REGIONS FINANCIAL CORP - FORM 8-K - EX-99.1 - VISUAL PRESENTATION

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8-K - FORM 8-K - REGIONS FINANCIAL CORP	d226222d8k.htm

2011 Barclays Capital

Global Financial Services Conference

September 12, 2011

Grayson Hall

President and Chief Executive Officer

Exhibit 99.1

Why Regions?

•

Strong Southeastern franchise with comprehensive line

of product offerings

•

Leading brand favorability and exceptional service

quality

•

Solid core business performance

•

Aggressively identifying and disposing of problem assets

•

Capital and liquidity remain solid

Regional Bank Focused in the Southeast

Ranked

Better

Market

Targeted Growth Areas

* As of August 26, 2011

Associates: 27,261

Assets: $131B

Loans: $81B

Deposits: $96B

Branches: 1,769

Morgan Keegan Offices: 312

Insurance Offices: 30

ATMs: 2,132

Market Cap: $5.2B*

($ in billions)

National Average: 3.9%

Regions’

Footprint is Characterized by Either High

Market Shares, High Growth Markets or Both

Source: SNL Financial

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 (%)

Top 10 MSAs

Deposits

Market

Rank

’10-’15

Population

Growth

Birmingham, AL

$7.7

27.8%

Nashville, TN

$6.6

17.8%

Miami, FL

$4.8

3.1%

Tampa, FL

$4.7

9.5%

Memphis, TN

$3.8

17.3%

Atlanta, GA

$3.4

3.1%

St. Louis, MO

$3.2

4.4%

Jackson, MS

$2.5

23.6%

New Orleans, LA

$2.4

8.7%

Mobile, AL

$2.3

38.7%

1.0%

8.8%

4.4%

1.9%

10.1

4.3%

3.6%

1.4%

9.6%

3.4%

Southeastern United States continues

to be a growth market

Regions is Well Positioned Competitively in its Core

US Southeastern Markets

National Deposit Market Share

Weighted Average Deposit Market Share

in Regions’

Core Markets

Rank

Name

Market

’10-’15

Population

Growth

Bank of America

11.7%

4.8%

Wells Fargo

10.6%

5.7%

JPMorgan Chase

9.2%

3.5%

Citigroup

3.7%

5.3%

PNC

2.6%

1.2%

U.S. Bancorp

2.5%

4.0%

Toronto-Dominion

1.9%

1.6%

SunTrust

1.7%

6.1%

BB&T

1.5%

5.6%

Regions

1.4%

4.7%

Source: SNL Financial. Deposit market share as of June 30, 2010, pro forma for announced acquisitions.

Note: Regions’

core markets defined as Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, Tennessee and Texas.

Note: Population growth is weighted by MSA deposits.

Rank

Name

Market

’10-’15

Population

Growth

Bank of America

12.7%

4.8%

Wells Fargo

10.9%

5.7%

JPMorgan Chase

7.5%

3.5%

Regions

6.1%

4.7%

SunTrust

5.9%

6.1%

BBVA / Compass

2.7%

7.9%

BB&T

2.3%

5.6%

Capital One

1.8%

3.7%

Synovus

1.6%

5.7%

Hancock Holdings

1.1%

5.3%

Comprehensive and Diversified Line of

Product Offerings

–

Small and mid-

sized C&I lending

–

Commercial Real

Estate

–

Equipment

–

Mortgage

–

Home Equity

–

Credit Card

–

Direct Lending

–

Indirect Auto

–

Private Banking

–

Insurance

–

Trust Services

Commercial

Consumer

Wealth Management

Finance

Competitive Advantage Driven by Customer

Loyalty

Regions continues to

perform in the top 10%

in customer loyalty and

top 20% for branch

service quality

(1)

Based on Gallup survey

(2)

Based on Prime Performance study

(3)

2010 Greenwich Excellence Award

#1 in Customer Service and

“Friendliest”

Bank

(2)

Regions received

Excellence Award

for Small Business

and Middle Market

Banking

(3)

Top Bank in

Customer

Service Study

Ranked 5

in Satisfaction for

Small Business Banking

Ranked 2

in Satisfaction for

Mortgage Servicing

J.D. Power

AND ASSOCIATES

Excellent Service Quality and Brand Strength

Being Recognized

(1)

