Regions Financial Corporation · NYSE:RF
Regions Financial — Sanford C. Bernstein & Co. Strategic Decisions Conference 2008
27 slides from Regions Financial's conference presentation, May 29, 2008
Slide 1: Sanford C. Bernstein Strategic Decisions Conference 2008
Sanford C. Bernstein & Co., LLC Strategic Decisions Conference 2008 May 29, 2008 Exhibit 99.1
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS The information contained in this presentation may include forward-looking statements which reflect Regions' current views with respect to future events and financial performance. The Private Securities Litigation Reform Act of 1995 ("the Act") provides a safe harbor for f
Slide 3: Company Profile, Financial Performance, Credit Quality, Capital, Strategic Initiatives
Company Profile Financial Performance Credit Quality Capital Strategic Initiatives
Slide 4: Franchise Footprint
Franchise Footprint Source: SNL DataSource and Regions as of June 30, 2007. State Dep. ($B) Mkt. Share Rank AL $18.2 25% #1 FL 17.7 #4 TN 16.7 #2 LA 7.6 #3 MS 6.2 #1 GA 5.5 #6 AR 4.3 #2 TX 3.0 #18 IL 2.4 #24 MO 2.3 #8 IN 2.0 #9 Other 2.4 — —
Slide 5: Regions compares favorably in local market share relative to top 10 banking franchises
Regions compares favorably in terms of local market share relative to other top 10 banking franchises 18.5 Regions Deposit weighted by county. Excludes deposits from branches with > $10bn of deposits. Based on June 30, 2007 data. 16.6% Median 7.9 Citigroup 13.2 National City 14.3 SunTrust 16.0 JP Mo
Slide 6: Fast Growing Footprint
Fast Growing Footprint 10.5% 10.0% 8.1% 8.0% 7.9% 7.0% 6.9% 5.9% 5.7% 4.5% 4.2% 3.7% 3.4% 3.4% 3.3% 2.8% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% Projected Population Growth (2007-2012) of Market Footprint (1) Source: SNL Financial. Data as of June 2007. Pro forma for completed/pending M&A. Deposit weig
Slide 7: Morgan Keegan – Among the Largest Regional Full-Service Brokerage and Investment Banking Firms
Morgan Keegan – Among the Largest Regional Full-Service Brokerage and Investment Banking Firms Revenue ($M) Pre-Tax Income ($M) Financial Performance 416 Office Locations Revenue Composition (2007) Profile › Founded in 1969 › Acquired by Regions in 2001 › 1,282 financial advisors › 416 offices in 19
Slide 8: First Quarter Financial Performance
First Quarter Financial Performance Credit metrics deteriorating as expected Continuation of net interest margin pressure Strong fee income Maintained capital levels Exceeding merger cost save targets
Slide 9: Exceeding Original Cost Saves
$0 $200 $400 $600 $800 Original Target Run-rate Achieved at 1Q08 New Target $400 Exceeding Original Cost Saves $ in millions $700+ 2008 2008 2007 1Q08 $510 Run Rate
Slide 10: Housing Market
Source: US Census Bureau Reports Housing Market J07 F07 M07 A07 M07 J07 J07 A07 S07 O07 N07 D07 J08 F08 M08 $200,000 $210,000 $220,000 $230,000 $240,000 $250,000 $260,000 $270,000 New Home Sales Median New Home Price
Slide 11: Credit Quality Trends
Credit Quality Trends 1.25% 0.53% 0.20% 0.23% 0.27% 0.45% 0.62% 0.90% 0.62% 0.45% 0.48% 0.22% 0.22% 0.35% 0.37% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 1Q07 2Q07 3Q07 4Q07 1Q08 NPAs/Loans and OREO Net Charge-Offs/Average Loans Delinquent Loans (90+ Past Due)
Slide 12: Industry Challenges
SUBPRIME SIVs / CDOs NON-TRADITIONAL MORTGAGES Industry Challenges X X X Regions has $100 million (0.1%) of subprime loans Regions has no option ARMs, negative amortization, or loans with teaser rates Regions has no SIV exposure or CDOs on the balance sheet
Slide 13: Loan Portfolio Overview (Risk View)
Loan Portfolio Overview (Risk View) CRE - Owner-Occupied Mortgages, $111 Commercial Real Estate Non-Owner-Occupied Mortgages, $208 Construction, $447 Alt-A, $14 Business and Community Banking, $101 Residential First Mortgage, $42 Other Consumer, $2 Commercial and Industrial/Leases, $89 Home Equity L
Slide 14: Commercial Real Estate Portfolio - $20.5 billion
Commercial Real Estate Portfolio - $20.5 billion CRE Portfolio by Product CRE Portfolio Characteristics Portfolio well-diversified by product type $6.2 billion residential homebuilder portfolio is a subset of the Commercial Real Estate portfolio with the majority of the residential homebuilder portf
