Regions Financial at Morgan Stanley Conference: Strategic Growth Focus

On Tuesday, 10 June 2025, Regions Financial Corporation (NYSE:RF) presented at the Morgan Stanley US Financials Conference 2025, outlining its strategic focus on sustainable long-term growth. CEO John Turner emphasized the company’s strong performance in return on tangible common equity and robust deposit growth. However, the company noted some challenges in the commercial sector, particularly among companies with over $250 million in revenue.

Key Takeaways

• Regions Financial is a top-quartile performer in return on tangible common equity, with strong deposit growth at lower costs than peers.
• Plans to hire 170 bankers over the next three years, with a focus on priority markets.
• Guidance for net interest income growth is set at 1-4% year-on-year, with expenses expected to rise up to 2%.
• The company is strategically reallocating resources to high-opportunity markets and optimizing its branch footprint.

Financial Results

• Return on Tangible Common Equity (ROTCE): Consistent top-quartile performance over the last four years, expected to continue in 2025.
• Dividend Growth: Over 10% CAGR, leading among peers.
• Deposit Growth: $12.5 billion growth in priority markets over the last five years, with costs significantly lower than peers.
• Capital Markets Revenue: Expected to generate $80 to $90 million per quarter.
• Wealth Management Growth: 8.3% CAGR over the past six years.
• Net Interest Income (NII): Projected growth of 1% to 4% year-on-year, potentially reaching mid-range.
• Fee Income Growth: Guided at 1% to 3% year-on-year.
• Expense Growth: Expected to be flat to up 2% for the year, indicating positive operating leverage.

Operational Updates

• Priority Markets: Identified eight markets with a deposit growth opportunity exceeding $1.5 trillion.
• Banker Hiring: Plan to add 170 bankers in commercial, wealth, treasury management, and mortgage sectors.
• Banker Reallocation: 600 branch bankers to be reskilled for high-opportunity markets.
• Commercial Banker Hiring: 80 planned hires, with 23 already completed.
• Small Business Growth: $2.5 billion in deposit growth from small businesses, with a focus on treasury management.

Future Outlook

• Loan Demand: Dependent on economic clarity among customers.
• Capital Markets: Expected revenue of $80 to $90 million per quarter.
• NII Guidance: Potential to reach the upper end of the 1% to 4% growth range.
• Core Deposit Conversion: Completion expected by 2027.
• M&A Strategy: Focus on non-bank M&A, with plans to capitalize on market disruptions.

Q&A Highlights

• Customer Sentiment: Described as "wait and see," with better sentiment than in September.
• Tariff Impact: Customers managing tariffs up to 30% with minimal credit risk.
• Digital Assets: Not a focus; Regions will follow rather than lead in crypto assets.
• M&A Disruption: Plans to capitalize on market disruptions from M&A activities.

For a deeper dive into Regions Financial’s strategic plans and financial performance, refer to the full conference call transcript below.

Full transcript - Morgan Stanley US Financials Conference 2025:

Betsy, Morgan Stanley Sales Representative, Morgan Stanley: Great. Well, I have to read a disclosure 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.

Alright. Super. With that out of the way, let me, please join me in welcoming to the stage Regions Financial. We are pleased to have with us this morning John Turner, chairman, president, CEO of Regions. Thanks so much, John, for joining us.

David Turner, chief financial officer and Kate Donella, head of consumer banking. So with that, John is gonna kick off with a couple of slides, and then we’re gonna get into some q and a.

John Turner, Chairman, President, CEO, Regions Financial: Somebody have oh, here it is. Okay.

Betsy, Morgan Stanley Sales Representative, Morgan Stanley: Yeah.

John Turner, Chairman, President, CEO, Regions Financial: Yeah. Okay. Thanks, Betsy. Just a couple of maybe comments, introductory comments. So our focus has 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’re 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 02/2015, we’ve come from the bottom quartile to be the the top performer in return on tangible common equity over each of the last four years and are trending to make that a 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 five ten year relative basis.

So we’ve, you know, we look at these total shareholder returns and, again, feel like that our we have delivered dividend growth better than 10%, on a 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 three, five, and ten 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 ten year period acquired, bought back more stock on a relative basis than any of our peers as well.

