Executive Summary

Q4 2024 delivered diluted EPS of $0.56, up 14% QoQ and 44% YoY; total revenue was $1.815B (+1% QoQ, flat YoY), with NII +1% QoQ and NIM up 1 bp to 3.55% .
Fee lines were mixed: capital markets rose to $97M (+5% QoQ; +102% YoY), while cards (-4% QoQ) and wealth (-2% QoQ) eased from strong Q3; adjusted non-interest income fell 5% QoQ due to lower market value adjustments and securities losses .
Credit metrics were within expectations, but nonperforming loans increased to 0.96% of loans and NCOs ticked to 0.49% (annualized); ACL/Loans held steady at 1.79% .
2025 guidance: NII +2–5%, NIM targeted to reach ~3.60% by Q4 2025, adjusted NIR +2–4%, adjusted NIE +1–3%, average loans ~+1%, deposits relatively stable; dividend payout targeted at 40–50% and CET1 (incl. AOCI) managed toward 9.25–9.75% .
Corporate actions and macro positioning: $700M securities repositioned at a $30M pretax loss to lift yields; AFS-to-HTM transfers ($2.0B in Q4) reduce AOCI volatility; ending deposits +1% QoQ led by public funds inflows .

What Went Well and What Went Wrong

What Went Well

Record performance across capital markets, wealth management, and treasury management businesses in 2024; “This was a year of records…” (John Turner) .
NII resilience with deposit cost management and hedging offsetting falling asset yields; NII +1% QoQ and NIM +1 bp to 3.55% .
Strategic balance sheet positioning: $700M securities repositioning (220 bp yield uplift) and $2.0B AFS-to-HTM transfer to dampen AOCI volatility .
Capital markets revenue reached $97M in Q4; management reiterates near-term $80–$90M run-rate and longer-term ~$100M target .

What Went Wrong

Adjusted non-interest income declined 5% QoQ; securities losses ($30M) and negative market value adjustments (-$5M) weighed on adjusted NIR .
Card and ATM fees fell 4% QoQ and 11% YoY; rewards liability usage and mix effects reduced Q4 contribution .
Credit: NPLs rose 11 bps QoQ to 0.96% of loans, with concentration in office, senior housing, and trucking; ACL/NPL coverage declined to 186% .
CET1 inclusive of AOCI fell to an estimated 8.8% (from 9.1%) on higher long-term rates; reported CET1 was 10.8% .

Financial Results

Metric	Q4 2023	Q3 2024	Q4 2024
Total Revenue ($USD Millions)	1,811	1,790	1,815
Net Interest Income ($USD Millions)	1,231	1,218	1,230
Non-Interest Income ($USD Millions)	580	572	585
Diluted EPS ($USD)	0.39	0.49	0.56
Net Interest Margin (FTE, %)	3.60%	3.54%	3.55%
Efficiency Ratio (GAAP, %)	65.0%	59.3%	56.8%

Segment/fee components:

Fee Line ($USD Millions)	Q4 2023	Q3 2024	Q4 2024
Service Charges on Deposit Accounts	143	158	155
Card and ATM Fees	127	118	113
Wealth Management Income	117	128	126
Capital Markets Income	48	92	97
Mortgage Income	31	36	35
Securities Gains (Losses), Net	(2)	(78)	(30)

Deposits by segment (Ending):

Segment ($USD Millions)	Q4 2023	Q3 2024	Q4 2024
Consumer Bank	80,031	78,858	78,637
Corporate Bank	36,883	36,955	38,361
Wealth Management	7,694	7,520	7,736
Other	3,180	3,043	2,869
Total Ending Deposits	127,788	126,376	127,603

Key KPIs:

KPI	Q4 2023	Q3 2024	Q4 2024
CET1 Ratio (%)	10.3%	10.6%	10.8%
CET1 (incl. AOCI, %)	8.3%	9.1%	8.8%
ACL / Loans (%)	1.73%	1.79%	1.79%
NPL / Loans (%)	0.82%	0.85%	0.96%
Net Charge-Offs / Avg Loans (annualized, %)	0.54%	0.48%	0.49%
Tangible Common Book Value per Share ($)	10.77	12.26	11.42

Drivers and notes:

Adjusted items in Q4: $30M securities losses and $10M severance; diluted EPS impact of about $(0.03) .
NII supported by lower deposit costs (interest-bearing down 21 bps QoQ; down-rate beta ~34%) and hedging, offsetting lower asset yields .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Interest Income YoY	FY 2025	NII growth expected; pace dependent on deposit costs (Q3 commentary)	+2–5%	Clarified range
Net Interest Margin	Q4 2025	Path to ~3.60% over time (Q3)	~3.60% by Q4 2025	Maintained/dated target
Adjusted Non-Interest Income YoY	FY 2025	$2.45–$2.50B in FY 2024 (Q3)	+2–4% vs 2024 adjusted	New FY outlook
Adjusted Non-Interest Expense YoY	FY 2025	FY 2024 adjusted NIE ~$4.25B (Q3)	+1–3% (inclusive of investments)	New FY outlook
Average Loans	FY 2025	Stable to down modestly in 2024 (Q2/Q3)	~+1%	New FY outlook
Average Deposits	FY 2025	Stable trend after seasonality (Q3)	Relatively stable vs 2024	Maintained
Net Charge-Offs / Avg Loans	FY 2025	40–50 bps range; toward upper end in 2024 (Q3)	40–50 bps; toward upper end; elevated in 1H25	Maintained with timing detail
Effective Tax Rate	FY 2025	~20% area (implied historical)	20–21%	New FY outlook
Capital Markets Revenue	Near-term	$80–$90M (Q3)	$80–$90M near-term; ~$100M over time	Confirmed
Dividend Payout	Ongoing	Attractive dividends; increases in recent years (Q2)	Target 40–50% of earnings	Stated policy
CET1 incl. AOCI	Near-term	Increased sensitivity guidance, transfers to HTM (Q3)	Manage closer to 9.25–9.75% operating range	Formalized range

