Regions Financial Corporation · NYSE:RF
Regions Financial — Q3 2002 Earnings Presentation
27 slides from Regions Financial's earnings presentation, Oct 28, 2002
Slide 1: Regions
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Slide 2: Forward-Looking Statement
Forward-Looking Statement ‘The information contained in this presentation may include forward-looking statements that reflect Regions’ cunent views with respect to future events and financial performance. Regions” management believes that these forward-looking statements are reasonable, however, ‘yo
Slide 3: Key Highlights
Key Highlights @ A leading financial service provider in the South @ Well diversified revenue stream @ Customer focused sales culture @ Established credit culture @ Excellent opportunities for growth Regions
Slide 4: Company Profile
Company Profile Asset size: $47.4 billion at Sept. 30, 2002 Among 25 largest U.S. banks Geographic footprint: Banking offices in 9 states Brokerage offices in 15 states Insurance relationships throughout U.S. # of banking offices: 684 #of ATM’s: 773 # of brokerage offices: 145 # of households: 2.0 m
Slide 5: Strong Deposit Market Share in Banking Footprint
Strong Deposit Market Share in Banking Footprint #1 market share in Alabama at 17.4% #1 market share in Arkansas at 14.0% #4 market share in Georgia at 6.2% “#4 market share in Louisiana at 7.3% aN ge a TEI Top 3 Nara Share HEI th toch Mare share Regions
Slide 6: Community Banking Franchise: Low Cost Deposits
Community Banking Franchise 46.0% 45.0% 44.0% 43.0% 42.0% 41.0% 40.0% 39.0% Low Cost Deposits as % of Total Deposits 45.3% 39.8% 45.9% 3Q01 4Q01 1Q02 2Q02 3Q02 Regions
Slide 7: Community Banking Franchise: Community Bank Loans
82.0% 81.0% 80.0% 79.0% 78.0% 77.0% 76.0% 75.0% Community Banking Franchise Community Bank Loans as % of Total Loans 81.0% 78.6% 77.6% 75.7% 3Q01 4Q01 1Q02 2Q02 3Q02 Regions
Slide 8: Equity AssetLine Loans
Equity AssetLine Loans $1.1 billion outstanding = $1.9 billion contingent amount © Increased 27% in last year 45,000 accounts = Average contingent line amount - $41K = Average current balance - $22K = Average years on books — 3.16 years 25% of active accounts are secured by 1** mortgages 716 average
Slide 9: Regions' Diversified Revenue Stream
Regions’ Diversified Revenue Stream Over 31% of Revenue Stream from Other Financial Services Third Quarter 2002 Brokerage and Investment Banking 18% Retail and Commercial Asset Management Banking 2% 69% Mortga ge Banking 9% Insurance 2% ; Regions
Slide 10: Regions' Diversified Revenue Stream
Regions’ Diversified Revenue Stream Over 31% of Revenue Stream from Other Financial Services Third Quarter 2002 Brokerage and Investment Banking 18% Retail and Commercial Banking 69% Asset Management 2% ‘Mortgage Banking 9% Insurance 2% ¥ Combined $51 billion of customer assets v Excellent growth pr
Slide 11: Regions/Morgan Keegan Footprint
Regions/Morgan Keegan Footprint
Slide 12: Morgan Keegan Business Units
Morgan Keegan Business Units Third Quarter 2002 Private Client Group 34% Investment Advisory 10% Fixed Income Capital Markets Equity Capital 45% Markets 11% a Regions
Slide 13: Regions/Morgan Keegan Combined Trust Function
Regions/Morgan Keegan Combined Trust Function e Morgan Keegan assumed management of Regions Trust Function in early 2002 = Results in additional expertise and resources to benefit customers @ Combined $12 billion in assets under management @ Combined $51 billion in customer assets Regions
Slide 14: Morgan Keegan's Role
Morgan Keegan’s Role Provide leadership in developing a sales culture within Regions Financial Corporation. Establish Morgan Keegan as Regions’ exclusive distribution channel for investment products / services. e@ Emphasis on gathering assets e@ Pursue investment banking opportunities with existing
Slide 15: Regions' Diversified Revenue Stream: Insurance
Regions’ Diversified Revenue Stream Over 31% of Revenue Stream from Other Financial Services Third Quarter 2002 Brokerage and Investment Banking 18% Asset Management Retail and 2% Commercial Banking 69% ‘Mortgage Banking 9% “Insurance revenues of $11.8 million in 1* quarter 2002 “Insurance revenues
Slide 16: Regions' Diversified Revenue Stream: Mortgage Banking
Regions’ Diversified Revenue Stream Over 31% of Revenue Stream from Other Financial Services Third Quarter 2002 Brokerage and Investment Banking 18% Asset Management 2% Retail and Commercial Banking 9% ‘Mortgage Banking Insurance 9% 2% v Includes $17.7 billion servicing portfolio ¥$1.7 billion 3"! q
Slide 17: More Diversified Revenue Stream
More Diversified Revenue Stream ‘Morgan Keegan 50%. Non-interest income as % of revermes 29% Regions
Slide 18: Active Integration of Sales Culture
Active Integration of Sales Culture e Bridging the gaps = Bringing together services/products from all lines of business = Increased training and coaching = Increased accountability @ Developed new commercial sales process = Complements Chart-the-Course on retail side = Focus attention on relationsh
Slide 19: Asset Quality Improves
Asset Quality Improves @ Increased allowance $49.3 million from 3Q01 e@ NPA’s declined $34.3 million from 2"* quarter 2002 e@ NPL portfolio granular, diversified, well secured, 33% single family residential @ Largest 25 non-accrual loans range from $11.2 million to $1.3 million with one over $10 mil
Slide 20: Net Loan Losses at Regions Historically Below Industry
1.60% 1.40% 1.20% 1.00% 0.80% 0.60% 0.40% 0.20% 0.00% * FDIC-insured commercial banks. For 2002, annualized through September 30. Net Loan Losses at Regions Historically Below Industry + Regions -= Industry* 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 0 Regions
Slide 21: Increased Focus on Optimizing Profitability of Franchise
Increased Focus on Optimizing Profitability of Franchise e Implementing new performance measurement system based on risk-adjusted returns on capital = Management tool for allocating capital within the company = Consistent framework for comparing returns from business units, products or customers = O
Slide 22: Well Positioned in Growth Markets
Slide 23: Growth Strategies
Growth Strategies e Acquisitions in growth markets (@ in millions) Park Meridian, Inc. $310 Charlotte, NC First Bancshares of Texas, Inc $189 Houston, TX Brookhollow Bancshares, Inc. $165 Dallas, TX Independence Bank, National Association $112 Houston, TX e De Novo expansion in growth markets = Expa
Slide 24: Outstanding Dividend Record
(En Dollars) Outstanding Dividend Record 31 Consecutive Years Of Increased Dividends Recently named to Bloomberg Personal Finance magazine Top 25 list for dividend performance Regions Years * Indicated 24
Slide 25: Third Quarter Highlights
Third Quarter Highlights @ Record quarterly earnings of $.70 per diluted share — a 19% increase over prior year e@ Strong revenue growth — overall 10% compared to prior year = Non-interest income up 17% = Net interest income up 5% @ Fee income increase driven by brokerage, trust, mortgage banking an
Slide 26: Key Highlights
Key Highlights e A leading financial service provider in the South @ Well diversified revenue stream e Strong credit culture e@ Excellent opportunities for growth Regions
Slide 27: Regions
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