Regions Financial Corporation · NYSE:RF
Regions Financial — Barclays Global Financial Services Conference 2012
27 slides from Regions Financial's conference presentation, Sep 11, 2012
Slide 1: Barclays Global Financial Services Conference
BARCLAYS GLOBAL FINANCIAL SERVICES CONFERENCE September 11, 2012 David Turner Chief Financial Officer Exhibit 99.1
Slide 2: Investment Thesis
Attractive Market Presence • Leading Southeastern depository franchise with favorable demographics • Leading brand favorability • Top share in core markets Improved Credit Profile • Aggressive risk management initiatives • Significant reduction in higher risk loan portfolios • Significant improvemen
Slide 3: Franchise Overview
Business Services Consumer Services Wealth Management FRANCHISE OVERVIEW • Bank Associates: 23,422 • Assets: $122B • Loans: $76B • Deposits: $95B • Branches: 1,719 • Insurance Offices: 30 • ATMs: 2,063 • Market Cap: $10.1B* *As of August 27, 2012 › Small and mid-sized C&I lending › Commercial Real E
Slide 4: Doing the Right Thing
We believe being a responsible bank means being an integral part of our communities. Community Service Housing Assistance Disaster Response Policy DOING THE RIGHT THING › Regions associates volunteered for nearly 5,300 community service activities in first-half 2012 › Included teaching 3,300-plus fi
Slide 5: Regions' Footprint: High Market Share, High Growth Markets or Both
Weighted Average Deposit Market Share in Regions’ Core Markets REGIONS’ FOOTPRINT IS CHARACTERIZED BY EITHER HIGH MARKET SHARE, HIGH GROWTH MARKETS OR BOTH Source: SNL Financial Note: Core Markets include AL, FL, LA, MS, AR, TN Rank Name Market Share Bank of America 11.5% Regions 9.8% Wells Fargo 9.
Slide 6: Continued Momentum in Asset Quality Metrics
CONTINUED MOMENTUM IN ASSET QUALITY METRICS *Year-over-year change **Excludes loans held for sale
Slide 7: Significant Reduction in High Risk Loan Portfolios
Reduced Investor Real Estate $16.4 B or 64% since 4Q06 Investor Real Estate as a % of total loans has decreased since 4Q06 SIGNIFICANT REDUCTION IN HIGH RISK LOAN PORTFOLIOS Total Investor Real Estate Investor Real Estate as % of Total Loans 4Q06 2Q12
Slide 8: Renewed Focus on C&I and Consumer Lending
RENEWED FOCUS ON C&I AND CONSUMER LENDING BUSINESS SERVICES • 61% of Total Loan Portfolio • Focused on middle market and small business • Broad based middle-market commercial loan growth across footprint and industries • Driven by specialized industries, including healthcare, franchise restaurant, e
Slide 9: Business Services Focused on Specialized Industries
• Specialized lending groups are headquartered throughout our footprint • Our goal is to be the premier corporate middle market bank for the specialized industries we serve • Experienced positive year over year growth in all industries BUSINESS SERVICES FOCUSED ON SPECIALIZED INDUSTRIES Transportati
Slide 10: Loan Commitments and Utilization Increase
LOAN COMMITMENTS AND UTILIZATION INCREASE Commitments and Outstandings • Commercial & industrial line utilization rose 130 basis points linked quarter to 44.4% • Commitments increased $3.2 billion since last year to $31.2 billion • Commercial & industrial loan balances on an average basis increased
Slide 11: 2Q12 Financial Highlights
With each passing quarter, we are better positioned for ultimate outperformance. 2Q12 FINANCIAL HIGHLIGHTS Adjusted Pre-tax Pre-provision Income from Continuing Operations (1) Loan Loss Provision $398 $355 $295 $117 $26 (1) Non-GAAP - See GAAP to non-GAAP reconciliation in appendix, excludes goodwil
Slide 12: Closing the Gap on Loan Yields
CLOSING THE GAP ON LOAN YIELDS • Commercial & industrial loan balances on an average basis increased 4% linked quarter reflecting strength in our middle market portfolio • Commercial & industrial line utilization rose 130 basis points to 44.4% • Loan yield remained flat linked quarter despite the lo
Slide 13: Mix and Cost of Deposits Provide Further Opportunity
MIX AND COST OF DEPOSITS PROVIDE FURTHER OPPORTUNITY TO LOWER DEPOSIT COSTS AND IMPROVE MARGIN Deposit Mix Compared to Peers* Regions Peer Average *Average basis for 2Q12 Source: SNL Financial: Peer banks include BBT, CMA, FHN, FITB, HBAN, KEY, MTB, PNC, STI, USB, WFC, ZION • Deposit repricing oppor
