RF - Earnings call transcript Q4 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 for staying. Quarter Year Fourth Earnings Regions to and XXXX Full Call. Welcome are commentary David statement results. Earnings reconciliations Investor will and our regarding section disclaimer in of Relations provide non-GAAP forward-looking John our high-level our website. the include documents, and available which cover today's prepared our Q&A. remarks materials, presentation disclosures and These

I will call John. turn to the now over

John Turner

service today. with and year superior of a Dana, We well our you, focus was driven as morning, Thank consistent appreciate you profitability at Regions, soundness This everyone. good joining performance by our and call as records on growth.

management Our and record as markets treasury capital our XXXX. management in and wealth generated businesses all well services as products revenue

This earnings on XX%. of tangible year full per common average resulting share morning, of a reported in return billion, $X.XX strong quartile earnings equity of we and $X.X top

benefit from risk prudent strong our positions balance and management. liquidity capital sheet, continue We to solid and diverse

hedging proactive us beyond. support our footprint base business, fee-generating deposit long-term Additionally, and granular sustainable to investments and XXXX and strategy, consistent, growth in performance ability desirable our in deliver for position

are of markets some country. the the to fortunate in be best We in

markets the core U.S. XX% of foundational Our betas deposit we've and deposit top maintaining our market and of And markets while this peer-leading rest achieved growth the XX-state core that footprint. growth a to have supported in our advantage X are exceeds our share throughout

with it's some growth pronounced fastest-growing our create the in our to markets across of the even but in the than expected than the across of Population a of markets, growth average. future Xx within that significant markets national more more presence opportunities these is more of priority Investments We priority also for U.S., expectations have footprint double growth country. Regions.

investments these our more by outpacing to many uniquely We our long-standing a extending the to pattern history advantages across incremental customer market. leverage markets, operated and success underpinned for this XXX the in supporting since we Importantly, We as strong than and XXXX growing This are us presence growth positioned serve deposits a in believe we've success our these rich where to with invest plan loyal we've advantage. by further base. on a and $XX.X billion build already in we allowed established communities footprint years. they and build are brand areas, of has

us over So years the markets strategically to efficiencies. you'll talent, growth generate and see and continue in next technology several to drive invest

We're excited about our prospects. growth

of judicious However, we'll expense record continue our track management.

Management. Banking, the we bankers invest and Banking of Wealth next all Consumer years, to expect in segments: our across couple Corporate Over of

sets, associates. our within expected bankers to Specifically, approximately XXX additions loan well as markets. X treasury as we growth priority plan our These mortgage wealth across officers, to focus add are management relationship product management commercial bankers, managers primarily

located to align opportunities with within businesses into and small Consumer Additionally, million advantage regard within lean successes our the resources demonstrated focusing capabilities Bank, business. the branch allocation invest the small of our presented also to better take better mobile enhanced priority to online network, markets branch footprint. in by and We'll specifically the throughout deposit XX we'll capital on

time. allow already We've believe We and priority XX% enhanced $X.X growth business billion over and experienced $X.X these share or of capabilities XX% our markets. occurring small additional deposit focus billion branch in to growth since or will capture market XXXX, us

have we all about Putting XXXX. together, this going excited into we're the momentum

in quartile leadership a proven and believe, us solid setting desirable with highly We XXXX execution, a record top team track results footprint up, for growth, beyond. and for have plan a we a of

of we force and their plan, do center the right needs our to it doing Regions driving things successful are and right hand of I on put over to I focus XX,XXX They the teammates. way. execution want all call I'm the David, who and associates the to Before them strategic thank our at proud behind customers the

I'll over highlights quarter the David the regarding year. it and With provide hand some to to that,

David Turner

John. you, Thank

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

portfolio, remain the as our excess liquidity business quarter-over-quarter to average levels. decreased continue loans historic and utilization below customers carry modestly Within rates

However, client and optimism tariffs and clarity improving be to surrounding tax is reform lending. business a activity is catalyst for further expected and

of the result, probably a we be the economy. through will see the before As it to half second the filter impact year

footprint us our meaningful provides noted, John advantages. As

approved We're of federal customers For also benefit within allocated which is there are infrastructure state adjacent and footprint, infrastructure pipelines trending that example, already industries. encouraged and the up. commitments at infrastructure our billion will in $XX spending level, and

