Regions Financial Corporation · NYSE:RF
Regions Financial — Investor Day (November 2015)
113 slides from Regions Financial's investor day presentation, Nov 19, 2015
Slide 1: 2015 Investor Day
® Investor Day 2015 2015 Investor Day November 19, 2015 ® Exhibit 99.2
Slide 2: Today's Agenda
® Investor Day 2015 Today’s Agenda 2 Topic Speaker Welcome and Overview of Company & Strategy Grayson Hall Regional Banking Group John Owen Corporate Banking Group John Turner Enterprise Risk Management & Credit Outlook Matt Lusco & Barb Godin Financial Overview and Expectations David Turner Final Q
Slide 3: Forward-looking statements
® Investor Day 2015 Forward‐looking statements 3 This presentation may include forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995, which reflect Regions’ current views with respect to future events and financial performance. Forward-looking statements are
Slide 4: Forward-looking statements (continued)
® Investor Day 2015 4 • Our ability to manage fluctuations in the value of assets and liabilities and off-balance sheet exposure so as to maintain sufficient capital and liquidity to support our business. • Possible changes in consumer and business spending and saving habits and the related effect o
Slide 5: Building Sustainable Franchise Value
® Investor Day 2015 2015 Investor Day Building Sustainable Franchise Value Grayson Hall November 19, 2015 ®
Slide 6: Our banking franchise
® Investor Day 2015 Our banking franchise Regions aims to be the premier regional financial institution in America Corporate Banking Business Capital Capital Markets Dealer Finance Equipment Finance Government/Institutional Specialized Industry Institutional Services Insurance Private Wealth • • • •
Slide 7: Strength of markets – our state footprint
® Investor Day 2015 Strength of markets – our 16 state footprint Of all US auto manufacturing is within our footprint(2) 30% Of all US auto manufacturing employment is in our footprint(2) 46% All new jobs created in the US since 2009 were in our footprint(1) 41% Of the total US GDP is within our foo
Slide 8: Strength of markets: core markets provide a sound deposit franchise
® Investor Day 2015 Strength of markets Core markets provide a sound deposit franchise Regions Branches Regions Insurance Group 79% 79% of total deposits are in these six states AL – MS – FL LA – TN – AR Ranked 3rd or better in 14 of our Top 25 MSAs TOP 3 Source: SNL Financial as of 6/30/2015 FDIC s
Slide 9: Priority markets provide opportunities for growth
® Investor Day 2015 Strength of markets Priority markets provide opportunities for growth Top MSAs Deposits Market Rank ’15‐’20 Population Growth Birmingham, AL $10.9 1 Nashville, TN $6.9 2 Tampa, FL $5.8 4 Memphis, TN $4.4 2 Miami, FL $4.2 12 Atlanta, GA $3.6 6 Jackson, MS $3.1 2 St. Louis, MO $2.8
Slide 10: Priority markets provide opportunities for growth
® Investor Day 2015 Strength of markets Priority markets provide opportunities for growth Population Rank 19th Largest City Projected Population Growth 7.7% Projected Population Growth 4.8% Projected Population Growth 5.9% Source: SNL Financial 6
Slide 11: Business mix
® Investor Day 2015 Business mix (1) Income mix based on YTD results through 3Q2015. Excludes corporate treasury and other corporate support segments. Consumer & Business Banking 47% Wealth 7% Corporate Banking 46% Corporate Banking Income Mix by Business(1) Consumer & Business Banking Private Wea
Slide 12: Our priorities
® Investor Day 2015 Focus on the Customer Build the Best Team Manage Performance Strengthen Financial Performance Enhance Risk Management Our priorities 5 strategic priorities that provide direction for decisions 8
Slide 13: Our priorities
® Investor Day 2015 Focus on the Customer Build the Best Team Manage Performance Strengthen Financial Performance Enhance Risk Management Our priorities 5 strategic priorities that provide direction for decisions 9
Slide 14: Our priorities
® Investor Day 2015 Focus on the Customer Build the Best Team Manage Performance Strengthen Financial Performance Enhance Risk Management Our priorities 5 strategic priorities that provide direction for decisions 10
Slide 15: Our priorities