Based on 4 Quarter Rolling Average from TNS Consumer Banking Market Effectiveness Study

(2)

Banks in study include: Bank of America, BB&T, BBVA Compass, Citigroup, Capital One, J.P. Morgan Chase,

SunTrust, U.S. Bank, Wachovia, Wells Fargo

Regions

Ranks

Highest

Brand

Favorability

(1)

Regions

Bank #2

Bank #3

Bank #4

Bank #5

Bank #6

Bank #7

Bank #8

Bank #9

Bank #10

Quality Loans Key to Profitable Growth

61%

39%

Portfolio Mix*

Consumer Services

›

Growing consumer loans to achieve a

more balanced portfolio

›

Consumer loan growth will be fueled by

new businesses as well as growth in

existing businesses

›

Loan production in mortgage

portfolio was 2

largest ever

›

Indirect auto lending production

increased from $255 million in

1Q11 to $291 million in 2Q11

›

Acquired $1.2 billion Regions-

branded credit portfolio

Business Services

›

Focused on middle market & small

business

›

Represents over 80% of

Business Services Revenue

›

Broad based middle-market

commercial loan growth across

footprint and industries

›

65% of area regions

experienced growth in 2Q11

*Ending Balances

Regions C&I Loan Growth has significantly

outpaced Peers

Source: SNL Financial; FRY-9C Regulatory filings

•

Our Commercial &

Industrial loan growth

has significantly

outpaced peers since the

end of 2009

•

Momentum has

continued in 2011, as

Commercial & Industrial

loans have grown

another 7.9%

•

Commercial & Industrial

commitments increased

7% year-to-date and line

utilization remained

stable

13.5%

9.1%

7.9%

6.4%

5.6%

5.3%

4.9%

4.7%

2.4%

0.5%

-0.6%

Bank

#10

Bank

#11

C&I Loan Growth Y-T-D

19.3%

18.9%

16.1%

5.5%

3.9%

3.8%

0.6%

2.5%

5.1%

10.9%

Bank

#10

Bank

#11

C&I Loan Growth since 4Q09

We have made great strides in improving deposit mix

and cost and funding costs

Deposit Cost

79 bps

Deposit Cost

59 bps

Deposit Cost

53 bps

Q2 2011

Low Cost

Deposits

73%

Time

Deposits

27%

Low Cost

Deposits

76%

Time

Deposits

24%

Low Cost

Deposits

77%

Time

Deposits

Q1 2011

Q2 2010

6 bps Improvement

26 bps Improvement

31 bps Improvement

23%

Total Funding Cost

111 bps

Total Funding Cost

86 bps

Total Funding Cost

80 bps

Net Interest Margin Impacted by Excess Liquidity

and Non-Accrual Loans

Net Income & Net Interest Margin

Impact of Excess Liquidity &

Non-Accruals on NIM

$863

$876

$886

$872

2.87%

2.96%

3.00%

3.07%

3.05%

$500

$550

$600

$650

$700

$750

$800

$850

$900

$950

2Q10

3Q10

4Q10

1Q11

2Q11

$ in millions

Net Interest Income (FTE)

Net Interest Margin

2.87%

2.96%

3.00%

3.07%

3.05%

0.15%

0.08%

0.11%

0.10%

0.13%

0.17%

0.16%

0.15%

3.19%

3.20%

3.27%

3.33%

2.0%

2.2%

2.4%

2.6%

2.8%

3.0%

3.2%

3.4%

2Q10

3Q10

4Q10

1Q11

2Q11

Reported Net Interest Margin

Impact of Excess Liquidity

Impact of Non-Accruals

2.0%

2.2%

2.4%

2.6%

2.8%

3.0%

3.2%

3.4%

Regions is the only bank in our peer group to

grow service charges year-over-year

Offsetting Durbin

•

Increasing hurdle on

obtaining free checking

•

Debit card usage fee to

begin in 4Q11

•

Shift debit cards to credit

cards increase

interchange fees

•

Cross-sell new products

and services in

development

2.0%

-1.9%

-7.2%

-11.6%

-13.8%

15.4%

-18.2%

-18.6%

-21.9%

-24.2%

-37.3%

Bank

#10

Bank

#11

Year-Over-Year Growth

Expense control continues to be a focus

•

While many peers grew

expenses in the second

quarter, Regions

decreased expenses by

•

Over the last year

Regions’

