EX-99.2 3 rf-2014331xexhibit992.htm EXHIBIT SUPPLEMENT RF-2014.3.31-Exhibit 99.2
Exhibit 99.2

Regions Financial Corporation and Subsidiaries
Financial Supplement
First Quarter 2014


Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2014 Earnings Release


Table of Contents
 
 
 
 
 
  
Page
 
 
Consolidated Balance Sheets
  
 
 
Consolidated Statements of Income
  
 
 
Selected Ratios and Other Information
  
 
 
Consolidated Average Daily Balances and Yield / Rate Analysis from Continuing Operations
  
 
 
Loans
  
 
 
Deposits
  
 
 
Pre-Tax Pre-Provision Income (“PPI”) and Adjusted PPI
  
 
 
Non-Interest Income, Mortgage Income and Wealth Management Income
  
 
 
Non-Interest Expense
  
 
 
Credit Quality
  
 
Allowance for Credit Losses, Net Charge-Offs and Related Ratios
  
Non-Accrual Loans (excludes loans held for sale), Criticized and Classified Loans - Commercial and Investor Real Estate, and Home Equity Lines of Credit - Future Maturities
  
Early and Late Stage Delinquencies
  
Troubled Debt Restructurings
  
 
 
Reconciliation to GAAP Financial Measures
  
 
Adjusted Efficiency Ratios, Adjusted Fee Income Ratios, and Adjusted Non-Interest Income / Expense
  
Return Ratios, Tangible Common Ratios and Capital
  
 
 
Statements of Discontinued Operations
  
 
 
Forward-Looking Statements
  


Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2014 Earnings Release

Consolidated Balance Sheets (unaudited)
 
As of
($ amounts in millions)
3/31/2014
 
12/31/2013
 
9/30/2013
 
6/30/2013
 
3/31/2013
Assets:
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
2,072

 
$
1,661

 
$
2,032

 
$
2,112

 
$
1,796

Interest-bearing deposits in other banks
3,114

 
3,612

 
1,827

 
2,168

 
3,137

Federal funds sold and securities purchased under agreements to resell
10

 
—

 
—

 
—

 
—

Trading account securities
117

 
111

 
119

 
102

 
121

Securities held to maturity
2,317

 
2,353

 
2,388

 
2,425

 
8

Securities available for sale
21,615

 
21,485

 
21,630

 
22,001

 
27,089

Loans held for sale
395

 
1,055

 
673

 
839

 
1,082

Loans, net of unearned income
75,680

 
74,609

 
75,892

 
74,990

 
73,936

Allowance for loan losses
(1,261
)
 
(1,341
)
 
(1,540
)
 
(1,636
)
 
(1,749
)
Net loans
74,419

 
73,268

 
74,352

 
73,354

 
72,187

Other interest-earning assets
86

 
86

 
105

 
135

 
102

Premises and equipment, net
2,194

 
2,216

 
2,218

 
2,228

 
2,252

Interest receivable
316

 
313

 
331

 
326

 
366

Goodwill
4,816

 
4,816

 
4,816

 
4,816

 
4,816

Mortgage servicing rights at fair value (MSRs)
288

 
297

 
281

 
276

 
236

Other identifiable intangible assets
294

 
295

 
307

 
318

 
331

Other assets
5,880

 
5,828

 
5,785

 
7,607

 
6,195

Total assets
$
117,933

 
$
117,396

 
$
116,864

 
$
118,707

 
$
119,718

Liabilities and stockholders’ equity:
 
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
 
Non-interest-bearing
$
31,154

 
$
30,083

 
$
30,308

 
$
29,464

 
$
29,971

Interest-bearing
62,239

 
62,370

 
62,013

 
62,990

 
64,162

Total deposits
93,393

 
92,453

 
92,321

 
92,454

 
94,133

Borrowed funds:
 
 
 
 
 
 
 
 
 
Short-term borrowings:
 
 
 
 
 
 
 
 
 
Federal funds purchased and securities sold under agreements to repurchase
1,981

 
2,182

 
1,773

 
2,877

 
1,829

Other short-term borrowings
—

 
—

 
—

 
1,000

 
1

Total short-term borrowings
1,981

 
2,182

 
1,773

 
3,877

 
1,830

Long-term borrowings
4,226

 
4,830

 
4,838

 
4,856

 
5,847

Total borrowed funds
6,207

 
7,012

 
6,611

 
8,733

 
7,677

Other liabilities
2,201

 
2,163

 
2,443

 
2,191

 
2,168

Total liabilities
101,801

 
101,628

 
101,375

 
103,378

 
103,978

Stockholders’ equity:
 
 
 
 
 
 
 
 
 
Preferred stock, Series A non-cumulative perpetual
442

 
450

 
458

 
466

 
474

Common stock
14

 
14

 
14

 
14

 
15

Additional paid-in capital
19,179

 
19,216

 
19,248

 
19,440

 
19,643

Retained earnings (deficit)
(1,897
)
 
(2,216
)
 
(2,443
)
 
(2,736
)
 
(3,003
)
Treasury stock, at cost
(1,377
)
 
(1,377
)
 
(1,377
)
 
(1,377
)
 
(1,377
)
Accumulated other comprehensive income (loss), net
(229
)
 
(319
)
 
(411
)
 
(478
)
 
(12
)
Total stockholders’ equity
16,132

 
15,768

 
15,489

 
15,329

 
15,740

Total liabilities and stockholders’ equity
$
117,933

 
$
117,396

 
$
116,864

 
$
118,707

 
$
119,718



1

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2014 Earnings Release

Consolidated Statements of Income (unaudited)
 
Quarter Ended
($ amounts in millions, except per share data)
3/31/2014
 
12/31/2013
 
9/30/2013
 
6/30/2013
 
3/31/2013
Interest income on:
 
 
 
 
 
 
 
 
 
Loans, including fees
$
732

 
$
758

 
$
758

 
$
746

 
$
743

Securities—taxable
154

 
151

 
144

 
152

 
156

Loans held for sale
8

 
6

 
6

 
8

 
9

Trading account securities
2

 
1

 
1

 
—

 
1

Other interest-earning assets
2

 
1

 
2

 
1

 
2

Total interest income
898

 
917

 
911

 
907

 
911

Interest expense on:
 
 
 
 
 
 
 
 
 
Deposits
27

 
29

 
31

 
33

 
42

Short-term borrowings
—

 
—

 
1

 
1

 
—

Long-term borrowings
55

 
56

 
55

 
65

 
71

Total interest expense
82

 
85

 
87

 
99

 
113

Net interest income
816

 
832

 
824

 
808

 
798

Provision for loan losses
2

 
79

 
18

 
31

 
10

Net interest income after provision for loan losses
814

 
753

 
806

 
777

 
788

Non-interest income:
 
 
 
 
 
 
 
 
 
Service charges on deposit accounts(1)
173

 
185

 
190

 
175

 
184

Card and ATM fees(1)
79

 
80

 
82

 
81

 
76

Mortgage income
40

 
43

 
52

 
69

 
72

Securities gains, net
2

 
—

 
3

 
8

 
15

Other
144

 
218

 
168

 
164

 
154

Total non-interest income
438

 
526

 
495

 
497

 
501

Non-interest expense:
 
 
 
 
 
 
 
 
 
Salaries and employee benefits
455

 
464

 
455

 
452

 
447

Net occupancy expense
93

 
91

 
92

 
92

 
90

Furniture and equipment expense
70

 
71

 
71

 
69

 
69

Other
199

 
320

 
266

 
271

 
236

Total non-interest expense
817

 
946

 
884

 
884

 
842

Income from continuing operations before income taxes
435

 
333

 
417

 
390

 
447

Income tax expense
128

 
92

 
124

 
122

 
114

Income from continuing operations
307

 
241

 
293

 
268

 
333

Discontinued operations:
 
 
 
 
 
 
 
 
 
Income (loss) from discontinued operations before income taxes
19

 
(25
)
 
(1
)
 
(2
)
 
4

Income tax expense (benefit)
7

 
(11
)
 
(1
)
 
(1
)
 
2

Income (loss) from discontinued operations, net of tax
12

 
(14
)
 
—

 
(1
)
 
2

Net income
$
319

 
$
227

 
$
293

 
$
267

 
$
335

Net income from continuing operations available to common shareholders
$
299

 
$
233

 
$
285

 
$
260

 
$
325

Net income available to common shareholders
$
311

 
$
219

 
$
285

 
$
259

 
$
327

Weighted-average shares outstanding—during quarter:
 
 
 
 
 
 
 
 
 
Basic
1,378

 
1,378

 
1,388

 
1,401

 
1,413

Diluted
1,390

 
1,395

 
1,405

 
1,418

 
1,423

Actual shares outstanding—end of quarter
1,378

 
1,378

 
1,378

 
1,395

 
1,413

Earnings per common share from continuing operations:
 
 
 
 
 
 
 
 
 
Basic
$
0.22

 
$
0.17

 
$
0.21

 
$
0.19

 
$
0.23

Diluted
$
0.21

 
$
0.17

 
$
0.20

 
$
0.18

 
$
0.23

Earnings per common share:
 
 
 
 
 
 
 
 
 
Basic
$
0.23

 
$
0.16

 
$
0.21

 
$
0.18

 
$
0.23

Diluted
$
0.22

 
$
0.16

 
$
0.20

 
$
0.18

 
$
0.23

Cash dividends declared per common share
$
0.03

 
$
0.03

 
$
0.03

 
$
0.03

 
$
0.01

Taxable-equivalent net interest income from continuing operations
$
831

 
$
846

 
$
838

 
$
821

 
$
811

           
(1)
The "card and ATM fees" line item represents the combined amounts of credit card/bank card income and debit card and ATM related revenue. Debit card and ATM related revenue was previously included in the "service charges on deposit accounts" line item. Credit card/bank card income was previously included in the "other" non-interest income line item. All prior periods presented have been reclassified to conform to this presentation.


2

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2014 Earnings Release

Selected Ratios and Other Information
 
As of and for Quarter Ended
 
3/31/2014
 
12/31/2013
 
9/30/2013
 
6/30/2013
 
3/31/2013
Return on average assets from continuing operations*
1.03
%
 
0.79
%
 
0.97
%
 
0.88
%
 
1.11
%
Return on average tangible common stockholders’ equity (non-GAAP)* (1)
11.84
%
 
8.58
%
 
11.41
%
 
10.15
%
 
13.12
%
Adjusted efficiency ratio from continuing operations (non-GAAP) (1)
66.9
%
 
66.3
%
 
67.3
%
 
63.1
%
 
64.9
%
Common book value per share
$
11.38

 
$
11.12

 
$
10.90

 
$
10.65

 
$
10.80

Tangible common book value per share (non-GAAP) (1)
$
7.81

 
$
7.54

 
$
7.32

 
$
7.11

 
$
7.29

Tangible common stockholders’ equity to tangible assets (non-GAAP) (1)
9.53
%
 
9.24
%
 
9.02
%
 
8.72
%
 
8.98
%
Tier 1 common equity risk-based ratio (non-GAAP) (1)(2)
11.4
%
 
11.2
%
 
11.0
%
 
11.1
%
 
11.2
%
Basel III common equity Tier 1 ratio (non-GAAP) (1)(2)
10.8
%
 
10.6
%
 
10.4
%
 
10.3
%
 
9.1
%
Tier 1 Capital (2)
11.9
%
 
11.7
%
 
11.5
%
 
11.6
%
 
12.4
%
Total Risk-Based Capital (2)
14.9
%
 
14.7
%
 
14.5
%
 
14.7
%
 
15.8
%
Leverage (2)
10.2
%
 
10.0
%
 
9.9
%
 
9.7
%
 
10.1
%
Allowance for loan losses as a percentage of loans, net of unearned income
1.67
%
 
1.80
%
 
2.03
%
 
2.18
%
 
2.37
%
Allowance for loan losses to non-performing loans, excluding loans held for sale
1.18x

 
1.24x

 
1.14x

 
1.09x

 
1.10x

Net interest margin (FTE) from continuing operations*
3.26
%
 
3.26
%
 
3.24
%
 
3.16
%
 
3.13
%
Loans, net of unearned income, to total deposits
81.0
%
 
80.7
%
 
82.2
%
 
81.1
%
 
78.5
%
Net charge-offs as a percentage of average loans*
0.44
%
 
1.46
%
 
0.60
%
 
0.77
%
 
0.99
%
Adjusted net charge-offs as a percentage of average loans (non-GAAP)* (1)
0.44
%
 
0.67
%
 
0.60
%
 
0.77
%
 
0.99
%
Non-accrual loans, excluding loans held for sale, as a percentage of loans
1.41
%
 
1.45
%
 
1.78
%
 
2.01
%
 
2.15
%
Non-performing assets (excluding loans 90 days past due) as a percentage of loans, foreclosed properties and non-performing loans held for sale
1.63
%
 
1.74
%
 
2.03
%
 
2.25
%
 
2.41
%
Non-performing assets (including loans 90 days past due) as a percentage of loans, foreclosed properties and non-performing loans held for sale (3)
1.97
%
 
2.08
%
 
2.38
%
 
2.68
%
 
2.88
%
Associate headcount
23,687

 
24,255

 
24,068

 
23,692

 
23,466

Total branch outlets
1,673

 
1,705

 
1,706

 
1,709

 
1,709

ATMs
2,002

 
2,029

 
2,030

 
2,038

 
2,048

             
*Annualized
(1)
See reconciliation of GAAP to non-GAAP Financial Measures on pages 12 and 16-18.
(2)
Current quarter Tier 1 Common, Basel III Common Equity Tier 1, Tier 1 Capital, Total Risk-Based Capital and Leverage ratios are estimated.
(3)
Excludes guaranteed residential first mortgages that are 90+ days past due and still accruing. Refer to the footnotes on page 14 for amounts related to these loans.


