Regions Financial Corporation · NYSE:RF
Regions Financial — Investor Presentation (March 2003)
29 slides from Regions Financial's investor presentation, Mar 4, 2003
Slide 1: Regions
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Slide 2: Forward-Looking Statement
Forward-Looking Statement The formation contained inthis presentation may peu forward ooking statment that eet Regions” cunent views with egpect fo future events andl financial performance. Regions” management believes that these forward-looking statements are reasonable, however, ‘you should not pl
Slide 3: Company Profile
Company Profile Asset size: $47.9 billion at Dec. 31, 2002 Among 25 largest U.S. banks Geographic footprint: Banking offices in 9 states Brokerage offices in 15 states Insurance relationships throughout U.S. # of banking offices: 689 #of ATM’s: 764 # of brokerage offices: 142 # of households: 2.0 mi
Slide 4: Regions — A Diversified Provider of Financial Products and Services
Regions — A Diversified Provider of Financial Products and Services @ Banking @ a io Brokerage & rokerage ani Investment Servi ayaike 9 = ei Employee Berefits Commercial Personal Insurance MA Insurance @ Insurance Regions
Slide 5: Regions Footprint
Regions Footprint Fae Morgan Keegan Offbe=| | Rebsamen Coes mses wih Cumere Barking Offs
Slide 6: Results of 2002 and Focus for 2003
Results of 2002 1. Lines of business 2. Asset quality 3. Improved balance sheet mix Focus for 2003 1. Asset quality 2. Banking franchise 3. Capital management Regions
Slide 7: 2002 Highlights
2002 Highlights e@ Record earnings — 22% increase based on net income — 12% increase adjusted for FAS 142 — Fee income totals 45% of total revenue (excluding securities gains) @ Record year for lines of business — Brokerage — Mortgage — Insurance Specialty finance @ Improved credit quality — Declini
Slide 8: 2002 Highlights: Selected Ratios
2002 Highlights Selected Ratios Performance Ratios: 12/31/02 Return on equity 15.27% Return on tangible equity 20.56 Return on assets 1.34 Capital Ratios: Equity to assets 8.72% Tier 1 leverage 6.92 Tier 1 risk-based 8.98 Total risk-based 13.84 12/31/01 13.49% 17.61 1.14 8.89% TAL 9.66 13.23
Slide 9: Record Net Income: Morgan Keegan
$20 $16 $12 $8 $4 $0 2002 Highlights Record Net Income Morgan Keegan net income S$ in millions $16.8 $13.2 $118 $98 1902 2Q02 3Q02 4Q02
Slide 10: Record Mortgage Earnings
$757 $65 $55 $45 $35 $25 $15 2002 Highlights Record Mortgage Earnings (excluding impairment) Mortgage division earnings Sin millions $293 $35.0 $672 2000 2001 12 Regions
Slide 11: Strong Fee Income: Insurance Division Revenues
$807 $70 $60 $50 $40 $30 $20 $10 $0 2002 Highlights Strong Fee Income G Insurance division revenues 8 in millions $663 $48.2 $173 2000 2001 2002 Regions
Slide 12: Improved Credit Quality
2002 Highlights Improved Credit Quality @ 2"¢ consecutive quarter of declining NPA’s — $34.3 million decline in third quarter — $22.2 million decline in fourth quarter Regions
Slide 13: Improved Credit Quality: NPAs
$400. $3380 $360 $340 $320 $300. 2002 Highlights Improved Credit Quality ONPA's S$ in millions $374.8 $364.1 $340.5 $3184 1902 2Q02 3Q02 4Q02 Regions
Slide 14: Improved Credit Quality
2002 Highlights Improved Credit Quality @ 24 consecutive quarter of declining NPA’s — $34.3 million decline in third quarter — $22.2 million decline in fourth quarter @ Declining 90+ days past due loans — Four consecutive quarters of decline — Lowest level since December 2000 Regions
Slide 15: 90+ Days Past Due Loans
$507 $40 $30 $20 Sin millions 90+ days past due loans $449 $43.2 $42.2 $385 1902 2Q02 3Q02 4902 Regions
Slide 16: Total Loan Delinquencies Five Year Trend
