Fee Income Growth Won’t Offset Falling Interest Income for Regions Financial

Regions Financial’s first-quarter 2026 earnings are expected to reflect lower net interest income despite growth in fee-based revenues. The Zacks Consensus Estimate for net interest income is $1.26 billion, a 1.9% decline from the prior quarter, as the Federal Reserve held interest rates unchanged during the period. Management projected a 1-2% sequential drop in net interest income, with only a marginal rise in average interest-earning assets to $1.39 billion.

Non-interest income, however, is expected to rise 2.1% to $653.6 million. Capital markets revenues are forecast at $91.5 million, a 14.4% increase from the prior quarter, driven by strong M&A activity despite geopolitical uncertainty. Mortgage banking fees are expected to improve slightly to $33.5 million, up 4.7%, as refinance activity recovered from 2025 lows even with mortgage rates stuck at 6-6.5%. Wealth management income is projected to grow 1.8% to $145.6 million, while service charges on deposit accounts remain flat at $163 million. Card and ATM fees are expected to fall 3% to $119.3 million.

Expenses increased due to higher salaries, employee benefits, and ongoing investments in technology and franchise development. Asset quality pressures emerged as non-performing loans are expected to rise 12.3% to $783.8 million, reflecting a challenging backdrop of inflation and Middle Eastern conflict. The earnings report is set for April 17, 2026.