Regions Financial Corporation · NYSE:RF
Regions Financial — Q2 2009 Earnings Presentation
20 slides from Regions Financial's earnings presentation, Jul 21, 2009
Slide 1: Regions Financial 2nd Quarter Earnings Conference Call
Exhibit 99.3 *************** *************** *************** *************** *************** *************** *************** *************** *************** *************** Regions Financial *************** *************** 2nd Quarter Earnings Conference Call *************** July 21, 2009 **********
Slide 2: Forward-Looking Statements
Forward-Looking Statements The information contained in 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 f
Slide 3: Summary of Second Quarter 2009 Results
Summary of Second Quarter 2009 Results › Loss per diluted share of $0.28 › Average customer deposits up $2.5 billion or 3%, including a $1.5 billion or 8% increase in average non-interest bearing deposits; Average loans declined 1% on lower overall demand › Credit quality › Annualized net charge-off
Slide 4: Significant Earnings Drivers
Significant Earnings Drivers After-tax Per Share (in millions) Pre-Tax Impact Significant Items: Trust preferred exchange gain $ 61 $ 0.04 VISA shares sale gain 80 0.06 Securities gains 108 0.08 Leveraged lease termination gain 189 0.13 FDIC special assessment (64) (0.05) Securities-related impaimen
Slide 5: Credit Perspective
Credit Perspective Portion of the loan portfolio that is under stress comprises 8.4% of the total, down $4 billion since the beginning of 2008. 4Q 2007 2Q 2009 Change Loan % of Loan % of ($ in millions) Balance Portfolio Balance Portfolio $ % Homebuilder Land $ 2,926 2.2 % $ 1,273 1.3 % $(1,653) (56
Slide 6: Success in Reducing Most Problematic Exposures
Success in Reducing Most Land Portfolio – $3.5 billion $2.8 billion (45%) decrease since 12/31/2006 Problematic Exposures 7,000 6,000 5,000 4,000 Homebuilder Portfolio – $3.8 billion $3.4 billion (47%) decrease since 12/31/2007 3,000 2,000 1,000 8,000 - 7,000 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08
Slide 7: Non-Performing Loans Coverage
Non-Performing Loans Coverage Coverage Ratio (ALL/NPL) 1.04 1.02 1.74 1.13 0.87 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 Q2 '08 Q3 '08 Q4 '08 Q1 '09 Q2 '09 Non-performing Loans Allowance for Loan Losses Excludes loans held for sale
Slide 8: Credit Costs
Credit Costs 1Q09 2Q09 Variance (in millions) $ bps $ bps $ bps Net Charge-offs Valuation Losses 92 62 129 87 37 25 Other Losses 135 91 174 117 39 26 Business Services 227 153 303 204 76 51 Residential First Mortgage 39 102 51 131 12 29 Equity Lending 95 238 113 285 18 47 Other Consumer 29 246 24 21
Slide 9: Non-performing Assets Rollforward
Non-performing Assets Rollforward ($ in millions) 2Q 2008 3Q 2008 4Q 2008 1Q 2009 2Q 2009 Beginning Non-Performing Assets* $ 1,204 $ 1,621 $ 1,642 $ 1,295 $ 1,935 Additions $ 730 $ 721 $ 1,004 $ 1,116 $ 1,758 Payments (52) (70) (82) (55) (116) Returned to Accruing Status (9) (19) (44) (34) (10) Char
Slide 10: Loan Trends
Loan Trends Loan Portfolio - Average Balances ($ in millions) 3/31/2009 6/30/2009 $ Change % Change Commercial & Industrial $ 23,095 $ 22,707 $ (388) -2% Commercial Real Estate - Non Owner-Occupied 15,215 16,081 866 6% Commercial Real Estate - Owner-Occupied 11,773 11,983 210 2% Construction - Non O
Slide 11: Outstanding Customer Deposit Growth
Outstanding Customer Deposit Growth Deposit Portfolio - Average Balances (In millions) 3/31/2009 6/30/2009 % Change Low Cost Deposits $58,813 $60,865 3% Non-interest Bearing Deposits 18,896 20,421 8% Customer Deposits 91,627 94,086 3% Corporate Treasury Deposits 610 949 56% Total Deposits $92,237 $9
Slide 12: Strong Deposit Growth has Decreased the Need for Wholesale Funding
Strong Deposit Growth has Decreased the Need for Wholesale Funding $105 $100 $95 $90 Customer $85 deposits up 10.9% Sept ’08 to June ‘09 $80 $75 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 Loans Customer Deposits
Slide 13: As Expected - Net Interest Income and Margin Stabilized
As Expected - Net Interest Income and Margin Stabilized › Taxable-equivalent net interest 6.00 5.75 income of $840 million - up $23 5.50 million 5.25 5.00 › Steady net interest margin of 4.75 4.50 2.62%, declined 2 basis points 4.25 › falling short-term interest rates have 4.00 now flowed through th
Slide 14: Non-Interest Revenues Higher
Non-Interest Revenues Higher 1Q09 2Q09 % Change Non-interest revenue (GAAP) $ 1,066 $ 1,199 Leveraged lease termination gains 323 189 Securities gains 53 108 VISA shares sale gain - 80 Trust preferred exchange gain - 61 Adjusted non-interest revenue $ 690 $ 761 10% › Service charges income higher re
Slide 15: Solid Morgan Keegan results
Solid Morgan Keegan results › Fixed Income Capital Markets remain strong › 8th National rank in municipal bond underwriting › Private Client, Equity Capital Markets and Asset Management revenues rebound versus prior quarter › Positive trends in account openings and customer asset inflows › Efficienc
Slide 16: Non-interest Expenses
Non-interest Expenses › Salaries and benefits cost higher primarily due to brokerage- related incentive costs › Higher FDIC insurance expense ›$64 million of increase due to special assessment › $69 million other than temporary impairment charges on securities › Projected expense reduction of 2-4% i
Slide 17: Capital Plan Execution Achieved – $2.5 Billion Requirement
Capital Plan Execution Achieved – $2.5 Billion Requirement › Common Stock Offering $1.8 billion › Mandatory Convertible Preferred $ 278 million › Sale of Agency Mortgage Securities $66 million › Sale of Visa Shares $50 million › Trust Preferred Exchange $172 million › Deferred Tax Asset $213 million
Slide 18: First Half Results vs. SCAP Stress Case
First Half Results vs. SCAP Stress Case (in millions) RF SCAP Difference Net Charge-offs $ (881) $ (2,300) $ 1,419 Provision Over Charge-offs (456) - (456) Total Loan Loss Provision (1,337) (2,300) 963 PPNR* 1,367 1,225 142 Pre-tax $ 30 $ (1,075) $ 1,105 * RF PPNR adjusted to exclude Q209 securities
Slide 19: Capital Ratios Strengthened
Capital Ratios Strengthened 1Q09 2Q09 (1) Total Risk-Based Capital Ratio 14.6% 16.3% Tier 1 Capital Ratio 10.4% 12.2% Tier 1 Common 6.5% 8.1% (1) Current quarter ratios are estimated › Tier 1 and Total Risk-Based capital significantly strengthened › Tier 1 Capital $6.9 billion in excess of “Well Cap
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