Regions Financial Corporation · NYSE:RF
Regions Financial — Goldman Sachs US Financial Services Conference 2010
31 slides from Regions Financial's conference presentation, Dec 8, 2010
Slide 1: Goldman Sachs US Financial Services Conference
Goldman Sachs US Financial Services Conference December 8, 2010 Exhibit 99.1
Slide 2: 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 (“the Act”) provides a “safe harbor” for forward-looking statements which
Slide 3: Slide 3
Slide 4: Primary focus is returning to sustainable profitability
Our primary focus is returning to sustainable profitability through disciplined execution of our strategic priorities Our primary focus is returning to sustainable profitability through disciplined execution of our strategic priorities
Slide 5: Why Regions?
Why Regions? Strong Southeastern franchise with comprehensive line of business offerings Solid core business performance Aggressively identifying and disposing of problem assets Capital and liquidity remain solid
Slide 6: Strong Southeastern Franchise
Strong Southeastern Franchise Ranked 5 th or Better in Market Share Targeted Growth Areas Headquarters Birmingham, AL Associates 27,898 Branches 1,774 Morgan Keegan Offices Regions Insurance Offices 30 ATMs 2,150 Deposits $95 Billion Loans $84 Billion Projected population growth for Regions footprin
Slide 7: Diversified Offerings, Multi Channel Delivery
REGIONS Mortgage Branches Consumer Lending edit/Debit Telebanking ATMs Cards On-line Mobile Banking Banking Diversified Offerings Multi Channel Delivery
Slide 8: Business Services Segments
Middle Market Small Business Treasury Management Capital Markets / Syndications Equipment Finance Specialized Groups Core Middle Market Branches Business Banking (Metro Markets) Community Banking Business Services Real Estate Commercial Real Estate Affordable Housing Homebuilders Real Estate Corpora
Slide 9: Morgan Keegan and Wealth Offerings
Private Client Group Fixed Income Capital Markets Equity Capital Markets Equity Research, Institutional Sales & Trading Personal & Institutional Trust, Timber Management Institutional Sales & Trading, Fixed Income Research Retail Brokerage Regions Morgan Keegan Trust Morgan Keegan Municipal Finance,
Slide 10: Excellent Service Quality is the Foundation for Growth
Excellent Service Quality is the Foundation for Growth Regions Ranked in Top 10% for Customer Loyalty Regions Ranked in top 20% for Branch Service Quality Excellent - Gallup 90th percentile Good - Gallup 75th percentile Average - Gallup 50th percentile Excellent - Gallup 90th percentile Average - Ga
Slide 11: Strong Low-Cost Deposit Growth
Strong Low-Cost Deposit Growth While Driving Lower Deposit Costs $62.2 B $69.9 B $55 $60 $65 $70 $75 3Q09 3Q10 Average Low Cost Deposits $7.7 Billion YOY Growth 126 bps 70 bps 0 bps 20 bps 40 bps 60 bps 80 bps 100 bps 120 bps 140 bps 3Q09 3Q10 Deposit Costs Improved 56 bps
Slide 12: Improved Deposit Mix
Reduced Average Time Deposit mix from 34% in 3Q09 to 26% in 3Q10 Grew Low-Cost Deposits 12.4% year-over-year Improved Deposit Mix Average Deposits $94.8 B Average Deposits $95.1 B
Slide 13: Disciplined Focus on New Checking Account Growth
Disciplined Focus on New Checking Account Growth On track to open 1 Million New Checking Accounts in 2010 Account structure that provides quality products and services that customers value and at the same time fairly compensates Regions Net New Account Growth could slow as we migrate to fee generati
Slide 14: Consumer Loan Production Improving; Consumers Continue to De-Leverage
Consumer Loan Production Improving; However Consumers Continue to De-Leverage Mortgage Production remains strong – on track for second best year in terms of Mortgage Production New Consumer Loan Production volumes are improving in Branch Small Business, Direct and Indirect Auto Consumers De-Leveragi
Slide 15: Business Services Revenue is Well-Diversified
Business Services Revenue is Well-Diversified Middle Market C&I Specialized Groups Commercial Real Estate Professional income property developers, owners and operators Public real estate companies Homebuilders Affordable housing tax credits Small Business Business Banking (Metro Markets) Community B
Slide 16: We Are Growing: Commercial Loans
We Are Growing Commercial Loans
Slide 17: Net interest margin climbed