Slide 14: Funding Mix and Deployment of Cash Reserves
FUNDING MIX AND DEPLOYMENT OF CASH RESERVES HAVE AIDED NET INTEREST MARGIN AND CLOSING THE GAP TO PEERS Impact of Excess Cash Reserves & Non- Accruals on NIM* Regions has closed a portion of its gap vs. peers in the last 5 quarters * From continuing operations Source: SNL Financial: Peer banks inclu
Slide 15: Mortgage Income Increased 17% Linked Quarter
MORTGAGE INCOME INCREASED 17% LINKED QUARTER • Non-interest (1) revenue decreased 3% linked quarter • Mortgage revenues increased 17% linked quarter and 80% over last year • HARP II expected to increase mortgage volume by $1 billion in • Service charges declined linked quarter due to the establishme
Slide 16: Outpaced Peers in Expense Reduction in 2Q12
OUTPACED PEERS IN EXPENSE REDUCTION IN 2Q12 •Adjusted to exclude non-core items Source: SNL Financial: Peer banks include BBT, CMA, FITB, HBAN, KEY, MTB, PNC, STI, USB, WFC, ZION Change in Non-Interest Expense* 2Q12 vs 1Q12
Slide 17: Regions Has the Lowest Expense to Assets Ratio
REGIONS HAS THE LOWEST EXPENSE TO ASSETS RATIO * Adjusted to exclude non-core items, ratios are annualized Source: SNL Financial: Peer banks include BBT, CMA, FHN, FITB, HBAN, KEY, MTB, PNC, STI, USB, WFC, ZION Non-Interest Expense* / Average Assets
Slide 18: Strong Funding Profile and Liquidity Position
STRONG FUNDING PROFILE AND LIQUIDITY POSITION Source: SNL Financial - Peers include BBT, CMA, FHN, FITB, HBAN, KEY, MTB, PNC, STI, USB, WFC, ZION *Based on ending balances (1) Non-GAAP – See appendix for reconciliation (2) Includes Series A Preferred Stock and associated warrant
Slide 19: Opportunity for Outperformance
REVENUE EXPENSES CREDIT CAPITAL OPPORTUNITY FOR OUTPERFORMANCE • Tangible opportunity to close peer margin gap • Over $12.4 billion of deposit repricing through 2H13 • Lower liquidity costs • Reduction of non-accruals • Continued momentum in C&I and Consumer lending • Development of new products and
Slide 20: Appendix
APPENDIX
Slide 21: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS ›Regions’ ability to receive dividends from its subsidiaries. ›The effects of the failure of any component of Regions’ business infrastructure which is provided by a third party. ›Changes in accounting policies or procedures as may be required by the Financial Accounting S
Slide 22: Non-GAAP Reconciliation: Net Income / (Loss) and Earnings per Share
NON-GAAP RECONCILIATION: NET INCOME / (LOSS) AND EARNINGS PER SHARE ` (1)
Slide 23: Non-GAAP Reconciliation: Pre-Tax Pre-Provision Income
NON-GAAP RECONCILIATION: PRE-TAX PRE-PROVISION INCOME The Pre-Tax Pre-Provision Income from Continuing Operations table below presents computations of pre-tax pre-provision income from continuing operations excluding certain adjustments (non-GAAP). Regions believes that the exclusion of these adjust
Slide 24: Non-GAAP Reconciliation: Fee Income Ratios and Efficiency Ratios
NON-GAAP RECONCILIATION: FEE INCOME RATIOS AND EFFICIENCY RATIOS ($ amounts in millions) 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 Continuing Operations Non-interest expense (GAAP) $ $ 1,124 $ $ $ Adjustments: Securities impairment, net (2) - (2) - - Branch consolidation and property and equipment ch
Slide 25: Non-GAAP Reconciliation: Tier 1 Common
NON-GAAP RECONCILIATION: TIER 1 COMMON ($ amounts in millions, except per share data) 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 TIER 1 COMMON RISK-BASED RATIO CONSOLIDATED - Stockholders' equity (GAAP) 14,455 $ 17,534 $ 16,499 $ 17,263 $ 16,888 $ Accumulated other comprehensive (income) loss (54) (92
Slide 26: Non-GAAP Reconciliation: Tier 1 Capital
NON-GAAP RECONCILIATION: TIER 1 CAPITAL Regions' Series A preferred stock was repurchased on April 4, 2012 and the warrant to purchase 48.3 million shares of Regions common stock was retired on May 2, 2012. The following table presents the calculations of Tier 1 capital and the Tier 1 capital ratio,
Slide 27: Regions
REGIONS
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