As a result, by will lending we real be continued softness this but originations. commercial XXXX, in expect in offset C&I a notable estate in pickup partially

consumer fourth in in by categories. as card the growth in offset remained stable Average was other quarter modest credit loans declines

occurred average average For full our both continue a commercial the growth a deposit consistent modestly grew in seasonality. currently tax expected during in modest we risk-adjusted mix low as focus From of year-end deposits. XX% with year approximately XXXX, X% growth and quarter, state, noninterest-bearing to county deposit standpoint, interest-bearing deposits customers. we expect growth municipal remain loan inflows we balances Noteworthy due commercial normal of Despite in to quarter-over-quarter, returns. ending on largely to year-end our total and at

this the profile to coming believe relatively will in be quarters. stable We continue

first offset grow moderate In year, reversion baseline quarter, the with which commercial a modestly of year-end our balances the by After aligns driven normally in see refunds. increase balance the the growth some by quarter, deposits overall expectation. typically through tax we first consumer

commercial as their excess to in relatively offset stable customers For the XXXX by is be declines we down draw expect deposits of liquidity. full XXXX, expected to in as year growth consumer deposits deposits average modest remain for

to interest points, lower income advantage. costs fully exhibiting yields X% falling Let's deposit rate cycle even the strength pressure basis well-positioned amidst costs benefits rising grew a and a believe The net from XX%. representing by fourth interest manage the rate-bearing sheet income. XX the from easing. our hedging funding rates. of Net to beta demonstrating after during fell policy interest costs Fed shift the quarter, industry-leading of on in interest deposit offset profile balance lower deposit interest-bearing lower Linked highlights our deposit quarter, performance further ability We asset

deposits income. balances net balances, interest cash interest-bearing little impact interest the pressure to margin cash basis increased net by overcoming and Net from X interest had deposit added basis impacted impacted to but negatively in the margin elevated points. reported beta average Growth X.XX%, which negatively X point

pretax a benefit. bonds a in steepening we XXX can Finally, few basis million that a and risk resulting executing repositioning advantage quarter, securities objectives. million interest we replaced of of have meet of be capital our curve the fourth $XX the yield and loss in a yield Today, and and point rate $XXX took management

will continue we going to However, forward. reassess

interest income in is expected and to uncertainty building protect quarter net rate this, income growth in and fixed turnover mostly net will between rate XXXX, on year modestly come full After near evolves. of path due X%, to term, expected yield the the ability growth environment and decline deposit Fed higher and from rate X securities momentum net interest is of as terms the the improving the the to X% In prevailing loan income growth increase and the XXXX. from backdrop interest established In to in days. first fewer loan

noninterest take declined income quarter. strong let's fee revenue quarter. look X% Now performance third from at a during Adjusted a the

and in management talent, we X%, increased and income management already noninterest adjusted but expect more year wealth we consistently from a will markets, generate treasury our Over in made near rate in time driven the by full capital can favorable it benefiting quarterly environment, record capabilities $XX capital $XX investments markets revenue million income. interest business Our of we have approximately run term. around $XXX to million, expect million and

continue look mortgage advantage, and servicing the for opportunities to our acquired Within since building $XX will XXXX. in billion mortgage, rights, to additional to we due part we've on experience cost acquire

to XXXX. grow adjusted We X% expect between year full X% and XXXX versus noninterest income

Let's Adjusted escrow repeat. noninterest quarter, noninterest shares Visa B on third expense on benefits X% expense. litigation a and and basis. declined expense, the compared reflecting year driven lower Full declines quarter an expenses salaries class funding X% noninterest to prior X% move not that did by to and XXXX basis the in reported decreased adjusted primarily on

of to investments in demonstrated prudently business. expenses fund a managing record committed over to expense our base have managing and time our remain track We

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

expense adjusted full be approximately to and noninterest X%, year we expect to leverage. XXXX expect up operating We X% generate positive to

XX expense remained unchanged primarily increased provision basis year was credit and Annualized X equal quality, charge-offs portfolios points, net X.XX%. asset of a $XXX or basis XX charge-offs net at Regarding Full basis loans million percentage the ratio at by were of as point net identified allowance points. charge-offs to driven resulting $XXX million, previously average loss interest. approximately for to

modestly Nonperforming business XX stable. total points XX below range, our loans relatively services while historical remained basis increased of points, a as to criticized percent loans loans basis

through-the-cycle net between Our unchanged are and XX and XX expectations basis charge-off remain points.