® Investor Day 2015 Focus on the Customer Build the Best Team Manage Performance Strengthen Financial Performance Enhance Risk Management Our priorities 5 strategic priorities that provide direction for decisions 11
Slide 16: Our priorities
® Investor Day 2015 Focus on the Customer Build the Best Team Manage Performance Strengthen Financial Performance Enhance Risk Management Our priorities 5 strategic priorities that provide direction for decisions 12
Slide 17: Our priorities
® Investor Day 2015 Focus on the Customer Build the Best Team Manage Performance Strengthen Financial Performance Enhance Risk Management Our priorities 5 strategic priorities that provide direction for decisions 13
Slide 18: A solid foundation
® Investor Day 2015 A solid foundation Strength of Markets Strength of Team Strength of Culture Strength of Execution Improving associate engagement Attracting, retaining and developing talent One Team – One Regions Strong foundation of mission and values SM is delivering deeper relationsh
Slide 19: Strength of culture
® Investor Day 2015 Strength of culture Basic values, beliefs & mission reflect our culture Regions' mission is to achieve superior economic value for our shareholders over time by making life better for our customers, our associates and our communities and creating shared value as we help them meet
Slide 20: Strength of execution: what we are doing
® Investor Day 2015 Capital Return vs. Peers $54 $138 $247 $307 Strength of execution: what we… Are doing … Growing loans in almost every category 5% growth YTD Growing households/checking accounts, and consistently increasing penetration rates Growing and diversifying Non‐Interest Income (1
Slide 21: Strategic initiatives – strengthen financial performance
® Investor Day 2015 Strategic initiatives – strengthen financial performance Effectively Deploy Capital Grow and Diversify Revenue Disciplined Expense Management Three pillars of execution 17
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Slide 23: Regional Banking Group
® Investor Day 2015 2015 Investor Day Regional Banking Group John Owen November 19, 2015 ®
Slide 24: Regional Banking Group overview
® Investor Day 2015 Regional Banking Group overview Consumer Services Group Retail Small Business Mortgage Indirect Lending Wealth Management Group Private Wealth Investment Services Institutional Services Insurance 1,630 Branches 1,966 ATM’s 1.4 million Mobile Users 1.9 million Online Users 92 mill
Slide 25: Regional Banking Group 2015 highlights
® Investor Day 2015 Checking Accounts • 2% ‐ 3% Credit Cards • 9% ‐ 10% Debit Cards • 2% ‐ 3% Regions Now Banking® • 6% ‐ 7% Wealth Management Quality Households Regional Banking Group 2015 highlights Deposits • 2% ‐ 3% Consumer Loans • 3% ‐ 4% Assets Under Management • 1% ‐ 2% Regions360SM Relation
Slide 26: The right delivery model
® Investor Day 2015 The right delivery model Regions’ Customers Guided by Local Bankers Supported by industry specialists and a strong back office Relationship Managers Branch Team Wealth Advisors Insurance Specialists 1,630 Branches 1,966 ATM’s 1.4 million Mobile users 1.9 million Online us
Slide 27: Consumer Services delivering steady organic growth
® Investor Day 2015 Consumer Services delivering steady organic growth – focused on the fundamentals Remain focused on organic growth Deepen customer relationships through strategy Continue investments in our distribution network Innovate and launch initiatives that meet customer needs SM Gr
Slide 28: Focused on organic growth in attractive markets
® Investor Day 2015 Focused on organic growth in attractive markets St. Louis HoustonAtlanta Charlotte Indianapolis AustinMiamiTampa Bay Orlando Dallas New Orleans Population base of more than 80 million and growing 17 of the 36 U.S. major metros (population >500,000) with strong population grow
Slide 29: Diverse and growing businesses
® Investor Day 2015 Diverse and growing businesses Ports / International Trade Transportation Automotive Healthcare Manufacturing Logistics Aerospace / Defense Technology Retirees Tourism Agriculture / Timber Financial Services Entertainment Consumer Products Life Sciences Government / Military Ener
