Regions Financial Corporation · NYSE:RF
Regions Financial — Investor Presentation (October 2023)
81 slides from Regions Financial's investor presentation, Oct 31, 2023
Slide 1: Investor Information November - December 2023
Investor Information November - December 2023 Exhibit 99.1
Slide 2: Table of contents
2 Table of contents Topic Page # Profile and Strategy 3-10 Asset / Liability Management 11-20 Fees & Expenses 21-27 Business Segment Highlights 28-32 Loans & Deposits 33-40 Capital, Debt & Liquidity 41-43 Technology & Continuous Improvement 44-48 Credit 49-60 Near-Term Expectations 61 Environmental,
Slide 3: Our banking franchise
3 Line of business coverage Alabama – 186 Georgia – 116 Iowa – 5 Mississippi – 99 South Carolina – 18 Arkansas – 57 Illinois – 41 Kentucky – 9 Missouri – 50 Tennessee – 198 Florida – 273 Indiana – 40 Louisiana – 82 North Carolina – 7 Texas – 90 Ranked 19th in the U.S. in total deposits(1) Branch loc
Slide 4: Improved credit risk profile and continuous improvement
4 CCAR Loan Loss Rate Profile evolution Improved Credit Risk Profile Continuous Improvement Proactive Interest Rate Hedging Exited Non-Core Business Strategic M&A Top Quartile Profitability $24 $8 2008 2022 Investor CRE ($ in billions) 8.1% 6.9% 2012 2022 Customer Journeys Organization Simplificatio
Slide 5: Top market share plays a valuable role in the competitive landscape
5 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 6/30/2023; pro-forma for announced M&A transactions as of 10/26/2023. (2) Significant money center bank presence (JPM, BAC, C, WFC) defined as combined market sha
Slide 6: Serving fast-growing MSAs
6 Strong in-market migration has converted legacy core markets into growth markets Serving Fast-Growing MSAs Deposits Market Rank(1) Nashville, Tennessee $10.0 3 Tampa, Florida $6.5 5 Atlanta, Georgia $5.8 7 Orlando, Florida $2.7 6 Knoxville, Tennessee $2.7 3 Huntsville, Alabama $2.7 1 Dallas/Ft Wor
Slide 7: Regions receives top honors
7 Regions receives top honors Regions Bank recognized as a 2023 Top 10 Military Friendly Brand Regions Bank earned the Great Place to Work-Certified™ Company designation based on what current associates say about their experience working here Nine Years Strong: Regions Bank Again Named Gallup Except
Slide 8: Third quarter 2023 overview
8 Third quarter 2023 overview Continue to generate consistent, sustainable long-term performance (1) Non-GAAP, see appendix for reconciliation. Key Performance Metrics 3Q23 Reported Net Income Available to Common Shareholders $465M Diluted Earnings Per Share $0.49 Total Revenue $1.9B Non-Interest Ex
Slide 9: Regions' consistent outperformance
9 Regions' consistent outperformance Adjusted PPI(1) Less Adjusted Net Charge-offs(1) to RWA(2) Regions' earnings, including credit costs, have been top quartile for 12 straight quarters 2.16 2.33 2.29 2.33 2.44 2.23 2.19 2.54 2.68 2.76 2.72 2.43 2.09 1.73 1.74 1.86 1.97 1.91 1.78 1.63 1.89 2.28 2.2
Slide 10: ROATCE: Industry leading performance
10 ROATCE: Industry leading performance 9.0% 9.7% 11.0% 17.6% 14.9% 9.2% 21.4% 24.1% 26.7% 23.8% 20.6% 12.0% 11.0% 12.0% 17.0% 14.7% 8.5% 16.5% 19.3% 20.2% 17.6% 16.8% RF Peer Median 2015 2016 2017 2018 2019 2020 2021 2022 1Q23 2Q23 3Q23 ROATCE Performance Trend vs. Peers(1) (1) Non-GAAP; see Append
Slide 11: Consistent NIM outperformance aided by hedged loan yield and deposit advantage
11 4.52% 4.69% 4.15% 4.11% 4.07% 4.15% 4.53% 5.05% 5.68% 5.94% 5.91% 4.59% 4.79% 3.88% 3.61% 3.41% 3.64% 4.29% 5.10% 5.54% 5.81% 6.07% RF Peer Median 2018 2019 2020 2021 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 Consistent NIM outperformance aided by hedged loan yield & deposit advantage (1) Source: S&P Ca
Slide 12: Net interest income outlook
