Regions Financial Corporation (NYSE:RF) experienced a sharp decline in its stock price on Thursday, January 16, 2026, after reporting fourth quarter 2025 earnings that fell short of Wall Street expectations. The Birmingham-based bank’s shares tumbled 9.5% in pre-market trading to $27.20, down $1.34 from the previous close of $28.14.
Despite the earnings miss, the company posted solid full-year performance with revenue growth of 6% year-over-year and record-breaking results in Wealth Management and Treasury Management divisions. The disappointing quarterly results were primarily impacted by an increase in state income tax reserves and higher effective tax rates.
Regions Misses Q4 EPS Forecast Despite Revenue Growth
Regions Financial reported adjusted earnings per share of $0.57 for the fourth quarter of 2025, falling short of analyst estimates of $0.61 per share. However, the company achieved revenue of $1.9 billion, reflecting a 6% increase year-over-year.
For the full year 2025, Regions posted adjusted earnings of $2.1 billion, up 7% from the previous year, with adjusted EPS of $2.33, representing a 9% year-over-year increase. Net interest income rose 4.1% year-over-year to $1.28 billion, while non-interest income increased 9.4% to $640 million compared to the same quarter last year.
The bank maintained a strong net interest margin of 3.70%, up from 3.59% in the previous quarter, supported by its best-in-class hedging program. Asset quality showed continued improvement with business services criticized loans decreasing 9% and non-performing loan balances declining 8%.
The allowance for credit losses ratio stood at 1.76%, while the bank maintained a robust capital position with a Common Equity Tier 1 ratio of 10.8%. Average loans decreased approximately 1% compared to the prior quarter, while average deposits remained relatively stable, increasing 0.2%.
Regions Takes Tax Hit as Stock Slides 9%
The primary factor contributing to the earnings miss was an increase in the bank’s effective tax rate, which rose to 24.5% in the fourth quarter from 19.7% in the third quarter. This increase was primarily due to a $26 million adjustment related to state income tax reserves, which negatively impacted quarterly results and added approximately 4 percentage points to the effective tax rate.
Additionally, the company recorded $14 million in pre-tax selected items, including $7 million in severance charges, $5 million for Visa Class B litigation escrow funding, and $2 million in non-qualified benefit plan settlement charges.
Despite the quarterly earnings miss, Chairman, President and CEO John Turner emphasized the company’s solid growth trajectory, stating that teams delivered strong results by attracting more clients across business lines and generating record-breaking performance in Wealth Management and Treasury Management. The company maintained careful expense management with non-interest expense remaining relatively stable, resulting in an efficiency ratio of 56.8% on a reported basis.
At the pre-market price of $27.20 as of 6:45:55 AM EST on January 16, 2026, RF stock was trading significantly below its 52-week range of $17.74 to $29.26, with a market capitalization of approximately $25.4 billion and a forward dividend yield of 3.72%.