it be we expect primarily the to to year, associated loans expect within range, already do to portfolios end year these half We the full first of with the be interest. reserved but importantly, net previously relates of for. to attributable in our charge-offs losses towards As currently XXXX, of losses are the more higher portfolios identified elevated

quarter. include million in Common Tier Equity from an X.X% Let's estimated paying the the of with share to in ratio estimated turn the X million XX.X%, quarter, to impact decreased an rates interest the to AOCI, while on $XX We dividends portfolio. to Tier attributable third X adjusted and X.X% long-term fourth ended during to equity common common capital $XXX When from the from securities higher liquidity. quarter executing repurchases

maturity fourth transferred $X We better this as securities to continue of we held an manage to end to Near we regulatory available-for-sale of expectations. the execute prepare billion additional the transactions volatility. new to for quarter,

X.XX% to This Equity provide increase continue with flexibility inclusive repurchase capital near to commensurate to the manage evolving and and proposed dividend range. supporting shares Common regulatory expect objectives growth closer and while meaningful we Tier In to meet allowing to the going X.XX% forward of operating to changes earnings. strategic us X term, our AOCI will

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

Operator

comes first Ryan Our Goldman the Instructions] line with question Nash of Sachs. [Operator from

Ryan Nash

getting Maybe capacity investments? inclusive to off the to talk the make growth create of start to these you're just maybe to with where on from efficiencies X% X% about David, expenses, investments. outlook

about have pick incremental you're expectations comments growth operating your C&I And made And I positive the then ability over what for for loan generate second, making that think time? to means with that up, follow-up. do to given leverage you a you just combined investments the

David Turner

Yes.

we an from are the categories, and standpoint, benefits. expense So mentioned base expense XX% salaries key of our of kind

number right we've think I that. people done very So we That right watch of carefully, ends. of our we pretty places. head a in that making job And deploy right sure count the the never the good

and processes there. leverage which streamline We I to we look technology, continue to there's but okay, opportunity think more for opportunities do

managing head is that important. So count

Occupancy one reducing cost for and but job footprint, and us quite we've square pretty that's the office in over is largest bit. both categories, footage of done branch of footprint, a us so time, the in helped more good a our

the on we effort making vendors is have to we our appropriately, what the it's what good we make third third-party that only to run need that consultants or pretty and use business. to software a have vendors, whatever, whether getting And paid vendors for getting we sure sure we're or

that's technology. We're putting loan and of other deposit investments middle of a make in So to the new allowed parts us system. system in in

comments. as pay been John going people, And to for we're And so that. his in able make to mentioned in we've investments

if So that, positive end Ryan, do we're up all to just we'll operating do on have generate going that, Where we leverage. we we -- see. to

Ryan Nash

Got ask about it. capital. to Maybe

to of XXXX? Obviously, moving And thinking targeting? reported to limited talked target that rates. ratio So of X.XX% X.XX%. for what about growth, David, Maybe given means the it that a that's a you you return of you for the managing can talk think over of just capital you're bit uses talk maybe with means capital about and how the that just the what amount capital you're amount about about

David Turner

Yes.

loan particular, to and clarity. think we the We So foremost, more to growth want loan we regulatory growth. pick -- and the growth policies year it the half back our ready. as will as well business, grow have the and our want in but loan with capital fairly up first get at be policy, don't force slow want there front to in clarity use in We half of to

XX% dividend. be between We is to loans target of paid of our dividends. After in our really want somewhere to and form the out of earnings XX% a

So the call middle. that XX% in

of to As about AOCI capital we striking believe our post within we number. distance a we think AOCI, need be

at the end bit X.XX%, to of X.X%. the So can move this XX-year. at on that's That a X.XX% quarter, we're based quite

XX-year the at pegged we've way. kind by our base case, of so X.XX% as And the

to So part rules are we close going enough we continue means but the some to capital but immediately, get We that's we extent AOCI therefore, be believe CETX what reported that to our will to a does become want build increase know to high have to continue be, to don't we X.XX% to likelihood that, want don't the the and regime. level. of which at

growth, have have we We loan fewer buybacks. have X%, baked And really what we'll being. more growth have which buybacks we baked loan on buybacks. If that, more if do our ultimately If it, we approximately ends it than have loan depends is, into more we'd growth in, plan. just than call we up have less have

and we into everybody, X many year amortization the that Tier Equity last basis Common to the I seen the XX quarter. of it, to And this that's, remind this, do I have about haven't points. X ratio goes but call talk CECL want

needs which that to makes So quarter sense. buybacks otherwise if first be be lower will they been, than a have that means would the necessarily piece,