Slide 30: Deepening customer relationships through go-to-market strategy
® Investor Day 2015 Deepening customer relationships through go‐to‐market strategy Meeting customer needs through a team‐ based approach relationships are up ~2% year‐to‐ date Branch referrals to other businesses are up 42% year over year Branch revenue per referral is up 13% SM SM 8
Slide 31: Continue investments in our distribution network
® Investor Day 2015 Continue investments in our distribution network Continue investments in mobile and online Building five branches in 2015 and three in 2016 Continue deployment of Universal Banker Branch consolidations will continue in 2016 and 2017 9
Slide 32: Track record of launching new solutions
® Investor Day 2015 Track record of launching new and innovative solutions to meet customer needs Launched Regions Now Banking®2012 Grew customer base to 500,000 Re‐entered Indirect Auto Prudent loan growth reaching $3.9 billion2010 Launched Remote Deposit Capture Deliver funds availability op
Slide 33: Track record of launching new solutions
® Investor Day 2015 Track record of launching new and innovative solutions to meet customer needs Launched saving secured loans for loans under $2,000 Added 45,000 new loan customers Launched Regions Streamline of Credit for loans under $2,000 Added 40,000 new loan customers Launched pilot bra
Slide 34: New point-of-sale lending partnership with GreenSky
® Investor Day 2015 New point‐of‐sale lending partnership with GreenSky® Launched fourth quarter 2014 Focused on meeting customer needs in the home improvement space Supports Regions’ strategy to diversify and grow consumer loans Accretive to earnings in year one $6 $364 $575 Dec 2014 Dec 20
Slide 35: Growing Indirect Auto in a prudent manner
® Investor Day 2015 Growing Indirect Auto in a prudent manner Focused strategy on aligning with large preferred dealer groups 50% of production is from preferred dealer groups Loss rates for preferred dealers are significantly lower No subprime; no leases with Regions’ dealer partners $1.6 $4
Slide 36: Business Banking: three pillars of execution
® Investor Day 2015 Business Banking Three pillars of execution Remain focused on organic growth Deepen customer relationships through strategy Expand online credit delivery channel through partnerships with alternative lenders Continue expansion of Small Business Administration (SBA) produc
Slide 37: Business Banking delivering strong deposit growth
® Investor Day 2015 Business Banking delivering strong deposit growth while loan demand remains weak Strong deposit growth – balances up more than 8% year‐to‐date Growing Business Banking relationships – up 7% year‐to‐date Growing relationships – up 6% year‐to‐date Growing SBA lending, 2015
Slide 38: Business Banking continues a slow recovery
® Investor Day 2015 Business Banking continues a slow recovery Dallas / Fort Worth Houston Austin San Antonio Birmingham Miami Orlando St. Louis FL Panhandle Atlanta Memphis Clearwater / St. Pete Nashville South AL Tampa Baton Rouge Dallas / Fort Worth Knoxville Jacksonville Strong Deposit Growth ‐
Slide 39: Investments in SBA 7A lenders delivering results
® Investor Day 2015 Investments in SBA 7A lenders delivering results Hired 22 SBA 7A lenders over 24 month period Moved from being the 95th SBA lender in the U.S. in 2013 to 12th in 2015 New SBA specialists break even after 11 months Steady Production Growth ($ in Millions) $37 $200 $225 $250 20
Slide 40: New online lending partnership with Fundation
® Investor Day 2015 New online lending partnership with Fundation Launched September 2015 Focused on meeting small business customer needs by providing an online delivery channel for loans Supports Regions’ Test and Learn strategy TM 18
Slide 41: Wealth Management Group: three pillars of execution
® Investor Day 2015 Wealth Management Group Three pillars of execution Remain focused on organic growth Deepen customer relationships through strategy Grow Assets Under Management Make bolt‐on acquisitions and lift‐ outs Grow and Diversify Revenue Effectively Deploy Capital Disciplined Expens
Slide 42: Wealth Management strategy delivering revenue growth
