 Barclays Americas Select
Conference
May 21, 2013
Grayson Hall
Chief Executive Officer
Exhibit 99.1 |
 2
Why Regions?
Competitive Position
•
Strong presence in high-growth markets
•
Competitive product set
Proven Track Record
•
Stable net interest margin
•
Commitment to positive operating leverage
•
Disciplined expense management
Opportunity for
Outperformance
•
Business plans to support growth
•
Significant credit leverage remains
•
Low loan to deposit ratio
Moving Forward
•
Creating shared value for our customers, communities,
associates and shareholders |
 3
Regions Branches
Deposit Market Share
Regions Insurance Group
A leading southeastern banking franchise
Company Snapshot
March 2013
Associates
23,466
Assets
$120B
Loans
$74B
Deposits
$94B
Branches
1,709
ATMs
2,048
Market Cap*
$12.7B
* As of May 14, 2013
#4
#4
#2
#1
#1
#1
#6
Birmingham, Alabama
# |
 4
Top 10 MSAs
Deposits
Market
Rank
’12-’17E
Population
Growth
Birmingham, AL
$10.1
1
Nashville, TN
$7.0
1
Tampa, FL
$5.0
4
Miami, FL
$4.0
11
Memphis, TN
$3.9
2
Atlanta, GA
$3.3
6
St. Louis, MO
$3.0
4
Jackson, MS
$2.9
2
New Orleans, LA
$2.4
4
Mobile, AL
$2.3
1
1.7%
7.6%
3.4%
1.4%
3.5%
3.7%
7.6%
2.2%
5.3%
2.0%
($ in billions)
National Average: 3.5%
Source: SNL Financial
Attractive geographic footprint
Characterized by leading competitive positions in high-growth markets
9.0 and above
8.0 to 8.9
7.0 to 7.9
6.0 to 6.9
5.9 or less
Projected Population Growth (%) |
 5
Rank
Name
Market Share
1
Bank of America
11.1%
2
Wells Fargo
9.9%
3
Regions
9.4%
4
SunTrust
6.7%
5
JPMorgan Chase
3.8%
6
BB&T
3.0%
7
Capital One
2.2%
8
First Horizon
2.0%
9
Hancock
1.7%
10
Citi
1.6%
Source: SNL Financial
Note: Core Markets include Alabama, Florida, Louisiana, Mississippi, Arkansas, and
Tennessee Weighted
Average
Deposit
Market
Share
in Regions’
Core Markets
Well-positioned relative to competitors
National Deposit Market Share
Rank
Name
Market Share
1
Bank of America
12.3%
2
Wells Fargo
10.7%
3
JPMorgan Chase
10.4%
4
Citi
4.9%
5
U.S. Bancorp
2.8%
6
PNC
2.5%
7
Capital One
2.4%
8
Toronto Dominion
2.0%
9
BB&T
1.7%
10
SunTrust
1.6%
14
Regions
1.3% |
 6
Balance Sheet
1Q13
1Q11
Improvement
Deposit Costs
(1)
0.18%
0.59%
41 bps
Total Funding Costs
(1)
0.45%
0.86%
41 bps
Time Deposits as % of Total Deposits
13%
24%
Low-Cost Deposits
$81.9B
$73.7B
11%
Profitability
Mortgage Revenue
$72MM
$45MM
60%
Net Interest Margin
(1)
3.13%
3.09%
4 bps
Efficiency Ratio
(2)
64.9%
68.3%
340 bps
Credit Risk Profile
Non-Performing Assets
$1.8B
$3.9B
54%
Net Charge-Offs
$180MM
$481MM
63%
Allowance for Loan Losses / Loans
2.37%
3.92%
155 bps
Capital and Liquidity
Tier 1 Common Ratio
(2)
11.2%
7.9%
330 bps
Loan to Deposit Ratio
79%
84%
More liquid
Stronger company today
(1)
From continuing operations
(2)
Non-GAAP -
see appendix for reconciliation
1100 bps |
 7
Loan trends
Total Loan Balances
(1)
($ in millions)
(1)
Ending balances
46,421
46,324
45,705
44,793
45,061
30,299
29,878
29,554
29,202
28,875
$76,720
$76,202
$75,259
$73,995
$73,936
1Q12
2Q12
3Q12
4Q12
1Q13
Commercial and Investor Real Estate
Consumer Lending |
 8
Net interest margin stable as peers decline
Note: Peer banks include BBT, CMA, FHN, FITB, HBAN, KEY, MTB, PNC, STI, USB, WFC,
ZION Source: SNL Financial
Net Interest Margin vs. Peers
43 bps
Variance
26 bps
Variance
3.52%
3.51%
3.47%
3.44%
3.39%
3.09%
3.16%
3.08%
3.10%
