Regions Financial Corporation · NYSE:RF
Regions Financial — Investor Presentation (September 2021)
80 slides from Regions Financial's investor presentation, September 2021
Slide 1: Investor Information August - September 2021
Exhibit 99.1 Investor Information August - September 2021
Slide 2: Table of contents
Table of contents Topic Page # Profile and Strategy 3-8 Income Statement 9-21 Business Segment Highlights 22-26 Balance Sheet 27-30 Capital, Debt & Liquidity 31-36 Technology & Continuous Improvement 37-41 Credit 42-55 Near-Term Expectations 56 Environmental, Social & Governance 57-61 LIBOR Transiti
Slide 3: Our banking franchise
Our banking franchise Ranked 18th in the U.S. in total deposits(1) Line of business coverage First Sterling Ascentium Business Capital Capital Markets Commercial Banking Corporate Banking Equipment Finance Government/Institutional Institutional Services Birmingham, Alabama Private Wealth Real Estate
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 18th 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 16 of top 25 markets with net migration 60% of top(3) MSAs are projected to grow faster than inflows are within our footprint(1) the U.S. national average Population growth vs. peers(2) (2021-2026) Top Faster Market '21-'26 Population Growing MSAs Deposits Rank(3) G
Slide 6: Regions receives top honors
Regions receives top honors Regions Bank Ranked Seven Years Strong: Regions Highest in Customer Regions Bank named Best Regions Bank Awarded Bank Again Named Gallup Satisfaction in J.D. Power Places to work for LGBTQ Bronze Military Friendly Exceptional Workplace Award 2020 U.S. Online Banking Equal
Slide 7: Second quarter 2021 overview
Second quarter 2021 overview Net Income Available to $748M Common Shareholders Diluted Earnings Per $0.77 Share Adjusted Total $1,563M Revenue(1) • Adjusted pre-tax pre-provision income(1) increased 3% YoY • Adjusted efficiency ratio(1) Adjusted Non- $895M Interest Expense(1) improved 80bps YoY to 5
Slide 8: Poised for growth
Poised for growth Committed to continuous expansion of platforms and capabilities Innovating through digital investments and enhancing our customer experiences to generate shareholder return Digital investments Business segments Strong & recovering generate return prove resilient markets Online and
Slide 9: Net interest income and net interest margin - liquidity impacts
Net interest income and net interest margin - liquidity impacts NII(1) and NIM ($ in millions) $985 $978 $975 3.36% 3.40% 3.31% 3.19% 2.81% 3.02% 2Q20 1Q21 2Q21 NII(1) NIM NIM excl. PPP/Cash(2) • In 2Q, deposit and cash balances remained elevated given stimulus / liquidity in the system. • PPP and c
Slide 10: Net interest income and net interest margin - core drivers
Net interest income and net interest margin - core drivers Core(1) NII Attribution Drivers of Core NII and adjusted NIM(1) • Rate environment impacts offset through active Offset ongoing impacts of $936 reinvestment through balance balance sheet management sheet management strategies $929 ◦ Hedging
Slide 11: Balance sheet profile
Balance sheet profile (as of June 30, 2021) • Naturally asset sensitive balance sheet, supported by a large, Portfolio compositions Borrowin… stable deposit base and low reliance on wholesale borrowings Assets(1) Liabilities 2% Other Other 2% • NII sensitivity to short-term rates has been largely pr
Slide 12: Balance sheet management
Balance sheet management Cash management update • Recent liquidity inflows represent an NII ~$36B Avg Deposit Growth (Dec 2019 to June 2021) opportunity, with cash deployment dependent on: • Deposit growth broadly distributed across ◦ stability of deposit inflows products, businesses, and industries
