Regions Financial Corporation · NYSE:RF
Regions Financial — UBS Global Financial Services Conference 2006
20 slides from Regions Financial's conference presentation, May 16, 2006
Slide 1: Regions Financial Corporation UBS Global Financial Services Conference
Regions Financial Corporation UBS Global Financial Services Conference May 16, 2006 D. Bryan Jordan Executive V.P. and Chief Financial Officer Regions Financial Corporation
Slide 2: Forward-Looking Statement
FORWARD-LOOKING STATEMENT The information contained in this presentation may include forward-looking statements that reflect Regions' current views with respect to future events and financial performance. You should not place undue reliance on these statements as the forward-looking statements are b
Slide 3: Eight states represent 83% of deposit base
3 Regions Financial Corporation Eight states represent 83% of deposit base Projected 2005-2010 growth rates in these states are at or above nat'l average: 8% population growth 17% household income growth #1 $11.5B #7 $8.4B #4 $7.1B #6 $5.6B #1 $4.5B #4 $4.3B #4 $2.7B #7 $2.5B Source: SNL
Slide 4: Growing Net Income Base
Growing Net Income Base Over $1.0 Billion in Annualized Income* Banking Mortgage Insurance Brokerage 88 2 2 14 Combined Revenue Composition* Insurance 2% Banking 88% Mortgage Banking 2% Brokerage & Trust 14% * Based on annualized 1Q06 financial results; Other of -5.4% 7
Slide 5: Diversified, Rising Revenue Stream
Diversified, Rising Revenue Stream $5.0 Billion in Annualized Revenues* Net II Mortgage Insurance Brokerage Fees 61 6 2 18 12 Combined Revenue Composition* Insurance 2% Net Interest Income 61% Mortgage Banking 7% Brokerage & Trust 18% Banking Fees 12% * Based on annualized 1Q06 financial results 9
Slide 6: We're Off To A Strong Start in 2006
We're Off To A Strong Start in 2006 First Quarter Results Earnings of $295 million, increase of 12% year over year Revenue of $1.2 billion, a 6% increase year over year Record quarterly revenue and profits at Morgan Keegan Low net charge-offs of 0.20% of average loans 11
Slide 7: We're Optimistic About Continued Strength in 2006
Net interest margin is expected to increase from 2005's 3.91% to over 4.00% in 2006 Net charge-offs are anticipated to remain low, in the range of 0.25-0.30% of average loans Morgan Keegan is on track for another record year Retail banking productivity enhancements are ongoing And, We're Optimistic
Slide 8: Regions' Balance Sheet is Positioned Well For 2006
Regions' Balance Sheet is Positioned Well For 2006 Net Interest Margin 0.0391 0.0405 Regions has ability to protect deposit base as competition increases Regions has ability to shift to less asset sensitive position 4.00% + 2005 2006 Expectation* Based on current balance sheet modeling and forward r
Slide 9: Net Charge-offs Are Expected to Remain Low
Net Charge-offs Are Expected to Remain Low 1Q05 2Q05 3Q05 4Q05 1Q06 East 487.1 455.8 440.5 406.9 409.1 Slight up tick in 1Q06 result of Hurricane Katrina-area portfolio $26 million in non-accrual loans in Katrina portfolio as of March 31, 2006 $7.4 million Katrina-portfolio loans past due greater th
Slide 10: Net Charge-offs Are Expected to Remain Low
Net Charge-offs Are Expected to Remain Low Expect 0.25-0.30% charge-off ratio for 2006 compared to 0.23% in 2005 $58 million reserve identified for possible Katrina portfolio losses as of 3/31/06 Regions believes this reserve is adequate based on current knowledge of portfolio and economic factors 1
Slide 11: Morgan Keegan is Focused on Growing Its Largest Markets
12 Morgan Keegan is Focused on Growing Its Largest Markets... Morgan Keegan's 12 largest markets represent approximately $3 billion in brokerage revenues
Slide 12: Focused on Enhancing Banking Performance: Retail Banking
Focused on Enhancing Banking Performance Implementing Consistent Business and Staffing Models in Branches Individual performance plans already finalized for about 75% of branches Plans identify growth and efficiency potential, as well as strategies for realization of that potential Migrating Small B
Slide 13: Focused on Enhancing Banking Performance: Commercial Banking
Focused on Enhancing Banking Performance Consistent staffing guidelines Over 1,500 competency assessments in progress or completed Resulting in some associates being transferred into positions better aligned with their competencies Focus on metropolitan markets Formalized sales structure introduced
Slide 14: Focused on Enhancing Banking Performance: Private Banking
Focused on Enhancing Banking Performance Opportunity for Morgan Keegan to leverage existing banking relationships with upper affluent and wealth households Approximately 220K upper affluent and wealth segment households - only 10% are private banking customers Opportunity for Regions Bank to leverag
Slide 15: Revenue per FTE by Banking Group
Focused on Enhancing Banking Performance Quartile 1 Quartile 2 Quartile 3 Quartile 4 4Q05 339 282 248 215 1Q06 add 5.4 9.2 5 6.2 In thousands 4Q05 Baseline: $273 Revenue per FTE by Banking Group 31 1Q06: $281 + 3% 4Q05 1Q06
Slide 16: Operating Efficiency Ratio by Banking Group
Focused on Enhancing Banking Performance Quartile 1 Quartile 2 Quartile 3 Quartile 4 1Q06 0.44 0.5 0.57 0.62 0.01 0.03 0.04 0.06 4Q05 Average: 54% Operating Efficiency Ratio by Banking Group 17 1Q06 Average: 52% 4Q05 1Q06
Slide 17: Improving Return on Tangible Equity
Improving Return on Tangible Equity Goal: Mid-20s 1Q05 2Q05 3Q05 4Q05 1Q06 East 0.2016 0.2065 0.211 0.219 0.2232 Return on Tangible Equity *Excludes merger and other charges in 2005 35
Slide 18: Steady EPS Growth
Steady EPS Growth* 1Q05 2Q05 3Q05 4Q05 1Q06 EPS 0.57 0.59 0.61 0.62 0.64 12% Year over Year Growth *Excludes merger and other charges in 2005 37
Slide 19: Superior Five Year Total Shareholder Return
Superior Five Year Total Shareholder Return 83.44% 43.88% 21.46% Source: Bloomberg $100 invested in RF on March 31, 2001, with dividends reinvested, is worth $183.44 on March 31, 2006 39
Slide 20: Our Vision: To Become the Leading Regional Financial Services Company
Provide top quartile peer group returns for our shareholders Consistently deliver above average revenue and profit growth Provide excellent customer service Operational excellence Our Vision: To Become the Leading Regional Financial Services Company We aspire to... Leading associate engagement 41
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