3.13%
1Q12
2Q12
3Q12
4Q12
1Q13
Peer Average
Regions |
 9
Deposit trends
Deposit Balances
(1)
and Deposit Costs
($ in millions)
(1)
Average balances
77,008
78,688
79,073
80,585
80,960
19,053
17,175
15,536
14,220
12,904
$96,061
$95,863
$94,609
$94,805
$93,864
37 bps
32 bps
28 bps
22 bps
18 bps
1Q12
2Q12
3Q12
4Q12
1Q13
Low Cost Deposits
Time Deposits + Other
Deposit Costs |
 Expense
control
–
a
culture,
not
a
campaign
Total Expenses 1Q13 vs. 1Q12 % Change
Non-Interest Expense
(1)
/ Average Assets
2.7%
2.9%
2.9%
3.0%
3.1%
3.1%
3.2%
3.2%
3.2%
3.2%
3.2%
3.6%
3.9%
Bank
#1
Bank
#2
Bank
#4
Bank
#5
Bank
#6
Bank
#7
Bank
#8
Bank
#9
Bank
#10
Bank
#11
Bank
#12
Bank
#13
-25%
-11%
-8%
-6%
-4%
-
4%
-
3%
-
1%
0%
0%
1%
3%
6%
Bank
#1
Bank
#2
Bank
#4
Bank
#5
Bank
#6
Bank
#7
Bank
#8
Bank
#9
Bank
#10
Bank
#11
Bank
#12
Bank
#13
10
Peer banks include: BBT, CMA, FHN, FITB, HBAN, KEY, MTB, PNC, STI, USB, WFC, ZION
Source: SNL Financial
(1) 1Q13 Adjusted to exclude non-core items, ratios are annualized – See appendix for
reconciliation |
 11
Continued asset quality improvement
Significant credit leverage remains
Note: Peer banks include BBT, CMA, FHN, FITB, HBAN, KEY, MTB, PNC, STI, USB, WFC,
ZION Source: SNL Financial
46% decrease Y-O-Y
Allowance for Loan Losses / Total Loans
Net Charge-Offs and Ratio
($ in millions)
$332
$265
$262
$180
$180
1.73%
1.39%
1.38%
0.96%
0.99%
1Q12
2Q12
3Q12
4Q12
1Q13
Net Charge-Offs
Net Charge-Offs as % of Average Loans
2.22%
1.81%
3.30%
2.37%
1Q12
2Q12
3Q12
4Q12
1Q13
Peer Group Median
Regions |
 12
Strong capital and solid liquidity
(1) Non-GAAP –
See appendix for reconciliation
Note: Peer banks include BBT, CMA, FHN, FITB, HBAN, KEY, MTB, PNC, STI, USB, WFC,
ZION Source: SNL Financial
Estimated Basel III
(1)
at the end of
1Q13 was 9.1%
Loan to Deposit Ratio
Tier 1 Common Ratio
(1)
9.6%
10.0%
10.5%
10.8%
11.2%
9.6%
9.8%
9.9%
10.0%
10.1%
1Q12
2Q12
3Q12
4Q12
1Q13
Regions
Peer Median
79%
80%
79%
78%
79%
87%
88%
88%
88%
88%
1Q12
2Q12
3Q12
4Q12
1Q13
Regions
Peer Median |
 13
Consumer Services
Business Services
Wealth Management
Create shared value
Going to market as One bank, One team, One Regions
Providing service quality that creates exceptional loyalty and retention
•
Grow households
•
Grow quality earning assets
•
Leverage NOW Banking
•
Grow credit cards, mortgage
and indirect lending
•
Leverage technology to
improve sales and efficiency
•
Maintain disciplined focus on
specialized industries:
•
Healthcare
•
Restaurant
•
Transportation
•
Technology & Defense
•
Energy
•
Appropriate loan growth in
conjunction with our risk
appetite
•
Grow trust assets under
management
•
Branch-based Financial
Consultants
•
Expand service and product
offerings
•
Insurance services
Key focus areas for 2013
Understanding customer needs through a full and detailed 360° view |
 14
Moving forward in 2013
•
Through
, maximize opportunities to deepen quality customer
relationships
•
Grow households
•
Positioned for continued increases in loan production
•
Indirect auto portfolio
•
Commercial and Industrial
•
Credit card
•
Retention of 15-year fixed rate mortgages
•
Continue to leverage NOW Banking suite of products
•
Improve efficiency through investments in technology
•
Further enhancements to lower-cost delivery channels
•
Enhanced services and technology platforms within Wealth Management
•
