Regions Financial Corporation · NYSE:RF
Regions Financial — Non-Deal Roadshow (August 2021)
80 slides from Regions Financial's roadshow presentation, Aug 18, 2021
Slide 1: Investor Information August - September 2021
Investor Information August - September 2021 Exhibit 99.1
Slide 2: Table of contents
2 Table of contents Topic Page # Profile and Strategy 3-8 Income Statement 9-21 Business Segment Highlights 22-26 Balance Sheet 27-30 Capital, Debt & Liquidity 31-36 Technology & Continuous Improvement 37-41 Credit 42-55 Near-Term Expectations 56 Environmental, Social & Governance 57-61 LIBOR Transi
Slide 3: Line of business coverage
3 Line of business coverage Alabama – 190 Georgia – 111 Iowa – 5 Mississippi – 109 South Carolina – 21 Arkansas – 61 Illinois – 41 Kentucky – 11 Missouri – 52 Tennessee – 203 Florida – 278 Indiana – 45 Louisiana – 85 North Carolina – 7 Texas – 94 Ranked 18th in the U.S. in total deposits(1) Branch l
Slide 4: Top market share plays a valuable role in the competitive landscape
4 Top market share plays a valuable role in the competitive landscape (1) Based on MSA and non-MSA counties using FDIC deposit data as of 6/30/2020; pro-forma for announced M&A transactions as of 7/30/2021. (2) Significant money center bank presence (JPM, BAC, C, WFC) defined as combined market shar
Slide 5: Presence in strong growth markets
5 4.9% 3.1% 3.0% 1.9% 1.7% 1.2% 1.2% 1.0% 0.5% Peer #1 Peer #2 Peer #3 Peer #4 Peer #5 Peer #6 Peer #7 Peer #8 Presence in strong growth markets Top Faster Growing MSAs Deposits Market Rank(3) Nashville, Tennessee $9.7 3 Tampa, Florida $5.3 4 Miami, Florida $5.1 13 Atlanta, Georgia $4.8 7 Orlando, F
Slide 6: Regions receives top honors
6 Regions receives top honors Regions Bank Awarded Bronze Military Friendly Award Seven Years Strong: Regions Bank Again Named Gallup Exceptional Workplace Award Winner in 2021 Regions Bank Ranked Highest in Customer Satisfaction in J.D. Power 2020 U.S. Online Banking Satisfaction Study Among Region
Slide 7: Second quarter 2021 overview
7 Second quarter 2021 overview (1) Non-GAAP, see appendix for reconciliation. Adjusted Pre-Tax Pre- Provision Income(1) Diluted Earnings Per Share Adjusted Total Revenue(1) Adjusted Non- Interest Expense(1) Net Income Available to Common Shareholders $668M $0.77 $1,563M $895M $748M • Adjusted pre-ta
Slide 8: Poised for growth
8 Poised for growth Innovating through digital investments and enhancing our customer experiences to generate shareholder return Online and mobile banking enhancements Creation of omnichannel network Digitized sales within consumer bank- YTD digital sales up 53% Expanding E-signature capabilities Co
Slide 9: Net interest income and net interest margin - liquidity impacts
9 $985 $978 $975 3.19% 3.02% 2.81% 3.36% 3.40% 3.31% 2Q20 1Q21 2Q21 NII(1) Net interest income and net interest margin - liquidity impacts NII(1) and NIM ($ in millions) (1) Net interest income (NII) on a fully taxable-equivalent basis. (2) Non-GAAP; see appendix for reconciliation. NIM • In 2Q, dep
Slide 10: Net interest income drivers and active balance sheet management
10 • Rate environment impacts offset through active balance sheet management ◦ Hedging benefit of $104M NII in 2Q(3) ◦ Lower deposit pricing; 2Q deposit cost = 5bps / interest-bearing deposit cost = 9bps ◦ Pandemic cash management includes ~$5B securities adds ($2B at 1.2% in 2Q) and ~$10B long-term
