Regions Financial Plans 150 Branch Openings While Keeping Total Count Flat

Key Points

• Regions plans to open 135–150 branches while closing a similar number, keeping its roughly 1,250-location network flat; it also plans to renovate 1,000 branches and expects the repositioning to improve household coverage by 5%–6%.
• About $3 billion in fixed-rate assets reprice each quarter, supporting net interest income with a benefit expected to continue into 2027, though it will diminish. Regions expects to exit the fourth quarter with a net interest margin near 3.70%.
• Regions sees no new signs of portfolio credit stress and expects full-year net charge-offs near the low end of its 40–50-basis-point range. It reported a 10.8% third-quarter CET1 ratio and repurchased about $94 million in shares.

Regions Financial NYSE: RF expects its branch count to remain roughly flat even as it opens 135 to 150 locations, Chief Financial Officer Anil Chadha said at a financial conference. The bank also sees continued support for net interest income from the repricing of fixed-rate assets.

Chadha and John Jordan, head of consumer banking, described commercial and consumer customers as resilient, while acknowledging uncertainty around interest rates and potential policy changes following Tuesday’s elections.

Branch investment focuses on repositioning

Regions plans to open 135 to 150 branches but will probably close a similar number elsewhere in its footprint, leaving its total count relatively flat, Chadha said. The bank currently has about 1,250 branches, according to the conference moderator.

Jordan said the work is intended to put branches closer to growing neighborhoods and improve coverage in existing markets. Regions also plans to renovate 1,000 branches, he said.

“We do expect better productivity and better growth based on the repositioning,” Jordan said, adding that the effort would increase household coverage by about 5% to 6%.

A successful branch typically has a three-year payback period, Jordan said. Chadha cautioned that the timing varies: consolidating two branches into one can reduce costs, while a new branch in a new location may take longer to pay back.

Jordan said branch transactions have declined as customers move to digital channels, but interactions involving advice, guidance and new products have remained relatively stable. Regions also uses different strategies by market; in San Antonio, for example, it established a commercial banking team before considering complementary retail and wealth-management opportunities, Chadha said.

Deposit balances stable as fixed assets reprice

Jordan said consumer deposit balances have remained stable, with an average balance of approximately $5,200 and a median of $900. Debit and credit card spending grew in the third quarter, he said, and the bank recorded its strongest small-business account growth rate in more than a decade.

For net interest income, Chadha pointed to approximately $3 billion in fixed-rate assets repricing each quarter. Depending on interest rates, the repricing benefit is around 100 basis points, he said. That tailwind should continue into 2027, although at a decreasing rate.

Chadha said Regions feels good about exiting the fourth quarter with a net interest margin around 3.70%. He declined to offer a detailed 2027 outlook.

He also cited the bank’s understanding of its customers’ deposit-rate sensitivity and a relatively low loan-to-deposit ratio as reasons for confidence in its deposit outlook. Regions can make targeted offers to customers when competitors enter a market, he said.

Credit outlook and capital

Chadha said Regions continues to expect full-year net charge-offs near the low end of its 40-to-50-basis-point range. The bank has a portfolio of credits it is monitoring and has reserved for, though the timing of any charge-offs is uncertain, he said.

“We really have not seen any new signs of stress across our portfolio,” Chadha said. In commercial real estate, some loans have experienced ratings migration, but the bank does not see material risk of loss in those portfolios, he added.

Regions has limited its data-center exposure under its concentration-risk management practices, Chadha said. The bank has a roughly $1.2 billion concentration limit, with about $800 million outstanding and approximately $1 billion in commitments. He said it is not an area where Regions plans to grow.

Regions reported a third-quarter common equity Tier 1 ratio of 10.8%. Chadha said a calculation including accumulated other comprehensive income reduced that figure to about 9%, while proposed changes to risk-weighted assets brought it to approximately 10% on a fully phased-in basis. The outcome remains subject to final rules and any phase-in period.

The bank repurchased about $94 million of shares in the third quarter and expects it should be able to buy back more in the current quarter, depending on interest rates, Chadha said. Regions remains focused on nonbank bolt-on acquisitions rather than bank acquisitions, he added, citing revenue diversification as a benefit.

On technology, Chadha said Regions had placed its first account on a new deposit system in the preceding couple of weeks and was testing it. He maintained a timeline of mid-next year to potentially the third quarter of next year, saying the platform could make product development and tailored pricing more efficient.

About Regions Financial (NYSE:RF)

Regions Financial Corporation NYSE: RF is a financial services company headquartered in Birmingham, Alabama. Through its principal subsidiary, Regions Bank, the company provides banking and related financial services to consumers, businesses, institutions and governments.

Regions Bank offers checking and savings accounts, consumer and commercial loans, credit products, mortgages, treasury and cash-management services, investment and wealth-management solutions, and insurance-related services.

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