Regions Financial Corporation · NYSE:RF
Regions Financial — Q1 2025 Earnings Presentation
43 slides from Regions Financial's earnings presentation, Jan 17, 2025
Slide 1: 1st Quarter Earnings
Exhibit 99.3 1st Quarter Earnings April 17, 2025
Slide 2: First Quarter Overview
First Quarter Overview Continue to deliver consistent, sustainable long-term performance 1Q25 Key Performance Metrics Highlights Reported Adjusted(1) • Consistently generating top-quartile Net Income Available to Common returns in our peer group(2) $465M $487M Shareholders • Continued focus on disci
Slide 3: Longstanding Strategic Priorities
Longstanding Strategic Priorities Soundness Profitability Growth Strategically Investing in: • Top quartile organic loan & Relentless focus on: deposit growth over the last Committed to: 5 yrs vs. peers(1) • Credit Risk Management • Diversified Revenue • Non-bank M&A, expanding Streams • Interest Ra
Slide 4: Faster Earnings Growth and Top Returns
Faster Earnings Growth and Top Returns Supports a higher P/E multiple Peer Leading ROATCE(1) For 4 Straight Years Rank: 1 Rank: 1 24.1% Rank: 1 21.4% 21.9% Rank: 1 17.6% 17.8% 16.4% 14.9% 19.3% 12.0% 12.0% 17.0% 16.5% 11.0% 14.7% 9.2% 14.3% 9.0% 11.0% 8.5% 9.7% 2015 2016 2017 2018 2019 2020 2021 202
Slide 5: Capital Strength
Capital Strength Robust capital balances and strong organic capital generation position Regions well for full range of potential economic conditions Capital Resiliency • Prudent risk management evident in Pro Forma Post-Stress Capital(2) Federal Reserve's stress testing results 11.68% 11.92% 11.53%
Slide 6: Loans
Loans Stable loan trends with cautious optimism for growth Average Loans & Leases ($ in billions) QoQ Highlights & Outlook $97.4 $96.4 $96.1 • Avg loans remained relatively stable $33.4 $33.2 $33.0 while ending loans declined 1% • Avg business loans remained stable; $64.0 $63.2 $63.1 Customers carry
Slide 7: Deposits
Deposits Relationship deepening and customer acquisition support stabilizing deposit trends Average Deposits by Segment ($ in billions) $127.1 $126.5 $127.7 QoQ Highlights & Outlook $3.1 $3.1 $3.1 $7.7 $7.5 $7.6 • Avg deposits increased 1% and ending $37.1 $37.4 $38.3 deposits increased 3%, typical
Slide 8: NII & Margin Performance
NII & Margin Performance NII protected from falling short-term rates; growth from steeper curve/securities repositioning FTE NII and NIM ($ in millions) Drivers of NII and NIM $1,197 $1,243 $1,206 • NII -3% QoQ (down less than -1% excluding non-recurring items and two fewer days); NIM decreased 3bps
Slide 9: 2025 NII Expected Range and Assumptions
2025 NII(1) Expected Range and Assumptions Resilient NII expected to grow in 2025 under a wide range of possible outcomes Expectation: NII expected to grow in 2025, with fixed-rate asset Net Interest Income Trend ($M) turnover and funding cost management as the primary drivers; Return to long-term g
Slide 10: Non-Interest Income
Non-Interest Income Non-Interest Income Adj. Non-Interest Income(1) QoQ Highlights & Outlook ($ in millions) ($ in millions) $613 $615 $615 • NIR remained stable on an adjusted(1) basis and $585 $590 $563 increased slightly on a reported basis, which included a $25M pre-tax loss on securities reposi
Slide 11: Non-Interest Expense
