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Form 8-K REGIONS FINANCIAL CORP For: Apr 14

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April 15, 2016 6:06 AM EDT


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
 
FORM 8-K
 
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 14, 2016
 
 
REGIONS FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
 
 
 
 
 
 
 
 
DELAWARE
 
001-34034
 
63-0589368
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
1900 FIFTH AVENUE NORTH
BIRMINGHAM, ALABAMA 35203
(Address, including zip code, of principal executive office)
Registrant’s telephone number, including area code: (205) 581-7890
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨
Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))






Item 2.02 Results of Operations and Financial Condition
Item 7.01 Regulation FD Disclosure
On April 15, 2016, Regions Financial Corporation (“Regions”) will issue a press release announcing its preliminary results of operations for the quarter ended March 31, 2016. A copy of the press release is attached hereto as Exhibit 99.1. Supplemental financial information for the quarter ended March 31, 2016 is attached as Exhibit 99.2. Executives from Regions will review the results via teleconference and live audio webcast at 11:00 a.m. Eastern time on April 15, 2016. A copy of a visual presentation that will be a part of that review is attached as Exhibit 99.3. All of the attached exhibits are incorporated herein and may also be found on Regions' website at www.regions.com, and an archived webcast of the teleconference will be available through May 15, 2016.
In accordance with general instruction B.2 of Form 8-K, this information is being furnished and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934.

Item 9.01 Financial Statements and Exhibits
(d) Exhibits
 
99.1

  
Press Release dated April 15, 2016
99.2

  
Supplemental Financial Information
99.3

  
Visual Presentation of April 15, 2016






SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
REGIONS FINANCIAL CORPORATION
 
 
By:
/s/ Fournier J. Gale, III
Name:
Fournier J. Gale, III
Title:
Senior Executive Vice President, General Counsel and Corporate Secretary

 

Date: April 14, 2016





Exhibit 99.1
  
Media Contact:
  
 
  
Investor Relations Contact:
Evelyn Mitchell
  
 
  
Dana Nolan
(205) 264-4551
  
 
  
(205) 581-7890

Regions reports earnings of $257 million and earnings per share of $0.20 for the first quarter of 2016

BIRMINGHAM, Ala. - (BUSINESS WIRE) - April 15, 2016 - Regions Financial Corporation (NYSE: RF) today announced earnings for the first quarter ended March 31, 2016. The company reported net income available to common shareholders of $257 million, an increase of 18 percent compared to the first quarter of 2015. Earnings per diluted share was $0.20, an increase of $0.04 from the first quarter of 2015.

“These results illustrate that we are successfully executing our strategic plan, which includes reducing expenses so we can invest in new revenue initiatives,” said Chairman, President and CEO Grayson Hall. “We are demonstrating that we can increase revenue while prudently managing expenses, which puts us on track to reach our long-term performance targets.”

SUMMARY OF FIRST QUARTER 2016 RESULTS:
 
 
Quarter Ended
($ amounts in millions, except per share data)
 
3/31/2016
 
12/31/2015
 
3/31/2015
Income from continuing operations (A)
 
$
273

 
$
288

 
$
236

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

 
(3
)
 
(2
)
Net income
 
273

 
285

 
234

Preferred dividends (B)
 
16

 
16

 
16

Net income available to common shareholders
 
$
257

 
$
269

 
$
218

Net income from continuing operations available to common
shareholders (A) – (B)
 
$
257

 
$
272

 
$
220

 
 
 
 
 
 
 
Diluted earnings per common share from continuing operations
 
$
0.20

 
$
0.21

 
$
0.16

 
 
 
 
 
 
 
Diluted earnings per common share
 
$
0.20

 
$
0.21

 
$
0.16

 
 
 
 
 
 
 


1


FIRST QUARTER 2016 FINANCIAL RESULTS:
Selected items impacting earnings
 
 
Quarter Ended
($ amounts in millions, except per share data)
 
3/31/2016
12/31/2015
3/31/2015
Pre-tax select items:
 
 
 
 
 
 
 
Branch consolidation, property and equipment charges
 
$
(14
)
 
$
(6
)
 
$
(22
)
 
Salaries and benefits related to severance charges
 
(12
)
 
(6
)
 
 
 
Bank-owned life insurance benefits (tax free)
 
14

 
 
 
 
 
Professional fee recovery
 
7

 
 
 
 
 
Insurance proceeds
 
3

 
1

 
 
 
Lease adjustment
 
 
 
(15
)
 
 
 
Loss on early extinguishment of debt
 
 
 
 
 
(43
)
 
State deferred tax adjustment
 
 
 
 
 
10

 
 
 
 
 
 
 
 
 
Diluted EPS impact
 
—

 
(0.01
)
 
(0.02
)
 

During the first quarter of 2016, the company incurred $14 million of property-related expenses primarily related to previously announced branch consolidations as well as occupancy optimization initiatives. The company also incurred $12 million of severance expense, primarily related to efficiency efforts as the company executes its plan to eliminate $300 million in core expenses over the next three years.

The company also recorded additional income in bank-owned life insurance of $14 million in the first quarter related to a claim benefit as well as a gain on exchange of policies. In addition, professional and legal fees benefited from a $7 million settlement recovery, and insurance proceeds of $3 million were recognized related to prior legal matters.

First quarter 2016 results compared to fourth quarter 2015:
•
Average loans and leases totaled $82 billion, an increase of 1 percent.
◦
Business lending balances increased 1 percent on an average basis.
◦
Consumer lending balances increased 1 percent on an average basis.
•
Average deposit balances totaled $98 billion, an increase of $262 million; low-cost deposits increased $712 million or 1 percent.
•
Net interest income and other financing income on a fully taxable equivalent (FTE) basis was $883 million, an increase of $12 million or 1 percent excluding the lease adjustment(4) from the prior quarter. The resulting net interest margin was 3.19 percent.
•
Non-interest income increased 1 percent on an adjusted basis(1).
•
Non-interest expenses decreased 2 percent on an adjusted basis(1).
•
Net charge-offs decreased 13 percent while non-accrual loans, excluding loans held for sale, increased 27 percent and represented 1.22 percent of loans outstanding.

2


•
The fully phased-in pro-forma Common Equity Tier 1 ratio(1)(2) was estimated at 10.7 percent and the loan-to-deposit ratio was 83 percent at March 31, 2016.

First quarter 2016 results compared to first quarter 2015:
•
Average loans and leases increased $4 billion or 5 percent.
◦
Business lending balances increased $2 billion or 4 percent on an average basis.
◦
Consumer lending balances increased $1 billion or 5 percent on an average basis.
•
Average deposit balances increased $2 billion or 2 percent; average low-cost deposits increased 4 percent.
•
Net interest income and other financing income (FTE) increased $51 million or 6 percent.
•
Non-interest income increased 10 percent on an adjusted basis(1).
•
Non-interest expenses were relatively flat on an adjusted basis(1).
•
Net charge-offs increased 26 percent and represented 0.34 percent of average loans while non-accrual loans, excluding loans held for sale, increased 24 percent and represented 1.22 percent of loans outstanding.

Total revenue
 
 
Quarter Ended
($ amounts in millions)
 
3/31/2016
 
12/31/2015
 
3/31/2015
 
1Q16 vs. 4Q15
 
1Q16 vs. 1Q15
Net interest income and other financing income*
 
$
862

 
$
836

 
$
815

 
$
26

 
3.1
 %
 
$
47

 
5.8
 %
Net interest income and other financing income (FTE)*
 
$
883

 
$
856

 
$
832

 
$
27

 
3.2
 %
 
$
51

 
6.1
 %
Net interest margin (FTE)*
 
3.19
%
 
3.08
%
 
3.18
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Service charges on deposit accounts
 
159

 
166

 
161

 
(7
)
 
(4.2
)%
 
(2
)
 
(1.2
)%
Wealth Management
 
106

 
100

 
98

 
6

 
6.0
 %
 
8

 
8.2
 %
Card and ATM fees
 
95

 
96

 
85

 
(1
)
 
(1.0
)%
 
10

 
11.8
 %
Mortgage income
 
38

 
37

 
40

 
1

 
2.7
 %
 
(2
)
 
(5.0
)%
Capital markets fee income and other
 
41

 
28

 
20

 
13

 
46.4
 %
 
21

 
105.0
 %
Bank-owned life insurance
 
33

 
19

 
20

 
14

 
73.7
 %
 
13

 
65.0
 %
Commercial credit fee income
 
19

 
19

 
16

 
—

 
—
 %
 
3

 
18.8
 %
Net revenue from affordable housing
 
11

 
14

 
2

 
(3
)
 
(21.4
)%
 
9

 
450
 %
Securities gains (losses), net
 
(5
)
 
11

 
5

 
(16
)
 
(145.5
)%
 
(10
)
 
(200.0
)%
Other
 
9

 
24

 
23

 
(15
)
 
(62.5
)%
 
(14
)
 
(60.9
)%
Non-interest income
 
506

 
514

 
470

 
(8
)
 
(1.6
)%
 
36

 
7.7
 %
Total Revenue
 
$
1,368

 
$
1,350

 
$
1,285

 
$
18

 
1.3
 %
 
$
83

 
6.5
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted total revenue, taxable-equivalent basis (non-GAAP)(1)
 
$
1,391

 
$
1,358

 
$
1,295

 
$
33

 
2.4
 %
 
$
96

 
7.4
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
*Excluding the $15 million lease adjustment recorded in the fourth quarter 2015, net interest income and other financing income would have been $851 million or $871 million on an FTE basis and the net interest margin would have been 3.13 percent.

3


Comparison of first quarter 2016 to fourth quarter 2015
Total revenue (FTE) was $1.4 billion in the first quarter. On an adjusted basis(1) compared to the prior quarter total revenue (FTE) increased $33 million or 2 percent. Net interest income and other financing income (FTE)was $883 million, an increase of $27 million or 3 percent, and the resulting net interest margin was 3.19 percent. Excluding the $15 million lease adjustment in the prior quarter, net interest income and other financing income (FTE) increased $12 million or 1 percent. Net interest income and other financing income benefited from the increase in short-term rates, higher loan balances and lower premium amortization; however, these increases were partially offset by lower dividends on Federal Reserve stock and one less day in the quarter.

Non-interest income totaled $506 million in the first quarter. On an adjusted basis(1) compared to the prior quarter this represented an increase of 1 percent that was driven primarily by revenue diversification initiatives. In particular, capital markets income increased $13 million or 46 percent from the prior quarter driven by revenue contributions from the recently expanded mergers and acquisition advisory services group, fees generated from the placement of permanent financing for real estate customers, as well as syndicated loan transactions. Wealth Management income increased $6 million or 6 percent from the fourth quarter, driven by seasonal increases in insurance income, revenue from recent insurance related acquisitions and increased investment services fee income. This was partially offset by lower investment management fees driven by challenging market conditions.

Solid growth in checking accounts helped to offset the impact of seasonality and posting order changes that went into effect in early November 2015, as service charges declined 4 percent. Seasonally lower transaction volume impacted card and ATM income which declined 1 percent. Other non-interest income included a reduction to revenue of $12 million reflecting a decline in market value related to assets held for certain employment benefits, which is offset in salaries and benefits.


4


Comparison of first quarter 2016 to first quarter 2015
Total revenue (FTE) increased $96 million or 7 percent on an adjusted basis(1) compared to the first quarter of 2015. Net interest income and other financing income (FTE) increased $51 million or 6 percent. The increase was driven primarily by loan growth, balance sheet hedging and optimization strategies and the impact of higher short term rates.
 
Non-interest income increased $36 million or 8 percent. The year-over-year improvement was driven primarily by growth in checking accounts and credit card accounts, higher bank owned life insurance income, as well as new revenue initiatives. Capital markets income increased $21 million or more than doubled from the prior year as the company expanded M&A advisory service offerings and increased loan syndication volume and fees generated from the placement of permanent financing for real estate customers.

Card and ATM income increased $10 million or 12 percent, primarily related to an increase in transaction volume as the company grew active debit cards 4 percent and increased commercial card usage 38 percent. Wealth Management income improved $8 million or 8 percent as the company expanded insurance capabilities and increased investment services fee income through additional financial consultants. Service charges declined 1 percent from the first quarter of 2015 and were impacted by posting order changes that went into effect in early November 2015. However, excluding this change, service charges would have increased over the prior year.

5


Non-interest expense
 
 
Quarter Ended
($ amounts in millions)
 
3/31/2016
 
12/31/2015
 
3/31/2015
 
1Q16 vs. 4Q15
 
1Q16 vs. 1Q15
Salaries and employee benefits
 
$
475

 
$
478

 
$
458

 
$
(3
)
 
(0.6
)%
 
$
17

 
3.7
 %
Net occupancy expense
 
86

 
91

 
91

 
(5
)
 
(5.5
)%
 
(5
)
 
(5.5
)%
Furniture and equipment expense
 
78

 
79

 
71

 
(1
)
 
(1.3
)%
 
7

 
9.9
 %
Outside services
 
36

 
40

 
31

 
(4
)
 
(10.0
)%
 
5

 
16.1
 %
Marketing
 
25

 
23

 
26

 
2

 
8.7
 %
 
(1
)
 
(3.8
)%
Professional, legal and regulatory expenses
 
13

 
22

 
19

 
(9
)
 
(40.9
)%
 
(6
)
 
(31.6
)%
FDIC insurance assessments
 
25

 
22

 
22

 
3

 
13.6
 %
 
3

 
13.6
 %
Credit/checkcard expenses
 
13

 
13

 
13

 
—

 
NM

 
—

 
NM

Branch consolidation, property and equipment charges
 
14

 
6

 
22

 
8

 
133.3
 %
 
(8
)
 
(36.4
)%
Loss on early extinguishment of debt
 
—

 
—

 
43

 
—

 
NM

 
(43
)
 
(100.0
)%
Other
 
104

 
99

 
109

 
5

 
5.1
 %
 
(5
)
 
(4.6
)%
Total non-interest expense from continuing operations
 
$
869

 
$
873

 
$
905

 
$
(4
)
 
(0.5
)%
 
$
(36
)
 
(4.0
)%
Total adjusted non-interest expense(1)
 
$
843

 
$
861

 
$
840

 
$
(18
)
 
(2.1
)%
 
$
3

 
0.4
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Comparison of first quarter 2016 to fourth quarter 2015
Non-interest expense totaled $869 million in the first quarter. On an adjusted basis(1) this represents a decrease of $18 million or 2 percent. Total salaries and benefits decreased $3 million from the previous quarter, which included $12 million in severance expense. Excluding severance charges in both the first quarter of 2016 and the fourth quarter of 2015, salaries and benefits declined $9 million or 2 percent. The decrease for the quarter was primarily due to a 2 percent reduction in staffing and lower expenses related to a decline in market value for assets held for certain employment benefits. This was partially offset by seasonal increases in payroll taxes and increased incentives related to fee based revenue growth.