Slide 11: Balance sheet profile
11 IB 53% NIB 43% Time 4% Loans 54% Securities 19% Cash 15% Other 12% Deposits 96% Borrowin… 2% Other 2% Floating 61% Fixed 39% $131B Floating 24% Fixed 72% PPP 4% Loans(2)(3) $84B Balance sheet profile (as of June 30, 2021) Portfolio compositions• Naturally asset sensitive balance sheet, supported
Slide 12: Securities and cash deployment
12 Pe er 1 Pe er 2 Pe er 3 Pe er 4 Pe er 5 Pe er 6 Pe er 7 RF Pe er 8 Pe er 9 Pe er 1 0 Pe er 1 1 Pe er 1 2 Pe er 1 3 0% 20% Peer Median: 22% Ending Securities / Total Earning Assets (2Q21)(2) • Recent liquidity inflows represent an NII opportunity, with cash deployment dependent on: ◦ stability of
Slide 13: Earnings stability and hedging
13 10.8% 8.3% 7.1% 6.0% 5.2% 4.7% 4.6% 3.3% 2.9% 2.7% 0.9% 0.4% —% 3.1 2.8 0.8 2.8 1.9 2.0 2.5 1.7 2.7 RF Pe er 1 Pe er 2 Pe er 3 Pe er 4 Pe er 5 Pe er 6 Pe er 7 Pe er 8 Pe er 9 Pe er 1 0 Pe er 1 1 Pe er 1 2 WAL remaining on CF Hedges(5) Cash-flow Hedge Program Details 06/30/21(3) Cash-Flow Hedge No
Slide 14: Hedge terminations and maturity profile
14 1 2 3 4 5 6 • Recent terminations and resulting maturity profile well positioned for rising short-term rates in 2023 and beyond ◦ Notional reductions(2) - intended to ensure balanced rate risk position as higher rates become possible ◦ Securities offset(3) - $1.25B of swaps unwound to offset a po
Slide 15: NII exposure to the yield curve
15 3M U ST 6M U ST 1Y U ST 2Y U ST 3Y U ST 5Y U ST 7Y U ST 10 Y UST 15 Y Pr im ar y 30 Y Pr im ar y 15 Y Se co nd ar y 30 Y Se co nd ar y 0.00% 0.50% 1.00% 1.50% 2.00% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% (1) Includes both scheduled and unscheduled maturities for fixed assets as of 5/31/2
Slide 16: Interest rate exposure of future business and long-term rates
16 Agency/UST 2.8% Agency MBS 67.0% Agency CMBS 23.2% Non-Agency CMBS 1.8% Corporate Bonds 5.2% Interest rate exposure of future business and long-term rates (1) Source: SEC reporting, Call Report data for loan repricing within 1 year; Peers include CFG, CMA, FHN, FITB, HBAN, HWC, KEY, MTB, PNC, SNV
Slide 17: Non-interest income highlights and outlook
17 • Service charges impacted by 3 additional business days. Changes in customer behavior and customer benefits from enhancements to overdraft practices and transaction posting are likely to keep service charges 10-15% below 2019 levels. • Expect capital markets to remain a strong contributor, gener
Slide 18: Diversified non-interest income
18 Consumer 54% Wealth Management 17% Corporate 29% 2Q21 fee revenue by segment(1) Diversified non-interest income ($ in millions) • Consumer fee income categories include service charges on deposit accounts, card and ATM fees, and mortgage income generated through origination and servicing of resid
Slide 19: Mortgage
19 Closed mortgages expected to have reached $1.1T in 2Q 2021 across the US(1) Purchase and refinance volume expected to remain strong in 2021 driven by continued low rates, but declining from 2020 industry high production(1) Investments in people, process and technology beginning in 2018 Enhancing
Slide 20: Adjusted non-interest expense
20(1) Non-GAAP; see appendix for reconciliation. (2) 2020 adjusted non-interest expenses include ~$60M of expense associated with the Ascentium acquisition that closed 4/1/2020. • Adjusted non-interest expenses impacted primarily by lower capital markets' incentive compensation, payroll taxes and le
