RF - Earnings call transcript Q4 2020 | Regions Financial Corporation

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Operator

Good morning and welcome to the Regions Financial Corporation’s Quarterly Earnings Call. My name is Shelby, and I’ll be your operator for today’s call. I would like to remind everyone that all participant phone lines have been placed on listen-only. At the end of the call, there will be a question-and-answer session. [Operator Instructions] I will now turn the call over to Dana Nolan to begin.

Dana Nolan

Shelby. you, Thank fourth Regions’ earnings call. Welcome quarter to XXXX high-level and quarter the will some David provide commentary and regarding John full-year results. Earnings website. are section documents, available under the statements, including Investor of our forward-looking Relations comments, These our disclosures Q&A. presentation prepared cover and materials, the to I call John. will the now turn over

John Turner

and for joining today. our thank you Dana, call Thanks,

we pleased Earlier interest We pre-tax full-year Let great achieved level reported leverage me very deal begin this rate quarter of million, fourth despite highest X.X%. resulting more operating that saying adjusted our by challenging in and pre-provision than a environment. operating and morning, are a $XXX positive our of we with full-year in earnings decade, income results. a reflecting adjusted of

actions of performance. Over consistent, risk returns to sharpened the focus last enhanced to These years, foundation We've management us made well We've our XX-plus to a rate paying appropriate and growth. goal as what the on our sustainable processes positioning a can we focused we economic pandemic generate we've the efforts and long-term significant on year weather and Despite credit, remain our our risk-adjusted interest position off. downturn company for unprecedented platforms. strong by control operational capital uncertainty, serve allocation. and toward and strides caused of are the

that us for focus on to be technology, customer and beyond, production During across bank, investing incorporating to capabilities, XXXX XXXX, make digital products need loan and made and X.X%. will preferences X%. corporate with they growing in continuing our by tools we and the target provide while customers and to and corporate grew expanded consumer by easier increased We markets, and in pandemic. small to our consumer by business the continue from checking changing In and competitive. We learnings banking accounts the our business enhanced investments allow we associates areas talent, we

strengths mortgage by our rising, to over areas we by rates adjustments this our still when where better consistently incremental originators to make and will believe on adding investing we loan business us leveraging capitalize did mortgage activity. We win We positioning were can in time.

our expanded well business possible proud and technology XX,XXX none in be the closing, dedication XXXX, SBA work our In platform. of year posed as has myriad Ascentium as of very enhanced these acquisition, our we're our also hard of We through without small achievements platform challenges. of associates. This but a the will

face risk action, associates executing practices in service, success. providing the rapidly However, contributed evolving operating all to our environment, management customer our of successfully maintaining our on and best-in-class which a strong took strategy, of

quarter. Now, with some provide the regarding you Dave details will

David Turner

Thank you, John.

the balance with start Let's sheet.

in were X% While the adjusted for average up the year, loans decreased fourth quarter. they

New and third XX% compared production loan renewed commercial quarter. to the increased

utilization historically impacted negatively remain low by balances However, levels.

XX% just or As Approximately sold loans further by average commercial sale. of active under quarter. historical line million commercial the the held year-end, XX%. balances were was were for of compared to to portfolio impacted utilization efforts Commercial transferred of either during management worth $XXX company's loan

quarter growth, by the adjusted XXXX we million average loan Consumer reduction strong XXXX. balances. loan a to again, average resulting during forgiveness Additionally, balances Overall, expect loan compared offset in production began PPP be portfolios. runp-off mortgage down to $XXX by reflected in low-single-digits

to portfolio record deposits, new to higher bearing coming deposits in most However, of increase XX% operating primarily this noninterest the efforts, balances all higher segments. business XXXX increase growth balances. adjusted grow to Full-year of low-single-digits. to average than is three accounts management to we quarter's core to continue this after respect expect across with the The are loans due With excluding by impact levels. ending quarter

account also new are growth. experiencing we However,

the as We to is dispersed. continue will second of balances expect particularly increase deposit stimulus near-term round

average remain which remained income margin, lower quarter, and Regions. loan term income lower interest mostly X% cash and as the reducing $XX active quarter, stable at increased net PPP basis as interest the was to long PPP rates hold and source during increased by the realization a margin in points. Deposit costs, relatively XX Federal through Net of significant excluding the fourth approximately and levels benefited during hedges. PPP In drove of Net deposit contributed Reserve expected, of growth expected balances X% over stable notional values the to for from interest basis cash stability margin the to at the income forgiveness. shift to our interest related billion X the loan X.XX%. prior higher points and impact net benefit offset quarter income quarter by low to we forgiveness. million management from fees Similar program strategies, total, of and was $XX margin. Let's quarters record link averaging