Continue to seek opportunities to reduce expenses
•
Commitment to positive operating leverage |
 15
Appendix |
 16
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 which are identified as such and are accompanied by the
identification of important factors that could cause actual results to differ materially from the forward-looking statements. For these
statements, we, together with our subsidiaries, unless the context implies otherwise, claim the
protection afforded by the safe harbor in the Act. Forward-looking statements are not based on historical information, but rather are
related to future operations, strategies, financial results or other developments.
Forward-looking statements are based on management’s expectations as well as certain assumptions and estimates made by, and information available
to, management at the time the statements are made. Those statements are based on general
assumptions and are subject to various risks, uncertainties and other factors that may cause actual results to differ materially from the
views, beliefs and projections expressed in such statements. These risks, uncertainties and other
factors include, but are not limited to, those described below: › The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank
Act”) became law in July 2010, and a number of legislative, regulatory and tax proposals remain pending. Future and proposed rules, including
those that are part of the Basel III process are expected to require banking institutions to increase
levels of capital and to meet more stringent liquidity requirements. All of the foregoing may have significant effects on Regions and the
financial services industry, the exact nature and extent of which cannot be determined at this time.
› Possible additional loan losses, impairment of goodwill and other intangibles, and
adjustment of valuation allowances on deferred tax assets and the impact on earnings and capital.
› Possible changes in interest rates may increase funding costs and reduce earning asset yields,
thus reducing margins. Increases in benchmark interest rates could also increase debt service requirements for customers whose terms
include a variable interest rate, which may negatively impact the ability of borrowers to pay as
contractually obligated. › Possible changes in general economic and business conditions in
the United States in general and in the communities Regions serves in particular, including any prolonging or worsening of the current challenging economic
conditions including unemployment levels.
› Possible changes in the creditworthiness of customers and the possible impairment of the
collectability of loans. › Possible changes in trade, monetary and fiscal policies, laws
and regulations and other activities of governments, agencies, and similar organizations, may have an adverse effect on business.
› Possible regulations issued by the Consumer Financial Protection Bureau or other regulators
which might adversely impact Regions' business model or products and services. › Possible
stresses in the financial and real estate markets, including possible deterioration in property values.
› Regions' ability to manage fluctuations in the value of assets and liabilities and
off-balance sheet exposure so as to maintain sufficient capital and liquidity to support Regions' business.
