RF - Earnings call transcript Q1 2024 | Regions Financial Corporation

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Operator

Good morning, and welcome to the Regions Financial Corporation's quarterly earnings call. My name is Christine, and I will be your operator for today's call. [Operator Instructions] I will now turn the call over to Dana Nolan to begin.

Dana Nolan

Thank you, Christine. Welcome to Regions First Quarter 2024 Earnings Call. provide regarding will results. David and high-level our commentary John disclaimer a information Relations The website. include statement section and our Investor earning documents the forward-looking non-GAAP in are of available materials, comments presentation our cover disclosures and These Q&A. prepared

the turn to now will call I John. over

John Turner

We per Thank our you share reported quarter of call you, million, $XXX we joining earnings morning, $X.XX. appreciate of morning, This resulting Dana, good first and everyone. today. in earnings

reported negative results. and items press earnings release, impact reconciled on approximate an adjusted our However, supplement $X.XX within representing our

watermark For total $X.X our on on fee both Adjusted actions. quarter, face in the expenses reported an to and a increased income for of resiliency ongoing as quarter-over-quarter interest high expected the impacts as billion first seasonal expense macroeconomic the lingering $X.X was revenue year basis basis and billion political management offset and demonstrated uncertainty. net noninterest is revenue the and adjusted represent

lower an patterns. to our client the quarter-over-quarter, to deposits demand, continued consistent reflecting grow client debt Average line in perform Average continues ending expectations. activities. seasonal with in loans markets quarter, increase were in limited and Credit during paydowns with selectivity, capital

consumers remains historical to overall of pockets pressure lending, strong consistent business pandemic. anticipate the While healthy. and levels We asset our perform within will prior quality remain with experienced

delivering our feel and long-term closing, sustainable profitability by revenue, strategic top solid our on to consistent, evidenced we focused good as line continue In allows about the of successful performance plan execution growth. soundness, which while us

highlights quarter. the regarding Now provide some Dave will

David Turner

John. you, Thank

a sequential sheet. Average and start loans balance modestly ending Let's basis. with on decreased quarter the

growth with home and offset offset declined through credit real the in runoff million declines in loans during in Interbank lending. by estate residential relatively C&I loans Approximately refinanced portfolio, consumer associated remained sheet the construction business the X% approved as were equity were average stable investor loans by modest off consumer card markets capital were quarter. Average of C&I in debt $XXX declines as mortgage, balance of loans previously and Within funding portfolios. increases

be compared down modestly XXXX expect XXXX. average loans to We stable to to

deposits the see ending basis, the In the we average From which second expect a season. first on payments. is in for quarter, impact tax quarter overall refund balances, to deposit standpoint, typical tax declines of reflecting and increased

The mix of remixing to of noninterest-bearing slow. though has pace from deposits continued to continue interest-bearing to shift the products,

midyear, $X billion analysis trends Our of overall XX% we'll low a of us $X cover the mix the and area noninterest-bearing billion further behavior by to confidence potential decline savings approximately spending to corresponds and balances. gives low in in that have which checking interest

So income. let's shift net interest to

The beta is the expected, income. approximately securities. to points. net fixed-rate basis Offsetting and range. continue linked interest income this net expect through continue pressure, Deposit, and lower-yielding interest quarter, to rate XX%, rates continue full in to mid-XX% yields loans from now higher we the of benefit and to declined asset cycle replacement maturity interest-bearing increases pressure interest peak rising X% by deposit net margin remixing climbed X cost the and and As

rate in quarter to continue net deposit expect and over second half a benefits followed We improve second to the growth as trends the interest bottom of the income year turnover of reach the fixed persist. by asset

outcomes. the will balances range cost this to under and possible a economic billion our portion the reprice mostly cycle, responsible mostly interest-bearing wide of increase deposit Performance net the $X.X CDs. in for of small majority index deposits is be by The relatively A ability driven deposits. and array range of portrays well-protected $X.X interest narrow a billion XXXX between income profile deposit

lower interest steps as reducing Fed promotional half in on and rates. range, If hold, of promotional to take net the the flexibility modest shortening remains incremental We funding pressure. the cost likely maturities such have to increase CD assuming falls income

increased fee the So quarter. was capital at a markets strong revenue, activities experienced A markets transactions. performance income noninterest Adjusted take this Improvement activity. capital capital first and look quarter experienced increased during M&A as growth, estate as in and clients from particularly X% which markets. let's into both of real pushed most real estate, were by driven year-end quarter debt M&A the delayed categories portion

closed Late billion in service the of first the rights residential the of to mortgage bulk $X quarter, on we also loans. purchase

