RF - Earnings call transcript Q4 2021 | Regions Financial Corporation

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Operator

Good morning, and welcome to Regions' Financial Corporation's Quarterly Earnings Call. My name is Natalia, 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

Natalia. you, Thank fourth Regions’ earnings call. Welcome quarter to XXXX commentary and quarter. will high-level David provide regarding the John which our section documents, available Earnings include in information and the are non-GAAP Investor Relations on website. forward-looking our statement disclaimer cover disclosures Q&A. our comments prepared These and materials, presentation over the John. I'll call now to turn

John Turner

we reported of record our and off. focused environment. in everyone. is paying and and revenue earnings by associates exceeds rate represents accounts that deal results. business production the small uncertainty, new We higher corporate banking year Despite year pre-tax, three operating increase you, control pre-prevision rate X%. an $X.X are X% this years today. our remain record full a you previous off approximately growth continued group great and annual net call to We billion and grew income a loan on since We three we strategic charge enhanced made pre-pandemic We deliver our billion. capital framework, and joining generated can markets than lowest efforts challenging in full net revenue. in XX% combined ratio We Notably, Dana, growth Thank initiatives. very retail XXXX. risk what consumer we quarter levels. pleased key account growth of and times annual by talent management investments Through we support checking appreciate morning, $X.X facing our XXXX despite our interest by economic We're Earlier with accounts good morning, our fourth achieved

with Libor revenue advisors. and ready to diversify our transition We move clients reference to InterBank successfully grow We through partners our rates. our alternative in Clearsight to acquisitions to ensure were program executed capital continue all of

banking and empowerment that our programs of making racial for in commitment color. equity and capabilities. technology digital $XX on target focus economic two-year, promote advanced and We investments easier initiatives surpassed through markets, to million continue We to communities

in closing, possible but unique achievements as uncertainty, of extremely practices, XX,XXX dedication focus level. best in in service, class executing XXXX all remain for would've which these challenges maintaining been our to our the continue to we're posed that without best investments our work to past areas customer to need while with success. banking the nearly associates associates they and be both us contributed making proud steadfast. on allow and plan continued management growing to strong make and transition day, XXXX, to strategic Before year The Despite continue continue we'll all tools our easier continuing our new successful. successfully by provide and hard to on associates. a our business none professional of bring providing In our They personal every we to to our customers, work of their risk normal, our of beyond,

we time. incremental We and business over will in strengths to make adjustments consistently areas by our win leaning believe where we into our can investing

changes to and comprehensive to commitment As of last with we're incorporated results NSF late XXXX. head appendix which banking detailed for the impact fully been pleased loan these enhancements alerts, the additional note our into extension XXXX. as key are bank of well certified as our product, total our for a making These will represent that presentation. year. to It's as have financial great our momentum important and Again, checking our revenue we easier in this the posting process we our launched in announced expectation have our a overdraft in week, XXXX and changes priority earlier time-order enhanced customers natural be policies, of compliment

with will you the regarding provide some quarter. highlights Dave select Now

David Turner

Thank you, John.

the InterBank quarter. average from sheet, balance the X% and X% acquired during loans group ending including impact transaction, Let's and the with adjusted start the loans respectively of

and pre-pandemic fourth continue surpassed quarter. loans experienced impacted pipelines encouragingly, liquidity, basis in the be business excess have by Although to a we utilization during increase XXX line levels rates point

production line $X billion of addition, commitments loans, remained of credit another the addition strong well acquired loans in Consumer reflected of $X.X increasing credit growth billion strong by accompanied In as as card. with of production, mortgage interbank quarter year-over-year. modest

year grow to loan Looking compared forward, XXXX. XXXX balances we expect to to X% full average X% reported

deposits. to turn Let's

deposit to quarter The deposits acquired of includes deposit levels. base balances. and the We're the believe impact to accounts on predict increase slowed, of billion as the pace in to continued billion currently increase deposit rate balances deposit growth $XX during fourth increases analyze be this to can approximately support or through Although growth XX% analysis, continue deposit growth characteristics and new Based we new to has longer $XX inflow in as account used order cycle. continuing related future term to well pandemic behave. asset of this InterBank record quarter, our

portions persist rate deposit the Additional the defense more especially in like be or of to could balance cycle. on sheet later increases sensitive,

portion that and to insensitive rate construct generally do we granular you be of our the for us, when of rates the begin represents to sensitive, surge upside deposit nature expect deposits a significant overall rate While increase. will base recall

PPP, of quarters combined less XX fees but XX% by reduced of and basis the million recognized. quarter, interest during income acquisition, contributor balance averaged prior sheet margin $X been organic our PPP PPP margin. interest, net increased increased Approximately a points. Net Net have prior going PPP driven forward. be favorable X% from Cash reported InterBank when from income quarter, the billion and income primarily loans from will to fourth shift quarter versus growth. $XX estimated Let's income with and the interest

