Regions Financial Corporation · NYSE:RF
Regions Financial — Investor Presentation (November 2021)
80 slides from Regions Financial's investor presentation, Nov 2, 2021
Slide 1: Investor Information November - December 2021
Investor Information November - December 2021 Exhibit 99.1
Slide 2: Table of contents
2 Table of contents Topic Page # Profile and Strategy 3-9 Income Statement 10-22 Business Segment Highlights 23-28 Balance Sheet 29-32 Capital, Debt & Liquidity 33-39 Technology & Continuous Improvement 40-44 Credit 45-57 Near-Term Expectations 58 Environmental, Social & Governance 59-62 LIBOR Trans
Slide 3: Line of business coverage
3 Line of business coverage Alabama – 190 Georgia – 111 Iowa – 5 Mississippi – 109 South Carolina – 21 Arkansas – 61 Illinois – 41 Kentucky – 11 Missouri – 51 Tennessee – 201 Florida – 279 Indiana – 45 Louisiana – 84 North Carolina – 7 Texas – 94 Ranked 17th in the U.S. in total deposits(1) Branch l
Slide 4: Top market share plays a valuable role in the competitive landscape
4 Top market share plays a valuable role in the competitive landscape (1) Based on MSA and non-MSA counties using FDIC deposit data as of 6/30/2021; pro-forma for announced M&A transactions as of 10/28/2021. (2) Significant money center bank presence (JPM, BAC, C, WFC) defined as combined market sha
Slide 5: Presence in strong growth markets
5 4.7% 3.3% 3.0% 2.0% 1.8% 1.8% 1.2% 1.2% 0.5% Peer #1 Peer #2 Peer #3 Peer #4 Peer #5 Peer #6 Peer #7 Peer #8 Presence in strong growth markets Top Faster Growing MSAs Deposits Market Rank(3) Nashville, Tennessee $10.8 3 Tampa, Florida $7.2 4 Miami, Florida $5.9 11 Atlanta, Georgia $5.5 7 Orlando,
Slide 6: Strong recovery within footprint
6 Strong recovery within footprint (1) Per VISA Business and Economic Insights - Regional U.S. Economic Outlook, August 2021 measuring projected timeframes to return to pre-pandemic employment levels. • Majority of RF footprint will likely return to pre-pandemic employment levels during 2H22 with th
Slide 7: Regions receives top honors
7 Regions receives top honors Regions Bank Awarded Bronze Military Friendly Award Seven Years Strong: Regions Bank Again Named Gallup Exceptional Workplace Award Winner in 2021 Regions Bank Ranked Highest in Customer Satisfaction in J.D. Power 2021 U.S. Online Banking Satisfaction Study Among Region
Slide 8: Third quarter 2021 overview
8 Third quarter 2021 overview (1) Non-GAAP, see appendix for reconciliation. Adjusted Pre-Tax Pre- Provision Income(1) Diluted Earnings Per Share Adjusted Total Revenue(1) Adjusted Non- Interest Expense(1) Net Income Available to Common Shareholders $693M $0.65 $1,611M $918M $624M • Adjusted pre-tax
Slide 9: Strong foundation-positioned for growth
9 Strong foundation-positioned for growth Committed to continuous expansion of platforms and capabilities Innovating through digital investments and enhancing our customer experiences to generate shareholder return Online and mobile banking enhancements Omnichannel delivery-providing advice, guidanc
Slide 10: Stable NII & margin
10 $1,000 $975 $976 3.13% 2.81% 2.76% 3.41% 3.31% 3.30% 3Q20 2Q21 3Q21 NII(1) Stable NII & margin NII and NIM(1) ($ in millions) (1) Net interest income (NII) and net interest margin (NIM) are reflected on a fully taxable-equivalent basis. (2) Non-GAAP; see appendix for reconciliation. NIM • In 3Q,
Slide 11: Net interest income drivers and active balance sheet management
11 • Rate environment impacts offset through active balance sheet management ◦ Hedging benefit of $108M NII in 3Q(3) ◦ Lower deposit pricing; 3Q deposit cost = 4bps / interest-bearing deposit cost = 8bps ◦ Pandemic cash management includes ~$5B securities adds and ~$10.5B long-term debt calls/ matur
Slide 12: NII drivers and expected growth
