Regions Financial Corporation (NYSE:RF) Q2 2019 Earnings Conference Call - Final Transcript

Jul 19, 2019 • 11:00 am ET


Regions Financial Corporation (NYSE:RF) Q2 2019 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. [Operator Instructions].

I will now turn the call over to Dana Nolan to begin.

Dana W. Nolan

Thank you, Shelby. Welcome to Regions Second Quarter 2019 Earnings Conference Call. John Turner will provide highlights of our financial performance and David Turner will take you through an overview of the quarter. The slide presentation, as well as our earnings release and earnings supplement are available under the Investor Relations section of our website.

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.

And with that I will now turn the call over to John.

John M. Turner

Thank you, Dana, and thank you all for joining our call today. Let me begin by saying, in the phase of significant market volatility, we are pleased with our second quarter results. We reported earnings from continuing operations of $374 million, a 3% increase over the second quarter of the prior year and earnings per share of $0.37, an increase of 16%.

We also delivered solid pre-tax, pre-provision income growth compared to the prior year and generated 4% adjusted positive operating leverage. This quarter's results demonstrate our core business remained strong and our focus on meeting client needs is producing sustainable growth. We grew revenue, average loans and deposits and new customer relationships across our markets, while reducing expenses.

We're also experiencing success in our priority markets, which included Atlanta, Houston, Orlando and St. Louis. For example in Atlanta, the pace of new account and deposit growth is approximately two times better than that of the total company. Further, we are outperforming the general market in terms of household account growth in each respective location.

Shifting to the corporate bank, in just six months we've added a significant number of new clients across these same markets. Commercial banking growth has been particularly strong in Houston, where pipelines for credit and deposits are an all-time high. Although it's early, we believe these facts provide evidence that our investments for growth are paying off. We remain focused on those things we can control, and we continue to feel very good about our future. We are largely complete with our hedging strategy that we began about 18 months ago. These instruments will provide stability to our net interest income and net interest margin. Dave will spend some time discussing the details of that strategy in just a moment. We also remain well positioned to prudently through the next credit cycle because of our ongoing risk mitigation activities including client selectivity, sound underwriting, rigorous credit servicing and appropriate concentration limits.

We remain focused on appropriate capital allocation, balance sheet optimization and risk-adjusted returns. This work led to our exit of indirect auto and insurance and the decision to exit a point of