Regions Financial Corporation · NYSE:RF
Regions Financial — 2019 Barclays Americas Select Franchise Conference
22 slides from Regions Financial's conference presentation, May 15, 2019
Slide 1: Regions Financial Corporation 2019 Barclays Americas Select Franchise Conference
Regions Financial Corporation 2019 Barclays Americas Select Franchise Conference John Turner, President and Chief Executive Officer May 15, 2019
Slide 2: Cautionary note on forward-looking statements
Cautionary note on forward- looking statements This presentation includes 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,” “esti
Slide 3: Our banking franchise
Our banking franchise Ranked 15th in the U.S. in total deposits(2) Branch locations by state (1) Alabama – 197 Louisiana – 95 Birmingham, Alabama Line of business coverage Arkansas – 72 Mississippi – 117 Florida – 305 Missouri – 62 Georgia – 117 North Carolina – 7 Illinois – 46 South Carolina – 23 I
Slide 4: Top market share plays a valuable role in the competitive landscape
Top market share plays a valuable role in the competitive landscape Markets with top 5 market share(1) • Ranked 15th in the U.S. in total deposits(1) • 86% of deposits in 7 states: Alabama, Tennessee, Florida, Louisiana, Mississippi, Georgia, Arkansas • Top 5 or better market share in ~70% of MSAs a
Slide 5: Presence in strong growth markets
Presence in strong growth markets Population Growth vs. Peers(1) (2019-2024) More than 60% of top(2) MSAs are projected to grow faster than the U.S. national average Peer #1 5.1% Market Top MSAs Deposits Rank(2) '19-'24 Population Growth RF 3.6% Nashville, Tennessee $7.6 3 Peer #2 3.6% Tampa, Florid
Slide 6: Our footprint has significant economic advantages
Our footprint has significant economic advantages Markets Jobs Population Footprint Retirees 42% of all new jobs 51% of all U.S. 35% of the U.S. GDP 6 of the top 10 states created in the US since population growth in generated in our where retirees are 2009 were in our last 10 years occurred footpri
Slide 7: Deposit advantage
Deposit advantage Expected to continue Average deposits by customer type NIB deposits to total deposits(1) Deposit costs(1) (Retail vs. Business) 1Q19, ($ in billions) Peer #14 Peer #14 Private Institutional Peer #13 Peer #13 Wealth(3) Services(3) RF 36% Peer #11 $7 $1 Peer #12 RF 47 bps Peer #11 Pe
Slide 8: Positioned to support NIM profile through 2021
Positioned to support NIM profile through 2021 Net Interest Margin Forecast(1) Assumptions - Upper Range Upper End =3.70% • Modest GDP growth and stable credit environment • Increases in market interest rates through 2021 3.55% 3.53% • Fed Funds between 2.75% and 3.00% 3.49% Current Range • 10-year
Slide 9: Diversification through comprehensive concentration framework
Diversification through comprehensive concentration framework Industry Concentrations Geographic Concentrations • Risk Appetite driven approach • Market scorecards are product Concentration Risk Framework • Multi-tiered hierarchy specific e.g., Consumer vs. Investor Real Estate 9 sectors, 24 industr
Slide 10: Focus on risk-adjusted returns
Focus on risk-adjusted returns Capital Optimization Investments Mortgage Corporate/Commercial Mortgage Servicing Rights • Sold ~$1.3B of primarily under- • ~$86B of loan exposures • Over the last three years ~$16B in MSR performing loans in recent years have been reviewed in depth bulk purchases by
Slide 11: Simplify and Grow: a continuous improvement journey
Simplify and Grow: a continuous improvement journey 2018 - 2019 YTD successes • Completed 12 of 46 Simplify and Grow initiatives Making Banking Easier • Completed organizational simplification Revenue Growth including spans and layers improvements Efficiency Improvements • 2.0M calls handled by AI v
Slide 12: Focused technology strategy
Focused technology strategy Innovation Customer Experiences • Continue deployment of AI • Mobile-first thinking • Strategic investments and • Continued digitization of customer partnerships experiences • Talent acquisition • Making banking easier • Develop processes that enable continuous agility Co
Slide 13: Significant spending on new technology initiatives
Significant spending on new technology initiatives 2019 technology investment Strong technology Investments (11% of 2018 revenue) in place continue Cybersecurity & risk management • Single branch platform • AI and Robotics • New SEI wealth platform • Voice New technology • New nCino commercial • Mob
Slide 14: Prudently managing and optimizing capital
Prudently managing and optimizing capital Adjusted ROATCE(1) Capital priorities 16.5% 16.3% 9.0% 53 Organic growth 2015 2018 2019 YTD Dividends Dividend per common share Strategic investments $0.46 $0.23 $0.14 Share repurchases 2015 2018 2019 YTD (1) Non-GAAP; see appendix for return on average tang
Slide 15: Near-term and long-term expectations
Near-term and long-term expectations 2019 Expectations Three-Year Expectations (2019-2021) FY 2019 Category Expectations Category Expectations Adjusted average loan growth Low to mid-single 2021 adjusted return on average 18% - 20% (from adjusted 2018 of $77,667 million)(1) digits tangible common eq
Slide 16: Why Regions?
Why Regions? 1 FOOTPRINT advantage 2 Valuable DEPOSIT FRANCHISE Focus on risk adjusted returns and 3 PROFITABILITY ENHANCED risk management and 4 governance infrastructure Simplify and Grow underpins 5 LONG-TERM PERFORMANCE 16
Slide 17: Appendix
> GENERATING Consistent Sustainable \ Long-term Performance APPENDIX AM REGIONS 17
Slide 18: Footprint economic advantages source references
Footprint economic advantages source references Fact Source Bureau of Labor Statistics. "Employment, Hours, and Earnings from the Current Employment Statistics Survey." Databases, Tables & Calculators by Subject, 18 Feb. 2019, data.bls.gov/ Job Growth timeseries/CES0000000001. Accessed 18 Feb. 2019.
Slide 19: Forecast model assumptions
Forecast model assumptions (as of April 30, 2019) Upper Range 2018 2019 2020 2021 Real GDP, annual % change 2.9% 2.6% 1%- 2% 2%- 3% 10-year U.S. Treasury Yield, average of daily figures 2.9% 2.8% 3.0% 3.0% Fed Funds Target - Upper End, average of daily figures 1.9% 2.5% 2.8% 3.0% Stable Yield Curve
Slide 20: Non-GAAP information
Non-GAAP information This document contains non-GAAP financial measures, which exclude certain items management does not consider indicative of the Company’s on-going financial performance. Management believes that the exclusion of these items provides a meaningful base for period- to-period compari
Slide 21: Adjusted net income and Return on average tangible common equity
Adjusted net income and Return on average tangible common equity Quarter Ended Year Ended ($ amounts in millions) 3/31/2019 12/31/2018 12/31/2015 ADJUSTED RETURN ON AVERAGE TANGIBLE COMMON STOCKHOLDERS' EQUITY Net income from continuing operations available to common shareholders (GAAP) A $ 378 $ 1,
Slide 22: Generating Consistent Sustainable Long-term Performance
> GENERATING Consistent Sustainable \ Long-term Performance A REGIONS Mx REGIONS 2
Regions Financial — 2019 Barclays Americas Select Franchise Conference on 6ix