Legal fees declined $9 million or 41 percent which included a favorable legal settlement of $7 million. Total occupancy expenses decreased as the company benefits from lower total square footage resulting from branch and non-branch reductions.

6



The adjusted efficiency ratio(1) was 60.6 percent. Under the current operating environment with continued low interest rates, the company remains committed to disciplined expense management and is taking steps to continue to improve efficiencies and lower costs.

The effective tax rate for the first quarter was 29.3 percent which includes a benefit related to the conclusion of a state tax examination. Excluding the impact of this benefit, the effective tax rate was 30.3 percent. The effective tax rate is expected to be in the 29 to 31 percent range during 2016.

Comparison of first quarter 2016 to first quarter 2015
Non-interest expense increased $3 million on an adjusted basis(1) from the first quarter of last year. Total salaries and benefits increased $17 million from the previous year, primarily attributable to $12 million in 2016 severance expenses.

The company incurred branch consolidation, property and equipment costs totaling $14 million in the first quarter of 2016 and $22 million in the first quarter of 2015. Legal fees declined $6 million from the prior year, primarily related to favorable legal settlements in the first quarter of 2016.

Loans and Leases
 
 
Average Balances
 
 
 
 
 
 
 
 
 
 
 
($ amounts in millions)
 
1Q16
 
4Q15
 
1Q15
 
1Q16 vs. 4Q15
 
1Q16 vs. 1Q15
Total commercial
 
$
43,974

 
$
43,601

 
$
41,983

 
$
373

 
0.9
 %
 
$
1,991

 
4.7%
Total investor real estate
 
7,021

 
6,908

 
6,865

 
113

 
1.6
 %
 
156

 
2.3%
Business Loans
 
50,995

 
50,509

 
48,848

 
486

 
1.0
 %
 
2,147

 
4.4%
Residential first mortgage
 
12,828

 
12,753

 
12,330

 
75

 
0.6
 %
 
498

 
4.0%
Home equity
 
10,956

 
10,948

 
10,885

 
8

 
0.1
 %
 
71

 
0.7%
Indirect—vehicles
 
4,056

 
3,969

 
3,708

 
87


2.2
 %
 
348

 
9.4%
Indirect—other consumer
 
599

 
523

 
237

 
76

 
14.5
 %
 
362

 
152.7%
Consumer credit card
 
1,050

 
1,031

 
977

 
19

 
1.8
 %
 
73

 
7.5%
Other consumer
 
1,026

 
1,027

 
957

 
(1
)
 
(0.1
)%
 
69

 
7.2%
Consumer Lending
 
30,515

 
30,251

 
29,094

 
264

 
0.9
 %
 
1,421

 
4.9%
Total Loans
 
$
81,510

 
$
80,760

 
$
77,942

 
$
750

 
0.9
 %
 
$
3,568

 
4.6%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


7


Comparison of first quarter 2016 to fourth quarter 2015

Average loans and leases were $82 billion for the first quarter, an increase of $750 million or 1
percent. Average balances in the business lending portfolio were $51 billion during the first quarter, an increase of $486 million or 1 percent. This increase was driven by Corporate Banking and Real Estate Banking. New relationships in the Technology & Defense group and an increase in line utilization in Energy & Natural Resources also contributed to loan growth. Commercial loan balances increased $373 million or 1 percent. Investor real estate loans increased $113 million or 2 percent. Commitments remained flat from the previous quarter and commercial line utilization increased 110 basis points to 47.8 percent from the previous quarter.

The consumer lending portfolio experienced growth in almost every product category as average balances increased $264 million or 1 percent from the prior quarter. Indirect-vehicle lending continued to expand as balances increased $87 million or 2 percent from the previous quarter. Indirect-other increased $76 million or 15 percent as the company continues to successfully expand its point-of-sale initiatives. Residential first mortgage balances increased $75 million or 1 percent, and home equity balances increased $8 million as new production continued to out-pace run-off. Additionally, consumer credit card balances increased $19 million or 2 percent as active credit cards increased 2 percent.

Comparison of first quarter 2016 to first quarter 2015

Average loans and leases increased $4 billion or 5 percent over the prior year (3) as both the business and consumer lending portfolios achieved growth.

Average business lending balances increased $2 billion or 4 percent, as all lending groups achieved growth including Corporate Banking, Commercial Banking and Real Estate Banking. Within Corporate Banking, the company's specialized lending groups achieved solid loan growth, driven by new relationships within Restaurant, Technology & Defense, and Energy & Natural Resources primarily in the midstream sector. Average commercial loan balances increased $2 billion or 5 percent and investor real estate loans increased $156 million or 2 percent. Commitments increased 6 percent and commercial line utilization increased 180 basis points from the previous year.

The consumer lending portfolio experienced growth in every product category as average balances increased $1.4 billion or 5 percent from the prior year. Residential first mortgage balances increased $498 million or 4 percent benefiting from an increase in new-home purchases and continued low interest rates. Home equity balances increased $71 million. Indirect-vehicle lending balances increased $348 million or 9 percent as production increased 21 percent. Indirect-other increased $362 million or 153 percent as the company

8


successfully implemented its point-of-sale initiatives. Additionally, consumer credit card balances increased $73 million or 8 percent as active credit cards increased 12 percent, and the company's penetration rate of deposit base customers increased 165 basis points over the year to approximately 17.5 percent.

Deposits
 
 
Average Balances
 
 
 
 
 
 
 
 
 
 
 
($ amounts in millions)
 
1Q16
 
4Q15
 
1Q15
 
1Q16 vs. 4Q15
 
1Q16 vs. 1Q15
Low-cost deposits
 
$
90,382

 
$
89,670

 
$
87,283

 
$
712

 
0.8%
 
$
3,099

 
3.6%
Time deposits
 
7,368

 
7,818


8,500

 
(450
)
 
(5.8)%
 
(1,132
)
 
(13.3)%
Total Deposits
 
$
97,750

 
$
97,488

 
$
95,783

 
$
262

 
0.3%
 
$
1,967

 
2.1%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Comparison of first quarter 2016 to fourth quarter 2015

Total average deposit balances were $98 billion in the first quarter, an increase of $262 million compared to the prior quarter. In the quarter, average low-cost deposits increased $712 million and represented 92 percent of average deposits, reflecting the company's solid funding base. Deposit costs remained near historical lows at 11 basis points, and total funding costs were 28 basis points for the first quarter.

Comparison of first quarter 2016 to first quarter 2015

Total average deposit balances increased $2 billion or 2 percent from the prior year. Average low-cost deposits increased $3 billion or 4 percent from the prior year.



9


Asset quality
 
 
As of and for the Quarter Ended
($ amounts in millions)
 
3/31/2016
 
12/31/2015
 
3/31/2015
ALL/Loans, net~
 
1.41%
 
1.36%
 
1.40%
Net loan charge-offs as a % of average loans, annualized
 
0.34%
 
0.38%
 
0.28%
Non-accrual loans, excluding loans held for sale/Loans, net
 
1.22%
 
0.96%
 
1.02%
NPAs (ex. 90+ past due)/Loans, foreclosed properties and non-performing loans held for sale
 
1.36%
 
1.13%
 
1.24%
NPAs (inc. 90+ past due)/Loans, foreclosed properties and non-performing loans held for sale
 
1.61%
 
1.39%
 
1.51%
Total TDRs
 
$1,276
 
$1,303
 
$1,505
Total Criticized and Classified Loans—Business Services*
 
$3,625
 
$3,371
 
$2,824
* Business services represents the combined total of commercial and investor real estate loans.
~ ALL excludes operating leases

Comparison of first quarter 2016 to fourth quarter 2015

Net charge-offs totaled $68 million for the first quarter, a decrease of $10 million from the previous quarter. Net charge-offs as a percent of average loans were 0.34 percent compared to 0.38 percent in the fourth quarter. The provision for loan losses was $113 million, and the resulting allowance for loan and lease losses was 1.41 percent of total loans outstanding at the end of the quarter. This compares to 1.36 percent of total loans outstanding in the fourth quarter, and the increase was primarily attributable to an increase in energy related loan reserves. Total loan loss allowance for the direct energy loan portfolio was 8 percent at the end of the first quarter compared to 6 percent at the end of the fourth quarter.

Total non-accrual loans, excluding loans held for sale, increased $211 million from the previous quarter and represented 1.22 percent of total loans, while troubled debt restructured loans declined 2 percent. Beginning primarily in the third quarter of 2015, low oil prices began to drive the migration of a number of large energy credits into criticized loans, primarily in the exploration and production as well as oil field services sectors. Continued low oil prices prompted further migration of some of those credits into classified loans. As a result, total business services criticized loans increased 8 percent including a 36 percent increase in classified loans.

Comparison of first quarter 2016 to first quarter 2015

Net charge-offs increased $14 million from the first quarter of 2015. Net charge-offs as a percent of average loans was 0.34 percent compared to 0.28 percent in the first quarter last year. The allowance for loan and lease losses as a percent of total loans increased 1 basis point.


10


Total non-accrual loans, excluding loans held for sale, increased $193 million from the previous year, while troubled debt restructured loans declined 15 percent. Total business services criticized and classified loans increased 28 percent, primarily related to risk rating migration in the energy portfolio.


Capital and liquidity
 
 
As of and for Quarter Ended
 
 
3/31/2016
 
12/31/2015
 
3/31/2015
Basel III Common Equity Tier 1 ratio(2)
 
10.9%
 
10.9%
 
11.4%
Basel III Common Equity Tier 1 ratio — Fully Phased-In Pro-Forma (non-GAAP)(1)(2)
 
10.7%
 
10.7%
 
11.2%
Tier 1 capital ratio(2)
 
11.6%
 
11.7%
 
12.2%
Tangible common stockholders’ equity to tangible assets (non-GAAP)(1)
 
9.48%
 
9.13%
 
9.59%
Tangible common book value per share (non-GAAP)(1)
 
$8.97
 
$8.52
 
$8.39

Under the Basel III capital rules, Regions’ estimated ratios remain well above current regulatory requirements. The Tier 1(2) and Common Equity Tier 1(2) ratios were estimated at 11.6 percent and 10.9 percent, respectively, at quarter-end under the phase-in provisions. In addition, the Common Equity Tier 1 ratio(1)(2) was estimated at 10.7 percent on a fully phased-in basis.

During the first quarter, the company repurchased $175 million or 23 million shares of common stock. In addition, the company declared $80 million in dividends to common shareholders.

The company’s loan-to-deposit ratio at the end of the quarter was 83 percent. Additionally, as of period-end, the company was fully compliant with the liquidity coverage ratio rule.


(1)
Non-GAAP, refer to pages 9 and 19 of the financial supplement to this earnings release
(2)
Current quarter Basel III common equity Tier 1, and Tier 1 capital ratios are estimated.
(3)
During the fourth quarter of 2015, Regions corrected the accounting for certain leases which had previously been included in commercial loans. These leases had been
classified as capital leases but were subsequently determined to be operating leases. The adjustment resulted in a reclassification of these leases out of loans into other
earning assets. The average balance of these leases in the first quarter of 2016 was $825 million. Prior periods were not restated to account for this change.
(4)    The cumulative effect on pre-tax income related to the lease adjustment lowered net interest income and other financing income $15 million in the fourth quarter of 2015.

Conference Call
A replay of the earnings call will be available from Friday, April 15, 2016, at 2 p.m. ET through Monday, May 15, 2016. To listen by telephone, please dial 1-855-859-2056, and use access code 68982537. An archived webcast will also be available until May 15 on the Investor Relations page of www.regions.com.

About Regions Financial Corporation
Regions Financial Corporation (NYSE: RF), with $126 billion in assets, is a member of the S&P 500 Index and is one of the nation’s largest full-service providers of consumer and commercial banking, wealth management, mortgage, and insurance products and services. Regions serves customers across the South, Midwest and Texas, and through its subsidiary, Regions Bank, operates approximately 1,600 banking offices and 2,000 ATMs.

11


Additional information about Regions and its full line of products and services can be found at www.regions.com.


