Regions Financial Corporation · NYSE:RF
Regions Financial — Q2 2013 Earnings Presentation
19 slides from Regions Financial's earnings presentation, Jul 23, 2013
Slide 1: Regions Financial 2nd Quarter 2013 Earnings Conference Call
Exhibit 99.3 Regions Financial 2nd Quarter 2013 Earnings Conference Call July 23, 2013
Slide 2: Continued momentum
Continued momentum 2Q13 Highlights • Loan balances grew $1.1B; almost ($ in millions, except per share data) 70% of markets experienced growth Net Interest Income $808 • Expanded customer base and grew Non-Interest Revenue $497 core checking accounts Non-Interest Expense $884 • Invested in improved
Slide 3: Loan balances increased
Loan balances increased Total Loan Balances (1) • Total loan balances grew $1.1 billion linked quarter • Commercial and industrial loans increased 5% linked quarter • Experienced more modest pace of decline in investor real estate portfolio • Indirect auto production up 21% Commercial and Industrial
Slide 4: Improved funding mix continues to drive decline in deposit costs
Improved funding mix continues to drive decline in deposit costs Deposit Balances (1) and Deposit Costs • Average low-cost deposits grew $230 million linked quarter • Positive re-pricing and mix shift led to deposit costs declining to 15 bps, down 3 bps for the quarter • Time deposits fell to 12% of
Slide 5: Net interest income increased and net interest margin expanded
Net interest income increased and net interest margin expanded • Net interest income was up 1% Net Interest Income and Net Interest Margin linked quarter, driven by an additional day in the quarter, incremental loan growth, continued declines in deposit costs and liability management activity • Net
Slide 6: Interest rate sensitivity summary
Interest rate sensitivity summary Net interest income remains asset sensitive to increases in both short-term and longer-term rates 12- Month Net Interest Income Impact From 12- Month Net Interest Income Impact From Incremental Longer-term Rate Increases (1) Incremental Short-term Rate Increases (1)
Slide 7: Investment portfolio activity
Investment portfolio activity Earning Assets* • Overall size of investment portfolio declined $2.7 billion linked quarter • Moved $2.4 billion in securities to Held to Maturity • Will reduce wholesale borrowings, reduce overall balance sheet size, Securities Portfolio* reduce tangible common equity
Slide 8: Non-interest revenue relatively flat
Non-interest revenue relatively flat Non-Interest Revenue • Mortgage income was slightly down • Mortgage loan production was $1.9 billion dollars, an increase of 6% over the prior quarter • Service charges income were impacted by lower NSF fees • Experienced an increase in net checking accounts and
Slide 9: Expense control – a culture, not a campaign
Expense control – a culture, not a campaign • Non-interest expenses¹ declined 2% Adjusted Non-Interest Expenses (1) linked quarter, excluding debt 1% decrease Y-O-Y extinguishment costs related to the early termination of certain debt and preferred securities • Credit related costs continued to decl
Slide 10: Continued improvement in asset quality
Continued improvement in asset quality Net Charge-Offs and Ratio NPLs and Coverage Ratio (2) Allowance for Loan Losses / Total Criticized and Classified Loans (3) Loans (1) Year-over-year change 10 (2) Excludes loans held for sale (3) Includes commercial and investor real estate loans only
Slide 11: Capital position remains strong
Capital position remains strong Tier 1 capital ratio (1) • Successfully completed several actions that serve to improve capital efficiency: • Redeemed $350 million of 7.75% senior notes • Issued $750 million of 2% senior notes • Redeemed $498 million of 6.625% Trust Preferred Securities • Redeemed $
Slide 12: Appendix
Appendix Ms REGIONS »
Slide 13: Liability management summary
Liability management summary Q2 2013 - Liability Management Summary ($ in millions) Projected Next 12 Face Amount Up-front Costs Security Dividend/Coupon (1) Month Run Rate Strategic Impact Retired (pre-tax) Benefit (pre-tax) (2) (3) Elimination of high cost Union Planters Preferred Tender $100 7.75
Slide 14: Non-GAAP reconciliation: Pre-tax pre-provision income
Non-GAAP reconciliation: Pre-tax pre- provision income The Pre-Tax Pre-Provision Income (PPI) table below presents computations of pre-tax pre-provision income from continuing operations excluding certain adjustments (non-GAAP). Regions believes that the presentation of PPI and the exclusion of cert
Slide 15: Non-GAAP reconciliation: Non-interest expense
Non-GAAP reconciliation: Non-interest expense The table below presents non-interest expense (GAAP) excluding certain adjustments to arrive at adjusted non-interest expense (non-GAAP). Regions believes that the exclusion of these adjustments provides a meaningful base for period-to-period comparisons
Slide 16: Non-GAAP reconciliation: Tier 1 common
Non-GAAP reconciliation: Tier 1 common The following table provides calculations of Tier 1 capital (regulatory) and "Tier 1 common equity" (non-GAAP). Traditionally, the Federal Reserve and other banking regulatory bodies have assessed a bank's capital adequacy based on Tier 1 capital, the calculati
Slide 17: Non-GAAP reconciliation: Basel III
Non-GAAP reconciliation: Basel III The following table provides calculations of Tier 1 common,based on Regions’ current understandingof the Final Basel III requirements, released in July 2013. Regions currently calculates its risk-based capital ratios under guidelines adopted by the Federal Reserve
Slide 18: Forward-looking statements
Forward-looking statements This presentation may include forward-looking statements which reflect Regions’ current views with respect to future events and financial performance. The Private Securities Litigation Reform Act of 1995 (“the Act”) provides a “safe harbor” for forward-looking statements w
Slide 19: Ma REGIONS
Ma REGIONS