Regions Financial Corporation (NYSE:RF) Q1 2018 Earnings Conference Call - Final Transcript

Apr 20, 2018 • 11:00 am ET


Regions Financial Corporation (NYSE:RF) Q1 2018 Earnings Conference Call - Final Transcript


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Good morning and welcome to the Regions Financial Corporation's Quarterly Earnings Call. My name is Shelby and I'll be your operator for today's call. I would like to remind everyone that all participants' 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 Ms. Dana Nolan to begin.

Dana Nolan

Thank you, Shelby. Welcome to Regions' first quarter 2018 earnings conference call. Grayson Hall, our Chief Executive Officer will review highlights of our first quarter financial performance; and David Turner, our Chief Financial Officer will take you through the details of the quarter. Other members of Management are also present and available to answer questions.

A copy of the slide presentation as well as our earnings release and earning supplement are available under the Investor Relations section of Our forward-looking statements disclosure and non-GAAP reconciliations are included in the appendix of today's presentation and within our SEC filings. These cover our presentation materials prepared comments as well as the question-and-answer segment of today's call.

With that, I will now turn the call over to Grayson.

Grayson Hall

Thanks, Dana. Good morning and thank you for joining our call today. Let me begin by saying we're pleased with our first quarter 2018 results, which represent a good start to the year. For the first quarter, we reported solid earnings from continuing operations of $398 million, up 44% and earnings per share of $0.35, an increase of 52% compared to the first quarter of the prior year. Importantly, we delivered positive operating leverage with solid revenue growth and disciplined expense management and this marks another strong quarter of respect asset quality.

We continue to benefit from our asset-sensitive balance sheet and strong deposit franchise, which drove a 6% year-over-year increase in net interest income and a 21 basis point increase in net interest margin.Total new and renewed loan production increased 24% over the prior year, resulting in a modest adjusted average loan growth during the first quarter.

In terms of the economy, we remain encouraged by improving conditions, as well as customer sentiment. The consumer generally remains healthy, and we continue to experience growth in our consumer loan portfolios as well as consumer deposits. During the quarter, we continue to experience broad-based improvement in most credit metrics, including further reduction in non-performing loans, which marks the best metric in over a decade.

With respect to our business strategy, we remain committed to diligent execution of our strategic plan and we're making notable progress with respect to our Simplify and Grow strategic initiative. As part of that effort, in March, we announced steps to streamline our structure, creating more distinct lines of responsibility and much clearer accountability. These changes simplify our organization, strengthen our connection with our customers, increase engagement with our communities and create greater alignment with our business and our strategies.

In addition, through reinforcing our commitment to our communities, we believe these changes will further