Ten questions with John Turner, 57, CEO of Alabama-based Regions Financial Corp., the fourth-largest retail bank in the Tampa Bay area.
You took over the top job in July. How’s it going?
I think it’s going great. (Laughter)
Not so far.
From your perspective, how’s the Tampa Bay area doing?
Tampa looks good. It’s always been a really important market for us. What I see today is a growing economy, a diverse economy with a lot of opportunity to grow. We’re continuing to make investments here.
Will Regions’ growth include buying other banks?
We get asked a lot if we are big enough to compete with the biggest banks, which are making tremendous investments in technology and other things. We think we have the scale to compete. We don’t think we have to acquire other banks or merge with a bank of equal size.
There’s a risk associated with mergers or acquisitions. They are disruptive. They knock you off your plan. For that reason, we aren’t interested in them today.
Real estate isn’t as big a part of Regions’ portfolio as it was before the recession. Why, and will it grow?
Yes, we plan on growing it. One of the great lessons that we learned coming out of the Great Recession was the importance of diversity. We were over-weighted in real estate and it hurt us. We recognized that certain businesses require specialization. Real estate is one of those, and so we’ve reshaped our real estate business. We’ve built it around professional real estate bankers. Now that we’ve reached a place where we think the foundation is really solid, we’re beginning to grow it some.
On the commercial side, we like multifamily, we like industrial, and we like office space. We have some retail exposure, but we were careful there because that business tends to be a little more volatile.
How is Regions keeping its customers safe from cyber and other attacks?
We’ll invest $625 million in technology this year, and 42 percent of that will be in new capabilities. Our technology platforms are uncomplicated. We have one deposit system, one branch platform and one commercial loan system. So when we decide to update a system, we only have to make one change.
Many of our larger bank peers and competitors have multiple systems. Some may have hundreds of systems that do the same thing. So when they spend a lot of money, in part that is just maintaining this very complex infrastructure that they have. Ours is more simple.
Compared to years past, what do customers expect when they interact with their bank?
They expect more speed, more convenience and more reliability. Their impressions or expectations are informed not only by their experiences at the bank and other banks, but by their experience outside the industry.
Branches remain an important part of that experience. Customers still come into a branch to open 80 percent of our new accounts. People want to talk to a banker about a service issue, a mortgage or a boat they want to buy.
The country is enjoying a decade-long economic expansion. What’s your take on how long it will last?
I’ve been in eight or 10 markets recently, meeting with all of types of customers, and virtually all of them are very optimistic about 2019. There’s some caution surrounding the 2020 elections, but businesses had a good 2018 and feel good about the prospects for 2019. That’s true in Tampa. It’s true in Greenville, South Carolina, in Houston, Texas, in Birmingham, Nashville, St. Louis. So we don’t see anything on the horizon that gives us the impression that we’re headed to recession.
It has been a long economic cycle, but it’s been slow growing. Australia has been in a 25-year growth cycle. There’s really nothing to say that the U.S. economy can’t continue to grow at around 2.5 percent for a number of years to come.
No recession worries?
I get that it’s natural to start looking for signs of a recession when we get this far into an economic expansion. But we don’t see any excesses in the consumer space or in the commercial space that give us the impression that we’re headed for recession.
What would change your mind?
Investors think the Canadian economy either is now or is going to be in a recession. Europe has issues. China is not growing as fast as it was, and we have trade issues with China. So can the U.S. economy grow on its own? I’d watch that.
I’d also watch for a deterioration in consumer credit or declining consumer spending. If we saw a rapid decline, that would be concerning.
Contact Graham Brink at [email protected] Follow @GrahamBrink.
Regions Financial Corp.
Headquarters: Birmingham, Ala.
Total assets: $126 billion
Total deposits: $97 billion
Tampa Bay branches: 69
Local deposits: $4.2 billion (No. 4 behind Bank of America, Wells Fargo and SunTrust.)*
Local market share: 6.5 percent*
*Not including Raymond James Bank, which only has one branch and caters almost entirely to clients of Raymond James Financial.
Source: Federal Deposit Insurance Corporation