Regions Financial Corporation · NYSE:RF
Regions Financial — 2011 Barclays Capital Global Financial Services Conference
33 slides from Regions Financial's conference presentation, Sep 12, 2011
Slide 1: 2011 Barclays Capital Global Financial Services Conference
2011 Barclays Capital Global Financial Services Conference September 12, 2011 Grayson Hall President and Chief Executive Officer Exhibit 99.1
Slide 2: Why Regions?
Why Regions? • Strong Southeastern franchise with comprehensive line of product offerings • Leading brand favorability and exceptional service quality • Solid core business performance • Aggressively identifying and disposing of problem assets • Capital and liquidity remain solid
Slide 3: Regional Bank Focused in the Southeast
Regional Bank Focused in the Southeast Ranked or Better in Market Share Targeted Growth Areas * As of August 26, 2011 Associates: 27,261 Assets: $131B Loans: $81B Deposits: $96B Branches: 1,769 Morgan Keegan Offices: 312 Insurance Offices: 30 ATMs: 2,132 Market Cap: $5.2B* th
Slide 4: Regions' Footprint is Characterized by High Market Shares, High Growth Markets or Both
Regions’ Footprint is Characterized by Either High Market Shares, High Growth Markets or Both Southeastern United States continues to be a growth market ($ in billions) National Average: 3.9% Source: SNL Financial 9.0 and above 8.0 to 8.9 7.0 to 7.9 6.0 to 6.9 5.9 or less Projected Population Growth
Slide 5: Regions is Well Positioned Competitively in its Core US Southeastern Markets
Regions is Well Positioned Competitively in its Core US Southeastern Markets National Deposit Market Share Weighted Average Deposit Market Share in Regions’ Core Markets Rank Name Market Share ’10-’15 Population Growth Bank of America 11.7% 4.8% Wells Fargo 10.6% 5.7% JPMorgan Chase 9.2% 3.5% Citigr
Slide 6: Comprehensive and Diversified Line of Product Offerings
Comprehensive and Diversified Line of Product Offerings Commercial Consumer Wealth Management – Small and mid- sized C&I lending – Commercial Real Estate – Equipment – Mortgage – Home Equity – Credit Card – Direct Lending – Indirect Auto – Private Banking – Insurance – Trust Services Finance
Slide 7: Competitive Advantage Driven by Customer Loyalty
Competitive Advantage Driven by Customer Loyalty Regions continues to perform in the top 10% in customer loyalty and top 20% for branch service quality (1) (1) Based on Gallup survey (2) Based on Prime Performance study (3) 2010 Greenwich Excellence Award #1 in Customer Service and “Friendliest” Ban
Slide 8: Excellent Service Quality and Brand Strength Being Recognized
Excellent Service Quality and Brand Strength Being Recognized Regions Ranks Highest in Brand Favorability (1) (1) Based on 4 Quarter Rolling Average from TNS Consumer Banking Market Effectiveness Study (2) Banks in study include: Bank of America, BB&T, BBVA Compass, Citigroup, Capital One, J.P. Morg
Slide 9: Quality Loans Key to Profitable Growth
Quality Loans Key to Profitable Growth 39% Portfolio Mix* 61% Consumer Services › Growing consumer loans to achieve a more balanced portfolio › Consumer loan growth will be fueled by new businesses as well as growth in existing businesses › Loan production in mortgage portfolio was 2 nd largest ever
Slide 10: Regions C&I Loan Growth has significantly outpaced Peers
Regions C&I Loan Growth has significantly outpaced Peers Source: SNL Financial; FRY-9C Regulatory filings • Our Commercial & Industrial loan growth has significantly outpaced peers since the end of 2009 • Momentum has continued in 2011, as Commercial & Industrial loans have grown another 7.9% • Comm
Slide 11: Improving deposit mix and funding costs
We have made great strides in improving deposit mix and cost and funding costs Q2 2011 Q1 2011 Q2 2010 Total Funding Cost 111 bps Total Funding Cost 86 bps Total Funding Cost 80 bps Deposit Cost 79 bps Deposit Cost 59 bps Deposit Cost 53 bps Q2 2011 Low Cost Deposits 73% Time Deposits 27% Low Cost D
Slide 12: Net Interest Margin Impacted by Excess Liquidity and Non-Accrual Loans
