Regions Financial Corporation · NYSE:RF
Regions Financial — 2011 BancAnalysts Association of Boston Conference
33 slides from Regions Financial's conference presentation, Nov 3, 2011
Slide 1: 2011 BancAnalysts Association of Boston Conference
2011 BancAnalysts Association of Boston Conference November 3, 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 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: $5.3B* * As of October 27, 2011 th
Slide 4: Regions' Footprint is Characterized by High Market Shares, High Growth Markets or Both
Regions’ Footprint is Characterized by Either High Market Shares, High Growth Markets or Both Weighted Average Deposit Market Share in Regions’ Core Markets ($ in billions) National Average: 3.9% Source: SNL Financial Note: Core Markets include AL, FL, LA, MS, AR, TN Rank Name Market Share Bank of A
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 – Mortgage – Home Equity – Credit Card – Direct Lending – Indirect Auto – Private Banking – Insurance – Trust Services
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
Quality Loans Key to Profitable Growth 39% Portfolio Mix* 61% Consumer Services › Growing consumer loans to achieve a more balanced portfolio › Consumer loan growth will be fueled by new businesses as well as growth in existing businesses › Loan production in mortgage grew 9% over prior quarter › Ac
Slide 9: Regions has Continued to Grow C&I Loans
Regions has Continued to Grow C&I Loans Loan Growth Quarter to Quarter • Our Commercial & Industrial loan growth has significantly outpaced peers over the past year • Momentum has continued in 2011, as Commercial & Industrial loans have grown another 7.8% • Commercial & Industrial commitments increa
Slide 10: Improved deposit mix and funding costs
We have made great strides in improving deposit mix and cost and funding costs Q3 2010 Q2 2011 Q3 2011 Total Funding Cost 102 bps Total Funding Cost 80 bps Total Funding Cost 75 bps Low Cost Deposits 74% Time Deposits 26% Low Cost Deposits 77% Time Deposits 23% Low Cost Deposits 78% Time Deposits 22
Slide 11: Balance Sheet Opportunities Remain
Balance Sheet Opportunities Remain Deposit Cost Opportunity Gap 40 38 • Regions has additional room to reduce deposit costs even further • Opportunity to reduce deposit costs, most significantly through profitably re- pricing maturing CDs • Higher cost CDs maturing • 4Q11 - $2.4 B at 1.32% • 2012 -
Slide 12: Net Interest Margin Impacted by Cash Reserves and Non-Accrual Loans
Net Interest Margin Impacted by Cash Reserves and Non-Accrual Loans Impact of Excess Liquidity & Non-Accruals on NIM Regions has closed a portion of its gap vs. the peers in the last 5 quarters 2.96% 3.00% 3.07% 3.05% 3.02% Note: Peer banks include BAC, BBT, CMA, FITB, KEY, MTB, PNC, STI, USB, WFC 0
Slide 13: Service Charge Income Remains Strong
Service Charge Income Remains Strong Service Charge Growth Offsetting Durbin • Ongoing restructuring of our accounts to fee-eligible • Increasing hurdle obtaining free checking • Shift debit cards to credit cards to increase interchange fees • Cross-sell new revenue initiatives 2.4% 5.4% YTD Growth
Slide 14: Expense control continues to be a focus
Expense control continues to be a focus Year-Over-Year % Change NIE Per FTE * On an adjusted basis, refer to appendix for non-GAAP reconciliation Source: SNL Financial – excludes nonrecurring expenses Note: Peer banks include BAC, BBT, CMA, FITB, KEY, MTB, PNC, STI, USB, WFC • Year-over-year Regions
Slide 15: Strong Net Income and Adjusted Pre-tax Pre-Provision Income Growth
Strong Net Income and Adjusted Pre-tax Pre-Provision Income Growth ($ in millions) Net Interest Income Adjusted Non- Interest Revenue* Adjusted Non- Interest Expense* Adjusted Pre-tax Pre- provision Income* Net Income** * Refer to appendix for reconciliation to GAAP ** Net income available to common
Slide 16: 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 17: Credit Quality Metrics
