Slide 1: Regions Financial 2nd Quarter Earnings Conference Call
Regions Financial nd 2 Quarter Earnings Conference Call July 26, 2011
Slide 2: Continued Progress; Core PPNR reaches $500MM
Continued Progress; Core PPNR* reaches $500MM ($ in millions) 2Q10 1Q11 2Q11 Net Income (Loss) ($335) $17 $55 Earnings EPS ($0.28) $0.01 $0.04 Highlights Net Interest Margin 2.87% 3.07% 3.05% Loan Loss Provision $651 $482 $398 rd › 3 consecutive quarter of profitability, highest level since third qu
Slide 3: Solid Core Performance
Solid Core Performance › Key credit metrics continue to improve › Formation of non-performing loans declined for the 3rd consecutive quarter Asset Quality › Non-performing loans, excluding loans held for sale, declined for the 5th consecutive Improvement quarter or 10% › Total loan loss provision de
Slide 4: 2Q11 Earnings Highlights
2Q11 Earnings Highlights 2Q11 vs. 1Q11 2Q11 vs. 2Q10 ($ in millions, except EPS) 2Q10 1Q11 2Q11 $ % $ % Net Interest Income $ 856 $ 863 $ 864 $ 1 0% $ 8 1% Adjusted Non-Interest Revenue* 756 764 757 (7) -1% 1 0% Adjusted Non-Interest Expense* 1,126 1,167 1,121 (46) -4% (5) 0% Adjusted PPNR* 486 460
Slide 5: Non-Performing Loan Inflows Declined 24%
Non-Performing Loan Inflows Declined 24% NPL Inflows by Type Business Services Gross NPLs Ending Balances 4
Slide 6: Non-Performing Loans Declined 10%
Non-Performing Loans* Declined 10% Non-Performing Assets › Non-performing loans, excluding loans held for sale, declined $303 million or 10% › $620 million of criticized loans were sold or moved to held for sale › Non-performing assets declined $331 million or 8% › Delinquencies improved for the 5th
Slide 7: Allowance Coverage of Non-Performing Loans Increases 9 bps
Allowance Coverage of Non-Performing Loans Increases 9 bps Loan Loss Provision Allowance and Coverage Sales/ HFS (1) (1) Loan charge-offs related to Sales and Transfer to Held for Sale (2) Excludes loans held for sale 6
Slide 8: Loan Balances Reflect Commercial Growth offset by Continued Decline in Investor Real Estate
Loan Balances Reflect Commercial Growth offset by Continued Decline in Investor Real Estate › Commercial loan balances on an ending basis increased 7% from one year ago reflecting strength in our middle market segment › Commercial & industrial commitments increased 4% linked quarter to $28 billion ›
Slide 9: Deposit Costs Decline 6 bps; Driven by Improving Deposit Mix
Deposit Costs Decline 6 bps; Driven by Improving Deposit Mix Deposit Balances* and Deposit Costs › Our improved deposit mix is resulting in lower deposit costs › Low cost deposits as a % of total deposits increased to 76.6% in 2Q11 from 72.5% in 2Q10 › Repricing opportunities remain with over $6.1 b
Slide 10: Net Interest Income Steadied
Net Interest Income Steadied Net Income and Net Interest Margin › Net Interest Margin Up 18 bps versus prior year › Net interest margin decline impacted by excess liquidity › Repositioned securities portfolio, shortened duration resulting in $24 million of securities gains 9
Slide 11: Non-Interest Revenues Reflect Lower Brokerage Income Offset by Solid Service Charges Growth
Non-Interest Revenues Reflect Lower Brokerage Income Offset by Solid Service Charges Growth Adjusted Non-Interest Revenue* › Adjusted non-interest revenue* 1% lower than prior quarter › Morgan Keegan’s revenues down due to lower private client and capital markets revenue in 2Q11 › Service charges in
Slide 12: Focused Expense Management Leads to 4% Decline in Expenses
Focused Expense Management Leads to 4% Decline in Expenses Occupancy Detail › Adjusted non-interest expenses* 4% lower versus prior quarter Square Footage Branch Count › Salaries and benefits declined 6% linked quarter and professional and legal fees declined $20 million linked quarter › FDIC premiu
Slide 13: Capital Ratios Remain Strong; Liquidity Profile Solid
Capital Ratios Remain Strong; Liquidity Profile Solid Capital Ratios Favorable Liquidity Position › Well-positioned with respect to the Liquidity Coverage Ratio prescribed under Basel III › Solid liquidity at both the bank and holding company › Loan-to-deposit ratio of 84.3% * Current Quarter ratios
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Slide 15: Forward-Looking Statements
›Forward- Looking Statements This presentation may include forward-looking statements which reflect Regions’ current views with respect to future events and financial performance. The Private Securities Litigation Reform Act of 1995 (“the Act”) provides a “safe harbor” for forward-looking statements
Slide 16: Non-GAAP Reconciliation: PPNR
Non-GAAP Reconciliation: PPNR ($ in millions) 2Q10 3Q10 4Q10 1Q11 2Q11 Net interest income (GAAP) $ 856 $ 868 $ 877 $ 863 $ 864 Non-interest income (GAAP) 756 750 1,213 843 781 Adjustments: Securities (gains) losses, net - (2) (333) (82) (24) Leveraged lease termination gains - - (59) - - Loss (gain
Slide 17: Non-GAAP Reconciliation: EPS
Non-GAAP Reconciliation: EPS 2Q10 1Q11 2Q11 EPS as reported (GAAP) $ (0.28) $ 0.01 $ 0.04 Significant Items: Regulatory charge and related tax benefit 0.17 - (0.03) Securities (gains) losses, net - (0.04) (0.01) Branch consolidation and property and equipment charges - - 0.04 Adjusted EPS (Non-GAAP)
Slide 18: Non-GAAP Reconciliation: Capital
Non-GAAP Reconciliation: Capital ($ amounts in millions) 06/30/11 Stockholders' equity (GAAP) 16,888 (1) Non-qualifying goodwill and intangibles (5,754) Adjustments, including other comprehensive income related to cash flow hedges, disallowed deferred tax assets, threshold deductions and other adjus