Regions Financial Corporation · NYSE:RF
Regions Financial — 2012 Morgan Stanley Financials Conference
21 slides from Regions Financial's conference presentation, Jun 13, 2012
Slide 1: 2012 Morgan Stanley Financials Conference
Exhibit 99.1 2012 MORGAN STANLEY FINANCIALS CONFERENCE June 13, 2012 David Turner Chief Financial Officer
Slide 2: Franchise Overview
FRANCHISE OVERVIEW Business Services Small and mid-sized C&I lending Commercial Real Estate Equipment Finance Consumer Services Ranked 4th or Better in Market Share Targeted Growth Areas Mortgage Direct Lending Home Equity Indirect Auto • Bank Associates: 23,619 Credit Card • Assets: $128B • Loans:
Slide 3: Regions' footprint: high market share, high growth markets or both
REGIONS’ FOOTPRINT IS CHARACTERIZED BY EITHER HIGH MARKET SHARE, HIGH GROWTH MARKETS OR BOTH ($ in billions) ’10-’15 Top 10 MSAs Deposits Market Share Market Rank Population Growth Weighted Average Deposit Market Share in Regions’ Core Markets Birmingham, AL $11.0 37.6% 1 3.4% Market Nashville, TN $
Slide 4: A Quarter of Significant Accomplishment
A QUARTER OF SIGNIFICANT ACCOMPLISHMENT Key Milestones 1Q12 Results • No regulatory objection to Capital Plan • Closed Morgan Keegan Sale • Net income available to common • Successful common equity offering shareholders of $145MM or $0.11 per • Credit Ratings upgrade diluted share • Redeemed $3.5 bi
Slide 5: Marked Improvement in Asset Quality Metrics
MARKED IMPROVEMENT IN ASSET QUALITY METRICS NPL Gross Migration NPLs and Coverage Ratio 48% Decline* 30% Decline in Total NPLs* $3,087 116% 118% 120% $730 $755 $2,784 $2,710 115% $555 $561 $2,372 112% $2,151 110% $381 109% 105% 103% 100% 95% 1Q11 2Q11 3Q11 4Q11 1Q12 1Q11 2Q11 3Q11 4Q11 1Q12 NPLs ALL
Slide 6: Strong Funding Profile and Liquidity Position
STRONG FUNDING PROFILE AND LIQUIDITY POSITION Deposit Profile* 1Q12 Low Cost Deposits as a % of Total Funding 23% 19% Time 72% 71% Money Market 24% 29% Savings 6% 5% Interest Bearing 20% 14% Interest Free Regions Peer Median 29% 31% Low Cost Deposits* $79B $66B 1Q11 1Q12 Loans* / Deposits* Deposit C
Slide 7: Strong Capital Ratios
STRONG CAPITAL RATIOS • Tier 1 ratio is 14.3%, or 100 basis points higher linked quarter Tangible Common Equity / Tangible Assets • Tier 1 Capital adjusted to exclude TARP (2) stood at 10.6% at quarter-end 7.4% 6.2% 6.5% 6.6% • Basel III Tier 1 ratio estimated at 12.5% (1) 6.0% • Tier 1 Common ratio
Slide 8: Renewed Focus on C&I and Consumer Lending
RENEWED FOCUS ON C&I AND CONSUMER LENDING BUSINESS SERVICES Consumer services 39% of Total Loan Portfolio • 61% of Total Loan Portfolio • Focused on middle market and small business Consumer loan growth will be fueled by new businesses as • Broad based middle-market commercial loan growth across wel
Slide 9: Mix and Cost of Deposits Provide Opportunity to Lower Deposit Costs
MIX AND COST OF DEPOSITS PROVIDES FURTHER OPPORTUNITY TO LOWER DEPOSIT COSTS AND IMPROVE MARGIN Deposit Cost Opportunity Gap Deposit Mix Compared to Peers* 10 bps Time 7 bps 19% 49 bps Regions Other 50% 30 bps NIB 31% 1Q11 1Q12 Peer Median Regions Opportunity Gap • Regions has additional room to red
Slide 10: Funding Mix and Cash Deployment Aided Net Interest Margin
