Regions Financial Corporation · NYSE:RF
Regions Financial — Lehman Brothers 2007 Financial Services Conference
33 slides from Regions Financial's conference presentation, Sep 11, 2007
Slide 1: Lehman Brothers 2007 Financial Services Conference
Lehman Brothers 2007 Financial Services Conference September 11, 2007 Exhibit 99.1
Slide 2: Forward Looking Statement
FORWARD LOOKING STATEMENT The information contained in 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 fo
Slide 3: Company Profile
Company Profile Company Profile Integration Update 2007 Initiatives 2Q07 Financial Performance Summary
Slide 4: Regions is Among the Largest U.S. Banks
Regions is Among the Largest U.S. Banks Market Capitalization $23 billion 11th Assets $138 billion 10th Loans, net of unearned income $94 billion 9th Deposits $95 billion 8th Branches 1,911 7th ATMs 2,581 8th National Rank ¹ As of June 30, 2007.
Slide 5: Franchise Footprint
Franchise Footprint Source: SNL DataSource, adjusted for divestitures State Dep. ($B) Mkt. Share Rank AL $18.7 27% #1 FL 18.4 #4 TN 17.2 #2 LA 7.8 #3 MS 6.2 #1 GA 5.5 #6 AR 4.4 #1 TX 2.9 #19 IL 2.4 #22 MO 2.3 #7 IN 1.9 #10 Other 2.4 — — Regions Morgan Keegan Insurance
Slide 6: Strong Local Market Share
Strong Local Market Share 15.4 AmSouth 15.7 Regions (pre-merger) 20.4 Regions Regions compares favorably in terms of local market share relative to other top 10 banking franchises 10.9 Citigroup 14.9 SunTrust 15.1 National City 17.8 US Bancorp 18.7 Fifth Third 18.8 Bank of America 19.2 JPMorgan Chas
Slide 7: Fast Growing Footprint
Fast Growing Footprint Projected Population Growth of Market Footprint (1) 6.7% National Average Source: SNL Financial. Data as of June 2006. Pro forma for completed/pending M&A. (1) Deposit weighted by MSA.
Slide 8: Morgan Keegan – Among the Largest Regional Full-Service Brokerage and Investment Banking Firms
Morgan Keegan – Among the Largest Regional Full-Service Brokerage and Investment Banking Firms Revenue ($M) Pre-Tax Income ($M) Financial Performance 446 Office Locations Revenue Composition (2Q ’07) Profile Founded in 1969 Acquired by Regions in 2001 1,300 financial advisors 446 offices in 19 state
Slide 9: Integration Update
Integration Update Company Profile Integration Update 2007 Initiatives 2Q07 Financial Performance Summary
Slide 10: Key Integration Accomplishments
Key Integration Accomplishments Established Matrix Organizational Structure Completed Branch Divestitures Converted Brokerage, Mortgage, Payroll, Employee Benefits and Trust Systems Completed Alabama and Florida Branch Conversions Branch Consolidations Well Underway Exceeding Original Cost Saves
Slide 11: Integration Timeline
Integration Timeline Combined Product Set & Incentives Complete Sale of Divested Branches 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 Brokerage Conversion Mortgage Origination & Servicing Conversion Trust Conversion Achieve $500 MM Annual Run-rate in Cost Saves Event Two Branch Conversion and Consolidations Event
Slide 12: Branch Conversion Events
Event 1 July 13, 2007 (633 branches) Event 2 October 26, 2007 (563 branches) Event 3 December 7, 2007 (590 branches) FL AL GA MS LA TX AR MO IA IL IN KY TN NC VA SC
Slide 13: Branch Consolidations
Branch Consolidations Tennessee Missouri Georgia Mississippi Louisiana Alabama Florida 15 branches consolidated pre-conversion in Arkansas, Florida, Missouri and Tennessee Significant source of cost saves Total of 159 branches consolidated Event 1 Event 2 Event 3
Slide 14: Exceeding Original Cost Saves
Exceeding Original Cost Saves Net Cost Saves $0 $100 $200 $300 $400 $500 2008E 2007E 4Q06 $7 MM Estimated $250 MM Estimated $500 MM Full run-rate achieved by 2Q 2008 $135 MM through 2Q07
Slide 15: Measuring the Customer Experience
Measuring the Customer Experience Measurement Plans Gallup Organization, Greenwich Organization and Customer Surveys Trend Identification Tracking over 100 operational metrics
Slide 16: 2007 Initiatives
2007 Initiatives Company Profile Integration Update 2007 Initiatives 2Q07 Financial Performance Summary
Slide 17: De Novo Branching
De Novo Branching 2007 De Novo Branches Florida Alabama Tennessee Other Total
