Regions Financial Corp. (NYSE:RF) shares dropped sharply on Friday after the lender reported fourth-quarter 2025 adjusted results that missed Wall Street expectations, overshadowing revenue growth and a solid full-year showing.
The stock sank 9.50% in pre-market trading following the earnings announcement.
The Birmingham-based bank posted adjusted earnings per share of $0.57 for the quarter, below analysts’ forecasts of $0.61. Quarterly revenue came in at $1.9 billion, marking a 6% year-over-year increase. For full-year 2025, Regions reported adjusted earnings of $2.1 billion, up 7% from a year earlier, while adjusted EPS rose 9% to $2.33.
Net interest income increased 4.1% from the prior year to $1.28 billion, and non-interest income climbed 9.4% to $640 million. Net interest margin improved to 3.70%, compared with 3.59% in the previous quarter.
“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,” said John Turner, Chairman, President and CEO of Regions Financial Corp.
Asset quality metrics showed improvement, with criticized loans in business services down 9% and non-performing loan balances falling 8%. The allowance for credit losses ratio edged lower to 1.76% from 1.78% in the prior quarter.
Average loan balances declined about 1% sequentially, while average deposits were largely unchanged, rising 0.2%. Regions also maintained a strong capital base, reporting a Common Equity Tier 1 ratio of 10.8%.
However, results were pressured by a higher effective tax rate, which rose to 24.5% in the fourth quarter from 19.7% in the third. The increase was mainly driven by higher state income tax reserves, which weighed on quarterly earnings.