Slide 21: Industry leading PPI profile
21 2.50% 2.34% 2.31% 2.10% 2.05% 2.05% 2.05% 2.04% 2.00% 1.93% 1.82% 1.74% 1.71% 1.69% RF Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 Peer 11 Peer 12 Peer 13 Industry leading PPI(1) profile (1) Non-GAAP; see Appendix for reconciliation. (2) Source: SNL Financial. Risk-weig
Slide 22: Business segments
22 53%41% 6% 63% 35% 2% 33% 60% 7% $684M $85B $131B 2Q21 Pre-tax pre- provision income(1) 2Q21 Average deposits 2Q21 Average loans (1) Pie %'s exclude the pre-tax pre-provision income from the Other Segment totaling $31 million. Business segments Consumer Corporate Wealth Management
Slide 23: Consumer Bank
23 (1) Branch Count as of 1-1-2014. (2) Consumer Bank – LOB Average Deposits. (3) Informa - 2020 through Dec. • Extending digital capabilities to improve banker account origination & advice • Leveraging technology to improve credit turn times and origination speeds • Synergistic lending and servicin
Slide 24: Corporate Banking Group
24 Corporate Banking Group Our associates delivered results $285 $357 Jun20 YTD Jun21 YTD • Capital Markets income driven by M&A, Real Estate Placement, Debt & Equity Underwriting and Loan Syndications as customers acted on the interest rate environment and the favorable debt and equity markets • Co
Slide 25: Wealth Management
25 Wealth Management • Maintained strong momentum in growth markets and protected business through continued engagement and communication with clients • Published two cryptocurrency whitepapers to help clients stay informed • Plan to continue weekly market update calls every Friday • Implemented vir
Slide 26: Continuing our momentum
26 Continuing our momentum • Focused on executing core business disciplines centered on delivering Regions 360® through providing proactive, tailored solutions to meet clients’ needs • Areas of focus ◦ Ensuring full channel access to Ascentium and introducing Regions' capabilities ◦ Expanding capita
Slide 27: Loans picking up momentum
27 Loans picking up momentum (1) Non-GAAP, see appendix for reconciliation. $83.3 $78.9 $79.6 56.1 52.0 52.5 27.2 26.9 27.1 2Q20 1Q21 2Q21 (Ending, $ in billions) $85.8 $79.3 $79.2 58.9 52.1 52.3 26.9 27.2 26.9 2Q20 1Q21 2Q21 Adjusted loans and leases(1) (Average, $ in billions) Adj. business loans(
Slide 28: Deposit growth continues
28 $110.9 $122.9 $131.1 65.7 72.9 78.2 36.4 40.3 43.08.4 9.3 9.5 0.4 0.4 0.4 2Q20 1Q21 2Q21 Deposit growth continues (1) Other deposits represent non-customer balances primarily consisting of wholesale funding (for example, Eurodollar deposits, selected deposits and brokered time deposits). Average
Slide 29: 2Q21 average loan composition
29 $43.1 $5.4 $0.3 $5.5 $1.8 Commercial and Industrial CRE Mortgage - OO CRE Construction - OO IRE - Mortgage IRE - Construction 2Q21 Average loan composition $16.8 $0.7 $2.2 $6.8 $1.1 $0.9 Mortgage Indirect-Vehicles Indirect-Other Home Equity Credit Card Other Average consumer loans $28.5B Average
Slide 30: PPP loan details
30 ($ in millions) 2Q20 3Q20 4Q20 1Q21 2Q21 Round 1-average $ 3,213 $ 4,558 $ 4,143 $ 3,171 $ 2,401 Round 2-average — — — 627 1,500 Total-average $ 3,213 $ 4,558 $ 4,143 $ 3,798 $ 3,901 NII(1) $ 18 $ 31 $ 54 $ 40 $ 43 Round 1-ending $ 4,498 $ 4,594 $ 3,624 $ 2,974 $ 1,438 Round 2-ending — — — 1,343