We low-cost servicing have a model.

continue to us So you'll opportunities. additional look see for

expect and continue $X.X XXXX be billion year adjusted between to noninterest income billion. full We $X.X to

driven deposits expenses occurred million. X% quarter, also Let's move the compared that production-based losses on up primarily is activity and HR-related to ticked attributable year payments. noninterest noninterest increase, the seasonal increase to incentive during $XXX normalized losses levels, to increased quarter. to year. and expense to prior from expect warranty continue has Despite current full by operational we to The approximately Adjusted this last expense. claims check-related be XXXX expected Operational

investments prudently fund our committed to in to remain expenses We managing business.

largest focusing We will occupancy continue expense and our which include and salaries spend. categories, vendor benefits, on

to adjusted year. billion continue year for noninterest to full expect with be high first the $X.X We watermark quarter approximately expenses XXXX representing the

by quality charge-offs performance credit and manufacturing an a commercial Adjusted credit. large asset overall expected. standpoint, continues credit to net increased XX From points driven one legacy basis as normalize primarily restaurant

portfolio fast our restaurant As the and vertical small. XXXX remaining a relatively reminder, is casual we in exited

stress. improved criticized as loans towards and loans as of normalize services Total percentage due loans averages, basis total to delinquencies increased increased total a historical loans during nonperforming points within previously and downgrades the XX%. quarter to primarily to Nonperforming XX identified while business under continue industries

normalize expect to We averages. to continue towards NPLs historical

in million $XX The due X net X.XX%. ratio incrementally was credit higher normalization, in under stress. adjustments allowance a million previously and was point our increase for to risk the to in migration, certain to resulting qualitative and quality expense for allowance credit risk identified excess as in loss charge-offs, or basis increase continued adverse of portfolios Provision primarily $XXX

XXXX full ratio XX XX year our expect to basis between net be to continue charge-off We points. and

liquidity. and capital to turn Let's

commensurate equity changes implementation and the over ratio current provide expect share with X timeline with levels $XXX to allowing will while common consistent us an quarter to maintain supporting near Tier ratio with increase Tier while executing to We repurchases equity the in the X million growth the dividend and $XXX estimated This strategic objectives along common term. We our dividends with meet earnings. XX.X%, in level flexibility quarter. ended continue of during the sufficient million to proposed common

With call. that, move to Q&A the portion we'll of the

Operator

[Operator comes line Bank Instructions] first Ebrahim Poonawala America. question from of the of with Our

Ebrahim Poonawala

guess, mid mid-XXXX. David, up following comments I just low -- by around noninterest-bearing deposits sitting XX% on your

don't you you're do of XX% of below us based that and see I'm Just use assuming cuts, just give what balances get if on of the consumer a sense here? dipping as in you we terms that pricing seeing play any behavior balances of where mix there's across that's at are see some seeing So out? competition And bottoming in you do that attrition like markets? latest terms what's on the customer

David Turner

Yes.

So from a based be we feel expect that in and balance confident flows that seen standpoint, still we'd pretty on have low we that XX% range.

look new to what's to to important noninterest-bearing That's profitability. what accounts, operating our That's new accounts. checking continue We us. balances fuels through grow

little can businesses, in growing And migration year Southeast talked in people of the we about grow particular, there's bottomed from the comfort there. so favorable bit that this and in being then give a We first deposits of maybe out there. places, us some the half where

XX% -- a range a that think is I So good good low still level.

competition deposits we With a on been the for lot of think pricing, had at result And regards of a that, loan strong across the a seen, to had haven't it of is I industry, of day, competition demand. as have lot end the growth. we as as not loan could

have We competition. always

We creating customers making sure have and with balanced to and fair be we that are value. our

doing a is loan accordingly. what But I biggest of price standpoint, look competitors nothing our of because the we lack so there's that's growth. adjust and happening the from driver think that there. are And at unusual of And we