proactive Excluding the a net interest excess million despite compared rate X.X%, hedges balance $X our basis $XX to average Higher to cash sheet term million margin. margin Loan zero short PPP, and notional increase management net our and XX a to at third points drove added remained near hedged quarter. the environment. evidencing interest income stable normalized values

earlier four month. last Our hedges starting began this

until related levels in current late in So at interest begin forward, we roughly rate mature million going each expect income $XXX hedges to hedge XXXX. of quarter

four of provide Our for years protection life XXXX. remaining hedges a have and

with for basis Of but is in to factored rate, million which and look Total Ginnie deposit costs activity. Mae premium in Interest-bearing increased buy-out be return. deploy increases quarterly run XX quarter incremental the come We $XX $XX currently elevated contributing points fell our into note, net to income. excess this amortization X the cash, benefit. quarter points, basis premium overall balancing that was to to amortization low the million continue range booked larger $XX would and securities premiums, million net excluding opportunities premium and interest risk

the fourth relatively quarter. PPP-related with Looking expected stable first quarter, ahead to to the interest is income net be

uncertain. The mostly funding loan long-term roughly rates to management timing average for costs. lower impact setting to the income interest quarter-over-quarter, loan offset lower will -- level by participation balances. NII attributable million. expected of Fewer be and by After quarter in reduce first the However, PPP strategies, $XX to is round net forgiveness days second cash days, remains hedging, lower modestly and be from will continue deposit of benefits the lower of

another primarily quarter-over-quarter. let's revenue look Mortgage income production expense. quarter X% and Now a at increased activity. take capital increased for markets record achieved fee the year, M&A income by revenue. Adjusted full delivered record and non-interest generated solid We related and driven

fee we markets capital Looking and expect continue significant revenue. to ahead XXXX, to be mortgage contributors to to

generate $XX million CVA/DVA, of in expect on increased the $XX average. prior million remain markets charges to quarterly Excluding but revenue year capital we X% impact levels. below to the Service

behavior changes in our practices as enhancements and well as believe below overdraft While pre-pandemic continued postings are transaction levels. charges to service improving, we keep likely customer to

impact levels. levels. offset growth, remains ATM to credit XX% the year, these prior XX% charges be partially will Card but continued have driven Although fees of remain recovered estimate it we cards while card to changes we and below primarily approximately prior service XXXX improve, expect by the to XXXX compared account debit continues will behind by grow expense. spend year slightly increased And

compared fee of performance, with in be exceptionally this forgiveness the to amount expect revenue prior dependent combined and Given growth. strong on and XXXX of will we But interest timing XXXX, the income rate down timing loan the total to adjusted changes year. PPP modestly be

quarter, on capital record move activities. expense. Let’s non-interest incentive the markets expenses non-interest X% increased to related higher Adjusted compensation in by driven primarily to

quarter-over-quarter quarter XXXX. as the were third Ascentium of salaries to process, lower headcount X% and improvement excluding continuous our our we in decreased And associate compared X% X% the acquisition, base headcount the X% year-over-year. over Although on focused remain decreased impact associate

than to to stronger to technology, X-basis anticipated. people over business basis products, quarter, point manage perform perspective, Annualized loans economy loans, primarily quality improvement business. total Non-performing stable. all be prior a our net XXXX, improvement but portfolios. without to an continues in positive investing expenses remained remain services We charge-offs delinquencies, expenses criticize operating the to overall asset over while our modestly and than expect generating to to acknowledged credit down we XXXX. XX commercial XXXX We From a points, stable within relatively prudently committed currently will leverage were grow better remain will reflecting challenging time adjusted non-interest expected. In and compared continue

basis declined for to of loans XXX% X and credit of total points losses allowance X.XX% Our total loans. non-accrual

improved Excluding portfolio million management. reserves economic was impact decline The PPP losses provision. X.XX% net charge-offs and in outlook loans, performance, a in allowance previously our allowance credit credit of our provided benefit The reduction for active the and reflects resulted $XX of to loans. the total stabilization in for,

losses stress in highest measured remains Federal loans Our as our as the or period-in peer year-end the against group modeled allowance a Reserve. one by of

in the pandemic. forward, mindful exists look are we the we the to economy of As that due uncertainty

the exists we However, the are in pandemic. economy that of due mindful the uncertainty to

we optimistic However, economic move and charge-offs of beyond reductions as certainty source events respect Further of allowance in to quarters. the are will timing uncertainty prior of the the on cautiously recovery. path greater in before the depend we with the