12 • As Fed Funds nears a peak, NII and NIM will see declines from deposit cost normalization and forward starting swaps, offset by asset turnover at higher rates ◦ 4Q23 NII expected to decline ~5% vs 3Q23 ◦ 2023 NII expected to grow ~11% vs 2022; 2024 NII expected to stabilize over the first half o
Slide 13: Mid-2024 NII inflection; shift to quarterly growth
13 Notes: – Magnitude of bars is not to scale; intended to show directional differences within and across quarters. – Other NII drivers not presented include market rate movements, loan growth, days, one-time adjustments, etc. NII Drivers 1. (-) Additional hedges becoming active: $3B hedge notional
Slide 14: Balance sheet profile
14 Floating 54%Fixed 46% Deposits 82% Borrowings 4% Other 3% Equity 11% • Balance sheet position naturally benefits from higher interest rates (i.e. asset sensitive), supported by ◦ Large floating rate loan and cash mix ◦ Large, stable deposit base as evidenced over multiple rate cycles • Fixed-rate
Slide 15: Balance sheet positioning advantage
15 Cash / Earning Assets Bo rr ow in gs / E ar ni ng A ss et s Cash vs Borrowings 0% 5% 10% 15% 20% —% 5% 10% 15% 20% Balance sheet positioning advantage Strong deposit franchise and funding position provide an opportunity for flexibility and outperformance in a monetary tightening environment (1) R
Slide 16: Regions' deposit advantage
16 RF IB Deposit Cost ('15-'19) Peer Median ('15-'19) RF IB Deposit Cost (Current) Peer Median (Current) —% 0. 50 % 1. 00 % 1. 50 % 2. 00 % 2. 50 % 3. 00 % 3. 50 % 4. 00 % 4. 50 % 5. 00 % 5. 50 % —% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 2.50% 5.43% 0.82% 1.81% 1.03% 2.60% Fed Funds RF IB Deposit Cost
Slide 17: Conservative interest rate and liquidity risk management
17 Conservative Interest Rate and Liquidity Risk Management • Since early in the pandemic, Regions employed various analytical tools to better understand the unprecedented influx of deposits • Considering the significant uncertainty arising from the ‘surge,’ Regions chose to maintain a conservative
Slide 18: Balance sheet positioning and NII sensitivity
18 Sensitivity to Long-Term Rates • ~$12-$14B annual fixed rate loan production and securities reinvestment; mostly exposed to middle tenor rates • Reduced premium amortization from lower prepay speeds and lower purchase prices on monthly reinvestment Balance sheet positioning Sensitivity to Short-T
Slide 19: Hedging strategy update
19 1 2 3 4 5 6 7 Program Overview • Legacy Hedging Program: Performed as designed, limiting NII & NIM downside during a low-rate environment • 2021: Completed hedge repositioning to purposely open rate exposure prior to rates rising • 2022-23: Added meaningful future protection at rate levels suppor
Slide 20: Securities portfolio
20 • Portfolio constructed to protect against changes in market rates ◦ Duration is fully extended at ~4.5 years as of 9/30/2023; provides offset to long-duration deposit book ◦ ~36% of securities in the portfolio are bullet-like (CMBS, corporate bonds, agency bullets, and USTs) ◦ MBS mix concentrat
Slide 21: Non-interest income
21 Adj. Non-Interest Income $606 $576 $567 3Q22 2Q23 3Q23 Change vs ($ in millions) 3Q23 2Q23 3Q22 Service charges $142 (6.6)% (9.0)% Card and ATM fees 126 (3.1)% —% Capital markets (Ex CVA/DVA) 67 (13.0)% (6.9)% Capital markets - CVA/DVA (3) 66.7% (114.3)% Wealth management income 112 1.8% 3.7% Mor
Slide 22: Diversified non-interest income
22 Consumer 47% Wealth Management 20% Corporate 33% 3Q23 fee revenue by segment(1) Diversified non-interest income ($ 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 23: Capital Markets
23 Capital Markets Growing products and services that our clients value Our associates delivered results • 2022 vs. 2021 growth was driven by improvements in CVA/DVA, Real Estate loan syndications, and interest rate & commodity derivatives products • Capital Markets Income (ex. CVA/DVA) $68M in 3Q;