expenses have

remained flat while

peers continue to grow

expenses

•

Expenses per FTE are

among the lowest of all

peers

Source: SNL Financial –excludes nonrecurring expenses

-6.6%

3.9%

3.0%

2.7%

2.5%

0.8%

1.3%

1.4%

4.8%

5.3%

9.0%

Bank

#10

Bank

#11

Linked quarter Decline

$35.2

$39.6

$41.1

$43.9

$44.1

$44.2

$44.3

$45.0

$45.3

$52.6

$61.8

Bank

#10

Bank

#11

NIE per FTE

* Refer to appendix for reconciliation to GAAP

Solid Adjusted Pre-tax Pre-Provision

Income Growth

($ in millions)

Net

Interest

Income

Core Non-

Interest

Revenue

Core Non-

Interest

Expense

Adjusted

Pre-tax

Pre-

provision

Income*

2Q11

864

757

1,121

500

1Q11

863

764

1,167

460

4Q10

877

795

1,211

461

3Q10

868

748

1,162

454

Adjusted

Pre-tax Pre-

provision

Income

+9%

3 Consecutive Quarters of Profitability and Adjusted Pre-tax Pre-

provision Income Exceeded Loan Loss Provision for first time

since 1Q09

*Pre-tax pre-provision income adjusted for non-core items as reported in financial supplement.

Pre-tax Pre-Provision Income* Less Provision

$1,179

$770

$651

$760

$682

$482

$398

$386

$397

$486

$454

$461

$460

$500

4Q09

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

Loan Loss Provision

Pre

tax Pre-Provision Income*

$200

$400

$600

$800

$1,000

$1,200

$1,400

($793)

($373)

($165)

($306)

($221)

($22)

$102

4Q09

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

Significant Reduction in Highest Risk Portfolio

Segments

Reduced Investor Real Estate $12.4 B

48%

over 4 years

Reduced High Risk Segments $11.1 B

82%

over 4 years

Total Investor Real Estate

Higher Risk Investor Real Estate Segments

$6.3

$2.3

$5.0

$1.2

$0.3

$1.0

Land

Condo

Single Family

4Q06

2Q11

$ 25.8 B

$ 13.4 B

$10

$15

$20

$25

$30

4Q06

2Q11

Mortgage

Construction

Non-Performing Loan Inflows Declined 24%

Ending Balances

NPL Inflows by Type

Gross NPLs Current and Paying as Agreed

$0.8

$1.3

$0.9

$0.7

$0.6

$0.0

$0.2

$0.4

$0.6

$0.8

$1.0

$1.2

$1.4

$1.6

$1.8

2Q10

3Q10

4Q10

1Q11

2Q11

Land/Condo/Single Family

Income Producing

Business and Community

Commercial

$ in billions

24%

36%

37%

42%

2Q10

3Q10

4Q10

1Q11

2Q11

38%

Non-Performing Assets Declined 14%*

* 2Q11 shown on a pro-forma basis to include bulk sale completed after quarter-end

Non-performing loans, excluding loans

held for sale, declined $303 million or

10%

$620 million of criticized loans were

sold

or moved to held for sale

Non-performing assets declined $556

million or 14%*

Delinquencies improved for the 5th

straight quarter

Business Services criticized loans

declined approximately $1.2 billion or

14%

Non-Performing Assets

$3.5

$3.4

$3.2

$3.1

$2.8

$0.5

$0.4

$0.3

$0.4

$0.2

$4.3

$4.2

$3.9

$3.4

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

$4.0

$4.5

$5.0

2Q10

3Q10

4Q10

1Q11

2Q11*

NPL

OREO & Repo

Held For Sale

$ in billions

Substantial Improvement in Loan Loss Provision;

Coverage Ratio Remains Strong

(1) Loan charge-offs related to Sales and Transfer to Held for Sale

(2) Excludes Non-performing Loans Held for Sale

Sales/

HFS

(1)

Allowance

Coverage

(2)

Loan Charge-Offs

4.04%

3.99%

3.81%

3.79%

3.43%

0.92x

0.94x

1.01x

1.03x

1.12x

0.80x

0.86x

0.92x

0.98x

1.04x

1.10x

1.16x

3.00%

3.10%

3.20%

3.30%

3.40%

3.50%

3.60%

3.70%

3.80%

3.90%

4.00%

4.10%

4.20%

4.30%

4.40%

4.50%

4.60%

2Q10

3Q10

4Q10

1Q11

2Q11

NPL / Loans

Coverage Ratio (ALL/NPL)