12 While not included in the outlook, opportunities exist if surge deposits are retained with lower betas (assume 75% beta), or if excess cash is able to be deployed into loans/securities. NII is positioned to benefit from higher rates, as well as natural loan growth and strategic opportunities. Hed
Slide 13: Balance sheet profile
13 IB 54% NIB 43% Time 3% Loans 53% Securities 19% Cash 17% Other 11% Deposits 96% Borrowin… 2% Other 2% Floating 57% Fixed 43% $132B Floating 25% Fixed 73% PPP 2% Loans(2)(3) $83B Balance sheet profile (as of September 30, 2021) Portfolio compositions (1) Securities includes AFS, the unrealized AFS
Slide 14: Liquidity and securities deployment
14 Pe er 1 Pe er 2 Pe er 3 Pe er 4 Pe er 5 Pe er 6 Pe er 7 RF Pe er 8 Pe er 9 Pe er 1 0 Pe er 1 1 Pe er 1 2 Pe er 1 3 0% 20% Peer Median: 24% Ending Securities / Total Earning Assets (3Q21)(2) • Recent liquidity inflows represent an NII opportunity, with cash deployment dependent on: ◦ stability and
Slide 15: Earnings stability and hedging
15 WAL remaining on CF Hedges(5) Cash-flow Hedge Program Details 09/30/21(3) Cash-Flow Hedge Notional Fixed Rate/ Strike(6) Inclusive of deferred G/L(7) Swaps $17.0B 0.76% Floors $3.5B 2.17% Total $20.5B 1.00% 2.00% Cash-flow Hedge Contribution to NII - 2Q21(3)(4) Earnings stability and hedging (1)
Slide 16: Cash-flow hedge program and maturity profile
16 ~1.5% 1 2 3 4 5 6 • Gains on terminated hedges deferred and amortized over the life of the initial contract, locking in the benefit to NII in future periods; total return of ~$1.6B, including a ~$1.1B unrealized gain and +$574mm of realized NII since beginning of 2020 (~75% of total return realiz
Slide 17: Interest rate exposure and securities portfolio composition
17 Agency/UST 2.9% Agency MBS 67.1% Agency CMBS 23.2% Non-Agency CMBS 1.9% Corporate Bonds 4.9% Interest rate exposure of future business and long-term rates • In addition to growing NII exposure to short-term rates over time, NII benefits from a steepening yield curve through future fixed- rate ass
Slide 18: Non-interest income
18 • Changes in customer behavior and additional customer benefits likely keep service charges 10-15% below 2019 levels. • Capital markets increase driven by record loan syndication revenue and strong M&A advisory fees. ◦ Expect capital markets to generate revenue in $60-$70M range in 4Q, excluding
Slide 19: Diversified non-interest income
19 Consumer 50% Wealth Management 16% Corporate 34% 3Q21 fee revenue by segment(1) Diversified non-interest income ($ in millions) • Consumer fee income categories include service charges on deposit accounts, card and ATM fees, and mortgage income generated through origination and servicing of resid
Slide 20: Mortgage
20 Closed mortgages expected to have reached $900MM in 3Q 2021 across the US(1) Purchase and refinance volume expected to remain strong in 2021 driven by continued low rates, but declining from 2020 industry high production(1) Investments in people, process and technology beginning in 2018 Enhancing
Slide 21: Non-interest expense
21 (1) Non-GAAP; see appendix for reconciliation. (2) 2020 adjusted non-interest expenses include ~$60M of expense associated with the Ascentium acquisition that closed 4/1/2020. $3,387 $3,419 $3,434 $3,443 $3,541 2016 2017 2018 2019 2020 Non-interest expense QoQ highlights & outlookAdjusted non-int
Slide 22: Industry leading PPI profile
22 2.54% 2.49% 2.38% 2.14% 2.13% 2.12% 2.06% 2.06% 1.98% 1.98% 1.87% 1.78% 1.76% 1.69% RF Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 Peer 11 Peer 12 Peer 13 Industry leading PPI(1) profile (1) Non-GAAP; see Appendix for reconciliation. (2) Source: SNL Financial. Risk-weig
Slide 23: Business segments
