Regions Financial(RF) - 2025 Q3 - Quarterly Results

Financial Highlights Earnings Summary The company reported an increase in net income and diluted EPS for the third quarter of 2025 compared to the previous quarter and the prior year, indicating improved profitability Earnings Metrics | Metric | 9/30/2025 | 6/30/2025 | 9/30/2024 | | :----------------------------------- | :-------- | :-------- | :-------- | | Net income (millions) | $569 | $563 | $490 | | Net income available to common shareholders (millions) | $548 | $534 | $446 | | Diluted earnings per common share | $0.61 | $0.59 | $0.49 | - Adjusted diluted earnings per common share (non-GAAP) increased to $0.63 in Q3 2025 from $0.60 in Q2 2025 and $0.57 in Q3 2024[4] Balance Sheet Summary The balance sheet showed a slight increase in total assets and shareholders' equity, while loans and deposits experienced minor fluctuations in Q3 2025 Balance Sheet Metrics | Metric | 9/30/2025 | 6/30/2025 | 9/30/2024 | | :----------------------------------- | :-------- | :-------- | :-------- | | Loans, net of unearned income (millions) | $96,125 | $96,723 | $96,789 | | Assets (millions) | $159,940 | $159,206 | $157,426 | | Deposits (millions) | $130,334 | $130,919 | $126,376 | | Shareholders' equity (millions) | $19,049 | $18,666 | $18,676 | - Average loans, net of unearned income, increased to $96,647 million in Q3 2025 from $96,077 million in Q2 2025, but decreased from $97,040 million in Q3 2024[4] Selected Ratios and Other Information Key Financial Ratios Profitability ratios showed mixed trends, with Return on Average Assets slightly decreasing QoQ but increasing YoY. Efficiency ratios fluctuated, while capital adequacy ratios remained stable or improved Key Financial Ratios Overview | Metric | 9/30/2025 (%) | 6/30/2025 (%) | 9/30/2024 (%) | | :----------------------------------- | :-------- | :-------- | :-------- | | Return on average assets | 1.42 % | 1.43 % | 1.26 % |\ | Return on average common shareholders' equity | 12.56 % | 12.72 % | 10.88 % |\ | Efficiency ratio | 57.2 % | 56.0 % | 59.3 % |\ | Common equity Tier 1 ratio | 10.8 % | 10.8 % | 10.6 % |\ | Net interest margin (FTE) | 3.59 % | 3.65 % | 3.54 % |\ | Net charge-offs as a percentage of average loans | 0.55 % | 0.47 % | 0.48 % | - The dividend payout ratio for Q3 2025 was 43.0%, an increase from 42.0% in Q2 2025 but a decrease from 51.3% in Q3 2024[6] - Tangible common book value per share (non-GAAP) increased to $13.49 in Q3 2025 from $12.91 in Q2 2025 and $12.26 in Q3 2024[6] Operational Metrics Operational metrics show a slight increase in associate headcount and a minor reduction in ATMs and total branch outlets Operational Metrics Overview | Metric | 9/30/2025 | 6/30/2025 | 9/30/2024 | | :----------------------------------- | :-------- | :-------- | :-------- | | Associate headcount—full-time equivalent | 19,675 | 19,642 | 19,560 |\ | ATMs | 1,874 | 1,996 | 2,019 |\ | Total branch outlets | 1,248 | 1,250 | 1,261 | Consolidated Balance Sheets Assets Total assets increased slightly in Q3 2025, driven by higher interest-bearing deposits in other banks and debt securities held to maturity, while net loans saw a minor decrease Consolidated Assets | Asset Category | 9/30/2025 (millions) | 6/30/2025 (millions) | 9/30/2024 (millions) | | :----------------------------------- | :------------------- | :------------------- | :------------------- | | Cash and due from banks | $3,073 | $3,245 | $2,665 |\ | Interest-bearing deposits in other banks | $9,026 | $7,930 | $7,856 |\ | Debt securities held to maturity | $5,769 | $5,972 | $2,787 |\ | Debt securities available for sale | $26,886 | $26,333 | $28,698 |\ | Loans, net of unearned income | $96,125 | $96,723 | $96,789 |\ | Total assets | $159,940 | $159,206 | $157,426 | Liabilities and Equity Total deposits experienced a slight decline in Q3 2025, primarily in non-interest-bearing and time deposits, while shareholders' equity increased due to higher retained earnings and a reduction in accumulated other comprehensive loss Consolidated Liabilities and Equity | Liability/Equity Category | 9/30/2025 (millions) | 6/30/2025 (millions) | 9/30/2024 (millions) | | :----------------------------------- | :------------------- | :------------------- | :------------------- | | Non-interest-bearing deposits | $39,768 | $40,209 | $39,698 |\ | Interest-bearing