Regions Financial Corporation · NYSE:RF
Regions Financial — Q4 2015 Earnings Presentation
19 slides from Regions Financial's earnings presentation, Jan 15, 2016
Slide 1: 4th Quarter Earnings Conference Call
4th Quarter Earnings Conference Call January 15, 2016 ® Exhibit 99.3
Slide 2: 2015 Overview
2 2015 Overview (1) Available to common shareholders from continuing operations (2) Non-GAAP; see appendix for reconciliation (3) Excluding loans held for sale ($ in millions, except per share data) 2015 2014 Change Net Income(1) $1,011 $1,082 (7)% Diluted EPS - Continuing Operations $0.76 $0.78 (3)
Slide 3: Loans and leases
3 Loans and leases For the quarter: ▪ Adjusted ending loan and lease balances up $1 billion or 1%(1) ▪ Business lending achieved solid growth as balances increased 1%, excluding the lease reclassification(1) ▪ Commercial loans grew 1%(1) ▪ Commitments increased 2% ▪ Line utilization up 30 basis poin
Slide 4: Deposits and funding costs
4 Deposits and funding costs Deposit costs Funding costs Ending deposit balances ($ in billions) Average deposit balances ($ in billions) 4Q15 11 basis points ~Historical low~ 4Q14 1Q15 2Q15 3Q15 4Q15 $94.2 $97.5 $97.1 $97.2 $98.4 4Q14 1Q15 2Q15 3Q15 4Q15 $94.0 $95.8 $97.1 $97.2 $97.5 4Q14 1Q15 2Q15
Slide 5: Net interest income and other financing income and net interest margin
5 Net interest income and other financing income and net interest margin ▪ Net interest income and other financing income on a FTE basis was negatively impacted by the $15MM lease adjustment ▪ Excluding the lease adjustment net interest income and other financing income increased 2%(1) ▪ Primary dri
Slide 6: Non-interest income
6 Non-interest income ▪ Adjusted non-interest income increased 4%(1) ▪ Card and ATM fees increased 3% driven by an increase in commercial bank card usage and increased seasonal consumer spending ▪ Service charges were impacted by posting order changes which reduced income by approximately $7MM ▪ Wea
Slide 7: Non-interest expense
7 Non-interest expense ▪ Total adjusted expenses declined $33MM or 4%(1) ▪ FDIC insurance assessments decreased $24MM, primarily due to additional expenses of $23MM in 3Q related to prior assessments ▪ 4Q benefited from lower expenses related to unfunded commitment costs of $12MM ▪ Salaries and bene
Slide 8: Asset quality
8 $1,303$1,312 $1,404$1,505 $1,586 368 (1) Excludes loans held for sale (2) Includes commercial and investor real estate loans only (3) The All Other category includes TDRs classified as held for sale for the following periods : $29MM in 4Q14, $19MM in 1Q15, $18MM in 2Q15, $14MM in 3Q15 and $8MM in
Slide 9: Capital and liquidity
9 Capital and liquidity ▪ Repurchased $621MM and declared dividends of $304MM, returning 93% of earnings to shareholders in 2015 ▪ Transitional basis Basel III Common Equity Tier 1 ratio estimated at 10.9%, well above current regulatory minimums ▪ At period end, Regions was fully compliant with the
Slide 10: 2016 expectations
10 2016 expectations ▪ Adjusted average loan growth of 3% - 5%, excluding the impact of the lease reclassification ▪ Average deposit growth of 2% - 4% ▪ Net interest and other financing income up 2% - 4%(1) ▪ Adjusted non-interest income up 4% - 6%(2) ▪ Adjusted expenses flat to up modestly: efficie
Slide 11: Appendix
11 Appendix
Slide 12: Energy lending
12 Energy lending ▪ Reserves now stand at 6% of direct energy exposure. ▪ During the fourth quarter, Regions corrected the accounting for certain operating leases which had previously been included in loans. The total impact to the energy portfolio is $162 million. ▪ Securities portfolio contained ~
Slide 13: Energy lending outstanding balances
13 Energy lending Outstanding Balances(1)(2) Oilfield Services Outstanding Balances(1) (1) As of 12/31/2015, $ in millions (2) $162MM of total energy exposure was reclassified from loans to other earning assets as of 12/31/15. Oilfield Services: $969 Exploration and production: $910 Midstream: $441
Slide 14: Non-GAAP reconciliation: Adjusted ending loans and leases
14 Non-GAAP reconciliation: Adjusted ending loans and leases As of 12/31/2015 12/31/2015 ($ amounts in millions) 12/31/2015 9/30/2015 6/30/2015 3/31/2015 12/31/2014 vs. 9/30/2015 vs. 12/31/2014 Commercial and industrial $ 35,821 $ 35,906 $ 35,347 $ 33,681 $ 32,732 $ (85) (0.2)% $ 3,089 9.4 % Commerc
Slide 15: Non-GAAP reconciliation: Adjusted average loans and leases
15 Non-GAAP reconciliation: Adjusted average loans and leases During the fourth quarter 2015, Regions corrected the accounting for certain leases which had previously been included in loans. These leases had been classified as capital leases but were subsequently determined to be operating leases. T
Slide 16: Non-GAAP reconciliation: Non-interest expense and efficiency ratio
16 Non-GAAP reconciliation: Non-interest expense and efficiency ratio NM - Not Meaningful (1) Regions recorded $50 million and $100 million of contingent legal and regulatory accruals during the second quarter of 2015 and the fourth quarter of 2014, respectively, related to previously disclosed matt
Slide 17: Non-GAAP reconciliation: Basel III common equity Tier 1 ratio
17 Non-GAAP reconciliation: Basel III common equity Tier 1 ratio – fully phased- in pro-forma The calculation of the fully phased-in pro-forma "Common equity Tier 1" (CET1) is based on Regions’ understanding of the Final Basel III requirements. For Regions, the Basel III framework became effective o
Slide 18: Forward-looking statements
18 Forward-looking statements The foregoing list of factors is not exhaustive. For discussion of these and other factors that may cause actual results to differ from expectations, look under the captions “Forward-Looking Statements” and “Risk Factors" of Regions' Annual Report on Form 10-K for the y
Slide 19: Regions
A REGIONS