Operator

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

Robert Siefers

that your David, we, on sort a how way know see expectations updated any thoughts higher But full hoping you're to pricing stay for if the down. evolving. I the about thoughts deposit beta you on are get of sort through was curious just cycle, while? of indeed, I

the X within that hopefully the And of pros there. maybe you Slide just then sort on cons listed and of context

you sort a chunk that good to kind like NII the that? curve of focused where your you year of were or momentum shape versus either to rank pricing, are is the of this stuff programmatic, stack things most given if Just of like deposit sensitivity rates

David Turner

Yes.

could how referenced we're our checking fair why you us. NII to of fair down. One, of be X, up good glad We there. investments markets make we're drive Page to sure be in price for giving continue base to in them of important the our grow thinking can to case Deposit want deposits. accounts where our to grow to that's pricing A We want That's deposits. about we're want we priority we terms couple and checking business. noninterest-bearing I'm what So very competitive. or customers accounts on making their guide a operating accounts, and things is

continue deposit so And as costs. to our we we'll do lower that,

call it, XX% base beta, where down Our a is case about XX%, are. which is we

they of higher others Now had a had more the through a basis a move on that cumulative because on cycle. beta

over necessarily So hedging maturing high-cost protect that to that going also ours be in We to us. help lower, but But have we us where growth standpoint. is we help are and going CDs promotional deposit some a in that's deposit place some have looking time. to do markets we're out our will do to there think continue grow, we that's from have benefit rates our to

the bit, watching really you're primarily of curve too. combination yield a your shape a us deposit does the help really just it's of So costs and

yield steeper a is better. So curve

Operator

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

John Pancari

pressure on pressure are like returns by it the the it I Just on you in look And the by risk-adjusted mentioned like you conservative. and go did X% the Where you as of little about at loan should cite or influencing returns? you bit growth? loan pace XXXX. Is loan commentary And know look growth are -- low. considering today returns outlook. are looks if on that type relatively geography? I seeing a you that, to that that's It at Where you're relatively that expectation seeing I again,

John Turner

thought don't earn evaluating thought the with that establish portfolios. business result, a we able We're those. We with as of the a establish to always other of over that might, much the build John, don't would. as credit a we opportunities. ancillary I are or and course we we expectation are business about say kind we loan able that customers we to customers. portfolio Oftentimes, choose generate relationships to just with generally would our exit relationship the and And we'll it's not period, an we to X-year X-year originate we

last I you we allocation, continuing business, us is primary exiting as risk-adjusted years what able we're know, and X reason that have been relationships reallocating remixing returns portfolios, consistent we business. sustainable generate to our that X, to capital of And in discipline a appropriate have. generate us to Much capital the the focus it returns doing, think, and is is that on over We certain that think a well served today. don't really why has

David Turner

X%. your to opening different of the are There add I'll that, there. couple on comment stories John, a

minuses. growth little then estate the investor some have I bit. But other little a think, consumer given pluses over can robust, our year, of grow way. have this the card will and will will and a will Credit business real others, other X%. be that some be a quite So of parts challenging bit. We is the going consumer the C&I market more It's the mortgage up

net-net, different think return the we reasonable. out get it. We want that we So sure make there's X%, we on capital to our stories but there appropriate but in it's are lay

John Pancari

it. Got

X% the higher. expense it I an to might Okay. does X%. your Great. increase you Can IT that be XX%, but in That's X% And incorporate signaled you guide then to -- of believe helpful. moving had on it's budget? that currently

So to revision incorporate up does X% X% upward an that budget? that to

David Turner

than as to make maybe continued investments, We've you most. does. better It know,

go there. higher. that. XX% do on system year X% system We're call believe going to that systems, will over investing money years this we've be -- we're third deposit to spending to invest a we that, range But second, time, away. And been it, in continue couple are Loan a deposit quarter and the and of new We of in, loan system. will

percentage We guide does now. committed to the haven't that a we investments those have already. given But contemplate right