Slide 13: Earnings stability and hedging
Earnings stability and hedging NIM Performance vs Peers Cash-flow Hedge Contribution to NII - 2Q21(3)(4) 3.52% 10.8% 3.49% 3.45% 3.5 3.37% 3.39% 3.40% 3.36% 3.32% 3.31% 8.3% WAL remaining on 3.19% 7.1% CF Hedges(5) 3.39% 3.36% 3.13% 3.35% 6.0% 3.27% 3.26% 3.22% 5.2% 4.7% 4.6% 3 3.1 2.8 2.8 2.81% 3.3
Slide 14: Hedging strategy update
Hedging strategy update Hedge Notional Maturity Profile Long-term NII Sensitivity Profile to Rates Hedge Notional 1mo. LIBOR 1Q notional reductions Cumulative NII growth (2021-2024) - scenarios assume no 2Q notional reductions Current No Hedges(5) loan growth in any 2Q unwinds offset by Hedges scena
Slide 15: NII exposure to the yield curve
NII exposure to the yield curve Spot Yield Curve • Historically, Bank valuations are closely 2.00% 3.50% correlated with the steepness of the yield curve 30Y Mtg: US Treasury Rates 10Y UST: 3.00% Mortgage Rates -50bps -37bps 1.50% 2.50% ◦ The typical indicator for steepness often 2.00% used is the 1
Slide 16: Interest rate exposure of future business and long-term rates
Interest rate exposure of future business and long-term rates • The majority of Regions’ residual NII exposure to interest rates Fixed / float loan mix(1) 100% comes from future business activities and cash-flow reinvestment; 90% full-year 2021 estimate: 80% 70% ◦ ~$11B fixed-rate loan production (e
Slide 17: Non-interest income
Non-interest income QoQ highlights & outlook Change vs • Service charges impacted by 3 additional business days. Changes in customer behavior and customer ($ in millions) 2Q21 1Q21 2Q20 benefits from enhancements to overdraft practices and transaction posting are likely to Service charges on deposit
Slide 18: Diversified non-interest income
Diversified non-interest income 2Q21 fee revenue by segment(1) Consumer ($ in millions) • Consumer fee income categories include service charges on deposit accounts, card and ATM fees, and mortgage income generated through origination and servicing of residential mortgages Wealth Management • Wealth
Slide 19: Leverage operating advantage to grow mortgage share and relationships
Leverage operating advantage to grow mortgage share and relationships Market Prime Delivery Mortgage Investing Strength Portfolio Efficiency Servicing For Growth Closed mortgages 753 Avg. FICO 62% lower Servicing expense in Investments in expected to have origination and line with peer people, proce
Slide 20: Non-interest expense
Non-interest expense Adjusted non-interest expense(1) QoQ highlights & outlook ($ in millions) $898 $918 $895 • Adjusted non-interest expenses impacted primarily by lower capital markets' incentive 57.7% 56.9% compensation, payroll taxes and legal and 56.8% professional fees, partially offset by an
Slide 21: Industry leading PPI profile
Industry leading PPI(1) profile Adjusted PPI(1) to RWA(2) 2.50% 2.34% 2.31% 2.10% 2.05% 2.05% 2.05% 2.04% 2.00% 1.93% 1.82% 1.74% 1.71% 1.69% RF Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 Peer 11 Peer 12 Peer 13 • Regions' 2Q pre-tax pre-provision income (PPI)(1) increase
Slide 22: Business segments
Business segments 2Q21 Pre-tax pre- 2Q21 Average 2Q21 Average provision income(1) loans deposits 6% 2% 7% 33% 35% 41% $684M 53% $85B $131B 63% 60% Consumer Corporate Wealth Management (1) Pie %'s exclude the pre-tax pre-provision income from the Other Segment totaling $31 million. 22
Slide 23: Consumer Banking Group
Consumer Banking Group Strategic investments and prudent cost management driving growth, customer satisfaction, and effectiveness • Maximizing customer value and meeting consumer demand through an optimized distribution network • Industry outperformance in checking growth and primacy vs. peers • Re-