Net interest margin climbed 9bps linked quarter; up 24 bps year-to-date Repricing opportunity remains with over $11.4 billion of CD’s maturing over the next 9 months at an average rate of 2.10% Steady loan yields despite declining market rates Hedges in place through end of 2012 to protect net inter
Slide 18: Growth of Fee Income and Debit Card Interchange Offsets Reg E Impact
$3.1M $8.8M $5.4M $9.8M $5.4M– $11.6M 1Q10 2Q10 3Q10 Migration to Accounts Generating both customer value and fees for Regions Overdraft Protection Monthly Maintenance Fee $79M $87M $88M 1Q10 2Q10 3Q10 Debit Card Interchange Growing Driven by Account Growth and Usage Trends Growth of Fee Income and
Slide 19: Strengthened Our Core Franchise Through Productivity & Efficiency Initiatives
Strengthened Our Core Franchise Through Productivity & Efficiency Initiatives *Non-GAAP; refer to Appendix for Non-GAAP reconciliation ($ in millions) Sep YTD Branches 1,965 1,900 1,895 1,774 Reduced branch count by 10% since 2007 Headcount 33,161 30,784 28,509 27,898 Headcount declined 5,263 or 16%
Slide 20: Disposed of Over $5 Billion in Problem Assets in Past 24 Months
$62 $57 $65 $111 $128 $102 $171 $196 $214 $24 $15 $170 $265 $388 $371 $422 Disposed of Over $5 Billion in Problem Assets in Past 24 Months $57 $56 $67 $72 $117 $112 $78 $91 $706 $91 $134 $201 $133 $87 $159 $332 $0 $300 $600 $900 $1,200 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 OREO Sales Problem Loan
Slide 21: Total Investor Real Estate
Total Investor Real Estate Higher Risk Investor Real Estate Segments Higher Risk Portfolio Segments Significantly Reduced
Slide 22: Percentage of Non-Performing Loans Paying as Agreed
Percentage of Non-Performing Loans Paying as Agreed Business Services Gross Additions which remained at quarter end Total Business Services NPLs as of 09/30/10 0% 20% 40% 60% 80% 100% 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 Balances that are Current Balances 30+ DPD 7% 15% 21% 23% 28% 24% 36% $0.1B $1.4B
Slide 23: Higher Loan Charge-Offs Reflect Asset Dispositions
$372 $377 $385 $333 $348 $180 $200 $205 $186 $178 $128 $115 $110 $132 $233 $71 $76 $58 $36 $70 $0 $250 $500 $750 $1,000 3Q09 4Q09 1Q10 2Q10 3Q10 Business Services Consumer Sales/Transfer to HFS Costs other than Charge Offs $751 $768 $758 $687 Higher Loan Charge-Offs Reflect Asset Dispositions $829
Slide 24: Non-Performing Assets and Delinquencies Declining
Non-Performing Assets and Delinquencies Declining Non-Performing Assets (excludes loans held for sale) Accruing Loans Past Due $1.9 $3.1 $3.7 $4.1 $4.3 $4.0 $3.8 $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 $4.5 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10
Slide 25: Solid Capital; Currently above proposed Basel minimum ratios
Solid Capital; Currently above proposed Basel minimum ratios Basel Tier 1 Min Basel T1C Min
Slide 26: Liquidity Sources and Loan to Deposit Ratio
Low Cost Deposits 46% Low Cost Deposits 56% Low Cost Deposits 61% Other Customer Deposits 26% Other Customer Deposits 26% Other Customer Deposits 23% Wholesale Funding 29% Wholesale Funding 18% Wholesale Funding 16% Dec '08 Dec '09 Sept '10 Liquidity Sources Loan to Deposit Ratio 107% 92% 89%
Slide 27: Strong Liquidity
Strong Liquidity › Liquidity policy is to maintain a sufficient level of funding to meet projected cash needs at the parent company for 24 months › $4.5B Parent Company Cash at 9/30/10; $2.5B of parent company maturities in the next 24 months › Bank TLGP maturities $3.5B ($1.5B 4Q10 & $2B 4Q11) › $2
Slide 28: Impact from Regulatory Reform and Basel Proposal
Issue Impact to Regions Impact from Regulatory Reform and Basel Proposal Regulation E Impact from Reg E to be less than originally forecasted due to better than expected customer response to opting-in to program Original forecast for 2 half of 2010: $72 million New forecast: $50 - 60 million Durbin
Slide 29: Why Regions?
Why Regions? Strong Southeastern franchise with comprehensive line of business offerings Solid core business performance Aggressively identifying and disposing of problem assets Capital and liquidity remain solid
Slide 30: Regions
[A REGIONS
Slide 31: Appendix
Appendix Note: The following table illustrates the method of calculating the Non-GAAP financial measures used in this slide presentation:
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