Regions Financial Corporation · NYSE:RF
Regions Financial — Q2 2013 Earnings Presentation
19 slides from Regions Financial's earnings presentation, Jul 23, 2013
Slide 1: Regions Financial 2nd Quarter 2013 Earnings Conference Call
Regions Financial 2nd Quarter 2013 Earnings Conference Call July 23, 2013 1
Slide 2: Continued momentum
Continued momentum 2Q13 Highlights • Loan balances grew $1.1B; almost ($ in millions, except per share data) 70% of markets experienced growth th Net Interest Income $808 • Expanded customer base and grew Non-Interest Revenue $497 core checking accounts Non-Interest Expense $884 • Invested in improv
Slide 3: Loan balances increased
Loan balances increased Total Loan Balances(1) $76,202 $75,259 $73,995 $73,936 $74,990 • Total loan balances grew $1.1 billion linked quarter 29,878 29,554 29,202 28,875 28,946 • Commercial and industrial loans increased 5% linked quarter 46,324 45,705 44,793 45,061 46,044 • Experienced more modest
Slide 4: Improved funding mix continues to drive decline in deposit costs
Improved funding mix continues to drive decline in deposit costs Deposit Balances(1) and Deposit Costs $95,863 $94,609 $94,805 $93,864 $92,613 • Average low-cost deposits grew 17,175 15,536 14,220 12,904 11,423 $230 million linked quarter 32 bps • Positive re-pricing and mix shiftf led 28 bps to dep
Slide 5: Net interest income increased and net interest margin expanded
Net interest income increased and net interest margin e expanded panded • Net interest income was up 1% Net Interest Income and Net Interest Margin linked quarter, driven by an additional day in the quarter, $850 $830 $831 $811 $821 incremental loan growth, continued declines in deposit costs and li
Slide 6: Interest rate sensitivity summary
Interest rate sensitivity summary Net interest income remains asset sensitive to increases in both short-term and longer-term rates 5.00% 5.00% 4.00% 4.00% 3.00% 3.00% 2.00% 2.00% 1.00% 1.00% 0.00% 0.00% Forward Curve Forward Curve 12- Month Net Interest Income Impact From 12- Month Net Interest Inc
Slide 7: Investment portfolio activity
Investment portfolio activity Earning Assets* • Overall size of investment portfolio Loans declined $2.7 billion linked quarter 73% Investment • Moved $2.4 billion in securities to Portfolio Held to Maturity 3% Other 24% • Will reduce wholesale borrowings, reduce red ce overall o erall balance sheet
Slide 8: Non-interest revenue relatively flat
Non-interest revenue relatively y flat Non-Interest Revenue • Mortgage income was slightly down $533 $536 • Mortgage loan production was $507 $501 $497 $1.9 billion dollars, an 137 144 increase of 6% over the prior 135 139 143 quarter q 28 27 26 18 21 23 30 18 29 • Service charges income were 19 106
Slide 9: Expense control – a culture, not a campaign
Expense control – a culture, not a campaign • Non-interest expenses1 declined 2% Adjusted Non-Interest Expenses(1) linked quarter, excluding debt 1% decrease Y-O-Y extinguishment costs related to the early termination of certain debt and $869 $849 $842 preferred securities $840 $828 • Credit related
Slide 10: Continued improvement in asset quality
Continued improvement in asset quality Net Charge-Offs and Ratio NPLs and Coverage Ratio (2) $265 $262 46% Decline(1) 21% Decline in Total NPLs(1) 130% 120% 125% $180 120% $180 109% 114% $144 110% 109% 115% 1.39% 1.38% 110% 0.96% 0.99% 105% 0.77% $1,915 $1,884 100% $1 681 $1,681 $1,586 $1,506 95% 90
Slide 11: Capital position remains strong
Capital position remains strong Tier 1 capital ratio (1) • Successfully completed several actions that serve to improve capital efficiency: 11 5% 12.0% 11.5% 12 0% 12 4% 12.4% 11 7% 11.7% • Redeemed $350 million of 7.75% senior 11.0% notes • Issued $750 million of 2% senior notes • Redeemed $498 mil
Slide 12: Appendix
Appendix Ma REGIONS »
Slide 13: Liability management summary
Liability management summary Q2 2013 - Liability Management Summary ($ in millions) Projected Next 12 Face Amount Up-front Costs Security Dividend/Coupon (1) Month Run Rate Strategic Impact Retired (pre-tax) Benefit (pre-tax) (2) (3) Elimination of high cost Union Planters Preferred Tender $100 7.75
Slide 14: Non-GAAP reconciliation: Pre-tax pre-provision income
Non-GAAP reconciliation: Pre-tax pre- provision income The Pre-Tax Pre-Provision Income (PPI) table below presents computations of pre-tax pre-provision income from continuing operations excluding certain adjustments (non-GAAP). Regions believes that the presentation of PPI and the exclusion of cert
Slide 15: Non-GAAP reconciliation: Non-interest expense
Non-GAAP reconciliation: Non-interest expense The table below presents non-interest expense (GAAP) excluding certain adjustments to arrive at adjusted non-interest expense (non-GAAP). Regions believes that the exclusion of these adjustments provides a meaningful base for period-to-period comparisons
Slide 16: Non-GAAP reconciliation: Tier 1 common
Non-GAAP reconciliation: Tier 1 common The following table provides calculations of Tier 1 capital (regulatory) and "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 calculati
Slide 17: Non-GAAP reconciliation: Basel III
Non-GAAP reconciliation: Basel III Th following The f ll i table t bl provides id calculations l l ti off Tier Ti 1 common, based b d on Regions’ R i ’ currentt understanding d t di off theth Fi Finall B Basell III requirements, i t released l d iin JJuly l 2013 2013. Regions currently calculates it
Slide 18: 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”)) p provides a “safe harbor” for forward-looking g statem
Slide 19: VN REGIONS
VN REGIONS