Regions Financial Corp. Barclays 24th Annual Global Financial Services Conference

Great to be here. Thanks for having us.

I think the operating environment is good. I've been in a number of markets over the last six or eight weeks across our footprint. We operate in 15 states, so Southeast Texas and the Midwest. Across those markets, customers are investing. Consumers are optimistic and spending. We're seeing credit card spending up 8%, debit card spending up 7%. Deposit balances are still really good. Customers are mindful of all the things that are going on around the world and across the country, but focused on their businesses and their particular balance sheets. I think it's very constructive.

If it weren't for competition, it'd be a great business. It really would. We are experiencing, I'd say, increased competition. Banks coming into our markets that haven't been there. Our focus is just continuing to execute our plan. We know those banks are coming. We know what they do well. We know how they do it generally. We have a lot of data and analytics about our own customers. We're focused on retaining those customers, at the same time growing new relationships. That's about recruiting bankers, so we're adding bankers across our footprint. It's about investing in our markets. We're going to build between 130 and 150 branches over the next 3 to 4 years. It's about investing in technology to enable our bankers to better serve their customers and to enable our customers to better serve themselves and have a better experience.

I think we're doing those things. As a result of that, we are competing very effectively in all the markets we're in. Many of our markets we've been in for 100, 150, and some almost 200 years. So we have a strong brand. We have bankers that are well-known. We have a reputation, and we have a very loyal customer base, and we intend to protect that and grow off that base. I think so far, that's working well.

I'll just add to that when it comes to the data we have about our customers. We know our customers very well. When we look at the deposit side of our balance sheet, being able to really understand between our non-interest bearing and interest-bearing deposits how we expect them to perform through different rate cycles has been a really key benefit for us. So having a very strong, good non-interest-bearing deposit base has paid off for us meaningfully. Really understanding what we expect from our interest-bearing deposit base as well, both in terms of how we react to competition, but also how we react to the rate environment has been how we've been able to protect our deposit costs through some pretty good competition in our markets.

Yeah. Things are playing out as we expect them to. So we continue to see, as John mentioned, good underlying growth in our markets. We had pointed to, as we looked at our loan guide and our deposit guide, that the pace of loan growth that we saw in the first half of the year, we thought that would moderate a bit in the second half of the year. If you look at the H.8 data and kind of zoom in to where we are, that's what you're seeing, and so we're seeing that as well. We had guided to 2% NII increase quarter-over-quarter. That's what we're seeing in terms of what's coming on the balance sheet. So depending upon where loans go for the balance of the quarter, we feel good about that guide.

We look at non-interest revenue, expenses, everything's kind of coming in as we'd expect, so no updates to our guidance.

Yeah. If you look at our balance sheet where we saw a lot of good growth the first half of the year was particularly in C&I. If you zoom back to the first quarter, we saw a nice bit of growth late in the quarter when you saw line draws as the tariff conflict picked up. We did not expect that to continue into the second half of the year, which is why we kept our loan guide as is. That's what we're seeing. Seeing just continued good growth in C&I and CRE. On the consumer side where we participate, not a lot of growth there. We've pointed out that a lot of our growth has been in investment-grade credits, which has been a deliberate path for us. We like the risk-adjusted returns on that business. We continue to see that in the third quarter.