XX While charge-offs basis XXXX can range points. to full-year expect be volatile net XX quarter-to-quarter, charge-offs to we from currently

In operating what increased X.X% our our points near term, the mid-XXXX. in an X.X% operate on respect estimated we charge-offs approximately to this know equity ratio to With basis today, of to we of Tier XX range range. higher Additionally, of capital, at XX%. continue peak X to end we based current to common intend to expect the inside

wrapping expectations already addressed. are slide on the have we next So, which up, XXXX our

With Pretax cautiously on questions. about happy capital controlled, in solid, economic quality prospect is optimistic are we to So, are XXXX. and markets. summary, in well income strong, we take continue we're and optimistic for your the our recovery remains are liquidity pre-provision are to showing credit the expenses that, resilience,

Operator

questions. Thank you. question now Najarian for from of open Erika Bank Your floor America. [Operator is Instructions] of is The first

Erika Najarian

how And seven be those out also of about first as Good where should times you cash for for ago your and levels much whether did expectations you, year what morning. total how originated XXXX? should we to level Good quarter you're are forgiven ago and thinking year have X.X adjusted second a part morning. PPP we as not what loans David, expectations, revenue, the also think think in or that is in going participation about -- one -- cash question about are X.X you XXXX? as the we PPP is in a

David Turner

morning. Well, Okay. good

for this with year. originated me about loans so Let PPP start $X we PPP, billion the

of Now, it. money the know as early our really we you on rules some gave us yield much on actually earned customers changing before and were back

quarter fourth end to $X approximately from forgave $X.X billion see we alone on that in in the and So you. piece year, the where in loans XX at disclosed PPP $XX the XX. billion for of supplement, was you million that XXXX really We page December the our the forgiveness as generated amount the can to we at loans

originate this think PPP As at we'd in least we we loans. X.X, time, at approximately PPP billion $X about estimate that

and the with the that is Now, the the billion. $X.X forgiveness timing amount ultimate as is of uncertain existing

terms you in given may think you that can we've some Clearly, of the would forgiven So into from analysis into how standpoint. scenario income. and loans you do XXXX are revenue quicker pieces that come help come a that

the is of piece second Your cash. on question

We right. bit do cash. a you're have So, of quite

and deposit Our in year both Consumer during the quite Wealth, group. Corporate was Banking the and growth also strong in

three nice growth. all of So those had

more path. that the cash. at really revenue on even entry points, mindful would are to out Fed is XX cash place in problem this of put our some most duration have being could mortgage we the we're to little book have another and late. way gotten you've think great prudent going further, But and steepen is until We see give therefore, And reluctant a put are really to of take that, basis the understand at time. as earning tight we us of that steepening but securities risk which that you said, we we a seen stimulus, to cash, of spreads deployed on weigh bit a better that which does don't have point we The cash we have and, the that's

Erika Najarian

know the it. team your trading fit and the in sheet my stronger this that management your for management currency has expense Got middle Kudos X.X at balance you question book are from for inorganic to you using executed. thoughts opportunities. Really And second the a your as emerge John. of wondering is team that global and crisis times on you for tangible what pandemic. I'm

John Turner

great fruitful, acquisitions diversify that point hasn't on our our the as have capital proven years we make We opportunities the be revenue. fruitful We years example, of changed. and few Erika, the nonbank as proven to activity. markets, capabilities, to help have as by we've that last think continue over want expand to view look to evidenced an that to to by, grow acquisitions, driven largely to by our really made last us for be M&A few in evidenced the had quarter over

tax We also low-income in had credits a and syndications housing that good business. quarter of

about excited we’re can think future. for Capital, what Ascentium the it mean we

of our business changed. nice think for that's a from that, plan So our to consistently respect hasn't continue a We With to to that solid plan, focus. will view that about time, we we execute our to over continue sustainable performing, bank generating continue primary returns really we our if acquisitions, -- have build benefit shareholders.

executing to on consider opportunity our along an But in currency we get then focus opportunity have would plan. our future, the And Our is an it. stronger. comes will if

Erika Najarian

you, Thank Great. gentlemen.