Slide 24: Treasury Management
24 Treasury Management Enabling our clients to optimize cash flow and manage risk with a comprehensive & competitive suite of Treasury Management solutions +9% Treasury Management Revenue(1) +8% Portfolio of Treasury Management Clients(2) +8% Digital, Payment & Integrated Services Revenue(3) +18% Gl
Slide 25: Deposit account policy changes and adjusted non-interest income
25 Regions has made significant changes and upgrades while continuing to provide clients with resources needed to succeed in managing their finances. Details of Regions' Announcements(3): 1Q22-Eliminate overdraft protection transfer fees 2Q22-Reduce daily cap for overdraft occurrences to 3 2Q22-Elim
Slide 26: Mortgage remains a key component of fee revenue
26 Industry origination volume forecasted to be down 29% versus 2022(1) Closed mortgage volume is estimated to be $1.6T in 2023 across the US(1) Continuing to focus on growing servicing through acquiring new MSRs Enhancing MLO execution to drive customer experience and improve cycle time 757 Avg. FI
Slide 27: Non-interest expense and efficiency ratio
27 $1,170 $1,111 $1,093 62.3% 56.4% 58.5% Non-interest expense Efficiency ratio 3Q22 2Q23 3Q23 $988 $1,110 $1,089 $82 $53 52.6% 56.4% 58.2% Adjusted non-interest expense Incremental operational losses Adjusted efficiency ratio 3Q22 2Q23 3Q23 • Non-interest expense decreased ~2% on a reported and adj
Slide 28: Business segments
28 48% 45% 7% 64% 34% 2% 28% 64% 6% 2% $764M $99B $125B 3Q23 Pre-tax pre- provision income(1) 3Q23 Average deposits 3Q23 Average loans (1) Pie %'s exclude the pre-tax pre-provision income from the Other Segment totaling $3 million. Business segments Consumer Corporate Wealth Management Other
Slide 29: Investments in our businesses
29 (1) YTD Treasury Management Revenue Growth, September '22 to September '23, YoY Trade Services Dollar Volume Growth, September ‘22 to September‘23. (2) Quality Relationships defined as having a cumulative $500K in loans, deposits and IM&T accounts, revenue per Quality Relationship measured over T
Slide 30: Consumer Banking Group
30 (1) Consumer Bank – LOB Average Deposits 3Q23 vs. 3Q20. Consumer Banking Group Driving growth and customer engagement through strategic investments Continuing to Deliver Strong Results EnerBank Revenue Growth with revenue 8% higher than 3Q22 Consumer Deposit Growth of +16% (2020-2023)(1) Premier
Slide 31: Corporate Banking Group
31 Corporate Banking Group Driving continued long-term performance for our clients & our shareholders Executing on Investments to Engage & Deepen our Client Base Driving Growth with a Client Centric Model Cultivating Strong & Lasting Relationships Optimized how we serve Small Business Customers with
Slide 32: Wealth Management Group
32 Wealth Management Group Focus on execution & investments to optimize the client and associate experience Providing thought leadership through advice, guidance and education, in our refreshed Insights Magazine, Life Insurance article and the refreshed Weekly Market Commentary Campaign to continue
Slide 33: Loans
33 • Avg business loans remained stable; expect increased lending opportunities but reserving capital for full relationship business • Avg consumer loans increased 1% as growth in avg mortgage and EnerBank partially offset by declines in home equity and run- off in exit portfolios ◦ Other Consumer i
Slide 34: 3Q23 average loan composition
34 $51.7 $4.8 $0.3 $6.3 $2.3 Commercial and Industrial CRE Mortgage - OO CRE Construction - OO IRE - Mortgage IRE - Construction 3Q23 average loan composition $19.9 $5.7 $6.1 $0.4 $1.2 Mortgage Home Equity Other Consumer Other Consumer - Exit Portfolios Consumer Credit Card Average consumer loans $3
Slide 35: Commercial & IRE loans
