Barclays Global
Financial Services
Conference
September 11, 2017
Exhibit 99.1
Strategic initiatives
2
2017 YTD Results(1)
• Net Income(2) increased 13%
YTD
• Diluted EPS(2) increased 20%
YTD
• Net interest income and other
financing income (FTE)
increased 2% YTD
• Net interest margin increased
11 bps YTD to 3.28%
• Non-interest expenses remain
well controlled as efficiency
efforts helped mitigate core
expense inflation and the
impact of new initiatives
• Disciplined approach to credit
continues to deliver positive
results as we reported
improvement in almost every
credit metric during 2Q17
(1) Through June 30, 2017
(2) From continuing operations available to common shareholders
Results reflect continued execution of our strategic plan
3
Profitability
• Received no objection to
planned capital actions; Board
authorized share repurchase
program up to $1.47 billion, and
a 29% increase in quarterly
common stock dividend
• Remain committed to prudently
growing loans without
compromising risk adjusted
returns
• Positioned to increase net
interest income and other
financing income even in the
absence of meaningful loan
growth aided in part by the
strength of our deposit franchise
Balance Sheet and
Capital Optimization
• Grew checking accounts,
households, credit cards and
wealth management
relationships and assets under
management
• Temkin Group recognized
Regions as top rated bank and
4th overall company in the
United States for customer
experience
• Recognized by Javelin Strategy &
Research as a Trust in Banking
Leader Award winner and
received the Gallup Great
Workplace Award for the third
consecutive year
• Remain committed to offering
superior service, as well as
financial advice, guidance and
education to help customers
reach their financial goals
Focused on the
Fundamentals
Average loans and leases
2Q16 3Q16 4Q16 1Q17 2Q17
$82.0
$81.3
$80.6
$80.2 $80.1
Prudently managing loans
($ in billions)
4
• Average loan and lease balances remain relatively stable
• Total new and renewed loan production increased 46%
• Average consumer lending portfolio declined $87 million
◦ Continued to experience loan growth in residential
mortgage, home equity loans, indirect-other, and
direct lending categories
◦ Impacted by decision to exit third-party
arrangement within the indirect-vehicle portfolio
and continued declines in home equity lines of
credit
• Average Business lending portfolio increased $19
million
◦ Growth in commercial and industrial partially
offset by declines in owner-occupied commercial
real estate and investor real estate construction
loans
2Q17 Results and Outlook
2017 Guidance - Excluding the impact of exiting the third-party
indirect-vehicle portfolio, full year average loans are expected
to be flat to slightly down compared to the prior year
Average deposits by segment
Consumer
Bank
Corporate
Bank
Wealth
Management
Other
2Q16 3Q16 4Q16 1Q17 2Q17
54.7 55.2 55.6 56.2 57.1
27.6 28.3 28.7 28.2 27.6
11.3 10.6 10.2 10.0 9.5
3.9
$97.5
3.8
$97.9
4.0
$98.5
3.6
$98.0
3.3
$97.5
Average deposits by type
Solid deposit mix
Low-cost
deposits
Time deposits
+ Other
2Q16 3Q16 4Q16 1Q17 2Q17
90.2 90.5 91.0 90.8 90.5
7.3
$97.5
7.4
$97.9
7.5
$98.5
7.2
$98.0
7.0
$97.5
($ in billions)
5
($ in billions)
• Average deposits decreased $478 million
• Average Consumer deposits increased $890
million or 2%, reflecting the strength of the retail
franchise
• Average Corporate deposits decreased $581
million or 2% driven by seasonal decline in public
funds deposits
• Average Wealth Management deposits decreased
$496 million or 5% as a result of ongoing strategic
reductions of certain collateralized deposits
• Average Other deposits declined $291 million or
8% primarily due to declines in average retail
brokered sweep deposits
• Deposit costs remained low at 15 basis points
• Funding costs remained low at 34 basis points
• Expect continued growth in low-cost consumer
deposits will offset the strategic declines in
collateralized and brokered deposits in 2017
2Q17 Results and Outlook
2017 Guidance - Full year average deposits are
expected to be relatively stable with the prior year
$57
$8
$28
$3
2Q16 3Q16 4Q16 1Q17 2Q17
18 18 18 19 19
17
$35
17
$35
18
$36
17
$36
17
$36
Interest Bearing Deposits
by Customer Type(1)
($ in billions)
Non-Interest Bearing Deposits
by Customer Type(1)
($ in billions)
Other
Segment
Deposit advantage
Deposits by Customer Type(1)
(Retail vs. Business)
• Retail deposits consist of consumer and private wealth
accounts and represent 67% of total deposits
• Business deposits consist of corporate, institutional and
other accounts and represent 33% of total deposits
• 37% of total average 2Q17 deposits are non-interest
bearing deposits
• Approximately 44% of our consumer low-cost deposit
dollars have been customers for over 10 years
• Deposit MSA stratification
◦ ~50% of deposits <1M people
◦ ~35% of deposits <500K people
2Q16 3Q16 4Q16 1Q17 2Q17
44 44 45 46 45
18
$62
19
$63
17
$62
16
$62
16
$61
6
Consumer
Segment
Private
Wealth*
Corporate
Segment
Institutional
Trust*
$1
* Private Wealth and Institutional Trust deposits are combined into the Wealth Management Segment.
