostly neutral interest rate risk position aided by the company's interest rate hedging program, but net interest income may be adversely impacted if deposit and funding costs cannot move lower as fast as expected.

Regions' operations are concentrated primarily in the South, Midwest, and Texas, and adverse changes in economic conditions in this region can adversely affect financial results and condition. The company also faces risks from weakness in residential real estate markets, commercial real estate markets, and commodity businesses, as well as risks associated with home equity products where the company is in a second lien position. An outbreak or escalation of hostilities between countries or within a country or region could have a material adverse effect on the U.S. economy and on Regions' businesses.

Regions faces material credit risk from its loan portfolios, as customers may be unable to repay loans according to their terms, and any collateral may not be sufficient to assure repayment. The company's allowance for credit losses, determined based on available information including loan portfolio quality, collateral value, and reasonable and supportable forecasts of future economic conditions, may not be adequate if economic conditions deteriorate unexpectedly, and losses in excess of the allowance would reduce net income. The company is also exposed to market risk from fluctuations in interest rates, as net interest income depends on the spread between yields on interest-earning assets and costs of interest-bearing liabilities; if yields on interest-bearing liabilities increase faster than yields on interest-earning assets, or if yields on interest-earning assets decline faster than yields on interest-bearing liabilities, net interest income may decline. Additionally, the company's operations are concentrated in the South, Midwest, and Texas, and adverse economic conditions in this region could adversely affect financial results, with specific risks from weakness in residential and commercial real estate markets, commodity businesses, and home equity products where the company is in a second lien position.

Management's message emphasizes the company's commitment to 'Build the Best Team' as one of its strategic priorities, with a focus on attracting, retaining, and developing talent to accomplish the strategic plan. The company's SCB will remain floored at 2.5 percent ³⁸ through the third quarter of 2027, and from the fourth quarter of 2025 through the third quarter of 2026, the company's SCB will remain floored at 2.5 percent ³⁹. Management highlights that the company's net interest income is well supported by a mostly neutral interest rate risk position aided by the company's interest rate hedging program, and that to the extent the yield curve steepens, net interest income would benefit. The company is focused on adapting its products, technologies, and strategic partnerships to evolving customer preferences, including competition from decentralized finance platforms, cryptocurrencies, and blockchain-enabled financial products and services.