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 reductions of economic growth, which may adversely affect our lending and other businesses and our financial results and conditions.
•
Possible changes in trade, monetary and fiscal policies of, and other activities undertaken by, governments, agencies, central banks and similar organizations, which could have a material adverse effect on our earnings.
•
The effects of a possible downgrade in the U.S. government’s sovereign credit rating or outlook, which could result in risks to us and general economic conditions that we are not able to predict.
•
Possible changes in market interest rates or capital markets could adversely affect our revenue and expense, the value of assets and obligations, and the availability and cost of capital and liquidity.
•
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 where our allowance for loan losses may not be adequate to cover our eventual 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, which could increase our funding costs.
•
Our inability to develop and gain acceptance from current and prospective customers for new products and services in a timely manner could have a negative impact on our revenue.
•
The effects of any developments, changes or actions relating to any litigation or regulatory proceedings brought against us or any of our subsidiaries.
•
Changes in laws and regulations affecting our businesses, such as the Dodd-Frank Act and other legislation and regulations relating to bank products and services, as well as changes in the enforcement and interpretation of such laws and regulations by applicable governmental and self-regulatory agencies, which could require us to change certain business practices, increase compliance risk, reduce our revenue, impose additional costs on us, or otherwise negatively affect our businesses.
•
Our ability to obtain a regulatory non-objection (as part of the comprehensive capital analysis and review ("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 redeem preferred stock or other regulatory capital instruments, may impact our ability to return capital to stockholders and market perceptions of us.
•
Our ability to comply with stress testing and capital planning requirements (as part of the CCAR process or otherwise) may continue to require a significant investment of our managerial resources due to the importance and intensity of such tests and requirements.
•
Our ability to comply with applicable capital and liquidity requirements (including, among other things, the Basel III capital standards and the liquidity coverage ratio "LCR" rule), including our ability to generate capital internally or raise capital on favorable terms, and if we fail to meet requirements, our financial condition could be negatively impacted.
•
The Basel III framework calls for additional risk-based capital surcharges for globally systemically important banks. Although we are not subject to such surcharges, it is possible that in the future we may become subject to similar surcharges.
•
The costs, including possibly incurring fines, penalties, or other negative 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 are a party, and which may adversely affect our results.
•
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.
•
Our ability to execute on our strategic and operational plans, including our ability to fully realize the financial and non-financial benefits relating to our strategic initiatives.
•
The success of our marketing efforts in attracting and retaining customers.
•
Possible changes in consumer and business spending and saving habits and the related effect on our ability to increase assets and to attract deposits, which could adversely affect our net income.

12


•
Our ability to recruit and retain talented and experienced personnel to assist in the development, management and operation of our products and services may be affected by changes in laws and regulations in effect from time to time.
•
Fraud or misconduct by our customers, employees or business partners.
•
Any inaccurate or incomplete information provided to us by our customers or counterparties.
•
The risks and uncertainties related to our acquisition and integration of other companies.
•
Inability of our framework to manage risks associated with our business such as credit risk and operational risk, including third-party vendors and other service providers, which could, among other things, result in a breach of operating or security systems as a result of a cyber attack or similar act.
•
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 and the potential impact, directly or indirectly, on our businesses.
•
The effects of man-made and natural disasters, including fires, floods, droughts, tornadoes, hurricanes, and environmental damage, which may negatively affect our operations and/or our loan portfolios and increase our cost of conducting business.
•
Changes in commodity market prices and conditions could adversely affect the cash flows of our borrowers operating in industries that are impacted by changes in commodity prices (including businesses indirectly impacted by commodities prices such as businesses that transport commodities or manufacture equipment used in the production of commodities), which could impair their ability to service any loans outstanding to them and/or reduce demand for loans in those industries.
•
Our inability to keep pace with technological changes could result in losing business to competitors.
•
Our ability to identify and address cyber-security risks such as data security breaches, “denial of service” attacks, “hacking” and identity theft, a failure of which could disrupt our business and result in the disclosure of and/or misuse or misappropriation of confidential or proprietary information; increased costs; losses; or adverse effects to our reputation.
•
Significant disruption of, or loss of public confidence in, the Internet and services and devices used to access the Internet could affect the ability of our customers to access their accounts and conduct banking transactions.
•
Possible downgrades in our credit ratings or outlook could increase the costs of funding from capital markets.
•
The effects of problems encountered by other financial institutions that adversely affect us or the banking industry generally could require us to change certain business practices, reduce our revenue, impose additional costs on us, or otherwise negatively affect our businesses.
•
The effects of the failure of any component of our business infrastructure provided by a third party could disrupt our businesses; result in the disclosure of and/or misuse of confidential information or proprietary information; increase our costs; negatively affect our reputation; and cause losses.
•
Our ability to receive dividends from our subsidiaries could affect our liquidity and ability to pay dividends to stockholders.
•
Changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board ("FASB") or other regulatory agencies could materially affect how we report our financial results.
•
Other risks identified from time to time in reports that we file with the Securities and Exchange Commission ("SEC").
•
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, 2015, 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 Dana Nolan at (205) 581-7890; Regions’ Media contact is Evelyn Mitchell at (205) 264-4551.

Use of non-GAAP financial measures
Management uses the adjusted efficiency ratio (non-GAAP) and the adjusted fee income ratio (non-GAAP) 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 and other financing income on a taxable-equivalent basis and non-interest income are added together to arrive at total revenue on a taxable-equivalent basis. Adjustments are made to arrive at adjusted total revenue on a taxable-equivalent basis (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.

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. Analysts and banking regulators have assessed Regions’ capital

13


adequacy using the tangible common stockholders’ equity measure. Because tangible common stockholders’ equity is not formally defined by GAAP or prescribed in any amount by federal banking regulations it is currently considered to be a non-GAAP financial measure and other entities may calculate it differently than Regions’ disclosed calculations. Since analysts and banking regulators may assess Regions’ capital adequacy using tangible common stockholders’ equity, management believes that it is useful to provide investors the ability to assess Regions’ capital adequacy on this same basis.


The calculation of the fully phased-in pro-forma "Common equity Tier 1" (CET1) is based on Regions’ understanding of the Final Basel III requirements. For Regions, the Basel III framework became effective on a phased-in approach starting in 2015 with full implementation beginning in 2019. The calculation includes estimated pro-forma amounts for the ratio on a fully phased-in basis. Regions’ current understanding of the final framework includes certain assumptions, 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 Regions is not currently subject to the fully-phased in capital rules, this pro-forma measure is considered to be a non-GAAP financial measure, and other entities may calculate it differently from Regions’ disclosed calculation.

A company's regulatory capital 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 broad risk categories. The aggregated dollar amount in each category is then multiplied by the prescribed risk-weighted percentage. The resulting weighted values from each of the 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. CET1 capital is then divided by this denominator (risk-weighted assets) to determine the CET1 capital ratio. The amounts disclosed as risk-weighted assets are calculated consistent with banking regulatory requirements on a fully phased-in basis.

During the fourth quarter 2015, Regions corrected the accounting for certain leases which had previously been included in loans. These leases had been classified as capital leases but were subsequently determined to be operating leases. The adjustment resulted in a reclassification of these leases out of loans into other earning assets. Regions believes including the impact of the operating leases, reported as capital leases prior to the fourth quarter of 2015, provides a meaningful calculation of loan and lease growth rates and presents them on the same basis as that applied by management. Total loans (GAAP) is presented including the lease adjustment to arrive at adjusted total loans and leases (non-GAAP).
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 earnings that excludes selected items does not represent the amount that effectively accrues directly to stockholders.
Management and the Board of Directors utilize non-GAAP measures as follows:
•Preparation of Regions' operating budgets
•Monthly financial performance reporting
•Monthly close-out reporting of consolidated results (management only)
•Presentation to investors of company performance

14
Exhibit 99.2

Regions Financial Corporation and Subsidiaries
Financial Supplement
First Quarter 2016


Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2016 Earnings Release


Table of Contents
 
 
 
 
 
  
Page
 
 
Financial Highlights
  
 
 
Selected Ratios and Other Information
  
 
 
Consolidated Statements of Income
  
 
 
Consolidated Average Daily Balances and Yield / Rate Analysis from Continuing Operations
  
 
 
Pre-Tax Pre-Provision Income ("PPI") and Adjusted PPI
  
 
 
Non-Interest Income, Mortgage Income and Wealth Management Income
  
 
 
Non-Interest Expense
  
 
 
Reconciliation to GAAP Financial Measures
  
 
Adjusted Efficiency Ratios, Adjusted Fee Income Ratios, Adjusted Non-Interest Income / Expense, and Return Ratios
 
 
 
Statement of Discontinued Operations
  
 
 
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 Principal Payment Resets
  
Early and Late Stage Delinquencies
  
Troubled Debt Restructurings
  
 
 
Consolidated Balance Sheets
  
 
  
Loans and Leases
  
 
 
Deposits
  
 
 
Reconciliation to GAAP Financial Measures
  
 
Tangible Common Ratios and Capital
 
 
 
Forward Looking Statements
 



Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2016 Earnings Release

Financial Highlights
 
Quarter Ended
($ amounts in millions, except per share data)
3/31/2016
 
12/31/2015
 
9/30/2015
 
6/30/2015
 
3/31/2015
Earnings Summary
 
 
 
 
 
 
 
 
 
Interest income and other financing income - taxable equivalent
$
984

 
$
953

 
$
920

 
$
902

 
$
903

Interest expense - taxable equivalent
74

 
69

 
65

 
63

 
71

Depreciation expense on operating lease assets
27

 
28

 
—

 
—

 
—

Net interest income and other financing income - taxable equivalent
883

 
856

 
855

 
839

 
832

Less: Taxable-equivalent adjustment
21

 
20

 
19

 
19

 
17

Net interest income and other financing income
862

 
836

 
836

 
820

 
815

Provision for loan losses
113

 
69

 
60

 
63

 
49

Net interest income and other financing income after provision for loan losses
749

 
767

 
776

 
757

 
766

Non-interest income
506

 
514

 
497

 
590

 
470

Non-interest expense
869

 
873

 
895

 
934

 
905

Income from continuing operations before income taxes
386

 
408

 
378

 
413

 
331

Income tax expense
113

 
120

 
116

 
124

 
95

Income from continuing operations
273

 
288

 
262

 
289

 
236

Income (loss) from discontinued operations before income taxes
—

 
(6
)
 
(6
)
 
(6
)
 
(4
)
Income tax expense (benefit)
—

 
(3
)
 
(2
)
 
(2
)
 
(2
)
Income (loss) from discontinued operations, net of tax
—

 
(3
)
 
(4
)
 
(4
)
 
(2
)
Net income
$
273

 
$
285

 
$
258

 
$
285

 
$
234

Income from continuing operations available to common shareholders
$
257

 
$
272

 
$
246

 
$
273

 
$
220

Net income available to common shareholders
$
257

 
$
269

 
$
242

 
$
269

 
$
218

 

 
 
 
 
 
 
 
 
Earnings per common share from continuing operations - basic
$
0.20

 
$
0.21

 
$
0.19

 
$
0.20

 
$
0.16

Earnings per common share from continuing operations - diluted
0.20

 
0.21

 
0.19

 
0.20

 
0.16

Earnings per common share - basic
0.20

 
0.21

 
0.18

 
0.20

 
0.16

Earnings per common share - diluted
0.20

 
0.21

 
0.18

 
0.20

 
0.16

 

 
 
 
 
 
 
 
 
Balance Sheet Summary

 
 
 
 
 
 
 
 
At quarter-end—Consolidated

 
 
 
 
 
 
 
 
Loans, net of unearned income
$
81,606

 
$
81,162

 
$
81,063

 
$
80,149

 
$
78,243

Allowance for loan losses
(1,151
)
 
(1,106
)
 
(1,115
)
 
(1,115
)
 
(1,098
)
Assets
125,539

 
126,050

 
124,789

 
121,855

 
122,447

Deposits
98,154

 
98,430

 
97,178

 
97,075

 
97,477

Long-term debt
7,851

 
8,349

 
7,364

 
3,602

 
3,208

Stockholders' equity
17,211

 
16,844

 
16,952

 
16,899

 
17,051

Average balances—Continuing Operations

 
 
 
 
 
 
 
 
Loans, net of unearned income
$
81,510

 
$
80,760

 
$
80,615

 
$
79,175

 
$
77,942

Assets
125,960

 
124,645

 
122,920

 
120,875

 
120,566

Deposits
97,750

 
97,488

 
97,166

 
97,100

 
95,783

Long-term debt
8,806

 
7,740

 
6,112

 
2,903

 
3,371

Stockholders' equity
17,086

 
16,901

 
16,874

 
16,950

 
16,963





1


Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2016 Earnings Release

Selected Ratios and Other Information
 
As of and for Quarter Ended
 
3/31/2016
 
12/31/2015
 
9/30/2015
 
6/30/2015
 
3/31/2015
Return on average assets from continuing operations*
0.82
%
 
0.87
%
 
0.79
%
 
0.90
%
 
0.74
%
Return on average tangible common stockholders’ equity (non-GAAP)* (1)
9.16
%
 
9.61
%
 
8.65
%
 
9.66
%
 
7.91
%
Adjusted efficiency ratio from continuing operations (non-GAAP) (1)(2)
60.6
%
 
63.4
%
 
66.8
%
 
64.5
%
 
64.9
%
Common book value per share
$
12.86

 
$
12.35

 
$
12.36

 
$
12.06

 
$
12.05

Tangible common book value per share (non-GAAP) (1)
$
8.97

 
$
8.52

 
$
8.58

 
$
8.37

 
$
8.39

Tangible common stockholders’ equity to tangible assets (non-GAAP) (1)
9.48
%
 
9.13
%
 
9.34
%
 
9.52
%
 
9.59
%
Basel III common equity (3)
$
11,496

 
$
11,543

 
$
11,438

 
$
11,527

 
11,477

Basel III common equity Tier 1 ratio (3)
10.9
%
 
10.9
%
 
11.0
%
 
11.3
%
 
11.4
%
Basel III common equity Tier 1 ratio—Fully Phased-In Pro-Forma (non-GAAP) (1)(3)
10.7
%
 
10.7
%
 
10.8
%
 
11.1
%
 
11.2
%
Tier 1 capital ratio (3)
11.6
%
 
11.7
%
 
11.7
%
 
12.1
%
 
12.2
%
Total risk-based capital ratio (3)
13.8
%
 
13.9
%
 
14.0
%
 
14.4
%
 
14.6
%
Leverage ratio (3)
10.1
%
 
10.3
%
 
10.4
%
 
10.6
%
 
10.6
%
Effective tax rate (4)
29.3
%
 
29.3
%
 
30.7
%
 
30.1
%
 
28.7
%
Allowance for loan losses as a percentage of loans, net of unearned income
1.41
%
 
1.36
%
 
1.38
%
 
1.39
%
 
1.40
%
Allowance for loan losses to non-performing loans, excluding loans held for sale
1.16
x
 