Slide 15: Condo Portfolio by Region
Central, $294 Southwest, $30 Midwest, $89 Midsouth, $82 Other, $35 Florida, $838 As of March 31, 2008. Condo Portfolio by Region $ in millions › As of March 31, 2008, our condominium portfolio totaled $1.367 billion, down $891 million from December 31, 2006. › Portfolio is running off due to payment
Slide 16: Residential Homebuilder Portfolio - $6.2 billion
Residential Homebuilder Portfolio - $6.2 billion Land, $2,093 Residential Spec, $1,875 Residential Presold, $588 Lots, $1,417 National Homebuilders, $258 Product Breakout $ %* $ %* $ %* $ %* $ %* $ %* 90+ Past Due 2,883 0.17 0.07 6,596 0.35 3,764 0.18 0.04 13,273 0.21 Non-Accruing Loans 103,294 7.29
Slide 17: Residential Homebuilder Portfolio - Geographic Breakdown
Residential Homebuilder Portfolio - $6.2 billion Geographic Breakdown 500,000 1,000,000 1,500,000 2,000,000 2,500,000 Central consists of Alabama, Georgia, and South Carolina Midsouth consists of North Carolina, Virginia and Tennessee Midwest consists of Arkansas, Illinois, Indiana, Iowa, Kentucky,
Slide 18: Consumer Real Estate Portfolio - $31.8 billion
Consumer Real Estate Portfolio - $38 billion Consumer Real Estate Portfolio - $31.8 billion Subprime Mortgage, $0.1 Alt A Mortgage, $2.7 Home Equity 1st Lien, $6.1 Home Equity 2nd Lien, $8.8 Residential Prime Mortgage, $14.0 As of March 31, 2008. $ in billions Wgtd Avg. Wgtd Avg. Outstandings* LTV F
Slide 19: Consumer Real Estate Geographic Breakdown
Consumer Real Estate Geographic Breakdown 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 Central consists of Alabama, Georgia, and South Carolina Midsouth consists of North Carolina, Virginia and Tennessee Midwest consists of Arkansas, Illinois, Indiana, Iowa, Kentucky, Missouri, and
Slide 20: Example of a Home Equity 'Value'
Example of a Home Equity ‘Value’ Charge-off If the first mortgage holder forecloses, there is no value left to satisfy our Home Equity loan. We must charge off our balance of $140,000. At Origination Today Appraised Value 1,000,000 $ 600,000 $ Less: First Mortgage 600,000 $ 600,000 $ Equity Remainin
Slide 21: Excellent Loss Experience versus Peers
Excellent Loss Experience versus Peers NOTE: Industry peers include FITB, KEY, NCC, STI, USB, WFC, WM Home Equity Regions 0.24% 0.31% 0.31% 0.57% Industry Peers 0.52% 0.67% 1.01% 1.85% Residential First Mortgage Regions 0.12% 0.13% 0.18% 0.23% Industry Peers 0.26% 0.29% 0.80% 1.43% Net Charge-offs 2
Slide 22: Action Plan – Home Equity
Action Plan – Home Equity Underwriting › Lending criteria has tightened in line with market conditions. › Loan-to-Value on new production is 71% and appraised value is based on distressed market prices. As Real Estate markets strengthen, the effective loan-to-value will reduce. › We are a ‘through-t
Slide 23: Initiatives to Mitigate Risk
Initiatives to Mitigate Risk Exited subprime Shut down Regions Funding Segmented CRE and Small Business Shut down International Lending Focused on centrally managing our Homebuilder portfolio
Slide 24: Key Credit Takeaways
Key Credit Takeaways Plain vanilla lender Portfolios are performing as we expect, except for Homebuilder, Condominium and Home Equity portfolios In the case of Homebuilder, Condominium and Home Equity portfolios, we have focused resources to help mitigate the risk of loss and we are actively working
Slide 25: Capital Management
Capital Management March 31, 2008 Capital Recent Issuances: › Regions Financial – April 2008 8.875% Retail Enhanced Trust Preferred - $345 million › Regions Bank – May 2008 7.50% Subordinated Note - $750 million › Both issuances well received and oversubscribed Tangible Capital Ratio 11.07 Total Ris
Slide 26: Well Positioned Despite Challenging Environment
Well Positioned Despite Challenging Environment Growth driven by strategic initiatives Relatively neutral balance sheet positioning Strong Morgan Keegan contribution Merger opportunities mitigate industry downturn, allow for increased operating leverage Exceeding merger-related cost saves Continued
Slide 27: Regions
VN REGIONS
Regions Financial — Sanford C. Bernstein & Co. Strategic Decisions Conference 2008 on 6ix