X.XX% versus modestly higher third quarter. Our adjusted was margin the

reinvestment and third impacts recovery, yields lower positive our mostly approximately by stable amount is forward. rate expected contributed Excluding more in value rate earnings These $X.X hedging fourth the is Similar net offset future going has net quarter billion. environment. income quarters, The was either to quarter. fixed the Roughly are income from a as on net loans low impacts meaningfully impact program large of income interest was loan to core interest to interest prior reduced created cumulative recognized growth loan of interest been the hedge from hedging that XX% program The in interest terminations. or locked to neutral be to from securities.

first growth meaningfully to Excluding from the offset growth is Regions interest quarter, quarter loan by loan expected higher the well income first in fourth continued count. interest rates. grow PPP, net to in modestly partially benefit is a ending aided as strong positioned day by as sheet balance quarter,

the an poised and Importantly, increasing Hedging rising interest in XXXX industry, positioning hedging basis amount federal funds income for today, to XX cash summary, In rate in sheet we and through the in net rate the tightening, economy. over and large supported held is in anding shorten assets interest This when growth XX full includes rates earning add income for net significant the and higher of a a support point hedges increase between $XX beyond. Over the of projected first period. exposure by in proportion to XXX is well to fourth continue yield XXXX our basis growth to quarter. million compared curve points maturity of of changes stable a higher is a million changes recent and in deposit profile month rates each $XX balance us funding

Organic Advisors fee quarter. a look in quarter, revenue other repeat Now decreased primarily income let's third growth expense. not the of Adjusted in Capital from take due and will did X% elevated and Clearsight fourth the in the revenue integration capital income the Subal growth in that at non-interest Partners XXXX. markets to prior non-interest drive quarter and

contributor revenue, market Going capital to and an forward, by XXXX, relatively million, incrementally strong. DBA. stronger to to increased this and increase market performance stable Mortgage the particularly a income markets prior purchase and a management the the replicating we generate in $XX to income and of excluding don't million is in CBA X% we impact mortgage XXXX. Wealth remains compared sales impacts is expected key to grow charges year's our revenue in during expect remain value quarter drove driven $XXX Seasonality anticipate in while quarter. very of service fee footprint quarterly as to expected remained

annual XX% Looking throughout be interchange card the previous versus fees make expect overdraft to we line with with and in but million declined changes levels. has and NSF item. $XXX our practices, These annual approximately once XX% the NSF million result XXXX and implemented which service and implemented, implementation timeline, Since XXXX, revenue we on expect NSF Based once overdraft million debit last lower approximately approximately revenue will to fees. around XXXX. NSF overdraft fees the will and in from revenue yesterday, announced previously ATM year, decreased along overdraft XXXX, impact fully be charges will decade our changes reflected XX% changes $XXX XX% we to legislation substantially and million. than $XX lower $XX as contribution these our be up together are service making and implemented we these will has estimate last over ahead, of the further another fully changes fees out ruled expectations XXXX results. implemented reduce to our charge

our million to policy total through services We expanded fee result, a revenue diversify have declines these approximately and changes. period. of overcome increased impact Through services, and these over successfully continue ongoing will the capabilities same we and to $XXX diversified time based this as offset and income non-interest grow new

adjusted compared revenue by and growth X.X% expect of lower changes. interest in primarily up prior of We impact includes the X.X% total anticipated overdraft to revenue driven related PPP year, to impact the XXXX and NSF the income. be growth to This

increased expense, associates, also X% salaries primarily within increased compensation. of revenue as non-interest initiatives reflects the non-interest to new quarter. headcount incentive XXX producing other this key support added acquisitions due Salaries adjusted that on approximately benefits also to move The result X% higher businesses. increased and as expenses to closed we increased Base quarter. a hires strategic Let's primarily in

some expect in of already inflationary pressures experienced and have to certain persist We those XXXX.

than and compared associated performance, better year. with based and well quarter the our as variable to exclude our you acquisitions, adjusted fourth prior expenses expenses relatively If income as compensation credit remained to fee stable core expected related XXXX incentive

to continue investing expenses We in our technology, grow people will business. prudently products manage to and while

grow. base core our result, will a expense As

X% adjusted XXXX non-interest be to XXXX. up expenses to X% to expect compared We

to impact basis Importantly, generating third as we recent adjusted positive points six to this addition basis on and includes improve during charge record the offs lowest net by basis year quarter. the credit points remain acquisitions XX total increased Overall net from the levels record InterBank XXXX. driven just in continue low in level performance Non-performing leverage Despite of since to XX loans. pre-pandemic strong, offs these impacts. totalled annualized XXXX. year at below Full the operating the anticipated impacts, well charge quarter as XX fourth now quarter of the committed part of basis loans are full in inflationary points, points remained

for increased XX at loans stable the allowance X.XX% a percentage losses percentage points allowance loans, as Our non-performing remained while credit XXX%. of of relatively total to

slowly basis the XX XX basis expect in back points of We net decreased equity to With an ratio our capital, full expect half to range. one X.X% currently year estimated approximately the point normalize quarter. to tier XXX to credit point losses in charge and basis off respect begin to to common XXXX this be