Credit Quality Metrics Linked Quarter Net charge-offs declined 7% Provided less than net charge-offs for 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% Delinqu
Slide 18: 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 19: Substantial Improvement in Loan Loss Provision; Allowance Well Above Peers
Substantial Improvement in Loan Loss Provision; Allowance Well Above Peers Loan Charge-Offs Allowance versus 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 Sales/ HFS (1)
Slide 20: Strong Capital
Strong Capital 7.6% 7.9% 7.9% 7.9% 8.2% 7.7% * See appendix for non-GAAP 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 12.1% 12.4% 12.5% 12.6% 12.8% 11.3% 3Q10 4Q10 1
Slide 21: 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 89% 89% 88% 86% 85% 85% 84% 81% 81% 78% 56% Bank #1 Bank #2 RF Bank #4 Bank #5 Bank #6 Bank #7 Bank #8 Bank #9 Bank #10 Bank #11 3Q10 4Q10 1Q11 2Q11 3Q11
Slide 22: 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 23: Stronger Company Today
Stronger Company Today 4Q07 3Q11 Change Investor Real Estate $23B $12B 48% Reduction Allowance for Loan Losses $1.3B $3.0 More than doubled Tier 1 Common Ratio* 6.6% 8.2% 160 bps improvement Low Cost Deposits $60.3B $75.5B 25% Growth Loan to Deposit 100% 83% Strong Liquidity * See appendix for non-G
Slide 24: Forward-Looking Statements
Forward-Looking Statements This presentation may include forward-looking statements which reflect Regions’ current views with respect to future events and financial performance. The Private Securities Litigation Reform Act of 1995 (“the Act”) provides a “safe harbor” for forward-looking statements w
Slide 25: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($ 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 26: 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 27: Non-GAAP Reconciliation: Capital Basel III
Non-GAAP Reconciliation: Capital Basel III ($ amounts in millions) 9/30/11 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 ot
Slide 28: Continued Improvement in Early Stage Credit Metrics
Continued Improvement in Early Stage Credit Metrics 90+ Day Delinquencies 30-59 Day Delinquencies Business Services Criticized Loans * Business Services Classified Loans *Includes classified loans and special mention loans 3Q10 4Q10 1Q11 2Q11 3Q11 3Q10 4Q10 1Q11 2Q11 3Q11 3Q10 4Q10 1Q11 2Q11 3Q11 3Q
Slide 29: Credit Quality Metrics
Credit Quality Metrics Total NPLs (excluding HFS) Total NPAs (including HFS) NPLs Gross Migration Investor Real Estate Gross NPA Migration * Previous presentation showed 2Q11 on a pro-forma basis to include completed bulk sale after quarter-end. Current presentation shows actual 2Q11 and 3Q11 number
Slide 30: Credit Fundamentals
Credit Fundamentals NCO’s Avg Loans NPAs + 90 day Delinquencies NPAs + 90 Day Delinquencies/Loans + OREO + HFS NPL Balances Paying Current and as Agreed * Previous presentation showed 2Q11 on a pro-forma basis to include completed bulk sale after quarter-end. Current presentation shows actual 2Q11 a
Slide 31: Allowance Coverage Remains Strong
Allowance Coverage Remains Strong Allowance for Loan Losses to NPLs (excl HFS) Allowance for Loan Losses to Total Loans 94% 101% 103% 112% 109% 3Q10 4Q10 1Q11 2Q11 3Q11 3.77% 3.84% 3.92% 3.84% 3.73% 3Q10 4Q10 1Q11 2Q11 3Q11
Slide 32: Conservative Marks and Reserves Already Taken on Impaired Loans
Conservative Marks and Reserves Already Taken on Impaired Loans Impaired Loans as of September 30, 2011 A B C= (A - B) D E = (B + D) / A ($ millions) Unpaid Principal Balance Charge-Offs and Pmts Applied Total Impaired Loan Book Value Related Allowance for Loan Loss Coverage % Total Commercial and I
Slide 33: Adequately Reserved for Troubled Debt Restructurings
Adequately Reserved for Troubled Debt Restructurings Consumer loans make up 50% of accruing troubled debt restructurings Foreclosure rate less than half of the industry average September 30, 2011 ($ millions) Loan Allowance for Allowance as a % Balance Credit Losses of Loan Balance Accruing: Commerc
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