Regions Financial Corporation · NYSE:RF
Regions Financial — Q1 2009 Earnings Presentation
18 slides from Regions Financial's earnings presentation, Apr 21, 2009
Slide 1: Regions Financial 1st Quarter Earnings Conference Call
Exhibit 99.3 Regions Financial 1st Quarter Earnings Conference Call April 21, 2009
Slide 2: Summary of First Quarter 2009 Results
Summary of First Quarter 2009 Results Earnings per diluted share of $0.04 Customer deposits up $3.8 billion or 4%, including a $1.1 billion or 6% increase in average non-interest bearing deposits; Loans declined 2% on lower overall demand; record mortgage loan production Credit quality Annualized ne
Slide 3: Credit Perspective
Credit Perspective Portion of the loan portfolio that is under stress comprises 9% of the total, down $3.4 billion since the beginning of 2008. As of 3/31/09 ($ in millions) Balance % of Total Portfolio Homebuilder Lots $964 1.0% Residential Presold 280 0.3% Residential Spec 1,210 1.3% Land 1,425 1.
Slide 4: Success in Reducing Most Problematic Exposures
Success in Reducing Most Land Portfolio – $3.7 billion $2.6 billion (41%) decrease since 12/31/2006 Problematic Exposures 7,000 6,000 5,000 4,000 Homebuilder Portfolio – $4.1 billion 3,000 $3.1 billion (42%) decrease since 12/31/2007 2,000 1,000 8,000 - 7,000 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08
Slide 5: Home Prices Fall in Florida; Remainder of Regions' Footprint Steady
Home Prices Fall in Florida; Remainder of Regions’ Footprint Steady 500 450 400 350 300 250 200 150 Period FL Avg. Footprint Avg. Excluding FL Source: OFHEO Index 4
Slide 6: Solid Coverage of Non-Performing Loans
Solid Coverage of Non-Performing Loans Coverage Ratio (ALL/NPL) 1.34 1.04 1.02 1.74 1.13 $2,000 $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 Q1 '08 Q2 '08 Q3 '08 Q4 '08 Q1 '09 Non-performing Loans Allowance for Loan Losses Excludes loans held for sale 5
Slide 7: Credit Costs Decline
Credit Costs Decline 4Q08 1Q09 Variance (in millions) $ bps $ bps $ bps Net Charge-offs exc. Asset Dispositions Business Services 205 132 186 126 (19) (7) Residential First Mortgage 25 63 39 102 14 39 Equity Lending 69 172 95 238 25 66 Other Consumer 31 222 29 246 (2) 24 Net Charge-offs exc. Asset D
Slide 8: Stable Quarterly Inflows of Non-performing Assets
Stable Quarterly Inflows of Non-performing Assets (in millions) 1Q08 2Q08 3Q08 4Q08 1Q09 Beginning Non-Performing Assets* 864 1,204 1,621 1,642 1,295 Additions 523 730 721 1,004 1,116 Payments (62) (52) (70) (82) (55) Returned to Accruing Status (4) (9) (19) (44) (34) Charge-Offs/OREO Write-downs (9
Slide 9: Loan Trends
Loan Trends Loan Portfolio - Average Balances ($ in millions) 12/31/2008 3/31/2009 $ Change % Change Commercial & Industrial $ 24,122 $ 23,095 $ (1,027) -4% Commercial Real Estate - Non Owner-Occupied 14,313 15,215 902 6% Commercial Real Estate - Owner-Occupied 11,574 11,773 199 2% Construction - No
Slide 10: Outstanding Customer Deposit Growth
Outstanding Customer Deposit Growth Deposit Portfolio - Average Balances (In millions) 12/31/2008 3/31/2009 % Change Low Cost Deposits $ 56,422 $ 58,813 4% Non-interest Bearing Deposits $ 17,773 $ 18,896 6% Customer Deposits $ 87,864 $ 91,627 4% Corporate Treasury Deposits 1,669 610 -63% Total Depos
Slide 11: Net Interest Income and Margin
Net Interest Income and Margin › Taxable-equivalent net interest income of $817 million - down $116 million › Stable earning asset volumes › Net interest margin of 2.64%, declined 32 basis points › Falling short-term interest rates › 55% of earning assets tied to Prime or LIBOR › Deposits rates have
Slide 12: Non-Interest Revenue Impacted by Continued Slowdown in Economy
Non-Interest Revenue Impacted by Continued Slowdown in Economy › Non-Interest Revenue down 2% versus previous quarter, excluding SILO and securities gains › Lower transactions volume from slowing economy impacting service charges and brokerage income › Mortgage income substantially higher due to fav
Slide 13: Solid Morgan Keegan results in a tough environment
Solid Morgan Keegan results in a tough environment › Fixed Income Capital Markets remain strong › 8th Nationally in municipal bond underwriting › Private Client, Equity Capital Markets, Trust and Asset Management revenues slow › Customer assets benefit from over $1 billion of net new asset inflows ›
Slide 14: Mortgage Applications & Interest Rates
Mortgage Applications & Interest Rates $2,500 $2,347 7.0% 6.6% $1,966 $2,000 6.3% 6.5% $1,786 6.1% $1,500 6.0% $1,119 $1,000 5.5% $743 $656 5.1% $572 5.0% 5.0% $500 4.9% 5.0% $- 4.5% 09/08 10/08 11/08 12/08 01/09 02/09 03/09 Purchase Refinance Interest Rate* * Average Note Rate 13
Slide 15: Non-interest Costs Well Contained
Non-interest Costs Well Contained › Non-Interest Expense declined 10%, excluding 4Q08 Goodwill and MSR impairment charges (in millions) 4Q08 1Q09 % Change Non-Interest expense $ 7,273 $ 1,058 MSR impairment 99 - Goodwill impairment 6,000 - Adjusted non-interest expense $ 1,174 $ 1,058 -10% 14
Slide 16: Capital Ratios Remain Strong
Capital Ratios Remain Strong Estimate 4Q08 1Q09 Tier 1 Capital Ratio 10.38% 10.37% Total Risk-Based Capital Ratio 14.64% 14.53% Tangible Common Equity to Tangible Assets 5.23% 5.41% Tangible Equity to Risk-Weighted Assets 6.30% 6.48% › Tier 1 and Total Risk-Based capital remain strong › Tier 1 Capit
Slide 17: Strong Funding and Liquidity
Strong Funding and Liquidity Funding Liquidity › Customer deposits fund 66% of total › Combined available liquidity from the assets and 98% of loans Fed, FHLB, unpledged securities and unused lines exceeds $42 billion › Customer deposits are 99% of total deposits › $2.2 billion in excess cash reserv
Slide 18: Regions
Ma REGIONS