23 56% 39% 5% 63% 35% 2% 32% 60% 8% $676M $83B $132B 3Q21 Pre-tax pre- provision income(1) 3Q21 Average deposits 3Q21 Average loans (1) Pie %'s exclude the pre-tax pre-provision income from the Other Segment totaling $3 million. Business segments Consumer Corporate Wealth Management
Slide 24: Consumer Bank
24 (1) Branch Count as of 1-1-2014. (2) Consumer Bank – LOB Average Deposits. (3) Informa - 2020 through Dec. • Extending digital capabilities to improve banker account origination & advice • Leveraging technology to improve credit turn times and origination speeds • Synergistic lending and servicin
Slide 25: Making banking easier
25 Making banking easier Providing transparency, simplicity and speed into how accounts work Improved Visibility and Transparency Expanded Alert Capabilities ◦ Balance alerts based on available balance ◦ Transaction alerts providing information in near real-time ◦ Automated email alerts for notifica
Slide 26: Corporate Banking Group
26 Corporate Banking Group Our associates delivered results $445 $564 Sep20 YTD Sep21 YTD • Capital Markets income driven by M&A, Real Estate Placement, Debt & Equity Underwriting and Loan Syndications as customers acted on the interest rate environment and the favorable debt and equity markets • Co
Slide 27: Wealth Management
27 Wealth Management • Maintained strong momentum in growth markets and protected business through continued engagement and communication with clients, in a hybrid model. • Published five whitepapers to help clients stay informed, ranging from ESG, Non Fungible Tokens, Supply Chain Impacts, Value St
Slide 28: Continuing our momentum
28 Continuing our momentum • Deepen industry and solution expertise verticals to grow relationships and drive differentiation ◦ Pending acquisition of Sabal Capital Partners announced October 4, 2021; market leader in origination of small-balance agency loans • Establish an outbound business develop
Slide 29: Loan growth and outlook
29 • Adjusted average and ending loans increased ~1% QoQ; positioning us well for continued momentum for loan growth in 4Q and beyond. • Commercial pipelines have surpassed pre-pandemic levels, production remains strong, and line of credit commitments increased $2B YTD • Average PPP loans decreased
Slide 30: 3Q21 average loan composition
30 $41.9 $5.4 $0.3 $5.6 $1.7 Commercial and Industrial CRE Mortgage - OO CRE Construction - OO IRE - Mortgage IRE - Construction 3Q21 Average loan composition $17.2 $0.6 $2.1 $6.5 $1.1 $1.0 Mortgage Indirect-Vehicles Indirect-Other Home Equity Credit Card Other Average consumer loans $28.5B Average
Slide 31: PPP loan details
31 ($ in millions) 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 Round 1-average $ 3,213 $ 4,558 $ 4,143 $ 3,171 $ 2,401 $ 814 Round 2-average — — — 627 1,500 1,324 Total-average $ 3,213 $ 4,558 $ 4,143 $ 3,798 $ 3,901 $ 2,138 NII(1) $ 18 $ 31 $ 54 $ 40 $ 43 $ 31 Round 1-ending $ 4,498 $ 4,594 $ 3,624 $ 2,974 $ 1,4
Slide 32: Deposit growth continues
32 $116.7 $131.1 $131.9 68.8 78.2 79.1 38.8 43.0 42.5 8.7 9.5 9.9 0.4 0.4 0.4 3Q20 2Q21 3Q21 Deposit growth continues (1) Other deposits represent non-customer balances primarily consisting of wholesale funding (for example, Eurodollar deposits, selected deposits and brokered time deposits). Average
Slide 33: Capital and liquidity
33 9.3% 10.4% 10.8% 3Q20 2Q21 3Q21 • During 3Q, Regions declared $164M in common dividends. • Stress Capital Buffer requirement for 4Q21 through 3Q22 is 2.5%. • Common Equity Tier 1 (CET1) ratio increased 40 bps in 3Q to an estimated 10.8%. • Continue to prioritize capital utilization for organic gr
Slide 34: CET1 waterfall
34 10.4% 0.6% 0.1% (0.1)% (0.2)% 10.8% CET1 waterfall (1) Non-GAAP; see appendix for reconciliation. (2) Provision benefit includes the impact of CECL deferral. (3) Current quarter ratios are estimated and reflect rounding. 2Q21 CET1% Pre-tax pre- provision income(1) Common Dividend 3Q21 CET1%(3) Pr
