Regions Financial Corporation · NYSE:RF
Regions Financial — Q2 2012 Earnings Presentation
19 slides from Regions Financial's earnings presentation, Jul 24, 2012
Slide 1: Regions Financial 2nd Quarter Earnings Conference Call
Regions Financial 2nd Quarter Earnings Conference Call July 24, 2012 1
Slide 2: Prudent and Profitable Growth Driven by Solid Business Performance
PRUDENT AND PROFITABLE GROWTH DRIVEN BY SOLID BUSINESS PERFORMANCE • Experienced continued growth in 2Q12 Financial Highlights commercial and industrial portfolio • Conservative low loan-to-deposit ratio Diluted EPS $0.20 provides considerable flexibility to take advantage of lending opportunities t
Slide 3: 2Q12 Financial Highlights
2Q12 FINANCIAL HIGHLIGHTS ($ in millions, except EPS) 2Q11 1Q12 2Q12 2Q12 vs. 1Q12 2Q12 vs. 2Q11 From Continuing Operations Net Interest Income $ 856 $ 827 $ 838 $ 11 1% $ (18) -2% Non-Interest Non Interest Revenue 543 524 507 (17) -3% (36) -7% Non-Interest Expense 956 913 842 (71) -8% (114) -12% Pr
Slide 4: Commercial and Industrial Loans Grew 4% Over Last Quarter
COMMERCIAL AND INDUSTRIAL LOANS GREW 4% OVER LAST QUARTER Commercial and Industrial Loan Balances* • Commercial & industrial loan balances $ in millions 9% increase Y-O-Y $24,310 $24,748 $25,650 on an a average erage basis increased $902 $23,506 $23,953 million, or 4% linked quarter reflecting stren
Slide 5: Funding Mix Continues to Improve as Deposit Costs Declined
FUNDING MIX CONTINUES TO IMPROVE AS DEPOSIT COSTS DECLINED 5 BPS Deposit Balances* and Deposit Costs • Avg. time deposits as a % of avg. d deposits it ddecreased d tto 18% iin 2Q12 $ in millions $96,122 $96,147 $95,155 $96,061 $95,863 from 23% in 2Q11 22,506 21,369 19,774 19,053 17,175 • Deposit rep
Slide 6: Net Interest Margin Improves
NET INTEREST MARGIN IMPROVES 7 BPS • Net interest margin favorably impacted by Net Interest Income and Net Interest Margin1 improvements in deposit costs, lower excess cash and lower non-accrual $864 $859 $858 $839 $850 $ in millions balances 3.16% • Cash reserves negatively impacted net interest ma
Slide 7: Non-Interest Revenue Driven by 17% Increase in Mortgage Income
NON-INTEREST REVENUE DRIVEN BY 17% INCREASE IN MORTGAGE INCOME Fee Income by Quarter 1 • Non-interest revenue decreased 3% linked quarter $ in millions $519 $516 $505 $490 $488 66 52 55 • Mortgage revenues increased 17% 27 60 57 25 - 15 28 26 14 26 linked quarter and 80% over last year 50 68 16 15 5
Slide 8: Reduction in Credit Costs Drive Non-Interest Expenses Down
REDUCTION IN CREDIT COSTS DRIVE NON-INTEREST EXPENSES DOWN 8% LINKED QUARTER Non-Interest Expenses1 ons • Diligent and continued focus on reducing $956 $ in millio $ $913 expenses through efficiencies $871 $850 $842 • Non-interest expenses were 8% lower than prior q p quarter and down 12% yyear-over
Slide 9: Continued Momentum in Asset Quality Metrics
CONTINUED MOMENTUM IN ASSET QUALITY METRICS NPL Gross Migration NPLs and Coverage Ratio 43% Decline* 31% Decline in Total NPLs* ons ons $ in millio $ in millio 122% $755 118% 120% $2,784 $2,710 $2,372 118% 120% $555 $561 116% $2,151 116% 114% $381 $1,915 112% $315 110% 112% 108% 109% 106% 104% 102%
Slide 10: Strong Capital Ratios
STRONG CAPITAL RATIOS • The impact of the warrant redemption related to the Loan to Deposit Ratio (4) repayment of Series A preferred stock was $45 million during the second quarter 84% 83% 81% 80% • Basel III Tier 1 Common ratio estimated under the 79% new proposed rules at 8.0% • Low loan to depos
Slide 11: Appendix
APPENDIX ALREGIONS
Slide 12: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentatio n may include fo rward-lo o king statements which reflect Regio ns’ current views with respect to future events and financial perfo rmance. The P rivate Securities Litigatio n Refo rm A ct o f 1995 (“ the A ct” ) pro vides a “ safe harbo r” fo r fo rward-l
Slide 13: Non-GAAP Reconciliation: Net Income / (Loss) and Earnings Per Share
NON-GAAP RECONCILIATION: NET INCOME / (LOSS) AND EARNINGS PER SHARE The table below presents earnings (loss) per share from continuing operations, excluding preferred dividends and accretion (non-GAAP). The table also presents computations of earnings (loss) and certain other financial measures, exc
Slide 14: 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 15: Non-GAAP Reconciliation: Fee Income Ratios and Efficiency Ratios
NON-GAAP RECONCILIATION: FEE INCOME RATIOS AND EFFICIENCY RATIOS The table below presents computations of the efficiency ratio (non-GAAP), w hich is a measure of productivity, generally calculated as non-interest expense divided by total revenue. The table also show s the fee ratio (non-GAAP), gener
Slide 16: Non-GAAP Reconciliation: Tier 1 Common
NON-GAAP RECONCILIATION: TIER 1 COMMON The fo llo wing table pro vides calculatio ns o f Tier 1capital (regulato ry) and "Tier 1co mmo n equity" (no n-GA A P ). Traditio nally, the Federal Reserve and o ther banking regulato ry bo dies have assessed a bank's capital adequacy based o n Tier 1capital,
Slide 17: Non-GAAP Reconciliation: Tier 1 Capital
NON-GAAP RECONCILIATION: TIER 1 CAPITAL Regions' Series A preferred stock w as repurchased on April 4, 2012 and the w arrant to purchase 48.3 million shares of Regions common stock w as retired on May 2, 2012. The follow ing table presents the calculations of Tier 1 capital and the Tier 1 capital ra
Slide 18: Non-GAAP Reconciliation: Basel III
NON-GAAP NON GAAP RECONCILIATION: BASEL III The following table provides calculations of Tier 1 common equity (non-GAAP), based on Regions’ current understanding of Basel III requirements, as proposed by the U.S. Notices of Proposed Rulemaking released in June 2012. Regions currently calculates its
Slide 19: Regions
REGIONS