Slide 24: Corporate Banking Group
Corporate Banking Group 2021: Delivering proactive solutions to our clients Non-Interest Income PPP Loan Balances ($ in millions) ($ in billions) $357 $3.6 Our associates delivered results $285 $2.9 Jun20 YTD Jun21 YTD 12/31/20 06/30/21 Capital Markets Income Other PPP1 Service Charges on Deposit Ac
Slide 25: Wealth Management
Wealth Management Focus on execution while capitalizing on our investments in industry-leading technology to optimize the client and associate experience. Customer Experience • Maintained strong momentum in growth markets and protected business through and Communication continued engagement and comm
Slide 26: Continuing our momentum
Continuing our momentum Corporate Banking Group: ® • Focused on executing core business disciplines centered on delivering Regions 360 through providing proactive, tailored solutions to meet clients’ needs • Areas of focus ◦ Ensuring full channel access to Ascentium and introducing Regions' capabili
Slide 27: Loans picking up momentum
Loans picking up momentum Adjusted loans and leases(1) QoQ highlights & outlook • Adjusted ending loans increased 1% QoQ, providing momentum for loan growth in 2H21. (Average, $ in billions) • Commercial pipelines have surpassed pre- $85.8 pandemic levels, production remains strong, and $79.3 $79.2
Slide 28: Deposit growth continues
Deposit growth continues Average deposits by segment QoQ highlights & outlook ($ in billions) $131.1 • Average deposits grew across all three $122.9 0.4 business segments QoQ, primarily due to 0.4 9.5 $110.9 9.3 higher account balances, but also from 0.4 8.4 strong new account growth. 43.0 40.3 ◦ YT
Slide 29: 2Q21 Average loan composition
2Q21 Average loan composition Average consumer loans Average business loans ($ in billions) ($ in billions) $16.8 $5.4 $0.3 $28.5B $43.1 $56.1B $5.5 $0.9 $1.1 $0.7 $1.8 $2.2 $6.8 Mortgage Indirect-Vehicles Commercial and Industrial CRE Mortgage - OO Indirect-Other Home Equity CRE Construction - OO I
Slide 30: PPP loan details
PPP loan details ($ in millions) 2Q20 3Q20 4Q20 1Q21 2Q21 Round 1-average $ 3,213 $ 4,558 $ 4,143 $ 3,171 $ 2,401 Round 2-average — — — 627 1,500 Total-average $ 3,213 $ 4,558 $ 4,143 $ 3,798 $ 3,901 NII(1) $ 18 $ 31 $ 54 $ 40 $ 43 Round 1-ending $ 4,498 $ 4,594 $ 3,624 $ 2,974 $ 1,438 Round 2-endin
Slide 31: Capital and liquidity
Capital and liquidity Tier 1 capital ratio(1) Common equity Tier 1 Loan-to-deposit ratio(2) ratio(1) 11.9% 11.9% 10.3% 10.4% 78% 65% 64% 10.4% 8.9% 2Q20 1Q21 2Q21 2Q20 1Q21 2Q21 2Q20 1Q21 2Q21 QoQ Highlights & Outlook • During 2Q, Regions declared $147M in common dividends. • Stress Capital Buffer r
Slide 32: CET1 waterfall
CET1 waterfall 0.6% 0.2% 10.3% 10.4% (0.1)% (0.1)% (0.1)% (0.2)% (0.2)% Pre-tax pre- 1Q21 Provision Preferred Common Tax & Share Increase in 2Q21 provision CET1% benefit(2) expense(3) Dividend Other Repurchases RWAs CET1%(4) income(1) 32 (1) Non-GAAP; see appendix for reconciliation. (2) Provision b
Slide 33: 2Q21 - 4Q21 projected preferred stock expense
2Q21 - 4Q21 projected preferred stock expense ($ in millions) Regions Preferred Par Value 2Q21 3Q21E 4Q21E Series A $500.0 $21.8 $— $— Series B $500.0 $8.0 $8.0 $8.0 Series C $500.0 $7.1 $7.1 $7.1 Series D $350.0 $5.0 $5.0 $5.0 Series E $400.0 $— $6.5 $4.5 Total $41.9 $26.6 $24.6 • Series A shares w
Slide 34: Significant protection
Significant protection 2Q21 CET1 + Additional Loss Absorbency(1)(2) % of RWA 13.29% 13.25% 13.14% 0.52% 12.59% 12.55% 1.39% 1.21% 0.31% 0.27% 12.21% 12.03% 11.80% 11.74% 11.70% 11.66% 11.63% 1.75% 0.95% 0.47% 0.21% 0.08% 0.06% 11.27% 11.16% 1.56% 0.16% 0.26% —% 1.53% 1.56% 1.64% 1.84% 1.44% 1.40% 1.