› Regions' ability to expand into new markets and to maintain profit margins in the face of
competitive pressures. › Regions' ability to develop competitive new products and services
in a timely manner and the acceptance of such products and services by Regions' customers and potential customers.
› Regions' ability to keep pace with technological changes.
›
Regions' ability to effectively identify and manage credit risk, interest rate risk, market risk,
operational risk, legal risk, liquidity risk, reputational risk, counterparty risk, international risk, and regulatory and compliance risk.
› Regions’ ability to ensure adequate capitalization which is impacted by inherent
uncertainties in forecasting credit losses. › The cost and other effects of material
contingencies, including litigation contingencies, and any adverse judicial, administrative or arbitral rulings or proceedings.
› The effects of increased competition from both banks and non-banks.
› The effects of geopolitical instability and risks such as terrorist attacks.
› Regions ability to identify and address data security breaches.
› Possible changes in consumer and business spending and saving habits could affect Regions'
ability to increase assets and to attract deposits. › The effects of weather and natural
disasters such as floods, droughts, wind, tornados and hurricanes, and the effects of man-made disasters.
› Possible downgrades in ratings issued by rating agencies.
› Possible changes in the speed of loan prepayments by Regions’ customers and loan
origination or sales volumes. › Possible acceleration of prepayments on mortgage-backed
securities due to low interest rates and the related acceleration of premium amortization on those securities.
› The effects of problems encountered by larger or similar financial institutions that adversely
affect Regions or the banking industry generally. › Regions’ ability to receive
dividends from its subsidiaries. › The effects of the failure of any component of
Regions’ business infrastructure which is provided by a third party. › Changes in
accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies.
› The effects of any damage to Regions reputation resulting from developments related to any of
the items identified above. 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 for the year ended December 31, 2012, and the caption
"Forward-Looking Statements" of Regions' Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, as filed with the Securities and
Exchange Commission.
The words "believe," "expect," "anticipate," "project," and similar
expressions often signify forward-looking statements. You should not place undue reliance on any forward-looking statements, which speak only as of the date made.
We assume no obligation to update or revise any forward-looking statements that are made from time
to time. |
 17
Non-GAAP reconciliation: Tier 1 common
($ amounts in millions)
3/31/13
12/31/12
9/30/12
6/30/12
3/31/12
As of
TIER
1
COMMON
RISK-BASED
RATIO
-
CONSOLIDATED
Stockholders' equity (GAAP)
15,740
15,499
$
14,901
$
14,455
$
17,534
$
Accumulated other comprehensive (income) loss
12
(65)
(202)
(54)
60
Non-qualifying goodwill and intangibles
(4,819)
(4,826)
(4,836)
(4,852)
(4,881)
Disallowed deferred tax assets
-
(35)
(238)
(336)
(345)
Disallowed servicing assets
(37)
(33)
(33)
(33)
(36)
Qualifying non-controlling interests
93
93
93
92
92
Qualifying trust preferred securities
501
501
846
846
846
Tier 1 capital (regulatory)
11,490
$
11,134
$
10,531
$
10,118
$
13,270
$
Qualifying non-controlling interests
(93)
(93)
(93)
(92)
(92)
Qualifying trust preferred securities
(501)
(501)
(846)
(846)
(846)
Preferred stock
(474)
(482)
-
-
(3,429)
Tier 1 common equity (non-GAAP)
A
10,422
$
10,058
$
9,592
$
9,180
$
8,903
$
Risk-weighted assets (regulatory)
B
92,787
92,811
91,723
91,779
92,546
Tier 1 common risk-based ratio (non-GAAP)
A/B
11.2%
10.8%
10.5%
10.0%
9.6%
The following table provides calculations of Tier 1 capital (regulatory) and "Tier 1 common
equity" (non-GAAP). Traditionally, the Federal Reserve and other banking regulatory
bodies have assessed a bank's capital adequacy based on Tier 1 capital, the calculation of which is
prescribed in amount by federal banking regulations. In connection with the Company's
Comprehensive Capital Analysis and Review ("CCAR"), these regulators are supplementing their assessment of the capital adequacy of a bank based on a variation of
Tier 1 capital, known as Tier 1 common equity. While not prescribed in amount by federal banking
regulations, analysts and banking regulators have assessed Regions' capital adequacy
using the Tier 1 common equity measure. Because Tier 1 common equity is not formally defined by GAAP or prescribed in any amount by federal banking regulations,
this measure is considered to be a non-GAAP financial measure and other entities may calculate it
differently than Regions' disclosed calculations. Since analysts and banking regulators
may assess Regions' capital adequacy using Tier 1 common equity, management believes that it is useful to provide investors the ability to assess Regions' capital
adequacy on this same basis.
