Regions Financial Corporation · NYSE:RF
Regions Financial — Investor Day (February 2019)
27 slides from Regions Financial's investor day presentation, Feb 27, 2019
Slide 1: Investor Day 2019: Disciplined, focused, positioned for prudent growth
Exhibit 99.3 Investor Day 2019 Disciplined, focused, positioned for prudent growth Ronnie Smith | Head of the Corporate Banking Group | 1
Slide 2: Ronnie Smith, Head of Corporate Banking Group
Ronnie Smith Head of Corporate Banking Group Ronnie Smith is head of Corporate Banking at Regions, which includes Commercial Banking, Large Corporate Banking, Capital Markets, Real Estate Banking, Regions Business Capital, Credit Products Group, and Corporate Banking Group Administration. Smith is a
Slide 3: Key takeaways Corporate Bank
Key takeaways Corporate Bank We must build on our foundation of STRONG RISK 1 MANAGEMENT Unique customer focused GO‐TO MARKET STRATEGY that 2 sets us apart in the industry 3 Customized initiatives to facilitate HEALTHY GROWTH INVESTOR DAY 2019 | Corporate Bank | 3
Slide 4: Corporate bank overview
Corporate bank overview Pre‐tax pre‐provision income contribution Total Total Total # of Businesses Loans Deposits Revenue Clients Consumer 53% Corporate 40% Commercial Middle Market $23B $21B $982M 24,559 Wealth 7% $1M–$250M sales Large Corporate Revenue distribution and headcount $14B $4B $496M 1,
Slide 5: Foundational Risk Management
Foundational Risk Management • Client selectivity • Effective underwriting • Rigorous monitoring • Portfolio diversification INVESTOR DAY 2019 | Corporate Bank | 5
Slide 6: Commercial and Industrial balance & diversification
Commercial and Industrial balance & diversification Expertise across business Commercial & Industrial loan portfolio(1) $ in billions • Invested in specialized industry Government & Education 15% Manufacturing 11% expertise to further diversify portfolio Financial Services 11% • Technology & Defense
Slide 7: Investor real estate – balance and diversity exemplified
Investor real estate – balance and diversity exemplified Portfolio Commentary Significant decline in portfolio balances $6 $ in billions • Strong client selectivity YE 2007 • Pursue well‐capitalized companies $23B $5 • Remixed portfolio • Balancing exposure to term and $4 construction lending Invest
Slide 8: Leveraged loans – a conservative approach
Leveraged loans –a conservative approach Leveraged Lending Oversight Public / Sponsored vs. Private • Leveraged Lending transactions are subject to Public 35% enhanced underwriting and credit monitoring standards and are underwritten and serviced Sponsored 27% centrally within the Specialized and Le
Slide 9: Go-to Market Strategy
Go‐to Market Strategy • Local + industry & product expertise = client solutions • Relationship driven, improving returns • Continuous capital recycling • Solid core and growth markets INVESTOR DAY 2019 | Corporate Bank | 9
Slide 10: Unique go-to market strategy
Unique go‐to market strategy SM Local + Industry and Product expertise = Client solutions Regions is positioned to provide stronger capabilities and better quality advice than community banks. Additionally, Regions will “out‐service” the national banks and “out‐team” the regional banks and non‐tradi
Slide 11: An efficient and effective model
An efficient and effective model ~2,100 associates represent 10% of the 10% total company headcount 33% Revenue of $1.9B is 33% of total company revenue Recognized 12 times for Middle Market Banking and Small Business Banking, including among Efficient business model – contributes the top for “Best
Slide 12: Successful execution: improving returns while deepening relationships
SM ‐ successful execution Improving returns while deepening relationships Corporate Banking Group Profitability Specialized Industry Verticals Profitability RAROC Vertical PTI / Total RAROC Risk Adj. Spread NIR/Revenue 17.5% 15.0% 36.5% 1.80% 24.9% 30.8% 15.0% 21.2% 13.0% 1.59% 11.2% 11.5% 2016 2018
Slide 13: Capital recycling efforts have contributed to improving returns
Capital recycling efforts have contributed to improving returns Capital Recycling Efforts Utilizing Capital More Efficiently –Large Corporate Economic Capital RAROC • Capital Commitments Working Group (“CCWG”) was Improvement Improvement 14.4% formed in January 2016 9.9% • More disciplined approach
