Regions Financial Corporation

Good morning, and welcome to the Region's Financial Corporation's quarterly earnings call. My name is Shelby, and I'll be your operator for today's call. I would like to remind everyone that all participant phone lines have been placed on listen only. At the end of the call, there will be a question and answer session. If you wish to ask a question, please press star 1 on your telephone keypad. I will now turn the call over to Dana Nolan to begin.

Thank you, Shelby. Welcome to Region's third 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. 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. With that, I will now turn the call over to John.

Thank you, Dan, and thank you all for joining our call today. This morning, we reported earnings from continuing operations of $385 million, a 9% increase over the third quarter of last year, resulting in earnings per share of 39 cents, an increase of 22% over the prior year. This quarter, we also delivered the highest pre-tax, pre-provision income that we've produced in nearly a decade, while generating 3% adjusted positive operating leverage year-to-date. All in all, despite lower interest rates and significant market volatility, it was a very solid quarter. Over the last two years, our core messaging has reflected our intention to generate consistent and sustainable long-term performance through all phases of the economic cycle. We've been planning for the time when we would no longer benefit from a rising rate environment and when credit would begin to normalize. Since late 2017, we began taking incremental actions to reduce our interest rate risk, build a stronger and more resilient balance sheet, and improve returns on capital. We executed a robust hedging strategy that will protect us in a declining rate environment and allows us to maintain a healthy and stable margin without having to stretch for loan growth. With respect to credit, our team has spent the better part of the last 10 years fundamentally changing and improving our credit risk management framework. Today, we have a robust and dynamic process centered on appropriate concentration risks, sound underwriting, rigorous client servicing, and early identification of potential problems. We've also intensified our focus on risk-adjusted returns and appropriate capital allocation, balance sheet optimization, de-risking, and repositioning. Just as important, we launched our continuous improvement initiative called Simplifying Grow, focusing on our desire to make banking easier for our customers and associates, accelerating revenue growth, and driving efficiency and effectiveness. We've already benefited significantly from these efforts, and we have much more to do. We have completed 16 of 67 initiatives and expect to complete seven more by year end. These efforts have allowed us to make significant investments in technology to better serve our customers, and we're seeing the benefits of those investments. For example, through our digital platform, Year-to-date checking and credit card production have increased 24% and 91% respectively. Loan applications have increased 55%, and with mortgage in particular, approximately 60% of all applications are completed online. Mobile deposits have increased 60% and now represent 13% of all deposits. These efforts are paying off and positively impacting the performance of our businesses. Simplify and Grow has allowed us to make investments in talent, improve services and capabilities, and in our markets, all while prudently managing our expense base. And these investments are also paying off. We continue to grow consumer checking accounts in households, as well as wealth assets under management. We're also succeeding in our priority growth markets, Atlanta, Houston, Orlando, and St. Louis. Consumer deposits and checking accounts in these markets are growing more than two times faster than the consumer bank average. Similarly, corporate bank revenue and loans are growing faster than the corporate bank average. Although it's relatively early, we are very pleased with the performance of these markets as we are delivering results above our expectations. With respect to the economy, our customers are still generally optimistic about their businesses. but they're becoming more cautious given continued market volatility and uncertainty regarding trade and tariffs. Many are taking a wait-and-see approach when it comes to business investments. However, pipelines remain steady, good but not great. So in summary, we have a lot of positive momentum and feel good about how we're positioned. Our plan is to remain focused on the things we can control. meeting the needs of our customers with best-in-class service while leveraging technology and making it easier for our customers to bank with us. We're also focused on the fundamentals of our business, generating positive operating leverage through disciplined expense management while making prudent investment decisions. We're focused on soundness, profitability, and growth in that order of priority. We believe our efforts will keep the company positioned to deliver consistent, sustainable results through every economic cycle. Thank you for your time and attention this morning. I'll now turn the call over to David. Thank you, John.