Regions Financial Corporation · NYSE:RF
Regions Financial — Investor Presentation (February 2005)
26 slides from Regions Financial's investor presentation, Feb 9, 2005
Slide 1: Regions
REGIONS &.
Slide 2: Forward-Looking Statement
FORWARD-LOOKING STATEMENT The information contained in this presentation may include forward-looking statements that reflect Regions' current views with respect to future events and financial performance. You should not place undue reliance on these statements as the forward-looking statements are b
Slide 3: Building A Better, More Profitable Franchise
REGIONS FINANCIAL CORPORATION Building A Better, More Profitable Franchise $84 billion in assets Over $15 billion in market capitalization $4.6 billion* in revenues from diversified sources 5 million customers Strong banking franchise in South, Midwest and Texas Over 240 brokerage offices in 15 stat
Slide 4: Building a Stronger, Better Positioned Franchise
REGIONS FINANCIAL CORPORATION Building a Stronger, Better Positioned Franchise Regions Bank Morgan Keegan Regions Insurance Group
Slide 5: Regions' Better Positioning Enhances Long-Term Opportunities
REGIONS' BETTER POSITIONING ENHANCES LONG-TERM OPPORTUNITIES TX AK LA TN AL GA SC NC FL MO IO IL IN KY MS Mkt. Position Improved to 6th from 17th in Florida Mkt. Position Improved to 15th from 20th in Texas Mkt. Position Improved to 4th from 8th in Tennessee New Mkt. Position in Kentucky, Indiana, I
Slide 6: Regions Has the Right Product Set and a Better Business Mix
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 60 8 2 2 15 12 18 REGIONS HAS THE RIGHT PRODUCT SET AND A BETTER BUSINESS MIX 40% of Total Revenues from Fee Income Combined Revenue Composition* Insurance 2% Net Interest Inc 60% Mortgage Banking 8% Brokerage & Trust 15% Other 2% Banking - Fees 13% * Based on 4Q04 fi
Slide 7: Diversified Business Mix
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 8.3 31.4 25.9 9.6 24.8 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr East 7.7 27.9 36.6 9.2 18.6 20 West 30.6 38.6 34.6 31.6 North 45.9 46.9 45 43.9 DIVERSIFIED BUSINESS MIX Ability to Adapt to Market Conditions FYE 12/31/03 FYE 12/31/04 Equity Capital Markets Dividends, Interest a
Slide 8: Potential Growth from Leveraging Morgan Keegan's Product Set and Skills
POTENTIAL GROWTH FROM LEVERAGING MORGAN KEEGAN'S PRODUCT SET AND SKILLS Regions Bank Morgan Keegan Regions Insurance Group
Slide 9: Initial Merger Targets Have All Been Accomplished on Schedule
Event Scheduled Timing Completed Day 1 - Legal merger, Employee/Customer launch events, consolidations (e.g. Credit Policy, Finance, HR) July 1, 2004 July 1, 2004 Top 200 executives in place July 1, 2004 July 1, 2004 Regions and Union Planters ATM's linked July 1, 2004 July 1, 2004 Combined new boar
Slide 10: Continuing to Successfully Execute Merger Plan
Event Scheduled Timing Completed Re-Branding of non-overlap branches 1Q05 In Process Phase 1 Bank Conversion (170 branches, AL, AK, LA, TN, TX) 2Q05 Mortgage Origination Platform Conversion 4Q04-1Q05 Phase 2 Bank Conversion (260 branches, AL, AK, MS, TN) 3Q05 Trust Conversion 3Q05 Phase 3 Bank Conve
Slide 11: Growing Loans and Deposits While Successfully Managing Merger
GROWING LOANS AND DEPOSITS WHILE SUCCESSFULLY MANAGING MERGER 6/30/04* 9/30/2004 12/31/2004 East 46.6 47.3 48.2 6/30/04* 9/30/2004 12/31/2004 East 49 49.3 50.1 Community Banking Loans $ in billions *Pro Forma combined Regions and Union Planters Community Banking Deposits 7%, annualized, growth 4.5%,
Slide 12: Implementing New Retail Sales Campaigns
IMPLEMENTING NEW RETAIL SALES CAMPAIGNS Credit Acquisition Campaign 2005 Goal: $1.2 billion (28% growth) in Equity AssetLines Deposit Acquisition Campaign 2005 Goal: 500,000 new DDAs 75% Visa Check Card penetration of new accounts 20% bill pay penetration of new DDAs Book of Business Campaign Increa
Slide 13: Broadening Commercial Banking Capabilities
BROADENING COMMERCIAL BANKING CAPABILITIES Expanded treasury management product set Full service commercial leasing capability Dedicated resources in Public Finance and Credit Enhancement (in conjunction with Morgan Keegan's public finance area) Broader Capital Markets capabilities Larger footprint
Slide 14: Taking Steps to Maximize Long-Term Opportunities