Slide 35: Optimizing capital while continuing to invest
Optimizing capital while continuing to invest Investments Talent and Technology Corporate Bank Consumer Bank • Expansion in priority growth markets • Acquired Ascentium Capital April 1, • Announced EnerBank USA acquisition • Corporate bankers, MLOs, Wealth Advisors 2020; largest independent equip. (
Slide 36: Regions unsecured debt and credit ratings profile
Regions unsecured debt and credit ratings profile Debt maturity profile(1) Select credit ratings ($ in millions) Moody's S&P Fitch Regions Financial Corporation $1,000 $900 Senior Unsecured Debt Baa2 BBB+ BBB+ $800 500 Subordinated Debt Baa2 BBB BBB 1,000 750 Regions Bank $100 300 $0 $0 Senior Unsec
Slide 37: Empowered by innovation & data
Empowered by innovation & data Expanding Influence of Data & Personalization Platform Modernization ® Efforts Deposit & Lending Modernization Modernization of the Bank's Core Systems Omnichannel view of customers for a to enable product and service innovation “You Know Me & Value Me” experience New
Slide 38: Differentiating through Customer Experience
Differentiating through Customer Experience Digital Acceleration Innovating Operations Regions Secure Messaging Mobile Enhancements 81% Customer Satisfaction Rating Digital 4.8 iOS App Rating New Mobile features include Chat functionality, Mobile Users up Statements, Zelle Two-Way SMS Authentication
Slide 39: Continue to invest for the future
Continue to invest for the future 10% System Maintenance New Technology 42% 48% Cybersecurity / Risk Management • Regions remains competitive by reserving ~10-11% of revenue for Technology Spend. • Past investment on innovation and strategy provided a firm, resilient foundation for addressing change
Slide 40: Growth in digital
Growth in digital Active Digital Banking Users Active Mobile Banking Users Digital Banking Log-Ins(4) (Millions) (Millions) (Millions) 9% YoY 13% YoY 2.21 311 2.13 285 280 3.0 3.1 2.8 170 1.95 147 161 138 141 118 2Q20 1Q21 2Q21 2Q20 1Q21 2Q21 2Q20 1Q21 2Q21 Mobile Banking Log-Ins Online Banking Log-
Slide 41: Continuous improvement initiatives delivering solid results
Continuous improvement initiatives delivering solid results Initiative tracker Expense initiatives (% represents $ of savings) Initiatives Total Initiatives to be number of complete completed initiatives Revenue 20 10 30 Organizational efficiency, Top 6-10 25 8 33 1% effectiveness & simplification T
Slide 42: Asset quality
Asset quality Net charge-offs and ratio ACL to loans ratio ($ in millions) ($ in millions) $182 132 2.82% 2.57% 2.68% 2.07% 1.71% 2.44% 2.00% 0.80% $83 1.71% 46 0.40% $47 Day 1 (2) 2Q20 1Q21 2Q21 50 23 37 24 0.23% (1) ACL/Loans (incl. PPP) ACL/Loans (excl. PPP) 2Q20 1Q21 2Q21 • 2Q annualized NCOs at
Slide 43: Allowance for credit losses waterfall
Allowance for credit losses waterfall ($ in millions) QoQ highlights $2,068 • 2Q ending allowance decreased $384M due to continued improvement in the $(47) economic outlook and expectations of improving credit performance in certain $1,684 sectors / clients. $(265) $(72) • The benefits of the improv
Slide 44: Base R&S economic outlook
Base R&S economic outlook (as of June 2021) Pre-R&S period 2Q2021 3Q2021 4Q2021 1Q2022 2Q2022 3Q2022 4Q2022 1Q2023 2Q2023 Real GDP, annualized % change 6.8 % 6.1 % 6.2 % 5.1 % 3.4 % 3.0 % 2.3 % 2.3 % 2.1 % Unemployment rate 5.8 % 5.2 % 4.9 % 4.6 % 4.4 % 4.2 % 4.0 % 3.9 % 3.8 % HPI, year-over-year %
Slide 45: Allowance allocation
Allowance allocation As of 6/30/21 As of 12/31/20 (in millions) Loan Balance ACL ACL/Loans Loan Balance ACL ACL/Loans C&I $42,628 $756 1.77 % $42,870 $1,027 2.40 % CRE-OO mortgage 5,381 150 2.79 % 5,405 242 4.47 % CRE-OO construction 245 13 5.37 % 300 24 7.98 % Total commercial $48,254 $919 1.90 % $
Slide 46: COVID-19 high-risk industry sectors