Slide 31: Capital and liquidity
31 Capital and liquidity (1) Current quarter ratios are estimated. (2) Based on ending balances. • During 2Q, Regions declared $147M in common dividends. • Stress Capital Buffer requirement for 4Q21 through 3Q22 will be floored at 2.5%. • Common Equity Tier 1 (CET1) ratio increased ~10 bps in 2Q to
Slide 32: CET1 waterfall
32 10.3% 0.6% 0.2% (0.1)% (0.1)% (0.1)% (0.2)% (0.2)% 10.4% CET1 waterfall (1) Non-GAAP; see appendix for reconciliation. (2) Provision benefit includes the impact of CECL deferral. (3) Preferred Expense includes preferred dividends and one-time impact of retiring Series A Preferred Stock. (4) Curre
Slide 33: Projected preferred stock expense
33 Regions Preferred Par Value 2Q21 3Q21E 4Q21E Series A $500.0 $21.8 $— $— Series B $500.0 $8.0 $8.0 $8.0 Series C $500.0 $7.1 $7.1 $7.1 Series D $350.0 $5.0 $5.0 $5.0 Series E $400.0 $— $6.5 $4.5 Total $41.9 $26.6 $24.6 2Q21 - 4Q21 projected preferred stock expense ($ in millions) • Series A share
Slide 34: Significant protection
34 Significant protection • The combined loss absorbing protection from capital, allowance coverage, and accumulated other comprehensive income(1) is among the highest in the peer set. ◦ Regions’ coverage equates to roughly 13.1% of RWA vs. the peer median of 11.9%. • AOCI reflective of implied stab
Slide 35: Optimizing capital while continuing to invest
35 Investments Optimizing capital while continuing to invest Talent and Technology • Expansion in priority growth markets • Corporate bankers, MLOs, Wealth Advisors • System enhancements and new technology • Data and analytics Corporate Bank • Acquired Ascentium Capital April 1, 2020; largest indepe
Slide 36: Unsecured debt and credit ratings profile
36 $0 $0 $1,000 $100 $900 $800 — — 1,000 750 300 500 HoldCo Senior Notes Bank Senior Notes HoldCo Subordinated Notes Bank Subordinated Notes 2021 2022 2023 2024 2025 2037 Regions unsecured debt and credit ratings profile • Unsecured wholesale debt footprint represents just 1.8% of 6/30/2021 assets w
Slide 37: Technology and data efforts
37 ® Efforts Omnichannel view of customers for a “You Know Me & Value Me” experience Regions Client IQ (RCLIQ) and WealthIQ delivering ‘needs based’ engagement resulting in significant corporate and wealth management revenue ROSIE Personalized offering of products and services to anticipate customer
Slide 38: Digital Acceleration
38 Digital Acceleration Digital Users up 9% in Q2 2021 compared to Q2 2020 Mobile Enhancements 4.8 iOS App Rating New Mobile features include Chat functionality, Mobile Statements, Zelle Two-Way SMS Authentication, FICO Score 75% increase in Zelle transactions in Q2 2021 compared to Q2 2020 Innovati
Slide 39: Continue to invest for the future
39 System Maintenance New Technology Cybersecurity / Risk Management Continue to invest for the future 48%42% 10% • Regions remains competitive by reserving ~10-11% of revenue for Technology Spend. • Past investment on innovation and strategy provided a firm, resilient foundation for addressing chan
Slide 40: Growth in digital
40 1.31 2.03 2.28 2Q20 1Q21 2Q21 285 311 280 138 141 118 147 170 161 2Q20 1Q21 2Q21 2.8 3.0 3.1 2Q20 1Q21 2Q21 Mobile Banking Log-Ins 1.95 2.13 2.21 2Q20 1Q21 2Q21 19% 21% 21% 32% 32% 32% 49% 47% 46% 2Q20 1Q21 2Q21 70.2 82.4 86.4 61.0 72.0 73.9 2.9 2.9 4.36.3 7.4 8.2 2Q20 1Q21 2Q21 66% 67% 68% 34% 3
