Loan Growth, Rise in NII to Aid Regions Financial's Q4 Earnings

Core Viewpoint - Regions Financial Corporation (RF) is expected to report year-over-year growth in both earnings and revenues for the fourth quarter of 2025, with results scheduled for January 16, 2026 [1] Financial Performance - The third-quarter 2025 results were positively influenced by an increase in both non-interest income and net interest income (NII), although concerns remain regarding lower loan balances and higher non-interest expenses [1] - The Zacks Consensus Estimate for fourth-quarter earnings is 61 cents per share, reflecting a 3.4% increase from the previous year, while revenues are estimated at $1.93 billion, indicating a 6.2% rise [3] Key Factors Influencing Q4 Results - The Federal Reserve's interest rate cuts in the fourth quarter are expected to support NII, which is projected to rebound modestly to $1.28 billion, a 1.2% increase sequentially [4][5] - Strong demand for commercial and industrial loans, as well as consumer loans, is anticipated to contribute positively to loan performance [5] Non-Interest Income - A significant increase in global mergers and acquisitions is expected to enhance capital markets revenues, with estimates for fourth-quarter capital markets revenues ranging from $95 million to $105 million [7][8] - Mortgage rates have declined, which may lead to year-over-year increases in earnings and revenues, although mortgage banking fees are projected to decline by 1.8% sequentially [9][10] Expenses and Asset Quality - High expenses are anticipated due to rising salaries and employee benefits, despite ongoing expense management efforts [11] - The Zacks Consensus Estimate for non-performing assets is $810.9 million, indicating a 2.9% increase from the previous quarter, reflecting potential pressures on consumer demand [12] Earnings Prediction - The model predicts an earnings beat for Regions Financial, supported by a positive Earnings ESP of +0.36% and a Zacks Rank of 2 (Buy) [13][14]