Regions Financial Corporation · NYSE:RF
Regions Financial — Q4 2014 Earnings Presentation
18 slides from Regions Financial's earnings presentation, Jan 20, 2015
Slide 1: 4th Quarter 2014 Earnings Conference Call
4th Quarter 2014 Earnings o Conference Call January 20, 2015
Slide 2: 2014 Overview
2014 Overview Financial Highlights • Loans increased $3 billion or 4% Focused on • Deposits increased $2 billion or 2%, while banking deposit costs reached historic lows fundamentals 2014 ($ in millions, except per share data) 2013 Change • Increased number of quality households Net Income(1) $1,103
Slide 3: Loans
Loans Loan Balances(1) ($ in billions) For the quarter: $77.3 • Ending loan balances up $700MM or 1% $76.5 $76.6 • Business loans(1)(2) increased 1% as production $75.7 increased 18% $74.6 • Commercial and industrial grew 3% • Line utilization increased 40 basis points and commitments increased 3% 4
Slide 4: Deposits and funding costs
Deposits and funding costs Deposit Balances(1) Deposit Balances(1) by type ($ in billions) ($ in billions) $94.2 $82.8 $84.2 $84.9 $85.4 $85.6 $94.1 $93.8 $93.4 $92.5 $9.7 $9.2 $9.0 $8.8 $8.6 4Q13 1Q14 2Q14 3Q14 4Q14 4Q13 1Q14 2Q14 3Q14 4Q14 Low-Cost Deposits Time Deposits + Other Deposit costs Fund
Slide 5: Net interest income and net interest margin
Net interest income and net interest margin Net interest income and net interest margin ($ in millions) • Despite continuation of the low $846 rate environment, which exerted $837 $837 $837 $831 pressure on asset yields, both net interest income and net 3.26% 3.26% interest margin remained 3.24% rel
Slide 6: Non-interest income
Non-interest income Non-interest income • Non-interest income down 6% ($ in millions) $526 • Service charges declined $14MM $478 $457 $448 • $4MM decline in fees resulting from 134 $438 66 83 product discontinuation 57 77 • Customer reimbursements of $8MM 84 90 89 90 91 • Mortgage income impacted by
Slide 7: Expenses
Expenses • Reported expenses included some unusual items • Previous quarter included $24MM benefit from Adjusted non-interest expenses(1) ($ in millions) 3% Decrease(2) unfunded commitments; partially offset by $7MM Visa® expense(3) $883 • Intend to consolidate 50 branches in 2015 and $859 incurred
Slide 8: Solid asset quality
Solid asset quality Net charge-offs and ratio NPLs and coverage ratio(3) ($ in millions) 35% Decline(1)(2) ($ in millions) 23% Decline in Total NPLs(1) $1,082 137% 141% $1,070 133% $899 $837 $829 124% 118% 4Q13 1Q14 2Q14 3Q14 4Q14 NPLs Coverage Ratio Criticized and classified loans(4) Troubled debt
Slide 9: Strong capital and solid liquidity
Strong capital and solid liquidity Tier 1 capital ratio(1) • Repurchased 25 million shares of common stock amounting to $248 million 12.5% 12.7% 12.5% • Basel III Common Equity Tier 1 ratio(1)(2) 11.7% 11.8% estimated to be approximately 11.1%, which is well above minimum threshold • Regions remains
Slide 10: Expectations for 2015
Expectations for 2015 Economy Loans NIM / Operating Leverage • Expect solid GDP growth in • Expect total loan growth in the 4% • If current market conditions Deposit growthprevail, of the U.S. economy in 2015 to 6% range net interest margin is expected to 1% to 2% remain relatively stable next quart
Slide 11: Appendix
Appendix A REGIONS 1 PSS SS SL PLP SP PPL PSP LP LLP LLP LP LSP LPL LLLP LLL Lf Z|
Slide 12: Energy and oil exposure
Energy and oil exposure Exposure E&P Risk Management Energy Loan Portfolio Outstandings • Experienced team of bankers and petroleum ($ in millions) As of 12/31/14 engineers on staff Oilfield Services $1,394 Exploration and production • Majority of exposure is in Shared National $1,144 (Upstream) Cre
Slide 13: 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 14: Non-GAAP reconciliation: Net charge-off ratio
Non-GAAP reconciliation: Net charge-off ratio Select calculations for annualized net charge-offs as a percentage of average loans (GAAP) are presented in the table below. During the fourth quarter of 2013, Regions made the strategic decision to transfer certain primarily accruing restructured reside
Slide 15: 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 16: Non-GAAP reconciliation: Basel III common equity Tier 1
Non-GAAP reconciliation: Basel III common equity Tier 1 The following table provides calculations of “common equity Tier 1" (CET1) (non-GAAP), based on Regions’ current understanding of the Final Basel III requirements. In December 2010, the Basel Committee on Banking Supervision (the “Basel Committ
Slide 17: Forward-looking statements
Forward-looking statements This presentation may include forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995, which reflect Regions’ current views with respect to future events and financial performance. Forward-looking statements are not based on historica
Slide 18: Regions
A. REGIONS