Regions Financial Corporation · NYSE:RF
Regions Financial — 2011 Bank of America Merrill Lynch Banking and Financial Services Conference
40 slides from Regions Financial's conference presentation, Nov 15, 2011
Slide 1: 2011 Bank of America Merrill Lynch Banking and Financial Services Conference
2011 Bank of America Merrill Lynch Banking and Financial Services Conference November 15, 2011 David Turner Chief Financial Officer Exhibit 99.1
Slide 2: Why Regions?
Why Regions? • Strong Southeastern franchise with comprehensive line of product offerings • Leading brand favorability and exceptional service quality • Solid core business performance • Aggressively identifying and disposing of problem assets • Capital and liquidity remain solid
Slide 3: Regional Bank Focused in the Southeast
Regional Bank Focused in the Southeast Ranked 4 th or Better in Market Share Targeted Growth Areas Associates: 26,881 Assets: $130B Loans: $79B Deposits: $96B Branches: 1,767 Morgan Keegan Offices: 303 Insurance Offices: 30 ATMs: 2,130 Market Cap: $5.3B* * As of October 27, 2011
Slide 4: Regions' Footprint is Characterized by Either High Market Shares, High Growth Markets or Both
Regions’ Footprint is Characterized by Either High Market Shares, High Growth Markets or Both Weighted Average Deposit Market Share in Regions’ Core Markets Top 10 MSAs Deposits Market Share Market Rank ’10-’15 Population Growth Birmingham, AL $11.0 37.6% Nashville, TN $6.6 17.3% Miami, FL $4.8 3.1%
Slide 5: Comprehensive and Diversified Line of Product Offerings
Comprehensive and Diversified Line of Product Offerings Business Services Consumer Services Wealth Management – Small and mid- sized C&I lending – Commercial Real Estate – Equipment Finance – Mortgage – Home Equity – Credit Card – Direct Lending – Indirect Auto – Private Banking – Insurance – Trust
Slide 6: Competitive Advantage Driven by Customer Loyalty
Competitive Advantage Driven by Customer Loyalty Regions continues to perform in the top 10% in customer loyalty and top 20% for branch service quality (1) (1) Based on Gallup survey (2) Based on Prime Performance study (3) 2010 Greenwich Excellence Award #1 in Customer Service and “Friendliest” Ban
Slide 7: Excellent Service Quality and Brand Strength Being Recognized
Excellent Service Quality and Brand Strength Being Recognized Regions Ranks Highest in Brand Favorability (1) (1) Based on 4 Quarter Rolling Average from TNS Consumer Banking Market Effectiveness Study as of June 30, 2011 Note: Banks in study include: Bank of America, BB&T, BBVA Compass, Citigroup,
Slide 8: Quality Loans Key to Profitable Growth: Portfolio Mix
Quality Loans Key to Profitable Growth Portfolio Mix* *Ending Balances
Slide 9: Regions has Continued to Grow C&I Loans
Regions has Continued to Grow C&I Loans
Slide 10: & REGIONS |
& REGIONS |
Slide 11: Slide 11
Slide 12: Slide 12
Slide 13: Slide 13
Slide 14: Slide 14
Slide 15: aie on
— aie on @> REGIONS |
Slide 16: We have made great strides in improving deposit mix and funding costs
We have made great strides in improving deposit mix and cost and funding costs 3Q11 2Q11 3Q10 Total Funding Cost 102 bps Total Funding Cost 80 bps Total Funding Cost 75 bps Deposit Cost 70 bps Deposit Cost 53 bps Deposit Cost 46 bps 7 bps Improvement 24 bps Improvement Low Cost Deposits 74% Time Dep
Slide 17: Balance Sheet Opportunities Remain: Deposit Cost Opportunity Gap
Balance Sheet Opportunities Remain 40 38 Deposit Cost Opportunity Gap 2Q11 3Q11 Peer Median Regions Opportunity Gap Note: Peer banks include BAC, BBT, CMA, FITB, KEY, MTB, PNC, STI, USB, WFC • Regions has additional room to reduce deposit costs even further • Opportunity to reduce deposit costs, mos
Slide 18: Net Interest Margin Impacted by Cash Reserves and Non-Accrual Loans
Net Interest Margin Impacted by Cash Reserves and Non-Accrual Loans Note: Peer banks include BAC, BBT, CMA, FITB, KEY, MTB, PNC, STI, USB, WFC
Slide 19: Service Charge Income Remains Strong
Service Charge Income Remains Strong Service Charge Growth
Slide 20: Expense control continues to be a focus
Expense control continues to be a focus * On an adjusted basis, refer to appendix for non-GAAP reconciliation Source: SNL Financial – excludes nonrecurring expenses Note: Peer banks include BAC, BBT, CMA, FITB, KEY, MTB, PNC, STI, USB, WFC
Slide 21: Idd paisnipy
Idd paisnipy Ms. REGIONS |
Slide 22: Significant Reduction in Highest Risk Portfolio Segments
Significant Reduction in Highest Risk Portfolio Segments Reduced Investor Real Estate $13.9 B or 54% over 4 years Reduced High Risk Segments $11.5 B or 85% over 4 years Total Investor Real Estate Higher Risk Investor Real Estate Segments
Slide 23: Credit Quality Metrics Linked Quarter