35 Commercial & IRE loans As of 09/30/23 ($ in millions) Total Commitments Outstanding Balances % Utilization Administrative, Support, Waste & Repair $2,487 $1,616 65% Agriculture 515 295 57% Educational Services 3,980 3,369 85% Energy 4,916 1,668 34% Financial Services - Banking & Trust 9,972 4,380
Slide 36: Deposits
36 $135.4 $127.0 $126.2 85.5 81.6 81.0 38.3 35.3 34.7 9.4 7.2 7.8 2.2 2.9 2.7 3Q22 2Q23 3Q23 $135.5 $125.5 $125.2 84.7 81.0 80.0 39.1 34.9 34.9 9.5 7.4 7.5 2.2 2.2 2.8 3Q22 2Q23 3Q23 Deposits Normalization occurring as expected (1) Other deposits represent non-customer balances primarily consisting
Slide 37: Median consumer deposit balances
37 Median Consumer deposit balances Retail Deposits De c- 20 19 M ar -2 02 0 Ju n- 20 20 Se p- 20 20 De c- 20 20 M ar -2 02 1 Ju n- 20 21 Se p- 20 21 De c- 20 21 M ar -2 02 2 Ju n- 20 22 Se p- 20 22 De c- 20 22 M ar -2 02 3 Ju n- 20 23 Se p- 20 23 (1) Excludes customers with zero-balance or overdraw
Slide 38: Checking balances and spending levels
38 Checking balances and Spending levels % Ch an ge v s. 2 01 9 Change in Consumer Checking Deposits Change in Debit Activity 2019 Average 1Q22 3Q23 —% 20% 40% 60% Ratio of balances to spend +30% Ratio within 10% of 2019 trend level (1) Balances are consumer checking average balances and exclude pri
Slide 39: Diversified deposit base
39 Diversified deposit base (1) $ in billions as of 9/30/2023. (2) Data and categorization reflects FR 2052a (Complex Institution Liquidity Monitoring Report) methodology. (3) High quality checking account estimates are based on multiple individual account behaviors and activities (e.g., balances an
Slide 40: Deposit advantage vs. peers
40 Deposit advantage Well diversified deposit base vs. Peers (1) As of 6/30/2023. Source: Bank Call Reports / SEC filings. Peers include CFG, CMA, FHN, FITB, HBAN, HWC, KEY, MTB, PNC, SNV, TFC, USB, ZION. ...Resulting in one of the highest mix of FDIC insured deposits amongst peers % of Total Deposi
Slide 41: Liquidity position
41(1) Fed master account closing balance only. Does not include other small in transit / processing items included in Call Report or SEC reports. (2) 'Liquid Securities Free to Use incl. Bank Term Funding Program (BTFP)' are comprised of Free to Pledge Securities and the incremental BTFP borrowing a
Slide 42: Capital and liquidity
42 • Basel III Endgame - estimate a low to mid-single digit increase in RWAs under the Expanded Risk Based Approach in addition to the phase-in of AOCI into regulatory capital ◦ CET1 adjusted to include AOCI at 9/30 is estimated at 7.6%(3) • Minimum Long-Term Debt - ~$6B of LTD issuance need over se
Slide 43: Tangible common equity
43 5.01% 5.63% 6.31% 6.09% 5.82% 7.17% 7.64% 8.02% 8.14% 8.37% TCE Ratio Adjusted TCE Ratio, ex-AOCI 3Q22 4Q22 1Q23 2Q23 3Q23 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% Tangible Common Equity (1) Non-GAAP; see Appendix for reconciliation. • Higher levels of interest rates are generally beneficial to Region
Slide 44: Investing for growth while maintaining focus on capital optimization
44 Investing for growth while maintaining focus on capital optimization Acquisition of HUD (MAP) License 2014 2015 2016 2019 2020 2018 2021 Acquisition of Fannie Mae DUS License Third-party originated auto portfolio ~$2.0B moved to runoff Entered into MSR flow-deal arrangement Sold Regions Insurance
Slide 45: Empowered by data & innovation
45 Empowered by data & innovation Regions remains competitive by reserving ~9–11% of revenue for technology spend Next Gen Platform Next Generation of Customer Experience and Core Banking and Data Platforms Modernization efforts began in 2021 with runway through 2027 to complete the overall program
Slide 46: Differentiating through customer experience
46 Differentiating through customer experience Authentication Improvements Completed launch of new Corporate Banking Authentication platform. Launched new Enterprise Authentication Portal for Consumer Online Banking using cloud native technologies. Faster Transactions 3Q23 Real Time Payment transact