(1) Average Balances
2Q17 ($ in billions)
Deposit composition and pricing
(as of June 30, 2017)
• Regions' predominantly deposit funded balance sheet, which includes an attractive mix of low cost deposits, provides for
a competitive funding advantage against the peer set
◦ 91% of liability funding is comprised of deposits, the highest in the peer group
◦ 34% of liability funding is in non-interest bearing accounts, the third highest in the peer group
• This advantage is evidenced in the current rising rate cycle through Regions' 10% deposit beta to date versus the peer
median of 14%
Interest bearing deposit betas Deposit funding composition
Peers include: BBT, CFG, CMA, FHN, FITB, HBAN, HBHC, KEY, MTB, PNC, SNV, STI, USB, ZION
Source: SNL Financial7
Peer median = 14.2%
Peer median = 4.5b
ps
Peer median = 86%
Peer median = 26%
Net interest income(1) growth and improving
net interest margin
Net Interest Income and Other Financing Income (FTE)
Net Interest Margin (RF)
Net Interest Margin (Peer Median)
2Q16 3Q16 4Q16 1Q17 2Q17
$869
$856
$874 $881
$904
3.15%
3.06%
3.16%
3.25%
3.32%
3.01%
2.97%
3.04%
3.11%
3.22%
• Net interest income(1) (FTE) increased $23 million
or 3%, and the net interest margin increased 7 bps
◦ Both margin and income benefited from
higher interest rates and favorable credit-
related interest recoveries
◦ One extra day in the quarter benefited net
interest income(1) (FTE) by ~$5 million and
negatively impacted net interest margin by
~ 2 bps
• NIM continues to outperform and is 10 bps above
the peer median at 2Q17
• Expect continued growth in net interest income(1)
and expect net interest margin to be stable to up
modestly
($ in millions)
8
Net interest income(1) and net interest margin
(1) Net interest income and other financing income
(2) Source: SNL Financial; Peer median includes BBT, CFG, CMA, FHN,
FITB, HBAN, HBHC, KEY, MTB, PNC, SNV, STI, USB, ZION
2Q17 Results and Outlook
2017 Guidance - Full year net interest
income(1) growth of 3%-5%
(2)
Capital markets
Mortgage
income
Other
Wealth
management
income
Card and ATM
fees
Service charges
on deposit
accounts
Selected items
2Q16 3Q16 4Q16 1Q17 2Q17
38 42 31 32 38
46 46 43 41 40
68 78
59 56 60
103
107
103 109 108
99
105
103 104 104
166
166
173 168
$510
169
6
$526
55
$599
10
$522
6
$525
Creating sustainable franchise value
(1) Non-GAAP; see appendix for reconciliation
* Expectation revised since 2Q17.
($ in millions)
9
Non-interest income
• Non-interest income increased $15 million or 3%;
includes the recognition of a $5 million deferred gain
associated with the sale of affordable housing
residential mortgage loans in 4Q16 (which is adjusted)
and negative impact of operating lease impairment
charges of $7 million in 2Q17 and $5 million in 1Q17
(which are not adjusted)
• Adjusted non-interest income(1) increased $9 million or
2%
◦ Capital markets income increased $6 million
due to increased M&A activity and fees from
placement of permanent financing for real
estate customers
◦ Bank-owned life insurance income, within
other non-interest income, increased $3
million due to higher claim benefits
◦ Mortgage income remained relatively stable;
purchased rights to service $2.7 billion of
mortgage loans in 2Q17
2017 Guidance - Full year adjusted non-
interest income relatively stable with 2016*
2Q17 Results and Outlook
(1)
Non-interest expenses
Prudently managing expenses
2Q16 3Q16 4Q16 1Q17 2Q17
889 912 877 872 899
26
$915
22
$934
22
$899
5
$877 10
$909
(1) Non-GAAP; see appendix for reconciliation
($ in millions)
Selected Items(1)Adjusted Non-Interest Expense(1)
10
• Expenses increased $32 million or 4%; adjusted
expenses(1) increased $27 million or 3%
◦ Salaries and Benefits increased $19 million and
included full quarter impact of merit increases
and $10 million pension settlement charge
(which is not adjusted)
◦ Professional, legal and regulatory increased $6
million due to an increase in legal settlement
expense
◦ Furniture & equipment expense increased $5
million associated with capital investment
projects and technology initiatives
• Adjusted efficiency ratio(1) increased 50 bps to
63.2% and included the pension settlement
charge (included in NIE) and operating lease
impairment charge (included in non-interest
income); these charges negatively impacted the
ratio by 100 bps
2Q17 Results and Outlook
2017 Guidance - Full year adjusted non-
interest expense growth of 0%-1%; adjusted
efficiency ratio ~62%
Investing in growth initiatives
11
2015-2016
• GreenSky
• Fundation
• CMBS origination
• Regions.com powered by Avant
