Regions Bank 2011 Annual Report Download - page 4

REGIONS 2011 ANNUAL REPORT2
Global deleveraging is also impacting the recov-
ery – driven by the intense debate about how
to cut the federal defi cit and the sovereign debt
crisis in Europe. Both issues have created a per-
vasive lack of confi dence that has resulted in in-
vestors taking fewer risks, causing a major stock
market sell-off and widening credit spreads.
Consumers are also taking fewer risks as they
continue to save more and spend less. To sum
up how much has changed in the U.S. econ-
omy, 6.3% of our GDP came from residential
construction in the fourth quarter of 2005, while
only 2.2% came from this component in 2011.
Regional Economic Strengths. Despite the
overall environment, the regional economic
outlook for our 16-state franchise gives us rea-
son
to be cautiously optimistic. Our footprint
in
cludes some of the most attractive markets
in the Southeast, and while these markets still
face the same prolonged challenges of high
unemployment and housing devaluations, we
believe long-term prospects are very good.
Population growth throughout our footprint
– a
primary driver of sustainable economic growth
–
is projected to be 4.2% between now and 2015,
approximately 10% greater than the national
projection. We believe this anticipated longer-
term growth in our footprint will provide a tail-
wind as we expand the number of customers
we serve in our existing markets, which in turn
can ultimately increase profi tability for Regions.
One example of the type of opportunity we see is
in Nashville, one of the largest healthcare cen-
ters in America and home to Regions’ Health-
care Specialty Banking Group. While the bulk
of the healthcare business is in our Nashville
market, there is tremendous opportunity with
this growing segment throughout most of our
Southeastern footprint. In the last two years
alone, we have closed over $1 billion in new
loan commitments and have grown outstand-
ing loan balances to more than $750 million.
Overall, spending on healthcare is anticipated to
grow by 5.8% per year between 2010 and 2020
as baby boomers start to retire.
Another example is in Mississippi, where high-
tech manufacturing and ship building industries
added 4,000 new jobs last year. Throughout our
Southwest region, which includes Texas, Arkan-
sas, Mississippi and Louisiana, there are about
30 million acres of agricultural opportunities.
Regions currently banks 5% of that acreage, and
we see tremendous potential to carefully expand
those relationships due to our long history and
expertise in the agricultural market. Commodi-
ties are produced throughout the Southwest,
which gives Regions a prudent way to benefi t
from the global demand for commodities.