Tier 1 common equity is often expressed as a percentage of risk-weighted assets. Under the
risk-based capital framework, a company's balance sheet assets and credit equivalent
amounts of off-balance sheet items are assigned to one of four broad risk categories. The
aggregated dollar amount in each category is then multiplied by the risk-weighted
category. The resulting weighted values from each of the four categories are added together and
this sum is the risk-weighted assets total that, as adjusted, comprises the denominator of
certain risk-based capital ratios. Tier 1 capital is then divided by this denominator (risk-weighted assets) to determine the Tier 1 capital ratio. Adjustments are made
to Tier 1 capital to arrive at Tier 1 common equity (non-GAAP). Tier 1 common equity
(non-GAAP) is also divided by the risk-weighted assets to determine the Tier 1 common
equity ratio (non-GAAP). The amounts disclosed as risk-weighted assets are calculated
consistent with banking regulatory requirements. |
 18
income / expense, fee income ratios and
efficiency ratios
($ amounts in millions)
3/31/13
12/31/12
9/30/12
6/30/12
3/31/12
Continuing Operations
Non-interest expense (GAAP)
842
$
902
$
869
$
842
$
913
$
(60)
$
-6.7%
(71)
$
-7.8%
Adjustments:
REIT investment early termination costs
-
(42)
-
-
-
42
-100.0%
-
-
Loss on early extinguishment of debt
-
(11)
-
-
-
11
-100.0%
-
-
Securities impairment, net
-
-
-
(2)
-
-
-
-
-
Adjusted non-interest expense (non-GAAP)
A
842
$
849
$
869
$
840
$
913
$
(7)
$
-0.8%
(71)
$
-7.8%
Net interest income (GAAP)
798
$
818
$
817
$
838
$
827
$
(20)
$
-2.4%
(29)
$
-3.5%
Taxable-equivalent adjustment
13
13
13
12
12
-
-
1
8.3%
Net interest income, taxable-equivalent basis
811
831
830
850
839
(20)
-2.4%
(28)
-3.3%
Non-interest income (GAAP)
501
536
533
507
524
(35)
-6.5%
(23)
-4.4%
Adjustments:
Securities gains, net
(15)
(12)
(12)
(12)
(12)
(3)
25.0%
(3)
25.0%
Leveraged lease termination gains, net
-
-
-
(7)
(7)
-
-
7
-100.0%
Adjusted non-interest income (non-GAAP)
B
486
524
521
488
505
(38)
-7.3%
(19)
-3.8%
Adjusted total revenue (non-GAAP)
C
1,297
$
1,355
$
1,351
$
1,338
$
1,344
$
(58)
$
-4.3%
(47)
$
-3.5%
Adjusted fee income ratio (non-GAAP)
B/C
37.5%
38.7%
38.6%
36.5%
37.6%
Adjusted efficiency ratio (non-GAAP)
A/C
64.9%
62.7%
64.3%
62.8%
67.9%
Quarter Ended
1Q13 vs. 4Q12
1Q13 vs. 1Q12
Non-GAAP reconciliation: non-interest
The table below presents computations of the efficiency ratio (non-GAAP), which is a measure of
productivity, generally calculated as non-interest expense divided by total revenue. The table also shows the fee income
ratio (non-GAAP), generally calculated as non-interest income divided by total revenue.
