Regions Financial Corporation · NYSE:RF
Regions Financial — 2012 Citi Financial Services Conference
25 slides from Regions Financial's conference presentation, Mar 7, 2012
Slide 1: 2012 Citi Financial Services Conference
Exhibit 99.1 2012 CITI FINANCIAL SERVICES CONFERENCE March 7, 2012 Grayson Hall Chief Executive Officer
Slide 2: Investment Thesis
INVESTMENT THESIS • Aggressive risk management initiatives Improved Credit Profile • Significant reduction in higher risk loan portfolios • Continued improvement in credit quality metrics • Continued growth in low cost core deposit base Strong Funding Profile • Loan to deposit ratio well below histo
Slide 3: Aggressive Risk Management Initiatives
AGGRESSIVE RISK MANAGEMENT INITIATIVES • New General Counsel, Chief Risk Officer and Chief Credit Officer in place • Strengthened Board of Directors by addition of 4 new members in the last 2 years • Substantial reduction in highest risk credit exposures • Continued focus on risk / portfolio diversi
Slide 4: Significant Reduction in High Risk Loan Portfolios
SIGNIFICANT REDUCTION IN HIGH RISK LOAN PORTFOLIOS Total Investor Real Estate Higher Risk Investor Real Estate Portfolio Reduced Investor Real Estate Reduced High Risk Portfolios $15.1 B or 59% over 5 years $11.8 B or 87% over 5 years 4
Slide 5: Continued Improvement in Credit Quality Metrics
CONTINUED IMPROVEMENT IN CREDIT QUALITY METRICS Total NPAs (including HFS) NPLs Gross Migration 24% Decline in Total NPAs* 41% Decline* $3,918 $3,933 $3,602 92% $948 $3,391 95% $730 $755 $2,996 90% 85% $555 $561 87% 87% 80% 81% 81% 75% 70% 65% 60% 4Q10 1Q11 2Q11 3Q11 4Q11 4Q10 1Q11 2Q11 3Q11 4Q11 NP
Slide 6: Strong Funding Profile and Liquidity Position
STRONG FUNDING PROFILE AND LIQUIDITY POSITION Deposit Profile* Core Deposits as a % of Total Funding Time 20% 89% 32% Money Market 25% 85% 24% 5% Savings 4% 20% Interest Bearing 16% Interest Free 24% 30% 2009 2011 Cost of Deposits 1.35% 0.49% Regions Peer Median Low Cost Deposits* $67.1B $76.2B % Lo
Slide 7: Strong Capital Levels
STRONG CAPITAL LEVELS 13.3% 12.4% 12.5% 12.6% 12.8% 11.4% 7.9% 7.9% 7.9% 8.2% 8.5% 7.7% (2) 4Q10 1Q11 2Q11 3Q11 4Q11 4Q11 Basel III (1) Tier 1 Common Tier 1 Capital 1 Non-GAAP – see appendix page 23 for reconciliation 2 Non-GAAP - Subject to change as interpretationof Basel IIIrules is ongoing and d
Slide 8: Franchise Overview
FRANCHISE OVERVIEW Business Services › Small and mid-sized C&I lending › Commercial Real Estate › Equipment Finance Consumer Services Ranked 5th or Better in Market Share Targeted Growth Areas › Mortgage › Direct Lending › Home Equity › Indirect Auto • Associates: 23,707* › Credit Card • Assets: $12
Slide 9: Regions' Footprint: High Market Share, High Growth Markets
REGIONS’ FOOTPRINT IS CHARACTERIZED BY EITHER HIGH MARKET SHARE, HIGH GROWTH MARKETS OR BOTH ($ in billions) ’10-’15 Top 10 MSAs Deposits Market Share Market Rank Population Growth Weighted Average Deposit Market Share in Regions’ Core Markets Birmingham, AL $11.0 37.6% 1 3.4% Market Nashville, TN $
Slide 10: Renewed Focus on C&I and Consumer Lending
RENEWED FOCUS ON C&I AND CONSUMER LENDING BUSINESS SERVICES CONSUMER SERVICES • 60% of Total Loan Portfolio • 40% of Total Loan Portfolio • Focused on middle market and small business • Consumer loan growth will be fueled by new businesses as • Represents over 80% of Business Services Revenue well a
Slide 11: 2011 Financial Highlights
2011 FINANCIAL HIGHLIGHTS Adjusted Pre-tax Pre-provision Income from Continuing 2011 Financial Results Operations (2) 3.5% Net Loss ($429)MM $496 $516 $468 3.0% EPS ($0.34) $430 $424 2.5% Income from continuing $211MM 2.2% 2.0% operations (1) 2.1% 2.0% EPS from continuing $0.17 1.8% 1.8% 1.5% operat
Slide 12: Mix and Cost of Deposits Provide Opportunity to Lower Costs
MIX AND COST OF DEPOSITS PROVIDES FURTHER OPPORTUNITY TO LOWER DEPOSIT COSTS AND IMPROVE MARGIN Deposit Cost Opportunity Gap Deposit Mix Compared to Peers* 8 bps 7 bps Time 21% 38 bps 33 bps Other Regions 49% NIB 30% 3Q11 4Q11 Peer Median Regions Opportunity Gap • Regions has additional room to redu