deposits | $90,566 | $90,710 | $86,678 |\ | Total deposits | $130,334 | $130,919 | $126,376 |\ | Short-term borrowings | $1,300 | $— | $1,500 |\ | Long-term borrowings | $4,785 | $5,279 | $6,016 |\ | Total liabilities | $140,845 | $140,500 | $138,699 |\ | Total shareholders' equity | $19,049 | $18,666 | $18,676 | - Accumulated other comprehensive income (loss), net, improved from $(1,967) million in Q2 2025 to $(1,660) million in Q3 2025[9] Loans End of Period Loans Total end-of-period loans decreased slightly in Q3 2025, primarily driven by declines in commercial and industrial, owner-occupied commercial real estate, and other consumer loans, partially offset by growth in commercial investor real estate mortgage and consumer credit card portfolios End of Period Loan Balances | Loan Category | 9/30/2025 (millions) | Change vs. 6/30/2025 (millions) | Change vs. 9/30/2024 (millions) | | :----------------------------------- | :------------------- | :------------------------------ | :------------------------------ | | Commercial and industrial | $49,234 | $(352) (-0.7%) | $(331) (-0.7%) |\ | Commercial investor real estate mortgage | $7,122 | $173 (2.5%) | $560 (8.5%) |\ | Residential first mortgage | $19,881 | $(139) (-0.7%) | $(244) (-1.2%) |\ | Consumer credit card | $1,437 | $22 (1.6%) | $65 (4.7%) |\ | Other consumer | $5,834 | $(69) (-1.2%) | $(333) (-5.4%) |\ | Total Loans | $96,125 | $(598) (-0.6%) | $(664) (-0.7%) | Loan Portfolio Composition | Loan Category (Percentage) | 9/30/2025 (%) | 6/30/2025 (%) | 9/30/2024 (%) | | :----------------------------------- | :-------- | :-------- | :-------- | | Total business | 66.0 % | 66.0 % | 65.7 % |\ | Total consumer | 34.0 % | 34.0 % | 34.3 % | Average Balances of Loans Average loan balances for Q3 2025 showed a slight increase QoQ, primarily in business loans, but a decrease YoY. Year-to-date average loan balances for 2025 were lower than 2024 Average Loan Balances (Quarterly) | Loan Category (Average Balances) | 3Q25 (millions) | Change vs. 2Q25 (millions) | Change vs. 3Q24 (millions) | | :----------------------------------- | :-------------- | :------------------------- | :------------------------- | | Commercial and industrial | $49,588 | $555 (1.1%) | $(259) (-0.5%) |\ | Commercial investor real estate mortgage | $7,087 | $282 (4.1%) | $592 (9.1%) |\ | Total business | $63,860 | $648 (1.0%) | $42 (0.1%) |\ | Total consumer | $32,787 | $(78) (-0.2%) | $(435) (-1.3%) |\ | Total Loans | $96,647 | $570 (0.6%) | $(393) (-0.4%) | Average Loan Balances (Year-to-Date) | Loan Category (Average Balances YTD) | 2025 (millions) | Change vs. 2024 (millions) | | :----------------------------------- | :-------------- | :------------------------- | | Total business | $63,406 | $(551) (-0.9%) |\ | Total consumer | $32,878 | $(411) (-1.2%) |\ | Total Loans | $96,284 | $(962) (-1.0%) | Deposits End of Period Deposits Total end-of-period deposits decreased slightly QoQ but increased YoY, with notable growth in money market deposits and a decline in time deposits. Corporate Bank and Wealth Management segments showed deposit growth YoY End of Period Deposit Balances | Deposit Type | 9/30/2025 (millions) | Change vs. 6/30/2025 (millions) | Change vs. 9/30/2024 (millions) | | :----------------------------------- | :------------------- | :------------------------------ | :------------------------------ | | Non-interest-bearing deposits | $39,768 | $(441) (-1.1%) | $70 (0.2%) |\ | Money market—domestic | $39,051 | $526 (1.4%) | $3,846 (10.9%) |\ | Time deposits | $14,902 | $(392) (-2.6%) | $(782) (-5.0%) |\ | Total Deposits | $130,334 | $(585) (-0.4%) | $3,958 (3.1%) | Segment Deposit Balances | Segment Deposits | 9/30/2025 (millions) | Change vs. 6/30/2025 (millions) | Change vs. 9/30/2024 (millions) | | :----------------------------------- | :------------------- | :------------------------------ | :------------------------------ | | Consumer Bank Segment | $79,689 | $(264) (-0.3%) | $831 (1.1%) |\ | Corporate Bank Segment | $40,415 | $314 (0.8%) | $3,460 (9.4%) |\ | Wealth Management Segment | $7,654 | $302 (4.1%) | $134 (1.8%) | - Non-interest-bearing deposits as a percentage of total deposits decreased to 30.5% in Q3 2025 from 30.7% in Q2 2025 and 31.4% in Q3 2024[17] Average Balances of Deposits Average deposit balances showed a slight QoQ increase and a more