Regions Financial Corporation · NYSE:RF
Regions Financial — Investor Presentation (September 2009)
31 slides from Regions Financial's investor presentation, Sep 15, 2009
Slide 1: Risk Management Actions Post-Merger
Risk Management Actions Post-Merger Sold Equifirst (subprime originations) immediately post merger in 1Q 2007 Remaining exposure under $75mm Moratoriums on higher risk asset classes have been in place (Land and Lots, Condominiums, Retail CRE, etc.) Sold or moved to held for sale $1.97bn of problem a
Slide 2: Reducing Highest Risk Exposures
4Q 2007 2Q 2009 Change Loan % of Loan % of ($ in millions) Balance Portfolio Balance Portfolio $ % Homebuilder Land $ 2,926 2.2 % $ 1,273 1.3 % $(1,653) (56.5)% Lots 1,608 1.7 0.9 (700) (43.5) Residential Presold 0.6 0.3 (366) (59.2) Residential Spec 1,893 2.0 1,098 1.1 (795) (42.0) National Homebui
Slide 3: Gross NPA Migration - $1.8 Billion
Income Producing Real Estate 18% Business and Community 10% Commercial 15% Stressed Real Estate 55% 2Q09 Gross NPA Migration - $1.8 Billion Consumer 2% Stressed loan portfolios drove migration Average 31% write down on real estate loans upon migration to NPA
Slide 4: Credit Quality Consistent with Peer Levels
Credit Quality Consistent with Peer Levels 1. Excludes HFS NPLs. Individual Company data. 2. Excludes HFS NPLs. 3. SNL Peer Data includes BAC, BBT, CMA, FITB, KEY, MI, MTB, PNC, STI, USB, and WFC. Regions Peers³ Net Charge-Offs / Average Loans $982mm of NPAs sold / transferred to HFS 0.85% 0.99% 1.2
Slide 5: Net Charge-Offs Well Below Fed Stress Test Level
Net Charge-Offs Well Below Fed Stress Test Level $ millions $2.3B 2Qtr Cumulative $9.2B $5.9B $3.4B $881MM 2Qtr Cumulative Does not include Provision over Net Charge-Offs 1,000 1,200 1,400 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 Regulators - Stress Net Charge-Offs Regions - Base Net Charge-Offs Regi
Slide 6: Regions' Current Capital Levels Strong Versus Peers
6.9 6.2 6.7 4.5 6.9 5.3 8.4 7.7 6.9 7.3 8.1 7.4 10.6 9.8 12.6 12.2 12.2 11.9 11.6 10.5 9.9 9.4 8.2 12.9 RF Tier 1 T1C Regions’ Current Capital Levels Strong Versus Peers Peers include: BAC, BBT, CMA, FITB, KEY, MI, MTB, PNC, STI, USB, WFC
Slide 7: Diversified Southeastern Franchise
Diversified Southeastern Franchise Strategically important position across a number of Southeastern markets Note: Based on June 30, 2008 FDIC data per SNL. Regions Morgan Keegan Insurance Offices 1,899 State Dep. ($B) Rank AL 17.2 % % TN 16.3 FL 14.3 MS 9.7 LA 7.2 GA 6.4 AR 4.2 TX 3.0 IL 2.4 MO 2.2
Slide 8: Relative Market Density
Regions 20.7 Median 16.3 % High Relative Market Density 1. Deposits weighted by county. Excludes deposits from branches with > $10bn of deposits. Based on June 30, 2008 FDIC data. Weighted Average Bank Market Share¹ BB&T 22.2 % Wells Fargo 20.3 Comerica 18.8 M&T 18.1 M&I 17.8 Bank of America 16.6 J.