I are to out And to get way there. look things for have vendor that. pay to best-in-class technology, at make and and a grow, investments I'm spend that how Those the to to we to about earlier and have when occupancy have would talking have as we benefits to we figure to said continue salaries and

John Turner

more two that's while technology, else. somewhere expenses on I system two, going And time, One, on that we deposit reduce it's track, we're the money the future, conversion. in say, budget. things it's on would it's assumption John, spend may, on indicated, just to David with the about

Operator

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

Peter Winter

sort Just of on expenses. follow-up

I opening your if John, investments Just of expense you about, growth. terms in think plan guidance to future make series X%. bankers of revenue you is X% to comments, a The and outlined in

So back positive you question in leverage? given the is, than if pull comes operating growth investments focus this would bit these expected little revenue on weaker on a

John Turner

people Well, those make operating we're and we're generate will also leverage. committed although to primarily, enhancing investments those generating we platform an We'll as expect believe We a revenue we make we in the in to investments. associated in measured technology along the with that mobile investments indicate making investments way, way, example. positive our

So investments generate I the don't investments anticipate having making and the we've we we will given like think revenue have revenue. this, to necessarily operating which in the address track your record question come positive do because growth made

much to time. committed are We leverage operating positive very over

continue beyond. and We we believe if we'll we absolutely deliver will XXXX. the that growth, in that get will, expect we 'XX revenue in And

David Turner

Yes. Peter, to add to just that.

just operating you can't paid would Your need because going what not for to leverage? revenue for to of book, they we're back the And need you get today. investments forma. over sometimes That's make, all some pro make be we've be about. front sure do generate coming we're XXXX what investments to back has positive And that is tailwinds going going [ at in you abandon that to at, that question XXXX is you making to book. terms built-in ] the point us

The about question the operating have question so is we how And much. isn't positive leverage. whether

came Ryan's of think I at kind I so original And question.

the disproportionate to very year. committed So our think grow United the investments we're to growth relative of rest have areas committed to very States. And in we'll that where business this making we to

Peter Winter

Got then just it. And on helpful, helpful. That's really credit.

in would think lower year You points charge-offs in basis and Do XX elevated charge-offs mentioned for. in first come in you first that upper the will net half. to of be pretty X.XX%, that consistent to the then the 'XX? the net end second it's of XX the which and drift expect then ACL you lower in half above has I understand the half? ratio And from been secondly, down reserved

John Turner

drift which have to range ratio and a charge-off we given and the handful than given housing quarter, we've point a office credits, XX could little that of primarily in in large the XX higher signaled. Well, basis a transportation, in senior

are In half our of nonaccruals X fact, roughly in portfolios. those

episodic. higher resolutions, a We so And about be the little experience could a charge-offs as think you range. might they quarter than were somewhat when

are, losses we appropriately believe, obviously, for in credits. those We reserve

think come also see And so assuming to ratios could they absent I coverage get improving economy would you begin resolved, an with our down. that loan growth

Operator

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

Matthew O'Connor

what details, sorry down? then it categories other those were market. to on hoping some some thoughts of [indiscernible] was or the strong some levels, of service seasonality if there's get but the just but know I XQ And earlier, on and outlook categories. charges, management XQ just capital don't any if all you investment fee cards, unusually I besides covered on

David Turner

Yes.

individuals, that adjust -- have some and funds have, I we think that have where next what's that HR see for are we benefits this baked baked for year in a to certain in trust we others numbers that. asset

noise up go do the goes as of assets have bit That's little so our million. numbers. the why this about expenses. So we trust $XX that's And and in in up, NIR

see it that. of in distorts It's people really rate that $XX can We at run in supplement, If quarter-to-quarter. our you put look million. our XX think Page about you NIR

a the mentioned. fourth the markets, more you as get you bit are episodic As capital things quarter, little are that to

what's on So any It M&A Advisory had year. pipeline good a in in depends quarter. the given the finish for

the that will cash is markets, on which close finished higher end. which rate nice, we $XX million at be $XX a expectations. baked we get we're to going for many, deals, capital -- not more $XX signaling million why a smooth on million, more quarterly in $XX into you're million, it lower be at If close while that. be total the quarter we should don't to loan, run than If we we'll So

