Regions Financial Corporation · NYSE:RF
Regions Financial — 2012 Sanford Bernstein Strategic Decisions Conference
23 slides from Regions Financial's conference presentation, May 31, 2012
Slide 1: 2012 Sanford Bernstein Strategic Decisions Conference
Exhibit 99.1 2012 SANFORD BERNSTEIN STRATEGIC DECISIONS CONFERENCE May 31, 2012 Grayson Hall Chief Executive Officer
Slide 2: Business Plan Priorities
BUSINESS PLAN PRIORITIES Mm REGIONS 2
Slide 3: Doing the Right Thing
DOING THE RIGHT THING We believe being a responsible bank means being an integral part of our communities. Community Service Housing Assistance Small Business › Regions associates › Through our Customer › Regions consistently ranks in volunteered over 200,000 Assistance Program (CAP) the top 10 bank
Slide 4: Franchise Overview
FRANCHISE OVERVIEW Business Services › Small and mid-sized C&I lending › Commercial Real Estate › Equipment Finance Consumer Services Ranked 4th or Better in Market Share Targeted Growth Areas › Mortgage › Direct Lending › Home Equity › Indirect Auto • Associates: 23,619 › Credit Card • Assets: $128
Slide 5: Regions' Footprint: High Market Share, High Growth Markets or Both
REGIONS’ FOOTPRINT IS CHARACTERIZED BY EITHER HIGH MARKET SHARE, HIGH GROWTH MARKETS OR BOTH ($ in billions) ’10-’15 Top 10 MSAs Deposits Market Share Market Rank Population Growth Weighted Average Deposit Market Share in Regions’ Core Markets Birmingham, AL $11.0 37.6% 1 Market Nashville, TN $6.6 1
Slide 6: A Quarter of Significant Accomplishment
A QUARTER OF SIGNIFICANT ACCOMPLISHMENT Key Milestones 1Q12 Results No Regulatory objection to Capital Plan Closed Morgan Keegan Sale Net income available to common Successful common equity offering shareholders of $145MM or $0.11 per Credit Ratings upgrade diluted share Redeemed $3.5 billion of Ser
Slide 7: Marked Improvement in Asset Quality Metrics
MARKED IMPROVEMENT IN ASSET QUALITY METRICS NPL Gross Migration NPLs and Coverage Ratio 48% Decline* 30% Decline in Total NPLs* NPL Balances Paying Current and as Agreed*** Loan Loss Provision 11 bps Increase* 76% Decline* *Year-over-year change Business Services and HFS Net Charge-offs **Excludes l
Slide 8: Strong Funding Profile and Liquidity Position
STRONG FUNDING PROFILE AND LIQUIDITY POSITION Deposit Profile* 1Q12 Low Cost Deposits as a % of Total Funding Low Cost Deposits* $79B $66B Loans* / Deposits* Deposit Cost 0.59% 0.37% Funding Cost 0.86% 0.65% Source: SNL Financial - Peers include BBT, CMA, FHN, FITB, HBAN, KEY, MTB, PNC, STI, USB, WF
Slide 9: Strong Capital Ratios
STRONG CAPITAL RATIOS • Tier 1 ratio is 14.3%, or 100 basis points higher linked quarter Tangible Common Equity / Tangible Assets • Tier 1 Capital adjusted to exclude TARP(2) stood at 10.6% at quarter end • Basel III Tier 1 ratio estimated at 12.5% (1) (2) • Tier 1 Common ratio is 9.6%, or an increa
Slide 10: Renewed Focus on C&I and Consumer Lending
RENEWED FOCUS ON C&I AND CONSUMER LENDING BUSINESS SERVICES CONSUMER SERVICES • 61% of Total Loan Portfolio • 39% of Total Loan Portfolio • Focused on middle market and small business • Consumer loan growth will be fueled by new businesses as • Broad based middle-market commercial loan growth across
Slide 11: Mix and Cost of Deposits Provides Further Opportunity to Lower Deposit Costs
MIX AND COST OF DEPOSITS PROVIDES FURTHER OPPORTUNITY TO LOWER DEPOSIT COSTS AND IMPROVE MARGIN Deposit Cost Opportunity Gap Deposit Mix Compared to Peers* Regions • Regions has additional room to reduce deposit costs, most significantly through profitably re-pricing maturing CDs Peer • Approximatel
Slide 12: Funding Mix and Deployment of Cash Reserves Has Aided Net Interest Margin
FUNDING MIX AND DEPLOYMENT OF CASH RESERVES HAS AIDED NET INTEREST MARGIN AND CLOSING THE GAP TO PEERS Impact of Excess Cash Reserves & Non- Regions has closed a portion of its gap vs. Accruals on NIM* peers in the last 5 quarters 61 bps 52 bps * From continuing operations Source: SNL Financial: Pee
Slide 13: Ability to Adapt Our Business Model Helps Mitigate New Legislation Impact
ABILITY TO ADAPT OUR BUSINESS MODEL HELPS MITIGATE NEW LEGISLATION IMPACT Fee Income by Quarter 1 • Adjusted non-interest revenue 1 increased 3% linked quarter • Mortgage revenues increased 35% linked quarter and 71% over last year • Factors offsetting debit card legislation • Ongoing restructuring
Slide 14: Seasonal Increase in Expenses; Cost Containment Continues to Be a Focus
SEASONAL INCREASE IN EXPENSES; COST CONTAINMENT CONTINUES TO BE A FOCUS Headcount – Bank Associates 2 • Non-interest expenses from continuing operations were $913 million 1 • Adjusted non-interest expenses were 5% higher than prior quarter; however, down 2% year-over-year • Salaries and benefits cos
Slide 15: Opportunity for Outperformance
OPPORTUNITY FOR OUTPERFORMANCE • Tangible opportunity to close peer margin gap REVENUE Over $11 billion of deposit repricing Lower liquidity costs Level of non-accruals • Continued momentum in C&I and Consumer lending • Real estate expertise intact • Durbin mitigation efforts underway • Ongoing expe
Slide 16: Appendix
APPENDIX Mm REGIONS *
Slide 17: 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 statement
Slide 18: Non-GAAP Reconciliation: Non-Interest Expense and Non-Interest Revenue
NON-GAAP RECONCILIATION: NON-INTEREST EXPENSE AND NON-INTEREST REVENUE In the table below non-interest expense (GAAP) and non-interest income (GAAP) are presented excluding certain adjustments to arrive at adjusted non-interest expense (non-GAAP) and non-interest income (non-GAAP). Net interest inco
Slide 19: Non-GAAP Reconciliation: Tier 1 Capital
NON-GAAP RECONCILIATION: TIER 1 CAPITAL Regions Series A preferred stock was retired on April 4, 2012. The following tables present the calculations of Tier 1 capital and the Tier 1 capital ratio, adjusted as if the retirement occurred on the last day of the quarter for each period presented. The am
Slide 20: Non-GAAP Reconciliation: Tier 1 Common
NON-GAAP RECONCILIATION: TIER 1 COMMON The following table provides a reconciliation of stockholder’s 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 o
Slide 21: 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
Slide 22: Significant Reduction in High Risk Loan Portfolios
SIGNIFICANT REDUCTION IN HIGH RISK LOAN PORTFOLIOS Total Investor Real Estate Higher Risk Investor Real Estate Portfolio Reduced Investor Real Estate Reduced High Risk Portfolios $13.6 B or 57% over 5 years $10.5 B or 86% over 5 years 22
Slide 23: Regions
REGIONS
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