Regions Financial Corporation · NYSE:RF
Regions Financial — Investor Presentation (January 2003)
35 slides from Regions Financial's investor presentation, Jan 28, 2003
Slide 1: Regions
Reoions I
Slide 2: Forward-Looking Statement
Forward-Looking Statement The formation contained inthis presentation may peu forward ooking statment that eet Regions” cunent views with egpect fo future events andl financial performance. Regions” management believes that these forward-looking statements are reasonable, however, ‘you should not pl
Slide 3: Company Profile
Company Profile Asset size: $47.9 billion at Dec. 31, 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: 689 #of ATM’s: 764 # of brokerage offices: 142 # of households: 2.0 mi
Slide 4: Regions Footprint
Regions Footprint Fae Morgan Keegan Offbe=| | Rebsamen Coes mses wih Cumere Barking Offs
Slide 5: Results of 2002 and Focus for 2003
Results of 2002 1. Lines of business 2. Asset quality 3. Improved balance sheet mix Focus for 2003 1. Asset quality 2. Banking franchise 3. Capital management Regions
Slide 6: 2002 Highlights
2002 Highlights e@ Record earnings — 22% increase based on net income — 12% increase adjusted for FAS 142 @ Record year for lines of business — Brokerage — Mortgage — Insurance Specialty finance @ Improved credit quality — Declining NPA’s — Low loan losses — Low delinquency @ Balance sheet risk redu
Slide 7: 2002 Highlights: Strong Fee Income (Morgan Keegan revenues)
$170 $160 $150 $140 $130 $120 $110 $100 2002 Highlights Strong Fee Income i Morgan Keegan revenues 8 in millions $159.9 $140.6 $141.0 $129.2 1902 2Q02 3Q02 4Q02 Regions
Slide 8: 2002 Highlights: Record Net Income (Morgan Keegan)
$20 $16 $12 $8 $4 $0 2002 Highlights Record Net Income Hi Morgan Keegan net income S$ in millions $16.8 $13.2 $113 $98 1902 2Q02 3Q02 4Q02 Regions
Slide 9: 2002 Highlights: Strong Fee Income (Mortgage)
$327 $30 $28 $26 $24 $2: 8 $20 2002 Highlights Strong Fee Income Hi Mortgage servicing and origination fees Sin millions 529.8 $26.9 $24.7 | 7 1Q02 2.902 3Q02 4Q02 7 Regions
Slide 10: 2002 Highlights: Record Mortgage Earnings
$757 $65 $55 $45 $35 $25 $15 2002 Highlights Record Mortgage Earnings (excluding impairment) Mortgage division earnings Sin millions $293 $35.0 $672 2000 2001 rr Regions
Slide 11: 2002 Highlights: Strong Fee Income (Insurance)
$807 $70 $60 $50 $40 $30 $20 $10 $0 2002 Highlights Strong Fee Income G Insurance division revenues 8 in millions $663 $48.2 $173 2000 2001 2002 Regions
Slide 12: 2002 Highlights: Record Specialty Finance Earnings
2002 Highlights Record Specialty Finance Earnings $77 $6 $5 $4 $3 $2 $1 $0 Receivables factoring division earnings Sin millions $5.7 2000 2001 2002 Regions
Slide 13: Improved Credit Quality
2002 Highlights Improved Credit Quality @ 2"¢ consecutive quarter of declining NPA’s — $34.3 million decline in third quarter — $22.2 million decline in fourth quarter Regions
Slide 14: Improved Credit Quality: NPAs
$400. $3380 $360 $340 $320 $300. 2002 Highlights Improved Credit Quality ONPA's S$ in millions $374.8 $364.1 $340.5 $3184 1902 2Q02 3Q02 4Q02 Regions
Slide 15: Improved Credit Quality
2002 Highlights Improved Credit Quality @ 24 consecutive quarter of declining NPA’s — $34.3 million decline in third quarter — $22.2 million decline in fourth quarter @ Declining 90+ days past due loans — Four consecutive quarters of decline — Lowest level since December 2000 Regions
Slide 16: 90+ Days Past Due Loans
$507 $40 $30 $20 Sin millions 90+ days past due loans $449 $43.2 $42.2 $385 1902 2Q02 3Q02 4902 Regions
Slide 17: Improved Credit Quality: Total Loan Delinquencies
2002 Highlights Improved Credit Quality 3.50% 4 Total Loan Delinquencies 3.00% Five Year Trend 2.50% 2.00% + 1.50% 1.20% 1.00% 0.50% 4 0.00% Dec-97 Dec-98 Dec-99 Dec-00 Dec-01 Dec-02 Regions
Slide 18: Improved Credit Quality
2002 Highlights Improved Credit Quality @ 24 consecutive quarter of declining NPA’s — $34.3 million decline in third quarter — $22.2 million decline in fourth quarter @ Declining 90+ days past due loans — Four consecutive quarters of decline — Lowest level since December 2000 e@ Lower charge-offs in