I a is like episodic. bit, said, M&A So

swap income, just have swapping, You the right people rate into entering aren't protection environment. rate given interest now

much So of contributor. that's not a

in Syndication it contributor. be up to steady a the can markets, little depending a a it bit, has even bit the good it episodic, was we quarter. revenue been But fourth was in been actually That And little down even then had rates. on better better a could year. we more finish that's get have strongest, it capital just but than rates really a quarter. have the our quarter real If estate coming

a rate So million little $XX the from we going to time help million, need markets, $XX $XXX net-net but the to to think, million get it to being, I environment. for capital we're work and

just in fairly charges balances. Service noise on that partly to advisers to anything. Management investments but in due due wealth double markets, grow customers no Wealth continues are to partly predictable. to we're is and continue digits, And in real path. growth making There at

with happy that. we're So

that of to result our a We what biggest it's helpful. rewards them, we the we that, when log on ATM we people negative helpful liability But was identifying to believe card line. in the thought was more. as real started have fee rewards be the because the and our are using time liability. That's Probably customers would rewards and where you

reward XXXX. of So as adjust had and quarter a NIR that shouldn't liability, we that forward to repeat little we was for deduct go bit a our the into in fourth

Operator

Erika Our comes of Najarian question the next from UBS. with line

L. Erika Penala

we've David, we Slide about in think a we as should deposit have back seen long X, as just mix about base, rate guess, the think rate given growth? deposits. environment since in all excess I'm Regions, seems itself a wondering X. that your experience seen time how different we DDA pressure to on neutral wondering, with impact growing beta guess investors wondering different you've it's DDA sort of scenarios. thank is on again? wasn't your color in liquidity I I -- Just Regions of lapped can what you just such like what of been regard for going to the where I'm COVID And terms it see how And And environment the completely

David Turner

Yes.

and evidenced we account. so commercial to not that, question and a XX% a are grow important is we a operating operating can the consumer I relationship is and good total deposits make a grow pretty checking of to think investments do than have we've very valuable to business our very it's because accounts. by will side, accounts which continuing fuel managers to the one the our to job about in account a engine about in our operating that of and a doubling DDA of DDAs, get And great new business that standpoint. down logos noninterest-bearing, done we're business small continue It's small an we'll making our on on to loan, more consumer branch it's getting But the margin relationship, side reinforcing if our work. of the And continue which from business. our us

that about the environment at the markets really after And investments do rate and not has listed kind forward that. that's priority getting to looking of put we're ground getting it's John our and driver our the in So the could us on to we that boots making of challenge what the by it. It's material. we out that's the seeing just businesses,

L. Erika Penala

assets is perhaps could the over about more 'XX? of priorities should fee where clients in your sort And investments your XXXX. the trajectory in mortgage just we think investing question, term? And continued about investments medium servicing sort you think it. investment, are that And in terms in second Got David, maybe in as even -- mentioned income what fee you income. you how of better, of what service

David Turner

whole Well, provide. we so we but invest lot, not services value look like Sabal customers to something our take been would us have we what have don't ask products a need income could made and and our that trading side businesses at And sales don't that there. sense We and businesses nice a us. if that seen in in all that robust you've be find of to a helpful the platform. That fixed business Clearsight for us and there's

MSRs. buy but too [ We RIAs they're the love ] group, to expensive. wealth mentioned in You

chip to so we have nonbank-type those And to have to invest the capital continue in we acquisitions. --

an it. we price for with we all don't So but We're a that come pay have. service or have it, product over appropriate up to we we sure make

Operator

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

Gerard Cassidy

John, you some and to operate. core What next it's which on have going and growth. of let's you peers you your you it couple population commercial do to demographics do digits modest because to you into, guys as in think Good And is the impressive you define particularly good the with loan the really years? nominal to growth, GDP you been loan growth take data started you your side. and for time, area over growth take some know mid-single What time, guess, of continue at I rate folks presentation growth loan think, in of could your achieve to economic going I for very about bring same talking loan say, struggle footprint. the the in data

John Turner

-- marketplace. there they're less have less their sheet, Well, in quickly One of cash. and just lot working customers inventory, there's pre-COVID, to are the tremendous amount of more liquidity figured their how have shrunk than were are just Gerard. have is natural they potentially they with operating receivables turn out capital some Customers needs balance operate a a headwinds,

before an that increase work we'll see And customers activity. that put to so to money we believe in have

said activity projected X% be about really expect our we good. continue historically low to utilization growth. pretty line levels. still that, in saw nice talked do David a commercial increase year-over-year. to Having lending is loan But We at production