During approximately $X.X of capital. three absorbed combined, on the closed we acquisitions, quarter, billion which fourth

the stock quarter. Additionally, million we repurchased during $XXX common of

one X.XX% expect maintain operating common near our range. the We tier equity X.XX% to midpoint our to ratio of

in next wrapping continues, as quarter, which XXXX, positions us closing the experienced expectations, liquidity on risk up are optimistic we income that benign, we're well questions. With of slide we're to growth controlled, our capital remained well recovery In pre-tax the the and our expenses in already we've pace strong, for economic in take are the momentum pre-provision the recovery addressed. your about are fourth happy and solid, credit economic markets. XXXX is So the relatively

Operator

from of UBS. Najarian the instructions] line Erika first [Operator with question Your is

Erika Najarian

morning. good Hi.

the these investors I'm you on from sort wondering deals David, or from to feedback you expect didn't to expect upbeat, could And actually, for rather terms you the closed book the going us of this the just book that is in back performance is that share outlook with period fourth but quite I today, So value? ask announced your obviously the the if earned of deals tangible quarter surprised. in tangible got I that question, dilution

David Turner

also tangible diversification your Well, because we which look at several tangible revenue. at factors return value. book is buying on back, a of just We book in when reduction look -- not the look has a at value. stock you alternative investment We

a case, So in I acquisition, the to put years even we period return you're remember you than different was. looking at at trade that's payback return the if trying being to but or on less, look a higher we off can't between frankly, back. were at little had payback three we're If to capital and expect grow what we how where, that shares investment would able in the work, looking diversification and a your we this our bought is bank would've

Operator

line Your question next Morgan of Stanley. from is Graseck the Betsy with

Betsy Graseck

Couple of the an 'XX, that about give need on, XXXX. sized annualized would the I what as announcement would were understand first know us fees. you that because if overdraft to, be on as level you're a fund like? into you we looking impact the how obviously sense that questions, it to to year, and thinking think yesterday to in on be, sufficient full go Could made for full changes you

David Turner

yeah, so XX% XXXX you revenue, Betsy guidance impact service revenue, total back provided based all service implemented be is of revenue to to take we changes and go once annualized. charge the if XX% total and between the the is somewhere are on charge going XXXX,

John Turner

includes all we things the already done too. have that And

So it's a cumulative number.

to back to that you if be half, have we're go to right So round maybe and We'll done calculate half you that, XXXX. going in than more slightly can numbers.

double what would that proximity can total the you close so, And or of be.

Betsy Graseck

what service shows talking you like in charges as from the income up not overdraft when about charges your regulatory say statement, XXXX, And XXXX from service the you're

David Turner

correct. That's

John Turner

XXXX, And, it usage, growth as in it Because, revenue, business David additional non-revenue card are while these timeframe associated you fees, has and way. checking come with if we that overcoming and how go come the 'XX we've of all grow activity, the is loss to out earlier, debit And about fees consumer other think that and we overcome associated about think other consumer to debit been that. able as forward, things loss ultimately accounts, with we and through of reg card that with revenue pointed back significantly changes.

change true We we expect be the forward will to relative making look we're here. as same the

David Turner

a and if number. million. you charge And filings you into just to our little, help in Betsy, was supplement out It's $XXX number service go our our XXXX, public that off

Betsy Graseck

Right. Right.

Great. capital And is thinking up sheet the I line, understand, heard you that's Thank talk just but us about just then how confirm that. you going not feed business on it's in it to the help any balance acquisition is this here, was revenue All Okay. I grow right. where going Subal to and to you're and impact the income follow from into you. about markets question that have today? there the here how only maybe expectation statement

John Turner

Yeah.

sheet providing develop impact So deposit We'll the our balance I opportunity would will to to say an relationships. customers lead modest. opening and/or that credit be have might to relationships

really great recession business, we've for in from as real customer's $X to $XX capabilities, across from we we we're the XXXX up capabilities complete have, from country benefit sure. dollar, licenses XXXX a exceed million. primary we've I to the in four end placement one banks our real products, in real The a Subal placement derive five estate effectively. that we estate needs or license, the placement with, capabilities we that the CMBS And, permanent solid Fanny of be will large it think Freddy built, permanent for can a million array That's will ultimately that have real whether and think true permanent transitioned I estate revenue expect estate small We spectrum. of bank be today, is

that developers, gives building real liquidity been estate we relationships and really well balance and we've The around to those an and access business strong opportunity to regional additional and this capital. good very very, national portfolio sheets, performed So us extend profitability. think drive has

