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YoY and card penetration reaching 20%. Importantly, management is utilizing online lenders like GreenSky, a nationwide point-of-sale home improvement business, to drive growth as balances having increased to $660mn (1% of loans) from its 2014 inception. Of note, management expects challenged growth in auto, though its exclusive lending to the prime space limits the credit downside. Chart 38: How do you view the impact of new online lending startups on the banking industry? 60% 54% 50% 40% 30% 20% 10% 0% A revenue growth opportunity Potential disruptors that will Online lending start ups don’t as banks partner with these likely take market share away _ offer anything proprietary new players from traditional lenders Source: BofA Merrill Lynch Global Research = Possible tailwind from regulation: Management at Regions noted that while it is still uncertain how the regulatory landscape will evolve, a more favorable environment could allow Regions to free up investments tied to regulatory initiatives and risk management. Management would likely direct these funds to product development and customer initiatives. " Asset sensitive, particularly to the long end: Regions’ executives noted its highly asset sensitive balance sheet given the more favorable rate back drop since 3Q. According to management, a 100bp parallel shift in the yield curve produces ~$175mn in incremental spread revenue (11% of ’17e operating income) with two- thirds of the impact coming from the middle to long end of the curve. Part of the benefit of a rate rise is derived from lower premium amortization on its investment portfolio from higher rates. Given the steepening of the yield curve, we expect Regions to benefit more than peers. = Branch network continuing to evolve: Management intends to increase the productivity of its branches through several measures. Firstly, it is designing smaller, more visible locations to drive traffic. Management is also implementing the universal banker model, which has already resulted in 500 fewer tellers, in order to increase revenues at branches. Management noted that it expects to consolidate at the higher end of its expected 100-150 branch reductions, having already identified 90 branches for closure. Signature Bank (SBNY), B-1-9, Buy Focused on $4-6bn asset growth target: President & CEO Joe DePaolo & EVP Eric Howell sounded fairly optimistic about the outlook for balance sheet growth with $4bn in loan growth and $4.6bn in deposit growth YTD as of 9/30 vs. management target for $4-6bn in annual asset growth. Management reiterated that the fundamentals of the multifamily business (which is focused on the low-to-moderate Bankof America 2 2016 Future of Financials Conference | 17 November 2016 25 Merrill Lynch HOUSE_OVERSIGHT_014339