Bottom up review informs and narrows COVID-19 high-risk industry sectors (as of June 30, 2021) % of Utilization C&I Portfolio BAL$(1) BAL$ Rate(2) % Criticized Energy – Oil & Gas Extraction, Oilfield Services, Coal $1.02b 1.2% 50% 27% Consumer Services & Travel – Amusement, Arts and Recreation, Char
Slide 47: COVID-19 high-risk industry sectors waterfall
COVID-19 high-risk industry sectors waterfall ($ in billions) QoQ highlights • COVID high-risk industries are continuously refined to those exhibiting higher levels of stress due to COVID impact. • Previous specifically identified at-risk assets were removed from the $3.36 $0.22 methodology. $(0.20)
Slide 48: Commercial & IRE loans
Commercial & IRE loans Pending Review As of 6/30/21 Total Outstanding ($ in millions) Commitments Balances % Utilization Administrative, Support, Waste & Repair $2,548 $1,531 60% •The outstanding balance for Agriculture 650 358 55% Real Estate within the Educational Services 3,947 2,841 72% Commerci
Slide 49: Energy lending
Energy lending As of 6/30/21 Total Outstanding ($ in millions) # of Clients (1) Commitments Balances % Utilization $ Criticized % Criticized Oilfield services and supply (OFS)(2) 144 $426 $275 65% $24 9% Exploration and production (E&P)(2) 96 1,315 724 55% 247 34% Midstream 25 1,574 568 36% 97 17% D
Slide 50: Energy lending (continued)
Energy lending (continued) Balances by Category Gross Losses $1,500 $ (Millions) $1,200 $140 $135.9 $900 $600 $300 $120 $0 E& P ice s m m er ns $100 r v t r ea t r ea Ot h Lo a dS e ds wn s P l Mi o PP $ (Millions) i e D $80 $75.1 lf Oi $60 1Q2015 2Q2021 $40 $36.7 $33.0 Balance Trend $28.5 $20 $10.8
Slide 51: Restaurant lending
Restaurant lending As of 6/30/21 % of Total Outstanding Outstanding ($ in millions) # of Clients* Commitments Balances % Utilization $ Criticized Criticized Quick Service 16,153 $1,265 $1,004 79% $55 5% Casual Dining 27 476 316 66% 256 81% Other 20 144 107 74% 66 62% PPP Loans 2,342 342 342 100% — —
Slide 52: Hotel lending
Hotel lending As of 6/30/21 % of Total Outstanding Outstanding ($ in millions) # of Clients* Commitments Balances % Utilization $ Criticized Criticized CRE-Unsecured (REITs) 10 $709 $511 72% $345 68% IRE – Mortgage 19 309 297 96% 282 95% IRE – Construction — — — —% — —% Consumer Services 3,718 144 1
Slide 53: Commercial retail lending
Commercial retail lending As of 6/30/21 Total Outstanding ($ in millions) # of Clients* Commitments Balances % Utilization $ Criticized % Criticized CRE-Unsecured (REITs) 22 $2,612 $973 37% $0 —% IRE 131 673 635 94% 76 12% C&I 26,090 2,626 1,322 50% 12 1% CRE-OO 821 834 796 95% 18 2% ABL 20 1,105 29
Slide 54: Loans to Small Business and Small Farms
Loans to Small Business and Small Farms (outstanding balances as of June 30, 2021) Balances by Industry Balances by State Healthcare 14% 14% Real Estate 13% Florida 28% 21% Transportation & Warehousing 11% 28% Alabama 10% 13% Professional, Scientific & Technical Services 9% 38% Tennessee 9% 8% $7.4B
Slide 55: Consumer lending portfolio statistics
Consumer lending portfolio statistics Consumer Third Party Residential Mortgage Lending Consumer Credit Card • Avg. origination FICO 750 • Avg. origination FICO 754 • Avg. origination FICO 776 • Current LTV 58% • Avg. new line $28,984 • Avg. new line $5,289 • 97% owner occupied • 46% home improvemen
Slide 56: 2021 expectations
2021 expectations FY 2021 Category Expectations Stable to up modestly Total Adjusted Revenue (dependent on timing & amount (from adjusted 2020 of $6,206)(1)(2) of PPP forgiveness) Adjusted Non-Interest Expense Stable to up modestly (from adjusted 2020 of $3,541)(1)(2) Adjusted Average Loans Down low
Slide 57: ESG - Environmental
ESG - Environmental Regions' Climate Commitment Regions acknowledges the climate challenges that face our planet and is committed to both further reducing our environmental footprint and exploring new ways to support our customers and third parties in their own efforts to enact similar change. 2021