Toward a great footprint, so we talk often about that, really leads to our strong performance. 70 of our markets, we have top five market share or better, and our markets are growing at about one and a half times faster than the national average. And when when you add our priority markets, we’ll talk about in a minute, they grow at about 2.5 times 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 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, continues to contribute to our overall profitability. And I talked about our priority markets. We’ve identified eight.

You can see the names of those markets here. They, have contributed already to about $12,500,000,000 in deposit growth over the last five years and the deposit opportunity, the deposit gathering opportunity in those eight markets is over $1,500,000,000,000. So, truly exceptional markets. We’ve been growing in each of the markets and have increased our market share in six of the eight today. So we continue to make investments in our business.

We’ll add about a 170 bankers over the next three years in commercial banking, in wealth banking, in treasury management, in our mortgage business. We’re also think about the way we 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 12,000,000 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 $2,500,000,000 in deposit growth amongst small businesses across our markets. So we’re 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 kinds of results that we have delivered over the last last five years. With that, Betsy, maybe we’ll go to q and a. Is that okay?

Betsy, Morgan Stanley Sales Representative, Morgan Stanley: Super. That sounds terrific. Thanks so much, John, for that overview and reminding us about the profitability and the growth opportunities you have. And I did wanna dig into all of that. But, I wanted to understand how are clients thinking about investing today?

Obviously, we’ve had quite a bit of volatility with the tariff talk year to date, and you’ve been out visiting with clients recently, right, across any particular regions that you’ve been to?

John Turner, Chairman, President, CEO, Regions Financial: Across our footprint. The bulk of our business is in seven Southeastern states in Texas. That’s where I’ve spent more time, but I’ve talked to bankers across our footprint, and customers, obviously, as have been out in markets. And I would characterize, their attitudes, as I’m sure others have, is sort of wait and see. Customers’ sentiment is better.

I wouldn’t call it positive, but it’s definitely less negative than it was the September. We’ve seen continued improvement. Customers are preparing to invest. Pipelines within our small business and middle market business have continued to grow. The corporate sector, which we would refer to as companies with 250,000,000 or more in revenue, still soft.

Real estate pipelines are beginning to pick up as as multifamily developers look out and see opportunities to begin thinking about development. So, all in all, I’d say customers are today patient. They are watching closely what the impacts of tariffs, immigration reform, and other things might be. But generally, the underlying economy is good and sentiment is is okay.

Betsy, Morgan Stanley Sales Representative, Morgan Stanley: Okay. And putting capital to work is on pause? Or

John Turner, Chairman, President, CEO, Regions Financial: Yeah. I mean, we’re seeing some borrowing activity again amongst those small business and middle market customers who just have a consistent need. But there’s, there’s definitely not been the level of activity that we anticipated at the beginning of the year, and that’s reflective of uncertainty about tear the path of tariffs and generally the economy. But, all in all, I think the tone continues to improve.

Kate Donella, Head of Consumer Banking, Regions Financial: Okay. And, Kate, how are consumers and small businesses that you focus on handling the volatility? Yeah. Betsy, same or ditto for John’s comments on the small business side. On the personal side, it’s a similar kind of slight mismatch between feeling and and fact.

So sentiment is slightly down because of the uncertainty. Obviously, consumers have watched their four zero one k volatility there, the mortgage market not rebounding like many of us had hoped. But to the facts and just how consumers are behaving, responding, still in a position of strength. If you look at retail spend as an example, our our spend for our customers are everyday spend. So if you look at Costco, if you look at Amazon, that’s up year over year.

Walmart, up year over year. Restaurants, entertainment, flat. So discretionary spend, which is where you see some of the softness, is still holding up. So spend is holding up. I think if you were to look at employment and payrolls, so our unemployment receipts are still below twenty nineteen levels.

Our payroll, Social Security is still indicating a strong labor market. In fact, payrolls are up on a real basis or adjusted basis from 2019. And then we I think we have a page in the slide deck around average balances in our checking account relative to spend. Our customers are holding about 1.6 times their spend in their checking accounts that’s slightly down from pre pandemic. But when you factor in the balances and interest bearing accounts, that’s really where the the delta is.

So, you know, across all spend, balances, payrolls, all still indicating financial strength across most of our customer segments, really all of our customer segments.