All to portfolios. in that have said, growth also we other see

new to things headwinds is been new a real real money, borrowing business cost of that fact So not within we growing cost, are by have have of originations cost and that supplies of generated some cost largely insurance, due estate. originations construction, all estate headwind the today, the those to

So that growth offsets naturally C&I. in

still they And little Consumers stable. book cautiously money, but is a then the probably more spending are consumer were. than fairly

And so consumer other our growth stable. businesses seeing fairly card are in our we're some while portfolio,

have overall portfolio. growth to real we things some in growth order other C&I to think the beside I experience see loan in loan

Gerard Cassidy

to John, the And color, what those tying maybe did guys were How relative to of ago Can EnerBank they and any going of are when couple and they you Ascentium. bought into books comments. David, or loan years us you give just them in growing on their produce? terms expected doing you you acquisitions a

John Turner

Yes.

of really equipment. been would with both on which Ascentium, focus two we've business growing is think loan acquisitions. They've small is the I essential the been months, their have, been has I but nicely, XX business older business the originator, businesses say, XX happy increased ran it et against costs, up feeling borrowing are some to course cetera. that over increased cost, pressure call the the a small last, of pressure as of

as months over as the much would we grown XX So expect. last they haven't

experience integrating that that branch Ascentium. are, really good so we within can our We branches that the our platform capabilities however, bankers into have use having

minutes. approve that loan XX can about a We good really quickly. Ascentium example, can within have They close technology. an As loan

business in happy what within we're so branches. small lending about means that and our growth for And excited

some runoff EnerBank, business we to of had business, originations, With have decided regard we the and grow. home that that ] sole improvement there not [ finance continue we've a to bit portfolio to that a

lot XXXX, there so time. And so come a We of but as within will or growth EnerBank. we're over in portfolios portfolio, to remixing our anticipate speak, don't our that

quality We've are we they can have that believe continue that portfolios in and technology and over been given that really time. happy grow Ascentium credit to frankly, those capabilities, and EnerBank, we the both of with the the

David Turner

to Gerard. I'd add And that,

both of While lower was a they're balances, question a your portfolios -- spread more They're much lower lending mentioned, than with environment just those fixed about rate hedge because on natural rate that us. typical. John is protect

really of has like but compensated both those businesses. which why we for it risk, paid that Now higher we and is get risk,

Gerard Cassidy

slides very that's there. portfolio I provided earnings and we good. really that. Slides securities call, that. and XX and found appreciate guys, in some and all Dana appreciate you interesting And the Very XX, your you obviously, about for then, put good information David, together I And your

of regulatory year. keeping to? go goes current if this losses assume section sale the at III the are held-to-maturity On But through the securities in we and think comfortable your details XX%. later unrealized hopefully, assuming you represents end that it the about all the Or of HTM will just we level? it available game for capital, do you portfolio, that Basel you to show alluded as comments, where of the portfolio And the is you it know don't when -- finalized, all

David Turner

Yes.

we've So saw over today. X%, past were Gerard, quite this bit. at beginning that think, of We I that the at you year. about XX% at We're the a increased year, --

than does realize get the for still. an of changes the of rates to plan the relative regime to that about do that AOCI capital we median, have become to peer lower interest volatility in We is We the reducing important us. But to XX%. that's think extent interim part

XX% comfortable think is we So enough.

really with risk about interplay You liquidity LCR start getting into higher to and management. percentages, think have you the

want yourself in one HTM. So too all another you putting problem It's one don't to for much hamstring create you. and by

think if we our to once about get and XX%, point. reevaluate come that be. analysts and good we'll and we of a starting all is And update just regime, back need pretty percentage there, investors So any

Gerard Cassidy

you targeted active And to you likely 'XX strategy number we out that very maybe to that get 'XX part to I be repositioning, the you've been XX. as in reach repositioning Slide point gave is Should know there? in that assume of us, in just and

David Turner

that take 'XX that 'XX, of sense there under the to I would losses you're -- have in that the we trying primarily see saw been because in repositioning not to securities say the the for a -- just make us our are that. help period out don't We've you years. going payback magnitude X repositioning, with

our go about And really I years. we X.X don't that. want much was last one to over think

steeper if a maybe to curve, makes sense we that us. some So have

pushing of to We the going we X%, magnitude we're case, maybe I X.XX% Our repurchases that is have on in on in start don't you either then the the XX. so saw baseline have 'XX. think answer a different

Operator

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

Betsy Graseck

system here. the into of that indicating XQ, place loan it, the will One, go was were this year, on expenses, Couple follow-ups what you XQ?