significant YoY increase. Money market deposits were a key driver of growth, while non-interest-bearing and time deposits saw declines Average Deposit Balances (Quarterly) | Deposit Type (Average Balances) | 3Q25 (millions) | Change vs. 2Q25 (millions) | Change vs. 3Q24 (millions) | | :----------------------------------- | :-------------- | :------------------------- | :------------------------- | | Non-interest-bearing deposits | $39,538 | $(18) (—%) | $(152) (-0.4%) |\ | Money market—domestic | $38,593 | $1,204 (3.2%) | $3,542 (10.1%) |\ | Time deposits | $15,124 | $(210) (-1.4%) | $(303) (-2.0%) |\ | Total Deposits | $129,575 | $131 (0.1%) | $3,625 (2.9%) | Average Deposit Balances (Year-to-Date) | Segment Deposits (Average Balances YTD) | 2025 (millions) | Change vs. 2024 (millions) | | :----------------------------------- | :-------------- | :------------------------- | | Corporate Bank Segment | $39,098 | $2,231 (6.1%) |\ | Total Deposits | $128,909 | $2,253 (1.8%) | Consolidated Statements of Income Quarter Ended For Q3 2025, net interest income slightly decreased QoQ but increased YoY, while non-interest income saw a notable increase. Provision for credit losses decreased, contributing to higher net income Consolidated Statements of Income (Quarterly) | Metric | 9/30/2025 (millions) | 6/30/2025 (millions) | 9/30/2024 (millions) | | :----------------------------------- | :------------------- | :------------------- | :------------------- | | Total interest income | $1,796 | $1,784 | $1,820 |\ | Total interest expense | $539 | $525 | $602 |\ | Net interest income | $1,257 | $1,259 | $1,218 |\ | Provision for credit losses | $105 | $126 | $113 |\ | Non-interest income | $659 | $646 | $572 |\ | Non-interest expense | $1,103 | $1,073 | $1,069 |\ | Net income | $569 | $563 | $490 | - Interest income on loans, including fees, was $1,386 million in Q3 2025, a slight increase from $1,377 million in Q2 2025 but a decrease from $1,463 million in Q3 2024[20] - Interest expense on deposits increased to $456 million in Q3 2025 from $447 million in Q2 2025, but decreased from $507 million in Q3 2024[20] Nine Months Ended September 30 For the nine months ended September 30, 2025, net interest income and non-interest income increased significantly compared to the same period in 2024, leading to higher net income and diluted EPS Consolidated Statements of Income (Year-to-Date) | Metric | 2025 (millions) | 2024 (millions) | Change (millions) | Change (%) | | :----------------------------------- | :-------------- | :-------------- | :---------------- | :--------- | | Total interest income | $5,305 | $5,306 | $(1) | (0.0%) |\ | Total interest expense | $1,595 | $1,718 | $(123) | (7.2%) |\ | Net interest income | $3,710 | $3,588 | $122 | 3.4% |\ | Provision for credit losses | $355 | $367 | $(12) | (3.3%) |\ | Non-interest income | $1,895 | $1,680 | $215 | 12.8% |\ | Non-interest expense | $3,215 | $3,204 | $11 | 0.3% |\ | Net income | $1,622 | $1,359 | $263 | 19.4% |\ | Diluted earnings per common share | $1.72 | $1.38 | $0.34 | 24.6% | - Interest income on debt securities increased by $176 million (26.3%) year-to-date 2025 compared to 2024[23] Consolidated Average Daily Balances and Yield / Rate Analysis Quarter Ended Yield/Rate Analysis For Q3 2025, the yield on total earning assets slightly decreased QoQ, while the rate on total interest-bearing liabilities slightly increased. Net interest spread and net interest margin (FTE) both saw minor declines QoQ Yield and Rate Analysis (Quarterly) | Metric | 9/30/2025 (%) | 6/30/2025 (%) | 9/30/2024 (%) | | :----------------------------------- | :-------- | :-------- | :-------- | | Yield on Total earning assets | 5.09 % | 5.12 % | 5.26 % |\ | Rate on Total interest-bearing liabilities | 2.22 % | 2.20 % | 2.59 % |\ | Net interest spread | 2.87 % | 2.92 % | 2.67 % |\ | Net interest income/margin FTE basis | 3.59 % | 3.65 % | 3.54 % | - The yield on commercial and industrial loans decreased to 5.65% in Q3 2025 from 5.72% in Q2 2025 and 6.14% in Q3 2024[24][28] - The rate for total deposit costs remained stable at 1.39% in Q3 2025 compared to Q2 2025, but decreased from 1.60% in Q3 2024[26][31] Nine Months Ended September 30 Yield/Rate Analysis For the nine months ended September 30, 2025, the yield on total earning assets slightly decreased compared to 2024, while the rate