![]() Bank of America Merrill Lynch Banking & Financial Services Conference EXHIBIT 99.1 |
![]() Forward-Looking Statements 1 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, 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 became law on July 21, 2010, and a number of legislative, regulatory and tax proposals remain pending. Additionally, the U.S. Treasury and federal banking regulators continue to implement, but are also beginning to wind down, a number of programs to address capital and liquidity in the banking system. All of the foregoing may have significant effects on Regions and the financial services industry, the exact nature of which cannot be determined at this time. › The impact of compensation and other restrictions imposed under the Troubled Asset Relief Program (“TARP”) until Regions repays the outstanding preferred stock and warrant issued under the TARP, including restrictions on Regions’ ability to attract and retain talented executives and associates. › Possible additional loan losses, impairment of goodwill and other intangibles, and 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. › 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 unfavorable 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. › The current stresses in the financial and real estate markets, including possible continued 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 manage credit risk, interest rate risk, market risk, operational risk, legal risk, liquidity 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. › 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 and hurricanes, and the effects of the Gulf of Mexico oil spill. › Regions’ ability to maintain favorable ratings from rating agencies. › Potential dilution of holders of shares of Regions’ common stock resulting from the U.S. Treasury’s investment in TARP. › 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” in Regions’ Annual Report on Form 10-K for the year ended December 31, 2009 and Quarterly Reports on Form 10-Q for the quarters ended September 30, 2010, June 30, 2010 and March 31, 2010, as on file 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. |
![]() 2 Our primary focus is returning to sustainable profitability through disciplined execution of our strategic priorities |
![]() Why Regions? Strong Southeastern franchise with comprehensive line of business offerings Solid core business performance Aggressively identifying and disposing of problem assets Capital and liquidity remain solid 3 |
![]() Strong Southeastern Franchise Ranked 5 th or Better in Market Share Targeted Growth Areas Headquarters Birmingham, AL Associates 27,898 Branches 1,774 Morgan Keegan Offices 329 Regions Insurance Offices 30 ATMs 2,150 Deposits $95 Billion Loans $84 Billion Projected population growth for Regions footprint is above US average growth Operate on one fully integrated technology platform # 1 Market Share in Alabama, Tennessee and Mississippi 4 |
![]() Consumer Services Credit/Debit Cards 5 On-line Banking Mobile Banking |
![]() Business Services Middle Market Small Business Real Estate Treasury Management Capital Markets / Syndications Equipment Finance Commercial Real Estate Affordable Housing Homebuilders Real Estate Corporate Banking Specialized Groups Public, Institutional, Not for profit; Healthcare; Transportation; Franchise Restaurant; Energy; Regions Business Capital Core Middle Market Sales > $20 Million Branches Relationship Managed Business Banking (Metro Markets) Sales $2 - $20 Million Community Banking Sales > $2 Million Sales < $2 Million 6 |
![]() Morgan Keegan Private Client Group Fixed Income Capital Markets Equity Capital Markets Municipal Finance, M&A Equity Research, Institutional Sales & Trading Credit Products (including Securities Based Lending), Wealth Solutions Personal & Institutional Trust, Timber Management Public Offerings, Corporate Debt Institutional Sales & Trading, Fixed Income Research Retail Brokerage Investment Banking Regions Morgan Keegan Trust Regions Private Banking 7 |
![]() Excellent Service Quality is the Foundation for Growth Excellent - Gallup 90th percentile Good - Gallup 75th percentile Average - Gallup 50th percentile Excellent - Gallup 90th percentile Average - Gallup 50th percentile Good - Gallup 75th percentile 1Q08 2Q09 2Q10 1Q08 2Q09 2Q10 8 Regions Ranked in Top 10% for Customer Loyalty Regions Ranked in top 20% for Branch Service Quality |
![]() Strong Low-Cost Deposit Growth While Driving Lower Deposit Costs 9 Average Low Cost Deposits $7.7 Billion YOY Growth Deposit Costs Improved 56 bps |
![]() Reduced Average Time Deposit mix from 34% in 3Q09 to 26% in 3Q10 Grew Low-Cost Deposits 12.4% year-over-year Improved Deposit Mix 10 Average Deposits $94.8 B Average Deposits $95.1 B |
![]() Disciplined Focus on New Checking Account Growth On track to open 1 Million New Checking Accounts in 2010 Account structure that provides quality products and services that customers value and at the same time fairly compensates Regions Net New Account Growth could slow as we migrate to fee generating accounts Checking Account Production 1,008,136 761,901 as of 3Q 11 798,326 4Q 3Q 2Q 3Q 2Q 2Q 3Q 1Q 1Q 1Q |
![]() Consumer Loan Production Improving; However Consumers Continue to De-Leverage Mortgage Production remains strong – on track for second best year in terms of Mortgage Production New Consumer Loan Production volumes are improving in Branch Small Business, Direct and Indirect Auto Consumers De-Leveraging continues to outpace Loan Production Consumer Confidence and Unemployment need to improve before robust loan growth is achieved 12 $38.6 ($10.3) $7.6 $35.9 Mortgage H/E Branch SB Other |