Betsy Graseck

right? demand been some in for that that there's product, uptick And recently significant some pretty

John Turner

and And, you like multifamily deeper Fanny products hold to that to build from relationships look of segment. customer it's good Freddy the awfully be to and and those a both time source again, and Yes. developers the at wonderful and with think just a that found products again, to I revenue way access the want who buy and great time stronger, we've market if to build and

Operator

from next John the of is line question Your ISI. with Pancari Evercore

John Pancari

you a maybe expectation expect On if the on front, you and by growth the and I of Thanks. out for the little year see unpack give loan growth and I CRE can if consumer and to the could X% little for wanted it year. for color that to bit growth can a color how maybe X% the more play commercial on you have

David Turner

John, it's Hi David. Yeah.

thing look to X% we about to average, first if on have which at the you have first depends is where $X.X thing So PPP to all the overcome, it do is is X% billion. you average, overcome which

averaging. we'll So big if driver 'XX a have off to may we 'XX, so but ought we still areas put the have of your in can as our we going a get year or we're you its And where Mortgage clearly, having with that grow, grow that's from balance as to -- growth much and have whole we along nicely of InterBank InterBank look expect there. benefit quite that sheet model. it production believe not in at

a of still top We consider then X.X%, you to and on the average on that expect think runoff we grow after overcoming we credit PPP grow can commercial card it. continue even on to of

continue to geographically and in to diverse quite a did technology, 'XX we industries are XXXX transportation look strong home particularly we and based growth into our that in expect it's been see healthcare, services, as were and nice at lesser the financial space, areas or commercial builder that those in growth As we lending, the well. asset degree,

John Pancari

Right.

All prove looking pull move separately still Okay. just to still be, to hikes And basis maybe operating leverage leverage be to you on Thanks. to generate talk XX obtainable? that us than you're the based operating Do that points operating to expectation, Could points leverage. guidance, less is for by fed? if have leverages about any your right. basically expected, the you then despite fed how basis XX upon about

David Turner

that coming get you expense double there, guidance makes growth but and roughly showed to not always there, operating us as positive Well, you our time it more, we, goal or then we've can on the we aware points that it why can anybody we get many as we we of. generate that there's I'm we during the we that's rates to yeah, have is year, there of that that obviously or we help it things reasonable do if But in in think, and, XX certainly management said, believe basis and on but this as did pressure year we the leverage on but else just give that over we'll nor harder, and, didn't a our revenue down we path at think that. wouldn't up cause pace gave calculus, put

Operator

next is the from Wolfe question Your Carcache line Research. of Bill with

Bill Carcache

morning. you. Thank Good

up that that. more hikes flow Following than reflects next commentary through rate to have that hikes bit was forward increase those curve are variability X% year, much how your you but I is frame as a begin some leverage, the to there operating positive on the around expecting expenses, X% you little could for in the outlook four more hoping around

that does the that that, on And could I number you able different that, would your of to scenarios. X% how does of hikes, expense top leverage, you being such achieve expense and outlook you the under to inflation that operating hold? the discuss X% that it level do to influence positive if, control extent still even continue and great line be more, guess, to also confidence base, So the we

David Turner

yes, a there. lot Well, of

out. let So I me help see if you can

on of X% that large of we that's portion to acquisitions related X%, to the of that So the expense portion a side had. substantial

one So we them year. of fourth quarter, the of deals in right the end closed on the three at

the coming through X% rate So run the single all X%. full and we'll have biggest on a those that's driver to year of

and we've but expense vendor improve program do we compound control pretty If John at going our you don't over load. that and look growth and and equipment on and continuous just a in benefits has rate processes go one all we looking occupancy our controlling improvement to back us it's expenses all technology area, and annual to actually every and spend, day, furniture, hours done where of expense things, our us good and we're those leveraging still fixtures each and management, help job our are

So And, I, in gave we just of side during it think basis each revenue you you we So on, get XX four told it guidance two be will have we into get moves quarter, points terms our guidance four? our less the the more than baked to $XX four XX? average, million basis Will to for. $XX than depends that year. on four in XX million more or Will have that? it you You or be each we've points than that

we you expenses. challenging, But model positive that. get to what question put do work can more when Pancari, of from we And think to ledge So committed of and we'll are generating things John earlier, manage can to the time. leverage, terms in over with kind operating operating I back your

it leave that. I'll So at

Operator

next with Ebrahim of Poonawala Your Bank question the is of America. from line

Ebrahim Poonawala

follow from the and but from give a the to be stock overdraft. one feel fees regulatory on of use sense why just that of be away just up of like but fees a there's guidance order risk why competitively of over subset guess year, get component us that the to defendable. okay needs It's your David, you talk the a industry will standpoint, been exist the both us impact and a question and -- seems case this on I hang around downside to big I moving your

John Turner

Well.

