Regions Financial Corporation · NYSE:RF
Regions Financial — Non-Deal Roadshow (July 2016)
24 slides from Regions Financial's roadshow presentation, Jul 25, 2016
Slide 1: Investor Meetings July/August 2016
Investor Meetings July/August 2016 EXHIBIT 99.1
Slide 2: Our banking franchise
Our banking franchise Regions aims to be the premier regional financial institution in America Corporate Banking Business Capital Capital Markets Dealer Finance Equipment Finance Government/Institutional Specialized Industry Institutional Services Insurance Private Wealth • • • • • • • • • • Line of
Slide 3: 2016 Expectations
2016 Expectations • Average loan growth of 3% - 5%(1); expect to track toward lower end of range • Average deposits relatively stable(1)(2) • Net interest income and other financing income up 2% - 4%; assuming no rate increases, expect to be at mid-point of range • Adjusted non-interest income up 4%
Slide 4: Strategic initiatives
Strategic initiatives Effectively Deploy Capital Disciplined organic growth Return appropriate capital to shareholders Use strategic investments to leverage our infrastructure and enhance revenue diversification Disciplined Expense Management Generate positive operating leverage Continuous
Slide 5: 2nd quarter 2016 results
2nd quarter 2016 results Generated positive operating leverage of 4%(1) on an adjusted basis year-to-date Achieved year-to-date adjusted efficiency ratio of 62.3%(1) Expanded customer base as checking accounts, households, credit cards and wealth relationships grew Recognized as having the best over
Slide 6: Energy portfolio overview
Energy portfolio overview Decline in direct exposure since 2Q15 Total direct energy loans as a % of total loans E&P criticized loans paying as agreed 89% 19% 99% 2.9% OFS criticized loans paying as agreed No second lien exposure outstanding in energy portfolio Loss expectations in energy through the
Slide 7: Why Regions? – Building sustainable franchise value
Why Regions? – Building sustainable franchise value Effectively Deploy Capital Grow and Diversify Revenue Disciplined Expense Management Adjusted EPS growth of 12-15% (CAGR) Adjusted efficiency ratio of <60% Adjusted ROATCE 12-14% Three pillars of execution Long-term expected results How we intend t
Slide 8: Appendix
Appendix Ax REGIONS 8
Slide 9: Prudently managing balance sheet
Prudently managing balance sheet Average deposit balancesAverage loan and lease balances $79.2 $80.6 $80.8 $81.5 $82.0 2Q15 3Q15 4Q15 1Q16 2Q16 ($ in billions) Consumer lending experienced strong quarter with balances up 1% and production up 20% QoQ As a result of softer pipelines, business lending
Slide 10: Net interest income and other financing income and net interest margin
Net interest income and other financing income and net interest margin (1) During the fourth quarter of 2015, Regions corrected the accounting for certain leases which had previously been included in loans. The cumulative effect on pre-tax income lowered net interest income and other financing incom
Slide 11: Adjusted non-interest income
Adjusted non-interest income(1) (1) Non-GAAP; see appendix for reconciliation $494 $484 $502 $508 $520 2Q15 3Q15 4Q15 1Q16 2Q16 ($ in millions) +5.3% Year-Over-Year Credit card income increased 10% YoY Total mortgage income increased 21% from 1Q16 Capital markets income increased 41% YoY Wealth mana
Slide 12: Investments are paying off while prudently managing expenses
Investments are paying off while prudently managing expenses (1) Non-GAAP; see appendix for reconciliation (2) Represents ~9% of 2015 adjusted expense base Adjusted non-interest expense(1) $859 $894 $861 $843 $889 2Q15 3Q15 4Q15 1Q16 2Q16 ($ in millions) Focused on what we can control in an uncertai
Slide 13: Industry leading capital ratios
Industry leading capital ratios Note: Regions’ ratio is estimated at 6/30/16 and is unchanged from 3/30/16. Peer financial data as of 3/31/16. Peers include BBT, CMA, FHN, FITB, HBAN, KEY, MTB, PNC, SNV, STI, USB and ZION. Source: SNL Financial. 9.5% 9.7% 9.7% 9.8% 9.9% 10.1% 10.4% 10.4% 10.6% 10.6%
Slide 14: Solid liquidity
Solid liquidity Loan-to-deposit ratio(1) (1) Based on ending balances Regions has a strong, core funded balance sheet resulting in low loan-to-deposit ratio Future debt maturities are manageable and allow for efficient re-financing Regions’ liquidity policy requires that the holding company maintain
Slide 15: Asset quality
Net charge-offs and ratio NPLs and coverage ratio(1) Criticized and classified loans(2) (1) Excludes loans held for sale (2) Includes commercial and investor real estate loans only (3) The All Other category includes TDRs classified as held for sale for the following periods : $18MM in 2Q15, $14MM i
Slide 16: Energy lending overview
• Total outstandings and commitments declined primarily due to paydowns and payoffs • Allowance for loan and lease losses was 9.4% of direct energy balances at 6/30/16 vs 8.0% at 3/31/16 • No second lien exposure outstanding within the energy portfolio • Leveraged loans account for 14% of energy rel
Slide 17: Energy lending - Oil Field Services and Exploration & Production detail
Energy lending - Oil Field Services and Exploration & Production detail Type As of 6/30/16 # of Clients* Commentary Marine $457 9 Client selection is strong with ~61% of exposure tied to clients with contract protection through 2016. Expect some additional stress into 2017 as E&P companies focus on
Slide 18: Loan balances by select states: Texas, Louisiana
Loan balances by select states Texas Louisiana Note: Intelligence from our customer assistance program (CAP) reveals no noticeable increase in assistance requests in these markets to date. Investor Real Estate Balances by City ($ in millions) Office Retail Multi- Family Single Family Other Total Hou
Slide 19: Loan balances by select states: Alabama, Mississippi
Loan balances by select states Alabama Mississippi Investor Real Estate Balances by City ($ in millions) Office Retail Multi- Family Single Family Other Total Birmingham $32 $40 $30 $15 $24 $141 Huntsville 49 16 6 9 3 83 Mobile / Baldwin County 2 17 3 3 15 40 Other 17 20 21 13 20 91 Total $100 $93 $
Slide 20: Non-GAAP reconciliation: Non-interest income, non-interest expense and efficiency ratio
Non-GAAP reconciliation: Non-interest income, non-interest expense and efficiency ratio NM - Not Meaningful (1) Regions recorded $3 million, $50 million and $100 million of contingent legal and regulatory accruals during the second quarter of 2016, the second quarter of 2015, and the fourth quarter
Slide 21: Non-GAAP reconciliation continued: YTD
Non-GAAP reconciliation continued: YTD Non- interest income, non-interest expense, efficiency ratio and operating leverage (1) See page 7 of 2Q16 Financial Supplement for additional detail on these adjustments. 21
Slide 22: Forward-looking statements
Forward-looking statements 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 historica
Slide 23: Forward-looking statements continued
Forward-looking statements continued The foregoing list of factors is not exhaustive. For discussion of these and other factors that may cause actual results to differ from expectations, look under the captions “Forward-Looking Statements” and “Risk Factors" of Regions' Annual Report on Form 10-K fo
Slide 24: Regions
A. REGIONS