Regions Financial Corporation

Good morning and welcome to the Region's Financial Corporation's quarterly earnings call. My name is Christine and I will 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, Christine. Welcome to region's second quarter 2022 earnings call. John and David will provide high-level commentary regarding the quarter. Earnings documents, which include our forward-looking statement disclaimer and non-GAAP information, are available in the investor relations section of our website. These disclosures cover our presentation materials, prepared comments, and Q&A. With that, I'll turn the call over to John.

Thank you, Dana, and good morning, everyone. We appreciate you joining our call today. Once again, we are very pleased with our quarterly results. Earlier this morning, we reported earnings of $558 million, resulting in earnings per share of 59 cents. And importantly, our second quarter adjusted pre-tax, pre-provision income represents the company's highest level on record. We continue to successfully execute our strategic plan and deliver strong results. Sentiment among our business customers today is cautiously optimistic. They're rebuilding inventories and looking for opportunities to expand their businesses. Loan commitments and pipelines remain strong, and utilization rates continue to increase. The consumer remains healthy, net population migration inflows into our markets remain robust, and the majority of our footprint has returned to equal or better than pre-pandemic employment levels. In fact, unemployment rates in six of our top eight deposit markets are essentially at all-time lows. To date, broad segments of consumers still maintain substantial cushion in their deposit accounts. For example, consumers with less than $1,000 on average in their checking accounts prior to the pandemic are averaging a balance today that remains approximately six times higher than pre-pandemic levels. Overall asset quality remains strong during the quarter, with most metrics remaining substantially better than historical levels. However, we'll continue to closely monitor early warning indicators for any signs of deterioration. Our capital ratios remain strong, and in fact, earlier this week, our board approved an 18% increase to our common stock dividend to 20 cents per share. We have a strong balance sheet deliberately positioned to withstand an array of economic conditions. Investments we're making across our businesses are continuing to pay off. In the corporate bank, we continue to invest in talent, technology, and strategic acquisitions to expand our products, capabilities, and expertise. Excluding acquisitions, we have added over 200 new positions in the corporate bank since 2019, with approximately 85% in revenue generating or supporting roles. Our most recent acquisitions, Saval Capital Partners and Clearsight Advisors, are contributing to overall capital markets revenue growth in 2022. We're also strengthening our credit product capabilities for small businesses. Ascentium Capital is exceeding our expectations as a provider of essential equipment financing. We recently restructured our SBA organization and continue to invest in key talent to build out our non-restaurant franchise lending division, positioning regions as a trusted resource for franchisees within our footprint. We've been investing in our treasury management and payments business for several years and are experiencing strong revenue growth. Today, we offer a comprehensive and competitive suite of solutions positioned to meet the complex needs of any client. We continue to invest in these businesses, rolling out new products and enhancements across our iTreasury platform, including real-time payments and fraud mitigation, as well as APIs and new cash flow analysis tools. Within the consumer bank, we continue to make advancements to become the premier lender to homeowners. In recent years, we've expanded our mortgage loan origination team upgraded our mortgage contact relationship management platform, and continue to simplify the overall sales process. We also continue to invest in our mortgage servicing portfolio. Year-to-date, we've completed bulk purchases for the rights to service approximately $13 billion in mortgage loans. Interbank, a leader in the prime and super prime home improvement point of sales space, helps us meet customer needs while generating quality asset growth. Within wealth management, we continue to invest in talent and technology to optimize the client and associate experience. Since 2019, we've added 44 new revenue-generating positions in our wealth group, primarily in private wealth management and investment services. Last month, we launched our digital investing product, which combines the ease of a self-directed digital tool with the option of support from a financial advisor. These investments contributed to a strong performance in the first half of 2022. So wrapping up, we have a solid strategic plan, an outstanding team, and a proven track record of successful execution. While sentiment across both business and consumers remains generally positive, we will continue to monitor our portfolios for indicators of stress. We have a robust credit risk management framework and a disciplined, dynamic approach to managing concentration risk, which has positioned us well to weather any economic environment and continue to deliver consistent, sustainable long-term performance. Now David will provide some highlights regarding the quarter.