And base, and is fees yesterday, changed But give and up and lot things and we're we're the to make to guidance now where paycheck cases to our able days time. ability as to order, need. give cost at liquidity a limited in providing point if two they they there's our doing that we've in customer of need we loans. that the be some put have a industry. that. of which So eliminating going so that overdraft our we we to to We easier three small posting be there, the strongest And to we've bank than they things, we've -- given more for you -- be to NSF will and a liquidity, we've one to our dollar per we're want which we're stand it available have to some limiting our understand us short We're still our liquidity is done fees in for alerts, no any overdraft appreciate time to in altogether. day customers going with service to

that the we're at So ability for for term doing play We that our short want think it. a They things. that charge liquidity customers. a cost value lot for of that's we

Ebrahim Poonawala

just question missed that means I around a growth, talk non-footprint. us the it, And especially to of what acquisition, I if InterBank Noted. for some loan about guess separate but the growth, apologies

how perspective there InterBank to terms and today I Region's Give both footprint. have terms what in outside us think InterBank core the that opportunity scale the that of of does up? of is half you a in of

John Turner

Yeah.

of and beginning to about over quarter. time ability $X.X year, So get X% in averaging acquired up they numbers, X% of where and of production growth is worth about our we industry, had which have all loans, there. in and right the terms billion billion that's the that end X% We'll at which If have were at to fourth -- is doing of our think equated what we year. their to about we of production it been that next for the growth $X the take the ramp nice and the

the products that are customers excited to brings geographic more do that to well, as of about We about core have other footprint. to ability our banking our of including expansion InterBank with business country consumers. us small excited and that outside is throughout contractors fact the the services offer It

couldn't is people our expectation, about that it work growth InterBank portion to the a excited So there more and be big and family. the of Regions we adding

Operator

Your the Ken question Jefferies. of Usdin from next is with line

Ken Usdin

Hey, good morning guys.

on coming the help up part growth from the you then us are X% you of the in rate, of, X% acquisitions, run follow and actually that growth? What Can what just David. offsets improvement of into like what part understand just organic to Another, terms continuous in getting terms expenses, is efficiencies? is doing of the type of

David Turner

when that and we sure really really procurement you to that have. and Ken, services footage been that That's It's office a and that you branch about we getting. people our manage services Yeah. it part It's couple the computers standpoint, We're taking and expenses third you out managing vendor need related whether price salaries or our that earlier, have is that that's party things and group benefits from of acquisitions that we're talked have. our get be have finished not when the making square continuous vendors and we headcount majority improvement I as management are of to of leveraging the spend. them asking the And processes ensuring program. footage, you the square that number and have your for continue technology we there. demand them I for our have. ongoing, best with headcount, overwhelming manage the by growth to managing We've able mentioned control will to our core

reinvest. opportunities to to we Now create

services opportunities So we there. growth X% people technology, see that the in for investments there. people markets X% to to we're we We and embedded have, are in making the that in that help in us invest our certain

the that's to chase we're vast but you, giving of to that all that related majority that to embedded of numbers is the So X% acquisitions in announced. X%, the we cutting the the

Ken Usdin

I then what more understand I I that and little terminated want Yeah. this just earlier. separately, either and you just quarter. and is topic percentage that of bit David, comment color like. just missed you've -- apologize, a up kind -- the spoke see book Follow expected that trajectory to schedule locked Understand like, from on that you that is what understand your from the out now terminated we maturity or of you

think portfolio don’t I of if there's viewing different but change, can how So you're us much you. going Thank terms there's you anything in let that forward? know

David Turner

to continue in read Yeah, going the Ken reason regards we where to market is the Fed the so with rates.

So summer. off, some took this protection it of we our unwinds

to because important have important, it's A we proper we little rate it's in, sensitivity of rates asset have but us half for expect sensitivity we have maybe make ago, So more second month now the a that go. that when year, a two. the comes the or it's monitor to And a, to We do. sure timing. just that increase bit in we continue to

four. morning, it there today about, are Now, it's maybe only people be talking a will couple. This

going -- our a there's if a portfolio to very and will, we hedge is anticipate where those the you locked value over do So, can rate this of fair are our half. we've to and volatile best moves trying portion we're of in good

we pretty to sensitivity some So if but we're shape. I quickly think those, in in that put think good right spot. good more of in now can terminate we're We we want

Ken Usdin

much bounds upper how you float an and have you it sensitivity and David. of answers, up thanks Do for let the

