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 July 21, 2015
2nd Quarter Earnings Conference Call July 21, 2015 ®
Slide 2: Continued Momentum: 2Q15 Highlights
Continued Momentum 2 *Annualized (1) Available to common shareholders (2) Excluding loans held for sale (3) Non-GAAP; see appendix for reconciliation ($ in millions, except per share data) 2Q15 1Q15 Change Net Income(1) $269 $218 23% Diluted EPS $0.20 $0.16 25% Diluted EPS Impact from significant it
Slide 3: Loans
Loans 3 For the quarter: Ending loan balances up $1.9B or 2% Business lending achieved solid growth as balances increased 3% Production increased 29% Commercial and industrial grew 5% Line utilization increased 97 basis points and commitments increased 3% Consumer lending had a strong qu
Slide 4: Deposits and funding costs
11 bps 11 bps 11 bps 12 bps 11 bps 2Q14 3Q14 4Q14 1Q15 2Q15 $93.8 $94.1 $94.2 $97.5 $97.1 2Q14 3Q14 4Q14 1Q15 2Q15 Deposits and funding costs 4 31 bps 30 bps 29 bps 29 bps 25 bps 2Q14 3Q14 4Q14 1Q15 2Q15 Deposit costs Funding costs Ending deposit balances ($ in billions) Average deposit balances ($
Slide 5: Net interest income and net interest margin
$838 $837 $837 $832 $839 3.24% 3.18% 3.17% 3.18% 3.16% 2Q14 3Q14 4Q14 1Q15 2Q15 Net Interest Income (FTE) Net Interest Margin Net interest income and net interest margin Net interest income on an FTE basis increased $7 million or 1% Principal drivers were one additional day, loan growth and lowe
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
$827 $826 $859 $840 $859 $(7) $110 $65 $75 $820 $826 $969 $905 $934 2Q14 3Q14 4Q14 1Q15 2Q15 Adjusted Non-Interest Expense⁽¹⁾ Selected Items⁽¹⁾ ($ in millions) Non-interest expense Expense included $75 million of selected items(1) Included net expense for contingent legal and regulatory items fo
Slide 8: Asset quality
(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 : $16M in 2Q14, $13M in 3Q14, $29M in 4Q14, $19M in 1Q15 and $18M in 2Q15. $67 $75 $83 $54 $46 0.35% 0.39% 0.42%
Slide 9: Capital and liquidity
82% 81% 82% 80% 83% 2Q14 3Q14 4Q14 1Q15 2Q15 12.5% 12.7% 12.5% 12.2% 12.0% 2Q14 3Q14 4Q14 1Q15 2Q15 Capital and liquidity Repurchased $172 million or 17 million shares of common stock and declared dividends of $80 million Returned 94% of earnings to shareholders Transitional basis Basel III Co
Slide 10: Expectations for 2015
Expectations for 2015 Economic growth expected to pick up over the remainder of the year Continued improvement in housing prices expected Expect an increase in short- term rates in latter part of 2015 10 Economy Loans NIM / Operating leverage Expect total loan growth in the 4% to 6% range on
Slide 11: Appendix
Appendix AM REGIONS
Slide 12: Energy lending
Energy lending 12 Securities portfolio contains ~$265MM of high quality, investment grade corporate grade bonds that are energy related at 6/30/15 Energy Loan Portfolio Outstandings ($ 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 Explora
Slide 13: Non-GAAP reconciliation: Non-interest expense and efficiency ratio
13 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 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 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 year
Slide 16: Regions
A REGIONS REGIONS