1.41x

 
1.41x

 
1.49x

 
1.37x

Net interest margin (FTE) from continuing operations*(5)
3.19
%
 
3.08
%
 
3.13
%
 
3.16
%
 
3.18
%
Loans, net of unearned income, to total deposits
83.1
%
 
82.5
%
 
83.4
%
 
82.6
%
 
80.3
%
Net charge-offs as a percentage of average loans*
0.34
%
 
0.38
%
 
0.30
%
 
0.23
%
 
0.28
%
Non-accrual loans, excluding loans held for sale, as a percentage of loans
1.22
%
 
0.96
%
 
0.97
%
 
0.94
%
 
1.02
%
Non-performing assets (excluding loans 90 days past due) as a percentage of loans, foreclosed properties and non-performing loans held for sale
1.36
%
 
1.13
%
 
1.14
%
 
1.13
%
 
1.24
%
Non-performing assets (including loans 90 days past due) as a percentage of loans, foreclosed properties and non-performing loans held for sale (6)
1.61
%
 
1.39
%
 
1.40
%
 
1.38
%
 
1.51
%
Associate headcount—full-time equivalent
22,855

 
23,393

 
23,423

 
23,155

 
23,062

ATMs
1,950

 
1,962

 
1,966

 
1,960

 
1,966

 

 
 
 
 
 
 
 
 
Branch Statistics

 
 
 
 
 
 
 
 
Full service
1,525

 
1,548

 
1,549

 
1,549

 
1,551

Drive-thru/transaction service only
80

 
79

 
81

 
82

 
82

Total branch outlets
1,605

 
1,627

 
1,630

 
1,631

 
1,633

             
*Annualized
(1)
See reconciliation of GAAP to non-GAAP Financial Measures on pages 9 and 19.
(2)
During the fourth quarter of 2015, Regions corrected the accounting for certain leases, for which Regions is the lessor. These leases had been previously classified as capital leases but were subsequently determined to be operating leases and totaled approximately $834 million at December 31, 2015. The aggregate impact of this adjustment lowered net interest income and other financing income $15 million. Excluding the negative impact of the $15 million, the adjusted efficiency ratio would have been 62.7%. During the third quarter of 2015, approximately $23 million of FDIC insurance assessment adjustments to prior assessments were recorded. Excluding the $23 million, the adjusted efficiency ratio would have been 65.0%.
(3)
Current quarter Basel III common equity as well as the Basel III common equity Tier 1, Tier 1 capital, Total risk-based capital and Leverage ratios are estimated.
(4)
The first quarter of 2016 includes an income tax benefit related to the conclusion of a state tax examination. The fourth quarter of 2015 reflects the impact of higher than expected income tax benefits related to affordable housing investments. The second quarter of 2015 includes an income tax benefit related to the conclusion of certain state and federal examinations. The first quarter of 2015 includes an income tax benefit related to state deferred tax asset adjustments.
(5)
Excluding the negative impact of the $15 million lease adjustment discussed above, net interest margin would have been 3.13% for the fourth quarter of 2015.
(6)
Excludes guaranteed residential first mortgages that are 90+ days past due and still accruing. Refer to the footnotes on page 13 for amounts related to these loans.



2


Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2016 Earnings Release

Consolidated Statements of Income (unaudited)
 
Quarter Ended
($ amounts in millions, except per share data)
3/31/2016
 
12/31/2015
 
9/30/2015
 
6/30/2015
 
3/31/2015
Interest income, including other financing income on:
 
 
 
 
 
 
 
 
 
Loans, including fees (1)
$
768

 
$
741

 
$
748

 
$
728

 
$
725

Securities—taxable
147

 
140

 
137

 
141

 
145

Loans held for sale
3

 
4

 
5

 
4

 
3

Trading account securities
3

 
1

 
—

 
1

 
3

Other earning assets
10

 
14

 
11

 
9

 
10

Operating lease assets (1)
32

 
33

 
—

 
—

 
—

Total interest income, including other financing income
963

 
933

 
901

 
883

 
886

Interest expense on:
 
 
 
 
 
 
 
 
 
Deposits
27

 
27

 
27

 
27

 
28

Short-term borrowings
—

 
—

 
—

 
1

 
—

Long-term borrowings
47

 
42

 
38

 
35

 
43

Total interest expense
74

 
69

 
65

 
63

 
71

Depreciation expense on operating lease assets (1)
27

 
28

 
—

 
—

 
—

Total interest expense and depreciation expense on operating lease assets
101

 
97

 
65

 
63

 
71

Net interest income and other financing income
862

 
836

 
836

 
820

 
815

Provision for loan losses
113

 
69

 
60

 
63

 
49

Net interest income and other financing income after provision for loan losses
749

 
767

 
776

 
757

 
766

Non-interest income:


 
 
 
 
 
 
 
 
Service charges on deposit accounts
159

 
166

 
167

 
168

 
161

Card and ATM fees
95

 
96

 
93

 
90

 
85

Mortgage income
38

 
37

 
39

 
46

 
40

Securities gains (losses), net
(5
)
 
11

 
7

 
6

 
5

Other
219

 
204

 
191

 
280

 
179

Total non-interest income
506

 
514

 
497

 
590

 
470

Non-interest expense:


 
 
 
 
 
 
 
 
Salaries and employee benefits
475

 
478

 
470

 
477

 
458

Net occupancy expense
86

 
91

 
90

 
89

 
91

Furniture and equipment expense
78

 
79

 
77

 
76

 
71

Other
230

 
225

 
258

 
292

 
285

Total non-interest expense
869

 
873

 
895

 
934

 
905

Income from continuing operations before income taxes
386

 
408

 
378

 
413

 
331

Income tax expense
113

 
120

 
116

 
124

 
95

Income from continuing operations
273

 
288


262

 
289

 
236

Discontinued operations:


 
 
 
 
 
 
 
 
Income (loss) from discontinued operations before income taxes
—

 
(6
)
 
(6
)
 
(6
)
 
(4
)
Income tax expense (benefit)
—

 
(3
)
 
(2
)
 
(2
)
 
(2
)
Income (loss) from discontinued operations, net of tax
—

 
(3
)
 
(4
)
 
(4
)
 
(2
)
Net income
$
273

 
$
285


$
258

 
$
285

 
$
234

Net income from continuing operations available to common shareholders
$
257

 
$
272

 
$
246

 
$
273

 
$
220

Net income available to common shareholders
$
257

 
$
269

 
$
242

 
$
269

 
$
218

Weighted-average shares outstanding—during quarter:


 
 
 
 
 
 
 
 
Basic
1,286

 
1,301

 
1,319

 
1,335

 
1,346

Diluted
1,291

 
1,308

 
1,326

 
1,346

 
1,358

Actual shares outstanding—end of quarter
1,275

 
1,297

 
1,304

 
1,331

 
1,343

Earnings per common share from continuing operations:


 
 
 
 
 
 
 
 
Basic
$
0.20

 
$
0.21

 
$
0.19

 
$
0.20

 
$
0.16

Diluted
$
0.20

 
$
0.21

 
$
0.19

 
$
0.20

 
$
0.16

Earnings per common share:


 
 
 
 
 
 
 
 
Basic
$
0.20

 
$
0.21

 
$
0.18

 
$
0.20

 
$
0.16

Diluted
$
0.20

 
$
0.21

 
$
0.18

 
$
0.20

 
$
0.16

Cash dividends declared per common share
$
0.06

 
$
0.06

 
$
0.06

 
$
0.06

 
$
0.05

Taxable-equivalent net interest income and other financing income from continuing operations
$
883

 
$
856

 
$
855

 
$
839

 
$
832

_________
(1) During the fourth quarter of 2015, Regions corrected the accounting for certain leases, for which Regions is the lessor. These leases had been previously classified as capital leases but were subsequently determined to be operating leases and totaled approximately $834 million at December 31, 2015. The aggregate impact of this adjustment lowered net interest income and other financing income $15 million.



3


Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2016 Earnings Release

Consolidated Average Daily Balances and Yield/Rate Analysis from Continuing Operations
 
Quarter Ended
 
3/31/2016
 
12/31/2015
($ amounts in millions; yields on taxable-equivalent basis)
Average Balance
 
Income/ Expense
 
Yield/ Rate
 
Average Balance
 
Income/ Expense
 
Yield/ Rate
Assets
 
 
 
 
 
 
 
 
 
 
 
Earning assets:
 
 
 
 
 
 
 
 
 
 
 
Federal funds sold and securities purchased under agreements to resell
$
11

 
$
—

 
—
%
 
$
10

 
$
—

 
—
%
Trading account securities
132

 
3

 
10.20


138

 
1

 
3.71

Securities:


 


 
 
 
 
 
 
 
 
Taxable
24,618

 
147

 
2.39

 
24,325

 
140

 
2.28

Tax-exempt
1

 
—

 
—

 
1

 
—

 
—

Loans held for sale
362

 
3

 
3.30

 
404

 
4

 
4.18

Loans, net of unearned income:


 


 


 
 
 
 
 
 
Commercial and industrial (1)
36,103

 
321

 
3.56

 
35,511

 
290

 
3.24

Commercial real estate mortgage—owner-occupied
7,512

 
91

 
4.79

 
7,675

 
97

 
5.04

Commercial real estate construction—owner-occupied
359

 
4

 
4.17

 
415

 
5

 
4.48

Commercial investor real estate mortgage
4,430

 
34

 
3.07

 
4,332

 
35

 
3.20

Commercial investor real estate construction
2,591

 
20

 
3.11

 
2,576

 
19

 
2.97

Residential first mortgage
12,828

 
125

 
3.89

 
12,753

 
127

 
3.93

Home equity
10,956

 
99

 
3.63

 
10,948

 
96

 
3.48

Indirect—vehicles
4,056

 
32

 
3.18

 
3,969

 
32

 
3.22

Indirect—other consumer
599

 
10

 
6.41

 
523

 
8

 
5.71

Consumer credit card
1,050

 
31

 
12.01

 
1,031

 
30

 
11.52

Other consumer
1,026

 
22

 
8.47

 
1,027

 
22

 
8.50

Total loans, net of unearned income (1)
81,510

 
789

 
3.87

 
80,760

 
761

 
3.74

Investment in operating leases, net (1)
825

 
5

 
2.71

 
852

 
5

 
2.60

Other earning assets
4,046

 
10

 
0.98

 
3,709

 
14

 
1.39

Total earning assets
111,505

 
957

 
3.43

 
110,199

 
925

 
3.33

Allowance for loan losses
(1,108
)
 
 
 
 
 
(1,120
)
 
 
 
 
Cash and due from banks
1,710

 
 
 
 
 
1,642

 
 
 
 
Other non-earning assets
13,853

 
 
 
 
 
13,924

 


 


 
$
125,960

 
 
 
 
 
$
124,645

 
 
 
 
Liabilities and Stockholders’ Equity
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
Savings
$
7,491

 
3

 
0.16

 
$
7,245

 
2

 
0.12

Interest-bearing checking
21,244

 
5

 
0.10

 
21,052

 
5

 
0.08

Money market
26,821

 
7

 
0.10

 
26,627

 
7

 
0.10

Time deposits
7,368

 
12

 
0.67

 
7,818

 
13

 
0.67

Total interest-bearing deposits (2)
62,924

 
27

 
0.18

 
62,742

 
27

 
0.17

Federal funds purchased and securities sold under agreements to repurchase
—

 
—

 
—

 
10

 
—

 
—

Other short-term borrowings
8

 
—

 
—

 
3

 
—

 
—

Long-term borrowings
8,806

 
47

 
2.13

 
7,740

 
42

 
2.19

Total interest-bearing liabilities
71,738

 
74

 
0.42

 
70,495

 
69

 
0.39

Non-interest-bearing deposits (2)
34,826

 
—

 
—

 
34,746

 
—

 
—

Total funding sources
106,564

 
74

 
0.28

 
105,241

 
69

 
0.26

Net interest spread


 


 
3.01

 
 
 
 
 
2.94

Other liabilities
2,310

 


 


 
2,503

 
 
 
 
Stockholders’ equity
17,086

 


 


 
16,901

 
 
 
 
 
$
125,960

 


 


 
$
124,645

 
 
 
 
Net interest income and other financing income/margin FTE basis (1)
 
 
$
883

 
3.19
%
 
 
 
$
856

 
3.08
%
_______
(1) During the fourth quarter of 2015, Regions corrected the accounting for approximately $852 million of average balances of leases, for which Regions is the lessor. These leases had been previously classified as capital leases but were subsequently determined to be operating leases. Net interest margin, excluding the negative impact of the $15 million lease adjustment recorded in the fourth quarter of 2015 would have been 3.13%.
(2)
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 0.11% for both quarters ended March 31, 2016 and December 31, 2015.


