Regions Financial Corporation · NYSE:RF
Regions Financial — Q4 2011 Earnings Presentation
20 slides from Regions Financial's earnings presentation, Jan 24, 2012
Slide 1: Regions Financial 4th Quarter Earnings Conference Call
Exhibit 99.3 Regions Financial 4th Quarter Earnings Conference Call January 24, 2012
Slide 2: Disciplined Execution of Business Plans
Disciplined Execution of Business Plans Full-Year 2011 Results 4Q11 Results Net loss of ($429) million or ($0.34) Earnings Per Share Net loss of ($602) million or ($0.48) Earnings Per Share 1 1 $211 million net income from continuing operations $118 million net income from continuing operations or $
Slide 3: Divestiture of Morgan Keegan
Divestiture of Morgan Keegan › Announced an agreement to sell Morgan Keegan to Raymond James on January 11, 2012 › Total consideration for sale is $1.18 billion: purchase price of $930 million and expected pre-close $250 million dividend payment by Morgan Keegan to Regions › Expected to close first
Slide 4: 4Q11 Financial Highlights
4Q11 Financial Highlights ($ in millions, except EPS) 4Q10 3Q11 4Q11 4Q11 vs. 3Q11 4Q11 vs. 4Q10 From Continuing Operations Net Interest Income $ 863 $ 850 $ 849 $ (1) 0% $ (14) -2% Non-Interest Revenue 920 513 507 (6) -1% (413) NM 1 990 850 871 21 2% (119) -12% Non-Interest Expense Pre-tax Pre-prov
Slide 5: NPL Inflows Decreased / NPLs Current and Paying as Agreed Increased 3%
NPL Inflows Decreased / NPLs Current and Paying as Agreed Increased 3% Business Services Gross NPLs NPL Inflows by Type Current and Paying as Agreed $ in millions Ending Balances $948 48% 45% $755 42% $730 37% 38% $555 $561 4Q10 1Q11 2Q11 3Q11 4Q11 4Q10 1Q11 2Q11 3Q11 4Q11 Land/Condo/Single Family I
Slide 6: Non-Performing Assets Declined 12%
Non-Performing Assets Declined 12% Non-Performing Assets › Non-performing loans, $ in billions excluding loans held for sale, declined $338 million $3.9 $3.9 $3.6 or 12% $0.3 $0.4 $3.4 $0.4 $0.4 › Non-performing assets $0.4 $0.4 $3.0 $3.2 $0.4 declined $395 million or $3.1 $0.3 $0.3 $2.8 $2.7 $0.3 1
Slide 7: Loan Loss Provision Declined 17%
Loan Loss Provision Declined 17% Loan Loss Provision Allowance and Coverage $ in millions $ in millions $800 $3,400 130% $682 $700 $3,185 $3,186 $3,200 $3,120 120% 169 $600 $398 $482 $355 $2,964 $3,000 116% 110% $500 111 151 $295 112% 153 $400 165 109% $2,800 $2,745 100% 148 103% $300 207 101% 106 1
Slide 8: Loan Yields Increased 4 bps Linked Quarter
Loan Yields Increased 4 bps Linked Quarter Loan Balances* and Loan Yields › Loan yield increased 4 bps $100,000 $ in millions 4.50% linked quarter driven by disciplined pricing and an $90,000 $84,108 4.45% increase in LIBOR rates $82,412 $81,106 $80,513 $78,702 $80,000 4.40% 4.34% 4.35% › Commercial
Slide 9: Low Cost Deposits Grew 6% Year Over Year, Which Drove a 24 bps Decline in Deposit Costs
Low Cost Deposits Grew 6% Year Over Year, Which Drove a 24 bps Decline in Deposit Costs Deposit Balances* and Deposit Costs › Improved deposit mix is $ in millions $120,000 120 bps resulting in lower deposit costs $100,000 $94,642 $95,257 $96,122 $96,147 $95,155 100 bps › Low cost deposits as a % of
Slide 10: Net Interest Margin Impacted by Higher Prepayments in Investment Portfolio and Cash Reserves
Net Interest Margin Impacted by Higher Prepayments in Investment Portfolio and Cash Reserves 1 Net Interest Income and Net Interest Margin 1 › Net Interest Margin up 4 bps $925 3.20% linked quarter $900 3.09% 3.08% 3.07% 3.10% › Net interest margin impacted by 3.04% $873 higher prepayment activity a
Slide 11: Decline in Non-Interest Revenues Due to Impact from Lower Interchange Revenue
Decline in Non-Interest Revenues Due to Impact from Lower Interchange Revenue Non-Interest Revenue ¹ $600 $ in millions › Service charges decrease reflects first full quarter impact of Durbin $500 $513 Amendment, resulting in lower $920 $543 $580 $507 interchange revenue 51 50 68 45 57 $400 83 › Int
Slide 12: Focused Expense Management
Focused Expense Management › Non-interest expenses from continuing operations increased $274 million, which included $253 million goodwill impairment › Excluding the goodwill impairment non-interest expenses¹ were 2% higher than prior quarter; however, down 5% from 2010 › Salaries and benefits costs
Slide 13: Capital Ratios Remain Strong; Liquidity Profile Solid
Capital Ratios Remain Strong; Liquidity Profile Solid Capital Ratios Liquidity 84% 84% 83% 13.2% 81% 12.5% 12.6% 12.8% 11.3% 8.2% 8.5% 7.9% 7.9% 7.7% 1 1Q11 2Q11 3Q11 4Q11 4Q11 1Q11 2Q11 3Q11 4Q11 2 Basel III 4 Tier 1 Common 3 Tier 1 Loan to Deposit Rato › Well-positioned with respect to the Liquidi
Slide 14: Looking Ahead to 2012
Looking Ahead to 2012 Economic Headwinds Regions’ Business Plan › Low growth GDP › Improving fundamentals › Persistent high unemployment › Competitive advantage: customer loyalty and service quality › Low interest rate, slow growth environment › New revenue initiatives › Weak housing market › Change
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Slide 16: 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 statements w
Slide 17: Non-GAAP Reconciliation: Net Income / (Loss) and Earnings Per Share
Non-GAAP Reconciliation: Net Income / (Loss) and Earnings Per Share The tables below and on the next slide present computations of earnings (loss) and certain other financial measures, excluding goodwill impairment and regulatory charge and related tax benefit (non-GAAP). The goodwill impairment cha
Slide 18: Non-GAAP Reconciliation: Pre-Tax Pre-Provision Income and Adjusted Expenses
Non-GAAP Reconciliation: Pre-Tax Pre-Provision Income and Adjusted Expenses Year Ended December 31 As of and for Quarter Ended 2011 2010 4Q11 3Q11 2Q11 1Q11 4Q10 Pre-Tax Pre-Provision Income (non-GAAP) Income (loss) from continuing operations available to common shareholders (GAAP) $ (25) $ (682) $
Slide 19: Non-GAAP Reconciliation: Tier 1 Common
Non-GAAP Reconciliation: Tier 1 Common The following table provides a reconciliation of stockholder’ 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 of
Slide 20: 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