3

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2014 Earnings Release

Consolidated Average Daily Balances and Yield/Rate Analysis from Continuing Operations
 
Quarter Ended
 
3/31/2014
 
12/31/2013
($ amounts in millions; yields on taxable-equivalent basis)
Average Balance
 
Income/ Expense
 
Yield/ Rate
 
Average Balance
 
Income/ Expense
 
Yield/ Rate
Assets
 
 
 
 
 
 
 
 
 
 
 
Interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
Federal funds sold and securities purchased under agreements to resell
$
9

 
$
—

 
0.86
%
 
$
—

 
$
—

 
—
%
Trading account securities
111

 
2

 
6.31


110

 
1

 
3.86

Securities:
 
 
 
 
 
 
 
 
 
 
 
Taxable
23,872

 
154

 
2.62

 
23,771

 
151

 
2.52

Tax-exempt
4

 
—

 
—

 
5

 
—

 
—

Loans held for sale
854

 
8

 
3.89

 
625

 
6

 
3.94

Loans, net of unearned income:
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
29,993

 
278

 
3.75

 
29,950

 
287

 
3.81

Commercial real estate mortgage—owner-occupied
9,391

 
111

 
4.81

 
9,613

 
116

 
4.81

Commercial real estate construction—owner-occupied
341

 
3

 
4.00

 
302

 
3

 
3.86

Commercial investor real estate mortgage
5,287

 
45

 
3.42

 
5,405

 
47

 
3.46

Commercial investor real estate construction
1,524

 
12

 
3.28

 
1,426

 
13

 
3.44

Residential first mortgage
12,127

 
122

 
4.07

 
12,752

 
126

 
3.92

Home equity
11,216

 
101

 
3.64

 
11,311

 
102

 
3.59

Indirect
3,189

 
29

 
3.66

 
3,014

 
29

 
3.77

Consumer credit card
926

 
26

 
11.23

 
910

 
28

 
11.83

Other consumer
1,145

 
20

 
7.26

 
1,160

 
21

 
7.21

Total loans, net of unearned income
75,139

 
747

 
4.03

 
75,843

 
772

 
4.04

Other interest-earning assets
3,469

 
2

 
0.25

 
2,579

 
1

 
0.24

Total interest-earning assets
103,458

 
913

 
3.58

 
102,933

 
931

 
3.59

Allowance for loan losses
(1,321
)
 
 
 
 
 
(1,512
)
 
 
 
 
Cash and due from banks
1,817

 
 
 
 
 
1,807

 
 
 
 
Other non-earning assets
13,874

 
 
 
 
 
13,735

 
 
 
 
 
$
117,828

 
 
 
 
 
$
116,963

 
 
 
 
Liabilities and Stockholders’ Equity
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
Savings
$
6,234

 
2

 
0.12

 
$
6,049

 
2

 
0.09

Interest-bearing checking
20,791

 
5

 
0.09

 
19,815

 
4

 
0.09

Money market
26,213

 
8

 
0.13

 
26,081

 
8

 
0.13

Time deposits
9,419

 
12

 
0.53

 
9,888

 
15

 
0.59

Total interest-bearing deposits (1)
62,657

 
27

 
0.17

 
61,833

 
29

 
0.19

Federal funds purchased and securities sold under agreements to repurchase
2,097

 
—

 
0.08

 
2,021

 
—

 
0.07

Other short-term borrowings
—

 
—

 
—

 
159

 
—

 
0.20

Long-term borrowings
4,643

 
55

 
4.78

 
4,840

 
56

 
4.56

Total interest-bearing liabilities
69,397

 
82

 
0.48

 
68,853

 
85

 
0.49

Non-interest-bearing deposits (1)
30,268

 
—

 
—

 
30,218

 
—

 
—

Total funding sources
99,665

 
82

 
0.33

 
99,071

 
85

 
0.34

Net interest spread
 
 
 
 
3.10

 
 
 
 
 
3.10

Other liabilities
2,162

 
 
 
 
 
2,386

 
 
 
 
Stockholders’ equity
16,001

 
 
 
 
 
15,506

 
 
 
 
 
$
117,828

 
 
 
 
 
$
116,963

 
 
 
 
Net interest income/margin FTE basis
 
 
$
831

 
3.26
%
 
 
 
$
846

 
3.26
%
________
(1)
Total deposit costs from continuing operations may be calculated by dividing total interest expense on deposits by the sum of interest-bearing deposits and non-interest bearing deposits. The rates for total deposit costs from continuing operations equal 0.12% and 0.12% for the quarters ended March 31, 2014 and December 31, 2013, respectively.


4

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2014 Earnings Release

Consolidated Average Daily Balances and Yield/Rate Analysis from Continuing Operations
 
Quarter Ended
 
9/30/2013
 
6/30/2013
 
3/31/2013
($ amounts in millions; yields on taxable-equivalent basis)
Average Balance
 
Income/ Expense
 
Yield/ Rate
 
Average Balance
 
Income/Expense
 
Yield/ Rate
 
Average Balance
 
Income/ Expense
 
Yield/ Rate
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Trading account securities
$
107

 
$
1

 
1.52
%
 
$
122


$
—

 
0.48
%
 
$
117

 
$
1

 
3.20
%
Securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
24,074

 
144

 
2.38

 
26,706

 
152

 
2.29

 
26,893

 
156

 
2.35

Tax-exempt
5

 
—

 
—

 
6

 
—

 
—

 
7

 
—

 
—

Loans held for sale
751

 
6

 
3.34

 
880

 
8

 
3.42

 
1,206

 
9

 
3.17

Loans, net of unearned income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
29,319

 
284

 
3.84

 
28,301

 
272

 
3.85

 
27,058

 
260

 
3.90

Commercial real estate mortgage—owner-occupied
9,678

 
116

 
4.77

 
9,808

 
114

 
4.66

 
9,974

 
116

 
4.70

Commercial real estate construction—owner-occupied
368

 
4

 
4.22

 
339

 
5

 
5.27

 
303

 
3

 
4.41

Commercial investor real estate mortgage
5,712

 
51

 
3.53

 
6,124

 
54

 
3.58

 
6,613

 
59

 
3.59

Commercial investor real estate construction
1,251

 
10

 
3.48

 
1,085

 
10

 
3.57

 
951

 
9

 
3.77

Residential first mortgage
12,835

 
128

 
3.95

 
12,823

 
128

 
4.00

 
12,900

 
131

 
4.12

Home equity
11,351

 
103

 
3.58

 
11,475

 
103

 
3.62

 
11,670

 
105

 
3.64

Indirect
2,810

 
28

 
3.88

 
2,606

 
26

 
4.08

 
2,423

 
26

 
4.35

Consumer credit card
878

 
26

 
12.16

 
851

 
27

 
12.33

 
871

 
26

 
12.28

Other consumer
1,157

 
22

 
7.52

 
1,137

 
20

 
7.25

 
1,156

 
21

 
7.28

Total loans, net of unearned income
75,359

 
772

 
4.07

 
74,549

 
759

 
4.09

 
73,919

 
756

 
4.14

Other interest-earning assets
2,447

 
2

 
0.25

 
1,869

 
1

 
0.24

 
2,821

 
2

 
0.26

Total interest-earning assets
102,743

 
925

 
3.57

 
104,132

 
920

 
3.55

 
104,963

 
924

 
3.57

Allowance for loan losses
(1,613
)
 
 
 
 
 
(1,706
)
 
 
 
 
 
(1,894
)
 
 
 
 
Cash and due from banks
1,781

 
 
 
 
 
1,745

 
 
 
 
 
1,766

 
 
 
 
Other non-earning assets
14,006

 
 
 
 
 
14,077

 
 
 
 
 
14,288

 
 
 
 
 
$
116,917

 
 
 
 
 
$
118,248

 
 
 
 
 
$
119,123

 
 
 
 
Liabilities and Stockholders’ Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Savings
$
6,076

 
1

 
0.10

 
$
6,148

 
2

 
0.09

 
$
5,929

 
1

 
0.10

Interest-bearing checking
19,613

 
5

 
0.09

 
19,636

 
4

 
0.10

 
20,440

 
6

 
0.11

Money market
26,250

 
9

 
0.13

 
25,952

 
9

 
0.14

 
25,477

 
9

 
0.14

Time deposits
10,417

 
16

 
0.60

 
11,423

 
18

 
0.66

 
12,904

 
26

 
0.81

Total interest-bearing deposits (1)
62,356

 
31

 
0.19

 
63,159

 
33

 
0.21

 
64,750

 
42

 
0.26

Federal funds purchased and securities sold under agreements to repurchase
1,982

 
1

 
0.07

 
2,287

 
1

 
0.09

 
1,786

 
—

 
0.10

Other short-term borrowings
381

 
—

 
0.20

 
310

 
—

 
0.19

 
25

 
—

 
0.01

Long-term borrowings
4,845

 
55

 
4.57

 
5,298

 
65

 
4.93

 
5,857

 
71

 
4.89

Total interest-bearing liabilities 
69,564

 
87

 
0.49

 
71,054

 
99

 
0.56

 
72,418

 
113

 
0.63

Non-interest-bearing deposits (1)
29,724

 
—

 
—

 
29,454

 
—

 
—

 
29,114

 
—

 
—

Total funding sources
99,288

 
87

 
0.35

 
100,508

 
99

 
0.40

 
101,532

 
113

 
0.45

Net interest spread
 
 
 
 
3.08

 
 
 
 
 
2.99

 
 
 
 
 
2.94

Other liabilities
2,312

 
 
 
 
 
2,097

 
 
 
 
 
2,047

 
 
 
 
Stockholders’ equity
15,317

 
 
 
 
 
15,643

 
 
 
 
 
15,544

 
 
 
 
 
$
116,917

 
 
 
 
 
$
118,248

 
 
 
 
 
$
119,123

 
 
 
 
Net interest income/margin FTE basis
 
 
$
838

 
3.24
%
 
 
 
$
821

 
3.16
%
 
 
 
$
811

 
3.13
%
________
(1)
Total deposit costs from continuing operations may be calculated by dividing total interest expense on deposits by the sum of interest-bearing deposits and non-interest bearing deposits. The rates for total deposit costs from continuing operations equal 0.13%, 0.15%, and 0.18% for the quarters ended September 30, 2013, June 30, 2013, and March 31, 2013, respectively.