David Turner

market's parameters anticipate XXX we down, terms of really have it in we're risk a much have point predictable is we get could statement. how rates to where on is to basis NII in do of to we for top to have want we're What the really a risk we do margin do there's our us trying income where with point is to a to going risk move. trying repeatable, trying What What when But move. going do not tick NII.

want, have an there to period, So can take score we don't a us not pickup we want whether any but year, time. don't given that's helpful full be we advantage to our repeatable, it unusual quarter not over shareholders in a that's or

coming quarter on So in core getting basis probably trying We're we're, a to you of up get to with a We a range going up. normal in to be environment. we're had rate the interest XXX% the higher margin this back. our given XXX range

interest growth incremental on as we'll the portfolio bit have rate little it's moves a we environment So the see there, but just of making change.

Operator

the from Cassidy is RBC. of Gerard question next with Your line

Gerard Cassidy

can points eight, in the rate due give give the you and on us higher where us Can beta, XXX your betas interest surge deposits. can surge on XX% talked of deposits? on your the slide David, you third And on being John. first some the you deposit tell you you Morning, elaborate to deposits on exposure, how you basis further particularly us [indiscernible]? define the how large about color

David Turner

billion, surge our Okay. deposits so mathematically Yeah, $XX are about total just

would happening have that of at you a reaction, would surge so that's two really deposits think about with those those, -- -- a of reactive. think lower the going we And deposits. things of high, sorry, XX%, that billion. with, $XX deposits, be actually higher beta They beta And XX% pretty put beta that I'm when think we are pretty Of it's surge beta there's a right? those to surge

rest beta other is of the those that legacy deposits the that which that that's was. the And at nature beta the last accounts, you similar beta, our into, take that of our if well. we basis the core XX%, what cycle, had went XX% be look look with put as a going we a beta at on beta is last point Then hundred rate go think XX% based those if you we legacy and to percent. If back deposits, the to you on increase

that that giving we're, gotten guidance math the that's really we've you that So and our we're to

Gerard Cassidy

surge the the deposit, the from from non-operating stimulus? are or excess deposits excess that corporate left over on David money your consumers, And, those customers

David Turner

big that's that's best they their because those could of why money. we put that of are in XX% the deposits big, deposits Yeah, place that those And that believe, surge portion corporate came a deposits.

that. put in it don't call billion because $XX put, meaningful pay to likely they're place. the want to So reactive corporate we to very that need customers, XX for of up to are work that be those it's XX% more going a to And

to expect or expensive. move either probably be we to more out So those to

Gerard Cassidy

ratio. Very net then, you a your And as follow good. charge-off highlighted up,

think net point charge-offs XX said in about the you staying years, low lowest I around initially the levels. to probably

it's to of no, just toward in in that maybe second year, fourth that, gradually the to Is low, based see hard are you or because that us the we're sore the so course charge quarter, rates head to You're the we have charge there normalization. the formulaic on half start the maintain is start that influence later acquisition going excluding says, year, done underwriting to slow, higher reported may or some of the that the in that numbers?

David Turner

by the obviously credit. reality child Yeah. A running as low unusually stimulus stimulus quarter, out that in not were in tax propped particular. the this consumers been a lot has is up that It's of and care consumers underwriting terms We've hasn't, change. of businesses industry. an It's

basis of So still lower the manifesting in of that the expectation I normalize we rather stimulus, of would well half will If to than money bit think so low, range, occur. end anticipate the being be of to said, our to think history normal is starts perform because itself at we trying will But the the manage year. points second 'XX. that a start continues and runoff economy at the well, XX do which it, to charge-off when is that XX charge and of for off normalization consumers our it maybe, lower

Gerard Cassidy

thank the good; you color. Very for

Operator

Matt of Deutsche question Your the is from O'Connor next with Bank line

Matt O'Connor

It go much, Good be because rates bit be morning. put up a does underwriting?; more, if to X%, might obviously, given it on so to borrowers. rate about start you're but, early that pressure increase even how into of factoring does thinking little expectations or too this, when

David Turner

the of virtually we're of things, get moves one to talking Matt, think so zero. about off basis I X Well, XX point,

or four interest rate of of end they of an consumer, a consumer lot shocking the much portfolios up rate, portfolios, think don't a moves. fixed If having you so

again, know put the On which, as will. protection We've more put start moves banking our monitoring expect you if to on starting been corporate our on them the, we on move. would of them. rates customers, We to would stand on side, hedge We actually hedge. customers lot a four they where

don't a again, we, see So we lot of payment shocks there.

the running unique higher point. is given is risk think drive a rates or I business there stimulus. And losses out that at this to versus something industry could also it's in