Betsy, Morgan Stanley Sales Representative, Morgan Stanley: Excellent. Thank you. David, how would you describe the expected impact of tariffs on your C and I loan book from a credit perspective? And is there any sectors you’re leaning into or pulling away from?

David Turner, Chief Financial Officer, Regions Financial: Well, I think there’s still uncertainty with regards to the impact of tariffs. I mean, there are gonna be some winners and some losers. What our our, clients are telling us is depending on the level of tariffs, so if you’re in the 30% range, they’re telling us they can deal with that. Part of that, they’ll eat. Part of that, they’ll pass through to clients I mean, to cut to their customers.

So if you can get it down from some of the levels that we’ve heard about to a little bit lower, that’s all doable. And I think you can do that without having any real credit events. So we don’t have a lot of credit risk identified yet, for tariffs. You know, when we set the reserve at the end of the first quarter, all that hadn’t happened. There were discussions until after that, so we need to wait till June.

I don’t see any real big change to credit coming up. We you know, all bets are off until June 30. But right now, things seem to be okay with regards to credit. Our customers are pretty healthy. Kate just talked about consumers are pretty healthy.

We talked about charge offs being in the 40 to 50 range with it being a little higher in the half of the year and and then settling down to the lower part of that range in the in the back half, such as the end of the year, probably be, you know, between forty five and fifty.

John Turner, Chairman, President, CEO, Regions Financial: Okay. Betsy, since last time I checked, we have a very disciplined structured process to get out and talk to customers and try to understand what they think the impact might be. Last time I checked, we had talked to over 70% of our customers of any size. And to David’s point, it is a very, the results are are mixed. Some will potentially do better, some not as well.

But there have been no sirens go off, no no great concerns at this point.

Betsy, Morgan Stanley Sales Representative, Morgan Stanley: Okay. Great. So, John, let’s move on to strategy. And you gave us some of the results of that strategy in your slide deck with peer leading returns, and a great footprint. Just wanna understand your assessment of your competitive position within the regions, and where their opportunities are to lean in.

You talked about the deposit share you’ve been taking in priority markets. Maybe you could talk a little bit on how that could translate into some incremental growth for you.

John Turner, Chairman, President, CEO, Regions Financial: Yeah. So we think we’re very well positioned. We are have a nice mix of core markets, places that we’ve been for a hundred and fifty, a hundred and sixty, a hundred and seventy five years, markets that generate much of the core deposit base that we enjoy, the low cost loyal core deposit base we enjoy. And these priority markets where we have growth opportunities, where there’s $1,500,000,000,000 in deposits that we can compete for. And at end of the day, our business is about gathering deposits.

What we do with those deposits, those customer relationships, operating deposits, then drives the success of our business. There will be periods of time when we lean into lending because the market gives us those opportunities. But at the core, we’re focused on are we growing core relationships, are we growing operating deposits, Are we growing fee income that comes with those relationships? And I think if you look at our business today, we’ve been growing core deposits at a rate over 30%, so at the top of the peer group and at a very low cost. We are growing our service charge revenue.

We’re growing treasury management revenue at a 9% clip. We’ve been growing wealth management at an 8.3% CAGR over six over the last six years. So the business, the core business is growing. We are exiting certain portfolios from time to time, very focused on capital allocation and credit risk management. And so loans aren’t growing as rapidly, but they will grow over time when the opportunity exists.

And in the meantime, the core business is doing well, and we’re in some really good markets.

Betsy, Morgan Stanley Sales Representative, Morgan Stanley: And what is needed to unlock loan demand? Or Yeah. I I mean,

John Turner, Chairman, President, CEO, Regions Financial: I think customers need to have more clarity about the path forward. They need to feel more certain about the economy and understand I mean, everybody’s not impacted by directly by tariffs. Everybody’s, I guess, indirectly impacted by tariffs. But but everyone wants to understand the path of the economy, wants to feel confident about the future. And so we still need a little clarity, I think, in order to unlock demand.

Betsy, Morgan Stanley Sales Representative, Morgan Stanley: Now you also discussed at the beginning of the year the strategy to add bankers and relationship managers across the franchise. And how far along that effort are you?