Slide 47: Growth in digital
47 2.25 2.39 2.55 3Q21 3Q22 3Q23 2.40 3.20 4.14 3Q21 3Q22 3Q23 158 156 180 3Q21 3Q22 3Q23 21.4% 21.7% 22.9% 33.1% 32.5% 32.3% 45.5% 45.8% 44.8% 3Q21 3Q22 3Q23 83.8 86.8 102.0 71.3 70.3 87.4 12.5 16.5 14.6 Deposits Lending 3Q21 3Q22 3Q23 69% 71% 74% 31% 29% 26% 3Q21 3Q22 3Q23 Growth in digital Mobile
Slide 48: Continuous improvement framework
48 Continuous improvement framework • Making Banking Easier – Be intensely responsive to customer needs • Revenue Growth – Improve effectiveness in generating prudent, profitable, sustainable growth • Efficiency Improvements – Continuously leverage people and technology to improve processes, reduce
Slide 49: Historical credit profile
49 (1) Includes C&I, CRE - OO and IRE. (2) The spike in Consumer net charge-offs in late 2013 was associated with the move of ~$700M primarily accruing troubled debt restructured residential first mortgage loans to held for sale resulting in ~$150M of charge-offs. Historical Credit Profile —% 0.50%
Slide 50: Credit quality highlights and outlook
50 • 3Q annualized NCOs totaled 40 bps, increasing 7 bps QoQ and included elevated losses in a discontinued solar program at EnerBank and lower commercial recoveries • 3Q NPLs, business services criticized loans and total delinquencies increased; 3Q NPL increase attributable primarily to one large c
Slide 51: Commercial real estate
51 Commercial Real Estate(1) Highly Diversified Total IRE Portfolio (including Unsecured CRE) • Unsecured loans for RE purposes generally have low leverage, with strong access to liquidity ◦ 67% of REITs are investment grade or mapped to IG risk rating (provide loss insulation to overall portfolio)
Slide 52: Higher risk industry segments
52 Higher Risk Industry Segments (Outstanding balances as of September 30, 2023) (1) Amounts exclude PPP loans and Held For Sale loans. (2) CoStar is an industry leader in CRE data & analytics. CoStar data as of June 30, 2023. (3) GreenStreet Commercial Property Price Index as of October 5, 2023 - c
Slide 53: Allowance for credit losses waterfall
53 $1,633 $47 $15 $(18) $1,677 Allowance for credit losses waterfall 09/30/2023 • 3Q allowance increased $44M compared to the prior quarter, resulting in a $145M provision expense • Key drivers of the net increase in ACL: ◦ Adverse risk migration and continued credit quality normalization ◦ Increase
Slide 54: Base economic outlook
54 Pre-R&S period 3Q2023 4Q2023 1Q2024 2Q2024 3Q2024 4Q2024 1Q2025 2Q2025 3Q2025 Real GDP, annualized % change 3.6 % 0.4 % 1.0 % 0.9 % 1.3 % 1.7 % 1.8 % 1.9 % 1.9 % Unemployment rate 3.7 % 3.7 % 3.9 % 4.0 % 4.2 % 4.3 % 4.3 % 4.2 % 4.2 % HPI, year-over-year % change 2.7 % 1.6 % (0.5) % (2.7) % (3.0)
Slide 55: Allowance allocation
55 As of 9/30/2023 As of 12/31/2022 (in millions) Loan Balance ACL ACL/Loans Loan Balance ACL ACL/Loans C&I $51,604 $664 1.29 % $50,905 $628 1.23 % CRE-OO mortgage 4,833 111 2.30 % 5,103 102 2.00 % CRE-OO construction 270 7 2.47 % 298 7 2.29 % Total commercial $56,707 $782 1.38 % $56,306 $737 1.31 %
Slide 56: Well positioned for next downturn
56 All Other Commercial 3.6% Investor Real Estate 13.4% Financial Services 11.3% CRE Unsecured, including REITs 10.5% Govt. Education 10.1% Consumer Services 8.7% Technology Services 8.3% Manufacturing 7.2% Energy 2.5% Agriculture 0.5% Utilities 4.6% Business Services 7.8% Distribution 6.5% Healthca
Slide 57: Consumer lending portfolio statistics
57 Consumer lending portfolio statistics • Avg. origination FICO 764 • Current LTV 53% • 98% owner occupied • Avg. origination FICO 778 • Current LTV 34% • 67% of portfolio is 1st lien • Avg. loan size $34,791 • $79M to convert to amortizing or balloon during 2023 • Avg. origination FICO 762 • Avg.
