Regions Says AI Lifts Productivity 20% as Loan Growth Cools

Core Insights - Regions Financial is leveraging AI and mobile technology as integral components of its operational infrastructure, leading to measurable improvements in digital engagement and productivity [1][4]. Digital Engagement and AI Implementation - The fourth-quarter results highlight a significant increase in digital engagement, with mobile banking logins reaching 208 million, up from 188 million a year earlier, and active mobile banking users climbing to 6.2 million from 5.1 million [5]. - Digital transactions now represent 79% of consumer deposit transactions, an increase from 74% two years ago, indicating a shift away from traditional branch activities [5]. Technology Investment and Productivity - Technology expenses are projected to remain high as Regions transitions to software-as-a-service platforms, with spending expected to be 10% to 12% of revenue, slightly above historical levels [6]. - AI-driven platforms are already contributing to 35% of new business opportunities and are anticipated to enhance productivity by 20% [6]. Consumer Activity and Account Growth - Despite subdued loan growth, Regions reported stable consumer activity, with digital channels accounting for 70% of consumer checking account acquisitions in the last quarter, a significant increase from previous years [7]. - CEO John Turner noted that consumer customers are maintaining steady transactional activity, even as borrowing remains selective [8]. Commercial Business and Credit Quality - There has been an increase in pipeline activity for commercial loans, suggesting potential growth as customers begin utilizing excess liquidity [8]. - Credit quality is improving, with net charge-offs rising to 0.59% of average loans, which management considers a peak related to previously identified portfolios [9]. - The company expects full-year 2026 net charge-offs to be between 40 and 50 basis points [10].