John Turner, Chairman, President, CEO, Regions Financial: So we, as an example, we’d like to hire 80 commercial bankers as of yesterday. I think we’d hired 23. So it’s a it’s a three year objective. We’re continuing to recruit bankers in our markets, wealth bankers, treasury management bankers, mortgage loan originators. Kate might can speak to mortgage.

But, it it’s a process. It’ll take some time. So we’re what is that? We’re 25 of the way there, 30% of the way there.

Betsy, Morgan Stanley Sales Representative, Morgan Stanley: Okay. And do you think you that you’re gonna get to that 80 by year end, or that’s just a multiyear goal?

John Turner, Chairman, President, CEO, Regions Financial: I think it’s a multiyear goal.

Betsy, Morgan Stanley Sales Representative, Morgan Stanley: Okay. And then what about the capital markets growth strategy? That’s part of

John Turner, Chairman, President, CEO, Regions Financial: that? Well, yeah, I think the market conditions have led to less growth over the last two plus years in the interest rate environment and other factors. But we’re really happy with the success we’re having with capital markets and continuing to build that business. Remember back in 02/2014, it was a $65,000,000 business really built solely around our derivative sales in an environment where you could really push a lot of interest rate derivatives out. That business has changed, the opportunity has changed, and yet we’ve grown to three hundred and forty, three hundred and fifty million dollar business.

We think our capital markets platform is a $400,000,000 business over time. This year, we expect to generate 80 to may 80 to $90,000,000 a quarter on a run rate. So we feel good feel good about capital markets and the impact it’s having, not only on diversifying revenue, but on strengthening relationships with customers, which was a primary objective.

Betsy, Morgan Stanley Sales Representative, Morgan Stanley: Okay. And you talked a little bit about treasury management. What’s driving the growth there?

John Turner, Chairman, President, CEO, Regions Financial: Yeah. A couple of things. One is enhanced product offerings. Two is a focus on cash and the cash conversion cycle. So our bankers, we think, are highly skilled talking to customers about about cash, about their cash and cash conversion, which is so we’re not leading with credit.

We’re leading with talking about the customer’s business and how cash and cash the cash conversion cycle affects their business, and that has led to a lot of success continuing to grow treasury management opportunities. Today, about 65% of our corporate banking or wholesale customers have a treasury management relationship with us. So we have some upside opportunity, continuing to grow that. Last year, we grew relationships at about 10% and fee income at about 9%. So you add that growth in relationships with with new product offerings, and that’s driving growth

Betsy, Morgan Stanley Sales Representative, Morgan Stanley: And cash conversion?

John Turner, Chairman, President, CEO, Regions Financial: You know, like, businesses understanding what it means to sell a product, carry a receivable, collect the receivable, buy more inventory, and how does that affect their working capital?

Betsy, Morgan Stanley Sales Representative, Morgan Stanley: Got it. Alright. Kind of the basic fundamental

John Turner, Chairman, President, CEO, Regions Financial: fundamentals of of operating the business. Okay. Is king, we say.

Betsy, Morgan Stanley Sales Representative, Morgan Stanley: So Kate, maybe you can speak a little bit about that. I’m sure in your world with the branches, with the small business, can you speak to how you’re utilizing the treasury platforms that Regions has?

Kate Donella, Head of Consumer Banking, Regions Financial: Well, I’ll I’ll start maybe a little bit with the the banker strategy for us. So we noted earlier we’re investing in mortgage loan officers. We’re about eight bankers ahead of schedule. It’s a three year plan, so ahead of schedule there. On the 600 bankers that we are repurposing in micro markets where we have outsized opportunity in small business or wealth, we’re about 65% in staffing those 600 bankers.

We’ll get there by end of year, certainly before end of year. So feel good about those investments and the the efforts to date to get there. As it relates to small business, our focus is on the micro businesses in our branch trade area. So we’re focused certainly on cash management, but getting that deposit, checking account, payments. And we’ve we’ve really focused our bankers, built a proprietary AI tool to help look within the 400,000 customers that we serve today, to identify needs, prompt next best actions.

That feeds a lot of our outbound marketing as well as our conversation guides for our bankers. So we rolled that tool out, something that we we leverage from our corporate bank, rolled that out at the beginning of the year and the beginning of this investment platform that we’re making in small business. So tools, people, training, and and really think that’ll help

Betsy, Morgan Stanley Sales Representative, Morgan Stanley: put wind in our sails as we as we grow small business through the branches. Excellent. And then on wealth, wealth is driven out of a separate channel then, indicated. Is that right? Right.