5

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2014 Earnings Release

Loans
 
Quarter Ended
 
 
 
 
 
 
 
 
 
 
 
3/31/2014
 
3/31/2014
($ amounts in millions)
3/31/2014
 
12/31/2013
 
9/30/2013
 
6/30/2013
 
3/31/2013
 
vs. 12/31/2013
 
vs. 3/31/2013
Commercial and industrial
$
30,466

 
$
29,413

 
$
29,863

 
$
28,954

 
$
27,602

 
$
1,053

 
3.6
 %
 
$
2,864

 
10.4
 %
Commercial real estate mortgage—owner-occupied
9,257

 
9,495

 
9,566

 
9,731

 
9,812

 
(238
)
 
(2.5
)%
 
(555
)
 
(5.7
)%
Commercial real estate construction—owner-occupied
375

 
310

 
377

 
345

 
325

 
65

 
21.0
 %
 
50

 
15.4
 %
Total commercial
40,098

 
39,218

 
39,806

 
39,030

 
37,739

 
880

 
2.2
 %
 
2,359

 
6.3
 %
Commercial investor real estate mortgage
5,338

 
5,318

 
5,613

 
5,806

 
6,338

 
20

 
0.4
 %
 
(1,000
)
 
(15.8
)%
Commercial investor real estate construction
1,654

 
1,432

 
1,317

 
1,208

 
984

 
222

 
15.5
 %
 
670

 
68.1
 %
Total investor real estate
6,992

 
6,750

 
6,930

 
7,014

 
7,322

 
242

 
3.6
 %
 
(330
)
 
(4.5
)%
Residential first mortgage (1)
12,136

 
12,163

 
12,856

 
12,839

 
12,875

 
(27
)
 
(0.2
)%
 
(739
)
 
(5.7
)%
Home equity—first lien
6,008

 
5,998

 
5,894

 
5,726

 
5,625

 
10

 
0.2
 %
 
383

 
6.8
 %
Home equity—second lien
5,140

 
5,296

 
5,455

 
5,684

 
5,921

 
(156
)
 
(2.9
)%
 
(781
)
 
(13.2
)%
Indirect
3,253

 
3,075

 
2,889

 
2,693

 
2,483

 
178

 
5.8
 %
 
770

 
31.0
 %
Consumer credit card
917

 
948

 
896

 
866

 
851

 
(31
)
 
(3.3
)%
 
66

 
7.8
 %
Other consumer
1,136

 
1,161

 
1,166

 
1,138

 
1,120

 
(25
)
 
(2.2
)%
 
16

 
1.4
 %
Total consumer
28,590

 
28,641

 
29,156

 
28,946

 
28,875

 
(51
)
 
(0.2
)%
 
(285
)
 
(1.0
)%
Total Loans
$
75,680

 
$
74,609

 
$
75,892

 
$
74,990

 
$
73,936

 
$
1,071

 
1.4
 %
 
$
1,744

 
2.4
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average Balances
($ amounts in millions)
1Q14
 
4Q13
 
3Q13
 
2Q13
 
1Q13
 
1Q14 vs. 4Q13
 
1Q14 vs. 1Q13
Commercial and industrial
$
29,993

 
$
29,950

 
$
29,319

 
$
28,301

 
$
27,058

 
$
43

 
0.1
 %
 
$
2,935

 
10.8
 %
Commercial real estate mortgage—owner-occupied
9,391

 
9,613

 
9,678

 
9,808

 
9,974

 
(222
)
 
(2.3
)%
 
(583
)
 
(5.8
)%
Commercial real estate construction—owner-occupied
341

 
302

 
368

 
339

 
303

 
39

 
12.9
 %
 
38

 
12.5
 %
Total commercial
39,725

 
39,865

 
39,365

 
38,448

 
37,335

 
(140
)
 
(0.4
)%
 
2,390

 
6.4
 %
Commercial investor real estate mortgage
5,287

 
5,405

 
5,712

 
6,124

 
6,613

 
(118
)
 
(2.2
)%
 
(1,326
)
 
(20.1
)%
Commercial investor real estate construction
1,524

 
1,426

 
1,251

 
1,085

 
951

 
98

 
6.9
 %
 
573

 
60.3
 %
Total investor real estate
6,811

 
6,831

 
6,963

 
7,209

 
7,564

 
(20
)
 
(0.3
)%
 
(753
)
 
(10.0
)%
Residential first mortgage (1)
12,127

 
12,752

 
12,835

 
12,823

 
12,900

 
(625
)
 
(4.9
)%
 
(773
)
 
(6.0
)%
Home equity—first lien
6,014

 
5,963

 
5,825

 
5,697

 
5,642

 
51

 
0.9
 %
 
372

 
6.6
 %
Home equity—second lien
5,202

 
5,348

 
5,526

 
5,778

 
6,028

 
(146
)
 
(2.7
)%
 
(826
)
 
(13.7
)%
Indirect
3,189

 
3,014

 
2,810

 
2,606

 
2,423

 
175

 
5.8
 %
 
766

 
31.6
 %
Consumer credit card
926

 
910

 
878

 
851

 
871

 
16

 
1.8
 %
 
55

 
6.3
 %
Other consumer
1,145

 
1,160

 
1,157

 
1,137

 
1,156

 
(15
)
 
(1.3
)%
 
(11
)
 
(1.0
)%
Total consumer
28,603

 
29,147

 
29,031

 
28,892

 
29,020

 
(544
)
 
(1.9
)%
 
(417
)
 
(1.4
)%
Total Loans
$
75,139

 
$
75,843

 
$
75,359

 
$
74,549

 
$
73,919

 
$
(704
)
 
(0.9
)%
 
$
1,220

 
1.7
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
End of Period Loan Portfolio Balances by Percentage
 
 
 
Quarter Ended
 
 
 
3/31/2014
 
12/31/2013
 
9/30/2013
 
6/30/2013
 
3/31/2013
Commercial and industrial
 
 
 
40.3
%
 
39.4
%
 
39.4
 %
 
38.6
%
 
37.3
 %
Commercial real estate mortgage—owner-occupied
 
 
 
12.2
%
 
12.8
%
 
12.6
 %
 
13.0
%
 
13.3
 %
Commercial real estate construction—owner-occupied
 
 
 
0.5
%
 
0.4
%
 
0.5
 %
 
0.5
%
 
0.4
 %
Total commercial
 
 
 
53.0
%
 
52.6
%
 
52.5
 %
 
52.1
%
 
51.0
 %
Commercial investor real estate mortgage
 
 
 
7.0
%
 
7.1
%
 
7.4
 %
 
7.7
%
 
8.6
 %
Commercial investor real estate construction
 
 
 
2.2
%
 
1.9
%
 
1.7
 %
 
1.6
%
 
1.3
 %
Total investor real estate
 
 
 
9.2
%
 
9.0
%
 
9.1
 %
 
9.3
%
 
9.9
 %
Residential first mortgage
 
 
 
16.0
%
 
16.3
%
 
16.9
 %
 
17.1
%
 
17.4
 %
Home equity—first lien
 
 
 
8.0
%
 
8.0
%
 
7.8
 %
 
7.6
%
 
7.6
 %
Home equity—second lien
 
 
 
6.8
%
 
7.1
%
 
7.2
 %
 
7.6
%
 
8.0
 %
Indirect
 
 
 
4.3
%
 
4.1
%
 
3.8
 %
 
3.6
%
 
3.4
 %
Consumer credit card
 
 
 
1.2
%
 
1.3
%
 
1.2
 %
 
1.2
%
 
1.2
 %
Other consumer
 
 
 
1.5
%
 
1.6
%
 
1.5
 %
 
1.5
%
 
1.5
 %
Total consumer
 
 
 
37.8
%
 
38.4
%
 
38.4
 %
 
38.6
%
 
39.1
 %
Total Loans
 
 
 
100.0
%
 
100.0
%
 
100.0
 %
 
100.0
%
 
100.0
 %
________
NM - Not Meaningful
(1)
Regions transferred approximately $686 million of primarily performing restructured residential first mortgage loans to held for sale at the end of the fourth quarter of 2013. This transaction impacts the third quarter 2013 to fourth quarter 2013 ending balance variance as well as the fourth quarter 2013 to first quarter 2014 average balance variance.

6

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2014 Earnings Release

Deposits
 
Quarter Ended
 
 
 
 
 
 
 
 
 
 
 
3/31/2014
 
3/31/2014
($ amounts in millions)
3/31/2014
 
12/31/2013
 
9/30/2013
 
6/30/2013
 
3/31/2013
 
vs. 12/31/2013
 
vs. 3/31/2013
Customer Deposits
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-free deposits
$
31,154

 
$
30,083

 
$
30,308

 
$
29,464

 
$
29,971

 
$
1,071

 
3.6
 %
 
$
1,183

 
3.9
 %
Interest-bearing checking
20,605

 
20,789

 
19,583

 
19,937

 
20,004

 
(184
)
 
(0.9
)%
 
601

 
3.0
 %
Savings
6,463

 
6,050

 
6,038

 
6,117

 
6,159

 
413

 
6.8
 %
 
304

 
4.9
 %
Money market—domestic
25,730

 
25,635

 
26,085

 
25,946

 
25,411

 
95

 
0.4
 %
 
319

 
1.3
 %
Money market—foreign
222

 
220

 
241

 
193

 
332

 
2

 
0.9
 %
 
(110
)
 
(33.1
)%
Low-cost deposits
84,174

 
82,777

 
82,255

 
81,657

 
81,877

 
1,397

 
1.7
 %
 
2,297

 
2.8
 %
Time deposits
9,219

 
9,608

 
10,066

 
10,797

 
12,256

 
(389
)
 
(4.0
)%
 
(3,037
)
 
(24.8
)%
Total customer deposits
93,393

 
92,385

 
92,321

 
92,454

 
94,133

 
1,008

 
1.1
 %
 
(740
)
 
(0.8
)%
Corporate Treasury Deposits
 
 
 
 
 
 
 
 
 
 

 

 
 
 

Time deposits
—

 
68

 
—

 
—

 
—

 
(68
)
 
(100.0
)%
 
—

 
NM

Total Deposits
$
93,393

 
$
92,453

 
$
92,321

 
$
92,454

 
$
94,133

 
$
940

 
1.0
 %
 
$
(740
)
 
(0.8
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average Balances
($ amounts in millions)
1Q14
 
4Q13
 
3Q13
 
2Q13
 
1Q13
 
1Q14 vs. 4Q13
 
1Q14 vs. 1Q13
Customer Deposits
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-free deposits
$
30,268

 
$
30,218

 
$
29,724

 
$
29,454

 
$
29,114

 
$
50

 
0.2
 %
 
$
1,154

 
4.0
 %
Interest-bearing checking
20,791

 
19,815

 
19,613

 
19,636

 
20,440

 
976

 
4.9
 %
 
351

 
1.7
 %
Savings
6,234

 
6,049

 
6,076

 
6,148

 
5,929

 
185

 
3.1
 %
 
305

 
5.1
 %
Money market—domestic
25,988

 
25,834

 
26,026

 
25,722

 
25,161

 
154

 
0.6
 %
 
827

 
3.3
 %
Money market—foreign
225

 
247

 
224

 
230

 
316

 
(22
)
 
(8.9
)%
 
(91
)
 
(28.8
)%
Low-cost deposits
83,506

 
82,163

 
81,663

 
81,190

 
80,960

 
1,343

 
1.6
 %
 
2,546

 
3.1
 %
Time deposits
9,417

 
9,843

 
10,417

 
11,423

 
12,904

 
(426
)
 
(4.3
)%
 
(3,487
)
 
(27.0
)%
Total customer deposits
92,923

 
92,006

 
92,080

 
92,613

 
93,864

 
917

 
1.0
 %
 
(941
)
 
(1.0
)%
Corporate Treasury Deposits
 
 
 
 
 
 
 
 
 
 

 

 
 
 

Time deposits
2

 
45

 
—

 
—

 
—

 
(43
)
 
(95.6
)%
 
2

 
NM

Total Deposits
$
92,925

 
$
92,051

 
$
92,080

 
$
92,613

 
$
93,864

 
$
874

 
0.9
 %
 
$
(939
)
 
(1.0
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
End of Period Deposits by Percentage
 
 
 
3/31/2014
 
12/31/2013
 
9/30/2013
 
6/30/2013
 
3/31/2013
Customer Deposits
 
 
 
 
 
 
 
 
 
 
 
 
Interest-free deposits
 
 
 
33.4
%
 
32.5
%
 
32.8
 %
 
31.9
%
 
31.8
 %
Interest-bearing checking
 
 
 
22.1
%
 
22.5
%
 
21.2
 %
 
21.6
%
 
21.3
 %
Savings
 
 
 