® Investor Day 2015 Wealth Management strategy delivering revenue growth Developed a talented team focused on client needs Built out our Investment Services team Continue investments in Insurance lift‐outs and acquisitions Fiduciary standard of care in Private Wealth Growing Non‐Interest Inc
Slide 43: Investments in Financial Consultants delivering results
® Investor Day 2015 Investments in Financial Consultants delivering results Fee Income ($ in Millions) $7.7 $19.3 $30.6 $38.0 2013 Actual 2014 Actual 2015 Estimate 2016 Outlook Hired, trained and on‐boarded 225 Financial Consultants over three years Financial Consultants breakeven at nine months
Slide 44: Steady revenue growth from investments in Insurance
® Investor Day 2015 Steady revenue growth from investments in Insurance Experienced team Organic growth and acquisitions / lift‐outs driving revenue growth Efficient delivery model – one technology platform Low risk business model Insurance Income ($ in Millions) $124 $141 $165 2014 Actual 20
Slide 45: Continue execution of Lean Six Sigma initiatives
® Investor Day 2015 Continue execution of Lean Six Sigma initiatives Delivered $35 million annualized financial benefits in 2015 Targeting $30 million to $50 million of revenue or expense improvements in 2016 Usage of Remote Deposit Capture, DepositSmart ATMs® and Universal Banker, driving telle
Slide 46: Investing in people & products
® Investor Day 2015 Investing in people & products Cumulative 3‐Year Financial Impact of Initiatives 2015 2016 2017 2018 Revenue Pre‐Tax Income 24 Expenses
Slide 47: Regional Banking Group growth outlook
® Investor Day 2015 Regional Banking Group Positive Operating Leverage of 2% ‐ 3% Revenue growth of 2% ‐ 4% (CAGR) 2016 – 2018 Growth Outlook – Annual Growth Targets Customer accounts 2% ‐ 4% accounts 2% ‐ 4% Deposits 2% ‐ 4% Loans 3% ‐ 5% Assets Under Management 5% ‐ 7% Wealth Management Non
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Slide 49: Corporate Banking Group
® Investor Day 2015 2015 Investor Day Corporate Banking Group John Turner November 19, 2015
Slide 50: Strategic initiatives – strengthen financial performance
® Investor Day 2015 Strategic initiatives – strengthen financial performance Effectively Deploy Capital Grow and Diversify Revenue Disciplined Expense Management Three pillars of execution 2
Slide 51: The Corporate Banking Group
® Investor Day 2015 17,207 1,196 5,549 58% 42% 73% 27% 78% 22% 80% 20% Loans Revenue Pre‐Tax Pre‐Provision IncomeHeadcount Deposits Non‐Interest Income The Corporate Banking Group Notes: 1. All figures above are based on 2015 YTD financials, unless otherwise noted. 2. All figures, except Headcount,
Slide 52: Corporate Banking Group structure
® Investor Day 2015 Corporate Banking Group structure Businesses Clients1,3 Loans2 Deposits2 Revenue2 Relationship Managers3 Commercial Banking $20MM–$250MM sales 2,051 $15.9B $13.3B $472MM 99 Corporate Banking $250MM–$2B sales 766 $12.2B $3.5B $340MM 20 Real Estate Banking 651 $10.1B $2.0B $252MM 3
Slide 53: Corporate Banking business model
® Investor Day 2015 Corporate Banking business model Healthcare Energy & Natural Resources Technology & Defense Restaurant Transportation Financial Services Asset Based Lending Lender Finance Retail Trade A/R Securitization Capital Markets Treasury Management Equipment Finance Wealth Management Mark
Slide 54: Opportunities & initiatives
® Investor Day 2015 Opportunities & initiatives Opportunity Initiative Underpenetrated in some markets and business segments Continue to recruit, retain and develop bankers who provide quality ideas and solutions Too many of our relationships are single‐service Improve execution on our needs‐based s
Slide 55: Building capacity across our footprint
® Investor Day 2015 Notes: 1. Based on number of client‐facing associates. 2. Source: Moody’s Analytics. 3. Core Markets: Regions’ market ranking is 1, 2 or 3; Strategic Markets: One of the top 13 markets based on client‐facing associates and Regions’ market ranking is 1, 2 or 3; Growth Markets: One
Slide 56: Impact in Corporate Banking Group