• Mortgage servicing rights acquisitions
• Financial consultants
• Retail bankers
• Insurance lift-outs and acquisitions
• M&A advisory
◦ BlackArch acquisition
• Multi-family debt placements
• Affordable housing
◦ First Sterling acquisition
• Treasury platform
2017-2018
• Additional point-of-sale opportunities
• Expansion of mortgage home loan direct
channel
• Additional mortgage servicing rights
acquisitions
• Loan sales & trading
• Fixed income sales & trading
• Multi-family debt placements
• Grow affordable housing
• Enhanced treasury management platform
• Insurance acquisitions
• De novo branch additions
• Digital loan offers
• Streamlined digital account opening
solutions
• Additional retail bankers
• Integration of artificial intelligence and
personalization to enhance the customer
experience
NPLs and coverage ratio(1)
Criticized (Direct Energy) Criticized (Non-Energy)
2Q16 3Q16 4Q16 1Q17 2Q17
1,078 1,024 971 867 755
2,586
$3,664
2,718
$3,742
2,641
$3,612
2,671
$3,538
2,525
$3,280
Net Charge-Offs (Direct Energy) Net Charge-Offs (Non-Energy)
Net Charge-Offs ratio
2Q16 3Q16 4Q16 1Q17 2Q17
17 6 14 13 18
55
$72
48
$54
69
$83 87
$100
50
$68
0.35%
0.26%
0.41%
0.51%
0.34%
2Q16 3Q16 4Q16 1Q17 2Q17
280 305 311 310 267
745
$1,025
773
$1,078
684
$995
694
$1,004
556
$823
112% 104% 110% 106%
127%
124% 123% 138% 135% 163%
Stable asset quality
• Provision for loan losses was $20 million less than net charge-offs primarily
attributable to reductions in NPLs, criticized and classified loans across various
industries
• Decrease in NPLs driven by broad based improvement in commercial loans;
decrease in criticized business loans driven by declines in energy, transportation &
warehousing, wholesale goods and other industries
• Allowance for loan losses, as a percent of NPLs, was 127%; excluding direct energy
this ratio increased linked quarter from 135%(2) to 163%(2)
• Direct energy charge-offs totaled $18 million for the quarter and $31 million for
the first half of the year
• Loan exposure in the Houston market impacted by Hurricane Harvey is
approximately $3.2 billion, and potential losses are currently estimated in the $10-
$20 million range based on current modeling results
($ in millions) ($ in millions)
12
2Q17 Results and Outlook
(1) Excludes loans held for sale
(2) Non-GAAP; see appendix for reconciliation
Net charge-offs and ratio
(2)
Criticized Business Loans
($ in millions)
Coverage ratio excluding Direct
Energy
NPLs (Non-Energy) (1)
Coverage Ratio
NPLs (Direct Energy)(1)
Strong capital levels
Note: Regions’ and peer CET1 ratios are as of 6/30/17. Peers includes BBT, CFG, CMA, FHN, FITB, HBAN, HBHC, KEY, MTB, PNC, SNV, STI, USB and ZION.
Source: SNL Financial13
Basel III Common Equity Tier 1 Ratio
Peer #1
RF
Peer #2
Peer #3
Peer #4
Peer #5
Peer #6
Peer #7
Peer #8
Peer #9
Peer #10
Peer #11
Peer #12
Peer #13
Peer #14
12.3
11.5
11.5
11.2
10.8
10.6
10.3
10.3
10.0
10.0
10.0
9.9
9.8
9.7
9.5
Capital Priorities
Capital Returned to Shareholders
Dividends Share Repurchases
2014 2015 2016 6/30/17 YTD
247 304 318
162
256
$503
623
$927
839
$1,157
275
$437
Robust capital returns
(1) Includes fees associated with open market share repurchases.14
• Received no objection to planned
CCAR capital actions; Board
authorized share repurchase
program up to $1.47 billion, and a
29% increase in quarterly common
stock dividend
• Remain committed to target CET1
ratio of 9.5 percent based on
current risk in our balance sheet
• Target dividend payout ratio
between 30 and 40 percent;
expect target range to increase to
35 to 45 percent over time
• 3Q17 share repurchases through
September 8th totaled $500
million
• Sufficient capital to support
organic growth, strategic
investments, and a robust return
to shareholders
($ in millions)
(1)
2017 expectations
15
• Excluding the impact of the third-party indirect-vehicle portfolio, full year average loans
are expected to be flat to slightly down compared to the prior year
• Full year average deposits are expected to be relatively stable with the prior year
• Net interest income and other financing income growth of 3%-5%
• Adjusted non-interest income relatively stable with the prior year*
• Adjusted expenses 0%-1%; adjusted efficiency ratio ~62%
• Adjusted operating leverage of 2%-4%
• Effective tax rate expected in the 30%-31% range
• Net charge-offs of 35-50 bps
Note: The reconciliation with respect to these forward-looking non-GAAP measures is expected to be consistent with the actual non-GAAP
reconciliations included in the attached appendix.
