Regions Financial Corporation · NYSE:RF
Regions Financial — Q4 2013 Earnings Presentation
18 slides from Regions Financial's earnings presentation, Jan 21, 2014
Slide 1: Regions Financial 4th Quarter 2013 Earnings Conference Call
1 Regions Financial 4th Quarter 2013 Earnings Conference Call January 21, 2014 Exhibit 99.3
Slide 2: Progress made in 2013 and momentum into 2014
2 We are pleased with the progress made in 2013 and look forward to building on that momentum in 2014 2013 – Focused on the fundamentals Noteworthy Accomplishments in 2013 • Net income available to common shareholders increased 10% • Expanded net interest margin 16 bps • Lowered deposit costs 10 bps
Slide 3: Notable items in the fourth quarter
3 Notable items in the fourth quarter • Loans totaling approximately $686 million transferred to held-for-sale • Loans were primarily accruing first lien residential mortgages classified as Troubled Debt Restructurings (TDRs) • Net charge-offs increased $151 million and allowance for loan losses red
Slide 4: Loan balances impacted by the transfer of loans to held-for-sale
4 Loan balances impacted by the transfer of loans to held-for-sale Total Loan Balances (1) (1) Ending balances (2) See GAAP to non-GAAP reconciliation in appendix • Total average loan balances up 1% - however, ending loans down 2% due to loans transferred to held-for-sale • Excluding the loans trans
Slide 5: Total funding costs continued to improve
5 Total funding costs continued to improve • Average low-cost deposits increased $500 million linked quarter to 89% of average deposits • Deposit costs declined to a historically low level of 12 bps • Deposit costs declined 10 bps from the fourth quarter of the previous year • Total funding costs de
Slide 6: Net interest income increased and net interest margin expanded
6 Net interest income increased and net interest margin expanded • Net interest income increased 1% from prior quarter and net interest margin increased 2 bps • Increases in long-term interest rates further reduce prepayments on securities and premium amortization • Premium amortization totaled $45
Slide 7: Non-interest revenue impacted by company initiatives
7 Non-interest revenue impacted by company initiatives • Non-interest revenue increased 6% QoQ • Included $17 million net gain related to sale of certain low-income housing investments and $39 million gain related to leveraged lease terminations • As expected, mortgage production slowed by 23% and m
Slide 8: Prudent expense management
8 Prudent expense management • 4Q expenses included $58 million regulatory charge • Branch consolidation expense of $5 million for 30 branches • Deposit administrative fees lower by $15 million - due to improvement in asset quality and overall business performance and refunds of previously incurred
Slide 9: Broad-based improvement in asset quality
9 3,156 2,964 2,776 2,477 2,088 1,336 1,136 1,142 1,035 927 $4,492 $4,100 $3,918 $3,512 $3,015 4Q12 1Q13 2Q13 3Q13 4Q13 Classified Loans Special Mention NPLs and Coverage Ratio (2) Broad-based improvement in asset quality Net Charge-Offs and Ratio Criticized and Classified Loans (3) ($ in millions)
Slide 10: Strong capital position
10 Strong capital position • Basel III Tier 1 Common ratio(1)(2) estimated to be approximately 10.5%, which is well above minimum threshold • Liquidity at both the bank and holding company remains solid with a loan to deposit ratio of 81% • Regions remains well-positioned to be fully compliant with
Slide 11: Appendix
Appendix AM REGIONS «
Slide 12: Non-GAAP reconciliation: Ending loans
12 Non-GAAP reconciliation: Ending loans NM – Not Meaningful (1) Regions believes excluding the impact of the residential first mortgage loans transferred to held for sale during the fourth quarter of 2013 provides a more meaningful calculation of loan growth rates and presents them on the same basi
Slide 13: Non-GAAP reconciliation: Non-interest expense and efficiency
13 Quarter Ended ($ amounts in millions) 12/31/2013 9/30/2013 6/30/2013 3/31/2013 12/31/2012 4Q13 vs. 3Q13 4Q13 vs. 4Q12 Non-interest expense (GAAP) $ 946 $ 884 $ 884 $ 842 $ 902 $ 62 7.0 % $ 44 4.9 % Adjustments: REIT investment early termination costs — — — — (42 ) — NM 42 NM Loss on early extingu
Slide 14: Non-GAAP reconciliation: Net charge-off ratio
14 Non-GAAP reconciliation: Net charge-off ratio As of and for Quarter Ended ($ amounts in millions) 12/31/2013 9/30/2013 6/30/2013 3/31/2013 12/31/2012 Residential first mortgage net charge-offs (GAAP) A $ 164 $ 13 $ 18 $ 22 $ 26 Less: Net charge-offs associated with transfer to loans held for sale
Slide 15: Non-GAAP reconciliation: Tier 1 common
15 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 calcul
Slide 16: Non-GAAP reconciliation: Basel III
16 Non-GAAP reconciliation: Basel III The following table provides calculations of Tier 1 common, based on Regions’ current understanding of the Final Basel III requirements, released in July 2013. Regions currently calculates its risk-based capital ratios under guidelines adopted by the Federal Res
Slide 17: Forward-looking statements
17 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 statement
Slide 18: Ma REGIONS
Ma REGIONS