Ebrahim Poonawala

That's helpful. separate question. And a just

As you expect deployment is did And terms with to we quarter in on about the we there the XX, appetite yields? XQ to lift much you go just in should think securities the bond in that for terms how in of more second repositioning? of what capital outlined Slide

David Turner

Yes.

on at we capital. to And we're generate. enough equity ourselves being striking we think challenge close distance what's best loan regards the that of we're We capital consistently on robust again, fair X. in Tier be common our growth with we to pay XX.X% a Obviously, industry, a changes dividend. So the whatever with use in want regime the to muted

work. did the back either We $XX to repositioning. securities So shares the do or things We the capital buy that generating first quarter. put million be we're like in to needs we

less get as we than close it to would look We'll that want X.X it. say keep I years our to we payback for the can continue frankly proof to and to because if was ground closer is not X as opportunities.

Our trade payback X.X. was about last in this

of us. for And so we think that was great use capital a

do so not And to we'll but committing to it. look that, we're

Operator

Our comes [ Siefers line Piper the next question Sandler. Scott from with ] of

Unknown Analyst

you outlook. what data. who ways understand and more growth the behind the the we're some in an I hoping with certainly given contrast of was out loan second might be in flesh could half. of I softened some expecting peers the the please But in backdrop rationale it, acceleration seeing it

So and thoughts customer just curious demand your thinking. updated they're how to hear on

David Turner

net-net the Interbank, see feel but job growing consumer offset it we We good. card, pretty growth just we declines good as We good that. made really loan in on was the of Consumers -- flat. equity about a home lot consumers are which mentioned, Well, by side, a growth. growing did mortgage, growing actually loan don't

we blowing production, are course, quarter, and rates we careful helped And an had industry, downs. us some to decline, a balance we've hurt seeing group from point. M&A that the standpoint, of placements pay had us debt payoffs industries at this and commercial, will are standpoint. nice obviously activity others million pick start had We've but on up. past Relative through this If going, NIR $XXX depending that of and but being from actually our

grow be And so activity. meaningfully going to all that to through of it's net-net, hard

and to we'll have And don't to the about don't need need if environment, that talked force liquidity to numerous John careful. it. growth. times. going to so. not uncertainty. do see with has loan We And And push We we We to we're fine we're want be still capital grow, client that. but we clearly be In selectivity. this need careful to push. We for opportunities, on there's

Unknown Analyst

the Were I then was though last quarter. all elevated hoping that no expectation, see confidence everything? Perfect. in just you losses. these the I issues that up of an color. and there new year? sort are gives of issues have cropped just Or resolved you what were true-ups? additional Okay. instances they the And full year still the to operational first to And change glad Maybe could was separately, the discuss definitely additional were

John Turner

Yes. This is John.

no So did new additional with was losses tail were there result, some the in breach than quarter. little to was, anticipated. of And warranty claims, as we the a respect we events. The longer a incur

that confidence can, us rate all the in place, we quarter was gives our the for our of talent we countermeasures year. can and for working expectations $XXX activities, fact, we've for meet implies What in exit gives is our fraud that that million is the recruited us prevention confidence the significantly we put reduced, target which meet that the that

Operator

question comes Graseck Betsy Stanley. line from of next with Our the Morgan

Betsy Graseck

about to being slower. So how thinking year question little for one in NII relation on a full the we're growth loan just

lower NII growth square So your same understand, I things? the so. expectations, guide How understandably is Loan before. do it I those just as obviously, to little was a wanted

David Turner

being Well, loan the of back in talked about had year. half we the growth,

So guidance. in from get growth to a loan carry of going you weren't our lot

see of us we setting is what the not XXXX. want to really XXXX, year so for up half loan the growth back And for for

you never So factored that we gave guidance was on that into the NII.

