Regions Financial Corporation · NYSE:RF
Regions Financial — 2011 Goldman Sachs US Financial Services Conference
32 slides from Regions Financial's conference presentation, Dec 6, 2011
Slide 1: 2011 Goldman Sachs US Financial Services Conference
Exhibit 99.1 2011 Goldman Sachs US Financial Services Conference December 6, 2011 Grayson Hall President and Chief Executive Officer
Slide 2: Why Regions?
Why Regions? • Strong Southeastern franchise with comprehensive line of product offerings • Leading brand favorability and exceptional service quality • Solid core business performance • Aggressively identifying and disposing of problem assets • Capital and liquidity remain solid 2
Slide 3: Regional Bank in the Southeast with Comprehensive and Diversified Line of Product Offerings
Regional Bank in the Southeast with Comprehensive and Diversified Line of Product Offerings Business Services › Small and mid-sized C&I lending › Commercial Real Estate › Equipment Finance Consumer Services › Associates: 26,881 › Mortgage › Direct Lending › Assets: $130B › Home Equity › Indirect Aut
Slide 4: Regions' Footprint is Characterized by High Market Shares, High Growth Markets or Both
Regions’ Footprint is Characterized by Either High Market Shares, High Growth Markets or Both ’10-’15 ($ in billions) Market Market Population Weighted Average Deposit Market Share Top 10 MSAs Deposits Share Rank Growth in Regions’ Core Markets Birmingham, AL $11.0 37.6% 1 3.4% Nashville, TN $6.6 17
Slide 5: Competitive Advantage Driven by Customer Loyalty
Competitive Advantage Driven by Customer Loyalty J.D. Power AND ASSOCIATES nd Ranked 2 in Satisfaction for Mortgage Servicing Top Bank in Customer Service Study Regions continues to perform in the top 10% Regions received in customer loyalty and Excellence Award #1 in Customer Service and top 20% fo
Slide 6: Quality Loans Key to Profitable Growth
Quality Loans Key to Profitable Growth Portfolio Mix* Business Services Consumer Services › Focused on middle market & small › Growing consumer loans to achieve a business more balanced portfolio › Represents over 80% of › Consumer loan growth will be fueled by new businesses as well as growth in Bu
Slide 7: Regions C&I Loan Growth has significantly outpaced Peers
Regions C&I Loan Growth has significantly outpaced Peers Year-To-Date % Change 16.7% 15.6% • Our Commercial & 12.5% 11.9% 11.8% Industrial loan growth 11.2% 9.5% has significantly 7.3% outpaced peers over the 5.3% 3.9% 2.6% past year • Momentum has Bank Bank RF Bank Bank Bank Bank Bank Bank Bank Ban
Slide 8: Opportunities Remain To Further Lower Deposit Costs
Opportunities Remain To Further Lower Deposit Costs Deposit Cost Opportunity Gap Deposit Mix Compared to Peers 12 bps 8 bps Time 22% 40 bps Regions Other 38 bps 48% NIB 30% 2Q11 3Q11 Peer Median Regions Opportunity Gap • Regions has additional room to reduce deposit costs even further • Opportunity
Slide 9: Net Interest Margin Impacted by Cash Reserves and Non-Accrual Loans
Net Interest Margin Impacted by Cash Reserves and Non-Accrual Loans Impact of Excess Liquidity & Regions has closed a portion of its Non-Accruals on NIM gap vs. the peers in the last 5 quarters 3.90% 3.4% 3.33% 3.33% 3.32% 3.27% 3.67% 3.65% 3.63% 3.20% 3.70% 3.60% 0.16% 0.15% 0.14% 3.55% 3.2% 0.16%
Slide 10: Service Charge Income Remains Strong
Service Charge Income Remains Strong Year-To-Date Service Charge Growth Offsetting Durbin • Ongoing restructuring 2.4% of our accounts to fee- 0.5% eligible • Increasing hurdle -2.5% obtaining free -3.2% -3.8% -4.4% checking -4.7% -5.7% -6.5% • Cross-sell new -9.5% revenue initiatives -11.4% RF Bank