Slide 41: Continuous improvement initiatives delivering solid results
41Note: Data through 2Q21. Initiatives complete Initiatives to be completed Total number of initiatives Revenue 20 10 30 Organizational efficiency, effectiveness & simplification 25 8 33 Third-party spend reductions 19 10 29 Total initiatives 64 28 92 Continuous improvement initiatives delivering so
Slide 42: Asset quality
42 1.71% 2.68% 2.44% 2.00%1.71% 2.82% 2.57% 2.07% ACL/Loans (incl. PPP) ACL/Loans (excl. PPP) Day 1 2Q20 1Q21 2Q21 $182 $83 $47 50 37 24 132 46 23 0.80% 0.40% 0.23% 2Q20 1Q21 2Q21 $614 $738 $666 395% 280% 253% 2Q20 1Q21 2Q21 NPLs and ACL coverage ratio Asset quality ($ in millions) ($ in millions) (
Slide 43: Allowance for credit losses waterfall
43 Changes in Portfolio Risk & Balances $2,068 $(47) $(265) $(72) $1,684 Allowance for credit losses waterfall Changes in Economic Outlook & Adjustments Net Charge- Offs 6/30/2021 • 2Q ending allowance decreased $384M due to continued improvement in the economic outlook and expectations of improving
Slide 44: Base economic outlook
44 Pre-R&S period 2Q2021 3Q2021 4Q2021 1Q2022 2Q2022 3Q2022 4Q2022 1Q2023 2Q2023 Real GDP, annualized % change 6.8 % 6.1 % 6.2 % 5.1 % 3.4 % 3.0 % 2.3 % 2.3 % 2.1 % Unemployment rate 5.8 % 5.2 % 4.9 % 4.6 % 4.4 % 4.2 % 4.0 % 3.9 % 3.8 % HPI, year-over-year % change 13.6 % 12.6 % 9.7 % 6.9 % 3.7 % 2.
Slide 45: Allowance for credit losses by loan category
45 As of 6/30/21 As of 12/31/20 (in millions) Loan Balance ACL ACL/Loans Loan Balance ACL ACL/Loans C&I $42,628 $756 1.77 % $42,870 $1,027 2.40 % CRE-OO mortgage 5,381 150 2.79 % 5,405 242 4.47 % CRE-OO construction 245 13 5.37 % 300 24 7.98 % Total commercial $48,254 $919 1.90 % $48,575 $1,293 2.66
Slide 46: COVID-19 high-risk industry sectors
46 • Proactive, frequent customer dialogue • Closely monitoring most vulnerable customers • Monitoring ratings migration Bottom up review informs and narrows COVID-19 high-risk industry sectors (as of June 30, 2021) C&I Portfolio BAL$(1) % of BAL$ Utilization Rate(2) % Criticized Energy – Oil & Gas
Slide 47: COVID-19 high-risk industry sectors waterfall
47 $3.36 $0.22 $(0.20) $(0.22) $(0.45) $2.71 COVID-19 high-risk industry sectors waterfall ($ in billions) Removal of Specifically Identified Assets • COVID high-risk industries are continuously refined to those exhibiting higher levels of stress due to COVID impact. • Previous specifically identifi
Slide 48: Commercial & IRE loans
48 Commercial & IRE loans As of 6/30/21 ($ in millions) Total Commitments Outstanding Balances % Utilization Administrative, Support, Waste & Repair $2,548 $1,531 60% Agriculture 650 358 55% Educational Services 3,947 2,841 72% Energy - Oil, Gas & Coal 4,004 1,665 42% Financial Services 10,027 4,649
Slide 49: Energy lending
49 As of 6/30/21 ($ in millions) # of Clients (1) Total Commitments Outstanding Balances % Utilization $ Criticized % Criticized Oilfield services and supply (OFS)(2) 144 $426 $275 65% $24 9% Exploration and production (E&P)(2) 96 1,315 724 55% 247 34% Midstream 25 1,574 568 36% 97 17% Downstream 11
Slide 50: Energy lending (continued)