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 & Q3 2024)	Current Period (Q4 2024)	Trend
Deposit pricing & betas	Peak cumulative beta ~43–45%; exit rate ~2.2% in Q3; down-rate beta ~30% expected	Interest-bearing deposit costs fell 21 bps QoQ; down-rate beta ~34% in Q4	Improving cost trajectory
Capital markets	Near-term $70–80M (Q2), $80–90M (Q3)	$97M in Q4; near-term $80–90M; target ~$100M run-rate over time	Strengthening
Technology modernization	Deposit system “on track” (Q2/Q3)	Loan system go-live 2Q–3Q 2025; deposit pilot 2H 2026, full conversion likely early/mid 2027	Execution progress
Credit portfolios of interest	Office, senior housing, trucking monitored; NCOs toward upper end	NPLs up to 0.96%; ACL on office at 7.5%; NCOs higher in 1H25 then lower	Elevated near-term, reserved
Capital/AOCI	$2.5B AFS→HTM (Q3)	+$2.0B AFS→HTM; manage CET1 incl. AOCI toward 9.25–9.75%	Proactive de-volatilization
Markets/footprint growth	Strong core and priority markets; pipelines building (Q2/Q3)	Plan to add ~140 bankers over several years; focus on priority markets	Investing for growth

Management Commentary

“This was a year of records... Capital Markets and Wealth Management... Treasury Management products and services all generated record revenue in 2024.” — John Turner .
“Net interest income grew 1% in the fourth quarter... falling interest rate-bearing deposit beta of 34%.” — David Turner .
“In the near term, we expect to manage CET1 inclusive of AOCI closer to our 9.25% to 9.75% operating range.” — David Turner .
“We plan to add approximately 140 bankers... primarily within our 8 priority growth markets.” — John Turner .

Q&A Highlights

Expenses and operating leverage: Management targets positive operating leverage in 2025 despite investment in systems and talent; focus on salaries/benefits, occupancy, vendor spend for offsets .
Capital returns and CET1: Dividend payout targeted at ~45% mid-point; buybacks flex with loan growth; CET1 inclusive of AOCI to be managed near 9.25–9.75% .
Deposit pricing outlook: Down-rate beta ~35% base case; promotional rates used selectively; steeper curve helpful .
Credit trajectory: NCOs could exceed upper end of 40–50 bps in a given quarter due to episodic resolutions in office/senior housing/transportation, but credits are reserved .
Tech conversion timing: Loan system in 2Q–3Q 2025; deposit system pilot in 2H 2026, full conversion likely in early/mid 2027; savings not material near-term, but customer experience benefits expected .

Estimates Context

S&P Global consensus estimates for Q4 2024 EPS and revenue were unavailable at time of analysis due to request limits. As a result, we cannot definitively assess beat/miss versus the Street for EPS or revenue this quarter. Reported diluted EPS was $0.56 and total revenue was $1.815B .

Key Takeaways for Investors

Margin model intact: deposit costs are falling (down-rate beta ~34%) and hedging protects against Fed cuts; NII guided +2–5% for 2025, with NIM targeted at ~3.60% by Q4 2025 .
Fee diversification working: capital markets momentum and treasury/wealth records support adjusted NIR growth of +2–4% in 2025, offsetting softer card/ATM .
Credit watchlist: expect elevated NCOs in 1H25 and higher NPLs in office/senior housing/trucking, but reserves are in place; through-the-cycle NCOs remain 40–50 bps .
Capital flexibility: reported CET1 10.8%; inclusive-of-AOCI CET1 managed toward 9.25–9.75% to address Basel III Endgame; buybacks and dividend payout (40–50%) flex with loan growth .
Balance sheet actions help earnings power: 2024 securities repositioning ($4.3B total; $205M losses) materially lifts portfolio yields with ~2.5-year payback; continued tactical HTM migration reduces AOCI swings .
Growth investments: multi-year banker adds (~140) and digital/core modernization should support deposit gathering (DDA mix low-30s%) and small-business opportunities across priority markets .
Near-term cadence: 1Q25 NII to decline modestly (seasonality, fewer days), then resume growth as fixed-rate turnover and deposit trends normalize .

Sources: Q4 2024 earnings call transcript –; 8-K earnings materials and financial supplement –; Q3/Q2 2024 earnings call transcripts – –; additional press releases (prime rate change; dividend declarations) .

REGIONS FINANCIAL CORP (RF)·Q4 2024 Earnings Summary