Slide 11: Expense control continues to be a focus
Expense control continues to be a focus Year-Over-Year % Change NM 6.2% 6.4% 3.8% 3.8% 4.3% • Year-over-year 1.4% Regions’ expenses* have declined 8% -1.6% while many peers -4.0% continue to grow -6.0% expenses -8.3% RF Bank Bank Bank Bank Bank Bank Bank Bank Bank Bank #2 #3 #4 #5 #6 #7 #8 #9 #10 #1
Slide 12: Strong Net Income and Adjusted Pre-tax Pre-Provision Income Growth
Strong Net Income and Adjusted Pre-tax Pre-Provision Income Growth Adjusted Adjusted Adjusted Net Pre-tax Non- Non- Net Interest Pre- Interest Interest Income** Income provision ($ in Revenue* Expense* millions) Income* 3Q11 858 + 748 - 1,066 = 540 $101 2Q11 864 + 757 - 1,121 = 500 $55 1Q11 863 + 76
Slide 13: Significant Reduction in Highest Risk Portfolio Segments
Significant Reduction in Highest Risk Portfolio Segments Total Investor Real Estate Higher Risk Investor Real Estate Segments $30 $7 $6.3 $25.8 $6 $25 $5.0 $5 $20 $14.8 $4 $15 $11.9 $3 $1.2 $2.3 $10 $2 $1.0 $0.9 $5 $11.0 $10.7 $1 $0.2 $0 $0 4Q06 3Q11 Land Condo Single Family 4Q06 3Q11 Mortgage Const
Slide 14: Credit Quality Metrics Linked Quarter
Credit Quality Metrics Linked Quarter Net charge-offs declined 7% nd Provided less than net charge-offs for 2 straight quarter Non-performing loans declined 3% Non-performing assets declined 6% Business Services criticized loans declined 8% Loan loss allowance to net loans declined 11bps to 3.73% th
Slide 15: Substantial Improvement in Loan Loss Provision; Allowance Well Above Peers
Substantial Improvement in Loan Loss Provision; Allowance Well Above Peers Loan Charge-Offs Allowance versus Peers $ in millions $1,000 3.92% 3.84% 3.84% 3.77% 3.73% $800 $760 $682 178 $600 169 $398 $355 3.23% $482 151 3.11% 233 111 3.03% 153 $400 165 Sales/ 2.78% 207 106 198 HFS (1) 2.62% $200 402
Slide 16: Strong Capital
Strong Capital 12.4% 12.5% 12.6% 12.8% 12.1% 11.3% 7.6% 7.9% 7.9% 7.9% 8.2% 7.7% 3Q10 4Q10 1Q11 2Q11 3Q11 3Q11 Basel III** Tier 1 Common* Tier 1 * Non-GAAP – see appendix for reconciliation ** Non-GAAP - Subject to change as interpretation of Basel III rules is ongoing and dependent on guidance from
Slide 17: Solid Liquidity
Solid Liquidity Core Deposits as a % of Total Funding Loans / Deposits 89% 89% 88% 86% 85% 85% 84% 89% 81% 81% 88% 78% 84% 84% 56% 83% Bank Bank RF Bank Bank Bank Bank Bank Bank Bank Bank #1 #2 #4 #5 #6 #7 #8 #9 #10 #11 3Q10 4Q10 1Q11 2Q11 3Q11 Source: SNL Financial Note: Peer banks include BAC, BBT
Slide 18: Business Plan Priorities
Business Plan Priorities My REGIONS | *
Slide 19: Stronger Company Today
Stronger Company Today 4Q07 3Q11 Change Investor Real Estate $23B $12B 48% Reduction More than Allowance for Loan Losses $1.3B $3.0B doubled 160 bps Tier 1 Common Ratio* 6.6% 8.2% improvement Low Cost Deposits $60.3B $75.5B 25% Growth Loan to Deposit 100% 83% Strong Liquidity * Non-GAAP – see append
Slide 20: Appendix
Ms REGIONS |
Slide 21: Forward-Looking Statements
Forward-Looking Statements This presentation may include forward-looking statements which reflect Regions’ current views with respect to future events and financial performance. The Private Securities Litigation Reform Act of 1995 (“the Act”) provides a “safe harbor” for forward-looking statements w
Slide 22: We have made great strides in improving deposit mix and cost and funding costs
