Regions Financial Corporation RF has been witnessing steady organic growth over the past few years. The company’s total revenues saw a compounded annual growth rate (CAGR) of 3.9% (2019-2024), with the rising trend continuing in the first half of 2025. This was driven by a rise in net interest income (NII) and non-interest income.
RF’s NII witnessed a CAGR of 6% over the past five years ending in 2024. In the first half of 2025, NII continued to rise, driven by lower deposit costs and higher returns from fixed-rate assets. Looking ahead, the Federal Reserve’s recent 25-basis-point rate cut, along with anticipated further reductions by year-end and a strengthening lending environment, is expected to support continued NII growth.
Management expects average loan balances to be stable to rise modestly from the 2024 reported figure of $97.03 billion, while the average deposit balance is expected to be stable to grow modestly higher than the 2024 level of $126 billion. Overall, NII is expected to grow 3-5% in 2025.
Non-interest income witnessed a CAGR of 12.9% over the past five years ending 2024, with a rising trend continuing in the first six months of 2025. Going forward, as the company is committed to diversifying its revenue streams and meeting customer needs via diverse services, we believe such endeavours will likely support its growth prospects in the long term. Management expects adjusted non-interest income to grow 2.5-3.5% in 2025 from the 2024 level of $2.47 billion.
Hence, with stable loan and deposit growth, a supportive interest-rate environment and a focus on diversified revenue streams, Regions Financial is well-positioned to sustain its organic growth momentum in the coming period.
How RF’s Peers Are Faring in Terms of Organic Growth
Regions Financial’s peers, Citizens Financial Group CFG and M&T Bank Corporation MTB, have both demonstrated steady growth in recent years.
Organic growth remains a key strength for Citizens Financial, seeing a total revenue CAGR of 3% from 2020 to 2024. During the same period, NII witnessed a 5.3% CAGR, while non-interest income declined at a CAGR of 1.8%. In the first half of 2025, total revenues improved year over year, with higher non-interest income offsetting a modest decline in NII.
Continued expansion of the net interest margin (NIM), modest growth in interest-earning assets and strength in fee-based businesses are expected to drive overall growth. Citizens Financial’s management projects NII to rise 3-5% in 2025 from $5.6 billion in 2024, while non-interest income is expected to increase 8-10% from $2.6 billion, supporting overall top-line growth.
M&T Bank has demonstrated strong revenue growth, seeing a CAGR of 7.8% from 2018 to 2024, with the trend continuing into the first half of 2025. Going forward, revenue growth is expected to be supported by higher NII, driven by modest lending demand and Fed rate cuts. Efforts to strengthen non-interest income are also likely to bolster overall revenues.
M&T Bank’s management projects NII (tax-equivalent basis) between $7.05 billion and $7.15 billion, with NIM in the mid to high-3.60% range. Non-interest income is anticipated between $2.5 billion and $2.6 billion. Average loan and lease balances are expected to reach $135-$137 billion, while average total deposits are projected at $162-$164 billion.
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Regions Financial Corporation (RF): Free Stock Analysis Report M&T Bank Corporation (MTB): Free Stock Analysis Report Citizens Financial Group, Inc. (CFG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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