Regions Financial (RF) Barclays 23rd Annual Global Financial Services Conference summary

Economic and industry outlook

• Loan demand remains subdued due to uncertainty around interest rates and policy, with expectations for more clarity after the election and potential Fed rate cuts in Q4.

• Credit quality is stable overall, with some stress in CRE office and trucking, but reserves are considered adequate and consumer credit remains healthy.

• Deposit balances and costs have stabilized post-pandemic, with rate-seeking behavior largely subsided and liquidity levels consistent with pre-pandemic patterns.

• Competitive landscape remains intense, especially in the Carolinas, but customer service differentiation is emphasized.

Balance sheet and interest rate management

• Deposit base is about 36% rate sensitive, driving most cost increases, and is expected to react quickly to rate cuts.

• Net interest income is guided to the upper end of the range for 2024, supported by deposit outperformance and portfolio repositioning.

• Repricing of the balance sheet is expected to provide a tailwind for net interest income over the next few years.

• Net interest margin is expected to expand from the 350s to the 360s and potentially approach 370 over the next couple of years, despite excess cash weighing on NIM.

Securities portfolio and capital management

• Ongoing securities portfolio repositioning is expected to continue, focusing on maintaining target duration and capital neutrality.

• CET1 ratio has improved to around 9% or better, with more capital flexibility due to rate movements and Basel III clarity.

• Capital deployment priorities include supporting loan growth, dividends, non-bank acquisitions, securities repositioning, and share buybacks.