We have made great strides in improving deposit mix and cost and funding costs 3Q10 2Q11 3Q11 Time Time Time Deposits Deposits Deposits Low Cost Low Cost Low Cost 22% 26% 23% Deposits Deposits Deposits 74% 77% 78% Deposit Cost Deposit Cost Deposit Cost 70 bps 53 bps 46 bps 7 bps Improvement 24 bps I
Slide 23: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($ in millions) 3Q10 4Q10 1Q11 2Q11 3Q11 Net interest income (GAAP) $ 868 $ 877 $ 863 $ 864 $ 858 Non-interest income (GAAP) 750 1,213 843 781 745 Adjustments: Securities (gains) losses, net (2) (333) (82) (24) 1 Leveraged lease termination (gains) / losses - (59) - - 2 Loss
Slide 24: Non-GAAP Reconciliation: Capital
Non-GAAP Reconciliation: Capital As of and for Quarter Ended ($ amounts in millions, except per share data) 9/30/11 6/30/11 3/31/11 12/31/10 9/30/10 TIER 1 COMMON RISK-BASED RATIO Stockholders' equity (GAAP) $ 17,263 $ 16,888 $ 16,619 $ 16,734 $ 17,163 Accumulated other comprehensive (income) loss (
Slide 25: Non-GAAP Reconciliation: Capital / Basel III
Non-GAAP Reconciliation: Capital / Basel III ($ amounts in millions) 09/30/11 Stockholders' equity (GAAP) 17,262 (1) Non-qualifying goodwill and intangibles (5,820) Adjustments, including other comprehensive income related to cash flow hedges, disallowed deferred tax assets, threshold deductions and
Slide 26: Continued Improvement in Early Stage Credit Metrics
Continued Improvement in Early Stage Credit Metrics 30-59 Day Delinquencies 90+ Day Delinquencies $766 $593 $585 $642 $676 $527 $566 $483 $518 $412 3Q10 4Q10 1Q11 2Q11 3Q11 3Q10 4Q10 1Q11 2Q11 3Q11 Business Services Criticized Loans * Business Services Classified Loans $10,593 $9,804 $7,929 $9,142 $
Slide 27: Credit Quality Metrics
Credit Quality Metrics NPLs Gross Migration Investor Real Estate Gross NPA Migration Land/Single $996 Family/Condo $1,340 Income Producing CRE $947 480 $605 $730 $755 $518 $555 $403 335 245 179 $271 516 137 270 224 273 134 3Q10 4Q10 1Q11 2Q11 3Q11 3Q10 4Q10 1Q11 2Q11 3Q11 Total NPLs (excluding HFS)
Slide 28: Credit Fundamentals
Credit Fundamentals NCO’s Avg Loans NPAs + 90 day Delinquencies 3.52% $4,819 $4,503 $4,460 3.22% $4,085 2.71% $3,803 2.52% 2.37% 3Q10 4Q10 1Q11 2Q11 3Q11 3Q10 4Q10 1Q11 2Q11* 3Q11 NPAs + 90 Day Delinquencies/Loans + NPL Balances Paying OREO + HFS Current and as Agreed 45% 42% 5.65% 5.38% 5.42% 37% 3
Slide 29: Allowance Coverage Remains Strong
Allowance Coverage Remains Strong Allowance for Loan Losses to NPLs Allowance for Loan Losses to Total Loans (excl HFS) 112% 3.92% 109% 3.84% 3.84% 103% 101% 3.77% 3.73% 94% 3Q10 4Q10 1Q11 2Q11 3Q11 3Q10 4Q10 1Q11 2Q11 3Q11 28
Slide 30: Conservative Marks and Reserves Already Taken on Impaired Loans
Conservative Marks and Reserves Already Taken on Impaired Loans Impaired Loans as of September 30, 2011 A B C= (A - B) D E = (B + D) / A Unpaid Charge-Offs Total Impaired Related Principal and Pmts Loan Book Allowance for ($ millions) Balance Applied Value Loan Loss Coverage % Total Commercial and I
Slide 31: Adequately Reserved for Troubled Debt Restructurings
Adequately Reserved for Troubled Debt Restructurings Consumer loans make up 50% of accruing troubled debt restructurings Foreclosure rate less than half of the industry average September 30, 2011 ($ millions) Loan Allowance for Allowance as a % Balance Credit Losses of Loan Balance Accruing: Commerc
Slide 32: Mn REGIONS
Mn REGIONS
Regions Financial — 2011 Goldman Sachs US Financial Services Conference on 6ix