Loan Growth, Rise in NII to Support Regions Financial's Q3 Earnings

Core Insights - Regions Financial Corporation (RF) is expected to report third-quarter 2025 results on October 17, with anticipated year-over-year growth in earnings and revenues [1][10] - The company has a strong earnings surprise history, surpassing estimates in the last four quarters with an average surprise of 6.96% [2] Earnings and Revenue Estimates - The Zacks Consensus Estimate for third-quarter earnings is 60 cents per share, reflecting a 5.3% increase from the previous year [3] - Revenue estimates are set at $1.92 billion, indicating a 7.1% rise from the prior year [3] Key Factors Influencing Performance - Net interest income (NII) is expected to be stable to modestly higher, with a consensus estimate of $1.27 billion, a 1% increase sequentially [5] - Loan demand has been strong, particularly for commercial and industrial loans and consumer loans, contributing positively to NII [5] - Average interest-earning assets are estimated to increase by 1.1% sequentially to $1.41 billion [6] Non-Interest Income Insights - Capital markets revenues are projected between $85 million and $95 million, with a consensus estimate of $90.6 million, reflecting a 9.2% increase from the prior quarter [8] - Mortgage banking fees are expected to decline, with estimates for mortgage income at $44.6 million, a 7.1% decrease from the previous quarter [11] - Total non-interest income is estimated at $645.7 million, indicating a slight sequential decline [12] Expense and Asset Quality Considerations - Expenses are anticipated to be high due to increased salaries and technology investments, despite ongoing expense management efforts [13] - Non-performing assets are expected to rise to $853.9 million, a 5.7% increase from the prior quarter, reflecting concerns over potential bad loans [14] Earnings Prediction Model - The earnings prediction model indicates a likelihood of an earnings beat for Regions Financial, supported by a positive Earnings ESP of +0.32% [15] - The company currently holds a Zacks Rank of 3, indicating a hold position [16]