* Expectation revised since 2Q17.
Executing on our strategy
16 Note: The reconciliation with respect to forward-looking non-GAAP measures is expected to be consistent with the actual non-GAAP reconciliations
included in the attached appendix.
(1) Non-GAAP; see appendix for reconciliation
Appendix,
Non-GAAP and
Forward Looking
Statements
17
Regions aims to be the premier regional financial institution in America
Line of Business Coverage
Alabama – 206 Louisiana – 99
Arkansas – 77 Mississippi – 119
Florida – 320 Missouri – 55
Georgia – 120 North Carolina – 6
Illinois – 46 South Carolina – 25
Indiana – 51 Tennessee – 211
Iowa – 8 Texas – 72
Kentucky – 11
Ranked 16th Nationally in Total Deposits(2)
Corporate Banking
Business Capital
Capital Markets
Dealer Finance
Equipment Finance
Government/Institutional
Specialized Industry
Institutional Services
Insurance
Private Wealth
Real Estate Corporate Banking
Commercial Banking
•
•
•
•
•
•
•
•
•
•
•
•
Branch Locations by State (1)
Our banking franchise
Birmingham, Alabama
(1) Full Service branches as of 6/30/2017
(2) Source: SNL Financial as of 6/30/2016
18
Strength of our markets
19
Market Share Rank in Core States
78% of total deposits are in our core states
Alabama - Mississippi - Florida
Louisiana - Tennessee - Arkansas
78%
Market Share in High Growth Markets
Source: SNL Financial
As of 6/30/2016 FDIC summary
6
• Approximately $250 million of outstanding balances across the REIT and
IRE portfolios relate to shopping malls
• Portfolio exposure to REIT's specializing in enclosed malls consists of a
small number of credits, all of which are investment grade
• IRE portfolio is widely distributed, largest tenants typically include 'basic
needs' anchors
• C&I retail portfolio is also widely distributed; largest categories include:
◦ Motor vehicle & parts dealers ~$450 million outstanding to
~1,100 clients
◦ Building materials, garden equipment & supplies ~$200 million
outstanding to ~700 clients
◦ Non-store retailers ~$170 million outstanding to ~270 clients
◦ Less than $65 million outstanding to clothing & accessories
• CRE-OO portfolio consists primarily of small strip malls and convenience
stores
• ABL portfolio is collateralized primarily by inventory and accounts
receivable
• Generally, well placed retail centers continue to perform well with low
vacancy rates
• Regions has not been impacted by recent big name bankruptcies;
continue to watch the sector closely
• Securities portfolio includes ~$810 million of post-crisis issued AAA rated
CMBS with exposure to retail within the diversified collateral pool;
protected with 34% credit enhancement, and losses expected to be de
minimis in severely adverse scenario; portfolio also includes ~$83 million
in retail related high quality, investment grade corporate bonds
Commercial retail lending overview
Total retail
(1) Does not include $28 million of retail related operating leases.
* Represents the number of clients with loan balances outstanding.20
As of 6/30/17
($ in millions)
Loan
Balances
Total
Commitments
Including
Outstanding
Balances
%
Utilization
$
Criticized
%
Criticized
# of
Clients *
REITs
$1,503 $2,797 54% — — 27
Investor real
estate (IRE) 1,034 1,115 93% 21 2% 356
C&I
1,358 2,480 55% 43 3% 7,204
CRE-OO
662 692 96% 34 5% 1,311
ABL
643 1,735 37% 22 3% 26
Total Retail (1)
$5,200 $8,819 59% $120 2% 8,924
• Total outstandings and commitments
declined primarily due to paydowns and
payoffs
• Allowance for loan and lease losses was
6.9% of direct energy balances at
6/30/17 vs 6.1% at 3/31/17
• No second lien exposure outstanding
within the energy portfolio
• Leveraged loans account for 22% of
energy related balances; the majority are
Exploration & Production and Midstream
• Energy charge-offs are $18 million for
2Q17 and $31 million for 2017 year to
date
• Under a stressed scenario with oil
averaging below $25, incremental losses
could total $100 million over the next 8
quarters
• Utilization rate has remained between
40-60% since 1Q15
• 13% of direct energy loans are on non-
accrual status
• ALLL/NPL excluding direct energy is
163%(1)
Energy lending overview
Total energy
As of 6/30/17 As of 3/31/17
($ in millions)
Loan /
Lease
Balances
Total
Commitments
Including
Outstanding
Balances
%
Utilization
$
Criticized
%
Criticized
Loan /
Lease
Balances
Total
Commitments
Including
Outstanding
Balances
%
Utilization
$
Criticized
%
Criticized
Oilfield services
and supply (OFS) $601 $926 65% $335 56% $647 $1,015 64% $375 58%
Exploration and
production
(E&P) 678 1,261 54% 388 57% 664 1,298 51% 445 67%
Midstream 519 1,188 44% 13 3% 502 1,152 44% 27 5%
Downstream 81 299 27% 16 20 83 278 30% 16 19%
Other 106 287 37% 3 3% 117 256 46% 3 3
Total direct
1,985 3,961 50% 755 38% 2,013 3,999 50% 866 43%
Indirect 544 994 55% 103 19% 514 913 56% 112 22%
Direct and
indirect 2,529 4,955 51% 858 34% 2,527 4,912 51% 978 39%
Operating leases
97 97 — 58 60% 119 119 — 61 51%
Loans held for
sale $1 $1 — $1 100% — — — — —
Total energy $2,627 $5,053 52% $917 35% $2,646 $5,031 53% $1,039 39%
Note: Securities portfolio contained ~$4MM of high quality, investment grade corporate bonds that are energy related at 6/30/17, unchanged from 3/31/17.
