Regions Financial Corporation · NYSE:RF
Regions Financial — Q1 2016 Earnings Presentation
20 slides from Regions Financial's earnings presentation, Apr 15, 2016
Slide 1: 1st Quarter Earnings Conference Call
1st Quarter Earnings Conference Call April 15, 2016 Exhibit 99.3
Slide 2: A solid start to 2016
A solid start to 2016 2016 Strategic Initiatives ▪ Grow and diversify revenue streams ▪ Disciplined expense management ▪ Effectively deploy capital • Results reflect growth in total revenue, lower adjusted expenses(2) and positive operating leverage • Expanded customer base as checking accounts, hou
Slide 3: Loans and leases reflect solid growth
Loans and leases reflect solid growth 1Q15 2Q15 3Q15 4Q15 1Q16 $77.9 $79.2 $80.6 $80.8 $81.5 ($ in billions) Average loan and lease balances Quarter-over-Quarter: • Loan and lease balances up $750MM or 1% • Business lending balances increased 1%, driven by Corporate Banking and Real Estate Banking •
Slide 4: Average deposits experienced growth
Average deposits experienced growth Low-cost deposits Time deposits + Other 1Q15 2Q15 3Q15 4Q15 1Q16 87.3 88.9 89.1 89.7 90.4 8.5 $95.8 8.2 $97.1 8.1 $97.2 7.8 $97.5 7.4 $97.8 ($ in billions) Quarter-over-Quarter: • Deposits up $262MM • Low-cost deposits up $712MM or 1% • Deposit costs steady at 11
Slide 5: Increased net interest income and other financing income and net interest margin
Increased net interest income and other financing income and net interest margin Net Interest Income and Other Financing Income (FTE) Net Interest Margin 1Q15 2Q15 3Q15 4Q15 1Q16 $856 3.18% 3.16% 3.13% 3.08% 3.19% Quarter-over-Quarter: • Adjusted net interest income and other financing income (FTE)
Slide 6: Non-interest income driven by growth in revenue diversification initiatives
Non-interest income driven by growth in revenue diversification initiatives 1Q15 2Q15 3Q15 4Q15 1Q16 41 40 46 39 37 38 59 66 54 75 69 98 97 102 100 106 85 90 93 96 95 161 168 167 166 159 7 96 13 12 470 940 590 1,180 497 994 514 1,028 506 1,012 (1) Non-GAAP; see appendix for reconciliation (2) Total
Slide 7: Disciplined non-interest expense management
Disciplined non-interest expense management 1Q15 2Q15 3Q15 4Q15 1Q16 $840 $859 $894 $861 $843 $65 $75 $1 $12 $26 Quarter-over-Quarter: • Total adjusted expenses declined $18MM or 2%(1) • Total salaries and benefits decreased $3MM or $9MM on an adjusted basis ◦ $12MM in severance expense in 1Q16 rela
Slide 8: Net charge-offs and credit quality
Net Charge-Offs Net Charge-Offs ratio 1Q15 2Q15 3Q15 4Q15 1Q16 $54 $46 $60 $78 $68 0.28% 0.23% 0.30% 0.38% 0.34% NPLs Coverage Ratio 1Q15 2Q15 3Q15 4Q15 1Q16 $800 $751 $789 $782 $993 137% 149% 141% 141% 116% Classified Loans Special Mention 1Q15 2Q15 3Q15 4Q15 1Q16 1,727 1,787 1,838 1,937 2,640 1,09
Slide 9: Industry leading capital and liquidity ratios
Industry leading capital and liquidity ratios 1Q15 2Q15 3Q15 4Q15 1Q16 12.2% 12.1% 11.7% 11.7% 11.6% 1Q15 2Q15 3Q15 4Q15 1Q16 11.2% 11.1% 10.8% 10.7% 10.7% 1Q15 2Q15 3Q15 4Q15 1Q16 80% 83% 83% 83% 83% Tier 1 capital ratio(1) Common equity Tier 1 ratio – Fully phased-in pro-forma(1)(2) Loan-to-deposi
Slide 10: 2016 Expectations
2016 Expectations . (1) 2016 non-interest income reflects the negative impact from posting order change of approximately $10M-$15M per quarter. • Average loan growth of 3% - 5% relative to 4Q15 average balances • Average deposit growth of 2% - 4% compared to 4Q15 average balances • Net interest inco
Slide 11: Appendix
Appendix Ax REGIONS :
Slide 12: Energy lending overview
• Total commitments declined; however, direct balances increased - driven primarily by higher utilization and new loans to creditworthy borrowers • Allowance for loan and lease losses was 8% of direct energy balances at 3/31/16 vs 6% at 12/31/15 • No second lien exposure outstanding within the energ
Slide 13: Energy lending - Oil Field Services and Exploration & Production detail
Energy lending - Oil Field Services and Exploration & Production detail Type As of3/31/16 # of Clients* Commentary Marine $470 9 Shelf operators remain under stress. Additional stress is expected in 2016 as deepwater contracts mature and competition in the spot market intensifies. Integrated OFS 231
Slide 14: Loan balances by select states: Texas, Louisiana
Loan balances by select states Texas Louisiana Note: Intelligence from our customer assistance program (CAP) reveals no noticeable increase in assistance requests in these markets to date. Commercial - Non-Energy, $4,323 Commercial - Energy (Direct), $1,387 Consumer Non- Real Estate Secured, $880 Co
Slide 15: Loan balances by select states: Alabama, Mississippi
Loan balances by select states Alabama Mississippi Commercial - Non- Energy, $5,470 Consumer Real Estate Secured, $3,545 Consumer Non-Real Estate Secured, $856 Investor Real Estate, $370 Commercial - Energy (Direct), $54 Commercial - Non-Energy, $1,513 Commercial - Energy (Direct), $70 Consumer Non-
Slide 16: Non-GAAP reconciliation: Non-interest income, non-interest expense and efficiency ratio
Non-GAAP reconciliation: Non-interest income, 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 previou
Slide 17: 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 (1) Current quarter amounts and the resulting ratio are estimated. (2) Regions continues to develop systems and internal controls to precisely calculate risk-weighted assets as required by Basel III on a fully
Slide 18: 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 19: Forward-looking statements continued
Forward-looking statements continued 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 fo
Slide 20: A. REGIONS
A. REGIONS