points rates. about -- a we're and securities have standpoint points good with bit to the shape over book little XXX basis picking up a short-term neutral And to curve that, where on of book, basis front book. we balance from feel we're positioned We sheet little our XXX basically reinvest we back where a

to going to do gives that well NII. with us regards confidence pretty there we're So that

in deposit started also flatten. change they've of months And cost, costs. February if we If our the you the so look little cost, our deposit March, at and input there look to at was

mid-XXs. So beta, would is at the today, said XX in which our we be cumulative

confidence We have a that. of in lot

didn't NII we our guide. why that's So change

Betsy Graseck

it -- then Okay. securities That about Slide that here. to And repositioning about understand you the of just sense. a lot on go on is wanted Got forward you're thinking it. talked the X, makes just how

the extending long basically makes you Like You how the to some but know will added of leaning comfortable even more? thinking in again, duration, book if sense, is duration wanted are -- question. securities you're of the

David Turner

X-X, year. basis points duration a like extension XX our Well, only was

going from little believe make risk And our down, compensated taking very to then risk of if up some where sense the duration you either believe get perhaps can So we you rates . is standpoint, flat low, especially they're either i.e., negligible. a for today.

naturally is declining. duration Our

kind to good can We'd make trade I can. modestly higher than payback, are it a a one to we get doing seems a use our keep X.X of right to closer flat So If we be than capital. X, like it did, payback's where now, it's sense. X.X And we just of to less said, the we it years. if like to

experienced. you if commit to did at while it. fairly so we would want pretax no to small income. look than just of it keep percentage be a what at And it, won't we it that, our And we doing We would more

Operator

of Our from Evercore ISI. next comes Pancari question the John with line

John Pancari

On the increase front, the quarter. about a moderate saw in nonperformers in credit

However, reserves. is the your loan pretty stable loss despite reserve move-in

So nonperformance. mean, -- I

give So little you about behind nonperformers. if here? you also, the to want bit reserves you're can bit if a And I how color get more color just of thinking on the see little a

John Turner

This Yes. John Turner. is maybe I'll John start. --

with First stress are senior in that Office, we particular care, is quarters there began And technology. of goods couple transportation, ago, industries: increases we loans classified housing, specifically largely stress now those signaling and industries. and health the a nonaccrual that portfolios in indication specific are a of loans couple all, of seeing services, and or the consistent in

fact, In in five of credits that are nonaccruals up sectors at of -- credits you excuse mentioned. our XX I our me, and XX our of make our when XX% those nonaccruals, -- XX those XX look XX% nonaccruals, of

So consistent deterioration, see would we did with our been and expectations. anticipate that's that some we

average charge-off And expectation which we our those I'd an to that point basis back return -- ago, And that several nonaccruals ratio would began prepandemic thing and points, of points. of metrics. we basis to XXX specifically, second we about trended the expectations. with historical would levels are of be The to again, is quarters we to XX consistent have ranges, set is credit

ensure we through that reserved go process properly loss regard for allowance, With the those to we're to in against the portfolios. every quarter expectation

of about XX we feel nonaccruals, credits we have that you into very visibility expect high that make Given up a XX% position. can degree reserve of that the good our our very

John Pancari

on the the the expense front, given Great. know the because the I Is Okay. should or remainder the separately, the operating that given do mentioned represent And of expect that building year, on revenue through quarter you then losses? first expenses. the efficiencies elevated you Or high primarily backdrop either watermark some picture?

David Turner

on probably several $XX can have worth expense million John, And to of point we we different front. things.

valuation HR regards offset obviously that's is We it part that to with first part of So too. will have repeat. we payroll don't that's asset a nature. that, and losses of had issues of quarter NIR things operational that We think taxes the in

in fees. and professional things some occupancy have We

take did divide $XX confidence. that add have to we about and up, to a pretty We that high that the good fourth that severance we you we're billion have to that all first the you quarter going $X.X take like pretty good and quarter our and in tried this from million, If And the some that, We watermark that, couldn't the was and guidance did to be sticking we repeat. have. standpoint. we won't confidence and signal sticking by we're quarter it's X, actions

severance. for to quarter first in payroll normal the folks those expense the addition has the Now of

So won't repeat. that

million. that, like I to right all adds up around So $XX said, of

John Turner

have That's as -- we to just well. opportunities just indicator expenses it other pretty can an reduce quickly identify that's what we won't of And repeat.