John Turner

thing is other of stressing the when things I'd and business -- other interest underwriting we're occur. always or normal say credits, only that among I rate course might But, in sensitivity

not be current would common in practice. change that a our So

Matt O'Connor

then separately just I And it. and if Okay apologies missed

been could year for revenue's be rate cap maybe issue, strong talk run markets, markets kind capital we've of peers and really some Right? early fees and, all seen that if mixed if, XQ. part the the just didn't think I'll, I but 'XX, of your to Your of you and a but it did, And you at strong in have did Thanks. you might look you transcript. increase

John Turner

no, I think good it's question. a No,

bulk distributed If of raising revenue look services. you at capital our both advisory the markets across just and capital

So real actions generating or relatively those loans, whether permanent placement M&A estate, fixed indications, it's revenue we transact are a similar amounts platforms. across income of

So good we've diversity. got

Now we've added and capital. we've ClearSight added advisors Sabal

of when And appropriate. per you that we will we've is those that developed products XX that run capabilities to with the consider rate XXX concert so acquisitions think the contribution make businesses quarter in or the

Matt O'Connor

Okay. Thank you.

Operator

Steven Your next Scouten question line Sandler is with the of from Piper

Steven Scouten

morning. Good Yeah. Thanks.

X% commentary does your growth, it ex-PPP the I PPP, clarifying is one earlier impact? the loan or of to from I So wanted to make sure X% runoff the question just that include first. David,

David Turner

mean, the you it year X% the growth that average overcoming and in it see important supplement. and that of No, that one four a points to our that it's having includes includes and that it's on X% was the for half, I

Steven Scouten

great. you pulling from have I I Perfect. question that just some but million the, bit of ability Is $XXX I some That's rate income forward basis is a on know hand-off slide to had you're the kind hedging the decline there impact and heard. it rate is kind could one of greater then other through of maybe if that. can That's thought the, you I can pulls pulls you quarter the about down rates we quarter the kind wondering to there talk detail I'm bit. up? now run the the of Thank a you. positive obviously back And walk XX, what sensitivity see that, little a that higher

David Turner

hedge we're in but early little of timing quarter our, but could is it, deposit we the that locked asset a a too, us things on to quarter-to-quarter, have a I've our little we transaction Well, we're, sensitive sensitivity. number particular of you and portfolio good always ask we're The the had, issue year. half chart from bit we've in growth our, is growth that going loan our a added our thing base. it, and of I the still to in adding a can see but mean, the on – key that of second EnerBank you forgot got earlier, question very of sensitivity moves that help the because portion

close of zero. when so seeing couple moves, is pretty And you start to that the first beta

I, so, the but And be think handoff, might that'll perfect. in aid not it

able continues base to regions over low an we period deposit an for grow. If think deposit we're core, have shines; as that core ours that us. extract been grow been low it now value of economy we the to really low It's haven't rate at in you but the time, positioned where a in looking increases such and of cost because out of in. to we because just, opportunity. investment kind get We that fact, the, we're making Forbes If differentiator a been haven't environment, that's higher we've our that you're in base well see a seen starting of, baked we us rates the, get the has the, rate to

Steven Scouten

given rate? be meaningful 'XX growth point increasing even helpful. better convey subsequent think from that obviously that other just chart it is will be on loan in Okay. 'XX. and very that each you growth it of that year is organic a one perspective in be to more the higher just impact at the or growth can will Is that's That's, organic And

David Turner

a Well, of it's bit both. little

to, to our mentioned, can a had in than far think to had. regulated that they that's a absolute one in where and portfolios and just have were to new $X I we, to, states right? And of So have seven a better the a what that bank as added we company, would've take so they about acquired energy I continue growth. distribution ability we billion lot we level. production new we've example there balance historically been billion we're is EnerBank; see

grow. so why portfolio to take to through investments, see our we because for And that that people be continue network example. we and have that's us able just make the to push and to working a to one That's we continue all

getting rate by help You're also environment. the

So to rate X% into as annual well. growth compound baked that's that four

Steven Scouten

Yeah. the for Thanks encouraging. coming. That's Perfect.

Operator

Your from with the next Barath question line Wells of Christopher Fargo

Christopher Barath

Good morning.

a run think XXXX is was least about think my to So about kind said core a point kind X.X% expenses. at next month Is increases. of year? starting to wage expenses that for good Last about you rate of question for

David Turner

things. of payments Actually the be are Chris, going we've increases, need little some that to that about retain bit had we've, technology we've a this think certain house number's in to make, as folks we recruiting merit seen to those, inflation higher in side type people we the particular year

little than that bit So two that. a half's a higher and

Now into that is we baked if the gave guidance you.