Yeah. So could you talk a little bit about where the opportunities are in wealth?

John Turner, Chairman, President, CEO, Regions Financial: Yeah. So we’ve been growing the lower end of the market, which is a retail focused platform we call Regions Investment Services. It’s essentially a branch brokerage business. That’s been growing rapidly. We go back to, again, maybe 2014, 2015, we had zero branch based brokers.

We’ve added now over two fifty, and, they are continuing to drive revenue and to strengthen relationships with existing customers. In addition to that, we have a very effective investment management and trust platform through both our private bank, our wealth bank, and our corporate trust group. And, you know, we have we have this may surprise some people. We we provide a wide range of services. In addition to management of securities portfolios, we manage natural resources.

So we manage over a million acres of timberland. We manage oil and gas properties, commercial real estate, farmland for families and wealthy individuals, and that business continues to grow at a nice nice clip. Again, I think I mentioned the CAGR over six years is about 8.3% growth in in wealth management. So we’re looking to hire more wealth bankers, tremendous in migration of people into our markets. We think that presents a real opportunity to us and, for us, and so we’ll continue to invest there.

Betsy, Morgan Stanley Sales Representative, Morgan Stanley: So you manage some very diverse asset classes for your clients. You know, as the Genius Act makes its way through congress, there is going to be more opportunity for banks to work with crypto assets and digital assets. And I’m wondering, is that something that you would consider adding to the product set that you offer to your clients?

John Turner, Chairman, President, CEO, Regions Financial: Never say never, but I’ve not been a great fan of crypto. And so I think we’ll we’ll be a follower there for sure, not a leader.

Betsy, Morgan Stanley Sales Representative, Morgan Stanley: Okay. Guess a function of demand from clients that

John Turner, Chairman, President, CEO, Regions Financial: Yeah. That’s right. And we and frankly, we we have not had a lot of conversations with customers about that. But we do pay attention and follow what our customers are doing for sure.

Betsy, Morgan Stanley Sales Representative, Morgan Stanley: Okay. Alright. Excellent. And so, Kate, with that wealth strategy, you do need to partner with the wealth team. Is that right?

Kate Donella, Head of Consumer Banking, Regions Financial: That’s right. The 300 bankers three of the 600 bankers that we are upskilling are going to be focused more and more on partnering with the wealth organization. We do a great job partnering with them today, but we have identified markets and really within a branch radius where we have outsized opportunity. And so those 300 bankers will be focused on certainly home equity mortgage, but making referrals into, the wealth organization, and it’s at a very hyper local branch by branch basis.

Betsy, Morgan Stanley Sales Representative, Morgan Stanley: Okay. Super. Back to you, John. Just generally speaking here, we’ve got a new administration that is considering lightening the regulatory burden on banks. Right?

We heard from Michelle Bowman on Friday. And while I know a lot of that is GSIB focused, there’s discussion around regulation in general. Mhmm. And then there’s the supervision process. You know, the list goes on.

How are you thinking about what’s likely going to change here, and what is the most important changes that you’re looking for, and how would that impact regions?

John Turner, Chairman, President, CEO, Regions Financial: Yeah. Well, I and we think we’ll get more clarity on capital liquidity. Obviously, I think long term debt, we hadn’t heard anybody talk about that. So that that proposal is probably not coming up anytime soon, if if ever. I I think m and a, there’s appears to be a more favorable tone around m and a, which should be helpful to the industry in in general.

I think the big two biggest things from our perspective will be increased transparency, so better dialogue with regulators around their observations and ours. We participate in CCAR process every other year, and we’d love to have better insight as to what their observations are about our stress losses, etcetera, and we’ve never had those kinds of conversations. So that would be helpful. The other is just generally the regulatory tone and supervision, which, again, I think there’ll be more transparency around and, a little more clarity. So we’ve not as someone, said at dinner last night, it’s been fifteen years since the regulatory regime has at least been as appeared to be as favorable as it looks like it may be.