Slide 35: Projected preferred stock expense
35 Regions Preferred Par Value 3Q21 4Q21E Series B $500.0 $8.0 $8.0 Series C $500.0 $7.1 $7.1 Series D $350.0 $5.0 $5.0 Series E $400.0 $6.5 $4.5 Total $26.6 $24.6 Projected preferred stock expense ($ in millions) • The 3Q dividend for Series E includes a long first dividend period to include accrua
Slide 36: Significant protection
36 Significant protection • The combined loss absorbing protection from capital, allowance coverage, and accumulated other comprehensive income(1) is among the highest in the peer set. ◦ Regions’ coverage equates to roughly 13.1% of RWA vs. the peer median of 11.9%. • AOCI reflective of implied stab
Slide 37: Return on tangible common equity improvement
37 • Strong improvement despite second lowest loan growth in peer group resulting from de-risking activities and focus on risk- adjusted returns. ◦ Capital recycling in C&I portfolio began in earnest in 2014 ◦ Improvement came without whole bank M&A • ROATCE improved 480 bps from 2014 to 2020 with r
Slide 38: Investing for growth while maintaining focus on capital optimization
38 Investing for growth while maintaining focus on capital optimization Investments Talent and Technology • Expansion in priority growth markets • Corporate bankers, MLOs, Wealth Advisors • System enhancements and new technology • Data and analytics Corporate Bank • Pending acquisition of Sabal Capi
Slide 39: Regions unsecured debt and credit ratings profile
39 $100 $900 $650 $800 750 650 100 150 300 500 HoldCo Senior Notes Bank Senior Notes HoldCo Subordinated Notes Bank Subordinated Notes 2022 2023 2024 2025 2028 2037 Regions unsecured debt and credit ratings profile • Unsecured wholesale debt footprint represents just 1.6% of 9/30/2021 assets with Ho
Slide 40: Technology and data efforts
40 ® Efforts Omnichannel view of customers for a “You Know Me & Value Me” experience Regions Client IQ (RCLIQ) and WealthIQ delivering ‘needs based’ engagement resulting in significant corporate and wealth management revenue ROSIE Personalized offering of products and services to anticipate customer
Slide 41: Digital acceleration
41 Digital Acceleration Digital Users up 8% in Q3 2021 compared to Q3 2020 Mobile Enhancements 4.8 iOS App Rating New Mobile features include Mobile Wallet One Time Passcode, Landscape Mode, What's New Carousel, Adobe Analytics Web Insights, Zelle Enhancements 53% increase in Zelle transactions in Q
Slide 42: Continue to invest for the future
42 System Maintenance New Technology Cybersecurity / Risk Management Continue to invest for the future 48%42% 10% • Regions remains competitive by reserving ~10-11% of revenue for Technology Spend. • Past investment on innovation and strategy provided a firm, resilient foundation for addressing chan
Slide 43: Growth in digital
43 0.67 1.57 2.40 3Q19 3Q20 3Q21 120 143 162 3Q19 3Q20 3Q21 2.7 2.8 3.1 3Q19 3Q20 3Q21 1.8 2.0 2.3 3Q19 3Q20 3Q21 13% 20% 21% 30% 33% 33% 57% 47% 46% 3Q19 3Q20 3Q21 60.2 73.0 83.0 49.3 63.4 71.3 7.4 2.8 4.1 3.5 6.8 7.6 3Q19 3Q20 3Q21 60% 66% 69% 40% 34% 31% 3Q19 3Q20 3Q21 Growth in digital Mobile Ba
Slide 44: Continuous improvement framework
44 Continuous improvement framework • Making Banking Easier – Be intensely responsive to customer needs • Revenue Growth – Improve effectiveness in generating prudent, profitable, sustainable growth • Efficiency Improvements – Continuously leverage people and technology to improve processes, reduce
Slide 45: Asset quality improvement continues
45 1.71% 2.74% 2.00% 1.80% 1.71% 2.90% 2.07% 1.83% ACL/Loans (incl. PPP) ACL/Loans (excl. PPP) Day 1 3Q20 2Q21 3Q21 $113 $47 $30 38 24 25 75 23 5 0.50% 0.23% 0.14% 3Q20 2Q21 3Q21 $767 $666 $530 316% 253% 283% 3Q20 2Q21 3Q21 NPLs and ACL coverage ratio Asset quality improvement continues ($ in millio