Operator

of next Ken is Your Usdin from Jefferies. question

Ken Usdin

Hey. guys. morning, Good

follow-up a the on side. loan Just

and give back. the adjusted in You us nice number reconciliation that

wondering the still auto us portfolio sale on understand help the the you book that's also that loan out. that, runoff you can underneath Just if happening and called

look So as it that like XXXX. you XXXX, into averaged look about going think to auto like stuff million, and in the $X.X you that's forward looked

John Turner

think, our to we runoff low-single you’re business, our to of that, go portfolios. the referring end-to-end, is our -- with because to we'd in pace cut there said kind we XX of the want still you loans. level-set page can core but that if We going you regards to again, to think, to to back we'll if supplement, and point exit have Well, I you we the grow see grow of continue we're digits, really

$XXX We loans. to in we our message see on we're the other just the total million You were trying pace about great quarter, million way on and But $XXX that the in see business some down on markets. were core vehicles. continuing indirect we see down

economic towards of somewhat rebound on but be is to a it'll recovery. there really back dependent expect that the We which half be the matter,

Ken Usdin

Yeah. was I I follow to exactly up David. understand going and that's

be look economic you to regular and where commercial starting in that As seen book? to would through in up the way the show Thanks. like that that loan of most books recovery you expect terms

John Turner

Yeah.

growing. and to that going at be big I we be like be would areas are, Those big elements of are a will would of really three time. one, think a things capable part is those that services, of care this manufacturing in financial think to health also we point

Ken Usdin

cost to Got There starting on might flat. and come talk fronting time. -- extra expenses a to the keeping the it. job guys a holding And of question done just investments about things over are good have you second of are the very of the that line some peers close on to

go think to enough thinking hear and you strategically you to wanted guys as save you, do forward? Thanks. Just about that? are in putting how Are are as you keep you flat that you strategically how about

John Turner

Yeah.

loan Wealth advisors people, originators another We've so mortgage one. been We've managers. again our So, an in is be we've message consistent investments. relationship on had pretty with invested example.

side continue have investments in the make to people there. to we So,

We to technology cyber in and investments continue digital. make and

to serve our We doing keep that have customers. to

that also cognizant fact for to We that we keep we're pay to as so our revenues challenge, are that expenses of we relatively forgot indicating. haven’t when down stable can the is how

to fixtures at in like areas XX% continue cost at is it's we're it equipment. improvement really at good XXXX. So those on occupancy continuous and vendors, keeping of through our And in -- on our things costs. third-party look been down. do what we we our focus look program We We at head reef count, look same We've costs. that furniture

Ken Usdin

David. Thanks Understood.

John Turner

Thank you.

Operator

question is from Securities. Truist Your of Demba Jennifer next

Jennifer Demba

Good morning.

where might the you of loss level that reserve your one and course reserve that go you Do XXXX? more this over XXXX. see loan in or you going do Just curious think back about to will the day occur people think

David Turner

Yeah. It's that. there's regards lot a of a question with great and uncertainty to

evidenced the where the -- the deck moving. XX can program. Jennifer, out that the there's see with have is on You component break stimulus parts recovery reserve federal we to of page that's as slide uncertainty still by our that economic where government regards our the we

So, have clarity risk to bit, to that certainty we We the they're losses think an that more we ultimately think there. those they're at until And been pushed just we're still will that need with a regards not, we a out where be. see there's going keep to level. have appropriate reserves

reserves. measure we are quarter The timing macroeconomic have matter mindful that charge offs us. We which on of the to the every is end important to fact factors of

that pace good. confident in down And just we when mentioned. happen the get will the XXXX think on can not not ultimately were reserves again I’m there so we that things times coming we dependent confident, be are can of I've and

Jennifer Demba

Dave. Thanks,

Operator

question from Gerard next of is Your Cassidy RBC.

Gerard Cassidy

slide year? the the is Good. the being of Maybe look you're on the you that risks that question off top the date three focused transition of get deck the of or think And LIBOR any back second there's smooth then two pushed possibility you here? of you David, when I at at The do dead an out from interesting we a guys one had start the ensure on for there's that to drop end have you that in slide deck transition.