Management uses these ratios to monitor performance and believes these measures provide meaningful information to investors.
Non-interest expense (GAAP) is presented excluding certain adjustments to arrive at adjusted
non-interest expense (non-GAAP), which is the numerator for the efficiency ratio. Non-interest income (GAAP) is presented
excluding certain adjustments to arrive at adjusted non-interest income (non-GAAP), which is
the numerator for the fee income ratio. Net interest income on a taxable-equivalent basis and non-interest income are added
together to arrive at total revenue. Adjustments are made to arrive at adjusted total revenue
(non-GAAP), which is the denominator for the fee income and efficiency ratios. Regions believes that the exclusion of these
adjustments provides a meaningful base for period-to-period comparisons, which management
believes will assist investors in analyzing the operating results of the Company and predicting future performance. These
non-GAAP financial measures are also used by management to assess the performance of Regions'
business. It is possible that the activities related to the adjustments may recur; however, management does not
consider the activities related to the adjustments to be indications of ongoing operations.
Regions believes that presentation of these non-GAAP financial measures will permit investors to assess the performance of the
Company on the same basis as that applied by management.
|
 19
Non-GAAP reconciliation: Basel III
(1)
Under
Basel
III,
regulatory
capital
must
be
reduced
by
purchased
credit
card
relationship
intangible
assets.
These
assets
are partially allowed in Basel I capital.
(2)
Regions continues to develop systems and internal controls to precisely calculate
risk-weighted assets as required by Basel III. The amount included
above is a reasonable approximation, based on our understanding of the requirements.
Estimate based on June
2012 U.S. Notices of
Proposed Rulemaking
($ amounts in millions)
3/31/13
Stockholders' equity (GAAP)
15,740
Non-qualifying goodwill and intangibles
(1)
(4,956)
Adjustments, including other comprehensive income related to cash flow hedges,
disallowed deferred tax assets,
threshold deductions and other adjustments
(301)
Non-Common Tier 1
(474)
Basel III Tier 1 Common (non-GAAP)
10,009
Basel I risk-weighted assets
92,787
Basel III risk-weighted assets
(2)
109,728
Basel III Tier 1 Common Ratio
9.1%
The following table provides calculations of Tier 1 common, based on Regions’ current
understanding of Basel III requirements, as proposed by the U.S. Notices of Proposed Rulemaking
released in June 2012. Regions currently calculates its risk-based capital ratios under guidelines adopted by the Federal Reserve based on the
1988 Capital Accord (“Basel I”) of the Basel Committee on Banking Supervision (the
“Basel Committee”). In December 2010, the Basel Committee released its final
framework for Basel III, which will strengthen international capital and liquidity regulation.
In June 2012, U.S. Regulators released three separate Notices of Proposed Rulemaking covering
U.S. implementation of the Basel III framework. When implemented by U.S. bank regulatory agencies and fully phased-in, Basel III will change
capital requirements and place greater emphasis on common equity. The Federal Reserve has
announced a delay in the implementation date of the final rules. However, when
implemented there will be a phase in period of up to 6 years. The calculations provided below are estimates, based on Regions’ current understanding
of the framework, including the Company’s reading of the requirements, and informal feedback
received through the regulatory process. Regions’ understanding of the framework is
evolving and will likely change as the regulations are finalized. Because the Basel III implementation regulations are not formally defined by GAAP and
have not yet been finalized and codified, these measures are considered to be non-GAAP financial
measures, and other entities may calculate them differently from Regions’ disclosed
calculations. Since analysts and banking regulators may assess Regions’ capital adequacy using the Basel III framework, we believe that it is useful
to provide investors the ability to assess Regions’ capital adequacy on the same basis.
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