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The "real challenge" for Regions Financial (NYSE:RF) this year will be how well deposit costs are managed, as it prepares for the Federal Reserve to start cutting interest rates, Chief Financial Officer David Turner said Wednesday at the Bank of America Financial Services Conference.
In doing so, Turner noted the bank has started to shorten tenors in terms of the certificates of deposits it has. The repricing of its balance sheet, in turn, should be a boon for deposit costs and thus net interest income, he added, calling for NII to bottom out in Q2.
In Q4 2023, NII (fully taxable equivalent) of $1.24B slipped from $1.30B in Q3 and $1.41B in Q4 2022. Net interest margin ("FTE") of 3.60% narrowed from 3.73% in the prior quarter and 3.99% a year ago.
Asked about is exposure to commercial real estate, Turner said the bank "will have some losses in office," but probably no losses in multifamily loans.
Regions Financial (RF) stock edged down 0.4% in midafternoon trading, after sliding some 3% earlier in the session.
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