Slide 46: Allowance for credit losses waterfall
46 Changes in Portfolio Risk & Balances $1,684 $(30) $(91) $(64) $1,499 Allowance for credit losses waterfall Changes in Economic Outlook & Adjustments Net Charge- Offs 9/30/2021 • 3Q ending allowance decreased $185M due to continued improvement in the economic outlook and expectations of improving
Slide 47: Base R&S economic outlook
47 Pre-R&S period 3Q2021 4Q2021 1Q2022 2Q2022 3Q2022 4Q2022 1Q2023 2Q2023 3Q2023 Real GDP, annualized % change 3.8 % 5.6 % 5.2 % 4.1 % 3.2 % 2.6 % 2.3 % 2.2 % 2.3 % Unemployment rate 5.2 % 4.8 % 4.6 % 4.4 % 4.2 % 4.1 % 4.0 % 3.9 % 3.8 % HPI, year-over-year % change 18.1 % 16.0 % 12.9 % 8.1 % 4.0 % 3
Slide 48: Allowance for credit losses by portfolio
48 As of 9/30/2021 As of 12/31/20 (in millions) Loan Balance ACL ACL/Loans Loan Balance ACL ACL/Loans C&I $41,748 647 1.55 % $42,870 $1,027 2.40 % CRE-OO mortgage 5,446 128 2.35 % 5,405 242 4.47 % CRE-OO construction 252 9 3.64 % 300 24 7.98 % Total commercial $47,446 $784 1.65 % $48,575 $1,293 2.66
Slide 49: COVID-19 high-risk industry sectors
49 • Proactive, frequent customer dialogue • Closely monitoring most vulnerable customers • Monitoring ratings migration • Quarter over quarter balances declined $0.19B Bottom up review informs and narrows COVID-19 high-risk industry sectors (as of September 30, 2021) C&I Portfolio BAL$(1) % of BAL$
Slide 50: Commercial and IRE loans by industry
50 Commercial & IRE loans As of 9/30/21 ($ in millions) Total Commitments Outstanding Balances % Utilization Administrative, Support, Waste & Repair $2,728 $1,501 55% Agriculture 560 331 59% Educational Services 3,877 2,954 76% Energy - Oil, Gas & Coal 3,918 1,455 37% Financial Services 10,396 4,858
Slide 51: Energy lending
51 As of 9/30/21 ($ in millions) # of Clients (1) Total Commitments Outstanding Balances % Utilization $ Criticized % Criticized Oilfield services and supply (OFS)(2) 146 $377 $231 61% $1 —% Exploration and production (E&P)(2) 87 1,305 698 53% 201 29% Midstream 23 1,587 475 30% 95 20% Downstream 10
Slide 52: Energy lending (continued)
52 $ (M ill io ns ) 1Q2015 3Q2021 E& P Oilfi eld Se rvi ces Midstr ea m Dow nst rea m Othe r PPP Lo an s $0 $300 $600 $900 $1,200 $1,500 Energy lending (continued) Balances by Category Gross Losses *Other Losses include losses to MLP funds as well as losses related to coal. $ (M ill io ns ) $0.0 $28
Slide 53: Restaurant lending
53 As of 9/30/21 ($ in millions) # of Clients* Total Commitments Outstanding Balances % Utilization $ Criticized % of Outstanding Criticized Quick Service 12,188 $1,196 $981 82% $44 4% Casual Dining 23 446 280 63% 195 70% Other 20 118 87 74% 8 9% PPP Loans 1,681 193 193 100% — —% Total Restaurants 1
Slide 54: Hotel lending
54 As of 9/30/21 ($ in millions) # of Clients* Total Commitments Outstanding Balances % Utilization $ Criticized % of Outstanding Criticized CRE-Unsecured (REITs) 9 $685 $468 68% $367 78% IRE – Mortgage 19 312 298 96% 282 95% IRE – Construction — — — —% — —% Consumer Services 3705 138 132 96% 6 5% P
Slide 55: Commercial retail lending
55 Commercial retail lending As of 9/30/21 ($ in millions) # of Clients* Total Commitments Outstanding Balances % Utilization $ Criticized % Criticized CRE-Unsecured (REITs) 18 $2,115 $615 29% $0 —% IRE 123 638 608 95% 66 11% C&I 21,326 2,435 1,135 47% 9 1% CRE-OO 810 943 882 94% 13 1% ABL 16 1,044
Slide 56: Loans to small business and small farms
56 13% 13% 13% 8%8% 8% 8% 8% 21% Healthcare 13% Transportation & Warehousing 13% Real Estate 13% Retail Trade 8% Professional, Scientific & Technical Services 8% Restaurant, Accommodation & Lodging 8% Administrative, Support, Waste & Repair 8% Manufacturing 8% Other 21% (Portfolios <8% of total) 27%
Slide 57: Consumer lending portfolio statistics
