Regions Financial : 2025 Morgan Stanley U.S. Financials Conference Transcript
RF
Published on 06/10/2025 at 14:07
Contents
Table of Contents
Call Participants
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3
Presentation
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4
Question and Answer
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6
EXECUTIVES
David Jackson Turner
Senior EVP & CFO
John M. Turner
President, CEO & Chairman
Katherine Randall Danella Senior EVP & Head of Consumer Banking Group
ANALYSTS
Betsy Lynn Graseck
Morgan Stanley, Research Division
Betsy Lynn Graseck
Morgan Stanley, Research Division
Okay. Great. Well, I have to read a disclosure first. For important disclosures, please see Morgan Stanley research disclosure website at morganstanley.com/researchdisclosures. And if you have any questions, reach out to your Morgan Stanley sales representative.
All right, super. With that out of the way, please join me in welcoming to the stage, Regions Financial. We are pleased to have with us this morning John Turner, Chairman, President and CEO of Regions. Thanks so much, John, for joining us. David Turner, Chief Financial Officer; and Kate Danella, Head of Consumer Banking.
So with that, John is going to kick off with a couple of slides, and then we're going to get into some Q&A.
John M. Turner
President, CEO & Chairman
Yes. Okay. Thanks, Betsy. Just a couple of maybe comments, introductory comments. So our focus is on -- been on building consistent, sustainable long-term performance. We talked a lot about soundness, profitability and growth. That has led us to focus on improving credit risk management, liquidity and capital risk management practices and processes, operational and compliance risk management. We focused on diversifying and growing our revenue streams, and we've been investing in people and technology.
Part of that focus on credit risk management, better client selectivity, better underwriting effectively has, I think, significantly improved our credit risk outcomes, and that's reflected in our CCAR results, as you can see here. Our capital degradation under stress is quite a bit better than the median average. And our PPNR as a percentage of stress losses, again, the best amongst our peer group. So I think very reflective of the quality of work we've done around credit risk management.
All that's led to better returns. Since 2015, we've come from the bottom quartile to be the top performer in return on tangible common equity over each of the last 4 years and are trending to make that a fifth year in 2025. And additionally, you've seen nice growth in earnings per share as we've been a top quartile performer on both a 5- and 10-year relative basis.
So we look at these total shareholder returns and again, feel like that our -- we have delivered dividend growth of better than 10% on a CAGR basis, which is the top of our peer group as well. And all those results have resulted in total shareholder return of over a 3-, 5-and 10-year basis, that puts us again at the top of our peer group.
We think that growth in tangible book value and the payment of dividends is a real proxy for a good stock price, should be correlated. And again, as you can see here, our experience has been very good as we've delivered top quartile performance, tangible book value and dividends on a relative basis. We also have, over the last 10-year period, acquired -- bought back more stock on a relative basis than any of our peers as well.
So we're in a great footprint. So we talk often about that, really leads to our strong performance, 70% of our markets, we have top 5 market share or better. And our markets are growing at about 1.5x faster than the national average. And when you add our priority markets, we'll talk about in a minute, they grow at about 2.5x faster than the national average. So we have a really good opportunity within our markets and we expect to continue to benefit from that over time.
Deposits have been growing. We talk about growth. And while we haven't -- we're not projecting a lot of loan growth for this year. Deposit growth continues to be very good, and we're doing that at a cost that's considerably less than our peers. All that's led again to, I think, top -- when you combine our hedging strategy with the quality of our deposits has led to peer-leading margins, which continues to contribute to our overall profitability.
And I talked about our priority markets. We've identified 8. You can see the names of those markets here. They have contributed already to about $12.5 billion in deposit growth over the last 5 years. And the deposit opportunity, the deposit gathering opportunity in those 8 markets is over $1.5 trillion. So truly exceptional markets. We've been growing in each of the markets and have increased our market share in 6 of the 8 today. So we continue to make investments in our business. We'll add about 170 bankers over the next 3 years in commercial banking, in wealth banking and treasury management and in our mortgage business.
We're also -- think about the way we focus on capital allocation. We think about human resources, human capital in the same way. And so we're reallocating -- about 600 of our branch bankers who will be reskilled and focused on markets where we have real discrete opportunities, a high concentration of either small business bankers or wealth bankers around those markets, mostly in our
priority markets, and that, we think, will help drive additional growth. There are about 12 million small businesses in our priority markets. Today, we bank 400,000 of those customers. So we think there's a tremendous opportunity. And again, we're already seeing good success here as we have generated over $2.5 billion in deposit growth among small businesses across our markets.
So we're going to continue to invest in our businesses, invest in technology, invest in people. We think there's a real opportunity to continue to grow and deliver the same kind of results that we have delivered over the last 5 years.
With that, Betsy, maybe we'll go to Q&A. Is that okay?
Disclaimer
Regions Financial Corporation published this content on June 10, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on June 10, 2025 at 18:06 UTC.