David Turner

correct. That's

Betsy Graseck

relates will So as more it my there expense Or that system is question be -- of -- to roll okay. Is a there off unwinds? 'XX?

David Turner

get Yes. when I third don't think that from kind That's you'll we see pickup any rate. to baked okay? into quarter, the our run of that appreciable

any think So change from live. going that I don't there's

Betsy Graseck

quarters live, couple get turn and wait you But it, test you then the off old goes once a Right. to of right? it system,

David Turner

I We savings do, there's but there. appreciable don't think

I serve And help cloud-based all think about. the an new to will think it clients us system. system managers, our serve really customers a particular, And I our better. that it's opportunity relationship what gives in That's better. our that's

Betsy Graseck

timing I'm sense the ramp prior the does to driving can Okay. trying of follow-up to kind the know at on the the this in bankers us how Super. the bring compared question a the sense a then as just years? of you But over course And the you call, year time I mentioned around looking beginning of give in of of get XXX a you're are frame. to that business. you XXX bankers. what the on number,

you times As I'm is revenues. productivity know, count sure head

a Is those very this be understand And to year? here. is helpful X understand. would looking a So That ramping to multiyear? this

David Turner

to multiyear. hire year. sure not hiring it, X-year call X a XXX That's not in people X Well, X-, we year. a, the I'm answer could very the end. -- in XXX It's you at That's got a we're people -- not that's ramp.

see X% the year. the coming to the baked X%. on and probably throughout really towards of year, into year You'll the the back That's our of that middle

no feather for effect so committed leverage. to makes growth. so it in that with all shouldn't to positive the this sense time, us. see operating And this we're we're same committed to revenue. you it expense big Again, cliff At having of We're going

So how to do up not bunch that that see very have be we is on our of that sudden show a we of going and the doorstep. all you're to people just do a to measured, pace going so

Betsy Graseck

the I'm along pace to this this into be prior accelerating And it. well sure and indicating of way wondering, space. I'm that the people you've into hiring doubling going business just you a are tripling? pay, hiring wondering, Got I'm been of is this you're just as

John Turner

business, mean on I just XX% Yes. head XX% or range. increase the in Betsy, would the upon business depending a by function count be it to depending

Operator

with line final Chris Our Fargo. question Spahr of comes from Wells the

Christopher Spahr

in It's growth the expect, loans a think growth normal the you. deposits you and environment be So a this is much. growing a of yet rate and do points, a outsized of kind of you What recent lot [indiscernible] strong obviously, more both? and organic should to footprint for

John Turner

we to we business said to number with to presence. challenging, we've competitors of consistently and but our continue the in Well, or grow to to we're markets relative that We acknowledge share little makes ability indicating markets there. our our ought we that marketplace the ought same at have think in our an rate the they into called Yes. priority about marketplace, have grow significant market at position them growth and confidence core in a maybe we economy have the excited little markets. have we've there come we those markets, grow of the faster business the degree we plus are in high a be more our an which new growing to -- opportunity a And where current opportunity, we to core want time, protect markets, where a our markets

Christopher Spahr

may the And benefits of like be when more also you'll already, you think timeline little standpoint, you what's operating I an just what you both opportunity just expect ancillary bit the see, was an kind asked kind And progress a the know this little done? but just on specific are on a can but to of be standpoint? tech

John Turner

deposit and our begin the first in this running quarter system of in David XXXX. an Yes. quarter, loan to convert the XXXX half mentioned, likely second the second then later the year of new system implementation we'll pilot on a second to with

to a more upgrade think it us system. cloud-based all terms a much We'll give we a It faster benefits, system gives think And the of capabilities, capabilities. we more us competitive allow just bit they launches. will products. In bundle can all, easily so -- quickly. think us product good We It's we in interesting advantage. more have

a you Okay. for That's appreciate great your weekend. very Thank interest today. Regions. all the in questions. in much We all Have calling

Operator

today's teleconference. This concludes

at time. may your You disconnect this lines

Regions Financial (RF) 17 Jan 252024 Q4 Earnings call transcript