Slide 58: Leveraged portfolio
58 $3.1B Leveraged portfolio (outstanding balances as of September 30, 2023) • Consistent with Moody's historical Regional Bank Survey definition; Commitments >$5M with funded debt to EBITDA>4.0x ◦ Commitments are $4.2B • Not a strategic growth objective; used to support client relationships • Spons
Slide 59: SNC portfolio
59 $27.0B SNC Portfolio (outstanding balances as of September 30, 2023) • Improved portfolio composition and asset quality through focus on lower risk segments • 43% of balances are Investment Grade • 11% of balances are leveraged(2) • Regions is agent or holds a title role for over half of SNC bala
Slide 60: Shared National Credit select portfolios
60 Shared National Credit Outstandings: $14B (51%) Select and Investment Grade Asset Securitization $1.7 6.4% Real Estate Investment Trusts (REITs) $5.3 19.5% Subscription Lines $0.9 3.3% Investment Grade Utilities $1.1 4.1% Superior Transaction And Return Relationships (STARR) $0.5 1.8% Investment
Slide 61: 2023 expectations
61 2023 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) Expectations assum
Slide 62: Environmental, Social & Governance: managing ESG risks & opportunities
62 Environmental, Social & Governance Managing ESG risks & opportunities BOARD OF DIRECTORS ESG-related elements of the Strategic Plan, annual budget, and capital planning process BOARD-LEVEL COMMITTEES NCG Committee Risk Committee CHR Committee Audit Committee Technology Committee ESG strategies, i
Slide 63: Environmental, Social & Governance
63 Environmental, Social & Governance Customized approach to making life better for the people and places we serve We provide a suite of ESG disclosures on our ESG Resource Center, which is accessible at ir.regions.com/governance: • ESG Report • TCFD Report • SASB Index • GRI Index Sound practices t
Slide 64: Acquisitions exceeding expectations
64 Acquisitions exceeding expectations Ascentium Capital(1) EnerBank(2) Origination Growth • Ascentium Capital loans of $2.6B increased+2% vs. 2Q23 • An increasing interest rate environment, inflation, and a slowing economy are providing headwinds to origination growth and portfolio credit performan
Slide 65: Appendix
> GENERATING Consistent Sustainable \ Long-term Performance APPENDIX AW REGIONS] 65
Slide 66: Selected items impact
66 Selected items impact Third quarter 2023 highlights (1) Non-GAAP, see appendix for reconciliation. (2) Based on income taxes at an approximate 25% incremental rate. (3) Items impacting results or trends during the period, but are not considered non-GAAP adjustments. ($ amounts in millions, except
Slide 67: Non-GAAP measures explanation
67 Management uses computations of earnings and certain other financial measures, which exclude certain adjustments that are included in the financial results presented in accordance with GAAP, to monitor performance and believes these measures provide meaningful information to investors. Non-intere
Slide 68: Non-GAAP reconciliation: non-interest expense
68 Non-GAAP reconciliation Non-interest expense Twelve Months Ended December 31 ($ amounts in millions) 2022 2021 2020 2019 2018 2017 2016 Non-interest expense (GAAP) $ 4,068 $ 3,747 $ 3,643 $ 3,489 $ 3,570 $ 3,491 $ 3,483 Adjustments: Contribution to Regions Financial Corporation foundation — (3) (
Slide 69: Adjusted net charge-offs and ratio
69 Non-GAAP reconciliation Adjusted Net Charge-Offs and Ratio For the Quarter Ended ($ amounts in millions) 9/30/2023 6/30/2023 3/31/2023 12/31/2022 9/30/2022 Net loan charge-offs (GAAP) $ 101 $ 81 $ 83 $ 69 $ 110 Less: charge-offs associated with the sale of unsecured consumer loans — — — — 63 Adju
Slide 70: Pre-tax pre-provision income
