RF · 8-K · 20260807PR000057

Credit Loss Provisions

REGIONS FINANCIAL CORP · 2026-08-07 · Importance 52 · Surprise 56 · In source text

The provision for credit losses declined to $68 million in the second quarter of 2026 from $91 million in the first quarter, a $23 million, or 25.3%, sequential decrease. The provision was $126 million in the second quarter of 2025, making the year-over-year decline $58 million, or 46.0%. Pre-tax pre-provision income was $786 million, down $19 million, or 2.4%, sequentially and $46 million, or 5.5%, year over year. Annualized pre-tax pre-provision income less charge-offs as a percentage of average risk-weighted assets increased to 2.32% from 2.18% in the first quarter.

Key facts

• 2Q26 Net charge-offs decreased 12bps to 42bps company-wide; Provision of $68M; ACL declined $34M; ACL ratio down 5bps to 1.63%; coverage of NPLs 241% source
• 2Q25 1Q26 2Q26 ACL balances $1,743M $1,647M $1,613M and ACL/Loans 1.80% 1.68% 1.63% source
• Allowance decreased $34M QoQ resulting in $68M provision; ACL change drivers included portfolio net increase due to high quality loan growth and model enhancements, offset by reduction in qualitative and decreases in specific reserve borrowers due to charge-offs source
• Proforma Day 1 ACL ratio applying Day 1 CECL ACL rates to 2Q26 loan portfolio would be 1.62% (vs Day 1 ACL ratio 1.71%) source
• Net charge-offs $113M $130M $102M and NCOs ratio 0.47% 0.54% 0.42% for 2Q25 1Q26 2Q26 respectively source
• 2Q26 Net charge-offs decreased 15bps to 32bps (Corporate), with Core Business 27bps and Ascentium 159bps source
• Provision for (benefit from) credit losses (GAAP) for quarter ended 6/30/2026: $68 million. source
• 2Q26 Net charge-offs of 63bps in Consumer Banking Group source

Impact estimates