6.9
%
 
6.6
%
 
6.5
 %
 
6.6
%
 
6.5
 %
Money market—domestic
 
 
 
27.5
%
 
27.7
%
 
28.3
 %
 
28.1
%
 
27.0
 %
Money market—foreign
 
 
 
0.2
%
 
0.2
%
 
0.3
 %
 
0.2
%
 
0.4
 %
Low-cost deposits
 
 
 
90.1
%
 
89.5
%
 
89.1
 %
 
88.4
%
 
87.0
 %
Time deposits
 
 
 
9.9
%
 
10.4
%
 
10.9
 %
 
11.6
%
 
13.0
 %
Total customer deposits
 
 
 
100.0
%
 
99.9
%
 
100.0
 %
 
100.0
%
 
100.0
 %
Corporate Treasury Deposits
 
 
 
 
 
 
 
 
 
 
 
 
Time deposits
 
 
 
—
%
 
0.1
%
 
—
 %
 
—
%
 
—
 %
Total Deposits
 
 
 
100.0
%
 
100.0
%
 
100.0
 %
 
100.0
%
 
100.0
 %
________
NM - Not Meaningful


7

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2014 Earnings Release

Pre-Tax Pre-Provision Income ("PPI") and Adjusted PPI (non-GAAP)
The Pre-Tax Pre-Provision Income table below presents computations of pre-tax pre-provision income from continuing operations excluding certain adjustments (non-GAAP). Regions believes that the presentation of PPI and the exclusion of certain items to PPI provides a meaningful base for period-to-period comparisons, which management believes will assist investors in analyzing the operating results of the Company and predicting future performance. These non-GAAP financial measures are also used by management to assess the performance of Regions’ business. It is possible that the activities related to the adjustments may recur; however, management does not consider the activities related to the adjustments to be indications of ongoing operations. Regions believes that presentation of these non-GAAP financial measures will permit investors to assess the performance of the Company on the same basis as that applied by management. Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied and are not audited. Although these non-GAAP financial measures are frequently used by stakeholders in the evaluation of a company, they have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analyses of results as reported under GAAP. In particular, a measure of income that excludes certain adjustments does not represent the amount that effectively accrues directly to stockholders.
 
 
Quarter Ended
($ amounts in millions)
3/31/2014

 
12/31/2013
 
9/30/2013
 
6/30/2013
 
3/31/2013
 
1Q14 vs. 4Q13
 
1Q14 vs. 1Q13
Net income from continuing operations available to common shareholders (GAAP)
$
299

 
$
233

 
$
285

 
$
260

 
$
325

 
$
66

 
28.3
 %
 
$
(26
)
 
(8.0
)%
Preferred dividends (GAAP)
8

 
8

 
8

 
8

 
8

 
—

 
NM

 
—

 
NM

Income tax expense (GAAP)
128

 
92

 
124

 
122

 
114

 
36

 
39.1
 %
 
14

 
12.3
 %
Income from continuing operations before income taxes (GAAP)
435

 
333

 
417

 
390

 
447

 
102

 
30.6
 %
 
(12
)
 
(2.7
)%
Provision for loan losses (GAAP)
2

 
79

 
18

 
31

 
10

 
(77
)
 
(97.5
)%
 
(8
)
 
(80.0
)%
Pre-tax pre-provision income from continuing operations (non-GAAP)
437

 
412

 
435

 
421

 
457

 
25

 
6.1
 %
 
(20
)
 
(4.4
)%
Other adjustments:
 
 
 
 
 
 
 
 
 
 


 

 

 


Securities gains, net
(2
)
 
—

 
(3
)
 
(8
)
 
(15
)
 
(2
)
 
NM

 
13

 
(86.7
)%
Gain on sale of other assets(1)
—

 
—

 
(24
)
 
—

 
—

 
—

 
NM

 
—

 
NM

Leveraged lease termination gains, net(2)
(1
)
 
(39
)
 
—

 
—

 
—

 
38

 
(97.4
)%
 
(1
)
 
NM

Gain on sale of TDRs held for sale, net
(35
)
 
—

 
—

 
—

 
—

 
(35
)
 
NM

 
(35
)
 
NM

Loss on early extinguishment of debt
—

 
—

 
5

 
56

 
—

 
—

 
NM

 
—

 
NM

Branch consolidation and property and equipment charges
6

 
5

 
—

 
—

 
—

 
1

 
20.0
 %
 
6

 
NM

Regulatory charge
—

 
58

 
—

 
—

 
—

 
(58
)
 
(100.0
)%
 
—

 
NM

Total other adjustments
(32
)
 
24

 
(22
)
 
48

 
(15
)
 
(56
)
 
(233.3
)%
 
(17
)
 
113.3
 %
Adjusted pre-tax pre-provision income from continuing operations (non-GAAP)
$
405

 
$
436

 
$
413

 
$
469

 
$
442

 
$
(31
)
 
(7.1
)%
 
$
(37
)
 
(8.4
)%
 
NM - Not Meaningful
(1)
Gain on sale of a non-core portion of a Wealth Management business.
(2)
After-tax amount for leveraged lease termination gains was $6 million for the fourth quarter of 2013.



8

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2014 Earnings Release

Non-Interest Income
 
Quarter Ended
($ amounts in millions)
3/31/2014
 
12/31/2013
 
9/30/2013
 
6/30/2013
 
3/31/2013
 
1Q14 vs. 4Q13
 
1Q14 vs. 1Q13
Service charges on deposit accounts (1)
$
173

 
$
185

 
$
190

 
$
175

 
$
184

 
$
(12
)
 
(6.5
)%
 
$
(11
)
 
(6.0
)%
Card and ATM fees (1)
79

 
80

 
82

 
81

 
76

 
(1
)
 
(1.3
)%
 
3

 
3.9
 %
Mortgage income
40

 
43

 
52

 
69

 
72

 
(3
)
 
(7.0
)%
 
(32
)
 
(44.4
)%
Investment management and trust fee income
49

 
48

 
50

 
49

 
49

 
1

 
2.1
 %
 
—

 
NM

Insurance commissions and fees
30

 
28

 
27

 
29

 
30

 
2

 
7.1
 %
 
—

 
NM

Capital markets fee income and other
13

 
29

 
18

 
20

 
20

 
(16
)
 
(55.2
)%
 
(7
)
 
(35.0
)%
Bank-owned life insurance
19

 
20

 
18

 
22

 
22

 
(1
)
 
(5.0
)%
 
(3
)
 
(13.6
)%
Commercial credit fee income
15

 
16

 
16

 
17

 
16

 
(1
)
 
(6.3
)%
 
(1
)
 
(6.3
)%
Leveraged lease termination gains, net
1

 
39

 
—

 
—

 
—

 
(38
)
 
(97.4
)%
 
1

 
NM

Investment services fee income
10

 
8

 
10

 
9

 
7

 
2

 
25.0
 %
 
3

 
42.9
 %
Securities gains, net
2

 
—

 
3

 
8

 
15

 
2

 
NM

 
(13
)
 
(86.7
)%
Gain on sale of other assets(2)
—

 
—

 
24

 
—

 
—

 
—

 
NM

 
—

 
NM

Net revenue (loss) from affordable housing
(18
)
 
1

 
(18
)
 
(15
)
 
(17
)
 
(19
)
 
NM

 
(1
)
 
5.9
 %
Other
25

 
29

 
23

 
33

 
27

 
(4
)
 
(13.8
)%
 
(2
)
 
(7.4
)%
Total non-interest income from continuing operations
$
438

 
$
526

 
$
495

 
$
497

 
$
501

 
$
(88
)
 
(16.7
)%
 
$
(63
)
 
(12.6
)%
Mortgage Income 
 
Quarter Ended
($ amounts in millions)
3/31/2014
 
12/31/2013
 
9/30/2013
 
6/30/2013
 
3/31/2013
 
1Q14 vs. 4Q13
 
1Q14 vs. 1Q13
Production and sales
$
24

 
$
25

 
$
37

 
$
54

 
$
59

 
$
(1
)
 
(4.0
)%
 
$
(35
)
 
(59.3
)%
Loan servicing
21

 
22

 
22

 
23

 
19

 
(1
)
 
(4.5
)%
 
2

 
10.5
 %
MSR hedge ineffectiveness:


 
 
 
 
 
 
 
 
 
 
 


 
 
 


MSRs fair value increase (decrease) (3)
(17
)
 
5

 
(8
)
 
24

 
1

 
(22
)
 
(440.0
)%
 
(18
)
 
NM

MSRs hedge gain (loss)
12

 
(9
)
 
1

 
(32
)
 
(7
)
 
21

 
(233.3
)%
 
19

 
(271.4
)%
MSR hedge ineffectiveness
(5
)
 
(4
)
 
(7
)
 
(8
)
 
(6
)
 
(1
)
 
25.0
 %
 
1

 
(16.7
)%
Total mortgage income
$
40

 
$
43

 
$
52

 
$
69

 
$
72

 
$
(3
)
 
(7.0
)%
 
$
(32
)
 
(44.4
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage production - purchased
$
662

 
$
802

 
$
968

 
$
1,009

 
$
637

 
$
(140
)
 
(17.5
)%
 
$
25

 
3.9
 %
Mortgage production - refinanced
304

 
436

 
638

 
912

 
1,182

 
(132
)
 
(30.3
)%
 
(878
)
 
(74.3
)%
Total mortgage production(4)
$
966

 
$
1,238

 
$
1,606

 
$
1,921

 
$
1,819

 
$
(272
)
 
(22.0
)%
 
$
(853
)
 
(46.9
)%
 
Wealth Management Income
 
Quarter Ended
($ amounts in millions)
3/31/2014
 
12/31/2013
 
9/30/2013
 
6/30/2013
 
3/31/2013
 
1Q14 vs. 4Q13
 
1Q14 vs. 1Q13
Investment services fee income
$
10

 
$
8

 
$
10

 
$
9

 
$
7

 
$
2

 
25.0
%
 
$
3

 
42.9
%
Investment management and trust fee income
49

 
48

 
50

 
49

 
49

 
1

 
2.1
%
 
—

 
NM

Insurance commissions and fees
30

 
28

 
27

 
29

 
30

 
2

 
7.1
%
 
—

 
NM

Gain on sale of other assets(2)
—

 
—

 
24

 
—

 
—

 
—

 
NM

 
—

 
NM

Total wealth management income (5)
$
89

 
$
84

 
$
111

 
$
87

 
$
86

 
$
5

 
6.0
%
 
$
3

 
3.5
%
_________
NM - Not Meaningful
(1)
"Card and ATM fees" line item represents the combined amounts of credit card/bank card income and debit card and ATM related revenue. Credit card/bank card income was previously reported as a separate line item. Debit card and ATM related revenue was previously included in "service charges on deposit accounts" line item. All prior periods presented have been reclassified to conform to this presentation.
(2)
Gain on sale of a non-core portion of a Wealth Management business.
(3)
Fair value adjustment includes payment decay and assumptions change impact.
(4)
Represents total mortgage production during the period, including amounts sold into the secondary market as well as amounts retained in Regions' residential first mortgage loan portfolio.
(5)
Total Wealth Management income presented above does not include the portion of service charges on deposit accounts and similar smaller dollar amounts that are also attributable to the Wealth Management segment.

Selected Non-Interest Income Variance Analysis
•
Capital markets fee income and other declined $16 million, or 55%, in the first quarter of 2014 compared to the fourth quarter of 2013. The decrease is primarily attributable to a slowdown in sales activity for syndications and customer derivatives which were seasonally high in the fourth quarter of 2013.
•
During the fourth quarter of 2013, the termination of certain leveraged leases resulted in a $39 million gain, which was largely offset by a related $33 million increase in tax expense. The resulting benefit to net income was $6 million.
•
In the fourth quarter of 2013, net revenue related to investments in affordable housing benefitted primarily from the sale of multiple investments resulting in a $17 million gain, net of impairment costs.