70 Non-GAAP reconciliation Pre-tax pre-provision income (PPI) Quarter Ended ($ amounts in millions) 9/30/2023 6/30/2023 3/31/2023 12/31/2022 9/30/2022 6/30/2022 3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021 12/31/2020 9/30/2020 Net income available to common shareholders (GAAP) $ 465 $ 556 $ 58
Slide 71: NII, non-interest income/expense, and efficiency ratio
71 Non-GAAP reconciliation NII, non-interest income/expense, and efficiency ratio NM - Not Meaningful Quarter Ended ($ amounts in millions) 9/30/2023 6/30/2023 3/31/2023 12/31/2022 9/30/2022 3Q23 vs. 2Q23 3Q23 vs. 3Q22 Non-interest expense (GAAP) A $ 1,093 $ 1,111 $ 1,027 $ 1,017 $ 1,170 $ (18) (1.6
Slide 72: NII, non-interest income/expense, and efficiency ratio (annual)
72 Non-GAAP reconciliation NII, non-interest income/expense, and efficiency ratio Twelve Months Ended December 31 ($ amounts in millions) 2022 Non-interest expense (GAAP) A $ 4,068 Adjustments: Branch consolidation, property and equipment charges (3) Professional, legal and regulatory expenses (179)
Slide 73: Return on average tangible common shareholders' equity
73 Quarter Ended ($ amounts in millions) 9/30/2023 6/30/2023 3/31/2023 12/31/2022 9/30/2022 RETURN ON AVERAGE TANGIBLE COMMON SHAREHOLDERS' EQUITY Net income available to common shareholders (GAAP) A $ 465 $ 556 $ 588 $ 660 $ 404 Average shareholders' equity (GAAP) $ 16,468 $ 16,892 $ 16,457 $ 15,44
Slide 74: Return on average tangible common shareholders' equity (annual)
74 Non-GAAP reconciliation Return on average tangible common shareholders' equity Year Ended ($ amounts in millions) 2022 2021 2020 2019 2018 2017 2016 2015 RETURN ON AVERAGE TANGIBLE COMMON SHAREHOLDERS' EQUITY Net income available to common shareholders A $ 2,146 $ 2,400 $ 991 $ 1,503 $ 1,695 $ 1,
Slide 75: Adjusted CET1 inclusive of AOCI
75 As of ($ amounts in millions) 9/30/2023 ADJUSTED CET1 RATIO Common equity(1) A $ 13,056 Adjustments: AOCI gain (loss) on securities(2) (3,084) AOCI gain (loss) on defined benefit pension plans and other post employment benefits (403) Adjusted common equity (non-GAAP) B $ 9,569 Total risk-weighted
Slide 76: Non-interest income
76 Non-GAAP reconciliation Non-interest income Year Ended ($ amounts in millions) 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 Non-interest income (GAAP) $ 2,429 $ 2,524 $ 2,393 $ 2,116 $ 2,019 $ 1,962 $ 2,011 $ 1,937 $ 1,785 $ 2,096 $ 2,201 $ 2,226 Security (gains) losses, net 1 (3)
Slide 77: Tangible common ratios
77 Non-GAAP reconciliation Tangible Common Ratios As of and for Quarter Ended ($ amounts in millions, except per share data) 9/30/2023 6/30/2023 3/31/2023 12/31/2022 9/30/2022 TANGIBLE COMMON RATIOS Shareholders’ equity (GAAP) A $ 16,100 $ 16,639 $ 16,883 $ 15,947 $ 15,173 Less: Preferred stock (GAA
Slide 78: Forward-Looking Statements
78 Forward-Looking Statements This presentation may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. The words “future,” “anticipates,” “assumes,” “intends,” “plans,” “seeks,” “believes,” “predicts,” “potential,” “objectives,” “estimates,” “expec
Slide 79: Forward-looking statements risk factors
79 • Our inability to keep pace with technological changes, including those related to the offering of digital banking and financial services, could result in losing business to competitors. • Changes in laws and regulations affecting our businesses, including legislation and regulations relating to
Slide 80: Forward-looking statements risk factors (continued)
80 • The effects of man-made and natural disasters, including fires, floods, droughts, tornadoes, hurricanes, and environmental damage (specifically in the Southeastern United States), which may negatively affect our operations and/or our loan portfolios and increase our cost of conducting business.
Slide 81: GENERATING
> GENERATING Consistent Sustainable Krizneterm Performance A REGIONS Ax REGIONS| 81
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