Credit Quality Metrics Linked Quarter Net charge-offs declined 7% Provided less than net charge-offs for nd straight quarter Non-performing loans declined 3% Non-performing assets declined 6% Business Services criticized loans declined 8% Loan loss allowance to net loans declined 11bps to 3.73% Deli
Slide 24: Non-Performing Assets Decline 6%
Non-Performing Assets Decline 6% NPL and NPA to Loans Non-Performing Assets (1) NPAs (inc. 90+ past due) / Loans, foreclosed properties and non-performing loans held for sale
Slide 25: Substantial Improvement in Loan Loss Provision; Allowance Well Above Peers
Substantial Improvement in Loan Loss Provision; Allowance Well Above Peers (1) Loan charge-offs related to Sales and Transfer to Held for Sale Note: Peer banks include BAC, BBT, CMA, FITB, KEY, MTB, PNC, STI, USB, WFC
Slide 26: Strong Capital
Strong Capital * Non-GAAP – see appendix for reconciliation ** Non-GAAP - Subject to change as interpretation of Basel III rules is ongoing and dependent on guidance from Basel and regulators; see appendix for reconciliation
Slide 27: Solid Liquidity
Loans / Deposits Core Deposits as a % of Total Funding Solid Liquidity Note: Peer banks include BAC, BBT, CMA, FITB, KEY, MTB, PNC, STI, USB, WFC
Slide 28: As REGIONS |
As REGIONS |
Slide 29: Regions' Business Plan
Regions’ Business Plan is for all associates to Focus on customers, build relationships customers value and manage risks. Executing this plan with excellence will result in a high-performing financial institution. Business Plan Focus on the Customer Build Sustainable Performance Enhance Risk Managem
Slide 30: Stronger Company Today
Stronger Company Today 4Q07 3Q11 Change Investor Real Estate $23B $12B 48% Reduction Allowance for Loan Losses $1.3B $3.0B More than doubled Tier 1 Common Ratio* 6.6% 8.2% 160 bps improvement Low Cost Deposits $60.3B $75.5B 25% Growth Loan to Deposit 100% 83% Strong Liquidity * Non-GAAP – see append
Slide 31: Forward-Looking Statements
Forward-Looking Statements This presentation may include forward-looking statements which reflect Regions’ current views with respect to future events and financial performance. The Private Securities Litigation Reform Act of (“the Act”) provides a “safe harbor” for forward-looking statements which
Slide 32: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($ in millions) 3Q10 4Q10 1Q11 2Q11 3Q11 Net interest income (GAAP) $ $ $ $ $ Non-interest income (GAAP) 1,213 Adjustments: Securities (gains) losses, net (2) (333) (82) (24) Leveraged lease termination (gains) / losses - (59) - - Loss (gain) on sale of mortgage loans - (26)
Slide 33: Non-GAAP Reconciliation: Capital
Non-GAAP Reconciliation: Capital ($ amounts in millions, except per share data) 9/30/11 6/30/11 3/31/11 12/31/10 9/30/10 TIER 1 COMMON RISK-BASED RATIO Stockholders' equity (GAAP) 17,263 $ 16,888 $ 16,619 $ 16,734 $ 17,163 $ Accumulated other comprehensive (income) loss (93) (208) Non-qualifying goo
Slide 34: Non-GAAP Reconciliation: Capital / Basel III
Non-GAAP Reconciliation: Capital / Basel III ($ amounts in millions) 09/30/11 Stockholders' equity (GAAP) 17,262 Non-qualifying goodwill and intangibles (1) (5,820) Adjustments, including other comprehensive income related to cash flow hedges, disallowed deferred tax assets, threshold deductions and
Slide 35: Continued Improvement in Early Stage Credit Metrics
Continued Improvement in Early Stage Credit Metrics *Includes classified loans and special mention loans
Slide 36: Credit Quality Metrics
Credit Quality Metrics * Previous presentation showed 2Q11 on a pro-forma basis to include completed bulk sale after quarter-end. Current presentation shows actual 2Q11 and 3Q11 numbers as reported.
Slide 37: Credit Fundamentals
Credit Fundamentals * Previous presentation showed 2Q11 on a pro-forma basis to include completed bulk sale after quarter-end. Current presentation shows actual 2Q11 and 3Q11 numbers as reported.
Slide 38: Allowance Coverage Remains Strong
Allowance Coverage Remains Strong
Slide 39: Conservative Marks and Reserves Already Taken on Impaired Loans
Conservative Marks and Reserves Already Taken on Impaired Loans Note1: Impaired loans include non-accrual commercial and investor real estate loans, excluding leasing, and all TDRs (including accruing commercial, investor real estate, and consumer TDRs) Note 2: Book value represents the unpaid princ
Slide 40: Adequately Reserved for Troubled Debt Restructurings
Adequately Reserved for Troubled Debt Restructurings September 30, 2011 Consumer loans make up 50% of accruing troubled debt restructurings Foreclosure rate less than half of the industry average ($ millions) Loan Allowance for Allowance as a % Balance Credit Losses of Loan Balance Accruing: Commerc