9

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2014 Earnings Release

 Non-Interest Expense
 
Quarter Ended
($ amounts in millions)
3/31/2014
 
12/31/2013
 
9/30/2013
 
6/30/2013
 
3/31/2013
 
1Q14 vs. 4Q13
 
1Q14 vs. 1Q13
Salaries and employee benefits
$
455

 
$
464

 
$
455

 
$
452

 
$
447

 
$
(9
)
 
(1.9
)%

$
8

 
1.8
 %
Net occupancy expense
93

 
91

 
92

 
92

 
90

 
2

 
2.2
 %
 
3

 
3.3
 %
Furniture and equipment expense
70

 
71

 
71

 
69

 
69

 
(1
)
 
(1.4
)%
 
1

 
1.4
 %
Professional and legal expenses
35

 
46

 
34

 
21

 
31

 
(11
)
 
(23.9
)%
 
4

 
12.9
 %
Deposit administrative fee
22

 
20

 
35

 
37

 
33

 
2

 
10.0
 %
 
(11
)
 
(33.3
)%
Outside services
27

 
31

 
27

 
26

 
22

 
(4
)
 
(12.9
)%
 
5

 
22.7
 %
Marketing
24

 
25

 
26

 
24

 
23

 
(1
)
 
(4.0
)%
 
1

 
4.3
 %
Loss on early extinguishment of debt
—

 
—

 
5

 
56

 
—

 
—

 
NM

 
—

 
NM

Regulatory charge
—

 
58

 
—

 
—

 
—

 
(58
)
 
(100.0
)%
 
—

 
NM

Branch consolidation and property and equipment charges
6

 
5

 
—

 
—

 
—

 
1

 
20.0
 %
 
6

 
NM

Provision (credit) for unfunded credit losses
—

 
4

 
1

 
(15
)
 
5

 
(4
)
 
(100.0
)%
 
(5
)
 
(100.0
)%
Gain on sale of TDRs held for sale, net
(35
)
 
—

 
—

 
—

 
—

 
(35
)
 
NM

 
(35
)
 
NM

Other
120

 
131

 
138

 
122

 
122

 
(11
)
 
(8.4
)%
 
(2
)
 
(1.6
)%
Total non-interest expense from continuing operations
$
817

 
$
946

 
$
884

 
$
884

 
$
842

 
$
(129
)
 
(13.6
)%
 
$
(25
)
 
(3.0
)%
_________
NM - Not Meaningful

Selected Non-Interest Expense Variance Analysis
•
Professional and legal expenses declined by $11 million or 24% quarter over quarter. In the fourth quarter of 2013, professional and legal expenses were higher primarily due to increased legal matters and related fees, as well as increased consulting charges attributable to regulatory and compliance projects.
•
In the fourth quarter of 2013, Regions recorded a non-tax deductible regulatory charge of $58 million related to previously disclosed inquiries from government authorities concerning matters from 2009. Regions is in discussions with banking supervisors to resolve their inquiries on these matters.
•
In the fourth quarter of 2013, Regions announced the consolidation of 30 branches, and recorded $5 million and $6 million in related consolidation expenses in the fourth quarter of 2013 and the first quarter of 2014, respectively.
•
In the fourth quarter of 2013, Regions transferred certain primarily accruing residential first mortgage loans classified as TDRs to loans held for sale. During the first quarter of 2014, the sale was finalized and the net transaction costs incurred were $35 million lower than initially expected.

10

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2014 Earnings Release

Credit Quality
 
As of and for Quarter Ended
($ amounts in millions)
3/31/2014
 
12/31/2013
 
9/30/2013
 
6/30/2013
 
3/31/2013
Components:
 
 
 
 
 
 
 
 
 
Allowance for loan losses (ALL)
$
1,261

 
$
1,341

 
$
1,540

 
$
1,636

 
$
1,749

Reserve for unfunded credit commitments
78

 
78

 
74

 
73

 
88

Allowance for credit losses (ACL)
$
1,339

 
$
1,419

 
$
1,614

 
$
1,709

 
$
1,837

 
 
 
 
 
 
 
 
 
 
Provision for loan losses
$
2

 
$
79

 
$
18

 
$
31

 
$
10

Provision (credit) for unfunded credit losses
—

 
4

 
1

 
(15
)
 
5

 
 
 
 
 
 
 
 
 
 
Net loans charged-off:
 
 
 
 
 
 
 
 
 
Commercial and industrial
10

 
36

 
17

 
30

 
58

Commercial real estate mortgage—owner-occupied
13

 
27

 
20

 
28

 
25

Commercial real estate construction—owner-occupied
1

 
(1
)
 
—

 
—

 
(1
)
Total commercial
24

 
62

 
37

 
58

 
82

Commercial investor real estate mortgage
1

 
(2
)
 
6

 
16

 
14

Commercial investor real estate construction
—

 
(1
)
 
(1
)
 
(2
)
 
—

Total investor real estate
1

 
(3
)
 
5

 
14

 
14

Residential first mortgage (3)
9

 
164

 
13

 
18

 
22

Home equity—first lien
7

 
8

 
10

 
7

 
10

Home equity—second lien
14

 
18

 
22

 
22

 
27

Indirect
7

 
6

 
5

 
4

 
6

Consumer credit card
8

 
8

 
6

 
11

 
9

Other consumer
12

 
15

 
16

 
10

 
10

Total consumer (3)
57

 
219

 
72

 
72

 
84

Total (3)
$
82

 
$
278

 
$
114

 
$
144

 
$
180

Net loan charge-offs as a % of average loans, annualized:
 
 
 
 
 
 
 
 
 
Commercial and industrial
0.14
 %
 
0.48
 %
 
0.22
 %
 
0.43
 %
 
0.87
 %
Commercial real estate mortgage—owner-occupied
0.58
 %
 
1.13
 %
 
0.81
 %
 
1.17
 %
 
1.01
 %
Commercial real estate construction—owner-occupied
0.47
 %
 
(0.10
)%
 
(0.03
)%
 
(0.83
)%
 
(1.31
)%
Total commercial
0.25
 %
 
0.63
 %
 
0.37
 %
 
0.61
 %
 
0.89
 %
Commercial investor real estate mortgage
0.10
 %
 
(0.13
)%
 
0.39
 %
 
1.02
 %
 
0.88
 %
Commercial investor real estate construction
(0.13
)%
 
(0.44
)%
 
(0.18
)%
 
(0.54
)%
 
0.01
 %
Total investor real estate
0.05
 %
 
(0.20
)%
 
0.28
 %
 
0.79
 %
 
0.77
 %
Residential first mortgage (3)
0.32
 %
 
5.10
 %
 
0.41
 %
 
0.56
 %
 
0.68
 %
Home equity—first lien
0.44
 %
 
0.51
 %
 
0.66
 %
 
0.47
 %
 
0.72
 %
Home equity—second lien
1.13
 %
 
1.35
 %
 
1.56
 %
 
1.53
 %
 
1.82
 %
Indirect
0.85
 %
 
0.78
 %
 
0.76
 %
 
0.56
 %
 
1.03
 %
Consumer credit card
3.63
 %
 
3.65
 %
 
3.06
 %
 
4.95
 %
 
4.20
 %
Other consumer
4.14
 %
 
5.04
 %
 
5.24
 %
 
3.66
 %
 
3.44
 %
Total consumer (3)
0.81
 %
 
2.98
 %
 
0.99
 %
 
0.99
 %
 
1.17
 %
Total (3)
0.44
 %
 
1.46
 %
 
0.60
 %
 
0.77
 %
 
0.99
 %
Non-accrual loans, excluding loans held for sale
$
1,070

 
$
1,082

 
$
1,354

 
$
1,506

 
$
1,586

Non-performing loans held for sale
40

 
82

 
43

 
53

 
66

Non-accrual loans, including loans held for sale
1,110

 
1,164

 
1,397

 
1,559

 
1,652

Foreclosed properties
129

 
136

 
147

 
136

 
136

Non-performing assets (NPAs)
$
1,239

 
$
1,300

 
$
1,544

 
$
1,695

 
$
1,788

Loans past due > 90 days (1)
$
257

 
$
256

 
$
270

 
$
319

 
$
344

Accruing restructured loans not included in categories above (2)
$
1,578

 
$
1,676

 
$
2,529

 
$
2,591

 
$
2,717

Accruing restructured loans held for sale not included in categories above (2)
$
11

 
$
545

 
$
19

 
$
19

 
$
—

Credit Ratios:
 
 
 
 
 
 
 
 
 
ACL/Loans, net
1.77
 %
 
1.90
 %
 
2.13
 %
 
2.28
 %
 
2.48
 %
ALL/Loans, net
1.67
 %
 
1.80
 %
 
2.03
 %
 
2.18
 %
 
2.37
 %
Allowance for loan losses to non-performing loans, excluding loans held for sale
1.18x

 
1.24x

 
1.14x

 
1.09x

 
1.10x

Non-accrual loans, excluding loans held for sale/Loans, net
1.41
 %
 
1.45
 %
 
1.78
 %
 
2.01
 %
 
2.15
 %
NPAs (ex. 90+ past due)/Loans, foreclosed properties and non-performing loans held for sale
1.63
 %
 
1.74
 %
 
2.03
 %
 
2.25
 %
 
2.41
 %
NPAs (inc. 90+ past due)/Loans, foreclosed properties and non-performing loans held for sale (1)
1.97
 %
 
2.08
 %
 
2.38
 %
 
2.68
 %
 
2.88
 %
           
(1)
Excludes guaranteed residential first mortgages that are 90+ days past due and still accruing. Refer to the footnotes on page 14 for amounts related to these loans.
(2)
See page 15 for detail of restructured loans.
(3)
Includes $151 million in residential first mortgage net charge-offs on loans transferred to loans held for sale during the fourth quarter of 2013. Excluding these net charge-offs, the adjusted net charge-off percentage for residential first mortgages for the fourth quarter of 2013 would have been 0.41% (non-GAAP). Excluding these net charge-offs, the adjusted net charge-off percentage for total consumer loans for the fourth quarter of 2013 would have been 0.93% (non-GAAP). The adjusted net charge-off percentage for all loans would have been 0.67% (non-GAAP). See page 12 for a reconciliation of these GAAP to non-GAAP net charge-off ratios.

11

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2014 Earnings Release

Credit Quality (Continued)
 
 
 
 
Adjusted Net Charge-Offs Ratio (non-GAAP)

Select calculations for annualized net charge-offs as a percentage of average loans are presented in the table below. During the fourth quarter of 2013, Regions made the strategic decision to transfer certain primarily accruing restructured residential first mortgage loans to loans held for sale. These loans were marked down to fair value through net charge-offs upon transfer to held for sale. Management believes that excluding the incremental increase to net charge-offs from the affected net charge-off ratios will assist investors in analyzing the Company's credit quality performance as well as provide a better basis from which to predict future performance. Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied and are not audited. Although these non-GAAP financial measures are frequently used by stakeholders in the evaluation of a company, they have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analyses of results as reported under GAAP.
 
