Regions Financial: A Strong Foundation for 2025

Regions Financial (RF) has reported strong full-year earnings of $1.8 billion, with earnings per diluted share of $1.93 and a top quartile return on average tangible common equity of 18%. The company's performance was driven by a consistent focus on superior service, soundness, profitability, and growth. Regions' capital markets and wealth management businesses, as well as its treasury management products and services, all generated record revenue in 2024.

Regions' strategic focus on superior service has been recognized by external sources, such as receiving the Forbes Best Customer Service award. This focus on customer satisfaction helps to build a loyal customer base and drive growth in deposits and other fee-generating products and services. Regions' fee-generating businesses have contributed to the company's overall revenue and profitability. For example, Regions' wealth management income increased by 9% in 2024 compared to the previous year, and its capital markets income grew by 5.4% in the fourth quarter of 2024 compared to the same period in 2023.

Regions' deposit growth can be attributed to several key factors, including strategic investments in priority markets, effective deposit beta management, and growth in small business deposits. The company has grown deposits by $12.5 billion since 2019 in these priority markets, outpacing the market. Regions has also maintained peer-leading deposit betas, which means they have been able to attract and retain deposits even as interest rates change. Additionally, Regions has seen a significant increase in small business deposits, with a growth of $2.6 billion or 30% since 2019.

Regions' capital allocation strategy, which includes investments in talent, technology, and markets, significantly enhances its competitive position. The company plans to add approximately 140 bankers across various segments, focusing primarily within its eight priority growth markets. This strategic hiring will help drive growth and generate efficiencies. Regions is also investing in new deposit and loan systems, which will enable the bank to provide better services to its customers, improve operational efficiency, and stay competitive in the digital age. Additionally, Regions has a significant presence in some of the fastest-growing markets in the country, with population growth expected to more than triple the national average. By strategically investing in these markets, Regions can capitalize on their growth potential and expand its customer base.

In conclusion, Regions Financial's strong performance in 2024 is a testament to the company's strategic focus on superior service, fee-generating businesses, and effective capital allocation. The company's deposit growth, driven by strategic investments in priority markets, effective deposit beta management, and growth in small business deposits, is a key factor in its success. Regions' capital allocation strategy, which includes investments in talent, technology, and markets, further enhances its competitive position. As Regions looks to the future, it is well-positioned to continue its growth and generate long-term value for shareholders.