John Pancari

status And if Is of of conversion. one as in systems ask the Is, just core that. related still I that to and follow-up timing could trending cost? your your -- expected terms

John Turner

meeting progress stay just to We ability that through fact, time. with -- the the Yes. It the Board. and making this on a that about on Board had we're project feel our good We, our in and went week budget tail is. all and

Operator

Our comes Usdin line Jefferies. the next question of Ken with from

Kenneth Usdin

cetera, you talk bit mix I we see? shift February what's mid-XXs starting et X that terms in And Slide just pricing still what that terms little on but -- about in know movement, you're and David, you should to takeaway about March. of talked put Wondering if you costs, to bullet stable could a about be deposit that deposit our changing betas, underneath of stability in

David Turner

we but is deposit quarter you're full what Yes. had higher there a what peers, change did quarter, seeing was fourth the Part in of our because we that one of than because and that. reasons of big the cost in -- put effect that's of you from

seeing baked on we've coming Now of of stabilizing gives in in down, got kind base, the cumulative beta and us the those and into of February offers we our that offerings confidence things deposit are therefore, in a nature that a the that lot mid-XXs. March of and and start confidence that have costs the band we exit deposit lot

a where more So couple of points today. are we from

Kenneth Usdin

What offers, follow-up, change Okay. to you guess that to a as take And are in pricing, in of point you terms further? I change trying are bring duration? doing starting

David Turner

good point, Yes, Ken. that's a

seeding maturities able X-month we to to the than sooner the now. and down they So last yes, this coming with went longer be dated probably Actually, coming those the year XX-month had quarter. reprice we that be X- expectation started rates in that shorter that we are range some XX-, CDs to would were

so yes. -- And

do to leave have and see be we to with we we price, competitive a can standpoint, from to fair we but be don't need competitive, And balanced. want

down the to starting of benefit having the And promotional rates see here. so you're coming

Kenneth Usdin

$XX also that say you've longer? and year. the when point year you to about higher year? And for while higher for last -- and $XX the per billion Has you longer, better how get that that think benefit production the from that versus rate about on like that's And for a talked of differ fixed next billion about now does does this Okay.

David Turner

say because side. up we're today. it, securities loan the have picking XXX of that about call Yes, basis up, that I basis XXX you are a picking longer We're would marginally on points higher for points repricing, lot

repricing had you don't case just the That stabilized So if the the we far. been side. get the deposit on costs deposit you you overwhelming has get and not been that to -- then actually expect -- start then costs It's thus can the the opposite.

you're see to the which we're calling second quarter. that So turn, why bottom is going us for the in

Operator

Dave Our of next line with question Compass from comes Point. Rochester the

David Rochester

the Just the you large you net impacts regarding quantify could charge-offs the the background commercial and resolution give process additional on And this and credit where there, are on guys credit, in credit be great. quarter? if some you provision restaurant that'd just could manufacturing on

David Turner

about So two if points look just those added of basis were those at charge-offs. to you together, X two made

have been So have our would around two, if didn't XX, XX the... those we

David Rochester

then those? resolving you of process Great. guys And in the are where

David Turner

that again? Say

David Rochester

process are of those the Where resolving in you credits?

John Turner

They're both still being worked out.

David Rochester

Okay. you're guide the to guess end high reiterating XX for that with now. XX And net of at bps, charge-off the picture year I here bigger you just right the of

end remain through either have you or to confidence that around year, and the that. expecting of you're . the stable So decline here

John Turner

We do. Yes.

David Rochester

NIB impact you and been range at that for the impact then your data does remix on the to elevated from change just year, year? this that activity all? that's there? all expected the And expectations rate any at noticing to customers' And you corporate fewer recent of of with in seeing deposits switching any any behavior are deposit your Are cuts Great. to shift inflation

David Turner

No.

big side. comes do on a largely from We base. consumer the NIB NIV commercial have obviously our Our

a an uncertainty, of a liquidity to that maintain don't huge still that's why but And more standpoint, I done inflation were seek year. But so. this bit think our range. they think little to elections move going little low want to XX% folks I stay still a geopolitical out just cycle we decline to calling rate going for in have bit And NIB has we're we're the change that a from think to see from our going all into NIB. own no, risk, that NIB