on total interest-bearing liabilities also decreased. Net interest spread improved, and net interest margin (FTE) increased Yield and Rate Analysis (Year-to-Date) | Metric | 2025 (%) | 2024 (%) | | :----------------------------------- | :--- | :--- | | Yield on Total earning assets | 5.08 % | 5.19 % |\ | Rate on Total interest-bearing liabilities | 2.23 % | 2.53 % |\ | Net interest spread | 2.85 % | 2.66 % |\ | Net interest income/margin FTE basis | 3.59 % | 3.54 % | - The yield on commercial and industrial loans decreased to 5.65% year-to-date 2025 from 6.06% in 2024[33] - Total deposit costs decreased to 1.39% year-to-date 2025 from 1.58% in 2024[35] Pre-Tax Pre-Provision Income ("PPI") and Adjusted PPI (non-GAAP) Pre-Tax Pre-Provision Income Analysis Pre-tax pre-provision income (non-GAAP) decreased QoQ but increased YoY, while adjusted pre-tax pre-provision income (non-GAAP) remained relatively stable QoQ and increased YoY, after accounting for various adjustments Pre-Tax Pre-Provision Income Reconciliation | Metric | 9/30/2025 (millions) | 6/30/2025 (millions) | 9/30/2024 (millions) | | :----------------------------------- | :------------------- | :------------------- | :------------------- | | Income before income taxes (GAAP) | $708 | $706 | $608 |\ | Provision for credit losses (GAAP) | $105 | $126 | $113 |\ | Pre-tax pre-provision income (non-GAAP) | $813 | $832 | $721 |\ | Adjusted pre-tax pre-provision income (non-GAAP) | $830 | $832 | $799 | - Total other adjustments, including securities gains/losses and FDIC insurance special assessment, significantly impacted the reconciliation from PPI to Adjusted PPI, with a $17 million positive adjustment in Q3 2025[37] - Securities (gains) losses, net, showed a gain of $25 million in Q3 2025, compared to zero in Q2 2025 and a loss of $78 million in Q3 2024[37] Non-Interest Income, Service Charges on Deposit Accounts by Segment, Wealth Management Income, Capital Markets Income, and Mortgage Income Quarterly Non-Interest Income Total non-interest income increased QoQ and YoY, driven by strong performance in service charges on deposit accounts, wealth management income, and capital markets income, despite a decrease in mortgage income Non-Interest Income (Quarterly) | Income Category | 9/30/2025 (millions) | Change vs. 6/30/2025 (millions) | Change vs. 9/30/2024 (millions) | | :----------------------------------- | :------------------- | :------------------------------ | :------------------------------ | | Service charges on deposit accounts | $160 | $9 (6.0%) | $2 (1.3%) |\ | Wealth management income | $139 | $6 (4.5%) | $11 (8.6%) |\ | Capital markets income | $104 | $21 (25.3%) | $12 (13.0%) |\ | Mortgage income | $38 | $(10) (-20.8%) | $2 (5.6%) |\ | Securities gains (losses), net | $(27) | $(26) (NM) | $51 (65.4%) |\ | Total non-interest income | $659 | $13 (2.0%) | $87 (15.2%) | - Other miscellaneous income increased significantly by $20 million (52.6%) QoQ to $58 million in Q3 2025[39] Quarterly Service Charges on Deposit Accounts by Segment Service charges on deposit accounts increased QoQ, primarily driven by the Consumer Bank Segment, while the Corporate Bank Segment also showed growth Service Charges on Deposit Accounts by Segment (Quarterly) | Segment | 9/30/2025 (millions) | Change vs. 6/30/2025 (millions) | Change vs. 9/30/2024 (millions) | | :----------------------------------- | :------------------- | :------------------------------ | :------------------------------ | | Consumer Bank Segment | $99 | $9 (10.0%) | $(1) (-1.0%) |\ | Corporate Bank Segment | $61 | $1 (1.7%) | $3 (5.2%) |\ | Total service charges on deposit accounts | $160 | $9 (6.0%) | $2 (1.3%) | - Consumer overdraft fees represent approximately half of the Consumer Bank Segment's service charges on deposit accounts each quarter[44] Quarterly Wealth Management Income Wealth management income increased QoQ and YoY, with both investment management and trust fee income and investment services fee income contributing to the growth Wealth Management Income (Quarterly) | Income Type | 9/30/2025 (millions) | Change vs. 6/30/2025 (millions) | Change vs. 9/30/2024 (millions) | | :----------------------------------- | :------------------- | :------------------------------ | :------------------------------ | | Investment management and trust fee income | $91 | $1 (1.1%) | $6 (7.1%) |\ | Investment services fee income | $48 | $5 (11.6%) | $5 (11.6%) |\ | Total wealth management income | $139 | $6 (4.5%) | $11 (8.6%) | Quarterly Capital Markets Income Capital markets income showed significant QoQ and YoY growth, indicating strong performance in capital raising activities Capital Markets Income (Quarterly) | Income Type | 9/30/2025 (millions) | Change vs. 6/30/2025 (millions) | Change vs. 9/30/2024 (millions) | | :----------------------------------- | :------------------- | :------------------------------ | :------------------------------ | | Capital markets income | $104 | $21 (25.3%) | $12 (13.0%) |\ | Capital markets income excluding valuation adjustments | $104 | $19 (22.4%) | $11 (11.8%) | - Capital markets income primarily relates to debt securities underwriting and placement, loan syndication, foreign exchange, derivatives, and M&A advisory services[43] Quarterly Mortgage Income Mortgage income decreased QoQ but increased YoY, primarily due to a significant negative MSR and related hedge impact, despite stable production and sales and loan servicing income Mortgage Income (Quarterly) | Income Type | 9/30/2025 (millions) | Change vs. 6/30/2025 (millions) | Change vs. 9/30/2024 (millions) | | :----------------------------------- | :------------------- | :------------------------------ | :------------------------------ | | Production and sales | $17 | $— (—%) | $1 (6.3%) |\ | Loan servicing | $47 | $— (—%) | $(6) (-11.3%) |\ | MSR and related hedge impact | $(26) | $(10) (-62.5%) | $7 (21.2%) |\ | Total mortgage income | $38 | $(10) (-20.8%) | $2 (5.6%) | - Total mortgage production decreased by $149 million (-13.3%) QoQ to $969 million in Q3 2025[43] Year-to-Date Non-Interest Income Total non-interest income for the nine months ended September 30, 2025, increased significantly YoY, driven by strong growth across most categories, particularly securities gains (losses), net, wealth management, and capital markets income Non-Interest Income (Year-to-Date) | Income Category | 9/30/2025 (millions) | 9/30/2024 (millions) | Change (millions) | Change (%) | | :----------------------------------- | :------------------- | :------------------- | :---------------- | :--------- | | Service charges on deposit accounts | $472 | $457 | $15 | 3.3% |\ | Wealth management income | $401 | $369 | $32 | 8.7% |\ | Capital markets income | $267 | $251 | $16 | 6.4% |\ | Mortgage income | $126 | $111 | $15 | 13.5% |\ | Securities gains (losses), net | $(53) | $(178) | $125 | 70.2% |\ | Total non-interest income | $1,895 | $1,680 | $215 | 12.8% | Year-to-Date Service Charges on Deposit Accounts by Segment Year-to-date service charges on deposit accounts increased YoY, primarily due to growth in the Corporate Bank Segment, while the Consumer Bank Segment saw a slight decrease Service Charges on Deposit Accounts by Segment (Year-to-Date) | Segment | 9/30/2025 (millions) | 9/30/2024 (millions) | Change (millions) | Change (%) | | :----------------------------------- | :------------------- | :------------------- | :---------------- | :--------- | | Consumer Bank Segment | $285 | $287 | $(2) | (0.7%) |\ | Corporate Bank Segment | $185 | $167 | $18 | 10.8% |\ | Total service charges on deposit accounts | $472 | $457 | $15 | 3.3% | Year-to-Date Wealth Management Income Year-to-date wealth management income increased YoY, with both investment management and trust fee income and investment services fee income contributing to the growth Wealth Management Income (Year-to-Date) | Income Type | 9/30/2025 (millions) | 9/30/2024 (millions) | Change (millions) | Change (%) | | :----------------------------------- | :------------------- | :------------------- | :---------------- | :--------- | | Investment management and trust fee income | $267 | $249 | $18 | 7.2% |\ | Investment services fee income | $134 | $120 | $14 | 11.7% |\ | Total wealth management income | $401 | $369 | $32 | 8.7% | Year-to-Date Capital Markets Income Year-to-date capital markets income increased YoY, reflecting strong performance in capital markets activities Capital Markets Income (Year-to-Date) | Income Type | 9/30/2025 (millions) | 9/30/2024 (millions) | Change (millions) | Change (%) | | :----------------------------------- | :------------------- | :------------------- | :---------------- | :--------- | | Capital markets income | $267 | $251 | $16 | 6.4% |\ | Capital markets income excluding valuation adjustments | $270 | $256 | $14 | 5.5% | Year-to-Date Mortgage Income Year-to-date mortgage income increased YoY, primarily due to an improved MSR and related hedge impact, offsetting a decline in production and sales income Mortgage Income (Year-to-Date) | Income Type | 9/30/2025 (millions) | 9/30/2024 (millions) | Change (millions) | Change (%) | | :----------------------------------- | :------------------- | :------------------- | :---------------- | :--------- | | Production and sales | $47 | $56 | $(9) | (16.1%) |\ | Loan servicing | $141 | $143 | $(2) | (1.4%) |\ | MSR and related hedge impact | $(62) | $(88) | $26 | 29.5% |\ | Total mortgage income | $126 | $111 | $15 | 13.5% | - Total mortgage production remained relatively stable year-to-date, with portfolio production increasing by 5.3% and agency/secondary market production decreasing by 4.8%[51] Non-Interest Expense Quarterly Non-Interest Expense Total non-interest expense increased QoQ and YoY, primarily driven by higher salaries and employee benefits, outside services, and professional, legal and regulatory expenses Non-Interest Expense (Quarterly) | Expense Category | 9/30/2025 (millions) | Change vs. 6/30/2025 (millions) | Change vs. 9/30/2024 (millions) | | :----------------------------------- | :------------------- | :------------------------------ | :------------------------------ | | Salaries and employee benefits | $671 | $13 (2.0%) | $26 (4.0%) |\ | Equipment and software expense | $106 | $2 (1.9%) | $5 (5.0%) |\ | Outside services | $42 | $3 (7.7%) | $1 (2.4%) |\ | Professional, legal and regulatory expenses | $30 | $2 (7.1%) | $9 (42.9%) |\ | FDIC insurance assessments | $15 | $(5) (-25.0%) | $(2) (-11.8%) |\ | Total non-interest expense | $1,103 | $30 (2.8%) | $34 (3.2%) | - Visa class B shares expense increased significantly by $4 million (100.0%) QoQ to $8 million in Q3 2025, but decreased by $9 million (-52.9%) YoY[54] Quarterly Salaries and Benefits Expense Salaries and employee benefits expense increased QoQ and YoY. Excluding market value adjustments on 401(k) liabilities, the increase was more pronounced Salaries and Benefits Expense (Quarterly) | Expense Type | 9/30/2025 (millions) | Change vs. 6/30/2025 (millions) | Change vs. 9/30/2024 (millions) | | :----------------------------------- | :------------------- | :------------------------------ | :------------------------------ | | Salaries and employee benefits | $671 | $13 (2.0%) | $26 (4.0%) |\ | Salaries and employee benefits less market value adjustments on employee benefits liabilities | $658 | $16 (2.5%) | $25 (3.9%) | Year-to-Date Non-Interest Expense Total non-interest expense for the nine months ended September 30, 2025, remained relatively stable YoY, with increases in salaries and employee benefits and professional, legal and regulatory expenses offset by decreases in FDIC insurance assessments and operational losses Non-Interest Expense (Year-to-Date) | Expense Category | 9/30/2025 (millions) | 9/30/2024 (millions) | Change (millions) | Change (%) | | :----------------------------------- | :------------------- | :------------------- | :---------------- | :--------- | | Salaries and employee benefits | $1,954 | $1,912 | $42 | 2.2% |\ | Professional, legal and regulatory expenses | $81 | $74 | $7 | 9.5% |\ | FDIC insurance assessments | $55 | $89 | $(34) | (38.2%) |\ | Operational losses | $44 | $79 | $(35) | (44.3%) |\ | Total non-interest expense | $3,215 | $3,204 | $11 | 0.3% | Year-to-Date Salaries and Benefits Expense Year-to-date salaries and employee benefits expense increased YoY. Excluding market value adjustments on 401(k) liabilities, the increase was slightly higher Salaries and Benefits Expense (Year-to-Date) | Expense Type | 9/30/2025 (millions) | 9/30/2024 (millions) | Change (millions) | Change (%) | | :----------------------------------- | :------------------- | :------------------- | :---------------- | :--------- | | Salaries and employee benefits | $1,954 | $1,912 | $42 | 2.2% |\ | Salaries and employee benefits less market value adjustments on employee benefits liabilities | $1,926 | $1,878 | $48 | 2.6% | Reconciliation of GAAP Financial Measures to non-GAAP Financial Measures Adjusted Efficiency Ratios, Adjusted Fee Income Ratios, Adjusted Non-Interest Income/Expense, Adjusted