® Investor Day 2015 Our local relationship managers collaborate with Specialized Industries, Regions Business Capital and product partners to deliver the whole bank to the client, meeting clients’ needs and helping them achieve their financial and operational objectives impact in Corporate Banking G
Slide 57: Impact in Corporate Banking Group
® Investor Day 2015 Impact in Corporate Banking Group SM Relationships that are shared between our C&I bankers and our Specialized Industries or RBC bankers generate 134% more revenue than our core C&I relationships 134% more revenue In our core Commercial Middle Market business, relationships gener
Slide 58: Investing in people & products
® Investor Day 2015 Investing in people & products 2014‐2015 2016‐2018 Investments in People Two new industry sector teams Strategic additions to Commercial and Corporate Banking teams Real Estate Capital Markets and M&A advisory Additional Capital Markets staff to support new products Inves
Slide 59: Investing in people & products
® Investor Day 2015 2014 2015 2016 2017 2018 Revenue Pre‐Tax Income Expenses Investing in people & products Cumulative 3‐Year Financial Impact of Initiatives 11
Slide 60: Growing non-interest income
® Investor Day 2015 Growing non‐interest income 20% 27% 35% 39% 42% 25% 21% 19% 19% 19% 19% 20% 18% 18% 17% 36% 32% 28% 24% 22% 2014 2015 2016 2017 2018 Treasury Management Revenue Letter of Credit / Unused Fees Other Non‐ Interest Income Capital Markets Non‐interest income mix 78% 77% 78% 74% 72% 2
Slide 61: Growing our leadership role in loan syndications
® Investor Day 2015 Growing our leadership role in loan syndications Source: Thompson Reuters; includes both left and right leads $1 $2 $4 $5 $6 $8 $10 12 18 39 56 68 87 107 $‐ $2 $4 $6 $8 $10 $12 0 25 50 75 100 125 150 D e a l V o l u m e ( $ i n B i l l i o n s ) D e a l C o u n t Lead Arranger De
Slide 62: Corporate Banking Group targets
® Investor Day 2015 Corporate Banking Group targets Objectives 2016‐18 Target Key Initiatives Grow Loans 4% – 6% › Strategic adds to staff in Corporate Banking Grow Deposits 2% – 4% › Improved use of Customer Relationship Management tools Grow Non‐Interest Income 8% – 12% › New Capital Markets produ
Slide 63: 2016-18 strategic priorities
® Investor Day 2015 2016‐18 strategic priorities Recruit, retain, motivate, and coach bankers who will differentiate Regions by the quality of advice, guidance, and expertise they provide. Use data and analytics to allocate capital and other resources. Continue to develop a relationship‐ focused and
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Slide 65: Risk Management & Credit
® Investor Day 2015 2015 Investor Day Risk Management & Credit Matt Lusco Barb Godin November 19, 2015 ®
Slide 66: Our priorities
® Investor Day 2015 Focus on the Customer Build the Best Team Manage Performance Strengthen Financial Performance Enhance Risk Management Our priorities 5 strategic priorities that provide direction for decisions 2
Slide 67: A look at our progress
® Investor Day 2015 A look at our progress Evolution of risk management at Regions 2015 Basic Risk Silos Top Down Integrated Risk Management Risk Intelligent S h a r e h o l d e r V a l u e 2010 Regions has transitioned from a basic risk management program, guided by ad‐hoc policies and procedures,
Slide 68: Enhancing risk culture at Regions
® Investor Day 2015 Enhancing risk culture at Regions A strategic priority Regions is committed to continuous improvement and the sustainability of our mission. Continuing to enhance Regions’ risk culture Needs‐based selling Deepen existing relationships Ensure transparency and better credit
Slide 69: Risk Ownership & Awareness initiatives
® Investor Day 2015 Risk Ownership & Awareness (ROA) Initiatives ROA Communications & Outreach Campaign Business Risk Committees Risk and Control Self‐Assessment (RCSA) Refresh IT Risk Framework Enhancements 5
Slide 70: Risk Management Framework
® Investor Day 2015 Risk Management Framework Sound Risk Appetite Risk Appetite Understood across the Company Risk concentrations Risk reward evaluation Financial Strength Alignment with Strategy Overall Risk Capacity 6
Slide 71: Regions' approach to managing risk: three lines of defense