 
As of and for Quarter Ended
($ amounts in millions)
 
3/31/2014
 
12/31/2013
 
9/30/2013
 
6/30/2013
 
3/31/2013
Residential first mortgage net charge-offs (GAAP)
A
$
9

 
$
164

 
$
13

 
$
18

 
$
22

Less: Net charge-offs associated with transfer to loans held for sale
 
—

 
151

 
—

 
—

 
—

Adjusted residential first mortgage net charge-offs (non-GAAP)
B
$
9

 
$
13

 
$
13

 
$
18

 
$
22

Total consumer net charge-offs (GAAP)
C
$
57

 
$
219

 
$
72

 
$
72

 
$
84

Less: Net charge-offs associated with transfer to loans held for sale
 
—

 
151

 
—

 
—

 
—

Adjusted total consumer net charge-offs (non-GAAP)
D
$
57


$
68


$
72


$
72


$
84

Total net charge-offs (GAAP)
E
$
82

 
$
278

 
$
114

 
$
144

 
$
180

Less: Net charge-offs associated with transfer to loans held for sale
 
—

 
151

 
—

 
—

 
—

Adjusted net charge-offs (non-GAAP)
F
$
82

 
$
127

 
$
114

 
$
144

 
$
180

Average residential first mortgage loans (GAAP)
G
$
12,127

 
$
12,752

 
$
12,835

 
$
12,823

 
$
12,900

Add: Average balances of residential first mortgage loans transferred to loans held for sale
 
—

 
74

 
—

 
—

 
—

Adjusted average residential first mortgage loans (non-GAAP)
H
$
12,127

 
$
12,826

 
$
12,835

 
$
12,823

 
$
12,900

Average total consumer loans (GAAP)
I
$
28,603

 
$
29,147

 
$
29,031

 
$
28,892

 
$
29,020

Add: Average balances of residential first mortgage loans transferred to loans held for sale
 
—

 
74

 
—

 
—

 
—

Adjusted average total consumer loans (non-GAAP)
J
$
28,603

 
$
29,221

 
$
29,031

 
$
28,892

 
$
29,020

Total average loans (GAAP)
K
$
75,139

 
$
75,843

 
$
75,359

 
$
74,549

 
$
73,919

Add: Average balances of residential first mortgage loans transferred to loans held for sale
 
—

 
74

 
—

 
—

 
—

Adjusted total average loans (non-GAAP)
L
$
75,139

 
$
75,917

 
$
75,359

 
$
74,549

 
$
73,919

Residential first mortgage net charge-off percentage (GAAP)*
A/G
0.32
%
 
5.10
%
 
0.41
%
 
0.56
%
 
0.68
%
Adjusted residential first mortgage net charge-off percentage (non-GAAP)*
B/H
0.32
%
 
0.41
%
 
0.41
%
 
0.56
%
 
0.68
%
Total consumer net charge-off percentage (GAAP)*
C/I
0.81
%
 
2.98
%
 
0.99
%
 
0.99
%
 
1.17
%
Adjusted total consumer net charge-off percentage (non-GAAP)*
D/J
0.81
%
 
0.93
%
 
0.99
%
 
0.99
%
 
1.17
%
Total net charge-off percentage (GAAP)*
E/K
0.44
%
 
1.46
%
 
0.60
%
 
0.77
%
 
0.99
%
Adjusted total net charge-off percentage (non-GAAP)*
F/L
0.44
%
 
0.67
%
 
0.60
%
 
0.77
%
 
0.99
%
________
* Annualized



12

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2014 Earnings Release

 Non-Accrual Loans (excludes loans held for sale)
 
Quarter Ended
($ amounts in millions)
3/31/2014
 
12/31/2013
 
9/30/2013
 
6/30/2013
 
3/31/2013
Commercial and industrial
$
280

 
0.92
%
 
$
257

 
0.87
%
 
$
383

 
1.28
%
 
$
408

 
1.41
%
 
$
355

 
1.29
%
Commercial real estate mortgage—owner-occupied
307

 
3.31
%
 
303

 
3.19
%
 
364

 
3.81
%
 
398

 
4.08
%
 
420

 
4.28
%
Commercial real estate construction—owner-occupied
16

 
4.31
%
 
17

 
5.33
%
 
12

 
3.25
%
 
15

 
4.38
%
 
12

 
3.70
%
Total Commercial
603

 
1.50
%
 
577

 
1.47
%
 
759

 
1.91
%
 
821

 
2.10
%
 
787

 
2.08
%
Commercial investor real estate mortgage
209

 
3.91
%
 
238

 
4.47
%
 
276

 
4.92
%
 
352

 
6.07
%
 
451

 
7.12
%
Commercial investor real estate construction
8

 
0.51
%
 
10

 
0.70
%
 
31

 
2.34
%
 
16

 
1.30
%
 
13

 
1.32
%
Total Investor Real Estate
217

 
3.11
%
 
248

 
3.67
%
 
307

 
4.43
%
 
368

 
5.25
%
 
464

 
6.34
%
Residential first mortgage
136

 
1.12
%
 
146

 
1.21
%
 
167

 
1.30
%
 
186

 
1.44
%
 
201

 
1.56
%
Home equity
114

 
1.02
%
 
111

 
0.98
%
 
121

 
1.06
%
 
130

 
1.14
%
 
133

 
1.15
%
Direct
—

 
—
%
 
—

 
—
%
 
—

 
—
%
 
—

 
0.06
%
 
—

 
0.06
%
Indirect
—

 
—
%
 
—

 
—
%
 
—

 
—
%
 
1

 
0.03
%
 
1

 
0.03
%
Consumer credit card
—

 
—
%
 
—

 
—
%
 
—

 
—
%
 
—

 
—
%
 
—

 
—
%
Other consumer
—

 
—
%
 
—

 
—
%
 
—

 
—
%
 
—

 
—
%
 
—

 
—
%
Total Consumer
250

 
0.87
%
 
257

 
0.90
%
 
288

 
0.99
%
 
317

 
1.09
%
 
335

 
1.16
%
Total Non-Accrual Loans
$
1,070

 
1.41
%
 
$
1,082

 
1.45
%
 
$
1,354

 
1.78
%
 
$
1,506

 
2.01
%
 
$
1,586

 
2.15
%

Criticized and Classified Loans—Commercial and Investor Real Estate
 
Quarter Ended
 
 
 
 
 
 
 
 
 
 
 
3/31/2014
 
3/31/2014
($ amounts in millions)
3/31/2014
 
12/31/2013
 
9/30/2013
 
6/30/2013
 
3/31/2013
 
vs. 12/31/2013
 
vs. 3/31/2013
Special Mention
$
1,067

 
$
927

 
$
1,035

 
$
1,142

 
$
1,136

 
$
140

 
15.1
 %
 
$
(69
)
 
(6.1
)%
Accruing Classified Loans
1,094

 
1,263

 
1,411

 
1,587

 
1,713

 
(169
)
 
(13.4
)%
 
(619
)
 
(36.1
)%
Non-Accruing Classified Loans
820

 
825

 
1,066

 
1,189

 
1,251

 
(5
)
 
(0.6
)%
 
(431
)
 
(34.5
)%
Total
$
2,981

 
$
3,015

 
$
3,512

 
$
3,918

 
$
4,100

 
$
(34
)
 
(1.1
)%
 
$
(1,119
)
 
(27.3
)%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Home Equity Lines of Credit - Future Maturities(1) 
 
As of 3/31/2014
($ amounts in millions)
First Lien
 
% of Total
 
Second Lien
 
% of Total
 
Total
2014
$
21

 
0.24
%
 
$
164

 
1.82
%
 
$
185

2015
24

 
0.27
%
 
178

 
1.97
%
 
202

2016
31

 
0.34
%
 
41

 
0.46
%
 
72

2017
6

 
0.07
%
 
12

 
0.13
%
 
18

2018
19

 
0.21
%
 
27

 
0.30
%
 
46

2019-2023
1,283

 
14.23
%
 
1,125

 
12.49
%
 
2,408

2024-2028
2,772

 
30.77
%
 
3,175

 
35.24
%
 
5,947

Thereafter
74

 
0.82
%
 
58

 
0.64
%
 
132

Total
$
4,230

 
46.95
%
 
$
4,780

 
53.05
%
 
$
9,010

                 
(1)
The balance of Regions' home equity portfolio was $11,148 million at March 31, 2014 consisting of $9,010 million of home equity lines of credit and $2,138 million of closed-end home equity loans. The closed-end loans were primarily originated as amortizing loans, and were therefore excluded from the table above.


13

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2014 Earnings Release

Early and Late Stage Delinquencies

Accruing 30-89 Days Past Due Loans
Quarter Ended
($ amounts in millions)
3/31/2014
 
12/31/2013
 
9/30/2013
 
6/30/2013
 
3/31/2013
Commercial and industrial
$
27

 
0.09
%
 
$
43

 
0.15
%
 
$
31

 
0.10
%
 
$
36

 
0.12
%
 
$
54

 
0.20
%
Commercial real estate mortgage—owner-occupied
37

 
0.39
%
 
56

 
0.59
%
 
56

 
0.59
%
 
52

 
0.54
%
 
49

 
0.50
%
Commercial real estate construction—owner-occupied
—

 
0.10
%
 
—

 
0.06
%
 
1

 
0.21
%
 
1

 
0.25
%
 
2

 
0.62
%
Total Commercial
64

 
0.16
%
 
99

 
0.25
%
 
88

 
0.22
%
 
89

 
0.23
%
 
105

 
0.28
%
Commercial investor real estate mortgage
75

 
1.41
%
 
35

 
0.66
%
 
118

 
2.11
%
 
60

 
1.04
%
 
72

 
1.13
%
Commercial investor real estate construction
2

 
0.15
%
 
5

 
0.32
%
 
4

 
0.27
%
 
3

 
0.21
%
 
7

 
0.73
%
Total Investor Real Estate
77

 
1.11
%
 
40

 
0.59
%
 
122

 
1.76
%
 
63

 
0.90
%
 
79

 
1.08
%
Residential first mortgage—non-guaranteed (1)
146

 
1.24
%
 
187

 
1.58
%
 
176

 
1.41
%
 
183

 
1.47
%
 
207

 
1.65
%
Home equity
123

 
1.10
%
 
146

 
1.30
%
 
131

 
1.15
%
 
133

 
1.16
%
 
127

 
1.10
%
Direct
8

 
0.95
%
 
9

 
1.09
%
 
8

 
1.03
%
 
9

 
1.16
%
 
9

 
1.12
%
Indirect
42

 
1.28
%
 
50

 
1.62
%
 
39

 
1.35
%
 
38

 
1.39
%
 
31

 
1.26
%
Consumer credit card
11

 
1.26
%
 
13

 
1.38
%
 
12

 
1.37
%
 
10

 
1.18
%
 
9

 
1.11
%
Other consumer
8

 
2.41
%
 
10

 
2.89
%
 
12

 
3.38
%
 
12

 
3.53
%
 
9

 
2.59
%
Total Consumer (1)
338

 
1.20
%
 
415

 
1.47
%
 
378

 
1.31
%
 
385

 
1.35
%
 
392

 
1.37
%
Total Accruing 30-89 Days Past Due Loans (1)
$
479

 
0.64
%
 
$
554

 
0.75
%
 
$
588

 
0.78
%
 
$
537

 
0.72
%
 
$
576

 
0.78
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accruing 90+ Days Past Due Loans
Quarter Ended
($ amounts in millions)
3/31/2014
 
12/31/2013
 
9/30/2013
 
6/30/2013
 
3/31/2013
Commercial and industrial
$
7

 
0.02
%
 
$
6

 
0.02
%
 
$
6

 
0.02
%
 
$
8

 
0.03
%
 
$
8

 
0.03
%
Commercial real estate mortgage—owner-occupied
3

 
0.04
%
 
6

 
0.06
%
 
7

 
0.07
%
 
16

 
0.16
%
 
9

 
0.09
%
Commercial real estate construction—owner-occupied
—

 
—
%
 
—

 
—
%
 
—

 
0.12
%
 
—

 
—
%
 
—

 
0.02
%
Total Commercial
10

 
0.03
%
 
12

 
0.03
%
 
13

 
0.03
%
 
24

 
0.06
%
 
17

 
0.05
%
Commercial investor real estate mortgage
2

 
0.04
%
 
6

 
0.10
%
 
15

 
0.27
%
 
24

 
0.41
%
 
25

 
0.39
%
Commercial investor real estate construction
—

 
—
%
 
—

 
—
%
 
1

 
0.07
%
 
—

 
0.03
%
 
—

 
0.02
%
Total Investor Real Estate
2

 
0.03
%
 
6

 
0.08
%
 
16

 
0.23
%
 
24

 
0.34
%
 
25

 
0.34
%
Residential first mortgage—non-guaranteed (2)
154

 
1.31
%
 
142

 
1.21
%
 
149

 
1.19
%
 
178

 
1.42
%
 
203

 
1.62
%
Home equity
71

 
0.63
%
 
75

 
0.66
%
 
72

 
0.64
%
 
75

 
0.66
%
 
79

 
0.68
%
Direct
1

 
0.12
%
 
1

 
0.14
%
 
2

 
0.16
%
 
1

 
0.15
%
 
1

 
0.15
%
Indirect
5

 
0.15
%
 
5

 
0.17
%
 
4

 
0.15
%
 
3

 
0.13
%
 
3

 
0.13
%
Consumer credit card
12

 
1.30
%
 
12

 
1.28
%
 
12

 
1.27
%
 
11

 
1.27
%
 
14

 
1.60
%
Other consumer
2

 
0.62
%
 
3

 
0.64
%
 
2

 
0.47
%
 
3

 
0.63
%
 
2

 
0.73
%
Total Consumer (2)
245

 
0.87
%
 
238

 
0.84
%
 
241

 
0.83
%
 
271

 
0.95
%
 
302

 
1.06
%
Total Accruing 90+ Days Past Due Loans (2)
$
257

 
0.34
%
 
$
256

 
0.34
%
 
$
270

 
0.36
%
 
$
319

 
0.43
%
 
$
344

 
0.47
%
                 
(1)
Excludes loans that are 100% guaranteed by FHA and also those 100% guaranteed by GNMA where Regions has the right but not the obligation to repurchase. Total 30-89 days past due guaranteed loans excluded were $16 million at 3/31/14, $17 million at 12/31/13, $18 million at 9/30/13, $20 million at 6/30/13, and $17 million at 3/31/13.
(2)
Excludes loans that are 100% guaranteed by FHA and also those 100% guaranteed by GNMA where Regions has the right but not the obligation to repurchase. Total 90 days or more past due guaranteed loans excluded were $94 million at 3/31/14, $106 million at 12/31/13, $97 million at 9/30/13, $96 million at 6/30/13, and $98 million at 3/31/13.