50 $ (M ill io ns ) 1Q2015 2Q2021 E& P Oilfi eld Se rvi ces Midstr ea m Dow nst rea m Othe r PPP Lo an s $0 $300 $600 $900 $1,200 $1,500 Energy lending (continued) Balances by Category Gross Losses *Other Losses include losses to MLP funds as well as losses related to coal. $ (M ill io ns ) $0.0 $28
Slide 51: Restaurant lending
51 As of 6/30/21 ($ in millions) # of Clients* Total Commitments Outstanding Balances % Utilization $ Criticized % of Outstanding Criticized Quick Service 16,153 $1,265 $1,004 79% $55 5% Casual Dining 27 476 316 66% 256 81% Other 20 144 107 74% 66 62% PPP Loans 2,342 342 342 100% — —% Total Restaura
Slide 52: Hotel lending
52 As of 6/30/21 ($ in millions) # of Clients* Total Commitments Outstanding Balances % Utilization $ Criticized % of Outstanding Criticized CRE-Unsecured (REITs) 10 $709 $511 72% $345 68% IRE – Mortgage 19 309 297 96% 282 95% IRE – Construction — — — —% — —% Consumer Services 3,718 144 138 96% 6 4%
Slide 53: Commercial retail lending
53 Commercial retail lending As of 6/30/21 ($ in millions) # of Clients* Total Commitments Outstanding Balances % Utilization $ Criticized % Criticized CRE-Unsecured (REITs) 22 $2,612 $973 37% $0 —% IRE 131 673 635 94% 76 12% C&I 26,090 2,626 1,322 50% 12 1% CRE-OO 821 834 796 95% 18 2% ABL 20 1,105
Slide 54: Loans to Small Business and Small Farms
54 14% 13% 11% 9%8% 8% 8% 8% 21% Healthcare 14% Real Estate 13% Transportation & Warehousing 11% Professional, Scientific & Technical Services 9% Restaurant, Accommodation & Lodging 8% Retail Trade 8% Administrative, Support, Waste & Repair 8% Manufacturing 8% Other 21% (Portfolios <8% of total) 28%
Slide 55: Consumer lending portfolio statistics
55 Consumer lending portfolio statistics Residential Mortgage • Avg. origination FICO 750 • Current LTV 58% • 97% owner occupied Home Equity • Avg. origination FICO 754 • Current LTV 40% • Only $25.5M of resets through 2021 • 70% of portfolio is 1st lien • Avg. loan size $33,453 Other Consumer Unsec
Slide 56: 2021 expectations
56 2021 expectations (1) Non-GAAP, see appendix for reconciliation. (2) The reconciliation with respect to forward-looking non-GAAP measures is expected to be consistent with actual non-GAAP reconciliations included in the attached appendix or in previous filings with the SEC. (3) Adjusted ending an
Slide 57: ESG - Environmental
57 2018 ESG - Environmental Launched Solar Tax Equity Finance Team Began publicly issuing a Corporate Sustainability Report Expanded Asset Management offerings to include ESG- focused products Adopted an Environmental Sustainability Policy Statement and two environmental goals: Reduce Scope 1 and Sc
Slide 58: ESG - Social
58 Customers Associates Communities • Regions360® approach • Bank Your Way • Regions Now Banking® • Fair and responsible banking • Digital and online banking channels • Diversity, Equity and Inclusion commitments established • Cultivating a more inclusive work environment • Support for the physical
Slide 59: ESG - Governance
59 ESG - Governance COVID-19 Board oversight of Regions' response 43 Board and Committee meetings in 2020 98% attendance by Directors As we emerge from a year of enormous challenges, we stand by our commitment to creating shared value: Our shareholders benefit when we do what is right for our custom
Slide 60: ESG - Recognitions and resources