David Turner

gets there your pushed part that of Well, so this chance first is a is that out question all answer a bit. this

just really this standpoint what and business. loan It I customers. our to we And our competitive with of most index. customers small as to think would index. our lot updated we get people finding so, an customers difficult more deal say lot index and a deal a is it transition what go of. risk systems is of and may be than much market we book and different How our business that our mindful are competitors large to how middle we a but important. use will a book is changing that permeates I we prefer a with From our derivatives have

that to need so we time. And structures continue rate transitioning see will that need same having term can to front us. be without in at effectively our to We the important basis so risk we develop, interest risk for hedge

of a be And contract. time having just helpful. So, work, body of lot more would big a It’s Gerard.

Gerard Cassidy

strong, your a good. reasons benefit people are that to want good big to bigger the down question, you that's you for John this look appears question of? out you next what that as Can up picture you XX The tied well. was to quarter And the are quite -- as should I forecasting don't about obviously that are positioned say recovery rollout. is peers a industry time Very putting the be go -- for numbers night, with elevator bigger that vaccine us lose economic picture at that when from your many over the risks months share to to XX you think you sight

David Turner

The in, as challenging day, done environment in unrest we I the still We're last XX operating business. to the political environment. confronting those social I job. crises a through to think our country say of plus they continue be health across great whether job impact granted we're related, the industry potentially can't all a Well the take things improvement has number economy, We've our see our over a very and anything great a done we every business. team for months working

focus the can't are team. our stay care job the we performance. respond It's we we how every make can sustainable our executing we in on engaged business and we they long-term as that of focusing that is our the externally focus things things on doing business. talent an recruit those which internally things sure in anything in risks we so, managing of and I we continue on investments we're to think to active those that customers, risks are think to control. we and I our and do about can do our for And that what we each other. make granted. business that that about got we'll then we’re deliver focused day good And to and a do really to those well, consistent take continuing We've control, we in how take things, If It’s keep technology

Gerard Cassidy

Thank you.

Operator

Graseck Your question of Stanley. Morgan from next is Betsy

Betsy Graseck

in I C&I for basis more little just think to asset and about of points bit classes a day a on the consumer to fairly kind XXXX your and understand obviously guide with how trajectory basis But the of dig Hi. discretion. NCO different tends be mechanistic just bit because among the to points calendar at XX career the roll. XX little wanted to

to So maybe give should anticipate cadence goes. we how the a sense throughout as the year

John Turner

Yeah.

the is or fact as we that's of points we've guided some think, they’d the and estate year, the the to that we've will points XX wholesale or year. of to be I commercial really basis view half half basis first that corporate real peak to invest the whether C&I bank charge-offs our a in XX So in believe got credits first a typical reflection through of work

the will which think to really hand, well the pumped particularly economy. quality On exceptionally has with good other exhibit the stimulus additional we performed into credit continue consumer

it. that's as we if And about sector, way charge-offs of consumer half think in the so, the it’s year to be in the likely second rise the

Betsy Graseck

so charge-offs they through? for charge the them, these are come should reserved then -- manage already you’ve release we offs And to as anticipate

John Turner

Yeah.

that. aren't And the growing remaining you're factors you loans changing isn't question wouldn't macroeconomic got really the do then I how the me. you the if a has the quality and -- go in re-provide charge-offs. should and think much already of the of But is isn’t credit that always you theory for And did bothered because then portfolio word need reserve the changing, so, you is reserve because release down portfolio? a

a make to so straightforward how that's know And it. as I

Betsy Graseck

better? word the match like you Do

John Turner

in be it my don't is under and to No. be CECL. think And can't, flippant I Then trying -- charge-off context That's the two old what But reserve settle can't to is I'm needs there saying down independent you're to thoughts but the you of get my you or figure in point basically everything. what what mean point of accounting. about you out are your you charge-offs.

Betsy Graseck

though is you recognition another the Are then getting ahead release charge reserve you that should net suggesting better, that's the have also economy of off possibility?