Operating Leverage Ratios, and Adjusted Total Revenue (Quarterly) For Q3 2025, the adjusted efficiency ratio slightly increased QoQ but remained stable YoY. Adjusted total revenue (non-GAAP) increased QoQ and YoY, while adjusted non-interest expense (non-GAAP) also increased Adjusted Financial Ratios and Revenue (Quarterly) | Metric | 9/30/2025 (%) | 6/30/2025 (%) | 9/30/2024 (%) | | :----------------------------------- | :-------- | :-------- | :-------- | | Adjusted non-interest expense (non-GAAP) | $1,111 | $1,073 | $1,069 |\ | Adjusted total revenue (non-GAAP) | $1,941 | $1,905 | $1,868 |\ | Adjusted efficiency ratio (non-GAAP) | 56.9 % | 56.0 % | 56.9 % |\ | Adjusted fee income ratio (non-GAAP) | 35.0 % | 33.7 % | 34.6 % | - Adjusted operating leverage ratio (non-GAAP) was (1.7)% in Q3 2025, compared to 0% in Q3 2024[59] Adjusted Efficiency Ratios, Adjusted Fee Income Ratios, Adjusted Non-Interest Income/Expense, Adjusted Operating Leverage Ratios, and Adjusted Total Revenue (YTD) For the nine months ended September 30, 2025, the adjusted efficiency ratio (non-GAAP) improved YoY. Adjusted total revenue (non-GAAP) and adjusted non-interest expense (non-GAAP) both increased YoY Adjusted Financial Ratios and Revenue (Year-to-Date) | Metric | 2025 (%) | 2024 (%) | | :----------------------------------- | :--- | :--- | | Adjusted non-interest expense (non-GAAP) | $3,219 | $3,198 |\ | Adjusted total revenue (non-GAAP) | $5,655 | $5,446 |\ | Adjusted efficiency ratio (non-GAAP) | 56.5 % | 58.3 % |\ | Adjusted fee income ratio (non-GAAP) | 34.2 % | 33.9 % | - Adjusted operating leverage ratio (non-GAAP) was 3.2% year-to-date 2025[62] Adjusted Net Income Available to Common Shareholders, Adjusted Diluted EPS, and Return Ratios Adjusted net income available to common shareholders (non-GAAP) and adjusted diluted EPS (non-GAAP) both increased QoQ and YoY. Return on average tangible common shareholders' equity (non-GAAP) slightly decreased QoQ but increased YoY Adjusted Profitability and Return Ratios | Metric | 9/30/2025 (millions) | 6/30/2025 (millions) | 9/30/2024 (millions) | | :----------------------------------- | :------------------- | :------------------- | :------------------- | | Net income available to common shareholders (GAAP) | $548 | $534 | $446 |\ | Adjusted net income available to common shareholders (non-GAAP) | $561 | $538 | $520 |\ | Diluted EPS (GAAP) | $0.61 | $0.59 | $0.49 |\ | Adjusted diluted EPS (non-GAAP) | $0.63 | $0.60 | $0.57 |\ | Return on average tangible common shareholders' equity (non-GAAP) | 18.81 % | 19.34 % | 16.87 % |\ | Adjusted return on average tangible common shareholders' equity (non-GAAP) | 19.24 % | 19.48 % | 19.68 % | - Average tangible common shareholders' equity (non-GAAP) increased by $490 million (4.4%) QoQ and $1,052 million (10.0%) YoY[65] Tangible Common Ratios Tangible common shareholders' equity (non-GAAP) and tangible common book value per share (non-GAAP) both increased QoQ and YoY, reflecting an improved capital position Tangible Common Equity Ratios | Metric | 9/30/2025 (millions) | 6/30/2025 (millions) | 9/30/2024 (millions) | | :----------------------------------- | :------------------- | :------------------- | :------------------- | | Common shareholders' equity (GAAP) | $17,680 | $17,297 | $16,961 |\ | Tangible common shareholders' equity (non-GAAP) | $11,934 | $11,541 | $11,172 |\ | Tangible common shareholders' equity to tangible assets (non-GAAP) | 7.74 % | 7.52 % | 7.37 % |\ | Tangible common book value per share (non-GAAP) | $13.49 | $12.91 | $12.26 | Common equity Tier 1 (CET1) Ratios The Common Equity Tier 1 (CET1) ratio remained stable QoQ and increased YoY. The adjusted common equity Tier 1 ratio (non-GAAP) also showed an increase QoQ and YoY, indicating a strong capital position Common Equity Tier 1 Ratios | Metric | 9/30/2025 (millions) | 6/30/2025 (millions) | 9/30/2024 (millions) | | :----------------------------------- | :------------------- | :------------------- | :------------------- | | Common equity Tier 1 | $13,620 | $13,533 | $13,185 |\ | Adjusted common equity Tier 1 (non-GAAP) | $11,983 | $11,647 | $11,379 |\ | Total risk-weighted assets | $126,060 | $125,755 | $124,645 |\ | Common equity Tier 1 ratio | 10.8 % | 10.8 % | 10.6 % |\ | Adjusted common equity Tier 1 ratio (non-GAAP) | 9.5 % | 9.3 % | 9.1 % | - Adjustments