Operator

of question next O'Connor comes Deutsche Bank. Matt with from line Our the

Matthew O'Connor

management if some And deposit wondering could the part you is seasonality. of but fee little just big Was the bit positive service there a nicely. of the is a charges trends a I on up were driver, elaborate weaker know treasury

So I if that can wondering was out. you scale

John Turner

Yes.

parts talk and So Treasury if that -- look business. you increases management about fees and up reflection is activities. different at across in of both and just in the increases fee year-over-year, relationships X% revenue

for nice is increases growth of management that Similarly, in assets and in the relationships. reflective valuations up over is So year-over-year, in held increases which wealth business. X% increasing asset both customers

the increase would quarter, also We nice activity we and to saw really a mortgage in expect continue. during that

the benefit fees overdraft the that's Consumer respect specifically, in customers to of overdrawn. down the actually the implementation result a we've of reduction about number really a as and modestly, with of implementation of changes reflection are a of all customers more who XX% to grades, are we've made And seen overdrafts.

resulting that -- by their in decline activity fee our by offset is in customers use interchange currently cards. revenue, debit and So of some

income in in business activities. relationships wealth is in that growth solid. reflect parts and fee wholesale of generally, our management growth and seeing good the in We're growth So

Matthew O'Connor

how then think there is? $XX million And but Obviously, range that sustainable any million like for had more market -- somewhat in in the to thoughts past driver capital that little and markets, to going the talk on yes, deals there you've Okay. and I with it's color that this forward. $XX just also dependent, the talk And upside. strong, wind just XQ were to came a

John Turner

Yes.

There's which been customers and NIR. activity capital to has see But incorporate is do market raise picking $X.X pipelines. helpful. broader, and billion to the institutional go that expectations around generally we to markets billion adjusted seeing up. $X.X still markets more Capital that We're I debt, our to think we stick the range is good for M&A more in activity.

during markets, is real is which quarter. us Our business capital for And M&A the diverse important a activity also active. really estate pretty then very was

about to so And for $XX feel we million the range pretty good million $XX the quarter.

Operator

Our from with the next RBC. line Cassidy question Gerard of comes

David Turner

you ask large before of credits. would X came said question, basis It's not the points. Gerard, that had question in a up we been let up had I clean XX from basis me charge-off something two points percentage your just terms those actually. have

we I So have we those math I sure been would the at just not in XX had to two. do the fixed that didn't had gets transcript. want correctly. make

Gerard Cassidy

All Very good. set?

John Turner

[indiscernible]. Gerard

Gerard Cassidy

you give Can there? us be finalized think will an update that debt? the for that's And where the the in going long-term NPR proposal's do you when out

your And the -- in estimate to that, second, carry know issue and your color and us of your what is? the once the given have this of what part what estimate have on you it cost might as on latest you peers, past, but I some of levels debt you've course, debt? latest higher

David Turner

Yes.

be at have a proposal couple X% which will little So the a care point. some at We're taken credit this not kind into of. bit gone outstanding, billion. suspect for will of hold when is a year Gerard, of billion for about it have that Basel has which Give to what on III of and whole you of debt time. long-term RWA, was get sure the debt The is us. We you $X

about talking $X billion. you're So raising

just that. was on to -- to can And NII time if fully to for it to on loan existing us. out wasn't $X implemented and put that something have X% We it natural billion do have a take drag muted, it's no in debt We it. NII, of need to and and address there's going need growth don't -- terrible this than being going to of a our It long-term leverage to go some But have we order work. debt with less raise is you were drag things.

and in new proposal We're to just have of the but it We'll to the being of number. X% we know. when cuts range adapt rule X% the down hoping gets There's the RWA, put been talk from X% don't overcome maybe out. that

Gerard Cassidy

us the the with the formers then you've due that? or Was industries not very identification Very yes, Can with caused have due think to you a you that about those downgrades? some -- novel downgrades stress some clear you downgrades, good. of credit. was as your it David, reason? for of And process of identified. the on I in debt those comments, follow-up, deteriorating some the more that -- [ but the portfolios the it a -- Was coverage? ] business to said, prepared In in mentioned certain what been -- of borrowers' it you business within what -- the color is downgrade you the part give little process, service share what the Can increase