Slide 13: Conservative Investment Portfolio vs. Peers
CONSERVATIVE INVESTMENT PORTFOLIO VS. PEERS Regions Securities Portfolio Components* Peer Average Securities Portfolio Components * Agency Debt 3% Agency Debt Agency 1% MBS Munis 4% Agency 94% Other MBS Treasuries 75% 3% 2% Private Other CMBS 1% 9% Agency CMBS Private Private 1% CMBS MBS 2% 5% *As o
Slide 14: Funding Mix and Cash Deployment to Improve NIM
FUNDING MIX AND DEPLOYMENT OF CASH RESERVES EXPECTED TO RESULT IN ADDITIONAL IMPROVEMENT TO NIM* Impact of Excess Cash Reserves & Non- Regions has closed a portion of its gap vs. Accruals on NIM* peers in the last 5 quarters 69bps 41bps * From continuing operations Source: SNL Financial: Peer banks
Slide 15: Ability to Adapt Business Model Helps Mitigate New Legislation
ABILITY TO ADAPT OUR BUSINESS MODEL HELPS MITIGATE NEW LEGISLATION Factors Offsetting Debit Interchange Fee Income by Quarter * Legislation $519 $516 $502 $501 $490 • Ongoing restructuring of our 66 52 accounts from free to fee-eligible 53 60 27 60 25 28 25 15 50 26 • Increased hurdle to obtain free
Slide 16: Expense Control Continues to Be a Focus
EXPENSE CONTROL CONTINUES TO BE A FOCUS Non-Interest Expense (1) – 4Q11 vs. 4Q10 Expenses Per FTE (1) (1) Headcount – Bank Associates (2) Regions has the lowest expenses per FTE of all peers (1) Non-GAAP from continuing operations excluding goodwill impairment; see GAAP to Non-GAAP reconciliation on
Slide 17: Opportunity for Outperformance
OPPORTUNITY FOR OUTPERFORMANCE • Tangible opportunity to close peer margin gap REVENUE • $11.7B of deposit repricing • Lower liquidity costs • Level of non-accruals • Continued momentum in C&I and Consumer lending • Real estate expertise intact • Durbin mitigation efforts underway EXPENSES • Ongoing
Slide 18: Investment Thesis
INVESTMENT THESIS • Aggressive risk management initiatives Improved Credit Profile • Significant reduction in higher risk loan portfolios • Continued improvement in credit quality metrics • Continued growth in low cost core deposit base Strong Funding Profile • Loan to deposit ratio well below histo
Slide 19: Appendix
APPENDIX Ax REGIONS
Slide 20: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation may include forward-looking statements which reflect Regions’ current views with respect to future events and financial performance. The Private Securities Litigation Reform Act of 1995 (“the Act”) provides a “safe harbor” for forward-looking statements w
Slide 21: Non-GAAP Reconciliation: Net Income / (Loss) and Earnings Per Share
NON-GAAP RECONCILIATION: NET INCOME / (LOSS) AND EARNINGS PER SHARE The tables below and on the next slide present computations of earnings (loss) and certain other financial measures, excluding goodwill impairment and regulatory charge and related tax benefit (non-GAAP). The goodwill impairment cha
Slide 22: Non-GAAP Reconciliation: Pre-Tax Pre-Provision Income and Risk Weighted Assets
NON-GAAP RECONCILIATION: PRE-TAX PRE-PROVISION INCOME AND RISK WEIGHTED ASSETS The Pre-Tax Pre-Provision Income from Continuing Operations table presents computations of pre-tax pre-provision income from continuing operations excluding certain adjustments (non-GAAP). Regions believes that the exclus
Slide 23: Non-GAAP Reconciliation: Tier 1 Common
NON-GAAP RECONCILIATION: TIER 1 COMMON The following table provides a reconciliation of stockholder’s equity to "Tier 1 common equity" (non-GAAP). Traditionally, the Federal Reserve and other banking regulatory bodies have assessed a bank's capital adequacy based on Tier 1 capital, the calculation o
Slide 24: Non-GAAP Reconciliation: Basel III
NON-GAAP RECONCILIATION: BASEL III The following table provides calculations of Tier 1 capital and Tier 1 common, based on Regions’ current understanding of Basel III requirements. Regions currently calculates its risk-based capital ratios under guidelines adopted by the Federal Reserve based on the
Slide 25: Regions
REGIONS
Regions Financial — 2012 Citi Financial Services Conference on 6ix