2002 Highlights Improved Credit Quality 3.50% 4 Total Loan Delinquencies 3.00% Five Year Trend 2.50% 2.00% + 1.50% 1.20% 1.00% 0.50% 4 0.00% Dec-97 Dec-98 Dec-99 Dec-00 Dec-01 Dec-02 Regions
Slide 17: Improved Credit Quality
2002 Highlights Improved Credit Quality @ 24 consecutive quarter of declining NPA’s — $34.3 million decline in third quarter — $22.2 million decline in fourth quarter @ Declining 90+ days past due loans — Four consecutive quarters of decline — Lowest level since December 2000 e@ Lower charge-offs in
Slide 18: Net Loan Losses at Regions Historically Below Industry
1.60% 1.40% 1.20% 1.00% 0.80% 0.60% 0.40% 0.20% 0.00% Net Loan Losses at Regions Historically Below Industry + Regions = Industry* 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 * FDIC-insured commercial banks through September 30, 2002, annualized. 0 Regions
Slide 19: Loan Portfolio Mix
1Q01 4% 3% 2% Commercial Hl Residential mortgages Hl Other real estate Construction a 4Q02 2% 1mt% i Branch installment Wi Indirect installment [Consumer lines of credit li Student loans
Slide 20: Commercial Real Estate Charge Off Experience
Commercial Real Estate Charge Off Experience 0.4 —e Regions — > Peer Group* 0.3 0.2 0.1 0 -0.1 -0.2 T T T T T T T T T T 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 *Peer Group includes AmSouth, BB&T, Comerica, Compass, Fifth Third, National Commerce, SouthTrust, SunTrust, Union Planters, Wacho
Slide 21: Deposit Mix Results in Lower Cost of Funding
CD's Deposit Mix Results in Lower Cost of Funding $13.5 “= CD's Transaction accounts $16.0 $13.0 4 S in billions . 7 $15.0 $12.5 + g $12.0 4 y Si40 8 3 $11.5 + & + $13.0 & $11.0 5 3 $10.5 4 y $120 2 $10.0 7 + $11.0 5 $9.5 + + $10.0 $9.0 + s $8.5 + + + + + + + $9.0 Mar-01 Jun-01 Sep-01 Dec-01 Mar-02
Slide 22: 2003 Focus
2003 Focus e Asset Quality e Banking Franchise 4 Streamlining « Sales e@ Capital Management Regions
Slide 23: 2003 Focus: Streamlining Banking Division
2003 Focus Streamlining Banking Division e@ Combining banking units into 15 groups @ Consolidating duties @ Provides opportunities for improving cost structure Regions 2s gyo
Slide 24: 2003 Focus: Branch Expansion Strategy
2003 Focus Streamlining Banking Division e Branch Expansion Strategy « De Novo expansion in growth markets « Plan to open 30 to 40 branches in 2003 « Incorporating additional financial discipline into expansion strategy to obtain maximum return on investment Regions 6
Slide 25: 2003 Focus: Sales Strategies
2003 Focus Sales Strategies @ Retail — Chart-the-Course « Leadership in Financial Services « Profile MainSail Book of Business 4 Mid-Year Sales Review « New Tracking and Reporting System @ Commercial Sales Process « Piloted in Texas — 30% Increase in Sales « All Lenders and Bank Presidents Trained «
Slide 26: Improved Performance Through Capital Allocation
2003 Focus Improved Performance Through Capital Allocation @ Management tool for allocating capital within the company @ Consistent framework for comparing returns from business units, products or customers @ Optimizing returns on capital creates stakeholder value Regions 2%
Slide 27: Regions Financial
Regions Financial A consistent performer With a strong balance sheet Operating in markets in the South Acompany that has changed itself before With continued good performance Now it’s changing again to better serve: — Its customers — Its stakeholders Regions » gyo
Slide 28: Debt Ratings
Debt Ratings S&P Moody’s Fitch Regions Financial Corp. Subordinated Debt A- AQ Trust Preferred Securities BBB+ al Regions Bank Short-Term Debt/CD’s A-l P-1 Long-Term Debt/CD’s At Aa3
Slide 29: Regions
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