A leveraged relationship is defined as senior cash flow leverage of 3x or total cash flow leverage of 4x except for Midstream Energy which is 6x total cash flow
leverage.
(1) Non-GAAP; see appendix for reconciliation
21
Energy lending - Oil Field Services and Exploration
& Production detail
Type As of6/30/17
# of
Clients* Commentary
Marine $395 8 Sector remains under stress. Approximately
45% of marine outstandings are under contract
for remainder of 2017.
Integrated OFS 92 6 Improving conditions for companies servicing
onshore activity. Average utilization remains at
30% indicating clients have ample liquidity.
Compression 50 2 Linked to movement of natural gas. Sector is
more stable and lower risk than other sectors.
Fluid Management 10 2 Improvement in this sector as rig counts have
improved. Exposure is minimal after recent
payoffs.
Pre-drilling / Drilling 54 3 Outlook for onshore drillers is improving.
Offshore drillers remain stressed; however
Regions only has minimal exposure to offshore
drillers.
Total Oil Field Services
(OFS)
601 21
Exploration and
production (E&P)
678 27**
Total OFS and E&P $1,279
• 47% shared national credit (SNC) loans
• 65% utilization rate compared to 64%
in 1Q17
• 83% of non-pass rated (criticized)
loans paying as agreed
E&P Portfolio
*Represents the number of clients that comprise 75% of the loan balances outstanding.
**Represents the number of clients that comprise 90% of the loan balances outstanding.
OFS Portfolio
• Majority of borrowing is senior
secured
• 97% shared national credit (SNC) loans
• 54% utilization rate compared to 51%
in 1Q17
• 84% of non-pass rated (criticized)
loans paying as agreed
($ in millions)
22
Commercial -
Non-Energy,
$2,177
Investor Real
Estate, $123
Consumer Real
Estate Secured,
$1,137
Consumer Non-Real Estate
Secured, $295
Commercial - Energy
(Direct), $417
Loan balances by select states
Texas Louisiana
Note: Intelligence from our customer assistance program (CAP) reveals no noticeable increase in assistance requests in these markets to date.
Commercial - Non-
Energy, $4,399
Investor Real
Estate, $1,122
Consumer Real Estate
Secured, $1,121
Consumer Non-Real Estate
Secured, $987 Commercial - Energy(Direct), $1,037
Investor Real Estate Balances by City
($ in millions)
Office Retail Multi-Family
Single
Family Other Total
Houston $46 $39 $245 $69 $17 $416
Dallas 93 31 154 53 31 362
San
Antonio — 26 51 41 25 143
Other 9 65 91 3 33 201
Total $148 $161 $541 $166 $106 $1,122
Investor Real Estate Balances by City
($ in millions)
Office Retail Multi-Family
Single
Family Other Total
Baton
Rouge $35 $1 $8 $13 $21 $78
New
Orleans 5 5 1 1 6 18
Other 1 5 5 1 15 27
Total $41 $11 $14 $15 $42 $123
$4.1B$8.7B
23
Loan balances by select states
Alabama Mississippi
Commercial - Non-
Energy, $5,069
Investor Real Estate,
$275
Consumer Real
Estate Secured,
$3,586
Consumer Non-Real Estate
Secured, $822
Commercial -
Non-Energy,
$1,445
Investor Real
Estate, $130
Consumer Real
Estate Secured,
$932
Consumer Non-Real Estate
Secured, $347
Commercial -
Energy (Direct),
$38
$2.9B$9.8B
Investor Real Estate Balances by City
($ in millions)
Office Retail Multi-
Family
Single
Family
Other Total
Birmingham $14 $21 $5 $19 $23 $82
Huntsville 82 15 5 3 1 106
Mobile /
Baldwin County 2 15 3 2 11 33
Other 7 10 18 11 8 54
Total $105 $61 $31 $35 $43 $275
Investor Real Estate Balances by City
($ in millions)
Office Retail Multi-Family
Single
Family Other Total
North
Mississippi — — — — $80 $80
Jackson/Other 4 5 19 1 3 32
Gulfport /
Biloxi /
Pascagoula — — 18 — — 18
Total $4 $5 $37 $1 $83 $130
Commercial- Energy
(Direct), $11
24
Non-GAAP reconciliation: Non-interest income,
non-interest expense and efficiency ratio
NM - Not Meaningful
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. Management uses this ratio to monitor
performance and believes this measure provides 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 and other financing income on a taxable-equivalent basis and non-interest income are added together to arrive at total revenue on a taxable-equivalent basis. Adjustments are made to arrive at adjusted total
revenue on a taxable-equivalent basis (non-GAAP), which is the denominator for the efficiency ratio. 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. The table on the following page presents a computation of the operating leverage ratio (non-GAAP) which is the period to period percentage change in adjusted total revenue on a taxable-equivalent basis (non-
GAAP) less the percentage change in adjusted non-interest expense (non-GAAP). 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.