FUNDING MIX AND DEPLOYMENT OF CASH RESERVES HAS AIDED NET INTEREST MARGIN AND CLOSING THE GAP TO PEERS Impact of Excess Cash Reserves & Non- Regions has closed a portion of its gap vs. Accruals on NIM* peers in the last 5 quarters 3.35% 3.36% 3.35% 3.35% 3.32% 3.70% 3.65% 3.62% 3.60% 3.61% 0.16% 0.1
Slide 11: Ability to Adapt Business Model Mitigates New Legislation Impact
ABILITY TO ADAPT OUR BUSINESS MODEL HELPS MITIGATE NEW LEGISLATION IMPACT 1 1 Fee Income by Quarter • Adjusted non-interest revenue increased 3% linked quarter $519 $516 $505 $501 $490 • Mortgage revenues increased 35% linked 66 43 46 60 27 52 quarter and 71% over last year 25 24 28 28 26 23 45 50 2
Slide 12: Seasonal Increase in Expenses; Cost Containment Continues
SEASONAL INCREASE IN EXPENSES; COST CONTAINMENT CONTINUES TO BE A FOCUS 2 Headcount – Bank Associates • Non-interest expenses from continuing 24,356 operations were $913 million 23,966 1 23,713 23,707 23,619 • Adjusted non-interest expenses were 5% higher than prior quarter; however, down 2% year-ov
Slide 13: Opportunity for Outperformance
OPPORTUNITY FOR OUTPERFORMANCE • Tangible opportunity to close peer margin gap REVENUE • Over $11 billion of deposit repricing • Lower liquidity costs • Level of non-accruals • Continued momentum in C&I and Consumer lending • Real estate expertise intact • Durbin mitigation efforts underway • Ongoin
Slide 14: Appendix
APPENDIX Aw REGIONS “
Slide 15: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation may include forward-looking statements which reflect Regions’ current views with respect to future events and financial performance. The Private Securities Litigation Reform Act of 1995 (“ the Act” ) provides a “ safe harbor” for forward-looking statement
Slide 16: Non-GAAP Reconciliation: Non-Interest Expense and Non-Interest Revenue
NON-GAAP RECONCILIATION: NON-INTEREST EXPENSE AND NON-INTEREST REVENUE In the table below non-interest expense (GAAP) and non-interest income (GAAP) are presented excluding certain adjustments to arrive at adjusted non-interest expense (non-GAAP) and non-interest income (non-GAAP). Net interest inco
Slide 17: Non-GAAP Reconciliation: Tier 1 Capital
NON-GAAP RECONCILIATION: TIER 1 CAPITAL Regions Series A preferred stock was retired on April 4, 2012. The following tables present the calculations of Tier 1 capital and the Tier 1 capital ratio, adjusted as if the retirement occurred on the last day of the quarter for each period presented. The am
Slide 18: Non-GAAP Reconciliation: Tier 1 Common
NON-GAAP RECONCILIATION: TIER 1 COMMON The following table provides a reconciliation of stockholder’s equity to "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 calculation o
Slide 19: Non-GAAP Reconciliation: Basel III
NON-GAAP RECONCILIATION: BASEL III The following table provides calculations of Tier 1 capital and Tier 1 common, based on Regions’ current understanding of Basel III requirements. Regions currently calculates its risk-based capital ratios under guidelines adopted by the Federal Reserve based on the
Slide 20: Significant Reduction in High Risk Loan Portfolios
SIGNIFICANT REDUCTION IN HIGH RISK LOAN PORTFOLIOS Total Investor Real Estate Higher Risk Investor Real Estate Portfolio $6.2 $23.7 11.9 $4.0 $10.1 $2.0 11.8 9.1 $0.8 $0.8 $0.1 1Q07 1Q12 Land Condo Single Family Mortgage Construction 1Q07 1Q12 Reduced Investor Real Estate Reduced High Risk Portfolio
Slide 21: Regions
REGIONS
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