![]() Business Services Revenue is Well-Diversified Middle Market C&I Specialized Groups Commercial Real Estate Professional income property developers, owners and operators Public real estate companies Homebuilders Affordable housing tax credits Small Business Business Banking (Metro Markets) Community Banking Branch Small Business 13 |
![]() We Are Growing Commercial Loans 14 |
![]() Net interest margin climbed 9bps linked quarter; up 24 bps year-to-date Repricing opportunity remains with over $11.4 billion of CD’s maturing over the next 9 months at an average rate of 2.10% Steady loan yields despite declining market rates Hedges in place through end of 2012 to protect net interest income in a prolonged low-rate environment Net Interest Income Improves Despite Decline in Earning Assets 15 |
![]() Growth of Fee Income and Debit Card Interchange Offsets Reg E Impact 16 |
![]() *Non-GAAP; refer to Appendix for Non-GAAP reconciliation 17 ($ in millions) 2007 2008 2009 Sep YTD 2010 Branches 1,965 1,900 1,895 1,774 Reduced branch count by 10% since 2007 Headcount 33,161 30,784 28,509 27,898 Headcount declined 5,263 or 16% Total Expenses $4,660 $10,792 $4,751 $3,719 Adjusted Expenses* $4,246 $4,448 $4,559 $3,456 Total adjusted expenses declined $313MM or 7% comparing 2007 to 2009 Credit-related expenses $153 $282 $424 $312 Strengthened Our Core Franchise Through Productivity & Efficiency Initiatives |
![]() Disposed of Over $5 Billion in Problem Assets in Past 24 Months $228 $281 $554 $643 $1,039 $689 $779 $1,041 Problem Asset Dispositions 18 Note: Dispositions include loans sold or moved to held for sale. The 09/30/10 balance in held for sale was $393MM. $0 $300 $600 $900 $1,200 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 |
![]() Higher Risk Portfolio Segments Significantly Reduced Total Investor Real Estate Higher Risk Investor Real Estate Segments 19 |
![]() Percentage of Non-Performing Loans Paying as Agreed Business Services Gross Additions which remained at quarter end Total Business Services NPLs as of 09/30/10 Balances that are Current Balances 30+ DPD Balances that are Current Balances 30+ DPD Gross NPL Migration 0% 20% 40% 60% 80% 100% 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 7% 15% 21% 23% 28% 24% 36% $0.1B $1.4B $0.4B $2.1B $0.6B $2.4B $0.8B $2.5B $1.0B $2.5B $0.8B $2.4B $1.1B $2.0B $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 0% 20% 40% 60% 80% 100% 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 7% 23% 38% 33% 45% 36% 62% $ millions 20 |
![]() $751 $768 $758 $687 Higher Loan Charge-Offs Reflect Asset Dispositions 21 $0 $250 $500 $750 $1,000 3Q09 4Q09 1Q10 2Q10 3Q10 |
![]() Non-Performing Assets and Delinquencies Declining Non-Performing Assets (excludes loans held for sale) Accruing Loans Past Due 22 |
![]() Solid Capital; Currently above proposed Basel minimum ratios * Estimated 23 Basel Tier 1 Min Basel T1C Min |
![]() Strong Liquidity Loan to Deposit Ratio 107% 92% 89% • As rules are currently interpreted, expect to exceed proposed Basel III Liquidity Coverage Ratio • High-quality securities portfolio comprised of over 95% agency securities 24 |
![]() Impact from Regulatory Reform and Basel Proposal Issue Impact to Regions Regulation E Impact from Reg E to be less than originally forecasted due to better than expected customer response to opting-in to program Original forecast for 2 half of 2010: $72 million New forecast: $50 - 60 million Durbin Amendment Lacking complete visibility as rules not finalized Product changes to partially offset total impact Collins Amendment Minimal impact to Regions. Trust Preferred securities only $846 million or 87 bps of Tier 1 capital Other – Impact to Morgan Keegan Minimal impact to Morgan Keegan No proprietary trading desk Minimal trading derivatives income Minimal exposure to private equity/hedge funds Basel III Minimal impact to Regions. Both Tier 1 common and Tier 1 are above the 7% and 8.5% minimum ratios Well positioned with respect to the Liquidity Coverage Ratio 25 nd |
![]() Committee of key managers approves the decision to proceed with foreclosure Same process for loans owned by Regions or an investor Mortgage foreclosure affidavits signed by a department manager in the presence of a notary Low foreclosure volumes 100 Regions-owned loans per month 160 investor-owned loans per month $41.2 billion residential mortgage servicing portfolio Regions-owned $16.3 billion Investor-owned $24.9 billion Proactive Customer Assistance Program Helped over 30,000 homeowners stay in their homes Top 5 Mortgage Servicer per J.D. Power Solid and Tested Foreclosure Process 26 |
![]() Why Regions? 27 Strong Southeastern franchise with comprehensive line of business offerings Solid core business performance Aggressively identifying and disposing of problem assets Capital and liquidity remain solid |
![]() |
![]() ![]() Appendix Note: The following table illustrates the method of calculating the Non-GAAP financial measures used in this slide presentation: ($ in millions) 2007 2008 2009 Sep YTD 2010 Total Non-Interest Expenses (GAAP) $ 4,660 $ 10,792 $ 4,751 $ 3,719 Adjustments: Goodwill impairment charge 6,000 Regulatory settlement charge 200 Merger-related charges 351 201 FDIC Special Assessment 64 Other-than-temporary impairment expense 6 22 75 2 MSR impairment 6 85 Loss on early extinguishment of debt 65 53 Branch consolidation charges 53 8 VISA settlement 51 (29) - - Adjusted Non-Interest Expenses (non-GAAP) 4,246 $ 4,448 $ 4,559 $ 3,456 $ |