25
Quarter Ended
($ amounts in millions) 6/30/2017 3/31/2017 12/31/2016 9/30/2016 6/30/2016 2Q17 vs. 1Q17 2Q17 vs. 2Q16
ADJUSTED EFFICIENCY AND FEE INCOME RATIOS, ADJUSTED NON-
INTEREST INCOME/EXPENSE-CONTINUING OPERATIONS
Non-interest expense (GAAP) A $ 909 $ 877 $ 899 $ 934 $ 915 $ 32 3.6 % $ (6) (0.7)%
Adjustments:
Professional, legal and regulatory expenses (1) — — — — (3) — NM 3 (100.0)%
Branch consolidation, property and equipment charges (7) (1) (17) (5) (22) (6) NM 15 (68.2)%
Loss on early extinguishment of debt — — — (14) — — NM — NM
Salary and employee benefits—severance charges (3) (4) (5) (3) (1) 1 (25.0)% (2) 200.0 %
Adjusted non-interest expense (non-GAAP) B $ 899 $ 872 $ 877 $ 912 $ 889 $ 27 3.1 % $ 10 1.1 %
Net interest income and other financing income (GAAP) $ 882 $ 859 $ 853 $ 835 $ 848 $ 23 2.7 % $ 34 4.0 %
Taxable-equivalent adjustment 22 22 21 21 21 — NM 1 4.8 %
Net interest income and other financing income, taxable-equivalent
basis C $ 904 $ 881 $ 874 $ 856 $ 869 $ 23 2.6 % $ 35 4.0 %
Non-interest income (GAAP) D $ 525 $ 510 $ 522 $ 599 $ 526 $ 15 2.9 % $ (1) (0.2)%
Adjustments:
Securities (gains) losses, net (1) — (5) — (6) (1) NM 5 (83.3)%
Insurance proceeds (1) — — — (47) — — NM — NM
Leveraged lease termination gains, net (1) — — — (8) — — NM — NM
Gain on sale of affordable housing residential mortgage loans (1) (5) — (5) — — (5) NM (5) NM
Adjusted non-interest income (non-GAAP) E $ 519 $ 510 $ 512 $ 544 $ 520 $ 9 1.8 % $ (1) (0.2)%
Total revenue, taxable-equivalent basis C+D=F $ 1,429 $ 1,391 $ 1,396 $ 1,455 $ 1,395 $ 38 2.7 % $ 34 2.4 %
Adjusted total revenue, taxable-equivalent basis (non-GAAP) C+E=G $ 1,423 $ 1,391 $ 1,386 $ 1,400 $ 1,389 $ 32 2.3 % $ 34 2.4 %
Efficiency ratio (GAAP) A/F 63.6% 63.1% 64.4% 64.2% 65.6%
Adjusted efficiency ratio (non-GAAP) B/G 63.2% 62.7% 63.2% 65.3% 64.0%
Fee income ratio (GAAP) D/F 36.8% 36.7% 37.4% 41.2% 37.7%
Adjusted fee income ratio (non-GAAP) E/G 36.5% 36.6% 36.9% 38.8% 37.5%
Non-GAAP reconciliation: Non-interest income,
non-interest expense and efficiency ratio
NM - Not Meaningful
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. Management uses this ratio to monitor
performance and believes this measure provides 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 and other financing income on a taxable-equivalent basis and non-interest income are added together to arrive at total revenue on a taxable-equivalent basis. Adjustments are made to arrive at adjusted total
revenue on a taxable-equivalent basis (non-GAAP), which is the denominator for the efficiency ratio. 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. The table on the following page presents a computation of the operating leverage ratio (non-GAAP) which is the period to period percentage change in adjusted total revenue on a taxable-equivalent basis (non-
GAAP) less the percentage change in adjusted non-interest expense (non-GAAP). 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.
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The table below presents computations of the adjusted allowance for loan losses to non-performing loans, excluding loans held for sale ratio (non-GAAP), generally calculated as adjusted allowance for
loan losses divided by adjusted total non-accrual loans, excluding loans held for sale. The allowance for loan losses (GAAP) is presented excluding the portion of the allowance related to direct energy
loans to arrive at the adjusted allowance for loan losses (non-GAAP). Total non-accrual loans (GAAP) is presented excluding direct energy non-accrual loans to arrive at adjusted total non-accrual loans,
excluding loans held for sale (non-GAAP), which is the denominator for the allowance for loan losses to non-accrual loans ratio. Management believes that excluding the portion of the allowance for
loan losses related to direct energy loans and the direct energy non-accrual loans will assist investors in analyzing the Company's credit quality performance absent the volatility that has been
experienced by energy businesses. Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, are not audited, and should not be considered in isolation, or as a
substitute for analyses of results as reported under GAAP.