57 Consumer lending portfolio statistics Residential Mortgage • Avg. origination FICO 750 • Current LTV 56% • 97% owner occupied Home Equity • Avg. origination FICO 755 • Current LTV 38% • Only $10.7M of resets through 2021 • 70% of portfolio is 1st lien • Avg. loan size $36,532 Other Consumer Unsec
Slide 58: 2021 expectations
58 2021 expectations (1) Non-GAAP, see appendix for reconciliation. (2) The reconciliation with respect to forward-looking non-GAAP measures is expected to be consistent with actual non-GAAP reconciliations included in the attached appendix or in previous filings with the SEC. (3) Adjusted ending an
Slide 59: ESG - Environmental
59 2018 ESG - Environmental Launched Solar Tax Equity Finance Team Began publicly issuing a Corporate Sustainability Report Expanded Asset Management offerings to include ESG- focused products Adopted an Environmental Sustainability Policy Statement and two environmental goals: Reduce Scope 1 and Sc
Slide 60: ESG - Social
60 Customers Associates Communities • Regions360® approach • Bank Your Way • Regions Now Banking® • Fair and responsible banking • Digital and online banking channels • Diversity, Equity and Inclusion commitments established • Cultivating a more inclusive work environment • Support for the physical
Slide 61: ESG - Governance
61 ESG - Governance COVID-19 Board oversight of Regions' response 43 Board and Committee meetings in 2020 98% attendance by Directors As we emerge from a year of enormous challenges, we stand by our commitment to creating shared value: Our shareholders benefit when we do what is right for our custom
Slide 62: ESG - Recognitions and resources
62 ESG - Recognitions and resources MSCI State Street Global Advisors S&P Global Sustainalytics AA ESG Rating 63 R-Factor Score S&P 500 ESG Index Low-Risk ESG Risk Rating Human Rights Campaign JUST Capital JUST Capital Disability Equality Index FTSE Russell 100 Score in 2021 Corporate Equality Index
Slide 63: LIBOR Transition Readiness & the Path Forward
63 LIBOR Transition Readiness & the Path Forward Key Considerations Financial Considerations & Potential Impact Regions' Approach & Timeline Despite a relatively short timeline until banks can no longer originate LIBOR-linked financial products, uncertainty remains around the market’s direction for
Slide 64: Ascentium Capital acquisition exceeding expectations
64 Ascentium Capital Acquisition exceeding expectations Company Overview • Ascentium Capital was the largest independent equipment finance lender in the U.S. • Partners with ~4,000 vendors to finance essential-use equipment for small business customers. • Strong risk management culture and data driv
Slide 65: EnerBank acquisition
65 • Headquartered in Salt Lake City, UT, EnerBank originates prime and super-prime home improvement point-of-sale loans through a national network of contractors • A top 5 originator in the home improvement point-of- sale space, one of the fastest growing segments in consumer lending • Experienced
Slide 66: Sabal Capital Partners acquisition
66 Agency Licenses Sabal Capital Partners acquisition Continues build-out of Regions' fee-based businesses Company Overview & Regions' Strategic Rationale • Announced October 4, 2021; expected close 4Q21 • Sabal Capital Partners is a market leader in the origination of small-balance agency loans. •
Slide 67: Appendix
> GENERATING Consistent Sustainable \ Long-term Performance APPENDIX AW REGIONS] 67
Slide 68: Non-GAAP measures explanation
68 Management uses pre-tax pre-provision income (non-GAAP) and adjusted pre-tax pre-provision income (non-GAAP), as well as the adjusted efficiency ratio (non-GAAP) and the adjusted fee income ratio (non-GAAP) to monitor performance and believes these measures provide meaningful information to inves
Slide 69: Core net interest income and adjusted net interest margin