® Investor Day 2015 Regions’ approach to managing risk Three lines of defense 1st Line of Defense Identifies, owns and manages risk Implements action plans to strengthen risk management or reduce risk Monitors and reports on risks relevant to the unit 2nd Line of Defense 3rd Line of Defense
Slide 72: A sound risk management framework
® Investor Day 2015 Regions’ approach to managing risk A sound risk management framework Committees & Working Groups Policies & Procedures Risk Reporting Responsible Risk GovernanceSustainable Risk Processes 8
Slide 73: From de-risking to recovery
® Investor Day 2015 From de‐risking to recovery 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4Q09 4Q10 4Q11 4Q12 4Q13* 4Q14 Net Charge‐Offs % of Loans 3Q15 9 *4Q13 included $151 million in Net Charge-Offs related to RFM TDR loan transfer to HFS, including these charges net charge-offs were
Slide 74: Steady credit quality improvement
® Investor Day 2015 Steady credit quality improvement $70,000 $75,000 $80,000 $85,000 $90,000 $95,000 $‐ $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 4Q09 4Q10 4Q11 4Q12 4Q13 4Q14 Non‐performing Loans Total Loans Criticized and Total Loans ($ in millions) $70,000 $75,000 $80,000 $85,000 $90
Slide 75: Pillars of credit culture
® Investor Day 2015 5 pillars of credit culture Everybody Owns Credit Risk Committed to continuous improvement Asset Quality is Derived from People Quality Associates are accountable for decisions Diversification is key 11
Slide 76: Diversity in the loan portfolio
® Investor Day 2015 Diversity in the loan portfolio Loan Balances at September 30, 2015 ($ in billions) Investor Real Estate, 8% Residential First Mortgage, 16% Indirect ‐ Vehicles, 5% Home Equity, 14% All Other Consumer, 3% All Other Commercial, 24% Energy*, 4% Commercial Real Estate Related, 8% Ma
Slide 77: Energy overview
® Investor Day 2015 Energy overview Majority of balances consist of approximately 40 Exploration & Production and less than 40 Oilfield Services (“OFS”) customers. Losses since 2008 are $11 million Only 4% or $3.3B of bank‐wide loan balances 78% of balances headquartered in four states TX – LA – MS
Slide 78: Experienced energy team
® Investor Day 2015 Experienced energy team Energy Credit – 245 years of combined experience Petroleum Engineering – 100 years of combined industry experience Energy Specialty ‐ 266 years of combined experience 14
Slide 79: Energy lending
® Investor Day 2015 Oilfield Services, $1,095 Exploration and production, $960 Midstream, $405 Downstream, $71 Other, $174 Indirect, $554 Energy lending Note: Securities portfolio contains ~$240MM of high quality, investment grade corporate grade bonds that are energy related at 9/30/15 (1) As of 9/
Slide 80: Oil field services credit servicing
® Investor Day 2015 Oil field services credit servicing Monthly review of all credits Swat Team review industry issues and tear sheets Renewals or new credits require CCO approval 16
Slide 81: E&P energy credit servicing
® Investor Day 2015 E&P energy credit servicing The majority of E&P capital expenditures are discretionary This led to a 20‐40% reduction in lease operating expenses in this price down‐cycle Price Deck is redetermined quarterly, or more frequently as conditions dictate Regions Energy team re‐eva
Slide 82: Credit quality outlook
® Investor Day 2015 Credit quality outlook Long‐term 75‐100 bps Long‐term 120‐140 bps Long‐term 25‐35 bps 3Q15 Actual 30 bps Net charge‐offs Non‐performing loans Allowance to total loans 3Q15 Actual 97 bps 3Q15 Actual 138 bps 18
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Slide 84: Financial Overview
® Investor Day 2015 2015 Investor Day Financial Overview David Turner November 19, 2015 ®
Slide 85: Our priorities
® Investor Day 2015 Focus on the Customer Build the Best Team Manage Performance Strengthen Financial Performance Enhance Risk Management Our Priorities 5 Strategic priorities that provide direction for decisions 2
Slide 86: Strategic initiatives – strengthen financial performance
® Investor Day 2015 Strategic initiatives – strengthen financial performance Effectively Deploy Capital Disciplined organic growth Return appropriate capital to shareholders Use strategic investments to leverage our infrastructure and enhance revenue diversification Disciplined Expense Managem