Slide 14: Solid core markets – who we bank matters
Solid core markets –who we bank matters • Client selectivity is essential as 70% of revenue growth comes from existing relationships • Focused on clients who want broad and deep relationships • Solid risk profile who have proven to perform through economic cycles • Key relationships have growth beyo
Slide 15: Significant opportunities within growth markets
Significant opportunities within growth markets Synergistic Initiative with Wealth & Consumer Momentum in Growth Markets Atlanta Houston Orlando Total Annual Revenue Headquarters for 25 #4 US metro area for Estimated Annual GDP +7% Fortune 1,000 Fortune 500 5.6% growth companies headquarters 9th lar
Slide 16: Corporate Bank Growth Strategies
Corporate Bank Growth Strategies • Liquidity Management • Technology, Innovation, Data & Analytics • 11 initiatives that will drive growth INVESTOR DAY 2019 | Corporate Bank | 16
Slide 17: Providing liquidity solutions
Providing liquidity solutions Current Portfolio Forward Strategies • ~80% of our clients maintain • Lead with Deposits and Treasury deposit operating accounts Management solutions • +3% YoY growth in client usage • Optimizing earnings credit rate for of Treasury Management more client benefit soluti
Slide 18: Leveraging technology, innovation, data & analytics
Leveraging technology, innovation, data & analytics Re‐engineered end‐to‐ Enhancing platforms to Innovative strategies for end credit process make banking easier for efficiencies and customer customers satisfaction • Reduced average approval • Capital Markets • Further advancement of time from 9 day
Slide 19: Customized initiatives to facilitate healthy growth
Customized initiatives to facilitate healthy growth 11 initiatives that support revenue growth and efficiencies Commercial / Treasury Management: • Further enhance commercial card by adding Capital Markets: capabilities and improve card penetration; • Extend and broaden conversion of card to a new s
Slide 20: Capital Markets - success and continued expansion
Capital Markets ‐ success and continued expansion aided by SM Successful expansions of capabilities lead to growth Capital Markets revenue • 2013: Started proprietary FHA/HUD MAP $ in millions $202 and LEAN program • 2014: Purchased Fannie Mae DUS $161 capability $152 • 2015: Acquired BlackArch Part
Slide 21: Key takeaways Corporate Bank Group
Key takeaways Corporate Bank Group 1 We must build on our foundation of STRONG RISK MANAGEMENT Unique customer focused GO‐TO MARKET STRATEGY that sets us 2 apart in the industry 3 Customized initiatives to facilitate HEALTHY GROWTH Corporate Bank Financial Expectations Efficiency Ratio 2018 2021 47.
Slide 22: Appendix
Appendix INVESTOR DAY 2019 | Corporate Bank | 22
Slide 23: Corporate bank loans and deposits overview
Corporate bank loans and deposits overview Total company deposit balances Total company loan balances Consumer 61% Consumer 39% Corporate 28% Corporate 58% $94B $81B Wealth 9% Wealth 3% Other 2% Corporate deposit balances by type Corporate loan balances by type Interest‐Free 58% Commercial 76% Inter
Slide 24: Corporate bank revenue overview
Corporate bank revenue overview Total Company Revenue Total Company Non‐Interest Income Consumer 57% Consumer 58% Commercial 27% $5.8B Corporate 33% $2.0B Wealth 16% Wealth 9% Corporate Total Revenue Mix Corporate Non‐Interest Revenue Capital Markets 37% Net Interest Income 72% Service Charges 27% $
Slide 25: Economic Facts
Economic Facts Growth market Source Atlanta Bureau of Labor Statistics. "Employment, Hours, and Earnings from the Current Employment Statistics Survey." Databases, Tables &Metro Atlanta Chamber of Commerce. "Metro Atlanta Economic Development Growth Resources & Statistics." Metro Atlanta Chamber of
Slide 26: Forward looking statements disclosure
Forward looking statements disclosure 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
Slide 27: Forward looking statements disclosure (continued)
Forward looking statements disclosure (continued) • Our ability to identify and address cyber‐security risks such as data security breaches, malware, “denial of service” attacks, “hacking” and identity theft, a failure of which could disrupt our business and result in the disclosure of and/or misuse