4


Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2016 Earnings Release

Consolidated Average Daily Balances and Yield/Rate Analysis from Continuing Operations (Continued)
 
Quarter Ended
 
9/30/2015
 
6/30/2015
 
3/31/2015
($ 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
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal funds sold and securities purchased under agreements to resell
$
3

 
$
—

 
—
%
 
$
2

 
$
—

 
—
%
 
$
21

 
$
—

 
—
%
Trading account securities
111

 
—

 
—

 
112


1

 
1.06

 
104

 
3

 
12.91

Securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
23,912

 
137

 
2.28

 
24,114

 
142

 
2.35

 
24,170

 
145

 
2.43

Tax-exempt
1

 
—

 
—

 
2

 
—

 
—

 
2

 
—

 
—

Loans held for sale
492

 
5

 
3.58

 
463

 
4

 
3.44

 
406

 
3

 
3.46

Loans, net of unearned income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
35,647

 
302

 
3.37

 
34,480

 
291

 
3.38

 
33,418

 
287

 
3.48

Commercial real estate mortgage—owner-occupied
7,768

 
99

 
5.04

 
7,921

 
97

 
4.89

 
8,143

 
98

 
4.90

Commercial real estate construction—owner-occupied
443

 
5

 
4.31

 
430

 
5

 
4.25

 
422

 
4

 
4.22

Commercial investor real estate mortgage
4,441

 
35

 
3.14

 
4,549

 
36

 
3.15

 
4,629

 
36

 
3.15

Commercial investor real estate construction
2,455

 
18

 
2.96

 
2,416

 
18

 
3.00

 
2,236

 
17

 
3.04

Residential first mortgage
12,649

 
123

 
3.86

 
12,471

 
121

 
3.91

 
12,330

 
121

 
3.97

Home equity
10,902

 
96

 
3.51

 
10,867

 
96

 
3.55

 
10,885

 
97

 
3.61

Indirect—vehicles
3,863

 
31

 
3.23

 
3,768

 
31

 
3.29

 
3,708

 
31

 
3.37

Indirect—other consumer
439

 
6

 
5.44

 
328

 
4

 
4.83

 
237

 
2

 
3.96

Consumer credit card
1,004

 
30

 
11.57

 
975

 
27

 
11.23

 
977

 
28

 
11.73

Other consumer
1,004

 
22

 
8.61

 
970

 
21

 
8.63

 
957

 
21

 
8.81

Total loans, net of unearned income
80,615

 
767

 
3.78

 
79,175

 
747

 
3.78

 
77,942

 
742

 
3.86

Investment in operating leases, net
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Other earning assets
3,441

 
11

 
1.21

 
2,659

 
8

 
1.44

 
3,486

 
10

 
1.11

Total earning assets
108,575

 
920

 
3.36

 
106,527

 
902

 
3.40

 
106,131

 
903

 
3.45

Allowance for loan losses
(1,111
)
 
 
 
 
 
(1,097
)
 
 
 
 
 
(1,098
)
 
 
 
 
Cash and due from banks
1,687

 
 
 
 
 
1,706

 
 
 
 
 
1,773

 


 
 
Other non-earning assets
13,769

 



 
 
13,739

 


 
 
 
13,760

 


 
 
 
$
122,920

 
 
 
 
 
$
120,875

 
 
 
 
 
$
120,566

 
 
 
 
Liabilities and Stockholders’ Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Savings
$
7,182

 
2

 
0.13

 
$
7,165

 
3

 
0.12

 
$
6,878

 
2

 
0.14

Interest-bearing checking
20,992

 
4

 
0.08

 
21,494

 
4

 
0.08

 
21,769

 
5

 
0.09

Money market
26,793

 
7

 
0.10

 
26,483

 
7

 
0.11

 
26,381

 
7

 
0.11

Time deposits
8,110

 
14

 
0.67

 
8,250

 
13

 
0.67

 
8,500

 
14

 
0.65

Total interest-bearing deposits (1)
63,077

 
27

 
0.17

 
63,392

 
27

 
0.17

 
63,528

 
28

 
0.18

Federal funds purchased and securities sold under agreements to repurchase
46

 
—

 
—

 
637

 
—

 
—

 
1,685

 
—

 
—

Other short-term borrowings
250

 
—

 
—

 
942

 
1

 
0.21

 
161

 
—

 
—

Long-term borrowings
6,112

 
38

 
2.45

 
2,903

 
35

 
4.83

 
3,371

 
43

 
5.20

Total interest-bearing liabilities 
69,485

 
65

 
0.37

 
67,874

 
63

 
0.37

 
68,745

 
71

 
0.42

Non-interest-bearing deposits (2)
34,089

 
—

 
—

 
33,708

 
—

 
—

 
32,255

 
—

 
—

Total funding sources
103,574

 
65

 
0.25

 
101,582

 
63

 
0.25

 
101,000

 
71

 
0.29

Net interest spread
 
 
 
 
2.99

 
 
 
 
 
3.03

 
 
 
 
 
3.03

Other liabilities
2,472

 
 
 
 
 
2,343

 
 
 
 
 
2,603

 
 
 
 
Stockholders’ equity
16,874

 
 
 
 
 
16,950

 
 
 
 
 
16,963

 
 
 
 
 
$
122,920

 
 
 
 
 
$
120,875

 
 
 
 
 
$
120,566

 
 
 
 
Net interest income and other financing income/margin FTE basis
 
 
$
855

 
3.13
%
 
 
 
$
839

 
3.16
%
 
 
 
$
832

 
3.18
%
_______
(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 0.11%, 0.11% and 0.12% for each of the quarters ended September 31, 2015, June 30, 2015, and March 31, 2015, respectively.


5


Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2016 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 from 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)
3/31/2016

 
12/31/2015

 
9/30/2015
 
6/30/2015
 
3/31/2015
 
1Q16 vs. 4Q15
 
1Q16 vs. 1Q15
Net income from continuing operations available to common shareholders (GAAP)
$
257

 
$
272

 
$
246

 
$
273

 
$
220

 
$
(15
)
 
(5.5
)%
 
$
37

 
16.8
 %
Preferred dividends (GAAP)
16

 
16

 
16

 
16

 
16

 
—

 
—
 %
 
—

 
—
 %
Income tax expense (GAAP)
113

 
120

 
116

 
124

 
95

 
(7
)
 
(5.8
)%
 
18

 
18.9
 %
Income from continuing operations before income taxes (GAAP)
386

 
408

 
378

 
413

 
331

 
(22
)
 
(5.4
)%
 
55

 
16.6
 %
Provision for loan losses (GAAP)
113

 
69

 
60

 
63

 
49

 
44

 
63.8
 %
 
64

 
130.6
 %
Pre-tax pre-provision income from continuing operations (non-GAAP)
499

 
477

 
438

 
476

 
380

 
22

 
4.6
 %
 
119

 
31.3
 %
Other adjustments:
 
 
 
 
 
 
 
 
 
 


 


 

 


Securities (gains) losses, net
5

 
(11
)
 
(7
)
 
(6
)
 
(5
)
 
16

 
(145.5
)%
 
10

 
(200.0
)%
Insurance proceeds (1)
(3
)
 
(1
)
 
—

 
(90
)
 
—

 
(2
)
 
200.0
 %
 
(3
)
 
NM

Leveraged lease termination gains, net
—

 
—

 
(6
)
 
—

 
(2
)
 
—

 
NM

 
2

 
(100.0
)%
Salaries and employee benefits—severance charges
12

 
6

 
—

 
—

 
—

 
6

 
100.0
 %
 
12

 
NM

Professional, legal and regulatory expenses (2)
—

 
—

 
—

 
48

 
—

 
—

 
NM

 
—

 
NM

Branch consolidation, property and equipment charges (3)
14

 
6

 
1

 
27

 
22

 
8

 
133.3
 %
 
(8
)
 
(36.4
)%
Loss on early extinguishment of debt
—

 
—

 
—

 
—

 
43

 
—

 
NM

 
(43
)
 
(100.0
)%
Total other adjustments
28

 
—

 
(12
)
 
(21
)
 
58

 
28

 
NM

 
(30
)
 
(51.7
)%
Adjusted pre-tax pre-provision income from continuing operations (non-GAAP)
$
527

 
$
477

 
$
426

 
$
455

 
$
438

 
$
50

 
10.5
 %
 
$
89

 
20.3
 %
 
NM - Not Meaningful
(1)
Insurance proceeds recognized in all periods presented are related to the settlement of the previously disclosed 2010 class-action lawsuit.
(2)
Regions recorded $50 million and $100 million of contingent legal and regulatory accruals during the second quarter of 2015 and the fourth quarter of 2014, respectively, related to previously disclosed matters. The fourth quarter of 2014 accruals were settled in the second quarter of 2015 for $2 million less than originally estimated and a corresponding recovery was recognized.
(3)
Charges in the second quarter of 2015 resulted from the transfer of land, previously held for future branch expansion, to held for sale based on changes in management's intent.



6


Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2016 Earnings Release

Non-Interest Income
 
Quarter Ended
($ amounts in millions)
3/31/2016
 
12/31/2015
 
9/30/2015
 
6/30/2015
 
3/31/2015
 
1Q16 vs. 4Q15
 
1Q16 vs. 1Q15
Service charges on deposit accounts
$
159

 
$
166

 
$
167

 
$
168

 
$
161

 
$
(7
)
 
(4.2
)%
 
$
(2
)
 
(1.2
)%
Card and ATM fees
95

 
96

 
93

 
90

 
85

 
(1
)
 
(1.0
)%
 
10

 
11.8
 %
Investment management and trust fee income
50

 
51

 
49

 
51

 
51

 
(1
)
 
(2.0
)%
 
(1
)
 
(2.0
)%
Mortgage income
38

 
37

 
39

 
46

 
40

 
1

 
2.7
 %
 
(2
)
 
(5.0
)%
Insurance commissions and fees
40

 
34

 
38

 
33

 
35

 
6

 
17.6
 %
 
5

 
14.3
 %
Capital markets fee income and other (1)
41

 
28

 
29

 
27

 
20

 
13

 
46.4
 %
 
21

 
105.0
 %
Insurance proceeds
3

 
1

 
—

 
90

 
—

 
2

 
200.0
 %
 
3

 
NM

Commercial credit fee income
19

 
19

 
20

 
21

 
16

 
—

 
—
 %
 
3

 
18.8
 %
Bank-owned life insurance
33

 
19

 
17

 
18

 
20

 
14

 
73.7
 %
 
13

 
65.0
 %
Investment services fee income
16

 
15

 
15

 
13

 
12

 
1

 
6.7
 %
 
4

 
33.3
 %
Securities gains (losses), net
(5
)
 
11

 
7

 
6

 
5

 
(16
)
 
(145.5
)%
 
(10
)
 
(200.0
)%
Net revenue from affordable housing
11

 
14

 
2

 
6

 
2

 
(3
)
 
(21.4
)%
 
9

 
450.0
 %
Other
6

 
23

 
21

 
21

 
23

 
(17
)
 
(73.9
)%
 
(17
)
 
(73.9
)%
Total non-interest income from continuing operations
$
506

 
$
514

 
$
497

 
$
590

 
$
470

 
$
(8
)
 
(1.6
)%
 
$
36

 
7.7
 %
Mortgage Income
 
Quarter Ended
($ amounts in millions)
3/31/2016
 
12/31/2015
 
9/30/2015
 
6/30/2015
 
3/31/2015
 
1Q16 vs. 4Q15
 
1Q16 vs. 1Q15
Production and sales
$
27

 
$
23

 
$
30

 
$
31

 
$
27

 
$
4

 
17.4
 %
 
$
—

 
—
 %
Loan servicing
20

 
20

 
20

 
20

 
21

 
—

 
—
 %
 
(1
)
 
(4.8
)%
MSR and related hedge impact:


 
 
 
 
 
 
 
 
 


 


 


 


MSRs fair value increase (decrease) due to change in valuation inputs or assumptions
(36
)
 
12

 
(25
)
 
28

 
(17
)
 
(48
)
 
(400.0
)%
 
(19
)
 
111.8
 %
MSRs hedge gain (loss)
35

 
(9
)
 
25

 
(22
)
 
17

 
44

 
(488.9
)%
 
18

 
105.9
 %
MSRs change due to payment decay
(8
)
 
(9
)
 
(11
)
 
(11
)
 
(8
)
 
1

 
(11.1
)%
 
—

 
—
 %
MSR and related hedge impact
(9
)
 
(6
)

(11
)

(5
)

(8
)
 
(3
)
 
50.0
 %
 
(1
)
 
12.5
 %
Total mortgage income
$
38

 
$
37

 
$
39

 
$
46

 
$
40

 
$
1

 
2.7
 %
 
$
(2
)
 
(5.0
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage production - purchased
$
756

 
$
852

 
$
1,057

 
$
1,097

 
$
743

 
$
(96
)
 
(11.3
)%
 
$
13

 
1.7
 %
Mortgage production - refinanced
355

 
338

 
364

 
505

 
527

 
17

 
5.0
 %
 
(172
)
 
(32.6
)%
Total mortgage production (2)
$
1,111

 
$
1,190

 
$
1,421

 
$
1,602

 
$
1,270

 
$
(79
)
 
(6.6
)%
 
$
(159
)
 
(12.5
)%
 
Wealth Management Income
 
Quarter Ended
($ amounts in millions)
3/31/2016
 
12/31/2015
 
9/30/2015
 
6/30/2015
 
3/31/2015
 
1Q16 vs. 4Q15
 
1Q16 vs. 1Q15
Investment management and trust fee income
$
50

 
$
51

 
$
49

 
$
51

 
$
51

 
$
(1
)
 
(2.0
)%
 
$
(1
)
 
(2.0
)%
Insurance commissions and fees
40

 
34

 
38

 
33

 
35

 
6

 
17.6
 %
 
5

 
14.3
 %
Investment services fee income
16

 
15

 
15

 
13

 
12

 
1

 
6.7
 %
 
4

 
33.3
 %
Total wealth management income (3)
$
106

 
$
100


$
102

 
$
97

 
$
98

 
$
6

 
6.0
 %
 
$
8

 
8.2
 %
_________
NM - Not Meaningful
(1)
Capital markets fee income and other primarily relates to capital raising activities that includes securities underwriting and placement, loan syndication and placement, as well as foreign exchange, derivative and advisory services. Beginning in the fourth quarter of 2015, this category also includes revenue derived from the purchase of BlackArch Partners, a private, middle-market mergers and acquisitions advisory firm headquartered in Charlotte, North Carolina.
(2)
Total mortgage production represents production during the period, including amounts sold into the secondary market as well as amounts retained in Regions' residential first mortgage loan portfolio.
(3)
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
•
Service charges on deposit accounts decreased compared to the fourth quarter of 2015 primarily due to posting order changes that went into effect in early November of 2015 as well as seasonality, partially offset by checking account growth.
•
Total wealth management income increased compared to the fourth quarter of 2015 primarily due to seasonal increases in insurance combined with recent insurance related acquisitions and increased investment services fee income; partially offset by lower investment management fees.
•
Capital markets and other income increased compared to the fourth quarter of 2015 primarily driven by revenue contributions from the recently expanded mergers and acquisition advisory services group, fees generated from placement of permanent financing for real estate customers, as well as syndicated loan transactions.
•
Bank-owned life insurance increased compared to the fourth quarter of 2015 primarily due to claims benefits as well as a gain on exchange of policies.
•
Securities gains (losses) decreased compared to the fourth quarter of 2015 as the Company reduced its energy exposure in its investment portfolio.
•
Other non-interest income decreased compared to the fourth quarter of 2015 and included a reduction to revenue of $12 million reflecting a market value decline related to assets held for certain employment benefits, which is offset in salaries and benefits expense.