TAKING STEPS TO MAXIMIZE LONG-TERM OPPORTUNITIES Improved strategic planning and budgeting including new accountability and measurement programs Development of stronger infrastructure Reassessment of operating model Investment initiatives Efficiency initiatives Improved sales and sales training
Slide 15: Investing in the Future Growth of Our Business: People
INVESTING IN THE FUTURE GROWTH OF OUR BUSINESS People Morgan Keegan Indianapolis, Miami and St. Louis offices staffing up Atlanta equity capital markets office Bank branch staffing Banking Over 100 private, retail and commercial bankers One-time opportunities due to other merger transactions $7 - $1
Slide 16: Investing in the Future Growth of Our Business: Technology
INVESTING IN THE FUTURE GROWTH OF OUR BUSINESS Technology Approximately $20 million in 2005 cost Systems include Mainframe capacity upgrade Disaster recovery Branch platform technology HR enhancement e-Banking Benefits include Better external and internal customer service through more reliable and f
Slide 17: Investing in the Future Growth of Our Business: New Bank Branches
INVESTING IN THE FUTURE GROWTH OF OUR BUSINESS New Bank Branches Over 40 new bank branches planned in 2005 High-growth-potential markets (e.g., Texas) Fill-in branches in already strong markets (e.g., Birmingham) Initial capital investment of $1.5 - $2.5 million per branch Average first year operati
Slide 18: Building New Bank Branches in High Potential Growth Areas
BUILDING NEW BANK BRANCHES IN HIGH POTENTIAL GROWTH AREAS Planned 2005 Branches TX AK LA TN AL GA SC NC FL MO IO IL IN KY MS 20 Build-out of new and growth markets Following change in demographics 40+ bank branches planned for 2005 High-growth potential and fill-in Initial investment: $1.5-$2.5MM ea
Slide 19: Using Portion of Targeted Merger Cost Saves to Fund Incremental Investment Spending
USING PORTION OF TARGETED MERGER COST SAVES TO FUND INCREMENTAL INVESTMENT SPENDING 2004 2006 bl INV. East 30 60 55 55 FYE 2006 $50-$70MM FYE 2004 $30MM FYE 2005 $100-$120MM Merger-related Cost Saves Cumulative $200 MM By Mid-2006 Approximately 50% to Investment Spending Approximately 50% to Reducti
Slide 20: Right-Sizing Mortgage
RIGHT-SIZING MORTGAGE Actions taken in third quarter 2004 Sale of $5 billion of non-footprint mortgage servicing rights Sale of non-footprint retail mortgage production offices Planned actions in 2005 Eliminate conforming wholesale origination channel Evaluate opportunities to eliminate existing ope
Slide 21: Elimination of Conforming Wholesale Origination Channel
ELIMINATION OF CONFORMING WHOLESALE ORIGINATION CHANNEL Retail Wholesale Correspondent East 45.8 37.2 17 Inconsistent with Regions Mortgage cross-sell strategy Inconsistent with "in-footprint" business strategy Wholesale originations represented approximately 40% of conforming mortgage originations
Slide 22: Managing Through a Challenging Environment for Net Interest Income
MANAGING THROUGH A CHALLENGING ENVIRONMENT FOR NET INTEREST INCOME* Slightly asset-sensitive balance sheet However, deposit pricing assumptions and rate of balance sheet growth critical variables in determining net interest income 3 to 4% loan and deposit growth required to maintain stable net inter
Slide 23: Committed to Creating Shareholder Value
* 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 0.03 0.061 0.066 0.069 0.07 0.08 0.09 0.11 0.12 0.13 0.14 0.15 0.17 0.18 0.21 0.24 0.28 0.29 0.31 0.34 0.35 0.37 0.42 0.49 0.53 0.57 0.65 0.75 0.81 0.87 0.91 0.94 1 1.34 1.36 Returning Excess C
Slide 24: Committed to Creating Shareholder Value: Share Repurchases
COMMITTED TO CREATING SHAREHOLDER VALUE Share Repurchases 20 million share Board Of Directors authorization 19.2 million shares remaining Expect to repurchase 7 - 10 million shares on average in 2005 Managing for Long-Term Success More consistent growth Greater profitability
Slide 25: Committed to Creating Shareholder Value
REGIONS FINANCIAL CORPORATION Committed to Creating Shareholder Value Optimistic about long-term prospects Taking appropriate actions to handle intermediate term challenges and capitalize on long-term opportunities Committed to ongoing, seamless merger execution Dedicated to building a franchise tha
Slide 26: Regions
REGIONS &.
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