Regional banking company Regions Financial (NYSE:RF) reported Q2 CY2025 results topping the market’s revenue expectations, with sales up 10.1% year on year to $1.91 billion. Its non-GAAP profit of $0.60 per share was 7.5% above analysts’ consensus estimates.
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Regions Financial (RF) Q2 CY2025 Highlights:
- Net Interest Income: $1.26 billion vs analyst estimates of $1.23 billion (6.2% year-on-year growth, 2.3% beat)
- Net Interest Margin: 3.7% vs analyst estimates of 3.6% (14 basis point year-on-year increase, 8.4 bps beat)
- Revenue: $1.91 billion vs analyst estimates of $1.85 billion (10.1% year-on-year growth, 2.9% beat)
- Efficiency Ratio: 56% vs analyst estimates of 56.9% (0.9 percentage point beat)
- Adjusted EPS: $0.60 vs analyst estimates of $0.56 (7.5% beat)
- Market Capitalization: $22.03 billion
Company Overview
Tracing its roots back to 1971 and operating in a region known as the "heart of Dixie," Regions Financial (NYSE:RF) is a financial holding company that provides banking services, wealth management, and specialty financial solutions across the South, Midwest, and Texas.
Sales Growth
From lending activities to service fees, most banks build their revenue model around two income sources. Interest rate spreads between loans and deposits create the first stream, with the second coming from charges on everything from basic bank accounts to complex investment banking transactions.
Regrettably, Regions Financial’s revenue grew at a mediocre 4.2% compounded annual growth rate over the last five years. This was below our standard for the bank sector and is a tough starting point for our analysis.
Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. Regions Financial’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 3.1% annually. 
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
This quarter, Regions Financial reported year-on-year revenue growth of 10.1%, and its $1.91 billion of revenue exceeded Wall Street’s estimates by 2.9%.
Net interest income made up 65.7% of the company’s total revenue during the last five years, meaning lending operations are Regions Financial’s largest source of revenue.
Markets consistently prioritize net interest income growth over fee-based revenue, recognizing its superior quality and recurring nature compared to the more unpredictable non-interest income streams.
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Tangible Book Value Per Share (TBVPS)
Banks are balance sheet-driven businesses because they generate earnings primarily through borrowing and lending. They’re also valued based on their balance sheet strength and ability to compound book value (another name for shareholders’ equity) over time.
When analyzing banks, tangible book value per share (TBVPS) takes precedence over many other metrics. This measure isolates genuine per-share value by removing intangible assets of debatable liquidation worth. Traditional metrics like EPS are helpful but face distortion from M&A activity and loan loss accounting rules.
Regions Financial’s TBVPS grew at a tepid 3.1% annual clip over the last five years. However, TBVPS growth has accelerated recently, growing by 15.9% annually over the last two years from $9.61 to $12.91 per share.
Over the next 12 months, Consensus estimates call for Regions Financial’s TBVPS to grow by 8.1% to $13.96, decent growth rate.
Key Takeaways from Regions Financial’s Q2 Results
We enjoyed seeing Regions Financial beat analysts’ EPS expectations this quarter. We were also glad its tangible book value per share outperformed Wall Street’s estimates. Overall, we think this was a solid quarter with some key areas of upside. The stock remained flat at $24.63 immediately after reporting.
Regions Financial put up rock-solid earnings, but one quarter doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.