14

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2014 Earnings Release

Troubled Debt Restructurings
 
 
Quarter Ended
($ amounts in millions)
3/31/2014
 
12/31/2013
 
9/30/2013
 
6/30/2013
 
3/31/2013
Current:
 
 
 
 
 
 
 
 
 
Commercial
$
408

 
$
441

 
$
428

 
$
426

 
$
486

Investor real estate
441

 
498

 
599

 
721

 
763

Residential first mortgage
240

 
212

 
894

 
898

 
891

Home equity
334

 
332

 
337

 
343

 
354

Consumer credit card
2

 
2

 
2

 
1

 
1

Other consumer
22

 
25

 
28

 
31

 
34

Total Current
1,447

 
1,510

 
2,288

 
2,420

 
2,529

Accruing 30-89 DPD:
 
 
 
 
 
 
 
 
 
Commercial
18

 
27

 
17

 
18

 
25

Investor real estate
18

 
13

 
88

 
26

 
27

Residential first mortgage
70

 
95

 
104

 
91

 
105

Home equity
23

 
29

 
29

 
33

 
28

Other consumer
2

 
2

 
3

 
3

 
3

Total Accruing 30-89 DPD
131

 
166

 
241

 
171

 
188

Total Accruing and <90 DPD
1,578

 
1,676

 
2,529

 
2,591

 
2,717

Non-accrual or 90+ DPD:
 
 
 
 
 
 
 
 
 
Commercial
207

 
156

 
283

 
302

 
289

Investor real estate
145

 
157

 
174

 
208

 
278

Residential first mortgage
147

 
156

 
161

 
177

 
191

Home equity
29

 
30

 
31

 
31

 
34

Total Non-accrual or 90+DPD
528

 
499

 
649

 
718

 
792

Total TDRs - Loans
$
2,106

 
$
2,175

 
$
3,178

 
$
3,309

 
$
3,509

 
 
 
 
 
 
 
 
 
 
TDRs - Held For Sale (1)
38

 
579

 
31

 
39

 
13

Total TDRs
$
2,144

 
$
2,754

 
$
3,209

 
$
3,348

 
$
3,522

           
(1)
The majority of TDRs held for sale at December 31, 2013 were comprised of residential first mortgage loans transfered during the fourth quarter of 2013 and subsequently sold in the first quarter of 2014.




15

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2014 Earnings Release

Reconciliation to GAAP Financial Measures—Continuing Operations
Adjusted Efficiency Ratios and Fee Income Ratios
The table below presents computations of the efficiency ratio (non-GAAP), which is a measure of productivity, generally calculated as non-interest expense divided by total revenue. The table also shows the fee income ratio (non-GAAP), generally calculated as non-interest income divided by total revenue. Management uses these ratios to monitor performance and believes these measures provide meaningful information to investors. Non-interest expense (GAAP) is presented excluding certain adjustments to arrive at adjusted non-interest expense (non-GAAP), which is the numerator for the efficiency ratio. Non-interest income (GAAP) is presented excluding certain adjustments to arrive at adjusted non-interest income (non-GAAP), which is the numerator for the fee income ratio. Net interest income on a taxable-equivalent basis and non-interest income are added together to arrive at total revenue (GAAP). Adjustments are made to arrive at adjusted total revenue (non-GAAP), which is the denominator for the fee income and efficiency ratios. Regions believes that the exclusion of these adjustments provides a meaningful base for period-to-period comparisons, which management believes will assist investors in analyzing the operating results of the Company and predicting future performance. These non-GAAP financial measures are also used by management to assess the performance of Regions’ business. It is possible that the activities related to the adjustments may recur; however, management does not consider the activities related to the adjustments to be indications of ongoing operations. Regions believes that presentation of these non-GAAP financial measures will permit investors to assess the performance of the Company on the same basis as that applied by management.
 
 
Quarter Ended
($ amounts in millions)
 
3/31/2014
 
12/31/2013
 
9/30/2013
 
6/30/2013
 
3/31/2013
 
1Q14
vs. 4Q13
 
1Q14
vs. 1Q13
Non-interest expense (GAAP)
 
$
817

 
$
946

 
$
884

 
$
884

 
$
842

 
$
(129
)
 
(13.6
)%
 
$
(25
)
 
(3.0
)%
Adjustments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss on early extinguishment of debt
 
—

 
—

 
(5
)
 
(56
)
 
—

 
—

 
NM

 
—

 
NM

Regulatory charge
 
—

 
(58
)
 
—

 
—

 
—

 
58

 
(100.0
)%
 
—

 
NM

Branch consolidation and property and equipment charges
 
(6
)
 
(5
)
 
—

 
—

 
—

 
(1
)
 
20.0
 %
 
(6
)
 
NM

Gain on sale of TDRs held for sale, net
 
35

 
—

 
—

 
—

 
—

 
35

 
NM

 
35

 
NM

Adjusted non-interest expense (non-GAAP)
A
$
846

 
$
883

 
$
879

 
$
828

 
$
842

 
$
(37
)
 
(4.2
)%
 
$
4

 
0.5
 %
Net interest income (GAAP)
 
$
816

 
$
832

 
$
824

 
$
808

 
$
798

 
$
(16
)
 
(1.9
)%
 
$
18

 
2.3
 %
Taxable-equivalent adjustment
 
15

 
14

 
14

 
13

 
13

 
1

 
7.1
 %
 
2

 
15.4
 %
Net interest income, taxable-equivalent basis
 
831

 
846

 
838

 
821

 
811

 
(15
)
 
(1.8
)%
 
20

 
2.5
 %
Non-interest income (GAAP)
 
438

 
526

 
495

 
497

 
501

 
(88
)
 
(16.7
)%
 
(63
)
 
(12.6
)%
Adjustments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Leveraged lease termination gains, net
 
(1
)
 
(39
)
 
—

 
—

 
—

 
38

 
(97.4
)%
 
(1
)
 
NM

Securities gains, net
 
(2
)
 
—

 
(3
)
 
(8
)
 
(15
)
 
(2
)
 
NM

 
13

 
(86.7
)%
Gain on sale of other assets(1)
 
—

 
—

 
(24
)
 
—

 
—

 
—

 
NM

 
—

 
NM

Adjusted non-interest income (non-GAAP)
B
435

 
487

 
468

 
489

 
486

 
(52
)
 
(10.7
)%
 
(51
)
 
(10.5
)%
Adjusted total revenue (non-GAAP)
C
$
1,266

 
$
1,333

 
$
1,306

 
$
1,310

 
$
1,297

 
$
(67
)
 
(5.0
)%
 
$
(31
)
 
(2.4
)%
Adjusted efficiency ratio (non-GAAP)
A/C
66.9
%
 
66.3
%
 
67.3
%
 
63.1
%
 
64.9
%
 
 
 
 
 

 
 
Adjusted fee income ratio (non-GAAP)
B/C
34.4
%
 
36.5
%
 
35.9
%
 
37.3
%
 
37.5
%
 
 
 
 
 
 
 
 
_________
NM - Not Meaningful
(1)
Gain on sale of a non-core portion of a Wealth Management business.

 
 
 
 
 
 
 
 
 


16

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2014 Earnings Release

Reconciliation to GAAP Financial Measures
Return Ratios, Tangible Common Ratios, Capital
The following tables provide calculations of “return on average tangible common stockholders’ equity”, end of period “tangible common stockholders’ equity” ratios and a reconciliation of stockholders’ equity (GAAP) to tangible common stockholders’ equity (non-GAAP), Tier 1 capital (regulatory) and “Tier 1 common equity” (non-GAAP). Tangible common stockholders’ equity ratios have become a focus of some investors and management believes they may assist investors in analyzing the capital position of the Company absent the effects of intangible assets and preferred stock. Traditionally, the Federal Reserve and other banking regulatory bodies have assessed a bank’s capital adequacy based on Tier 1 capital, the calculation of which is prescribed in amount by federal banking regulations. In connection with the Company’s Comprehensive Capital Analysis and Review (“CCAR”), these regulators are supplementing their assessment of the capital adequacy of a bank based on a variation of Tier 1 capital, known as Tier 1 common equity. While not prescribed in amount by federal banking regulations (under Basel I), analysts and banking regulators have assessed Regions’ capital adequacy using the tangible common stockholders’ equity and/or the Tier 1 common equity measures. Because tangible common stockholders’ and Tier 1 common equity are not formally defined by GAAP or prescribed in any amount by federal banking regulations (under Basel I), these measures are currently considered to be non-GAAP financial measures and other entities may calculate them differently than Regions’ disclosed calculations. Since analysts and banking regulators may assess Regions’ capital adequacy using tangible common stockholders’ equity and Tier 1 common equity, management believes that it is useful to provide investors the ability to assess Regions’ capital adequacy on these same bases.
Tier 1 common equity is often expressed as a percentage of risk-weighted assets. Under the risk-based capital framework, a company’s balance sheet assets and credit equivalent amounts of off-balance sheet items are assigned to one of four broad risk categories. The aggregated dollar amount in each category is then multiplied by the risk-weighted category. The resulting weighted values from each of the four categories are added together and this sum is the risk-weighted assets total that, as adjusted, comprises the denominator of certain risk-based capital ratios. Tier 1 capital is then divided by this denominator (risk-weighted assets) to determine the Tier 1 capital ratio. Adjustments are made to Tier 1 capital to arrive at Tier 1 common equity (non-GAAP). Tier 1 common equity (non-GAAP) is also divided by the risk-weighted assets to determine the Tier 1 common equity ratio (non-GAAP). The amounts disclosed as risk-weighted assets are calculated consistent with banking regulatory requirements.

The following tables also provide calculations of "Common equity Tier 1" (CET1), based on Regions’ current understanding of the Final Basel III requirements. In December 2010, the Basel Committee on Banking Supervision (the “Basel Committee”) released its final framework for Basel III, which will strengthen international capital and liquidity regulation. In June 2012, U.S. Regulators released three separate Notices of Proposed Rulemaking covering U.S. implementation of the Basel III framework. In July 2013, U.S. Regulators released final rules covering the U.S. implementation of the Basel III framework, which will change capital requirements and place greater emphasis on common equity. For Regions, the Basel III framework will be phased in beginning in 2015 with full implementation complete beginning in 2019. The calculations provided below are estimates, based on Regions’ current understanding of the final framework, including the Company’s interpretation of the requirements, and informal feedback received through the regulatory process. Regions’ understanding of the framework is evolving and will likely change as analysis and discussions with regulators continue. Because the Basel III implementation regulations are not formally defined by GAAP, these measures are considered to be non-GAAP financial measures, and other entities may calculate them differently from Regions’ disclosed calculations. Since analysts and banking regulators may assess Regions’ capital adequacy using the Basel III framework, we believe that it is useful to provide investors the ability to assess Regions’ capital adequacy on the same basis.
 