I and persist guess bottom to XXXX? we expect have we that into inflation so experienced line And is

John Turner

If XXXX. Chris? you I correctly. heard Chris's Now question around was

Christopher Barath

increases that I'm transient that's, I that to you're 'XX that, is versus be more think what be had run that we And and rate you're merit in for Like 'XX? now, correct. to I a difference are that's to to not to in of in then between consistent figure the out continue going or you the wage seeing revert deal related and year will accurate. trying or, inflation inflation more be to past that's cost run going pressure? That's the going is guess able rate this back

David Turner

the majority of we're vast going that to experience, of to that we to the acquisitions three Well, that the, had. thing the main is X% related is the

Christopher Barath

up, quick Okay. follow And please. then one

work money high level Is good to to month it's still or XX level you of think with the, going last think X% given the So process you years dry a with higher powder, put kind deposits. do your now was point that given thought of said, surge I already? and a to your be starting even

David Turner

we year think we of rate end the of have four No, as think the term the probably we in We and kind short we, so. still the out end by this approaches increases going hangs we but told the, still X% think year, short XX you year. that

because everybody volatility there's put So opportunities. think we're paid and on we're now, all persuade because run at idle appropriately have us short a to that, closer billion just to fed. money XX There's We with cash If reluctant getting as the the risk, increases can convicted be duration think short do change. book compensated on work work to we in we we the more to we're rate of on we does to for see cash things most we'd And securities remember to to if more, That don't we than a that much. lot see the more the the take it. there. being just want ability to, it the to the for move happy X% put little have may that we, been said, a bit

bit more paid getting little there. we're So a

Operator

the is question line Juneja next Your Morgan. with JP Vivek on

Vivek Juneja

two Hi clarification So questions. just on John; the last David; couple to of Hi,

tenure the to might X%, if work. to gets closer with you said you So some

anything you or do of have your So NII factored some reinvesting liquidity that into not? guidance for

David Turner

of would what top No, giving we're we on do That you. be not.

Vivek Juneja

incentive are your you in so And that at Okay. that then guidance? 'XX question level asked, you was that is 'XX the increase I that expense on comp in the, had stays the on just assuming

David Turner

I at No. don't stay It time. and forecast at as think, forecast we a, industry incentive up, it. not was across the this at level remain would that That was comp that It's to level.

Vivek Juneja

partly then markets? continue because you're of mortgage And capital revenues Okay. like not assuming and will those some

David Turner

Well, but that's budget. now into no, all our we, revenue baked given here the growth,

a at is compensated did reset you your much get, industry we, you than players the year you And that, your if which most you but got and you budget, don't better you, this have hit that so year, get what don't expectations. of over par to

again. you're start you down Now over to par all got the back

Vivek Juneja

sense? make that Does

John Turner

incentives. yeah, of reducing We're the increasing targets, have so impact that will

Vivek Juneja

Right, right.

you these pipelines you you're growth, that last which implies Okay. strong seeing for of and loan low that be talked seeing Has to three strong continuing quarter. we growth up the weeks? January? Are good. how fourth Makes couple, remain sense in because first expecting and very a one Is are that you in you both saw continued later about to bigger pick that obviously

John Turner

are a investments. by still in optimistic. of uncertainty are They're is good. balance hopeful expand invest they Investments measure cases. to some in I who still by constrained the actively looking we lot and lot spending. want labor who Pipelines businesses. some of in But continue. have are trends prepared we'll customers and do to are are, of The, investment Yeah. same there sheets, that are see Customers shortage think, at true consumers their are And of a make

do we continue so to growth. expect And see to loan

Operator

Your the line Jennifer final of Securities. question from Demba the with is Truist

John Turner

Good morning, Jennifer.

Jennifer Demba

your Good terms if the lies where, of revenue now and lies, case where, morning. about non-bank the more interest your where, interest interest still Could diversification. talk you and where just and, acquisitions where if, strongest and, that's

John Turner

Yeah.

servicing new We're rights, if consumer capital business. mortgage markets we to that potentially invest opportunities of like relationships. and So a available that to, the to to non-bank to mortgage always we're, continue have management, are to those some in I add nice interest interested within able do capabilities to We'd return wealth acquire If acquired. to those those on to in think investments I in leverage looking arise, think, lending been that our capabilities we acquisitions. opportunities continue got have and expand add those an

areas couple we those of a would be would where So make investment.

Jennifer Demba

much so Thanks Great.

Operator

I will John the you. to Turner back over call turn remarks. Thank for closing

John Turner

thank Well, you. Okay.

and awfully are have our all accomplished. proud of XXXX associates We that

staying on very are of prospects of about our of we focused a We investing strong emerging customers communities. our XXXX challenging some and each optimistic carrying very think momentum economy. lot times into the other, During good on in a,

interest support. much. and very you Thank your appreciate so And

Operator

concludes conference today's This call.

You may now disconnect.

Regions Financial (RF) 20 Jan 222021 Q4 Earnings call transcript