Regions Financial Corporation · NYSE:RF
Regions Financial — Q3 2013 Earnings Presentation
15 slides from Regions Financial's earnings presentation, Oct 22, 2013
Slide 1: Regions Financial 3rd Quarter 2013 Earnings Conference Call
1 Regions Financial 3rd Quarter 2013 Earnings Conference Call October 22, 2013 Exhibit 99.3
Slide 2: Third quarter highlights
2 Grew loan balances $902 million from the prior quarter to $76 billion Increased net interest income $16 million from the prior quarter to $824 million Expanded net interest margin 8 basis points to 3.24% Improved overall asset quality as net charge-offs declined to 0.60 percent of total loans Stay
Slide 3: Loan balances continued to increase
3 Loan balances continued to increase Loan Growth From Prior Quarter (1) 7% 4% 3% Indirect Auto Credit Card Commercial and Industrial Total Loan Balances (1) (1) Ending balances • Total loan balances grew over $900 million from the second quarter • Growing indirect auto loans by expanding the dealer
Slide 4: Total funding costs continued to improve
4 Total funding costs continued to improve • Average low-cost deposits grew $473 million from the prior quarter • Time deposits fell to 11% of total deposits, down from 16% last year • Deposit costs declined 2 bps to 13 bps due to mix shift and re-pricing of higher cost CDs • Additional $4.6 billion
Slide 5: Net interest income increased and net interest margin expanded
5 Net interest income increased and net interest margin expanded • Net interest income increased $16 million or 2% linked quarter • Net interest margin increased 8 bps quarter-over-quarter • Liability management and investment actions in 2Q provided 7 bps benefit to margin • Lower premium amortizati
Slide 6: Non-interest revenue relatively flat
6 Non-interest revenue relatively flat • Divested non-core portion of Wealth Management business, which resulted in a pre-tax gain of $24 million • As expected, mortgage income declined 25% as production slowed by 16% due to fewer refinances driven by higher interest rates • Taking steps to adjust m
Slide 7: Prudent expense management
7 Prudent expense management • Non-interest expenses were flat linked quarter • Salaries and benefits increased slightly due to additional staffing in revenue generating, customer facing and compliance areas • Continue to make investments in technology and talent to support innovation and enterprise
Slide 8: Broad-based improvement in asset quality
8 3,424 3,156 2,964 2,776 2,477 1,707 1,336 1,136 1,142 1,035 $5,131 $4,492 $4,100 $3,918 $3,512 3Q12 4Q12 1Q13 2Q13 3Q13 Classified Loans Special Mention $262 $180 $180 $144 $114 1.38% 0.96% 0.99% 0.77% 0.60% 3Q12 4Q12 1Q13 2Q13 3Q13 NPLs and Coverage Ratio (2) Broad-based improvement in asset qual
Slide 9: Strong capital position
9 Strong capital position • Basel III Tier 1 Common ratio(1)(2) estimated to be approximately 10.4%, which is well above minimum threshold • Liquidity at both the bank and holding company remains solid with a loan to deposit ratio of 82% • Regions remains well-positioned to be fully compliant with t
Slide 10: Appendix
Appendix Ms REGIONS ©
Slide 11: Interest rate sensitivity summary
11 Interest rate sensitivity summary Net interest income remains asset sensitive to increases in both short-term and longer-term rates 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% Forward Curve (1) NII impact due to instantaneous rate versus base case scenario *Based on market forward rates as of September 3
Slide 12: Non-GAAP reconciliation: Tier 1 common
12 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 13: Non-GAAP reconciliation: Basel III
13 Non-GAAP reconciliation: Basel III (1) Under Basel III, in addition to goodwill and other identified intangibles regulatory capital must be reduced by purchased credit card relationship intangible assets. The majority of these assets are allowed in Basel I capital. (2) Regions continues to develo
Slide 14: Forward-looking statements
14 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 15: Ma REGIONS
Ma REGIONS