Regions Financial delivered a solid fourth quarter and a record full year in 2024, underpinned by diversified fee-generating businesses (Capital Markets, Treasury Management, Wealth Management) and a prudent risk framework. LTM performance culminated in strong earnings momentum: Q4 revenue of $2.39B, net income of $534M and EPS of $0.56, with a quarterly net income margin of 29.4% and an ROA of 0.34%. Management highlighted a top-quartile full-year ROE of 18% in 2024, supported by a resilient deposit franchise and a disciplined balance sheet, including 10.8% CET1 excluding AOCI and a strategy to manage AOCI-driven capital volatility through securities repositioning and HTM allocations.
Looking ahead to 2025, Regions expects Net Interest Income (NII) to rise 2-5% as it leverages a favorable rate environment, hedging capabilities, and a lower-deposit-cost trajectory (deposit beta ~34%). Efficiency is expected to improve modestly with 1-3% adjusted non-interest expense growth, enabling positive operating leverage as higher-return businesses scale. The bank plans to add approximately 140 bankers across Corporate, Consumer, and Wealth Management, primarily in eight priority growth markets, while continuing to invest in digital capabilities and deposit growth initiatives (notably branch small business and online/mobile platforms). Management believes this growth-capital allocation cadence will sustain top-quartile performance in 2025 and beyond.
Key near-term dynamics include modest loan growth (about 1% in 2025), with C&I strength offset by softening investor real estate and some consumer segments. Asset quality remains sound, with NCOs at 49 bps and a ACL ratio of 1.79% for the full year 2024, though charge-offs are expected to skew toward the higher end of the 40-50 bps guidance in 2025. Regions also advanced risk-management objectives by moving $2B of AFS into HTM in Q4 to better align capital with evolving regulatory expectations, signaling a deliberate balance between capital stability and liquidity requirements. Investors should monitor: (1) the pace and sustainability of loan growth in core markets, (2) deposit cost dynamics and DDA growth in a normalized rate regime, (3) progress on the new deposit and loan systems, and (4) regulatory capital evolution as Basel III framework considerations crystallize.