Regions Financial Corporation · NYSE:RF
Regions Financial — Q4 2014 Earnings Presentation
18 slides from Regions Financial's earnings presentation, Jan 20, 2015
Slide 1: 4th Quarter 2014 Earnings Conference Call
4th Quarter 2014 Earnings o Conference Call January 20, 2015 Exhibit 99.3
Slide 2: 2014 Overview
2014 Overview 2 Continued risk discipline Emphasis on diversifying and growing revenue Focused on banking fundamentals • Loans increased $3 billion or 4% • Deposits increased $2 billion or 2%, while deposit costs reached historic lows • Increased number of quality households and grew number of check
Slide 3: Loans
Loans For the quarter: • Ending loan balances up $700MM or 1% • Business loans(1)(2) increased 1% as production increased 18% • Commercial and industrial grew 3% • Line utilization increased 40 basis points and commitments increased 3% • Investor real estate relatively steady • Consumer loans increa
Slide 4: Deposits and funding costs
4 Deposits and funding costs Deposit Balances(1) ($ in billions) 34 bps 33 bps 31 bps 30 bps 29 bps 4Q13 1Q14 2Q14 3Q14 4Q14 Funding costs $82.8 $84.2 $84.9 $85.4 $85.6 $9.7 $9.2 $9.0 $8.8 $8.6 4Q13 1Q14 2Q14 3Q14 4Q14 Low-Cost Deposits Time Deposits + Other Deposit Balances(1) by type ($ in billion
Slide 5: Net interest income and net interest margin
Net interest income and net interest margin • Despite continuation of the low rate environment, which exerted pressure on asset yields, both net interest income and net interest margin remained relatively stable with the third quarter • Stability in both measures was largely attributable to higher a
Slide 6: Non-interest income
Non-interest income • Non-interest income down 6% • Service charges declined $14MM • $4MM decline in fees resulting from product discontinuation • Customer reimbursements of $8MM • Mortgage income impacted by lower gains from loan sales and decline in market valuation of mortgage servicing portfolio
Slide 7: Expenses
Expenses • Reported expenses included some unusual items • Previous quarter included $24MM benefit from unfunded commitments; partially offset by $7MM Visa® expense(3) • Intend to consolidate 50 branches in 2015 and incurred related expense of $10MM in fourth quarter(4) • Contingent legal and regula
Slide 8: Solid asset quality
463 457 452 452 468 1,321 1,301 992 866 750 391 386 383 376 368 579 $2,754 $2,144 $1,827 $1,694 $1,586 4Q13 1Q14 2Q14 3Q14 4Q14 Residential First Mortgage All Other Home Equity TDRs Held-For-Sale 2,088 1,914 1,724 1,688 1,493 927 1,067 1,327 1,297 1,206 $3,015 $2,981 $3,051 $2,985 $2,699 4Q13 1Q14 2
Slide 9: Strong capital and solid liquidity
Strong capital and solid liquidity Tier 1 capital ratio(1) Loan to deposit ratio(3) Tier 1 common ratio(1)(2) (1) Current quarter ratios are estimated (2) Non-GAAP; see appendix for reconciliation (3) Based on ending balances 11.7% 11.8% 12.5% 12.7% 12.5% 4Q13 1Q14 2Q14 3Q14 4Q14 11.2% 11.4% 11.6% 1
Slide 10: Expectations for 2015
Expectations for 2015 10 Deposit growth of 1% to 2% Loans • Expect total loan growth in the 4% to 6% range • Commercial and industrial loans expected to drive growth within business lending portfolio • Expect growth in investor real estate to be limited as we remain committed to risk tolerance level
Slide 11: Appendix
Appendix Ms REGIONS 11
Slide 12: Energy and oil exposure
Energy and oil exposure 12 Exposure E&P Risk Management • Energy related loans represented 4.3% of total loans outstanding as of 12/31/14 • ~70% of E&P loans in Texas, 20% in South Louisiana and remaining 10% disbursed geographically • In E&P portfolio ~76% tied to oil and 24% to natural gas • Oilfi
Slide 13: 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 14: Non-GAAP reconciliation: Net charge-off ratio
Non-GAAP reconciliation: Net charge-off ratio Select calculations for annualized net charge-offs as a percentage of average loans (GAAP) are presented in the table below. During the fourth quarter of 2013, Regions made the strategic decision to transfer certain primarily accruing restructured reside
Slide 15: 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 16: Non-GAAP reconciliation: Basel III common equity Tier 1
Non-GAAP reconciliation: Basel III common equity Tier 1 The following table provides calculations of “common equity Tier 1" (CET1) (non-GAAP), based on Regions’ current understanding of the Final Basel III requirements. In December 2010, the Basel Committee on Banking Supervision (the “Basel Committ
Slide 17: 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 18: A. REGIONS
A. REGIONS