Now, you know, that’s not to say that, you know, I expect we’re get everything we want. The reality is the industry has has improved tremendously over the last fifteen years in terms of the way that we’re structured, the way we’re organized, the amount of capital liquidity that we carry, our processes, our controls, so much better than we were fifteen years ago. And so I welcome the balance, which is what I think we’re gonna get. It’s just a little better balance between the industry and and supervision.

Betsy, Morgan Stanley Sales Representative, Morgan Stanley: You brought up m and a as a positive for the industry. Could you speak a little bit to how you could potentially use that more transparent, predictable m and a regulatory environment.

John Turner, Chairman, President, CEO, Regions Financial: Yeah. So we we’ve, I think, been real consistent that we’re have not been interested in depository m and a, and and that’s still true. Go back to 02/1415. As we looked at the environment then, our currency wasn’t very good. We didn’t believe we could participate in m and a if we wanted to, but we did see, a real path to top quartile returns if we could execute our plan, which we did.

That’s helped improve our currency. We still believe that we have a real opportunity. Just focus on execution of our plan, we can continue to deliver top quartile results and grow the business versus do an acquisition, which is can be very disruptive. So, but think about that. Add to it the fact that we’ve got a big technology project underway.

We would expect to complete our core deposit conversion sometime in 2027. And until then, I think we’re gonna just do what we do every day, and depository acquisition is not not necessarily in our is not in our future. Nonbank m and a, we’ve been very interested in. I think we’ve been successful executing. We’ll likely continue to try to find those opportunities.

They’ve been harder to find over the last two or three years as others have been interested as well. So that that’s our view on m and a.

Betsy, Morgan Stanley Sales Representative, Morgan Stanley: But your point on good for the industry?

John Turner, Chairman, President, CEO, Regions Financial: Well, I think that I think the tone will will be good for the industry, and that is it’s it does appear that based on comments that leadership within the regulatory agencies have made, they’re they’re more favorably inclined to support m and a activity and to expedite processes. So whether things get approved or not, still there’s still a process for that. But the creating clarity around and and creating a better process so it’s more clear and expeditious, I think they’re committed to, which will be good for the industry.

Betsy, Morgan Stanley Sales Representative, Morgan Stanley: And when you think about the opportunity set ahead of you for nondepository acquisitions, thinking about where where would you be leaning towards? Is it acquiring talent in some of the fee based businesses you talked about, or is it more on the technology side? Or

John Turner, Chairman, President, CEO, Regions Financial: Well, so we, you know, we’re continuing to look for mortgage servicing right acquisition opportunities. We may or may not wanna add some capabilities within wealth management. Those are a lot of those are people centric. They’re expensive. They’re just hard to find.

On the capital market side, we have most of the capabilities we’d like to have. We talk sometimes about fixed income sales and trading. We don’t originate fixed income offerings. We typically participate. Might we like to do that?

We don’t have the sales and trading capabilities we need. And so but those that’s expensive and hard to to start. So, again, we’re looking kind of around the edges. We might add to some of the things that we currently do, but we don’t have, different than going back to 02/1516, we don’t have nearly the needs that we did back then.

Betsy, Morgan Stanley Sales Representative, Morgan Stanley: Okay. Super. And on the thought of increasing your share, we’ll look to Kate to help drive that. In markets? Yeah.

Kate Donella, Head of Consumer Banking, Regions Financial: Yeah. Yeah. We we are laser focused on growing households, growing operating accounts, participating in the growth in our markets. We as John mentioned, we have the luxury that we don’t need to de novo in a net new market because our markets are growing so well. That that’s very expensive and time consuming.

What we look at every single day is optimizing the footprint we have. Okay. Great. Closing in lower growth areas of certain markets in order to open and constantly optimizing. And that’s what we’ll continue to do.

It’s been proven to be very successful for us. Thanks so much, Keith.

David Turner, Chief Financial Officer, Regions Financial: I’d add back to the m and a in in these markets. If if there’s m and a in our markets, that creates a lot of disruption. And so we’re we’re not gonna be part of that, as John mentioned. We are gonna be part of taking advantage of that disruption if it occurs. Somebody’s gonna do a deal where we are, then we’re gonna be all over customers and people and trying to grow our business that way as well.

Betsy, Morgan Stanley Sales Representative, Morgan Stanley: Okay. So David, while we have you, maybe we could talk a little bit about the numbers. And off, any change to guidance that you have for us right now?

