- Key takeaway: Regions CEO John Turner's musing about a possible deal next year comes more than 15 years after the company completed its last bank acquisition.
- Expert quote: "If we were interested, we probably would be most focused on creating more density in markets that we were in." —Turner
Regions Financial hasn't bought any banks since acquiring a pair of failed institutions in 2008 and 2009, but it might consider exiting the merger-and-acquisition sidelines next year, CEO John Turner said Friday.
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Turner told analysts that if Birmingham, Alabama-based Regions were to look at a combination, it would do so to fill in its existing footprint.
Earlier during Friday's call, held to discuss Regions' third-quarter results, Turner had seemed to rule out the idea of mergers, citing the need to complete an ambitious, multiyear upgrade of its core-deposit platform.
But when an analyst broached the topic a second time, the CEO seemed to warm to the idea of a deal once the deposit-conversion project is finished.
"If we were interested, we probably would be most focused on creating more density in markets that we were in," Turner said. "We're in a lot of really great markets. If we had an opportunity to create more density and build a stronger business in some markets where we're not as present, that would certainly be a consideration."
The $163.2 billion-asset Regions is nearing the finish line on the upgrades to its core-deposit platform. It plans to begin pilot testing before the end of the year and is targeting completion in mid-2027.
Regions' 15-state footprint stretches across the Southeastern U.S., and extends north into Illinois, Iowa and Indiana.
"At first they said no but then they linked that to the deposit system conversion and said maybe after that," Truist Securities analyst Brian Foran wrote in a research note.
In the distant past, Regions made some big M&A waves.
It acquired the $31.5 billion-asset Union Planters Corp. in 2004 and the $53.9 billion-asset AmSouth Bancorp two years later. In 2008, Regions acquired Integrity Bank in Alpharetta, Georgia, after it failed. It merged with FirstBank Financial Services after that company's failure the following year.
Since then, Regions has focused mostly on nondepository, "bolt-on" deals. It bought equipment finance lender Ascentium Capital in 2020; Sabal Capital Partners, a commercial real estate lender, in 2021; and investment banking firm Frazier Lanier earlier this year.
Regions reportedly bid unsuccessfully for Comerica prior to its sale to the $300 billion-asset, Cincinnati-based Fifth Third Bancorp in February.
Bank M&A activity, which had been stunted by the conflict in the Middle East, has picked up over the past month and promises to quicken further, according to Seaport Research Partners analyst Laurie Havener Hunsicker.
"The recent strength in stock prices, the pent-up demand to do deals, and the substantially faster regulatory approval process will all act to continue to accelerate M&A," Hunsicker wrote in a research note this month.
Regions wasn't the only regional bank that signaled an openness to dealmaking Friday.
Buffalo, New York-based M&T Bank, which also reported third-quarter earnings, is eyeing M&A to expand in its Northeast and Mid-Atlantic footprint, according to Chief Financial Officer Daryl Bible.
On a conference call with analysts, Bible said that in any transaction, the $218.9 billion-asset M&T would target sellers with strong deposit franchises.
"When you find those, you really get a lot of value there," Bible said.
M&T is "actively talking" with a number of institutions, but no announcement is imminent, Bible said.
Net-income improvement
Regions reported third-quarter net income totaling $611 million Friday, up 11.5% from the same period in 2025. While deposits of $129.5 billion were flat compared with the Sept. 30, 2025, result, loans grew 3.9% year over year to $98.5 billion.
Third-quarter operating expenses totaled $1.18 billion, up a modest 1.4% from a year ago. Revenue, which totaled $1.97 billion for the three months ended Sept. 30, increased 3% year over year, generating positive operating leverage and resulting in Regions' efficiency ratio declining from 57.2% a year ago to 56.2% for the third quarter of 2026.
Third-quarter charge-offs totaled $72 million, a 47% year-over-year decrease.
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David Chiaverini, an analyst who covers Regions for Jefferies, highlighted its strong asset quality and positive revenue trends in his research note. "We view the quarter as solid," Chiaverini wrote.
Regions' shares closed up less than 1% Friday at $27.45.
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John Reosti is a reporter covering community banks in particular and the financial services industry in general. He also focuses on the Small... Read full bio