David Turner

pockets consumers we're stressed seeing businesses are in Gerard, usually, There John industries and general. strength in of that mentioned earlier.

that value taken. idiosyncratic to are at business I think seem are these charges be being -- the to of and end the of borrower, the they model the day, more that

going one two credits right the as It's one-off big just effect you when the think these good being mentioned, us. fairly pockets any chase, actually you're percentage. in so now, a of you credit these charge-off about of -- you have pockets risk have to terms And -- to kind deal on don't for cut the but

as -- contagion So don't much a issue. it idiosyncratic and we we see it as an as as business see

Gerard Cassidy

I see.

it, board, these affected for really wasn't it it downgrades like more the one borrowers. really of was for So each the higher rate environment but across idiosyncratic the

John Turner

if smaller is mean, industry, real under think some -- why that obviously, truckload you about Gerard, particularly estate-related but seeing exception and one truckload are area equipment for I understand businesses stress think borrowers those that, but be in where portfolios, in industry would valuations are the it like are stress. can having we truckload still would feels and where one truckload-related The valuations you doing to the transportation okay, less across I particular, senior transportation office and the housing, would the challenges. also also stress, that industry be I carriers say are related. are under under

Operator

Christopher the Fargo. next Our of comes from question Spahr line . with Wells

Christopher Spahr

the -- the in then charge-offs. itself, have kind shift on have mix the loan to impacted of your relating prepandemic might few thoughts than shifted with about expected. you bit up the the bit And a particularly the Interbank would just is as years, comparisons. mix to comparing it holding average of and a portfolio you're has little last question think And my better little So Interbank and over just kind thoughts where

David Turner

let couch in just Well, our standpoint. terms a overall CECL it portfolio me of from

all fourth time implemented go the So X.XX%. if you was prepandemic, back XXXX, we at when that our reserve quarter so to CECL, CECL

that today, for the rates to and same apply mix, so and of would just we reserve that XXX. portfolio, loss there's portfolio a imply a those our seasonal current you pluses If different adjust have completely minuses,

I of slides. one think on that's our

of rest And to the reserves pretty think stress expected bands we've portfolios we have more the pressure so driver. are than the cover of of consumer base. FICO at The have robust losses. day, talked that about The our the I on it end lower consumer

content. And in it, some X%, cases, they higher-yield we of X.X% loss those and expectation, portfolios, have had the whether with both Acentia, performing are two and and line or portfolios they're higher Interbank that be In Ascentium, it Interbank we've that. portfolios, those call added,

and back businesses that consumers, gets are I -- the to speaking, So pretty and it shape. in good generally think fact

sure making portfolios. real we've too those fast been careful So grow don't we in

everything far, so plan. to according And is worth

Operator

D.A. question Davidson. the of Our from comes Peter Winter line final with

Peter Winter

I'm the around liquidity, did building wondering on comfortable more just Last the question. rate mentioned Just you're hand, XXX. exit NIM with the one Just but if you an you one securities restructuring. you're that? quick quarter, then still for

David Turner

Yes.

higher counting still. I should long pretty huge have rates think number we carry on a get down, get we short to are that could the bit little negative we Incrementally, come though, stays Again, be not close rates end being swap us. reinvestment yields if our will then driver. better. a whether that then our If -- helped on we're our book propel that and

the So are bit I to XXX, we carrying more would cash. a XXXs say upper

NII of last an standpoint. that while abundance You just it hurt doesn't from And us probably of an margin given really caution cash saw from quarter. a out us that standpoint, does hurt events the

margins settling because funding kind leading a regardless should down. we have we of lot costs still have confidence And the of of so in one our

Peter Winter

restructuring you do Got it. benefit margin? on much And the get the from how securities

David Turner

and cost million, payback round $XX of number, X.X years. Well, is, a it's

you can math. quick So do

margins, on points of basis positive. a mean of You couple

Operator

to Mr. Turner, over for closing turn comments. like floor I back the now to would you

John Turner

you participation appreciate thank Okay. our interest all Well, concludes in company. We your today. That your for the call.

Operator

gentlemen, conclude this does and Ladies teleconference. today's

You may time. disconnect this your lines at

Regions Financial (RF) 19 Apr 242024 Q1 Earnings call transcript