60 ESG - Recognitions and resources MSCI State Street Global Advisors S&P Global Sustainalytics AA ESG Rating 63 R-Factor Score S&P 500 ESG Index Low-Risk ESG Risk Rating Human Rights Campaign JUST Capital JUST Capital Disability Equality Index FTSE Russell 100 Score in 2021 Corporate Equality Index
Slide 61: Making banking easier
61 Providing transparency, simplicity and speed into how accounts work Making banking easier Improved Visibility and Transparency Expanded Alert Capabilities ◦ Balance alerts based on available balance ◦ Transaction alerts providing information in near real-time ◦ Automated email alerts for notifica
Slide 62: LIBOR Transition Readiness & the Path Forward
62 LIBOR Transition Readiness & the Path Forward Key Considerations Financial Considerations & Potential Impact Regions' Approach & Timeline Despite a relatively short timeline until banks can no longer originate LIBOR-linked financial products, uncertainty remains around the market’s direction for
Slide 63: EnerBank USA company overview
63 • Headquartered in Salt Lake City, UT, EnerBank USA originates prime and super-prime home improvement point-of-sale loans through a national network of contractors • A top 5 originator in the home improvement point-of- sale space, one of the fastest growing segments in consumer lending • Experien
Slide 64: EnerBank USA acquisition
64 Home improvement point-of-sale finance complements these investments, extends our suite of home-centric lending products and accelerates our vision to be the premier lender to homeowners EnerBank USA acquisition Home Improvement Point-of-Sale Financing Deepens Regions' Commitment to Being the Pre
Slide 65: Proven Performance Through Cycles
65 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 —% 2.00% 4.00% Proven Performance Through Cycles Historical NCOs as a % of Average Loans NCOs peaked at 2.19% during the 2008 Crisis Deferrals during COVID peaked around 2% (1) (1) 2021 is LTM as of March 31, 2021; (2) Me
Slide 66: Home Improvement Finance Market Opportunity
66 • Balance growth will continue at robust levels due to increases in annual originations in recent years as well as reductions in the amount of loans sold to third parties • If EnerBank continues on current path, the portfolio will double within five years • Material room to run in the market base
Slide 67: Appendix
> GENERATING Consistent Sustainable \ Long-term Performance APPENDIX AM REGIONS| 67
Slide 68: Non-GAAP measures definitions
68 Management uses pre-tax pre-provision income (non-GAAP) and adjusted pre-tax pre-provision income (non-GAAP), as well as the adjusted efficiency ratio (non-GAAP) and the adjusted fee income ratio (non-GAAP) to monitor performance and believes these measures provide meaningful information to inves
Slide 69: Non-GAAP reconciliation: core net interest income and adjusted net interest margin
69 Non-GAAP reconciliation: core net interest income and adjusted net interest margin Quarter-ended 6/30/2021 3/31/2021 Net interest income (FTE) (GAAP) $ 975 $ 978 Impact of SBA PPP loans (43) (40) Impact of excess cash (3) (2) Core net interest income (FTE) (non-GAAP) $ 929 $ 936 Net interest marg
Slide 70: Non-GAAP reconciliation: adjusted average loans
70 Non-GAAP reconciliation: adjusted average loans Average Balances ($ amounts in millions) 2Q21 1Q21 4Q20 3Q20 2Q20 2Q21 vs. 1Q21 2Q21 vs. 2Q20 Commercial and industrial $ 43,140 $ 42,816 $ 43,889 $ 46,405 $ 49,296 $ 324 0.8 % $ (6,156) (12.5) % Add: Commercial loans held for sale reclassified to t