Slide 87: Grow and Diversify Revenue: Total Revenue
® Investor Day 2015 Total Revenue 63% 37% Net Interest Income Non Interest Income Grow and Diversify Revenue Total Revenue(1) Mix – 2015 YTD $3.9B (1) Adjusted non‐GAAP; see appendix for reconciliation 4
Slide 88: Favorable asset sensitivity position
® Investor Day 2015 Favorable asset sensitivity position Positioned to win in any rate environment Loan Mix(1) 59% 41% Variable Fixed (1) As of 3Q15 (2) See appendix for additional detail Naturally asset‐sensitive balance sheet Primarily core deposit funded 59% of loans have variable rates A
Slide 89: Unique deposit base
® Investor Day 2015 Unique deposit base Favorable projected deposit beta 57% 35% 8% Interest Bearing Checking, Money Market & Savings Non‐Interest Bearing Checking Time (1) Average balances as of 3Q15 (2) Betas measure deposit rate changes relative to market rate changes. Note: Peers include BBT, FI
Slide 90: Unique deposit base: sticky deposit base
® Investor Day 2015 Unique deposit base Sticky deposit base 0% 10% 20% 30% 40% 50% 60% 70% 80% Peer #1 Peer #2 Peer #3 Peer #4 Peer #5 Peer #6 Peer #7 Peer #8 Peer #9 Peer #10 Peer #11 RF Peer #12 Deposits <$250k / Total Deposits (1,2) Peer Average 0% 10% 20% 30% 40% 50% 60% Peer #1 Peer #2 Peer #3
Slide 91: Non-interest income
® Investor Day 2015 Non‐interest income 34% 21% 19% 9% 5% 12% Service charges Wealth Management Income Card and ATM fees Mortgage Income Capital Markets Other $1.4B Non‐Interest Income(1) Mix – 2015 YTD (1) Adjusted non‐GAAP; see appendix for reconciliation Grow and Diversify Revenue Summary of Non‐
Slide 92: Source of sustainable franchise value
® Investor Day 2015 Source of sustainable franchise value Evidence that our investments are paying off Non‐Interest Income(1) Mix – 2015 YTD 2015 GreenSky Fundation Streamline of Credit Financial Consultants Insurance Acquisitions M&A Advisory Multifamily Debt Placements Affordable H
Slide 93: Disciplined Expense Management
® Investor Day 2015 $3,666 $3,532 $3,471 $3,432 $3,358 $2,593 2010 2011 2012 2013 2014 2015 YTD Expenses (1) Adjusted non‐GAAP; see appendix for reconciliation Full Year Expenses(1) Disciplined Expense Management 54% 10% 9% 4% 3% 3% 3% 14% Salaries and Benefits Occupancy FF&E Outside Services Profes
Slide 94: Elimination of core expenses of $300 million
® Investor Day 2015 2016 35‐45% Elimination of core expenses of $300 million over the next 3 years Represents ~9% of 2015 adjusted expense base Restructuring Core Expense Base Disciplined Expense Management 11
Slide 95: Disciplined Expense Management
® Investor Day 2015 Disciplined Expense Management Committed to improve efficiencies Hiring restrictions for non‐customer facing positions started Oct 2015 Streamlining and automating processes to reduce personnel needs Partially through staffing reductions and through attrition Evaluate sta
Slide 96: Strength of our capital position
® Investor Day 2015 Strength of our capital position Industry leading common equity level 9.4% 9.6% 9.7% 10.0% 10.1% 10.1% 10.5% 10.6% 10.6% 10.7% 10.9% 11.0% 12.2% Peer #1 Peer #2 Peer #3 Peer #4 Peer #5 Peer #6 Peer #7 Peer #8 Peer #9 Peer #10 Peer #11 Regions Peer #12 Source: SNL Financial Peers
Slide 97: Capital Priorities
® Investor Day 2015 Capital Priorities Effectively Deploy Capital Strategic InvestmentsDividends Share RepurchasesOrganic Growth 14
Slide 98: 2016 Expectations
® Investor Day 2015 2016 Expectations Average Loan growth 3 ‐ 5% Average Deposit growth 2 – 4% Net interest income up 2 – 4%(1) Adjusted non‐interest income up 4 – 6% Adjusted expenses flat to up modestly: efficiency ratio <63% Operating leverage of 2 – 4%(1) Net charge‐offs 25‐35bps (1)
Slide 99: Why Regions? Building sustainable franchise value
® Investor Day 2015 Why Regions? – Building sustainable franchise value Effectively Deploy Capital Grow and Diversify Revenue Disciplined Expense Management Adjusted EPS growth of 12‐15% (CAGR) Adjusted efficiency ratio of <60% Adjusted ROATCE 12‐14% Three pillars of execution Long‐term expected res
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Slide 101: Appendix