to CET1 include AOCI loss on securities and defined benefit pension plans, which are considered in the adjusted non-GAAP measure[70] Asset Quality Allowance for Credit Losses, Net Charge-Offs and Related Ratios The allowance for credit losses (ACL) decreased QoQ but remained relatively stable YoY. Net charge-offs increased QoQ, primarily driven by commercial investor real estate mortgage and other consumer loans, leading to a higher net charge-off ratio Allowance for Credit Losses and Net Charge-Offs | Metric | 9/30/2025 (millions) | 6/30/2025 (millions) | 9/30/2024 (millions) | | :----------------------------------- | :------------------- | :------------------- | :------------------- | | Beginning allowance for loan losses (ALL) | $1,612 | $1,613 | $1,621 |\ | Total loans charged-off | $160 | $133 | $143 |\ | Total recoveries of loans previously charged-off | $25 | $20 | $26 |\ | Total net charge-offs | $135 | $113 | $117 |\ | Provision for loan losses | $104 | $112 | $103 |\ | Ending allowance for loan losses (ALL) | $1,581 | $1,612 | $1,607 |\ | Allowance for credit losses (ACL) at period end | $1,713 | $1,743 | $1,728 | Net Charge-Off Ratios | Net loan charge-offs as a % of average loans, annualized | 9/30/2025 (%) | 6/30/2025 (%) | 9/30/2024 (%) | | :----------------------------------- | :-------- | :-------- | :-------- | | Commercial investor real estate mortgage | 1.82 % | 0.10 % | 0.71 % |\ | Other consumer | 2.83 % | 2.50 % | 2.37 % |\ | Total | 0.55 % | 0.47 % | 0.48 % | - ACL as a percentage of loans, net, was 1.78% in Q3 2025, a slight decrease from 1.80% in Q2 2025[75] Non-Performing Loans (excludes loans held for sale), Early and Late Stage Delinquencies Non-performing loans (excluding loans held for sale) decreased QoQ and YoY. Total delinquencies also decreased QoQ and YoY, indicating an improvement in overall loan quality Non-Performing Loans and Delinquencies | Metric | 9/30/2025 (millions) | 6/30/2025 (millions) | 9/30/2024 (millions) | | :----------------------------------- | :------------------- | :------------------- | :------------------- | | Total non-performing loans | $758 | $776 | $821 |\ | Total accruing 30-89 days past due loans | $363 | $312 | $369 |\ | Total accruing 90+ days past due loans | $154 | $171 | $183 |\ | Total delinquencies | $517 | $483 | $552 | - Non-performing loans as a percentage of loans, excluding loans held for sale, improved to 0.79% in Q3 2025 from 0.80% in Q2 2025 and 0.85% in Q3 2024[78] - Criticized loans—business decreased significantly to $3,682 million in Q3 2025 from $4,608 million in Q2 2025 and $4,692 million in Q3 2024[75] Forward-Looking Statements Risks and Uncertainties The company's forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially. These include economic and market conditions, changes in monetary and fiscal policies, interest rate volatility, creditworthiness of customers, and regulatory changes - Key risks include the effects of possible declines in property values, increases in interest rates and unemployment rates, inflation, and financial market disruptions[81] - Changes in market interest rates or capital markets could adversely affect revenue, expense, asset values, and the availability and cost of capital and liquidity[81] - The company highlights risks related to its ability to effectively compete with traditional and non-traditional financial services companies, including fintechs, and the challenges presented by the development and use of AI[81] Operational and Regulatory Risks Operational risks encompass fraud, cybersecurity threats, and dependence on third-party infrastructure. Regulatory risks include changes in laws and regulations, compliance with capital and liquidity requirements, and potential adverse judicial or administrative rulings - Inability to identify and address cyber-security risks such as data security breaches, malware, and denial of service attacks could disrupt businesses and lead to financial losses or reputational damage[81] - Changes in laws and regulations affecting bank products and services, including special FDIC assessments and new long-term debt requirements, could increase compliance risk and negatively affect businesses[85] - The company's ability to comply with stress testing and capital planning requirements (CCAR process) requires significant managerial resources[85]