Regions Financial Corporation · NYSE:RF
Regions Financial — Q3 2011 Earnings Presentation
18 slides from Regions Financial's earnings presentation, Oct 25, 2011
Slide 1: Regions Financial 3rd Quarter Earnings Conference Call
Exhibit 99.3 Regions Financial rd 3 Quarter Earnings Conference Call October 25, 2011
Slide 2: Demonstrated Positive Earnings Growth
Demonstrated Positive Earnings Growth ($ in millions) 3Q10 2Q11 3Q11 Net Income (Loss) ($209) $55 $101 Earnings Adjusted Pre-tax Pre-provision Income* $454 $500 $540 Highlights EPS ($0.17) $0.04 $0.08 Loan Loss Provision $760 $398 $355 › Adjusted pre-tax pre-provision income (“PPI”) exceeded the loa
Slide 3: Maintaining Focus on Fundamentals
Maintaining Focus on Fundamentals › Solid loan production of $14.7 billion; Business Services loan production of $12.5 billion and Consumer Services loan production of $2.2 billion Loan › Business Services loan production reflected higher commercial loan growth Production › Consumer loan production
Slide 4: 3Q11 Earnings Highlights
3Q11 Earnings Highlights ($ in millions, except EPS) 3Q10 2Q11 3Q11 3Q11 vs. 2Q11 3Q11 vs. 3Q10 Net Interest Income $ 868 $ 864 $ 858 $ (6) -1% $ (10) -1% Adjusted Non-Interest Revenue* 748 757 748 (9) -1% - 0% Adjusted Non-Interest Expense* 1,162 1,121 1,066 (55) -5% (96) -8% Adjusted PPI* 454 500
Slide 5: Although NPL Inflows Increased, NPLs Current and Paying as Agreed Increased 3 bps
Although NPL Inflows Increased, NPLs Current and Paying as Agreed Increased 3 bps Business Services Gross NPLs NPL Inflows by Type Current and Paying as Agreed $ in millions Ending Balances $1,600 $1,400 $1,340 45% $1,200 42% $948 37% 38% $1,000 36% $800 $730 $755 $600 $555 $400 $200 $0 3Q10 4Q10 1Q
Slide 6: Non-Performing Assets Decline 6%
Non-Performing Assets Decline 6% Non-Performing Assets $ in billions $5.0 › Non-performing loans, excluding $4.5 $4.2 loans held for sale, declined $74 $3.9 $3.9 million or 3% $4.0 $0.3 $0.3 $3.6 $0.5 $0.4 $3.4 $3.5 $0.4 $0.4 › Non-performing assets declined $0.4 $0.4 $3.0 $0.4 $211 million or 6% $0
Slide 7: Loan Loss Provision Declined 11%
Loan Loss Provision Declined 11% Loan Loss Provision Allowance and Coverage $ in millions $ in millions $1,000 $3,400 130% $3,185 $3,185 $3,186 $800 $760 $3,200 $3,120 120% $682 $2,964 178 $3,000 110% $600 169 $398 112% $355 109% $482 233 151 $2,800 100% 111 153 103% $400 165 101% 207 Sales/ $2,600
Slide 8: Loan Balances Reflect Commercial and Credit Card Growth Offset by Continued Decline in Investor Real Estate
Loan Balances Reflect Commercial and Credit Card Growth Offset by Continued Decline in Investor Real Estate Loan Balances* and Loan Yields › Commercial & Industrial loan balances on an ending basis $100,000 $ in millions 4.50% increased 13% from one year ago reflecting strength in our $90,000 $85,61
Slide 9: Low Cost Deposit Growth Drives 7 bps Decline in Deposit Costs
Low Cost Deposit Growth Drives 7 bps Decline in Deposit Costs Deposit Balances* and Deposit Costs › Our improved deposit mix is $ in millions $120,000 120 bps resulting in lower deposit costs $95,078 $94,642 $95,257 $96,122 $96,147 › Low cost deposits as a % of $100,000 100 bps total deposits increa
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 Net Interest Income and Net Interest Margin › Net Interest Margin down 3 bps $900 3.20% linked quarter; up 6 bps versus $886 $876 prior year $872 $872 $875 3.10% $866 3.07% › Linked quarter decline driven by
Slide 11: Non-Interest Revenues Reflect Higher Mortgage Income and Solid Service Charges
Non-Interest Revenues Reflect Higher Mortgage Income and Solid Service Charges Adjusted Non-Interest Revenue* $ in millions › Adjusted non-interest revenue* 1% lower $900 $795 than prior quarter $800 $748 $764 $757 $748 51 45 50 › Service charges increase reflects ongoing $700 66 68 142 restructurin
Slide 12: Continued Focused Expense Management Leads to Further Decline in Expenses
Continued Focused Expense Management Leads to Further Decline in Expenses › Adjusted non-interest expenses* 5% lower versus prior quarter › Salaries and benefits costs declined $32 million linked quarter › FDIC premium expenses decreased $25 million versus 2Q11 › Credit-related costs increased $8 mi
Slide 13: Capital Ratios Remain Strong; Liquidity Profile Solid
Capital Ratios Remain Strong; Liquidity Profile Solid Capital Ratios Favorable Liquidity Position 12.5% 12.6% 12.8% 11.3% Loans Deposits $80.5 $96.1 7.9% 7.9% 8.2% 7.7% 1Q11 2Q11 3Q11* 3Q11 Basel III** Tier 1 Common Tier 1 › Well-positioned with respect to the Liquidity Coverage Ratio prescribed und
Slide 14: Slide 14
Slide 15: Forward-Looking Statements
Forward-Looking Statements ›This presentation may include forward-looking statements which reflect Regions’ current views with respect to future events and financial performance. The Private Securities Litigation Reform Act of 1995 (“the Act”) provides a “safe harbor” for forward-looking statements
Slide 16: Non-GAAP Reconciliation: PPI
Non-GAAP Reconciliation: PPI ($ in millions) 3Q10 4Q10 1Q11 2Q11 3Q11 Net interest income (GAAP) $ 868 $ 877 $ 863 $ 864 $ 858 Non-interest income (GAAP) 750 1,213 843 781 745 Adjustments: Securities (gains) losses, net (2) (333) (82) (24) 1 Leveraged lease termination (gains) / losses - (59) - - 2
Slide 17: Non-GAAP Reconciliation: EPS
Non-GAAP Reconciliation: EPS 3Q10 2Q11 3Q11 EPS as reported (GAAP) $ (0.17) $ 0.04 $ 0.08 Significant Items: Regulatory charge and related tax benefit - (0.03) - Securities (gains) losses, net - (0.01) NM Leveraged lease termination gains - - NM Branch consolidation and property and equipment charge
Slide 18: Non-GAAP Reconciliation: Capital
Non-GAAP Reconciliation: Capital ($ amounts in millions) 09/30/11 Stockholders' equity (GAAP) 17,263 (1) Non-qualifying goodwill and intangibles (5,820) Adjustments, including other comprehensive income related to cash flow hedges, disallowed deferred tax assets, threshold deductions and other adjus