Regions Financial Corporation · NYSE:RF
Regions Financial — Deutsche Bank Global Financial Services Conference 2016
21 slides from Regions Financial's conference presentation, May 31, 2016
Slide 1: Deutsche Bank Global Financial Services Conference June 1, 2016
Deutsche Bank Global Financial Services Conference June 1, 2016
Slide 2: 2016 Expectations
2016 Expectations Average loan growth of 3% ‐ 5% relative to 4Q15 average balances Average deposit growth of 2% ‐ 4% compared to 4Q15 average balances Net interest income and other financing income up 2% ‐ 4% Adjusted non‐interest income up 4% ‐ 6% Adjusted expenses flat to up modestly; full year ef
Slide 3: Strategic initiatives
Strategic initiatives Effectively Deploy Capital Disciplined organic growth Return appropriate capital to shareholders Use strategic investments to leverage our infrastructure and enhance revenue diversification Disciplined Expense Management Generate positive operating leverage Continuous
Slide 4: 1Q16 Results reflect a solid start to 2016
4 1Q16 Results reflect a solid start to 2016 Reported earnings of $257 million and earnings per share of $0.20 Results demonstrate that we are successfully executing on our strategic plan Expanded customer base as checking accounts, households, credit cards and wealth accounts achieved growth Recogn
Slide 5: Energy portfolio overview
Energy portfolio overview 5 Decline in direct exposure since 1Q15 Total energy loans as a % of total loans E&P criticized loans paying as agreed 98% 15% 99% 3.9% OFS criticized loans paying as agreed No second lien exposure outstanding in energy portfolio Loss expectations in energy for the remainde
Slide 6: Why Regions? – Building sustainable franchise value
Why Regions? – Building sustainable franchise value Effectively Deploy Capital Grow and Diversify Revenue Disciplined Expense Management Adjusted EPS growth of 12‐15% (CAGR) Adjusted efficiency ratio of <60% Adjusted ROATCE 12‐14% Three pillars of execution Long‐term expected results How we intend t
Slide 7: Appendix
Appendix 7 4. REGIONS
Slide 8: Balance sheet – steady growth
Balance sheet – steady growth Average deposit balancesAverage loan and lease balances 8 $77.9 $79.2 $80.6 $80.8 $81.5 1Q15 2Q15 3Q15 4Q15 1Q16 ($ in billions) Business lending balances increased 1%, driven by Corporate Banking and Real Estate Banking Almost every category in consumer lending experie
Slide 9: Steady increase in net interest income and other financing income
Steady increase in net interest income and other financing income (1) During the fourth quarter of 2015, Regions corrected the accounting for certain leases which had previously been included in loans. The cumulative effect on pre‐tax income lowered net interest income and other financing income $15
Slide 10: Adjusted non-interest income
10 Adjusted non‐interest income (1) (1) Non‐GAAP; see appendix for reconciliation $463 $494 $484 $502 $508 1Q15 2Q15 3Q15 4Q15 1Q16 ($ in millions) +9.7% Year‐Over‐Year Credit card income increased 12% Year‐over‐year Wealth Management income increased 8% from 1Q15 Capital markets income increased 10
Slide 11: Investments are paying off while prudently managing expenses
Investments are paying off while prudently managing expenses 11 (1) Non‐GAAP; see appendix for reconciliation (2) Represents ~9% of 2015 adjusted expense base Adjusted non‐interest expense(1) $840 $859 $894 $861 $843 1Q15 2Q15 3Q15 4Q15 1Q16 ($ in millions) Total salaries and benefits increased $17M
Slide 12: Industry leading capital ratios
Industry leading capital ratios Note: Financial data as of 3/31/16. Peers include BBT, CMA, FHN, FITB, HBAN, KEY, MTB, PNC, SNV, STI, USB and ZION. Source: SNL Financial. 12 9.5% 9.7% 9.7% 9.8% 9.9% 10.1% 10.4% 10.4% 10.6% 10.6% 10.9% 11.1% 11.1% 12.1% Peer #13 Peer #12 Peer #11 Peer #10 Peer #9 Pee
Slide 13: Solid liquidity
Solid liquidity Loan‐to‐deposit ratio(1) (1) Based on ending balances 13 Regions has a strong, core funded balance sheet resulting in low loan‐to‐deposit ratio Future debt maturities are manageable and allow for efficient re‐financing Regions’ liquidity policy requires that the holding company maint
Slide 14: Energy lending overview
Total commitments declined; however, direct balances increased ‐ driven primarily by higher utilization and new loans to creditworthy borrowers Allowance for loan and lease losses was 8% of direct energy balances at 3/31/16 vs 6% at 12/31/15 No second lien exposure outstanding within the energy port
Slide 15: Energy lending - Oil Field Services and Exploration & Production detail
Energy lending ‐ Oil Field Services and Exploration & Production detail Type As of 3/31/16 # of Clients* Commentary Marine $470 9 Shelf operators remain under stress. Additional stress is expected in 2016 as deepwater contracts mature and competition in the spot market intensifies. Integrated OFS 23
Slide 16: Loan balances by select states
Loan balances by select states 16 Note: Intelligence from our customer assistance program (CAP) reveals no noticeable increase in assistance requests in these markets to date. Investor Real Estate Balances ($ in millions) Office Retail Multi‐ Family Single Family Other Total Houston $13 $48 $333 $10
Slide 17: Loan balances by select states
Loan balances by select states 17 Investor Real Estate Balances ($ in millions) Office Retail Multi‐ Family Single Family Other Total Birmingham $49 $42 $29 $17 $24 $161 Huntsville 49 12 6 11 7 85 Mobile / Baldwin County 2 17 2 2 16 39 Other 9 20 20 15 21 85 Total $109 $91 $57 $45 $68 $370 Investor
Slide 18: Non-GAAP reconciliation: Non-interest income, non-interest expense and efficiency ratio
Non‐GAAP reconciliation: Non‐interest income, non‐interest expense and efficiency ratio NM ‐ Not Meaningful (1) Regions recorded $50 million and $100 million of contingent legal and regulatory accruals during the second quarter of 2015 and the fourth quarter of 2014, respectively, related to previou
Slide 19: 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 20: Forward-looking statements continued
Forward‐looking statements continued The foregoing list of factors is not exhaustive. For discussion of these and other factors that may cause actual results to differ from expectations, look under the captions “Forward‐Looking Statements” and “Risk Factors" of Regions' Annual Report on Form 10‐K fo
Slide 21: Regions
A REGIONS
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