7


Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2016 Earnings Release

Non-Interest Expense
 
Quarter Ended
($ amounts in millions)
3/31/2016
 
12/31/2015
 
9/30/2015
 
6/30/2015
 
3/31/2015
 
1Q16 vs. 4Q15
 
1Q16 vs. 1Q15
Salaries and employee benefits
$
475

 
$
478

 
$
470

 
$
477

 
$
458

 
$
(3
)
 
(0.6
)%

$
17

 
3.7
 %
Net occupancy expense
86

 
91

 
90

 
89

 
91

 
(5
)
 
(5.5
)%
 
(5
)
 
(5.5
)%
Furniture and equipment expense
78

 
79

 
77

 
76

 
71

 
(1
)
 
(1.3
)%
 
7

 
9.9
 %
Outside services
36

 
40

 
38

 
40

 
31

 
(4
)
 
(10.0
)%
 
5

 
16.1
 %
Marketing
25

 
23

 
24

 
25

 
26

 
2

 
8.7
 %
 
(1
)
 
(3.8
)%
Professional, legal and regulatory expenses
13

 
22

 
25

 
71

 
19

 
(9
)
 
(40.9
)%
 
(6
)
 
(31.6
)%
FDIC insurance assessments
25

 
22

 
46

 
15

 
22

 
3

 
13.6
 %
 
3

 
13.6
 %
Credit/checkcard expenses
13

 
13

 
15

 
13

 
13

 
—

 
NM

 
—

 
NM

Branch consolidation, property and equipment charges
14

 
6

 
1

 
27

 
22

 
8

 
133.3
 %
 
(8
)
 
(36.4
)%
Loss on early extinguishment of debt
—

 
—

 
—

 
—

 
43

 
—

 
NM

 
(43
)
 
(100.0
)%
Other
104

 
99

 
109

 
101

 
109

 
5

 
5.1
 %
 
(5
)
 
(4.6
)%
Total non-interest expense from continuing operations
$
869

 
$
873

 
$
895

 
$
934

 
$
905

 
$
(4
)
 
(0.5
)%
 
$
(36
)
 
(4.0
)%
_________
NM - Not Meaningful

Selected Non-Interest Expense Variance Analysis

•
Salaries and employee benefits decreased compared to the fourth quarter of 2015. The decrease for the quarter was primarily due to a 2 percent decrease in staffing and the benefit from lower expenses associated with liabilities held for employee benefit purposes; partially offset by seasonal increases in payroll taxes and a net $6 million increase in severance related expenses.
•
Professional, legal, and regulatory expenses decreased compared to the fourth quarter of 2015 primarily due to a favorable legal settlement of $7 million.
•
Branch consolidation, property and equipment charges in the first quarter of 2016 and the first and fourth quarters of 2015 include costs related to branch consolidations as well as occupancy optimization initiatives. The second quarter of 2015 charges resulted from the transfer of land, previously held for future branch expansion, to held for sale based on changes in management's intent.






8


Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2016 Earnings Release

Reconciliation to GAAP Financial Measures
Adjusted Efficiency Ratios, Adjusted Fee Income Ratios, Adjusted Non-Interest Income/Expense, and Return 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 and other financing income on a taxable-equivalent basis and non-interest income are added together to arrive at total revenue on a taxable-equivalent basis. Adjustments are made to arrive at adjusted total revenue on a taxable-equivalent basis (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.
The following table also provides a calculation of “return on average tangible common stockholders’ equity”. 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. Analysts and banking regulators have assessed Regions’ capital adequacy using the tangible common stockholders’ equity measure. Because tangible common stockholders’ equity is not formally defined by GAAP or prescribed in any amount by federal banking regulations it is currently considered to be a non-GAAP financial measure and other entities may calculate it differently than Regions’ disclosed calculations. Since analysts and banking regulators may assess Regions’ capital adequacy using tangible common stockholders’ equity, management believes that it is useful to provide investors the ability to assess Regions’ capital adequacy on this same basis.
 
 
Quarter Ended
($ amounts in millions)
 
3/31/2016
 
12/31/2015
 
9/30/2015
 
6/30/2015
 
3/31/2015
 
1Q16 vs. 4Q15
 
1Q16 vs. 1Q15
ADJUSTED EFFICIENCY AND FEE INCOME RATIOS, ADJUSTED NON-INTEREST INCOME/EXPENSE- CONTINUING OPERATIONS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest expense (GAAP)
 
$
869

 
$
873

 
$
895

 
$
934

 
$
905

 
$
(4
)
 
(0.5
)%
 
$
(36
)
 
(4.0
)%
Adjustments:
 


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Professional, legal and regulatory expenses (1)
 
—

 
—

 
—

 
(48
)
 
—

 
—

 
NM

 
—

 
NM

Branch consolidation, property and equipment charges(1)
 
(14
)
 
(6
)
 
(1
)
 
(27
)
 
(22
)
 
(8
)
 
133.3
 %
 
8

 
(36.4
)%
Loss on early extinguishment of debt
 
—

 
—

 
—

 
—

 
(43
)
 
—

 
NM

 
43

 
(100.0
)%
Salary and employee benefits—severance charges
 
(12
)
 
(6
)
 
—

 
—

 
—

 
(6
)
 
100.0
 %
 
(12
)
 
NM

Adjusted non-interest expense (non-GAAP)
A
$
843

 
$
861

 
$
894

 
$
859

 
$
840

 
$
(18
)
 
(2.1
)%
 
$
3

 
0.4
 %
Net interest income and other financing income (GAAP)
 
$
862

 
$
836

 
$
836

 
$
820

 
$
815

 
$
26

 
3.1
 %
 
$
47

 
5.8
 %
Taxable-equivalent adjustment
 
21

 
20

 
19

 
19

 
17

 
1

 
5.0
 %
 
4

 
23.5
 %
Net interest income and other financing income, taxable-equivalent basis
B
$
883

 
$
856

 
$
855

 
$
839

 
$
832

 
$
27

 
3.2
 %
 
$
51

 
6.1
 %
Non-interest income (GAAP)
C
$
506

 
$
514

 
$
497

 
$
590

 
$
470

 
$
(8
)
 
(1.6
)%
 
$
36

 
7.7
 %
Adjustments:
 


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Securities (gains) losses, net
 
5

 
(11
)
 
(7
)
 
(6
)
 
(5
)
 
16

 
(145.5
)%
 
10

 
(200.0
)%
Insurance proceeds (1)
 
(3
)
 
(1
)
 
—

 
(90
)
 
—

 
(2
)
 
200.0
 %
 
(3
)
 
NM

Leveraged lease termination gains, net
 
—

 
—

 
(6
)
 
—

 
(2
)
 
—

 
NM

 
2

 
(100.0
)%
Adjusted non-interest income (non-GAAP)
D
$
508

 
$
502

 
$
484

 
$
494

 
$
463

 
$
6

 
1.2
 %
 
$
45

 
9.7
 %
Total revenue, taxable-equivalent basis
B+C
$
1,389

 
$
1,370

 
$
1,352

 
$
1,429

 
$
1,302

 
$
19

 
1.4
 %
 
$
87

 
6.7
 %
Adjusted total revenue, taxable-equivalent basis (non-GAAP)
B+D=E
$
1,391

 
$
1,358

 
$
1,339

 
$
1,333

 
$
1,295

 
$
33

 
2.4
 %
 
$
96

 
7.4
 %
Adjusted efficiency ratio (non-GAAP) (2)(3)
A/E
60.6
%
 
63.4
%
 
66.8
%
 
64.5
%
 
64.9
%
 
 
 
 
 
 
 
 
Adjusted fee income ratio (non-GAAP)
D/E
36.5
%
 
37.0
%
 
36.2
%
 
37.0
%
 
35.7
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
 
 
 
 
 
 
 
($ amounts in millions)
 
3/31/2016

 
12/31/2015

 
9/30/2015

 
6/30/2015

 
3/31/2015

 
 
 
 
 
 
 
 
RETURN ON AVERAGE TANGIBLE COMMON STOCKHOLDERS' EQUITY- CONSOLIDATED
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income available to common shareholders (GAAP)
F
$
257

 
$
269

 
$
242

 
$
269

 
$
218

 
 
 
 
 
 
 
 
Average stockholders' equity (GAAP)
 
$
17,086

 
$
16,889

 
$
16,866

 
$
16,946

 
$
16,963

 
 
 
 
 
 
 
 
Less:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average intangible assets (GAAP)
 
5,131

 
5,132

 
5,089

 
5,083

 
5,089

 
 
 
 
 
 
 
 
Average deferred tax liability related to intangibles (GAAP)
 
(165
)
 
(167
)
 
(169
)
 
(171
)
 
(172
)
 
 
 
 
 
 
 
 
Average preferred stock (GAAP)
 
820

 
822

 
838

 
856

 
878

 
 
 
 
 
 
 
 
Average tangible common stockholders' equity (non-GAAP)
G
$
11,300

 
$
11,102

 
$
11,108

 
$
11,178

 
$
11,168

 
 
 
 
 
 
 
 
Return on average tangible common stockholders' equity (non-GAAP)*
F/G
9.16
%
 
9.61
%
 
8.65
%
 
9.66
%
 
7.91
%
 
 
 
 
 
 
 
 
________
*Annualized
NM - Not Meaningful
(1)
See page 6 for additional information regarding these adjustments.
(2)
Excluding $23 million of FDIC insurance assessment adjustments to prior assessments recorded in the third quarter of 2015, the adjusted efficiency ratio would have been 65.0%.
(3)
During the fourth quarter of 2015, Regions corrected the accounting for certain leases, for which Regions is the lessor. These leases had been previously classified as capital leases but were subsequently determined to be operating leases and totaled approximately $834 million at December 31, 2015. The aggregate impact of this adjustment lowered net interest income and other financing income $15 million. Excluding the negative impact of the $15 million adjustment, the adjusted efficiency ratio would have been 62.7%.

9


Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2016 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 tables represent the unaudited condensed results for discontinued operations.
 
 
Quarter Ended
($ amounts in millions, except per share data)
3/31/2016
 
12/31/2015
 
9/30/2015
 
6/30/2015
 
3/31/2015
Non-interest expense:
 
 
 
 
 
 
 
 
 
Professional and legal expenses
$
—

 
$
5

 
$
7

 
$
5

 
$
4

Other
—

 
1

 
(1
)
 
1

 
—

Total non-interest expense
—

 
6

 
6

 
6

 
4

Income (loss) from discontinued operations before income tax
—

 
(6
)
 
(6
)
 
(6
)
 
(4
)
Income tax expense (benefit)
—

 
(3
)
 
(2
)
 
(2
)
 
(2
)
Income (loss) from discontinued operations, net of tax
$
—

 
$
(3
)
 
$
(4
)
 
$
(4
)
 
$
(2
)
Weighted-average shares outstanding—during quarter (1):
 
 
 
 
 
 
 
 
 
Basic
1,286

 
1,301

 
1,319

 
1,335

 
1,346

Diluted
1,291

 
1,301

 
1,319

 
1,335

 
1,346

Earnings (loss) per common share from discontinued operations:
 
 
 
 
 
 
 
 
 
Basic
$
0.00

 
$
(0.00
)
 
$
(0.00
)
 
$
(0.00
)
 
$
(0.00
)
Diluted
$
0.00

 
$
(0.00
)
 
$
(0.00
)
 
$
(0.00
)
 
$
(0.00
)
 
_________
(1)
In a period where there is a loss from discontinued operations, basic and diluted weighted-average common shares outstanding are the same.
 
 
 
 



10


Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2016 Earnings Release

Credit Quality

As of and for Quarter Ended
($ amounts in millions)
3/31/2016

12/31/2015

9/30/2015

6/30/2015

3/31/2015
Components:









Allowance for loan losses (ALL)
$
1,151


$
1,106


$
1,115


$
1,115


$
1,098

Reserve for unfunded credit commitments
53


52


64


64


66

Allowance for credit losses (ACL)
$
1,204


$
1,158


$
1,179


$
1,179


$
1,164
















Provision for loan losses
$
113


$
69


$
60


$
63


$
49

Provision (credit) for unfunded credit losses
1


(12
)

—


(2
)

1
















Net loans charged-off:














Commercial and industrial
18


43


16


4


16

Commercial real estate mortgage—owner-occupied
3


1


3


3


1

Commercial real estate construction—owner-occupied
1


—


—


—


—

Total commercial
22


44


19


7


17

Commercial investor real estate mortgage
(3
)

(2
)

(2
)

1


2

Commercial investor real estate construction
(1
)

(7
)

—


(2
)

(2
)
Total investor real estate
(4
)

(9
)

(2
)

(1
)

—

Residential first mortgage
3


5


6


4


3

Home equity—first lien
5


2


4


5


3

Home equity—second lien
9


5


7


7


7

Indirect—vehicles
8


9


6


5


6

Indirect—other consumer
3

 
—

 
—

 
—

 
—

Consumer credit card
9


8


7


8


8

Other consumer
13


14


13


11


10

Total consumer
50


43


43


40


37

Total
$
68


$
78


$
60


$
46


$
54

Net loan charge-offs as a % of average loans, annualized:









Commercial and industrial
0.20
 %

0.48
 %

0.18
 %

0.04
 %

0.20
 %
Commercial real estate mortgage—owner-occupied
0.19
 %

0.08
 %

0.14
 %

0.14
 %

0.05
 %
Commercial real estate construction—owner-occupied
0.73
 %

(0.13
)%

(0.09
)%

(0.03
)%

(0.03
)%
Total commercial
0.20
 %

0.40
 %

0.17
 %

0.06
 %

0.17
 %
Commercial investor real estate mortgage
(0.23
)%

(0.22
)%

(0.17
)%

0.09
 %

0.17
 %
Commercial investor real estate construction
(0.15
)%

(1.00
)%

(0.15
)%

(0.23
)%

(0.40
)%
Total investor real estate
(0.20
)%

(0.51
)%

(0.16
)%

(0.02
)%

(0.01
)%
Residential first mortgage
0.11
 %

0.16
 %

0.17
 %

0.15
 %

0.10
 %
Home equity—first lien
0.29
 %

0.11
 %

0.24
 %

0.30
 %

0.19
 %
Home equity—second lien
0.86
 %

0.47
 %

0.62
 %

0.67
 %

0.58
 %
Indirect—vehicles
0.79
 %

0.83
 %

0.68
 %

0.50
 %

0.69
 %
Indirect—other consumer
1.79
 %
 
—
 %
 
—
 %
 
—
 %
 
—
 %
Consumer credit card
3.31
 %

3.14
 %

3.01
 %

3.13
 %

3.43
 %
Other consumer
5.02
 %

5.25
 %

5.37
 %

4.27
 %

4.43
 %
Total consumer
0.65
 %

0.55
 %

0.59
 %

0.54
 %

0.53
 %
Total
0.34
 %

0.38
 %

0.30
 %

0.23
 %

0.28
 %
Non-accrual loans, excluding loans held for sale
$
993


$
782


$
789


$
751


$
800

Non-performing loans held for sale
22


38


26


26


32

Non-accrual loans, including loans held for sale
1,015


820


815


777


832

Foreclosed properties
97


100


111


134


138

Non-performing assets (NPAs)
$
1,112


$
920


$
926


$
911


$
970

Loans past due > 90 days (1)
$
201


$
213


$
210


$
197


$
211

Accruing restructured loans not included in categories above (2)
$
993


$
1,039


$
1,046


$
1,150


$
1,220

Credit Ratios:














ACL/Loans, net
1.48
 %

1.43
 %

1.45
 %

1.47
 %

1.49
 %
ALL/Loans, net
1.41
 %

1.36
 %

1.38
 %

1.39
 %

1.40
 %
Allowance for loan losses to non-performing loans, excluding loans held for sale
1.16x


1.41x


1.41x


1.49x


1.37x

Non-accrual loans, excluding loans held for sale/Loans, net
1.22
 %

0.96
 %

0.97
 %

0.94
 %

1.02
 %
NPAs (ex. 90+ past due)/Loans, foreclosed properties and non-performing loans held for sale
1.36
 %

1.13
 %

1.14
 %

1.13
 %

1.24
 %
NPAs (inc. 90+ past due)/Loans, foreclosed properties and non-performing loans held for sale (1)
1.61
 %

1.39
 %

1.40
 %

1.38
 %

1.51
 %
           
(1)
Excludes guaranteed residential first mortgages that are 90+ days past due and still accruing. Refer to the footnotes on page 13 for amounts related to these loans.
(2)
See page 14 for detail of restructured loans.


11


Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2016 Earnings Release

 
 
 
 
 Non-Accrual Loans (excludes loans held for sale)
 
As of
($ amounts in millions)
3/31/2016
 
12/31/2015
 
9/30/2015
 
6/30/2015
 
3/31/2015
Commercial and industrial
$
556

 
1.53
%
 
$
325

 
0.91
%
 
$
350

 
0.97
%
 
$
297

 
0.84
%
 
$
298

 
0.89
%
Commercial real estate mortgage—owner-occupied
254

 
3.44
%
 
268

 
3.55
%
 
233

 
3.01
%
 
203

 
2.60
%
 
216

 
2.68
%
Commercial real estate construction—owner-occupied
2

 
0.68
%
 
2

 
0.50
%
 
3

 
0.81
%
 
4

 
0.96
%
 
3

 
0.63
%
Total commercial
812

 
1.85
%
 
595

 
1.36
%
 
586

 
1.33
%
 
504

 
1.16
%
 
517

 
1.23
%
Commercial investor real estate mortgage
28

 
0.62
%
 
31

 
0.73
%
 
39

 
0.89
%
 
63

 
1.38
%
 
85

 
1.89
%
Commercial investor real estate construction
—

 
—
%
 
—

 
—
%
 
1

 
0.02
%
 
2

 
0.08
%
 
—

 
0.01
%
Total investor real estate
28

 
0.39
%
 
31

 
0.45
%
 
40

 
0.57
%
 
65

 
0.93
%
 
85

 
1.23
%
Residential first mortgage
54

 
0.42
%
 
63

 
0.49
%
 
67

 
0.53
%
 
86

 
0.68
%
 
101

 
0.81
%
Home equity
99

 
0.90
%
 
93

 
0.84
%
 
96

 
0.88
%
 
96

 
0.88
%
 
97

 
0.90
%
Total consumer
153

 
0.50
%
 
156

 
0.51
%
 
163

 
0.54
%
 
182

 
0.61
%
 
198

 
0.68
%
Total non-accrual loans
$
993

 
1.22
%
 
$
782

 
0.96
%
 
$
789

 
0.97
%
 
$
751

 
0.94
%
 
$
800

 
1.02
%

Criticized and Classified Loans—Business Services (1)(2)
 
As of
 
 
 
 
 
 
 
 
 
 
 
3/31/2016
 
3/31/2016
($ amounts in millions)
3/31/2016
 
12/31/2015
 
9/30/2015
 
6/30/2015
 
3/31/2015
 
vs. 12/31/2015
 
vs. 3/31/2015
Accruing classified
$
1,800

 
$
1,311

 
$
1,212

 
$
1,218

 
$
1,125

 
$
489

 
37.3
 %
 
$
675

 
60.0
 %
Non-accruing classified
840

 
626

 
626

 
569

 
602

 
214

 
34.2
 %
 
238

 
39.5
 %
Total classified
2,640

 
1,937

 
1,838

 
1,787

 
1,727

 
703

 
36.3
 %
 
913

 
52.9
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Special mention
985

 
1,434

 
1,416

 
1,163

 
1,097

 
(449
)
 
(31.3
)%
 
(112
)
 
(10.2
)%
Total criticized
$
3,625

 
$
3,371

 
$
3,254

 
$
2,950

 
$
2,824

 
$
254

 
7.5
 %
 
$
801

 
28.4
 %
                 
(1)
Business services represents the combined total of commercial and investor real estate loans.
(2)
Beginning primarily in the third quarter of 2015, low oil prices began to drive the migration of a number of large energy credits into criticized (primarily in the exploration and production and oil field services sectors). Continued low oil prices prompted further migration of some of those credits into accruing classified and non-accruing classified during the first quarter of 2016.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Home Equity Lines of Credit - Future Principal Payment Resets (3) 
 
As of 3/31/2016
($ amounts in millions)
First Lien
 
% of Total
 
Second Lien
 
% of Total
 
Total
2016
$
20

 
0.26
%
 
$
38

 
0.49
%
 
$
58

2017
4

 
0.05
%
 
10

 
0.13
%
 
14

2018
13

 
0.17
%
 
20

 
0.26
%
 
33

2019
89

 
1.16
%
 
79

 
1.02
%
 
168

2020
181

 
2.35
%
 
139

 
1.81
%
 
320

2021-2025
1,548

 
20.11
%
 
1,519

 
19.74
%
 
3,067

2026-2030
2,011

 
26.14
%
 
2,023

 
26.29
%
 
4,034

Thereafter
—

 
—
%
 
1

 
0.02
%
 
1

Total
$
3,866

 
50.24
%
 
$
3,829

 
49.76
%
 
$
7,695

                 
(3)
The balance of Regions' home equity portfolio was $10,914 million at March 31, 2016 consisting of $7,695 million of home equity lines of credit and $3,219 million of closed-end home equity loans. The home equity lines of credit presented in the table above are based on maturity date for lines with a balloon payment and draw period expiration date for lines that convert to a repayment period. The closed-end loans were primarily originated as amortizing loans, and were therefore excluded from the table above.



12


Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2016 Earnings Release

Early and Late Stage Delinquencies

Accruing 30-89 Days Past Due Loans
As of
($ amounts in millions)
3/31/2016
 
12/31/2015
 
9/30/2015
 
6/30/2015
 
3/31/2015
Commercial and industrial
$
24

 
0.07
%
 
$
17

 
0.05
%
 
$
16

 
0.05
%
 
$
23

 
0.06
%
 
$
27

 
0.08
%
Commercial real estate mortgage—owner-occupied
34

 
0.46
%
 
31

 
0.42
%
 
41

 
0.53
%
 
38

 
0.49
%
 
30

 
0.37
%
Commercial real estate construction—owner-occupied
1

 
0.18
%
 
1

 
0.29
%
 
1

 
0.18
%
 
—

 
0.10
%
 
—

 
—
%
Total commercial
59

 
0.13
%
 
49

 
0.11
%
 
58

 
0.13
%
 
61

 
0.14
%
 
57

 
0.13
%
Commercial investor real estate mortgage
21

 
0.47
%
 
27

 
0.63
%
 
24

 
0.54
%
 
18

 
0.39
%
 
9

 
0.19
%
Commercial investor real estate construction
3

 
0.12
%
 
2

 
0.06
%
 
1

 
0.02
%
 
—

 
0.01
%
 
4

 
0.17
%
Total investor real estate
24

 
0.34
%
 
29

 
0.41
%
 
25

 
0.35
%
 
18

 
0.26
%
 
13

 
0.18
%
Residential first mortgage—non-guaranteed (1)
108

 
0.86
%
 
122

 
0.98
%
 
116

 
0.94
%
 
124

 
1.02
%
 
109

 
0.91
%
Home equity
75

 
0.68
%
 
84

 
0.76
%
 
98

 
0.89
%
 
84

 
0.77
%
 
101

 
0.93
%
Indirect—vehicles
49

 
1.20
%
 
63

 
1.59
%
 
52

 
1.33
%
 
46

 
1.21
%
 
41

 
1.10
%
Indirect—other consumer
3

 
0.50
%
 
3

 
0.57
%
 
2

 
0.33
%
 
1

 
0.14
%
 
—

 
—
%
Consumer credit card
11

 
1.08
%
 
12

 
1.08
%
 
11

 
1.13
%
 
10

 
1.02
%
 
11

 
1.14
%
Other consumer
12

 
1.20
%
 
15

 
1.44
%
 
14

 
1.41
%
 
14

 
1.42
%
 
12

 
0.99
%
Total consumer (1)
258

 
0.85
%
 
299

 
0.99
%
 
293

 
0.99
%
 
279

 
0.95
%
 
274

 
0.95
%
Total accruing 30-89 days past due loans (1)
$
341

 
0.42
%
 
$
377

 
0.47
%
 
$
376

 
0.47
%
 
$
358

 
0.45
%
 
$
344

 
0.44
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accruing 90+ Days Past Due Loans
As of
($ amounts in millions)
3/31/2016
 
12/31/2015
 
9/30/2015
 
6/30/2015
 
3/31/2015
Commercial and industrial
$
3

 
0.01
%
 
$
9

 
0.02
%
 
$
7

 
0.02
%
 
$
3

 
0.01
%
 
$
4

 
0.01
%
Commercial real estate mortgage—owner-occupied
3

 
0.04
%
 
3

 
0.03
%
 
6

 
0.08
%
 
2

 
0.02
%
 
7

 
0.09
%
Total commercial
6

 
0.02
%
 
12

 
0.03
%
 
13

 
0.03
%
 
5

 
0.01
%
 
11

 
0.03
%
Commercial investor real estate mortgage
2

 
0.04
%
 
4

 
0.10
%
 
2

 
0.05
%
 
1

 
0.01
%
 
2

 
0.05
%
Commercial investor real estate construction
8

 
0.30
%
 
—

 
—
%
 
—

 
—
%
 
—

 
—
%
 
—

 
—
%
Total investor real estate
10

 
0.14
%
 
4

 
0.06
%
 
2

 
0.03
%
 
1

 
0.01
%
 
2

 
0.03
%
Residential first mortgage—non-guaranteed (2)
115

 
0.92
%
 
113

 
0.91
%
 
121

 
0.98
%
 
109

 
0.89
%
 
109

 
0.90
%
Home equity
45

 
0.42
%
 
59

 
0.54
%
 
51

 
0.47
%
 
61

 
0.55
%
 
67

 
0.62
%
Indirect—vehicles
8

 
0.20
%
 
9

 
0.22
%
 
8

 
0.20
%
 
6

 
0.18
%
 
6

 
0.16
%
Consumer credit card
12

 
1.10
%
 
12

 
1.12
%
 
11

 
1.07
%
 
11

 
1.10
%
 
12

 
1.25
%
Other consumer
5

 
0.42
%
 
4

 
0.37
%
 
4

 
0.40
%
 
4

 
0.37
%
 
4

 
0.31
%
Total consumer (2)
185

 
0.61
%
 
197

 
0.66
%
 
195

 
0.66
%
 
191

 
0.65
%
 
198

 
0.69
%
Total accruing 90+ days past due loans (2)
$
201

 
0.25
%
 
$
213

 
0.26
%
 
$
210

 
0.26
%
 
$
197

 
0.25
%
 
$
211

 
0.27
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total delinquencies (1) (2)
$
542

 
0.67
%
 
$
590

 
0.73
%
 
$
586

 
0.73
%
 
$
555

 
0.70
%
 
$
555

 
0.71
%
                 
(1)
Excludes loans that are 100% guaranteed by FHA. Total 30-89 days past due guaranteed loans excluded were $19 million at 3/31/2016, $26 million at 12/31/2015, $23 million at 9/30/2015, $23 million at 6/30/2015, and $18 million at 3/31/2015.
(2)
Excludes loans that are 100% guaranteed by FHA and all guaranteed loans sold to GNMA where Regions has the right but not the obligation to repurchase. Total 90 days or more past due guaranteed loans excluded were $105 million at 3/31/2016, $107 million at 12/31/2015, $110 million at 9/30/2015, $103 million at 6/30/2015, and $116 million at 3/31/2015.