Slide 71: Non-GAAP reconciliation: adjusted full year average loans
71 Non-GAAP reconciliation: adjusted full year average loans Average Balance Tweleve Months Ended ($ amounts in millions) December 31, 2020 Total Loans $ 87,813 Add: Commercial loans held for sale reclassified to the portfolio 1 Less: SBA PPP Loans 2,986 Less: Indirect—other consumer exit portfolio
Slide 72: Non-GAAP reconciliation: adjusted ending loans
72 Non-GAAP reconciliation: adjusted ending loans As of 6/30/2021 6/30/2021 ($ amounts in millions) 6/30/2021 3/31/2021 12/31/2020 9/30/2020 6/30/2020 vs. 3/31/2021 vs. 6/30/2020 Commercial and industrial $ 42,628 $ 43,241 $ 42,870 $ 45,199 $ 47,670 $ (613) (1.4) % $ (5,042) (10.6) % Add: Commercial
Slide 73: Non-GAAP reconciliation: non-interest expense
73 Non-GAAP reconciliation: non-interest expense Year Ended December 31 ($ amounts in millions) 2020 2019 2018 2017 2016 Non-interest expense (GAAP) $ 3,643 $ 3,489 $ 3,570 $ 3,491 $ 3,483 Adjustments: Contribution to Regions Financial Corporation foundation (10) — (60) (40) — Professional, legal an
Slide 74: Non-GAAP reconciliation: ACL/Loans excluding PPP
74 Non-GAAP reconciliation: ACL/Loans excluding PPP As of ($ amounts in millions) 6/30/2021 3/31/2021 12/31/2020 9/30/2020 6/30/2020 Total Loans $ 84,074 $ 84,755 $ 85,266 $ 88,359 $ 90,548 Less: SBA PPP Loans 2,948 4,317 3,624 4,594 4,498 Loans excluding PPP, net (non- GAAP) $ 81,126 $ 80,438 $ 81,
Slide 75: Non-GAAP reconciliation: Pre-tax pre-provision income
75 Non-GAAP reconciliation: Pre-tax pre-provision income (PPI) Quarter Ended ($ amounts in millions) 6/30/2021 3/31/2021 12/31/2020 9/30/2020 6/30/2020 2Q21 vs. 1Q21 2Q21 vs. 2Q20 Net income (loss) available to common shareholders (GAAP) $ 748 $ 614 $ 588 $ 501 $ (237) $ 134 21.8 % $ 985 415.6 % Pre
Slide 76: Non-GAAP reconciliation: NII, non-interest income/expense, efficiency ratio
76 Non-GAAP reconciliation: NII, non-interest income/expense, operating leverage and efficiency ratio NM - Not Meaningful Quarter Ended ($ amounts in millions) 6/30/2021 3/31/2021 12/31/2020 9/30/2020 6/30/2020 2Q21 vs. 1Q21 2Q21 vs. 2Q20 Non-interest expense (GAAP) A $ 898 $ 928 $ 987 $ 896 $ 924 $
Slide 77: Forward-Looking Statements
77 Forward-Looking Statements This presentation may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not based on historical information, but rather are related to future operations, strategies, financial results or
Slide 78: Forward-Looking Statements (continued)
78 • Our ability to comply with stress testing and capital planning requirements (as part of the CCAR process or otherwise) may continue to require a significant investment of our managerial resources due to the importance of such tests and requirements. • Our ability to comply with applicable capit
Slide 79: Forward-Looking Statements (continued)
79 • Possible downgrades in our credit ratings or outlook could, among other negative impacts, increase the costs of funding from capital markets. • The effects of a possible downgrade in the U.S. government’s sovereign credit rating or outlook, which could result in risks to us and general economic
Slide 80: Generating Consistent, Sustainable, Long-term Performance
> GENERATING Consistent Sustainable We ng-term Performance A REGIONS