69 Non-GAAP reconciliation Core net interest income and adjusted net interest margin Quarter-ended 9/30/2021 6/30/2021 Net interest income (FTE) (GAAP) $ 976 $ 975 Impact of SBA PPP loans (31) (43) Impact of excess cash (3) (3) Core net interest income (FTE) (non-GAAP) $ 942 $ 929 Net interest margi
Slide 70: Adjusted average loans
70 Non-GAAP reconciliation Adjusted average loans Average Balances ($ amounts in millions) 3Q21 2Q21 1Q21 4Q20 3Q20 3Q21 vs. 2Q21 3Q21 vs. 3Q20 Commercial and industrial $ 41,892 $ 43,140 $ 42,816 $ 43,889 $ 46,405 $ (1,248) (2.9) % $ (4,513) (9.7) % Add: Commercial loans held for sale reclassified
Slide 71: Adjusted full year average loans
71 Non-GAAP reconciliation Adjusted full year average loans Average Balance Twelve Months Ended ($ amounts in millions) December 31, 2020 Total Loans $ 87,813 Add: Commercial loans held for sale reclassified to the portfolio 1 Less: SBA PPP Loans 2,986 Less: Indirect—other consumer exit portfolio 1,
Slide 72: Adjusted ending loans
72 Non-GAAP reconciliation Adjusted ending loans As of 9/30/2021 9/30/2021 ($ amounts in millions) 9/30/2021 6/30/2021 3/31/2021 12/31/2020 9/30/2020 vs. 6/30/2021 vs. 9/30/2020 Commercial and industrial $ 41,748 $ 42,628 $ 43,241 $ 42,870 $ 45,199 $ (880) (2.1) % $ (3,451) (7.6) % Add: Commercial l
Slide 73: Non-interest expense
73 Non-GAAP reconciliation Non-interest expense Year Ended December 31 ($ amounts in millions) 2020 2019 2018 2017 2016 Non-interest expense (GAAP) $ 3,643 $ 3,489 $ 3,570 $ 3,491 $ 3,483 Adjustments: Contribution to Regions Financial Corporation foundation (10) — (60) (40) — Professional, legal and
Slide 74: ACL/Loans excluding PPP
74 Non-GAAP reconciliation ACL/Loans excluding PPP As of ($ amounts in millions) 9/30/2021 6/30/2021 3/31/2021 12/31/2020 9/30/2020 Total Loans $ 83,270 $ 84,074 $ 84,755 $ 85,266 $ 88,359 Less: SBA PPP Loans 1,536 2,948 4,317 3,624 4,594 Loans excluding PPP, net (non- GAAP) $ 81,734 $ 81,126 $ 80,4
Slide 75: Pre-tax pre-provision income (PPI)
75 Non-GAAP reconciliation Pre-tax pre-provision income (PPI) Quarter Ended ($ amounts in millions) 9/30/2021 6/30/2021 3/31/2021 12/31/2020 9/30/2020 3Q21 vs. 2Q21 3Q21 vs. 3Q20 Net income (loss) available to common shareholders (GAAP) $ 624 $ 748 $ 614 $ 588 $ 501 $ (124) (16.6) % $ 123 24.6 % Pre
Slide 76: NII, non-interest income/expense, and efficiency ratio
76 Non-GAAP reconciliation NII, non-interest income/expense, and efficiency ratio NM - Not Meaningful Quarter Ended Year Ended ($ amounts in millions) 9/30/2021 6/30/2021 3/31/2021 12/31/2020 9/30/2020 3Q21 vs. 2Q21 3Q21 vs. 3Q20 12/31/2020 Non-interest expense (GAAP) A $ 938 $ 898 $ 928 $ 987 $ 896
Slide 77: Forward-Looking Statements
77 Forward-Looking Statements This presentation may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not based on historical information, but rather are related to future operations, strategies, financial results or
Slide 78: Forward-Looking Statements (continued)
78 • Our ability to comply with stress testing and capital planning requirements (as part of the CCAR process or otherwise) may continue to require a significant investment of our managerial resources due to the importance of such tests and requirements. • Our ability to comply with applicable capit
Slide 79: Forward-Looking Statements (continued)
79 • Market replacement of LIBOR and the related effect on our LIBOR-based financial products and contracts, including, but not limited to, derivative products, debt obligations, deposits, investments, and loans. • Possible downgrades in our credit ratings or outlook could, among other negative impa
Slide 80: Closing slide
> GENERATING Consistent Sustainable Krizneterm Performance A REGIONS AW REGIONS| 80
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