Regions Financial Corporation · NYSE:RF
Regions Financial — Barclays Global Financial Services Conference 2017
31 slides from Regions Financial's conference presentation, Sep 11, 2017
Slide 1: Barclays Global Financial Services Conference
Barclays Global Financial Services Conference September 11, 2017
Slide 2: Strategic initiatives
Grow and Diversify Revenue Leverage RecioXs 360° to grow customers and households and deepen existing relationships Prudently grow non-interest income Balance growth across geographies and businesses Disciplined Expense Management $400mm in expense saves by 2019 Continuously focus on efficiency and
Slide 3: 2017 YTD Results
(1) 2017 YTD Results Results reflect continued execution of our strategic plan Balance Sheet and Focused on the Profitability Capital Optimization Fundamentals • Net Income(2) increased 13% • Received no objection to • Grew checking accounts, YTD planned capital actions; Board households, credit car
Slide 4: Prudently managing loans
Prudently managing loans Average loans and leases 2Q17 Results and Outlook ($ in billions) • Average loan and lease balances remain relatively stable $82.0 • Total new and renewed loan production increased 46% $81.3 • Average consumer lending portfolio declined $87 million ◦ Continued to experience
Slide 5: Solid deposit mix
Solid deposit mix Average deposits by type 2Q17 Results and Outlook ($ in billions) Low-cost • Average deposits decreased $478 million $97.5 $97.9 $98.5 $98.0 $97.5 deposits • Average Consumer deposits increased $890 7.3 7.4 7.5 7.2 7.0 Time deposits million or 2%, reflecting the strength of the ret
Slide 6: Deposit advantage
Deposit advantage Deposits by Customer Type(1) Non-Interest Bearing Deposits Interest Bearing Deposits (Retail vs. Business) by Customer Type(1) by Customer Type(1) 2Q17 ($ in billions) ($ in billions) ($ in billions) Private Institutional $63 $36 $36 $36 $62 $62 $62 $61 Wealth* Trust* $35 $35 $1 $8
Slide 7: Deposit composition and pricing
Deposit composition and pricing (as of June 30, 2017) Interest bearing deposit betas Deposit funding composition Peer median = 4.5bps Peer median = 86% Peer median = 14.2% Peer median = 26% • Regions' predominantly deposit funded balance sheet, which includes an attractive mix of low cost deposits,
Slide 8: Net interest income growth and improving net interest margin
Net interest income(1) growth and improving net interest margin Net interest income(1) and net interest margin 2Q17 Results and Outlook ($ in millions) $904 • Net interest income(1) (FTE) increased $23 million $881 or 3%, and the net interest margin increased 7 bps $869 $874 $856 3.32% ◦ Both margin
Slide 9: Creating sustainable franchise value
Creating sustainable franchise value Non-interest income 2Q17 Results and Outlook ($ in millions) • Non-interest income increased $15 million or 3%; $599 includes the recognition of a $5 million deferred gain 55 associated with the sale of affordable housing $526 $522 $525 residential mortgage loans
Slide 10: Prudently managing expenses
Prudently managing expenses Non-interest expenses 2Q17 Results and Outlook ($ in millions) • Expenses increased $32 million or 4%; adjusted $934 expenses(1) increased $27 million or 3% $915 $909 22 $899 ◦ Salaries and Benefits increased $19 million and 26 $877 10 included full quarter impact of meri
Slide 11: Investing in growth initiatives
Investing in growth initiatives 2015-2016 2017-2018 • GreenSky • Additional point-of-sale opportunities • Fundation • Expansion of mortgage home loan direct channel • CMBS origination • Additional mortgage servicing rights • Regions.com powered by Avant acquisitions • Mortgage servicing rights acqui
Slide 12: Stable asset quality
Stable asset quality Net charge-offs and ratio NPLs and coverage ratio (1) ($ in millions) ($ in millions) $100 $1,078 $1,025 $995 $1,004 $83 87 773 $72 $68 745 684 694 $823 69 55 $54 50 556 48 0.51% 138% 135% 163% 124% 123% 0.41% 0.35% 0.34% 127% 0.26% 112% 104% 110% 106% 17 14 13 18 311 310 6 280
Slide 13: Strong capital levels
Strong capital levels Basel III Common Equity Tier 1 Ratio Capital Priorities Peer #1 12.3 RF 11.5 Peer #2 11.5 Peer #3 11.2 Peer #4 10.8 Peer #5 10.6 Peer #6 10.3 Peer #7 10.3 Peer #8 10.0 Peer #9 10.0 Peer #10 10.0 Peer #11 9.9 Peer #12 9.8 Peer #13 9.7 Peer #14 9.5 Note: Regions’ and peer CET1 ra
Slide 14: Robust capital returns
Robust capital returns Capital Returned to Shareholders • Received no objection to planned ($ in millions) $1,157 CCAR capital actions; Board authorized share repurchase program up to $1.47 billion, and a $927 29% increase in quarterly common stock dividend 839 • Remain committed to target CET1 rati
Slide 15: 2017 expectations
2017 expectations • Excluding the impact of the third-party indirect-vehicle portfolio, full year average loans are expected to be flat to slightly down compared to the prior year • Full year average deposits are expected to be relatively stable with the prior year • Net interest income and other fi
Slide 16: Executing on our strategy