Slide 19: 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% Net Loan Losses at Regions Historically Below Industry + Regions = Industry* 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 * FDIC-insured commercial banks through September 30, 2002, annualized. 0 Regions
Slide 20: Improved Balance Sheet
Improved Balance Sheet e@ Deposit mix e Loan mix Regions
Slide 21: Deposit Mix Results in Lower Cost of Funding
CD's Deposit Mix Results in Lower Cost of Funding $13.5 “© CD's —*Transaction accounts $16.0 $13.0 4 S in billions . 7 $15.0 $12.5 + g $12.0 4 y Si40 8 3 $11.5 + & + $13.0 & $11.0 5 3 $10.5 4 y $120 2 $10.0 7 + $11.0 5 $9.5 + + $10.0 $9.0 + s $8.5 + + + + + + + $9.0 Mar-01 Jun-01 Sep-01 Dec-01 Mar-0
Slide 22: Loan Mix
1Q01 4% 3% 2% Commercial ESBranch installment ll Residential mortgages Indirect installment i Other real estate [Consumer lines of credit Construction Hi Student loans » Regions
Slide 23: 2003 Focus
2003 Focus e Asset Quality e Banking Franchise 4 Streamlining « Sales e@ Capital Management Regions
Slide 24: 2003 Focus: Asset Quality
2003 Focus Asset Quality e A never ending quest for excellence e Some reorganization efforts « Underwriting 4 Loan review « Collections and recovery Regions 2s gyo
Slide 25: 2003 Focus: Streamlining Banking Division
2003 Focus Streamlining Banking Division e@ Combining banking units into 15 groups @ Consolidating duties @ Provides opportunities for improving cost structure Regions 2% gyo
Slide 26: 2003 Focus: Branch Expansion Strategy
2003 Focus Streamlining Banking Division e Branch Expansion Strategy « De Novo expansion in growth markets « Plan to open 30 to 40 branches in 2003 « Incorporating additional financial discipline into expansion strategy to obtain maximum return on investment Regions 2
Slide 27: 2003 Focus: Behavioral Change
2003 Focus Behavioral Change 2001 2002 % Change Outbound Contacts 501,224 982,444 96.0% Scheduled Appointments 200,945 405,195 101.6% Completed Profiles 178,791 357,018 99.7% Referrals 830,833 1,020,452 22.8% 2% Regions
Slide 28: 2003 Focus: Chairman's Club
2003 Focus Chairman’s Club Winners 2000 2001 2002 16 40 95 2002 Average Growth Chairman’s Club All Branches Branches Deposits 13.5% 2.1% Loans 37.0% 5.3% Fee Income 23.5% 5.6% Regions
Slide 29: 2003 Focus: Sales Strategies
2003 Focus Sales Strategies @ Retail — Chart-the-Course « Leadership in Financial Services « Profile MainSail Book of Business 4 Mid-Year Sales Review « New Tracking and Reporting System @ Commercial Sales Process « Piloted in Texas — 30% Increase in Sales « All Lenders and Bank Presidents Trained «
Slide 30: 2003 Focus: Market Potential
Slide 31: 2003 Focus: Improved Performance Through Capital Allocation
2003 Focus Improved Performance Through Capital Allocation @ Management tool for allocating capital within the company @ Consistent framework for comparing returns from business units, products or customers @ Optimizing returns on capital creates shareholder value Regions 2
Slide 32: Improved Performance Through Capital Allocation
S-ye Honsebold Growth Rate Improved Performance Through 30% Capital Allocation Bubbles Weighted by Economic Profit ‘© Banking Units High Low return 7 5m 30M 35% M5 NG 5% = 10% 15% 20% RAROC % + Quadrant are divided horizontally by a line that rep resenis weighted average growth and vertically by wei
Slide 33: RF Strong Return in 2002
RF Strong Return in 2002 $120 $115.29 $100 $80 $77.91 $78.20 $60 4 T , T 1 Jan-02 Apr-02 Jul-02 Oct-02 Dec-02 Regions ~~ S&P 500 =~ S&P 500 Financial Regions 34
Slide 34: Outstanding Dividend Record
(En Dollars) sum sue ste sae sate sae see suse sat sae sae sae sate Outstanding Dividend Record 32 Consecutive Years Of Increased Dividends Named to Bloomberg Personal Finance magazine Top 25 list for dividend performance Regions Years * Indicated 35
Slide 35: So, Who is Regions Financial?
So, Who is Regions Financial? e Aconsistent performer e@ With a strong balance sheet @ Operating in markets in the South Acompany that has changed itself before @ With continued good performance e@ Now it’s changing again to better serve: — Its customers — Its shareholders Regions 4 gyo
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