Christopher Spahr

Christopher Spahr questioned how M&T is achieving measured expense growth despite significant investments, asking for the sources of cost savings and if the office headcount is expected to change.

Answer

CFO Daryl Bible credited the company's entrepreneurial business leaders for driving efficiencies and automation within their own groups. He highlighted the company-wide adoption of agile work methods as a key driver of continuous improvement. He noted that while office headcount is relatively stable, the focus is on managing the overall expense base, not specific FTE counts.

Christopher Spahr sought clarity on the Q4 loan growth outlook, asking if there was upside potential if CRE runoff stabilizes, and questioned the timing and impact of potential rate cuts on criticized CRE loans.

Answer

CFO Daryl Bible projected that CRE runoff would likely continue for another couple of quarters, with growth not expected until mid-2025 as pipelines rebuild. He clarified that while lower rates help, the bank will not 'wipe out' its criticized loan book, as working with clients through stress is part of its DNA and builds loyalty. He reiterated a positive downward trajectory for criticized balances into 2025.

Christopher Spahr from Wells Fargo sought clarification on the lowered fee income guidance, asking if it was driven solely by capital markets weakness or if other factors were involved. He also requested more detail on actions being taken in the bank's core growth markets.

Answer

Executive David Turner confirmed the primary driver for the lower fee guidance is weakness in capital markets, particularly M&A, real estate, and loan syndications. Executive John Turner explained the core market strategy involves deploying specialized bankers and using a team-based approach to capitalize on opportunities in small business, commercial, and wealth management within those markets.

Christopher Spahr asked what the bank's organic loan and deposit growth rate should be in a normal environment, given its strong footprint. He also requested more specific details on the technology project timeline and its expected benefits.

Answer

Executive John Turner stated that in a normal environment, Regions should grow with the economy plus a little extra in its core markets. He reiterated the tech timeline: the new loan system converts in 2025, and the deposit system will be implemented in 2027 after a 2026 pilot. He highlighted benefits such as faster product launches, bundling capabilities, and easier upgrades from the new cloud-based system.

Christopher Spahr asked if the increase in energy loan growth was related to post-election optimism and what other areas might see growth. He also asked CEO Harris Simmons about other potential areas of regulatory relief for banks of Zions' size.

Answer

President and COO Scott McLean attributed the energy loan growth to favorable pricing and structure as competitors exit, noting a general sense of optimism among small and medium-sized business owners post-election. CEO Harris Simmons commented that relief from numerous CFPB rules and climate disclosure pressures would be beneficial. He expressed optimism that the new administration's focus on facilitating growth will create a more conducive environment.