The Friday (Jan. 16) report underscored normalizing lending and credit trends, along with a heightened pace of investment that appeared to temper forward guidance, moving investors to send the shares down by 2.6% on Friday.
AI and Digital Become Operating Infrastructure
CEO John Turner said technology modernization now touches “every layer of our technology stack and every business channel and support function,” emphasizing that Regions is investing simultaneously in data governance, authentication and real-time data to support broader AI use.
“These investments strengthen security, enhance the customer experience, support growth, and expand the use of both traditional and generative AI across the company,” Turner said.
The earnings presentation shows those investments translating into tangible usage. Mobile banking logins reached 208 million in the fourth quarter, up from 188 million a year earlier, while mobile banking active users climbed to 2.7 million, up 4% year on year. Mobile transactions accounted for 24% of deposit transactions.
Technology Spending Tied to Productivity
CFO David Turner said technology expenses will remain elevated as Regions continues migrating toward software-as-a-service platforms, with tech spending expected to run 10% to 12% of revenue, up modestly from historical norms. Over time, those investments are expected to offset headcount growth through efficiency gains, he said.
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The earnings deck shows AI-driven platforms already supporting banker enablement, treasury management implementation and client onboarding, generating 35% of new business opportunities and contributing to an expected 20% productivity boost.
Consumer Activity and Account Growth Hold Up
While loan growth remained subdued in 2025, Regions reported stable consumer activity and continued success acquiring accounts digitally. Digital channels accounted for 29% of checking account acquisitions, up from 21% last year.
CEO Turner said consumer customers “are still in really good shape from our perspective,” noting steady transactional activity even as households remain selective in borrowing.
As for the commercial side of the business, he noted that “we have seen a nice increase in pipeline activity quarter over quarter, year over year, and we believe that’s a catalyst for growth. We’re beginning to see customers use some of their excess liquidity, which we think is also a precursor, obviously, to borrowing and increased line utilization … About 40% of our new customers came from the new markets that we’re in. We’re continuing to hire bankers. We’ve targeted hiring almost 120 bankers over a two-year period … We’re adding small business bankers in our branches.”
Credit quality showed continued improvement, giving Regions additional flexibility to maintain investment levels. Net charge-offs rose to 0.59% of average loans in the quarter, a level management described as a peak tied to previously identified portfolios of interest.
“We expect full-year 2026 net charge-offs to be between 40 and 50 basis points,” CFO Turner said.