Executing on our strategy 16 Note: The reconciliation with respect to forward-looking non-GAAP measures is expected to be consistent with the actual non-GAAP reconciliations included in the attached appendix. (1) Non-GAAP; see appendix for reconciliation
Slide 17: Appendix, Non-GAAP and Forward Looking Statements
Appendix, Non-GAAP and Forward Looking Statements 17
Slide 18: Our banking franchise
Our banking franchise Regions aims to be the premier regional financial institution in America Ranked 16th Nationally in Total Deposits(2) Branch Locations by State (1) Line of Business Coverage Alabama – 206 Louisiana – 99 • Corporate Banking Birmingham, Alabama • Business Capital Arkansas – 77 Mis
Slide 19: Strength of our markets
Strength of our markets Market Share Rank in Core States Market Share in High Growth Markets 78% 6 78% of total deposits are in our core states Alabama - Mississippi - Florida Louisiana - Tennessee - Arkansas 19 Source: SNL Financial As of 6/30/2016 FDIC summary
Slide 20: Commercial retail lending overview
Commercial retail lending overview Total retail • Approximately $250 million of outstanding balances across the REIT and IRE portfolios relate to shopping malls As of 6/30/17 • Portfolio exposure to REIT's specializing in enclosed malls consists of a small number of credits, all of which are investm
Slide 21: Energy lending overview
Energy lending overview Total energy As of 6/30/17 As of 3/31/17 Total Total • Total outstandings and commitments Commitments Commitments declined primarily due to paydowns and Loan / Including Loan / Including Lease Outstanding % $ % Lease Outstanding % $ % payoffs ($ in millions) Balances Balances
Slide 22: Energy lending - Oil Field Services and Exploration & Production detail
Energy lending - Oil Field Services and Exploration & Production detail Type As of 6/30/17 # of Clients* Commentary OFS Portfolio ($ in millions) Marine $395 8 Sector remains under stress. Approximately • 47% shared national credit (SNC) loans 45% of marine outstandings are under contract for remain
Slide 23: Loan balances by select states
Loan balances by select states Texas Louisiana Consumer Non-Real Estate Commercial - Energy Commercial - Energy Consumer Non-Real Estate Secured, $987 (Direct), $417 (Direct), $1,037 Secured, $295 Consumer Real Estate Consumer Real Secured, $1,121 Estate Secured, $1,137 $8.7B $4.1B Investor Real Est
Slide 24: Loan balances by select states
Loan balances by select states Alabama Mississippi Commercial- Energy Commercial - Consumer Non-Real Estate (Direct), $11 Energy (Direct), Consumer Non-Real Estate Secured, $822 $38 Secured, $347 Commercial - Consumer Real Estate Secured, $9.8B Commercial - Non- Energy, $5,069 Consumer Real Estate S
Slide 25: Non-GAAP reconciliation: Non-interest income, non-interest expense and efficiency ratio
Non-GAAP reconciliation: Non-interest income, non-interest expense and efficiency ratio The table below presents computations of the efficiency ratio (non-GAAP), which is a measure of productivity, generally calculated as non-interest expense divided by total revenue. Management uses this ratio to m
Slide 26: Non-GAAP reconciliation: Non-interest income, non-interest expense and efficiency ratio
Non-GAAP reconciliation: Non-interest income, non-interest expense and efficiency ratio The table below presents computations of the efficiency ratio (non-GAAP), which is a measure of productivity, generally calculated as non-interest expense divided by total revenue. Management uses this ratio to m
Slide 27: Non-GAAP reconciliation: Adjusted allowance for loan losses to non-performing loans
Non-GAAP reconciliation: Adjusted allowance for loan losses to non-performing loans, excluding loans held for sale The table below presents computations of the adjusted allowance for loan losses to non-performing loans, excluding loans held for sale ratio (non-GAAP), generally calculated as adjusted
Slide 28: Non-GAAP reconciliation: YTD return on average tangible stockholders' equity and EPS
Non-GAAP reconciliation: YTD return on average tangible stockholders' equity and earnings per common share from continuing operations The tables below present computations of "adjusted net income from continuing operations available to common shareholders," "adjusted return on average tangible commo
Slide 29: Forward-looking statements
Forward-looking statements This presentation may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. The terms “Regions,” the “Company,” “we,” “us” and “our” mean Regions Financial Corporation, a Delaware corporation, and its subsidiaries when or wh
Slide 30: Forward-looking statements continued
Forward-looking statements continued • Possible changes in consumer and business spending and saving habits and the related effect on our ability to increase assets and to attract deposits, which could adversely affect our net income. • Our ability to recruit and retain talented and experienced pers
Slide 31: Regions
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