Regions Financial Corporation · NYSE:RF
Regions Financial — Credit Suisse 19th Annual Financial Services Forum (February 2018)
22 slides from Regions Financial's conference presentation, Feb 13, 2018
Slide 1: Credit Suisse 19th Annual Financial Services Forum
Credit Suisse 19th Annual Financial Services Forum February 13, 2018
Slide 2: 2017 results
2017 results Net income up 9% - EPS up 15% GROW AND DIVERSIFY DISCIPLINED EXPENSE OPTIMIZE AND EFFECTIVELY REVENUE MANAGEMENT DEPLOY CAPITAL • Reported total revenue (FTE) • Reported expenses relatively • Prudent loan management and +2%; adjusted total revenue unchanged; adjusted expenses improved c
Slide 3: Long-term financial targets
Long-term financial targets 2016 - 2018 long-term Three Pillars of Execution 2017 Results 2016 Results expected results Adjusted EPS Adjusted EPS growth Adjusted EPS growth growth of 12-15% of 18.7% (CAGR)(1) of 17.1% (CAGR)(1) (CAGR)(1) Adjusted efficiency Adjusted efficiency Adjusted efficiency ra
Slide 4: Economic outlook for 2018
(1) Economic outlook for 2018 U.S. and Regions Footprint U.S. Economy(1) Regions Footprint(1) Real GDP Improving global Improving labor growth ~ 2.4% economic growth market conditions • Job and income growth should remain in line with U.S. averages; look for gradual reductions in the • 2018 assumpti
Slide 5: Simplify and Grow: making it easier for customers to do business with us
Simplify and Grow: making it easier for customers to do business with us Why: • Industry undergoing a transformational change • Meeting customers' growing demand for an easier, faster, and more convenient way to conduct financial business How: • Remove internal silos and reduce friction • Simplify t
Slide 6: Simplify and Grow
Simplify and Grow A three year journey Customer Journeys Organization Revenue Growth Efficiency • Digitization Simplification • Faster launch of Improvements • Loan process • Spans and layers new initiatives • Robotics and • Account opening review • Advanced artificial • Streamline credit • Organiza
Slide 7: 2018 loan outlook
2018 loan outlook Business lending Consumer lending • Momentum into 2018 as production and pipelines • Excluding indirect vehicle, 2017 growth improved 2H17 outperformed industry averages across most • Specialized lending groups expected to drive growth consumer categories - expect that to continue
Slide 8: Deposit advantage
Deposit advantage Expected to continue Deposits by Customer Type(1) 4Q17 vs. 3Q15 Change in Total Deposit Costs(2) (Retail vs. Business) Peer #1 2bps 4Q17, ($ in billions) Peer #2 3bps Private Institutional RF 6bps Wealth(3) Trust(3) Peer #3 8bps $8 $1 Peer #4 9bps Peer #5 11bps Peer #6 12bps Consum
Slide 9: Interest rate risk assumptions
Interest rate risk assumptions (as of December 31, 2017) Standard Interest Rate Risk Scenario Assumptions Assumption Sensitivity Analysis (3)(4) ($ in millions) 2018 Expectations: Adjusted net interest income and other financing income (non-FTE) growth of 3% - 5% (1) Growth expectations exclude the
Slide 10: Revenue and expense initiatives
Revenue and expense initiatives Leveraging 2017 successes to boost 2018 efficiency Non-Interest Income Initiatives Non-Interest Expense Initiatives Solid core account growth in 2017: Retail Network Strategy – 1.5% checking account growth – ~10% decline of branches last two years – 2% Now banking acc
Slide 11: Improving asset quality
Improving asset quality Criticized Business Loans YoY Reduction in NPLs(1) to Total Loans ($ in millions) Peer #1 57bps $3,612 $3,538 $3,280 $2,962 RF 43bps 1,206 1,143 1,162 $2,456 941 Peer #2 41bps 1,007 2,406 2,395 2,118 Peer #3 37bps 2,021 1,449 Peer #4 28bps 4Q16 1Q17 2Q17 3Q17 4Q17 Peer #5 24b
Slide 12: Strong capital levels
Strong capital levels Basel III Common Equity Tier 1 Ratio(1) Capital Priorities Peer #1 12.1 Peer #2 11.6 RF 11.1 Peer #3 11.1 Peer #4 10.9 Peer #5 10.6 Peer #6 10.4 Peer #7 10.1 Peer #8 10.1 Peer #9 10.0 Peer #10 10.0 Peer #11 9.9 Peer #12 9.8 Peer #13 9.3 Peer #14 8.7 Note: Regions’ and peer CET1
Slide 13: Robust capital returns
Robust capital returns Capital Returned to Shareholders ($ in millions) • Received no objection to $1,645 planned CCAR capital actions; Board authorized share repurchase program up to $1,157 $1.47 billion, and a 29% $927 1,275 increase in quarterly common stock dividend 839 • Repurchased $1 billion
Slide 14: Managing for long-term performance
Managing for long-term performance Opportunities to drive growth and efficiencies Asset Sensitivity Capital Return Significant funding advantage Capital sufficient for organic driven by low-cost deposit growth, strategic opportunities, base, accretive fixed-rate robust shareholder returns reinvestme
Slide 15: Long-term targets and 2018 expectations
Long-term targets and 2018 expectations 2018 Expectations • Adjusted ROATCE of 14 to 16%(1)(2) • Full-year average loans are expected to grow in the low single digits, excluding impact of third- party indirect-vehicle portfolio • Full-year average deposits are expected to grow in the low single digi
Slide 16: Appendix, Non-GAAP and Forward Looking Statements
Appendix, Non-GAAP and Forward Looking Statements 16
Slide 17: Non-GAAP reconciliation: Total revenue, non-interest expense, net interest margin and efficiency ratio
Non-GAAP reconciliation: Total revenue, non-interest expense, net interest margin and efficiency ratio The table below presents computations of the efficiency ratio (non-GAAP), which is a measure of productivity, generally calculated as non-interest expense divided by total revenue. Management uses
Slide 18: Non-GAAP reconciliation continued: Total revenue, non-interest expense, net interest margin and efficiency ratio
Non-GAAP reconciliation continued: Total revenue, non- interest expense, net interest margin and efficiency ratio Year Ended December 31 ($ amounts in millions) 2017 2016 2017 vs. 2016 Non-interest expense (GAAP) I $ 3,624 $ 3,617 $ 7 0.2 % Adjustments: Contribution to Regions' charitable foundation
Slide 19: Non-GAAP reconciliation: YTD return on average tangible stockholders' equity and earnings per common share
Non-GAAP reconciliation: YTD return on average tangible stockholders' equity and earnings per common share from continuing operations The tables below present computations of "adjusted net income from continuing operations available to common shareholders," "adjusted return on average tangible commo
Slide 20: Forward-looking statements
Forward-looking statements Forward-Looking Statements This release 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 n
Slide 21: Forward-looking statements (continued)
Forward-looking statements (continued) • Our ability to execute on our strategic and operational plans, including our ability to fully realize the financial and non-financial benefits relating to our strategic initiatives. • The success of our marketing efforts in attracting and retaining customers.
Slide 22: Regions
A REGIONS
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