333

348

402

210

190

132

233

111

106

207

186

178

169

165

151

(150)

$651

$760

$682

$482

$398

($200)

$200

$400

$600

$800

$1,000

2Q10

3Q10

4Q10

1Q11

2Q11

$ in millions

Business Services and HFS

Consumer

Reserve Increase / Reduction

Strong Capital

** Non-GAAP -

Subject to change as interpretation of Basel III rules is ongoing and dependent on guidance from

Basel and regulators; see appendix for reconciliation

Loans / Deposits

Regions is well positioned for loan growth

Liquidity coverage ratio above the minimum requirement of 100%

Core Deposits as a % of Total Funding

Solid Liquidity

88%

87%

86%

85%

84%

80%

77%

53%

Bank

#10

Bank

#11

89.3%

88.9%

87.6%

84.4%

84.3%

2Q10

3Q10

4Q10

1Q11

2Q11

Regions’

Business Plan

is for all associates to

Focus on customers, build

relationships customers value

and manage risks.

Executing this

plan with excellence will result in a

high-performing financial institution.

Focus on the Customer

Build Sustainable Performance

Enhance Risk Management

Risk management will be built on our solid

foundation of trust and integrity. We will

clearly understand the risk we take, be paid

appropriately for that risk and prudently

manage our capital and liquidity.

Business Plan

We will ensure sustainable

profitability by diversifying

and expanding our revenue

streams while exercising

disciplined pricing and

expense management.

We will focus on our

customers to build

relationships they value and

enhance our industry-

leading customer service.

Why Regions?

•

Strong Southeastern franchise with comprehensive line

of product offerings

•

Leading brand favorability and exceptional service

quality

•

Solid core business performance

•

Aggressively identifying and disposing of problem assets

•

Capital and liquidity remain solid

Appendix

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, 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. Proposed rules,

including those that are part of the Basel III process, could require banking institutions to increase levels of capital. 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 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 would 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 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, wind, tornadoes and hurricanes, and the effects of man-made disasters.

›

Possible downgrades in ratings issued by 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, 2010 and quarterly reports on Form 10-Q for the quarters ended June 30, 2011 and March 31, 2011, 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

the

date

made.

assume

obligation

update

revise

any

forward-looking

statements

that

are

made

from

time

time.

Non-GAAP Reconciliation

($ in millions)

2Q10

3Q10

4Q10

1Q11

2Q11

Net interest income (GAAP)

856

868

877

863

864

Non-interest income (GAAP)

756

750

1,213

843

781

Adjustments:

Securities (gains) losses, net

(2)

(333)

(82)

(24)

Leveraged lease termination gains

(59)

Loss (gain) on sale of mortgage loans

(26)

Adjusted non-interest income (non-GAAP)

756

748

795

764

757

Adjusted total revenue (non-GAAP)

1,612

1,616

1,672

1,627

1,621

Non-interest expense (GAAP)

1,326

1,163

1,266

1,167

1,198

Adjustments:

Regulatory charge

(200)

Loss on extinguishment of debt

(55)

Securities impairment, net

(1)

Branch consolidation and property and equipment charges

(77)

Adjusted non-interest expense (non-GAAP)

1,126

1,162

1,211

1,167

1,121

Adjusted pre-tax pre-provision income

486

454

461

460

500

Improving Early Stage Credit Metrics…

*Includes classified loans and special mention loans

Business Services Criticized Loans *

Business Services Classified Loans

90+Day Delinquencies

30-59 Day Delinquencies

$612

$593

$585

$527

$483

$5,824

$6,687

$7,337

$7,929

$8,196

$7,899

$780

$766

$642

$676

$566

2Q10

3Q10

4Q10

1Q11

2Q11

2Q10

3Q10

4Q10

1Q11

2Q11

2Q10

3Q10

4Q10

1Q11

2Q11

2Q10

3Q10

4Q10

1Q11

2Q11

$9,142

$9,804

$10,593

$11,337

…Result In Improving Asset Quality

Total NPLs (excluding HFS)

Total NPAs (including HFS)

