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

Apr 20, 2018 • 11:00 am ET


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


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David J. Turner

loan and lease losses decreased 12 basis points to 1.05% of total loans outstanding. The resulting allowance for loan and lease losses as a percent of total non-accrual loans decreased four basis points to 140%. For the full year of 2018, we expect net charge-offs to be in the range of 35 to 50 basis points, and based on recent performance and current market conditions, we would expect to be at lower end of that range. However, volatility in certain credit metrics can be expected, especially related to large dollar commercial credits.

So let's move on to capital and liquidity. During the first quarter, we repurchased $235 million or 12.5 million shares of common stock and declared $101 million in dividends to common shareholders. As Grayson mentioned, following quarter end, we entered into a definitive agreement to sell our insurance subsidiary. Subject to regulatory approval, this transaction is expected to generate additional capital of approximately $300 million at closing, which is expected to be in the third quarter.

The capital generated is expected to be used to repurchase shares of common stock, subject to review and non-objection by the Federal Reserve, as part of the 2018 CCAR process. Our first quarter capital ratios remained robust. Under Basel III, the Tier one capital ratio was estimated at 11.9%, and the fully phased-in Common Equity Tier one ratio was estimated at 11.0%. Finally, our liquidity position remains solid with a low loan-to-deposit ratio of 82%, and we were fully compliant with the liquidity coverage ratio rule as of quarter end.

Regarding 2018 expectations. With exception of an increase in adjusted net interest income growth, our expectations remain unchanged and are summarized again on this slide for your reference. So in conclusion, our first quarter results provide a solid start to the year, and we believe our Simplify and Grow strategic initiative, along with other opportunities and competitive advantages position us well for 2018 and beyond.

With that, we thank you for your time and attention this morning, and I will now turn it back over to Dana.

Dana Nolan

Thank you, David. As it relates to Q&A, please limit your question to one primary and one follow-up to accommodate as many participants as possible. We will now open the line for your questions.