David Turner, Chief Financial Officer, Regions Financial: Things are trending like we laid out in our guidance, in our deck. We’ve continued to see benefit coming from the front book, back book, repricing of the balance sheet, dollars 12,000,000,000 to $14,000,000,000 worth of fixed rate asset repricing securities and loans, picking up 125 to 150 basis points. We’re neutral to rate, short term rates, so it doesn’t matter whether we hit rate cuts or not, relative to interest rate risk. You know, having a little shape to the curve, a little, steepening there helps us a bit. So we’re we’re where we wanna be with regards to continue to drive growth and net interest income.

We talked about getting our margin to the three sixty range. We were three fifty two last quarter. We were going get to $3.60 by the end of the year. It looks like we might be able to get there a little sooner. Things are working well.

Our deposits continue to reprice down. So if you take CDs, a lot of them in Kate’s world that mature and come up for repricing, we’re getting a benefit from having lower interest costs there.

Betsy, Morgan Stanley Sales Representative, Morgan Stanley: So your NII guide of plus 1% to plus 4% year on year with the curve could be pushing up towards mid

David Turner, Chief Financial Officer, Regions Financial: Right now, kind of the core is right there in the middle. So it’s two or three. And, things continue to to work out, we get, you know, like I said, a little shape to the curve, and it stays there. Could we be pushing to the upper end? Maybe.

We don’t have a lot of loan growth baked in at all. Our deposits continue to trend a little bit better than we thought. So, things are working to the positive on that front.

Betsy, Morgan Stanley Sales Representative, Morgan Stanley: Yeah. H eight is growing at about 3%. Does that sound right to you for your book

David Turner, Chief Financial Officer, Regions Financial: of that? I think, you know, at least as of now, and we’ll see. A lot of the customers would like to put those deposits to work when they have more clarity with regards to to the economy. That’s part of why we don’t have a lot of loan growth. We think those customers, commercial customers in particular, will wanna work through their liquidity before they start borrowing.

So that could change the total, if you will, from deposit, from a deposit standpoint.

Betsy, Morgan Stanley Sales Representative, Morgan Stanley: Okay. Great. And then on fee income growth of one to 3%, does that still sound about right?

David Turner, Chief Financial Officer, Regions Financial: Yeah. We continue to do well. John mentioned service charges and embedded in that’s TM. Our interchange is is doing well. Mortgage is the one that’s soft, right now and capital markets.

Those two, have been a bit challenging. But as John mentioned, we think we can be in the capital markets of 80 to 90, probably be at the lower end of that, in the quarter. And, you know, a good component of that is M and A. That’s probably 25% of that in a normal run rate, and that’s episodic. So it depends on if you get deals closed, you could be at the higher end of the 80 to 90.

If you don’t, you’re gonna be at the lower end. And then wealth management continues to be a success for us.

Betsy, Morgan Stanley Sales Representative, Morgan Stanley: Okay. Great. And then on expenses, I know you’re guiding flat to up 2% for the year. Right? Which is implying positive operating leverage.

And maybe you can talk a little bit about where the cost saves are coming from, and is there there more to give as we move into the future? I’m thinking about the core modernization cost and how that is gonna fade from here.

David Turner, Chief Financial Officer, Regions Financial: Well, so, as John mentioned, we’re the deposit system, we’ll be working on that the remainder of this year. All of ’26, we’ll start doing some conversions in the latter part of ’26 and into ’27. That’s baked into the run rate, so we don’t see any near term savings coming from that. And we’re putting in our new commercial loan system and call it the end of the third quarter, fourth quarter AFS vision. That’s been the run rate.

We’ve been looking at all areas of expense. So we start with salaries and benefits and occupancy and party spend. We we’re trying to save there so we can make the investments we need to make. All those folks we wanna hire, we have to pay for that. And so we still wanna generate positive operating leverage, and we’ve been able to do all that and and have the results that we’ve projected.

Betsy, Morgan Stanley Sales Representative, Morgan Stanley: Super. Well, thank you so much for joining us this morning. John, Kate, and David, it’s been a pleasure, and hope you enjoy the rest of your day. Thanks so much. Thank you.

Thank you.

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