Regions Financial Corporation (NYSE:RF) Q2 2020 Earnings Conference Call - Final Transcript

Jul 17, 2020 • 11:00 am ET


Regions Financial Corporation (NYSE:RF) Q2 2020 Earnings Conference Call - Final Transcript


Loading Event

Loading Transcript


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 Nolan

Thank you, Shelby. Welcome to Regions second quarter 2020 earnings conference call. John Turner will provide some high level commentary and David Turner will take you through an overview of the quarter.

Earnings-related documents, including forward-looking statements are available under the Investor Relations section of our website. These disclosures cover our presentation materials, prepared comments, as well as the Q&A segment of today's call. And with that I will turn the call over to John.

John M. Turner, Jr.

Thank you, Dana, and thank you all for joining our call today. Over the last four months, we've experienced tremendous disruption and uncertainty caused by both COVID- 19 and overt examples of social inequality. The impact on our customers, communities and associates has been profound and the resulting operating environment has been challenging. As our country works through the current health crisis and take steps to address the systemic racial injustices that impacts so many people in our society, we remain focused on the things that we can control. We are committed to supporting our associates, our communities and our customers through these difficult times by providing much needed capital, advice and guidance and financial support. It is incumbent on us to use our resources and expertise in ways that create positive change. Providing value to all stakeholders creates the foundation to deliver sustainable long term performance.

The disruptive and uncertain operating environment has presented both opportunities and challenges. In the second quarter, we delivered $646 million in adjusted pre-tax pre-provision income. This was Regions highest PPI in over 10 years and a reflection of our decade-long effort to optimize our balance sheet and improve risk adjusted returns, while making strategic investments, all to deliver sustainable performance and reduce variability in our revenue streams. However, while the core business performance was solid, it was more than offset by an elevated provision caused by further deterioration in the economic outlook and the resulting impact on risk ratings and credit quality.

Just a few weeks ago, while acknowledging that conditions were fragile, I said we were cautiously optimistic about the prospect for economic recovery in our footprint. The Southeast did fare better than other parts of the economy as evidenced by the fact that the unemployment rate in a majority of Southeastern states have been better than the national average and the number of small businesses that closed within the region because of the crisis was also below the national average. Most of the states where we operate and reopened, consumer deferral request have begun to taper off and consumer spend continue to increase toward more normal levels.

So clearly, there were some positive signs that we felt pretty good about. However, by the end of the quarter, certain areas in our footprint began experiencing an acceleration in COVID-19 cases