Slide 58: ESG - Social
ESG - Social Our mission at Regions is to achieve superior economic value for our shareholders over time by making life better for our customers, our associates and our communities and creating shared value as we help them meet their financial goals and aspirations. We do this by providing competiti
Slide 59: ESG - Governance
ESG - Governance We consider proper shareholder 43 engagement to be a continuous Specific components of COVID-19 Board and Committee relationship throughout the year, with Regions' ESG-related Board oversight meetings in 2020 both Directors and management, policies, practices, and of Regions' throug
Slide 60: ESG - Recognitions and resources
ESG - Recognitions and resources State Street MSCI Global Advisors S&P Global Sustainalytics AA 63 S&P 500 Low-Risk ESG Rating R-Factor Score ESG Index ESG Risk Rating Human Rights JUST Capital JUST Capital Disability Equality FTSE Russell Campaign Index 100 Top 100 Companies Score in 2021 2021 Supp
Slide 61: Making banking easier
Making banking easier Providing transparency, simplicity and speed into how accounts work Improved New Product - Visibility and Enhanced Product Coming Transparency Features Soon Expanded Alert Capabilities Simplified Transaction Posting Order New Checking Account Product – ◦ Balance alerts based on
Slide 62: LIBOR Transition
LIBOR Transition Readiness & the Path Forward Key Considerations Regions' Approach & Timeline Despite a relatively short timeline until banks can no longer originate LIBOR-linked financial products, uncertainty remains around the market’s direction for alternative Q4 2020: Mortgage ARMs are rates. R
Slide 63: EnerBank USA acquisition
EnerBank USA acquisition Approvals finalized; expected close 10/1/2021 Company Overview • Headquartered in Salt Lake City, UT, EnerBank USA Portfolio Overview originates prime and super-prime home improvement LTM Originations Heat Map(1) point-of-sale loans through a national network of contractors
Slide 64: EnerBank USA acquisition
EnerBank USA acquisition Approvals finalized; expected close 10/1/2021 Home Improvement Point-of-Sale Financing Deepens Regions' Commitment to Being the Premier Lender to Homeowners Regions has been on a multi-year journey investing in products, services and omni-channel origination capabilities cen
Slide 65: EnerBank USA acquisition
EnerBank USA acquisition Approvals finalized; expected close 10/1/2021 Proven Performance Through Cycles Modeling Considerations Valuation ($ in millions) Prime/Super-prime focus and well controlled underwriting processes have generated best in Purchase Price $960 class credit metrics through econom
Slide 66: EnerBank USA acquisition
EnerBank USA acquisition Approvals finalized; expected close 10/1/2021 Home Improvement Finance Market Loan Balances(3) Opportunity(1) (in billions) Home Improvement Expenditures: $506B 8.1% Annual growth from 2018 - 2021 h owt $3.0 d Gr st aine $2.5 Professional Market(2): S u $156B $1.9 $1.4 $1.2
Slide 67: Appendix
> GENERATING Consistent Sustainable Kone term Performance APPENDIX AM REGIONS] 67
Slide 68: Non-GAAP information
Non-GAAP information Management uses pre-tax pre-provision income (non-GAAP) and adjusted pre-tax pre-provision income (non-GAAP), as well as the adjusted efficiency ratio (non-GAAP) and the adjusted fee income ratio (non-GAAP) to monitor performance and believes these measures provide meaningful in
Slide 69: Non-GAAP reconciliation: core net interest income and adjusted net interest margin
Non-GAAP reconciliation: core net interest income and adjusted net interest margin Quarter-ended 6/30/2021 3/31/2021 Net interest income (FTE) (GAAP) $ 975 $ 978 Impact of SBA PPP loans (43) (40) Impact of excess cash (3) (2) Core net interest income (FTE) (non-GAAP) $ 929 $ 936 Net interest margin