Non-Interest Expense Non-Interest Expense Adj. Non-Interest Expense(1) ($ in millions) ($ in millions) $1,131 QoQ Highlights & Outlook $1,038 $1,039 $1,097 $1,029 $1,035 $22 $— • NIE remained relatively stable on a reported basis and increased ~1% on an adjusted(1) 64.3% 60.6% basis, driven primaril
Slide 12: Asset Quality
Asset Quality Customers remain healthy - Credit Metrics within expectations Net Charge-Offs(1) Non-Performing Loans (NPLs)(1) $906 $928 $843 $121 $119 $123 0.94% 0.96% 0.88% 0.50% 0.49% 0.52% 1Q24 4Q24 1Q25 NPLs - excluding LHFS NPL/Loans 1Q24 4Q24 1Q25 NCOs NCOs Ratio QoQ Highlights & Outlook • 1Q
Slide 13: Capital and Liquidity
Capital and Liquidity Managing capital flexibility to support growth and shareholder returns Tier 1 Capital Ratio(1) QoQ Highlights & Outlook 11.6% 12.2% 12.2% • Declared 1Q common dividends of $226M or $0.25 per share and executed $242M in share repurchases 1Q24 4Q24 1Q25 • Dividend payout target o
Slide 14: CET1 Under Basel III Endgame (B3E)
CET1 Under Basel III Endgame (B3E) B3E Update Volatility Management • B3E has yet to be finalized but expect AOCI to be included in • Reclassified Available-for-Sale securities into Held- Regulatory Capital to-Maturity to reduce volatility; ~17% of portfolio • CET1 inclusive of AOCI increased linked
Slide 15: 2025 Expectations
2025 Expectations Expectations for 2Q25 & Beyond(3) FY 2025 Expectations • NII expected to grow in 2025, with fixed-rate Net Interest Income up 1 – 4% (3) asset turnover and funding cost management (vs. 2024 of $4,818) as the primary drivers; opportunity if balance Adjusted Non-Interest Income sheet
Slide 16: Appendix
Appendix 4 a
Slide 17: Growth in Digital
Growth in Digital Digital Usage Sales & Transactions Zelle Transactions (Millions) (1) (4) Mobile Banking Active Users (Millions) Consumer Checking Sales by Channel +44% 5.03 +7% 4.35 2.57 2.63 2% 2% 2% 3.50 2.46 73% 81% 74% 25% 17% 24% 1Q23 1Q24 1Q25 1Q23 1Q24 1Q25 1Q23 1Q24 1Q25 Digital Branch Con
Slide 18: Investments in Our Businesses
Investments in Our Businesses Investments in talent, technology and strategic acquisitions continue to pay off Corporate Consumer Wealth • Continuing to drive growth in our • Growing and retaining primary • Record 1Q25 NIR, up 10% vs 1Q24 primary priority and core markets by relationships by reskill
Slide 19: Investing in People, Enabled with Technology
Investing in People, Enabled with Technology in Markets with Highest Opportunity Investing in Investments in Technology Banker Expansion Over the next 3 years, will invest in ☐ Core Modernization Talent across the Footprint in key Personalization Powered by AI areas of opportunity: By hiring and (1)
Slide 20: Hedging Strategy Update
Hedging Strategy Update Mostly "neutral" rate risk position protects margin & decreases capital volatility Asset Hedge Notional (Quarterly Avg) (Annual Avg) Receive-Fixed, Cash Flow Swaps - Loans Pay-Fixed, Fair Value Swaps - AFS Securities Net Asset Swap Position(2) Cash Flow Collars - Loans(3) 1Q2
Slide 21: Securities Portfolio
Securities Portfolio Provides downside rate protection/liquidity • Portfolio constructed to protect against changes in market rates Securities Portfolio Composition(1)(3) ◦ Duration of ~4.2 years (AFS ~3.9 years) as of 3/31/2025; provides offset to long-duration deposit book Agency/UST Corporate Bon
Slide 22: Securities Portfolio - Repositioning
