Regions Financial Corporation · NYSE:RF
Regions Financial — Barclays Global Financial Services Conference 2016
22 slides from Regions Financial's conference presentation, Sep 13, 2016
Slide 1: Barclays Global Financial Services Conference September 14, 2016
Barclays Global Financial Services Conference September 14, 2016 Exhibit 99.1
Slide 2: Strategic initiatives
Strategic initiatives Effectively Deploy Capital Disciplined organic growth Return appropriate capital to shareholders Use strategic investments to leverage our infrastructure and enhance revenue diversification Disciplined Expense Management Generate positive operating leverage Continuous
Slide 3: 2016 YTD results
2016 YTD results Expanded customer base as checking accounts, households, credit cards and wealth relationships grew Recognized as having the best overall reputation among U.S. banks and among the top 10% in online experience Successfully completed annual Comprehensive Capital Analysis and Review (C
Slide 4: Non-interest income – Source of sustainable franchise value
Non-interest income (1) Non-GAAP; see appendix for reconciliation (2) Total Wealth Management income presented above does not include the portion of service charges on deposit accounts and similar smaller dollar amounts that are also attributable to the Wealth Management segment. (3) Other income in
Slide 5: Investments are paying off while prudently managing expenses
Investments are paying off while prudently managing expenses ($ in millions) 2016 – 35 to 45% Elimination of core expenses of $300 million over the next 3 years(2) Hiring restrictions for non-customer facing positions started Oct 2015 Streamlining and automating processes to reduce personnel needs 6
Slide 6: Industry leading capital ratios
Industry leading capital ratios Note: Regions’ ratio is estimated at 6/30/16. Peers include BBT, CMA, FHN, FITB, HBAN, HBHC, KEY, MTB, PNC, SNV, STI, USB and ZION. Source: SNL Financial 9.5% 9.8% 9.8% 9.8% 9.9% 10.0% 10.0% 10.1% 10.5% 10.6% [VALUE] 11.0% 11.1% 12.0% Peer #13 Peer #12 Peer #11 Peer #
Slide 7: Prudently managing deposits; competitive advantage for our franchise
Prudently managing deposits; competitive advantage for our franchise 7 Certain collateralized deposits within Wealth Management and Corporate segments declined due to planned reductions Deposit costs remained near historically low levels at 12 basis points Funding costs remained low at 29 basis poin
Slide 8: Prudently managing balance sheet
Prudently managing balance sheet Average loan and lease balances 8 $81.5 ($ in billions) $80.8 $79.2 $80.6 $82.0 Consumer loan balances increased 2% compared to 4Q15(1) with growth in almost every category Business loan balances increased 1% compared to 4Q15(1) Direct energy loans declined $324 mill
Slide 9: Net interest income and other financing income and net interest margin
Net interest income and other financing income and net interest margin (1) During the fourth quarter of 2015, Regions corrected the accounting for certain leases which had previously been included in loans. The cumulative effect on pre-tax income lowered net interest income and other financing incom
Slide 10: Asset quality
Asset quality -6% TDR decrease YOY Charge-offs YTD 34 bps Coverage ratio(1) 112% 10 Decline in direct energy loan balances since 2Q15 11% Total direct energy loans as a % of total loans 2.9% Loan loss allowance up from 8.0%(2) 9.4% (1) Represents the percentage of allowance for loan and lease losses
Slide 11: 2016 Expectations
2016 Expectations • Average loan growth less than 3%(1)(2) • Average deposits relatively stable(1)(3) • Net interest income and other financing income up 2% - 4% • Adjusted non-interest income up 4% - 6% • Adjusted expenses flat to up modestly; full year efficiency ratio <63% • Adjusted operating le
Slide 12: Why Regions? – Building sustainable franchise value
Why Regions? – Building sustainable franchise value Effectively Deploy Capital Grow and Diversify Revenue Disciplined Expense Management Adjusted EPS growth of 12-15% (CAGR) Adjusted efficiency ratio of <60% Adjusted ROATCE 12-14% Three pillars of execution Long-term expected results How we intend t
Slide 13: Appendix
Appendix Mx REGIONS 1
Slide 14: Energy lending overview
• Total outstandings and commitments declined primarily due to paydowns and payoffs • Allowance for loan and lease losses was 9.4% of direct energy balances at 6/30/16 vs 8.0% at 3/31/16 • No second lien exposure outstanding within the energy portfolio • Leveraged loans account for 14% of energy rel
Slide 15: Energy lending - Oil Field Services and Exploration & Production detail
Energy lending - Oil Field Services and Exploration & Production detail Type As of 6/30/16 # of Clients* Commentary Marine $457 9 Client selection is strong with ~61% of exposure tied to clients with contract protection through 2016. Expect some additional stress into 2017 as E&P companies focus on
Slide 16: Loan balances by select states: Texas, Louisiana
Loan balances by select states Texas Louisiana Note: Intelligence from our customer assistance program (CAP) reveals no noticeable increase in assistance requests in these markets to date. Investor Real Estate Balances by City ($ in millions) Office Retail Multi- Family Single Family Other Total Hou
Slide 17: Loan balances by select states: Alabama, Mississippi
Loan balances by select states Alabama Mississippi Investor Real Estate Balances by City ($ in millions) Office Retail Multi- Family Single Family Other Total Birmingham $32 $40 $30 $15 $24 $141 Huntsville 49 16 6 9 3 83 Mobile / Baldwin County 2 17 3 3 15 40 Other 17 20 21 13 20 91 Total $100 $93 $
Slide 18: Non-GAAP reconciliation: Non-interest income, non-interest expense and efficiency ratio
Non-GAAP reconciliation: Non-interest income, non-interest expense and efficiency ratio NM - Not Meaningful (1) Regions recorded $3 million, $50 million and $100 million of contingent legal and regulatory accruals during the second quarter of 2016, the second quarter of 2015, and the fourth quarter
Slide 19: Non-GAAP reconciliation continued
Non-GAAP reconciliation continued: YTD Non- interest income, non-interest expense, efficiency ratio and operating leverage (1) See page 7 of 2Q16 Financial Supplement for additional detail on these adjustments. 19
Slide 20: Forward-looking statements
Forward-looking statements This presentation may include forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995, which reflect Regions’ current views with respect to future events and financial performance. Forward-looking statements are not based on historica
Slide 21: Forward-looking statements continued
Forward-looking statements continued The foregoing list of factors is not exhaustive. For discussion of these and other factors that may cause actual results to differ from expectations, look under the captions “Forward-Looking Statements” and “Risk Factors" of Regions' Annual Report on Form 10-K fo
Slide 22: Regions
A. REGIONS
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