Net Interest Margin Impacted by Excess Liquidity and Non-Accrual Loans Net Income & Net Interest Margin Impact of Excess Liquidity & Non-Accruals on NIM 2.87% 2.96% 3.00% 3.07% 3.05% 2.87% 2.96% 3.00% 3.07% 3.05% $863 $876 $886 $872 $872 $500 $550 $600 $650 $700 $750 $800 $850 $900 $950 2Q10 3Q10 4Q
Slide 13: Only bank in peer group to grow service charges year-over-year
Regions is the only bank in our peer group to grow service charges year-over-year Offsetting Durbin • Increasing hurdle on obtaining free checking • Debit card usage fee to begin in 4Q11 • Shift debit cards to credit cards increase interchange fees • Cross-sell new products and services in developme
Slide 14: Expense control continues to be a focus
Expense control continues to be a focus • While many peers grew expenses in the second quarter, Regions decreased expenses by 4% • Over the last year Regions’ expenses have remained flat while peers continue to grow expenses • Expenses per FTE are among the lowest of all peers Source: SNL Financial
Slide 15: Solid Adjusted Pre-tax Pre-Provision Income Growth
Solid Adjusted Pre-tax Pre-Provision Income Growth ($ in millions) Net Interest Income Core Non- Interest Revenue Core Non- Interest Expense Adjusted Pre-tax Pre- provision Income* * Refer to appendix for reconciliation to GAAP 2Q11 + - 1,121 = 1Q11 + - 1,167 = 4Q10 + - 1,211 = 3Q10 + - 1,162 = Adju
Slide 16: Consecutive Quarters of Profitability; Pre-provision Income Exceeded Provision
3 Consecutive Quarters of Profitability and Adjusted Pre-tax Pre- provision Income Exceeded Loan Loss Provision for first time since 1Q09 Pre-tax Pre-Provision Income* Less Provision *Pre-tax pre-provision income adjusted for non-core items as reported in financial supplement. $1,179 $770 $651 $760
Slide 17: Significant Reduction in Highest Risk Portfolio Segments
Significant Reduction in Highest Risk Portfolio Segments Reduced Investor Real Estate $12.4 B or 48% over 4 years Reduced High Risk Segments $11.1 B or 82% over 4 years Total Investor Real Estate Higher Risk Investor Real Estate Segments $6.3 $2.3 $5.0 $1.2 $0.3 $1.0 $0 $1 $2 $3 $4 $5 $6 $7 Land Con
Slide 18: Non-Performing Loan Inflows Declined 24%
Non-Performing Loan Inflows Declined 24% NPL Inflows by Type Gross NPLs Current and Paying as Agreed 24% 36% 37% 42% 38% Ending Balances $0.8 $1.3 $0.9 $0.7 $0.6 $0.0 $0.2 $0.4 $0.6 $0.8 $1.0 $1.2 $1.4 $1.6 $1.8 2Q10 3Q10 4Q10 1Q11 2Q11 Land/Condo/Single Family Income Producing Business and Communit
Slide 19: Non-Performing Assets Declined 14%
Non-Performing Assets Declined 14%* Non-Performing Assets $3.5 $3.4 $3.2 $3.1 $2.8 * 2Q11 shown on a pro-forma basis to include bulk sale completed after quarter-end Non-performing loans, excluding loans held for sale, declined $303 million or 10% $620 million of criticized loans were sold or moved
Slide 20: Substantial Improvement in Loan Loss Provision; Coverage Ratio Remains Strong
Substantial Improvement in Loan Loss Provision; Coverage Ratio Remains Strong Allowance & Coverage (2) Loan Charge-Offs 333 348 402 210 190 132 233 111 106 207 (150) (1) Loan charge-offs related to Sales and Transfer to Held for Sale (2) Excludes Non-performing Loans Held for Sale Sales/ HFS (1) 4.0
Slide 21: Strong Capital
Strong Capital ** Non-GAAP - Subject to change as interpretation of Basel III rules is ongoing and dependent on guidance from Basel and regulators; see appendix for reconciliation
Slide 22: Solid Liquidity
Loans / Deposits Core Deposits as a % of Total Funding Solid Liquidity Regions is well positioned for loan growth Liquidity coverage ratio above the minimum requirement of 100% 88% 87% 87% 86% 85% 85% 84% 80% 77% 77% 53% Bank #1 RF Bank #3 Bank #4 Bank #5 Bank #6 Bank #7 Bank #8 Bank #9 Bank #10 Ban
Slide 23: Regions' Business Plan
Regions’ Business Plan is for all associates to Focus on customers, build relationships customers value and manage risks. Executing this plan with excellence will result in a high-performing financial institution. Business Plan Focus on the Customer Build Sustainable Performance Enhance Risk Managem
Slide 24: Why Regions?