® Investor Day 2015 Appendix
Slide 102: The Chief Risk Officer's organization
® Investor Day 2015 The Chief Risk Officer’s organization Risk Management Leadership Team Matt Lusco Senior EVP, Chief Risk Officer 36 years of banking & financial services experience 5 years at RF Chad Webb Head of Enterprise & Operational Risk 16 years of banking & financial services experience 4
Slide 103: Credit structure
® Investor Day 2015 Credit structure Risk Management Group Credit Risk Group Consumer Credit Risk BB & Wealth Management Credit Problem Asset Management Emerging Credit Risk Credit Portfolio Management Credit MIS & Risk Reporting Commercial CreditRetail Collections & Asset Recovery Process Performan
Slide 104: Conservative borrowing base methodology – energy
® Investor Day 2015 Future Net Income of Total Proved Reserves Discounted Future Net Income of Total Proved Reserves at 9% Risk Adjusted Discounted Future Net Income of Total Proved Reserves Risk Adjusted Discounted Future Net Income of Total Proved Reserves After Advance Rate Total Lending Value Bo
Slide 105: Credit balances by select states
® Investor Day 2015 3% 52% 4% 31% 10% $3.2 B 15% 51% 16% 9% 9% $8.7 B 13% 51%6% 24% 6% $4.5 B Credit balances by select states 1% 53% 4% 34% 8% $10.3 B Alabama LouisianaTexas Mississippi Commercial – Energy (Direct) Consumer Real Estate Secured Commercial – Non‐Energy Consumer Non‐Real Estate Secure
Slide 106: Risk Management – Investing in Success
® Investor Day 2015 Risk Management ‐ Investing in Success We have invested significantly in the following areas: Capital and Strategic Planning Enhanced loss forecasting and capital planning processes and the integration into business planning and strategy Investment in 2014 to build out en
Slide 107: Additional risk management investments
® Investor Day 2015 Additional Investments include: Risk Ownership & Awareness Investment in ROA and ongoing risk culture initiatives Enhanced and fully‐deployed Risk & Control Self Assessment (RCSA) program Compliance Management Program, including BSA/AML/OFAC Compliance & Operations He
Slide 108: Standard shock scenario model assumptions
® Investor Day 2015 Standard shock scenario model assumptions 12 month NII sensitivity to instantaneous, parallel changes in interest rates versus a market forward rate scenario Category Assumption Interest Rates +100 bps parallel instantaneous rate shock above market forward rates Loan balances Mod
Slide 109: Asset sensitivity analysis
® Investor Day 2015 Asset sensitivity analysis(1) (1) As of 3Q15 (2) 12 month NII sensitivity to instantaneous, parallel changes in interest rates versus a market forward rate scenario. (3) Assumes reinvestment into wholesale funding $143 $67 ( $34 ) ( $20 ) ( $22 ) Standard Shock Scenario +100bps⁽²
Slide 110: Securities Portfolio
® Investor Day 2015 Securities Portfolio Gov't/ Agency, 87% IG Corporate Bonds, 7% Private AAA CMBS, 6% Securities Portfolio Mix Effective Duration 3.03 3.42 4.08 4.36 4.4 4.33 ‐50 Flat +100 +200 +300 +400 The securities portfolio is comprised of high quality assets that serve to provide adequate
Slide 111: Solid liquidity and funding mix
® Investor Day 2015 Solid liquidity and funding mix 70% 75% 80% 85% 90% 95% 0.0% 5.0% 10.0% 15.0% 20.0% L o a n s / D e p o s i t s Funded Debt / Avg. Earnings Assets Relatively low reliance on wholesale funding, driven by large, stable core deposit base Low loan to deposit ratio (83%) and low f
Slide 112: Non-GAAP Reconciliation: Non-Interest Expense, Non-Interest Income and Revenue
® Investor Day 2015 Non–GAAP Reconciliation: Non‐Interest Expense, Non‐Interest Income and Revenue Non-interest expense (GAAP) is presented excluding certain adjustments to arrive at adjusted non-interest expense (non-GAAP). Non-interest income (GAAP) is presented excluding certain adjustments to ar
Slide 113: Non-GAAP Reconciliation: Non-Interest Expense
® Investor Day 2015 Non–GAAP Reconciliation: Non‐Interest Expense Non-interest expense (GAAP) is presented excluding certain adjustments to arrive at adjusted non-interest expense (non-GAAP). Regions believes that the exclusion of these adjustments provides a meaningful base for period-to-period com