Regions Financial Corporation · NYSE:RF
Regions Financial — Q2 2015 Earnings Presentation
16 slides from Regions Financial's earnings presentation, Jul 21, 2015
Slide 1: 2nd Quarter Earnings Conference Call
® 2nd Quarter Earnings Conference Call July 21, 2015
Slide 2: Continued Momentum: 2Q15 Highlights
Continued Momentum 2Q15 Highlights • Successfully executing on strategic 2Q15 1Q15 Change ($ in millions, except per share data) priorities Net Income(1) $269 $218 23% • Growth in checking accounts, households, Regions360™ accounts Diluted EPS $0.20 $0.16 25% and credit card accounts Diluted EPS Imp
Slide 3: Loans
Loans Ending loan balances ($ in billions) For the quarter: $80.1 Ending loan balances up $1.9B or 2% Business lending achieved solid growth as balances $78.2 increased 3% $77.3 $76.5 $76.6 Production increased 29% Commercial and industrial grew 5% Line utilization increased 97 basis point
Slide 4: Deposits and funding costs
Deposits and funding costs Ending deposit balances Average deposit balances ($ in billions) ($ in billions) $97.5 $97.1 $97.1 $95.8 $94.0 $94.0 $94.1 $94.2 $93.8 $93.0 2Q14 3Q14 4Q14 1Q15 2Q15 2Q14 3Q14 4Q14 1Q15 2Q15 Deposit costs Funding costs 31 bps 30 bps 29 bps 29 bps 11 bps 11 bps 11 bps 12 bp
Slide 5: Net interest income and net interest margin
Net interest income and net interest margin $838 $839 Net interest income on an FTE basis $837 $837 $832 increased $7 million or 1% Principal drivers were one additional day, loan growth and 3.24% lower cost of wholesale 3.18% 3.18% 3.17% 3.16% borrowings, partially offset by the low rate enviro
Slide 6: Non-interest income
Non-interest income Non-interest income included $90 million of revenue from insurance proceeds Adjusted non-interest income(1) increased 7%, reflecting Regions’ commitment to diversify and grow fee based revenues Mortgage income increased 15% reflecting increased loan production as well as im
Slide 7: Non-interest expense
Non-interest expense Expense included $75 million of selected items(1) $969 Included net expense for contingent legal and $934 $905 regulatory items for previously disclosed $110 $75 $820 $826 $65 matters of $48 million Included a $27 million charge related to the valuation of properties ident
Slide 8: Asset quality
Asset quality Net charge-offs and ratio NPLs and coverage ratio(1) ($ in millions) ($ in millions) $75 $83 $67 $54 $899 $837 $46 $829 $800 $751 0.39% 0.42% 149% 0.35% 137% 137% 0.28% 0.23% 141% 133% 2Q14 3Q14 4Q14 1Q15 2Q15 2Q14 3Q14 4Q14 1Q15 2Q15 Net Charge-Offs Net Charge-Offs ratio NPLs Coverage
Slide 9: Capital and liquidity
Capital and liquidity Tier 1 capital ratio(1)(2)(3) Repurchased $172 million or 17 million shares of common stock and declared dividends of $80 12.5% 12.7% 12.5% 12.2% 12.0% million Returned 94% of earnings to shareholders Transitional basis Basel III Common Equity Tier 1 ratio estimated at 11
Slide 10: Expectations for 2015
Expectations for 2015 Economy Loans Deposits Economic growth expected Expect total loan growth in the Expect full year average balance to pick up over the 4% to 6% range on a point-to- growth of 1% to 2% remainder of the year point basis NIM / Operating Continued improvement in Commercial
Slide 11: Appendix
Appendix Aa REGIONS 11
Slide 12: Energy lending
Energy lending Energy Loan Portfolio Outstandings ($ in millions) As of 12/31/14 As of 3/31/15 As of 6/30/15 Oilfield Services and supply $1,247 $1,192 $1,216 Exploration and production 1,135 1,123 958 (Upstream) Midstream 202 258 284 Downstream 61 45 67 Other 200 227 176 Total Energy – Oil, Gas and
Slide 13: Non-GAAP reconciliation: Non-interest expense and efficiency ratio
Non-GAAP reconciliation: Non-interest expense and efficiency ratio The table below presents computations of the efficiency ratio (non-GAAP), which is a measure of productivity, generally calculated as non-interest expense divided by total revenue. Management uses this ratio to monitor performance an
Slide 14: Non-GAAP reconciliation: Basel III common equity Tier 1 ratio
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 on a
Slide 15: Forward-looking statements
Forward-looking statements This presentation may include forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995, which reflect Regions’ current views with respect to future events and financial performance. Forward-looking statements are not based on historica
Slide 16: Regions
A REGIONS REGIONS