Slide 70: Non-GAAP reconciliation: adjusted average loans
Non-GAAP reconciliation: adjusted average loans Average Balances ($ amounts in millions) 2Q21 1Q21 4Q20 3Q20 2Q20 2Q21 vs. 1Q21 2Q21 vs. 2Q20 Commercial and industrial $ 43,140 $ 42,816 $ 43,889 $ 46,405 $ 49,296 $ 324 0.8 % $ (6,156) (12.5)% Add: Commercial loans held for sale reclassified to the p
Slide 71: Non-GAAP reconciliation: adjusted full year average loans
Non-GAAP reconciliation: adjusted full year average loans Average Balance Tweleve Months Ended ($ amounts in millions) December 31, 2020 Total Loans $ 87,813 Add: Commercial loans held for sale reclassified to the portfolio 1 Less: SBA PPP Loans 2,986 Less: Indirect—other consumer exit portfolio 1,4
Slide 72: Non-GAAP reconciliation: adjusted ending loans
Non-GAAP reconciliation: adjusted ending loans As of 6/30/2021 6/30/2021 ($ amounts in millions) 6/30/2021 3/31/2021 12/31/2020 9/30/2020 6/30/2020 vs. 3/31/2021 vs. 6/30/2020 Commercial and industrial $ 42,628 $ 43,241 $ 42,870 $ 45,199 $ 47,670 $ (613) (1.4)% $ (5,042) (10.6)% Add: Commercial loan
Slide 73: Non-GAAP reconciliation: non-interest expense
Non-GAAP reconciliation: non-interest expense Year Ended December 31 ($ amounts in millions) 2020 2019 2018 2017 2016 Non-interest expense (GAAP) $ 3,643 $ 3,489 $ 3,570 $ 3,491 $ 3,483 Adjustments: Contribution to Regions Financial Corporation foundation (10) — (60) (40) — Professional, legal and r
Slide 74: Non-GAAP reconciliation: ACL/Loans excluding PPP
Non-GAAP reconciliation: ACL/Loans excluding PPP As of ($ amounts in millions) 6/30/2021 3/31/2021 12/31/2020 9/30/2020 6/30/2020 Total Loans $ 84,074 $ 84,755 $ 85,266 $ 88,359 $ 90,548 Less: SBA PPP Loans 2,948 4,317 3,624 4,594 4,498 Loans excluding PPP, net (non- GAAP) $ 81,126 $ 80,438 $ 81,642
Slide 75: Non-GAAP reconciliation: Pre-tax pre-provision income (PPI)
Non-GAAP reconciliation: Pre-tax pre-provision income (PPI) Quarter Ended ($ amounts in millions) 6/30/2021 3/31/2021 12/31/2020 9/30/2020 6/30/2020 2Q21 vs. 1Q21 2Q21 vs. 2Q20 Net income (loss) available to common shareholders (GAAP) $ 748 $ 614 $ 588 $ 501 $ (237) $ 134 21.8 % $ 985 415.6 % (1) Pr
Slide 76: Non-GAAP reconciliation: NII, non-interest income/expense, operating leverage and efficiency ratio
Non-GAAP reconciliation: NII, non-interest income/expense, operating leverage and efficiency ratio Quarter Ended ($ amounts in millions) 6/30/2021 3/31/2021 12/31/2020 9/30/2020 6/30/2020 2Q21 vs. 1Q21 2Q21 vs. 2Q20 Non-interest expense (GAAP) A $ 898 $ 928 $ 987 $ 896 $ 924 $ (30) (3.2)% $ (26) (2.
Slide 77: Forward-looking statements
Forward-looking statements Forward-Looking Statements This presentation may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not based on historical information, but rather are related to future operations, strategi
Slide 78: Forward-looking statements (continued)
Forward-looking statements (continued) • Our ability to comply with stress testing and capital planning requirements (as part of the CCAR process or otherwise) may continue to require a significant investment of our managerial resources due to the importance of such tests and requirements. • Our abi
Slide 79: Forward-looking statements (continued)
Forward-looking statements (continued) • Possible downgrades in our credit ratings or outlook could, among other negative impacts, increase the costs of funding from capital markets. • The effects of a possible downgrade in the U.S. government’s sovereign credit rating or outlook, which could result
Slide 80: Generating Consistent Sustainable Long-term Performance
> GENERATING Consistent Sustainable \ Long-term Performance A REGIONS Ma REGIONS] 80
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