Regions 4Q15 Earnings Call Notes

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Regions Financial’s (RF) CEO Grayson Hall on Q4 2015 Results

Continue to closely monitor energy portfolio

“With respect to the economic environment, while the U.S. economy is still slow and steadily improving, there is a clear significant pressure from the global economy. Low oil prices continue to create challenges for certain industries while benefiting others. Consequently, we continue to closely monitor our energy portfolio.”

Reserves stand at 6% of direct energy exposure

“We continue to prudently build reserves which now stand at 6% of our direct energy exposure. As a result, we’re cautious, but we expect the future losses related to this portfolio to be managed.”

Focus in acquisition has been in the non-bank space

“Quite frankly, our primary focus has been on bolt-on acquisitions in the non-bank space. 2015, we did two relatively small transactions that you’re familiar with. We continue to look at the marketplace and we still think there’s opportunities in both our wealth segment as well as our capital markets segment and insurance segments for bolt-on acquisitions.”

David Turner

Net charge offs increased to 38 bps of loans driven by energy portfolio

“Total net charge-offs increased $18 million to $78 million and represented 38 basis points of average loans. This increase was primarily related to one large charge-off in the energy loan portfolio.’

We see the domestic economy being okay

“In our discussions with our customers, we still see the domestic economy being okay. We’re looking at 2%, 2.5% GDP and so there is this dislocation that’s happening here of late, but as we see our customers, we believe they need the products and services, the capital markets investments we’re making we think are going to be very strong and looking for that to continue and help us get to that 4% to 6% growth rate that we’re expecting in non-interest revenue.

Barb Godin

I don’t think anyone thinks that oil is going to stay sub 30 for any length of time

“if it’s in the $20 a barrel range and it stays there for an entire year, it could be in terms of charge-offs — this is not provision — could be up to an incremental $50 million and that is based on some back of the envelope versus anything precise, I would have to tell you. But again, that’s not our view and I don’t think it’s the view of the industry at this point that oil is going to stay sub-$30 for any length of time.”