Securities Portfolio - Repositioning Provides efficient use of capital/downside rate protection Multiple, distinct securities repositioning Rationale for Securities Repositioning strategies occurred in 2024 and 2025 Efficient Portfolio Favorable Capital Use Management Market • Sold mostly shorter-du
Slide 23: Continuous Improvement in Risk Management
Continuous Improvement in Risk Management Our commitment to strengthening credit risk disciplines and intentional portfolio shaping over the past decade leaves us well positioned for sound, profitable growth Strong Origination Disciplines Aligned with Comprehensive Risk Framework Case Studies in Por
Slide 24: Historical Credit Profile
Historical Credit Profile Total Net Charge-Offs 2.00% 1.50% Average Pre-Pandemic Average Pandemic 0.46% 0.35% 1.00% 0.52% 0.50% —% 13 20 22 25 1Q 1Q 4Q 1Q Non-Performing Loans 2.50% 2.00% Average Pre-Pandemic Average Pandemic 1.07% 0.64% 1.50% 0.88% 1.00% 0.50% —% 13 20 22 25 1Q 1Q 4Q 1Q • Non-Accru
Slide 25: Commercial Real Estate
Commercial Real Estate (Outstanding balances as of March 31, 2025) Highly Diversified Portfolio (IRE including Unsecured CRE) Key Portfolio Metrics Res. Homebuilders Other Hotel 8.5% 3.1% 4.9% • Unsecured loans for RE purposes generally have low Healthcare leverage, with strong access to liquidity 7
Slide 26: CRE- Office Portfolio
CRE- Office Portfolio (Outstanding balances as of March 31, 2025) Key Portfolio Metrics(1) Investor Real Estate Office Portfolio Overview Balances $1,387 % of Total Loans 1.5% 8% 20% 41% NPL $184 59% 80% NPL / Loans 13.3% 92% Charge-offs $20 Class A Class B Multi-Tenant Single Tenant Suburban Urban
Slide 27: Transportation - Trucking
Transportation - Trucking (Outstanding balances as of March 31, 2025) Key Portfolio Metrics(1) Ongoing Portfolio Surveillance Balances $1,362 • The trucking industry entered 2025 with cautious optimism given the potential for freight demand % of Total Loans 1.4% and rates to recover; however, there
Slide 28: Consumer Lending Portfolio
Consumer Lending Portfolio • Consumer Credit Card Home Equity Consumer FICO Scores(1) • Avg. origination FICO 771 • Avg. origination FICO 760 • Avg. new line $8,812 • Current LTV 37% 2% 2% 2% • 1Q25 Yield 14.55% • 59% of portfolio is 1st lien • 1Q25 QTD NCO 4.18% • Avg. loan size $34,732 67% • $113M
Slide 29: Allowance for Credit Losses
Allowance for Credit Losses QoQ Highlights • 1Q allowance essentially flat compared to the prior quarter, resulting in a $124M provision expense ($ in millions) • A consistent ACL resulted from: $1,729 $37 $1,730 ◦ Decreases in Specific Reserve $(20) $(16) borrowers driven by charge-offs ◦ Portfolio
Slide 30: Base R&S Economic Outlook
Base R&S Economic Outlook (As of March 2025) Pre-R&S period 1Q2025 2Q2025 3Q2025 4Q2025 1Q2026 2Q2026 3Q2026 4Q2026 1Q2027 Real GDP, annualized % change 1.4 % 1.1 % 0.9 % 1.4 % 1.7 % 2.1 % 2.3 % 2.1 % 2.0 % Unemployment rate 4.1 % 4.2 % 4.2 % 4.3 % 4.3 % 4.3 % 4.2 % 4.2 % 4.1 % HPI, year-over-year %
Slide 31: Allowance Allocation
Allowance Allocation Regions "Day 1" CECL ACL ratio on 1/1/2020 was 1.71%. The company has executed a number of de-risking strategies that have improved the overall loan portfolio. Taking the 1Q25 loan portfolio and applying the "Day 1" ACL rates would produce a proforma Day 1 ACL ratio of 1.62%. As
Slide 32: Non-GAAP Information