NPLs Gross Migration

Investor Real Estate Gross NPA Migration

* 2Q11 shown on a pro-forma basis to include bulk sale completed after quarter-end

$799

$1,340

$947

$730

$555

2Q10

3Q10

4Q10

1Q11

2Q11

2Q10

3Q10

4Q10

1Q11

2Q11

2Q10

3Q10

4Q10

1Q11

2Q11

2Q10

3Q10

4Q10

1Q11

2Q11*

$3,473

$3,372

$3,160

$3,087

$2,784

$504

$266

$238

$996

$480

$516

$270

$335

$605

$224

$179

$403

Land/Single

Family/Condo

Income

Producing CRE

$134

$137

$271

$3,377

$3,933

$3,918

$4,275

$4,226

Credit Fundamentals Strengthening

* 2Q11 shown on a pro-forma basis to include bulk sale completed after quarter-end

2.99%

3.52%

3.22%

2.37%

2.71%

2Q10

3Q10

4Q10

1Q11

2Q11

NCO’s Avg Loans

NPAs + 90 day Delinquencies

NPL Balances Paying Current as Agreed

NPAs + 90 Day Delinquencies/Loans + OREO

+ HFS

$4,887

$4,819

$4,503

$4,460

$3,860

2Q10

3Q10

4Q10

1Q11

2Q11*

5.63%

5.65%

5.38%

5.42%

4.72%

2Q10

3Q10

4Q10

1Q11

2Q11*

24%

36%

37%

38%

42%

2Q10

3Q10

4Q10

1Q11

2Q11

Allowance Coverage Increasing

92%

94%

101%

103%

112%

2Q10

3Q10

4Q10

1Q11

2Q11

Allowance for Loan Losses to NPLs (excl HS)

Allowance for Loan Losses to Total Loans

3.71%

3.77%

3.84%

3.92%

3.84%

2Q10

3Q10

4Q10

1Q11

2Q11

Conservative Marks and Reserves

Already Taken on Impaired Loans

Note1: Impaired loans include non-accrual commercial and investor real estate loans, excluding leasing, and all TDRs (including accruing commercial, investor

real estate, and consumer TDRs)

Note 2: Book value represents the unpaid principal balance less charge-offs and payments applied; it is shown before any allowance for loan losses.

Note 3: Unpaid principal balance represents the contractual obligation due from the customer and includes the net book value plus charge-offs and payments

applied.

Impaired Loans as of June 30, 2011

C = (A -

E = (B + D) / A

($ in millions)

Unpaid

Principal

Balance

Charge-offs

and Payments

Applied

Total

Impaired

Loan Book

Value

Allowance for

Loan Losses

Coverage %

Commercial and industrial

585

499

183

46.0%

Commercial

real

estate

mortgage

owner

occupied

841

121

720

194

37.5%

Commercial

real

estate

construction

owner

occupied

54.5%

Total commercial

1,470

222

1,248

386

41.4%

Commercial investor real estate mortgage

1,280

221

1,059

237

35.8%

Commercial investor real estate construction

531

126

405

105

43.5%

Total investor real estate

1,811

347

1,464

342

38.0%

Residential first mortgage

1,146

1,083

153

18.8%

Home equity

426

412

15.7%

Indirect

0.0%

Other consumer

1.6%

Total consumer

1,635

1,558

207

17.4%

Total impaired loans

4,916

646

4,270

935

32.2%

Adequately Reserved for Troubled Debt

Restructurings

June 30, 2011

Consumer loans make up 81% of accruing troubled debt restructurings

Foreclosure rate less than half of the industry average

Note: We expect TDRs to increase as a result of recent accounting literature that will be

effective 3Q11. There will be no material impact to our loan loss allowance resulting from this

rule change.

($ millions)

Loan

Allowance for

Allowance as a %

Balance

Credit Losses

of Loan Balance

Accruing:

Commercial

13%

Investor Real Estate

273

Residential First Mortgage

876

123

14%

Home Equity

383

13%

Other Consumer

Total Accruing

1,664

196

12%

Non-accrual or 90+ DPD:

Commercial

164

26%

Investor Real Estate

200

20%

Residential First Mortgage

207

14%

Home Equity

13%

Other Consumer

Total Non-accrual or 90+DPD

600

117

19%

Total Troubled Debt Restructurings

2,264

313

14%

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