Non-GAAP reconciliation: Adjusted allowance for loan losses to
non-performing loans, excluding loans held for sale
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As of
($ amounts in millions) 6/30/2017 3/31/2017 12/31/2016 9/30/2016 6/30/2016
Allowance for loan losses (GAAP) A $ 1,041 $ 1,061 $ 1,091 $ 1,126 $ 1,151
Less: Direct energy portion 136 123 147 176 226
Adjusted allowance for loan losses (non-GAAP) B $ 905 $ 938 $ 944 $ 950 $ 925
Total non-accrual loans (GAAP) C $ 823 $ 1,004 $ 995 $ 1,078 $ 1,025
Less: Direct energy non-accrual loans 267 310 311 305 280
Adjusted total non-accrual loans (non-GAAP) D $ 556 $ 694 $ 684 $ 773 $ 745
Allowance for loan losses to non-performing loans, excluding loans held for sale (GAAP) A/C 1.27x 1.06x 1.10x 1.04x 1.12x
Adjusted allowance for loan losses to non-performing loans, excluding loans held for sale
(non-GAAP) B/D 1.63x 1.35x 1.38x 1.23x 1.24x
Non-GAAP reconciliation: YTD return on average tangible stockholders'
equity and earnings per common share from continuing operations
The tables below present computations of "adjusted net income from continuing operations available to common shareholders," "adjusted return on average
tangible common stockholders' equity" and "adjusted earnings per common share from continuing operations," which exclude certain significant items that are
included in the financial results presented in accordance with GAAP. Management believes these measures provide a meaningful base for period-to-period
comparisons, and 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. These
non-GAAP measures also provide analysts and investors certain metrics regarding the progress of the Company in comparison to long-term expected results
previously communicated.
(1) The total net adjustments to non-interest expense is the summation of the adjustments previously shown on page 26.
(2) The total net adjustments to non-interest income is the summation of the adjustments previously shown on page 26.
(3) The computation of the income tax impact for adjusted items is based on 38.5%, comprised of the statutory federal rate of 35%, adjusted for applicable state income taxes, net of the related federal tax benefit. The tax
adjustment also includes the tax impact from leveraged lease termination gains.
(4) On a continuing operations basis.
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Forward-looking statements
This presentation may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. The terms “Regions,” the “Company,” “we,” “us” and “our” mean Regions Financial Corporation, a Delaware
corporation, and its subsidiaries when or where appropriate. The words “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “targets,” “projects,” “outlook,” “forecast,” “will,” “may,” “could,” “should,” “can,” and similar
expressions often signify forward-looking statements. 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 current 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, and because they also relate to the future they are likewise subject to inherent uncertainties and other factors that may cause actual results to differ materially from the views, beliefs and
projections expressed in such statements. Therefore, we caution you against relying on any of these forward-looking statements. These risks, uncertainties and other factors include, but are not limited to, those described below:
• Current and future economic and market conditions in the United States generally or in the communities we serve, including the effects of declines in property values, unemployment rates and potential reductions of economic
growth, which may adversely affect our lending and other businesses and our financial results and conditions.
• Possible changes in trade, monetary and fiscal policies of, and other activities undertaken by, governments, agencies, central banks and similar organizations, which could have a material adverse effect on our earnings.
• The effects of a possible downgrade in the U.S. government’s sovereign credit rating or outlook, which could result in risks to us and general economic conditions that we are not able to predict.
• Possible changes in market interest rates or capital markets could adversely affect our revenue and expense, the value of assets and obligations, and the availability and cost of capital and liquidity.
• Any impairment of our goodwill or other intangibles, or any adjustment of valuation allowances on our deferred tax assets due to adverse changes in the economic environment, declining operations of the reporting unit, or
other factors.
• Possible changes in the creditworthiness of customers and the possible impairment of the collectability of loans and leases, including operating leases.
• Changes in the speed of loan prepayments, loan origination and sale volumes, charge-offs, loan loss provisions or actual loan losses where our allowance for loan losses may not be adequate to cover our eventual losses.
• Possible acceleration of prepayments on mortgage-backed securities due to low interest rates, and the related acceleration of premium amortization on those securities.
• Our ability to effectively compete with other financial services companies, some of whom possess greater financial resources than we do and are subject to different regulatory standards than we are.
• Loss of customer checking and savings account deposits as customers pursue other, higher-yield investments, which could increase our funding costs.
• Our inability to develop and gain acceptance from current and prospective customers for new products and services in a timely manner could have a negative impact on our revenue.
• The effects of any developments, changes or actions relating to any litigation or regulatory proceedings brought against us or any of our subsidiaries.