John Turner

did absolutely that to you would That's right. That's, parts on what XX why reserve. that's the page you show moving on we give I analysis analyzing the the are

You got charge a change other factors offs, then outlook in to and you get considerations you the you consider. and have model have qualitative that

absolutely right, continues if So is that's reserves that get the to economic not true outlook you're booked. better, need to And a then you release. you expect the would that

Betsy Graseck

And when Got in making earlier you the you're reserve or that XX like quarter end is of decisions it. those something doing the are is that at December quarter? the

John Turner

Well, look our incumbent -- what at sheet make upon -- determination. the our at balance is this it’s and every day, teams facts that do us every ultimate they but point we’re exist to in date we have time that

macroeconomic of the last next one So, week was yeah, dramatic environment. in to the the remember, week quarter first year, shifts you as

a until a you make can't quarter. end of you get So call to the

Betsy Graseck

Right.

game? Okay. you And impact a timing I for you've or are decision us then range just separately currently, on anywhere your -- fair Can waiting how you to then given in to you given that XX%. and that X.X% that at range is does know repurchases? XX% sense until that commence is as CETX hit your CETX, on you're X.X% give And

John Turner

If mentioned the higher range the operate range. want that the -- that uncertainty economy. our minute for shares. in subject But to going to near-term begun We're our of end repurchase be XX% would over number right that at ago, regulatory said to have our just probably to because, that's we in we continues the position to continue to we that other now. is as then we tests Well, accrete we we have

closer XX% mentioned that organically, than to buyback level. at will though, happens really that we'll something appropriate today, vary because it’s dividend. least based clarity at if grow to share we capital -- that need then bit an end. we But ourselves, we number. And a As to and pay what our maybe month grow share to a nonbank it use right John use to to want could keep -- repurchases do our on our get earlier lower XX% just at we that don't readjust new capital But transaction

Betsy Graseck

right. All Thanks very much. Okay.

John Turner

Yeah.

Operator

next from ISI. question Your of Evercore is John Pancari

John Pancari

net gave well in morning, see into the comment just details as full a morning. year Good how Thanks. around margin for given I you if trend maybe appreciate want outlook. PPP terms just little that liquidity as and I the dynamics to you next good quarter your the of income could interest can bit expectation obviously the and dynamics?

David Turner

it'll Yeah. John, we anomaly. so so bit. us margin have two-day a little by I help think from we $XX hurt of the an on a bit do a little it'll change, quarter have margin that standpoint, first a This million NII but

about down our at X up or though, the you. we're helps from at bit. XXX look think PPP. or year down actually we we We think in full be And And ex-cash points X look if we be basis then X are think today. where core will go cash you margin see little the will we Hopefully year, margin if look we'll think range. in And PPP, and down that points for the you trend So full X it at we basis a number. if now could total about margin year into that that our talking we with

John Pancari

obviously any And you beginning of activity see just to or a And seen competitive deals you. does. backdrop, competitive of a No, deals, those can acquisition then obvious just customer areas you recent impacting so? Southeast. so lot strain of Thank talent want even the that that opportunities as your in then backyard? bank ago are in they’re terms talk that show And we've other a does, on about as not potentially are result up seeing the are a either Thanks. that in or separately, loan on year pricing you or were set

David Turner

lot a let’s of amount seeing in know don’t Yeah. change liquidity because market. a that I competition a necessarily the there’s say There’s competition. of tremendous we’re in

opportunities bank as nature. few whether competitive. pretty when be new competitors, said see we in say of in again competitors, they’re anything of announcements And I lost good that, Having opportunities characterize wouldn't So, combinations it’d a as a non-bank we to that bank aggressive recently would or what good marketplace, a result that's very the we change fact pricing.

to Just like people quality to some stay just that market yield. opportunities been something assets looking the the all in on focused talent really and we've get regard I'd acquire looking community I'd particularly time. that's banks and With to to recruit we we able some space say feel the in for and say market middle disruption,

there pandemic, senior facing have customer bankers and our, of through market, is whether in to we and in our the the our our bank best some always leaders are be announced that or stable number team creating So, think for businesses the challenge markets disruption I in talent an both we in functions. operate to we that staff excited our added about transaction is looking a a in and

and And will say so expect it talent acquisition be. I'd been we good has continue to

John Pancari

to that view lack it -- anything more to only Would there bond sorry if rates what a what that seen make beyond money portfolio? the on be we've that's you of would would or in work? of move I in potentially would front. margin but your helpful. about there, a I else Thanks. it material liquidity anything putting know indicated put could the is you one just change interest some excess thank I'm really ask Well, work

David Turner

Yeah.

John. we bit but it’s could see to grown could this to continue peers, we think we have we think we’ll what trying type have the to And don't We've our But continue. all opportunity. see more have we where want deposit securities there. do, cash out to I risk both even figure take We're If I effect occur rate-driven have anything, out. steepening growth -- risk again, primary. run. compared all continuing some If want to now to just of we fairly our us more that's little we're we a strong it's cash grow where to figure -- a an trying than of for to we than be than opportunities now, really more

John Pancari

you, it. Thank right. All Got David.