Non-GAAP Information Management uses computations of earnings and certain other financial measures, which exclude certain adjustments that are included in the financial results presented in accordance with GAAP, to monitor performance and believes these measures provide meaningful information to inv
Slide 33: Non-GAAP Reconciliation
Non-GAAP Reconciliation Pre-Tax Pre-Provision Income (PPI) Quarter Ended ($ amounts in millions) 3/31/2025 12/31/2024 9/30/2024 6/30/2024 3/31/2024 1Q25 vs. 4Q24 1Q25 vs. 1Q24 Net income available to common shareholders (GAAP) $ 465 $ 508 $ 446 $ 477 $ 343 $ (43) (8.5)% $ 122 35.6 % Preferred divide
Slide 34: Non-GAAP Reconciliation
Non-GAAP Reconciliation NII, Non-Interest Income/Expense, and Efficiency Ratio Quarter Ended ($ amounts in millions) 3/31/2025 12/31/2024 9/30/2024 6/30/2024 3/31/2024 1Q25 vs. 4Q24 1Q25 vs. 1Q24 Non-interest expense (GAAP) A $ 1,039 $ 1,038 $ 1,069 $ 1,004 $ 1,131 $ 1 0.1 % $ (92) (8.1)% Adjustment
Slide 35: Non-GAAP Reconciliation
Non-GAAP Reconciliation Net Income Available to Common Shareholders, Adjusted Diluted EPS, and Return Ratios Quarter Ended ($ amounts in millions) 3/31/2025 12/31/2024 9/30/2024 6/30/2024 3/31/2024 1Q25 vs. 4Q24 1Q25 vs. 1Q24 Net income available to common shareholders (GAAP) A $ 465 $ 508 $ 446 $ 4
Slide 36: Non-GAAP reconciliation
Non-GAAP reconciliation Return on Average Tangible Common Shareholders' Equity Quarter Ended Year Ended ($ amounts in millions) 3/31/2025 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 RETURN ON AVERAGE TANGIBLE COMMON SHAREHOLDERS' EQUITY Net income available to common shareholders A $ 465 $ 1,7
Slide 37: Non-GAAP Reconciliation
Non-GAAP Reconciliation Non-Interest Expense Twelve Months Ended December 31 ($ amounts in millions) 2024 2023 2022 2021 2020 2019 2018 2017 2016 Non-interest expense (GAAP) $ 4,242 $ 4,416 $ 4,068 $ 3,747 $ 3,643 $ 3,489 $ 3,570 $ 3,491 $ 3,483 Adjustments: FDIC insurance special assessment (16) (1
Slide 38: Non-GAAP Reconciliation
Non-GAAP Reconciliation Adjusted CET1- inclusive of AOCI(4) Quarter Ended ($ amounts in millions) 3/31/2025 12/31/2024 9/30/2024 6/30/2024 3/31/2024 ADJUSTED CET1 RATIO Common Equity Tier 1(1) A $ 13,355 $ 13,434 $ 13,185 $ 13,093 $ 12,913 Adjustments: AOCI gain (loss) on securities(2) (1,645) (2,02
Slide 39: Non-GAAP Reconciliation
Non-GAAP Reconciliation Tangible Common Ratios As of and for Quarter Ended ($ amounts in millions, except per share data) 3/31/2025 12/31/2024 9/30/2024 6/30/2024 3/31/2024 TANGIBLE COMMON RATIOS Shareholders’ equity (GAAP) A $ 18,530 $ 17,879 $ 18,676 $ 17,169 $ 17,044 Less: Preferred stock (GAAP)
Slide 40: Forward-Looking Statements
Forward-Looking Statements Forward-Looking Statements This presentation and the accompanying earnings call may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. In addition, the company, through its senior management, may from time to time make fo
Slide 41: Forward-Looking Statements
Forward-Looking Statements (continued) • Our inability to develop and gain acceptance from current and prospective customers for new products and services and the enhancement of existing products and services to meet customers’ needs and respond to emerging technological trends in a timely manner co
Slide 42: Forward-Looking Statements
Forward-Looking Statements (continued) • 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 abi
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