 
As of and for Quarter Ended
($ amounts in millions, except per share data)
 
3/31/2014
 
12/31/2013
 
9/30/2013
 
6/30/2013
 
3/31/2013
RETURN ON AVERAGE TANGIBLE COMMON STOCKHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
 
Net income available to common shareholders (GAAP)
A
$
311

 
$
219

 
$
285

 
$
259

 
$
327

Average stockholders’ equity (GAAP)
 
$
16,002

 
$
15,504

 
$
15,317

 
$
15,644

 
$
15,552

Less:
 
 
 
 
 
 
 
 
 
 
Average intangible assets (GAAP)
 
5,107

 
5,118

 
5,129

 
5,141

 
5,154

Average deferred tax liability related to intangibles (GAAP)
 
(187
)
 
(189
)
 
(188
)
 
(188
)
 
(190
)
Average preferred equity (GAAP)
 
444

 
452

 
460

 
468

 
476

Average tangible common stockholders’ equity (non-GAAP)
B
$
10,638

 
$
10,123

 
$
9,916

 
$
10,223

 
$
10,112

Return on average tangible common stockholders’ equity (non-GAAP)(1)
A/B
11.84
%
 
8.58
%
 
11.41
%
 
10.15
%
 
13.12
%
TANGIBLE COMMON RATIOS—CONSOLIDATED
 
 
 
 
 
 
 
 
 
 
Stockholders’ equity (GAAP)
 
$
16,132

 
$
15,768

 
$
15,489

 
$
15,329

 
$
15,740

Less:
 
 
 
 
 
 
 
 
 
 
Preferred equity (GAAP)
 
442

 
450

 
458

 
466

 
474

Intangible assets (GAAP)
 
5,110

 
5,111

 
5,123

 
5,134

 
5,147

Deferred tax liability related to intangibles (GAAP)
 
(186
)
 
(188
)
 
(189
)
 
(187
)
 
(189
)
Tangible common stockholders’ equity (non-GAAP)
C
$
10,766

 
$
10,395

 
$
10,097

 
$
9,916

 
$
10,308

Total assets (GAAP)
 
$
117,933

 
$
117,396

 
$
116,864

 
$
118,707

 
$
119,718

Less:
 
 
 
 
 
 
 
 
 
 
Intangible assets (GAAP)
 
5,110

 
5,111

 
5,123

 
5,134

 
5,147

Deferred tax liability related to intangibles (GAAP)
 
(186
)
 
(188
)
 
(189
)
 
(187
)
 
(189
)
Tangible assets (non-GAAP)
D
$
113,009

 
$
112,473

 
$
111,930

 
$
113,760

 
$
114,760

Shares outstanding—end of quarter
E
1,378

 
1,378

 
1,378

 
1,395

 
1,413

Tangible common stockholders’ equity to tangible assets (non-GAAP)
C/D
9.53
%
 
9.24
%
 
9.02
%
 
8.72
%
 
8.98
%
Tangible common book value per share (non-GAAP)
C/E
$
7.81

 
$
7.54

 
$
7.32

 
$
7.11

 
$
7.29











17

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2014 Earnings Release

Return Ratios, Tangible Common Ratios, Capital (Continued)
 
 
As of and for Quarter Ended
($ amounts in millions, except per share data)
 
3/31/2014
 
12/31/2013
 
9/30/2013
 
6/30/2013
 
3/31/2013
TIER 1 COMMON RISK-BASED RATIO(2) —CONSOLIDATED
 
 
 
 
 
 
 
 
 
 
Stockholders’ equity (GAAP)
 
$
16,132

 
$
15,768

 
$
15,489

 
$
15,329

 
$
15,740

Accumulated other comprehensive (income) loss
 
229

 
319

 
411

 
478

 
12

Non-qualifying goodwill and intangibles
 
(4,804
)
 
(4,798
)
 
(4,804
)
 
(4,812
)
 
(4,819
)
Disallowed servicing assets
 
(29
)
 
(31
)
 
(30
)
 
(30
)
 
(37
)
Qualifying non-controlling interests
 
—

 
—

 
—

 
—

 
93

Qualifying trust preferred securities
 
—

 
—

 
—

 
3

 
501

Tier 1 capital (regulatory)
 
$
11,528

 
$
11,258

 
$
11,066

 
$
10,968

 
$
11,490

Qualifying non-controlling interests
 
—

 
—

 
—

 
—

 
(93
)
Qualifying trust preferred securities
 
—

 
—

 
—

 
(3
)
 
(501
)
Preferred stock
 
(442
)
 
(450
)
 
(458
)
 
(466
)
 
(474
)
Tier 1 common equity (non-GAAP)
F
$
11,086

 
$
10,808

 
$
10,608

 
$
10,499

 
$
10,422

Risk-weighted assets (regulatory)
G
97,127

 
96,416

 
96,486

 
94,640

 
92,787

Tier 1 common risk-based ratio (non-GAAP)
F/G
11.4
%
 
11.2
%
 
11.0
%
 
11.1
%
 
11.2
%
BASEL III COMMON EQUITY TIER 1 RATIO (2) (3)
 
 
 
 
 
 
 
 
 
 
Stockholder's equity (GAAP)
 
$
16,132

 
$
15,768

 
$
15,489

 
$
15,329

 
$
15,740

Non-qualifying goodwill and intangibles (4)
 
(4,923
)
 
(4,922
)
 
(4,933
)
 
(4,946
)
 
(4,956
)
Proposed Adjustments
 
 
 
 
 
 
 
 
 
 
Adjustments, including other comprehensive income related to cash flow hedges, disallowed deferred tax assets, threshold deductions and other adjustments
 
—

 
—

 
—

 
—

 
(301
)
Final Rules Adjustments
 


 
 
 
 
 
 
 
 
Adjustments, including all components of accumulated other comprehensive income, disallowed deferred tax assets, threshold deductions and other adjustments
 
61

 
130

 
244

 
291

 
—

Preferred stock
 
(442
)
 
(450
)
 
(458
)
 
(466
)
 
(474
)
Basel III common equity Tier 1 (non-GAAP)
H
$
10,828

 
$
10,526

 
$
10,342

 
$
10,208

 
$
10,009

Basel III risk-weighted assets (non-GAAP)(5)
I
$
100,368

 
$
99,483

 
$
99,739

 
$
99,048

 
$
109,728

Basel III common equity Tier 1 ratio (non-GAAP)
H/I
10.8
%
 
10.6
%
 
10.4
%
 
10.3
%
 
9.1
%
                
(1)
Annualized
(2)
Current quarter amounts and the resulting ratio are estimated.
(3)
The March 31, 2014, December 31, 2013, September 30, 2013 and June 30, 2013 estimates are based on the final rule released in July 2013. The March 31, 2013 estimate is based on June 2012 U.S. Notices of Proposed Rulemaking.
(4)
Under Basel III, regulatory capital must be reduced by purchased credit card relationship intangible assets. These assets are partially allowed in Basel I capital.
(5)
Regions continues to develop systems and internal controls to precisely calculate risk-weighted assets as required by Basel III. The amount included above is a reasonable approximation, based on our understanding of the requirements.



18

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2014 Earnings Release

Statements of Discontinued Operations (unaudited)
On January 11, 2012, Regions entered into a stock purchase agreement to sell Morgan Keegan and Company, Inc. and related affiliates to Raymond James Financial Inc. The sale was closed on April 2, 2012. Regions Investment Management, Inc. (formerly known as Morgan Asset Management, Inc.) and Regions Trust were not included in the sale. In connection with the agreement, the results of the entities sold are reported as discontinued operations. The following table represents the unaudited condensed results of operations for discontinued operations.
 
 
Quarter Ended
($ amounts in millions)
3/31/2014
 
12/31/2013
 
9/30/2013
 
6/30/2013
 
3/31/2013
Non-interest expense:
 
 
 
 
 
 
 
 
 
Professional and legal fees
$
(19
)
 
$
24

 
$
3

 
$
1

 
$
(5
)
Other
—

 
1

 
(2
)
 
1

 
1

Total non-interest expense
(19
)
 
25

 
1

 
2

 
(4
)
Income (loss) from discontinued operations before income tax
19

 
(25
)
 
(1
)
 
(2
)
 
4

Income tax expense (benefit)
7

 
(11
)
 
(1
)
 
(1
)
 
2

Income (loss) from discontinued operations, net of tax
$
12

 
$
(14
)
 
$
—

 
$
(1
)
 
$
2

Weighted-average shares outstanding—during quarter (1):
 
 
 
 
 
 
 
 
 
Basic
1,378

 
1,378

 
1,388

 
1,401

 
1,413

Diluted
1,390

 
1,378

 
1,388

 
1,401

 
1,423

Earnings (loss) per common share from discontinued operations:
 
 
 
 
 
 
 
 
 
Basic
$
0.01

 
$
(0.01
)
 
$
(0.00
)
 
$
(0.00
)
 
$
0.00

Diluted
$
0.01

 
$
(0.01
)
 
$
(0.00
)
 
$
(0.00
)
 
$
0.00

 
_________
(1)
In a quarter where there is a loss from discontinued operations, basic and diluted weighted-average common shares outstanding are the same.


19

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2014 Earnings Release

Forward-Looking Statements
This release may include forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995, which reflect Regions’ current views with respect to future events and financial performance. 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:

•
Current and future economic and market conditions in the United States generally or in the communities we serve, including the effects of declines in property values, unemployment rates and potential reduction of economic growth.
•
Possible changes in trade, monetary and fiscal policies of, and other activities undertaken by, governments, agencies, central banks and similar organizations.
•
The effects of a possible downgrade in the U.S. government’s sovereign credit rating or outlook.
•
Possible changes in market interest rates.
•
Any impairment of our goodwill or other intangibles, or any adjustment of valuation allowances on our deferred tax assets due to adverse changes in the economic environment, declining operations of the reporting unit, or other factors.
•
Possible changes in the creditworthiness of customers and the possible impairment of the collectability of loans.
•
Changes in the speed of loan prepayments, loan origination and sale volumes, charge-offs, loan loss provisions or actual loan losses.
•
Possible acceleration of prepayments on mortgage-backed securities due to low interest rates, and the related acceleration of premium amortization on those securities.
•
Our ability to effectively compete with other financial services companies, some of whom possess greater financial resources than we do and are subject to different regulatory standards than we are.
•
Loss of customer checking and savings account deposits as customers pursue other, higher-yield investments.
•
Our ability to develop and gain acceptance from current and prospective customers for new products and services in a timely manner.
•
Changes in laws and regulations affecting our businesses, including changes in the enforcement and interpretation of such laws and regulations by applicable governmental and self-regulatory agencies.
•
Our ability to obtain regulatory approval (as part of the CCAR process or otherwise) to take certain capital actions, including paying dividends and any plans to increase common stock dividends, repurchase common stock under current or future programs, or issue or redeem preferred stock or other regulatory capital instruments.
•
Our ability to comply with applicable capital and liquidity requirements (including the finalized Basel III capital standards), including our ability to generate capital internally or raise capital on favorable terms.
•
The costs and other effects (including reputational harm) of any adverse judicial, administrative, or arbitral rulings or proceedings, regulatory enforcement actions, or other legal actions to which we or any of our subsidiaries is a party.
•
Any adverse change to our ability to collect interchange fees in a profitable manner, whether such change is the result of regulation, legislation or other governmental action.
•
Our 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 our business.
•
Possible changes in consumer and business spending and saving habits and the related effect on our ability to increase assets and to attract deposits.
•
Any inaccurate or incomplete information provided to us by our customers or counterparties.
•
Inability of our framework to manage risks associated with our business, including operational risk and credit risk.
•
The inability of our internal disclosure controls and procedures to prevent, detect or mitigate any material errors or fraudulent acts.
•
The effects of geopolitical instability, including wars, conflicts and terrorist attacks.
•
The effects of man-made and natural disasters, including fires, floods, droughts, tornadoes, hurricanes and environmental damage.
•
Our ability to keep pace with technological changes.
•
Our ability to identify and address cyber-security risks such as data security breaches, “denial of service” attacks, “hacking” and identity theft.
•
Possible downgrades in our credit ratings or outlook.
•
The effects of problems encountered by other financial institutions that adversely affect us or the banking industry generally.
•
The effects of the failure of any component of our business infrastructure which is provided by a third party.
•
Our ability to receive dividends from our subsidiaries.
•
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 our 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” of Regions’ Annual Report on Form 10-K for the year ended December 31, 2013, as filed with the Securities and Exchange Commission.
The words “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “targets,” “projects,” “outlook,” “forecast,” “will,” “may,” “could,” “should,” “can,” 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.

Regions’ Investor Relations contact is List Underwood at (205) 801-0265; Regions’ Media contact is Evelyn Mitchell at (205) 264-4551.

20