Operator

Rochester Your Dave next of from Point. question Compass is

Dave Rochester

good Hey, morning.

a isn't I of there great just year? So later have borrowings you're any further reduction that wondering done last cost reducing I you if left. year, the job higher assuming guys much know was in this

John Turner

Yeah.

question and how your management much So done is have liability what to further -- reposition we… the we

David Turner

We’ve any are do false job or a borrowers, opportunities. -- cost higher about we done reducing other have good

John Turner

Yeah.

things running don't we that out, thinner What we try that of cash we up have hand. terms today is it So we're little have values in where call much end on do we to a liquidity that opportunities. so because taking

looking We as year. as have now at marginal Not we're right that have many opportunities some past this we

a of We calls. lot have

together, call all things too. some evaluate out continue things it. billion, over left We’re in arena to FLHB we still going $X stock including to small opportunities the that But there’s we’re preferred

Dave Rochester

roll this the at buying guys this the What's yields point, on point quick loan bit portfolio one And keep to book? margin. guess maybe then to the off that at then are Okay. where stable currently? differential I the to you those maybe securities roll extent you're seeing And on, just

John Turner

total. about Well, talk let it in me

$XX year billion have about we So, of flows. cash each

little about put about up that a both had We both about have back the today. work X%, been it than and million $XXX bit front now. it's piece to of $XXX million It's is

at short I think on we the even long strategies through we've think a have our management, rate end. so, cash to our course job liability end. pretty And But management the we hedges done good of neutralize

So, NII and be of our predicated to then loan the earlier. I on mix the book, is we've and to really ability rates the and timing as grow the going size really mentioned and our program margin growing resulting we neutralized think I PPP

Operator

final Our Bank. is question Matt O'Connor of Deutsche from

Matt O'Connor

just of I remind wonder strategy guys. very Obviously but you Hey very of quarter in the market strong. ago the business. quarters it's couple this of was us could strong cap also if a

customer and how with it's integrated of target just us the firm. remind So, overall

John Turner

Yeah.

investing help and was business to been a out us talent progress. really acquisitions with into help XXXX That build the So help our acquiring since markets build capital in to we’ve established and of been existing to leverage capabilities really our couple pleased that we’re it, made function build acquiring and business verticals, mechanism customer commercial customer banking new some both capabilities, that also our base business. for markets doing customers. and again, and We're the capital industry in creation as particular estate a of new leveraging in a through corporate of portfolio by, opportunities real our in

acquisitions had placement expect the good really has a we very Fannie business permanent in solid. quarter in DUS One first We of of fourth been will that estate was future. another that quarter and the the license, made we real and

accreting capital debt to working to our our our experts bankers see So the bankers activities, capabilities, be markets exchange. local us business, to very business objective are us matures. that our capital-raising helping the combine nicely placement, that our our All industry as and markets derivatives, with and closely and M&A grow expectation those it capital is whether is deliver to capital the continue markets foreign things we'll

Matt O'Connor

commentary the million And $XX is million drove in here, the the that, it approach there a on were results conservative near or lumpy being just outsized taken there a range just quarter? about couple $XX really in that term I the to being things guess kind in of the of

John Turner

flows that speak. is and ebbs as to bonus point next it, last the been what is we the we we it to we’ve episodic, so over reach The step up of level, years and Yeah. where equilibrium sort six a of building found

by number increasing being in was the that of when complemented prior there's as that a we episodic And that to this pulled we weren't that year XXXX. because done was guidance million forward case things now eager anticipating, of happened it think we're I kind $XX ago two think maybe $XX which a be will more so million guidance were half year that to of and And a year, giving a recurring revenue a years that sustainable business. to quarter end we the result the a completed something the had revenue certainly we of quarter got get that M&A customers transactions to

that second And don't that the And for so XXXX. on don't in we first the -- certainly for quarter. anticipate plan

performance say So we to new in business. we've likely that sort what level consistent of guided more is of a would

Dana Nolan

are if you. and interest weekend. participation Okay. much And your appreciate very today. Thank further Well, good no questions, we have there a

Operator

Thank Ladies for you and gentlemen, participation. this concludes your conference call. today's

may You now disconnect.

Regions Financial (RF) 22 Jan 212020 Q4 Earnings call transcript