Slide 9: Morgan Keegan
Morgan Keegan - Leading Regional Retail Brokerage, Investment Banking and Financial Services Company Morgan Keegan Highlights 1,297 Financial Advisors 324 Offices in 19 States $71 billion of customer assets $67 billion of trust assets $61 million assets per financial advisor $3.1 billion of new brok
Slide 10: Growing Customer Relationships
Growing Customer Relationships Loyalty drives the bottom line Loyalty Score May-08 J J A S O N D J F M A M Jun-09 Gallup’s 75th Percentile Gallup’s 50th Percentile Regions Percent Highly Loyal
Slide 11: Ma REGIONS
Ma REGIONS sayjuelg jo vaquinn
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Slide 15: Branch performance improved over the past year
Green Zone Red Zone 65% 132% KDS (Key Drivers Score) Baseline June 2008 June 2009 Over the past year, the performance of branches has improved dramatically Yellow Zone 8%
Slide 16: Emphasis on Customer Experience Has Led to Dramatic Performance Improvements
Added Emphasis on Customer Experience Has Led to Dramatic Performance Improvements J.D. Power 2009 Retail Bank Study Results Regions 2008 Industry Average Regions 2009 We passed 29 banks in 1 year #1 in customer satisfaction among the 27 largest mortgage servicing companies – J.D. Power and Associat
Slide 17: Continued Improvement in Client Satisfaction
Continued Improvement in Client Satisfaction Ratings of “Excellent” Per Q209 Greenwich & Associates Survey* 38% 41% 38% 42% 47% 41% 0% 10% 20% 30% 40% 50% $1-$10MM $10-$500MM Total Q1 09 Q2 09 *Based upon responses from companies identifying Regions as their primary bank
Slide 18: The Road to One Million
On The “Road to One Million” Total New Checking Account Production 20,000 40,000 60,000 80,000 100,000 Jan Feb Mar Apr May Jun 2008 2009 Up 29% Year Over Year Record Checking Sales
Slide 19: Strong Account Growth and High Customer Retention Lead to Rising Customer Deposits
Total Customer Deposits Q2 '08 Q3 '08 Q4 '08 Q1 '09 Q2 '09 Strong Account Growth and High Customer Retention Lead to Rising Customer Deposits Opened a record 491,000 new consumer and business checking accounts in 1H 2009 Retention remains better than industry norms and at historical highs Customer d
Slide 20: Regions Has Moved From Loan Pricing Underperformer to Outperformer
Regions Has Moved From Loan Pricing Underperformer to Outperformer (Risk Adjusted All-In Spread to LIBOR) Data Source: Standard & Poor’s Risk Adjusted All-In Credit Spread Trends Community Banking Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Regions Market CRE Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Regi
Slide 21: Core Earnings Improving (PPNR)
Core Earnings Improving (PPNR) $444 $494 $300 $350 $400 $450 $500 1Q09 2Q09 Note: See 8-K, Exhibit 99.2, page 10, filed July 21, 2009, for details regarding adjustments (in millions)
Slide 22: REGIONS
JN REGIONS
Slide 23: Seasoned Management/Fresh Perspective
Seasoned Management/Fresh Perspective O. B. Grayson Hall, Jr. General Banking Group (includes Vice Chairman & all banking offices across Regions Head of General footprint) Banking Group Morgan Keegan Corporate Marketing David B. Edmonds Human Resources Group Senior Executive Vice President Human Res
Slide 24: Seasoned Management/Fresh Perspective
Seasoned Management/Fresh Perspective David H. Rupp Consumer Deposits Senior Executive Vice Consumer & Home Equity Lending President Consumer Card & Payments Services Group Mortgage Banking Branch & ATM Support and Delivery Telephone Banking Retail Ecommerce Sales, Service & Performance Mgnt John B.
Slide 25: SCAP Net Charge-Off Assumptions vs. Peers
First Lien Mortgages Second / Junior Lien Mortgages CRE Total Other C&I Securities SCAP Net Charge-Off Assumptions vs. Peers 1. Includes regional banks subject to Supervisory Capital Assessment Program (BAC, BBT, FITB, KEY, PNC, STI, USB, WFC). 2. Based on regulatory data. Represents implied losses
Slide 26: Residential First Mortgage
Resi. 1st Mortgage 85% Alt-A 15% Other 63% Florida 37% Residential First Mortgage $15.6bn / 16.2% of Total Loans No exotic residential products (subprime, options ARM, neg. am.); no broker originations Alt-A performance similar to prime Weighted Average LTV = 66% Weighted Average FICO = 725 New Orig
Slide 27: Home Equity
2nd Lien 58% 1st Lien 42% Other States 63% Florida 37% Home Equity $15.8bn / 16.4% of Total Loans All branch originated, in-footprint balances Active monitoring and management of lines Florida 2Q 2009 charge-offs of 5.85% vs. 1.11% for remainder of portfolio Home Equity 1 st liens are 42% of outstan
Slide 28: Indirect / Other Consumer
Indirect 73% Other 27% Indirect / Other Consumer $4.2bn / 4.4% of Total Portfolio NCOs / Avg. Loans 90+ Delinquencies Observations $2.3 billion of prime indirect auto exposure; no new originations since October 2008 Weighted Average FICO of 741 2Q09 Losses of 1.31%; Industry loss rate slightly over
Slide 29: Commercial & Industrial
Commercial and Industrial 66% Commercial Real Estate - Owner- occupied 34% Healthcare 11% Real Estate 11% Retail 10% Other 32% Commercial & Industrial $35.9bn / 37.3% of Total Loans Diversified by industry and geography Emphasis on customer relationships vs. lending 29% small business Healthcare and
Slide 30: CRE (Non-Owner Occupied / Non-Construction)
Resi. 24% Multi Family 20% Retail 20% Office 15% Other 8% Florida 22% Midsout 29% Southwest 18% Central 27% CRE (Non-Owner Occupied / Non-Construction) $16.4bn / 17.1% of Total Loans Underwritten and approved by commercial real estate specialists 21% of portfolio is small business Underwriting for m
Slide 31: Construction
Non-Owner Occupied 87% Central 27% Florida 22% Midsout h 26% Southwes t 17% Construction $8.2bn / 8.6% of Total Loans Conservatively underwritten to permanent market standards Geographically diversified We are not seeing contagion in other portfolios to the degree and severity that we have seen in t
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