Why Regions? • Strong Southeastern franchise with comprehensive line of product offerings • Leading brand favorability and exceptional service quality • Solid core business performance • Aggressively identifying and disposing of problem assets • Capital and liquidity remain solid
Slide 25: Regions
Ad REGIONS |
Slide 26: 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 1995 (“the Act”) provides a “safe harbor” for forward-looking statements w
Slide 27: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($ in millions) 2Q10 3Q10 4Q10 1Q11 2Q11 Net interest income (GAAP) $ $ $ $ $ Non-interest income (GAAP) 1,213 Adjustments: Securities (gains) losses, net - (2) (333) (82) (24) Leveraged lease termination gains - - (59) - - Loss (gain) on sale of mortgage loans - - (26) - Adj
Slide 28: Improving Early Stage Credit Metrics
Improving Early Stage Credit Metrics… Business Services Criticized Loans * Business Services Classified Loans 90+Day Delinquencies 30-59 Day Delinquencies *Includes classified loans and special mention loans $612 $593 $585 $527 $483 $5,824 $6,687 $7,337 $7,929 $8,196 $7,899 $780 $766 $642 $676 $566
Slide 29: Result In Improving Asset Quality
…Result In Improving Asset Quality Total NPLs (excluding HFS) Total NPAs (including HFS) NPLs Gross Migration Investor Real Estate Gross NPA Migration * 2Q11 shown on a pro-forma basis to include bulk sale completed after quarter-end $799 $1,340 $947 $730 $555 2Q10 3Q10 4Q10 1Q11 2Q11 2Q10 3Q10 4Q10
Slide 30: Credit Fundamentals Strengthening
Credit Fundamentals Strengthening NCO’s Avg Loans NPAs + 90 day Delinquencies NPL Balances Paying Current as Agreed NPAs + 90 Day Delinquencies/Loans + OREO + HFS * 2Q11 shown on a pro-forma basis to include bulk sale completed after quarter-end 2.99% 3.52% 3.22% 2.37% 2.71% 2Q10 3Q10 4Q10 1Q11 2Q11
Slide 31: Allowance Coverage Increasing
Allowance Coverage Increasing Allowance for Loan Losses to NPLs (excl HS) Allowance for Loan Losses to Total Loans 92% 94% 101% 103% 112% 2Q10 3Q10 4Q10 1Q11 2Q11 3.71% 3.77% 3.84% 3.92% 3.84% 2Q10 3Q10 4Q10 1Q11 2Q11
Slide 32: Conservative Marks and Reserves Already Taken on Impaired Loans
Conservative Marks and Reserves Already Taken on Impaired Loans Note1: Impaired loans include non-accrual commercial and investor real estate loans, excluding leasing, and all TDRs (including accruing commercial, investor real estate, and consumer TDRs) Note 2: Book value represents the unpaid princ
Slide 33: Adequately Reserved for Troubled Debt Restructurings
Adequately Reserved for Troubled Debt Restructurings June 30, 2011 Consumer loans make up 81% of accruing troubled debt restructurings Foreclosure rate less than half of the industry average Note: We expect TDRs to increase as a result of recent accounting literature that will be effective 3Q11. The
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