• Changes in laws and regulations affecting our businesses, such as the Dodd-Frank Act and other legislation and regulations relating to bank products and services, as well as changes in the enforcement and interpretation of such
laws and regulations by applicable governmental and self-regulatory agencies, which could require us to change certain business practices, increase compliance risk, reduce our revenue, impose additional costs on us, or otherwise
negatively affect our businesses.
• Our ability to obtain a regulatory non-objection (as part of the CCAR process or otherwise) to take certain capital actions, including paying dividends and any plans to increase common stock dividends, repurchase common stock
under current or future programs, or redeem preferred stock or other regulatory capital instruments, may impact our ability to return capital to stockholders and market perceptions of us.
• 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 and
intensity of such tests and requirements.
• Our ability to comply with applicable capital and liquidity requirements (including, among other things, the Basel III capital standards and the LCR rule), including our ability to generate capital internally or raise capital on favorable
terms, and if we fail to meet requirements, our financial condition could be negatively impacted.
• The Basel III framework calls for additional risk-based capital surcharges for globally systemically important banks. Although we are not subject to such surcharges, it is possible that in the future we may become subject to similar
surcharges.
• The costs, including possibly incurring fines, penalties, or other negative effects (including reputational harm) of any adverse judicial, administrative, or arbitral rulings or proceedings, regulatory enforcement actions, or other
legal actions to which we or any of our subsidiaries are a party, and which may adversely affect our results.
• Our 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 our business.
• Our ability to execute on our strategic and operational plans, including our ability to fully realize the financial and non-financial benefits relating to our strategic initiatives.
• The success of our marketing efforts in attracting and retaining customers.
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• Possible changes in consumer and business spending and saving habits and the related effect on our ability to increase assets and to attract deposits, which could adversely affect our net income.
• Our ability to recruit and retain talented and experienced personnel to assist in the development, management and operation of our products and services may be affected by changes in laws and regulations in effect from time
to time.
• Fraud or misconduct by our customers, employees or business partners.
• Any inaccurate or incomplete information provided to us by our customers or counterparties.
• The risks and uncertainties related to our acquisition and integration of other companies.
• Inability of our framework to manage risks associated with our business such as credit risk and operational risk, including third-party vendors and other service providers, which could, among other things, result in a breach of
operating or security systems as a result of a cyber attack or similar act.
• The inability of our internal disclosure controls and procedures to prevent, detect or mitigate any material errors or fraudulent acts.
• The effects of geopolitical instability, including wars, conflicts and terrorist attacks and the potential impact, directly or indirectly, on our businesses.
• The effects of man-made and natural disasters, including fires, floods, droughts, tornadoes, hurricanes, and environmental damage, which may negatively affect our operations and/or our loan portfolios and increase our cost
of conducting business.
• Changes in commodity market prices and conditions could adversely affect the cash flows of our borrowers operating in industries that are impacted by changes in commodity prices (including businesses indirectly impacted
by commodities prices such as businesses that transport commodities or manufacture equipment used in the production of commodities), which could impair their ability to service any loans outstanding to them and/or reduce
demand for loans in those industries.
• Our inability to keep pace with technological changes could result in losing business to competitors.
• Our ability to identify and address cyber-security risks such as data security breaches, malware, “denial of service” attacks, “hacking” and identity theft, a failure of which could disrupt our business and result in the disclosure
of and/or misuse or misappropriation of confidential or proprietary information; disruption or damage to our systems; increased costs; losses; or adverse effects to our reputation.
• Our ability to realize our adjusted efficiency ratio target as part of our expense management initiatives.
• Significant disruption of, or loss of public confidence in, the Internet and services and devices used to access the Internet could affect the ability of our customers to access their accounts and conduct banking transactions.
• Possible downgrades in our credit ratings or outlook could increase the costs of funding from capital markets.
• The effects of problems encountered by other financial institutions that adversely affect us or the banking industry generally could require us to change certain business practices, reduce our revenue, impose additional costs
on us, or otherwise negatively affect our businesses.
• The effects of the failure of any component of our business infrastructure provided by a third party could disrupt our businesses; result in the disclosure of and/or misuse of confidential information or proprietary information;
increase our costs; negatively affect our reputation; and cause losses.
• Our ability to receive dividends from our subsidiaries could affect our liquidity and ability to pay dividends to stockholders.
• Changes in accounting policies or procedures as may be required by the FASB or other regulatory agencies could materially affect how we report our financial results.
• Other risks identified from time to time in reports that we file with the SEC.
• The effects of any damage to our reputation resulting from developments related to any of the items identified above.
You should not place undue reliance on any forward-looking statements, which speak only as of the date made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible to
predict all of them. We assume no obligation to update or revise any forward-looking statements that are made from time to time, either as a result of future developments, new information or otherwise, except as may be required by law.
See also the reports filed with the Securities and Exchange Commission, including the discussion under the “Risk Factors” section of Regions’ Annual Report on Form 10-K for the year ended December 31, 2016 as filed with the
Securities and Exchange Commission and available on its website at www.sec.gov.
Forward-looking statements continued
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