Slide 18: Consumer Services Initiatives for 2007
Consumer Services Initiatives for 2007 Consumer checking household growth of 2% Retain a minimum of 85% of the consumer checking households New customer cross-sell ratio of 4.5 services per household Grow private banking households by 10%
Slide 19: Commercial and Business Banking Services
Commercial and Industrial/ Middle Market Corporate Banking Business Banking Business Services Treasury Management Community Banking Commercial Real Estate
Slide 20: Summary of Key Initiatives
Summary of Key Initiatives Leverage New Capabilities and Credit Limits Fully Develop Morgan Keegan Partnership Drive Improvements in Sales Process Deepen Cross-Sell with Existing Clients Improve Associate and Client Retention Enhance Productivity
Slide 21: 2Q07 Financial Performance
2Q07 Financial Performance Company Profile Integration Update 2007 Initiatives 2Q07 Financial Performance Summary
Slide 22: Solid Financial Performance
Solid Financial Performance Good fee-based revenue growth Lower net interest income and margin compression driven largely by divestitures Above-plan merger cost saves; good expense containment Disciplined balance sheet/capital management Credit costs remain low Excellent merger integration progress,
Slide 23: 2Q07 Financial Summary
2Q07 Financial Summary Financial Performance $ 0.69 EPS – diluted* 0.23 % Net Charge-Off Ratio Asset Quality 0.62 % Nonperforming Assets as a % of Loans 1.19 % Allowance for Credit Losses as a % of Loans 24.79 % Return on Avg. Tangible Equity* 1.43 % Return on Avg. Assets* 57.44 % Operating Efficien
Slide 24: Credit Quality Trends
Credit Quality Trends 0.45 % 0.62 % 0.20 % 0.23 % 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 4Q06 1Q07 2Q07 0.40 % 0.27 % NPAs/Loans and OREO Net Charge-Offs/Average Loans 1.11 % 1.11 % 0.99 % Delinquent Loans (>30 days)
Slide 25: Diversified Loan Portfolio
Diversified Loan Portfolio Note: Loan Portfolio per Call Report Schedule RC-C. June 30, 2007. Loan Portfolio Total Loan Portfolio as of 6/30/07 ($MM) = $94,014 Commercial/Leasing, 23% Multifamily, 1% Other Commercial Real Estate, 9% Alt A, 3% Indirect, 4% 1-4 Family Construction, 5% Land and Other C
Slide 26: Commercial Real Estate
Commercial Real Estate CRE Portfolio by Product CRE Portfolio Characteristics CRE portfolio is diversified by product, loan size, and by geography CRE portfolio is very granular with the average note size under $500 thousand This average note size is reflective of real estate in our Community Banks
Slide 27: Consumer Real Estate Portfolio
Consumer Real Estate Portfolio Average Loan Size = $114 thousand 71% are first lien position Weighted Average LTV FICO Total Portfolio 71% Alt A 72% Negligible subprime exposure (0.1 %) No negative amortizing mortgages No Option Adjustable Rate Mortgages EquiFirst sold 1Q2007 Remaining Loan Portfoli
Slide 28: Strong Capital Position
Strong Capital Position Tangible Equity / Tangible Assets Source: SNL DataSource, Tangible Equity/Tangible Assets as of June 30, 2007. 5.5% Median
Slide 29: Summary
Summary Company Profile Integration Update 2007 Initiatives 2Q07 Financial Performance Summary
Slide 30: Current Banking Environment
Current Banking Environment Interest Rates Disciplined balance sheet management Large branch network in high growth areas provides strong engine for low cost deposit growth Concerns Our Response
Slide 31: Current Banking Environment
Current Banking Environment Interest Rates Credit Quality Disciplined balance sheet management Large branch network in high growth areas provides strong engine for low cost deposit growth Loan portfolio well diversified by size, product type and geography Strengthened underwriting and approval proce
Slide 32: Current Banking Environment
Current Banking Environment Interest Rates Credit Quality Economy Disciplined balance sheet management Large branch network in high growth areas provides strong engine for low cost deposit growth Fast growing Southeastern footprint High market density in footprint Customer retention programs Househo
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