13


Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2016 Earnings Release

Troubled Debt Restructurings
 
 
As of
($ amounts in millions)
3/31/2016
 
12/31/2015
 
9/30/2015
 
6/30/2015
 
3/31/2015
Current:
 
 
 
 
 
 
 
 
 
Commercial
$
136

 
$
135

 
$
147

 
$
202

 
$
244

Investor real estate
103

 
149

 
145

 
194

 
227

Residential first mortgage
345

 
341

 
334

 
328

 
333

Home equity
301

 
306

 
309

 
317

 
316

Consumer credit card
2

 
2

 
2

 
2

 
2

Other consumer
12

 
12

 
13

 
14

 
15

Total current
899

 
945

 
950

 
1,057

 
1,137

Accruing 30-89 DPD:
 
 
 
 
 
 
 
 
 
Commercial
10

 
11

 
12

 
16

 
5

Investor real estate
16

 
8

 
6

 
5

 
7

Residential first mortgage
52

 
57

 
58

 
53

 
49

Home equity
15

 
17

 
19

 
18

 
21

Other consumer
1

 
1

 
1

 
1

 
1

Total accruing 30-89 DPD
94

 
94

 
96

 
93

 
83

Total accruing and <90 DPD
993

 
1,039

 
1,046

 
1,150

 
1,220

Non-accrual or 90+ DPD:
 
 
 
 
 
 
 
 
 
Commercial
149

 
135

 
118

 
93

 
104

Investor real estate
27

 
22

 
25

 
31

 
42

Residential first mortgage
80

 
81

 
88

 
90

 
96

Home equity
19

 
18

 
21

 
22

 
24

Total non-accrual or 90+DPD
275

 
256

 
252

 
236

 
266

Total TDRs - Loans
$
1,268

 
$
1,295

 
$
1,298

 
$
1,386

 
$
1,486

TDRs - Held For Sale
8

 
8

 
14

 
18

 
19

Total TDRs
$
1,276

 
$
1,303

 
$
1,312

 
$
1,404

 
$
1,505

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total TDRs - Loans by Portfolio
 
 
 
 
 
 
 
 
 
 
As of
($ amounts in millions)
3/31/2016

 
12/31/2015

 
9/30/2015

 
6/30/2015

 
3/31/2015

Total commercial TDRs
$
295


$
281


$
277


$
311


$
353

Total investor real estate TDRs
146


179


176


230


276

Total consumer TDRs
827


835


845


845


857

Total TDRs - Loans
$
1,268


$
1,295


$
1,298


$
1,386


$
1,486



14


Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2016 Earnings Release

Consolidated Balance Sheets (unaudited)
 
As of
($ amounts in millions)
3/31/2016
 
12/31/2015
 
9/30/2015
 
6/30/2015
 
3/31/2015
Assets:
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
1,708

 
$
1,382

 
$
1,726

 
$
1,661

 
$
1,737

Interest-bearing deposits in other banks
2,682

 
3,932

 
3,217

 
2,094

 
4,224

Federal funds sold and securities purchased under agreements to resell
—

 
—

 
65

 
—

 
65

Trading account securities
110

 
143

 
106

 
110

 
107

Securities held to maturity
1,901

 
1,946

 
2,001

 
2,067

 
2,129

Securities available for sale
23,095

 
22,710

 
22,034

 
22,045

 
22,375

Loans held for sale
351

 
448

 
453

 
511

 
491

Loans, net of unearned income (1)
81,606

 
81,162

 
81,063

 
80,149

 
78,243

Allowance for loan losses
(1,151
)
 
(1,106
)
 
(1,115
)
 
(1,115
)
 
(1,098
)
Net loans
80,455

 
80,056


79,948

 
79,034

 
77,145

Other earning assets (1)
1,574

 
1,652

 
773

 
697

 
587

Premises and equipment, net
2,134

 
2,152

 
2,122

 
2,147

 
2,174

Interest receivable
314

 
319

 
316

 
305

 
313

Goodwill
4,878

 
4,878

 
4,831

 
4,816

 
4,816

Residential mortgage servicing rights at fair value (MSRs)
239

 
252

 
241

 
268

 
239

Other identifiable intangible assets
246

 
259

 
263

 
268

 
272

Other assets
5,852

 
5,921

 
6,693

 
5,832

 
5,773

Total assets
$
125,539

 
$
126,050


$
124,789

 
$
121,855

 
$
122,447

Liabilities and stockholders’ equity:
 
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
 
Non-interest-bearing
$
35,153

 
$
34,862

 
$
34,117

 
$
33,810

 
$
33,553

Interest-bearing
63,001

 
63,568

 
63,061

 
63,265

 
63,924

Total deposits
98,154

 
98,430


97,178

 
97,075

 
97,477

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

 
—

 
—

 
96

 
2,085

Other short-term borrowings
—

 
10

 
—

 
1,750

 
—

Total short-term borrowings
—


10


—

 
1,846

 
2,085

Long-term borrowings
7,851

 
8,349

 
7,364

 
3,602

 
3,208

Total borrowed funds
7,851

 
8,359


7,364

 
5,448


5,293

Other liabilities
2,323

 
2,417

 
3,295

 
2,433

 
2,626

Total liabilities
108,328

 
109,206


107,837

 
104,956

 
105,396

Stockholders’ equity:


 
 
 
 
 
 
 
 
Preferred stock, non-cumulative perpetual
820

 
820

 
836

 
852

 
868

Common stock
13

 
13

 
13

 
14

 
14

Additional paid-in capital
17,716

 
17,883

 
18,019

 
18,355

 
18,604

Retained earnings (deficit)
62

 
(115
)
 
(400
)
 
(658
)
 
(943
)
Treasury stock, at cost
(1,377
)
 
(1,377
)
 
(1,377
)
 
(1,377
)
 
(1,377
)
Accumulated other comprehensive income (loss), net
(23
)
 
(380
)
 
(139
)
 
(287
)
 
(115
)
Total stockholders’ equity
17,211

 
16,844


16,952

 
16,899

 
17,051

Total liabilities and stockholders’ equity
$
125,539

 
$
126,050


$
124,789

 
$
121,855

 
$
122,447

 
(1)
During the fourth quarter of 2015, certain capital leases, for which Regions is the lessor, were determined to be operating leases resulting in their reclassification out of loans into other earning assets. These lease balances were $834 million at December 31, 2015 and $803 million at March 31, 2016.





15


Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2016 Earnings Release

Loans and Leases
 
As of
 
 
 
 
 
 
 
 
 
 
 
3/31/2016
 
3/31/2016
($ amounts in millions)
3/31/2016
 
12/31/2015
 
9/30/2015
 
6/30/2015
 
3/31/2015
 
vs. 12/31/2015
 
vs. 3/31/2015
Commercial and industrial
$
36,200

 
$
35,821

 
$
35,906

 
$
35,347

 
$
33,681

 
$
379

 
1.1
 %
 
$
2,519

 
7.5
 %
Commercial real estate mortgage—owner-occupied
7,385

 
7,538

 
7,741

 
7,797

 
8,043

 
(153
)
 
(2.0
)%
 
(658
)
 
(8.2
)%
Commercial real estate construction—owner-occupied
346

 
423

 
406

 
448

 
437

 
(77
)
 
(18.2
)%
 
(91
)
 
(20.8
)%
Total commercial
43,931

 
43,782

 
44,053

 
43,592

 
42,161

 
149

 
0.3
 %
 
1,770

 
4.2
 %
Commercial investor real estate mortgage
4,516

 
4,255

 
4,386

 
4,509

 
4,499

 
261

 
6.1
 %
 
17

 
0.4
 %
Commercial investor real estate construction
2,554

 
2,692

 
2,525

 
2,419

 
2,422

 
(138
)
 
(5.1
)%
 
132

 
5.5
 %
Total investor real estate
7,070

 
6,947

 
6,911

 
6,928

 
6,921

 
123

 
1.8
 %
 
149

 
2.2
 %
Total business
51,001

 
50,729

 
50,964

 
50,520

 
49,082

 
272

 
0.5
 %
 
1,919

 
3.9
 %
Residential first mortgage
12,895

 
12,811

 
12,730

 
12,589

 
12,418

 
84

 
0.7
 %
 
477

 
3.8
 %
Home equity—first lien
6,723

 
6,696

 
6,577

 
6,424

 
6,261

 
27

 
0.4
 %
 
462

 
7.4
 %
Home equity—second lien
4,191

 
4,282

 
4,370

 
4,475

 
4,593

 
(91
)
 
(2.1
)%
 
(402
)
 
(8.8
)%
Indirect—vehicles
4,072

 
3,984

 
3,895

 
3,782

 
3,701

 
88

 
2.2
 %
 
371

 
10.0
 %
Indirect—other consumer
652

 
545

 
490

 
383

 
272

 
107

 
19.6
 %
 
380

 
139.7
 %
Consumer credit card
1,045

 
1,075

 
1,016

 
992

 
966

 
(30
)
 
(2.8
)%
 
79

 
8.2
 %
Other consumer
1,027

 
1,040

 
1,021

 
984

 
950

 
(13
)
 
(1.3
)%
 
77

 
8.1
 %
Total consumer
30,605

 
30,433

 
30,099

 
29,629

 
29,161

 
172

 
0.6
 %
 
1,444

 
5.0
 %
Total Loans
$
81,606

 
$
81,162

 
$
81,063

 
$
80,149

 
$
78,243

 
$
444

 
0.5
 %
 
$
3,363

 
4.3
 %
Operating leases previously reported as capital leases
803

 
834

 
—

 
—

 
—

 
NM

 
NM

 
803

 
NM

Adjusted Total Loans and Leases (non-GAAP) (1)
$
82,409

 
$
81,996

 
$
81,063

 
$
80,149

 
$
78,243

 
NM

 
NM

 
$
4,166

 
5.3
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average Balances
($ amounts in millions)
1Q16
 
4Q15
 
3Q15
 
2Q15
 
1Q15
 
1Q16 vs. 4Q15
 
1Q16 vs. 1Q15
Commercial and industrial
$
36,103

 
$
35,511

 
$
35,647

 
$
34,480

 
$
33,418

 
$
592

 
1.7
 %
 
$
2,685

 
8.0
 %
Commercial real estate mortgage—owner-occupied
7,512

 
7,675

 
7,768

 
7,921

 
8,143

 
(163
)
 
(2.1
)%
 
(631
)
 
(7.7
)%
Commercial real estate construction—owner-occupied
359

 
415

 
443

 
430

 
422

 
(56
)
 
(13.5
)%
 
(63
)
 
(14.9
)%
Total commercial
43,974

 
43,601

 
43,858

 
42,831

 
41,983

 
373

 
0.9
 %
 
1,991

 
4.7
 %
Commercial investor real estate mortgage
4,430

 
4,332

 
4,441

 
4,549

 
4,629

 
98

 
2.3
 %
 
(199
)
 
(4.3
)%
Commercial investor real estate construction
2,591

 
2,576

 
2,455

 
2,416

 
2,236

 
15

 
0.6
 %
 
355

 
15.9
 %
Total investor real estate
7,021

 
6,908

 
6,896

 
6,965

 
6,865

 
113

 
1.6
 %
 
156

 
2.3
 %
Total business
50,995

 
50,509

 
50,754

 
49,796

 
48,848

 
486

 
1.0
 %
 
2,147

 
4.4
 %
Residential first mortgage
12,828

 
12,753

 
12,649

 
12,471

 
12,330

 
75

 
0.6
 %
 
498

 
4.0
 %
Home equity—first lien
6,725

 
6,643

 
6,510

 
6,355

 
6,234

 
82

 
1.2
 %
 
491

 
7.9
 %
Home equity—second lien
4,231

 
4,305

 
4,392

 
4,512

 
4,651

 
(74
)
 
(1.7
)%
 
(420
)
 
(9.0
)%
Indirect—vehicles
4,056

 
3,969

 
3,863

 
3,768

 
3,708

 
87

 
2.2
 %
 
348

 
9.4
 %
Indirect—other consumer
599

 
523

 
439

 
328

 
237

 
76

 
14.5
 %
 
362

 
152.7
 %
Consumer credit card
1,050

 
1,031

 
1,004

 
975

 
977

 
19

 
1.8
 %
 
73

 
7.5
 %
Other consumer
1,026

 
1,027

 
1,004

 
970

 
957

 
(1
)
 
(0.1
)%
 
69

 
7.2
 %
Total consumer
30,515

 
30,251

 
29,861

 
29,379

 
29,094

 
264

 
0.9
 %
 
1,421

 
4.9
 %
Total Loans
$
81,510

 
$
80,760

 
$
80,615

 
$
79,175

 
$
77,942

 
$
750

 
0.9
 %
 
$
3,568

 
4.6
 %
Operating leases previously reported as capital leases
825

 
852

 
—

 
—

 
—

 
NM

 
NM

 
825

 
NM

Adjusted Total Loans and Leases (non-GAAP) (1)
$
82,335

 
$
81,612

 
$
80,615

 
$
79,175

 
$
77,942

 
NM

 
NM

 
$
4,393

 
5.6
 %
                  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NM - Not Meaningful
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Regions believes including the impact of the operating leases, reported as capital leases prior to the fourth quarter of 2015, provides a meaningful calculation of loan and lease
        growth rates and presents them on the same basis as that applied by management. All of these leases were previously included in the commercial and industrial loan category.
        Beginning in 2016, the linked quarter growth rates do not require an adjustment for operating leases because these leases are excluded from total loans in both periods.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

16


Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2016 Earnings Release

Loans and Leases (Continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
End of Period Loan Portfolio Balances by Percentage
 
 
 
As of
 
 
 
3/31/2016
 
12/31/2015
 
9/30/2015
 
6/30/2015
 
3/31/2015
Commercial and industrial
 
 
 
44.4
%
 
44.1
%

44.3
 %
 
44.1
%
 
43.0
 %
Commercial real estate mortgage—owner-occupied
 
 
 
9.0
%
 
9.3
%

9.5
 %
 
9.7
%
 
10.3
 %
Commercial real estate construction—owner-occupied
 
 
 
0.4
%
 
0.5
%

0.5
 %
 
0.6
%
 
0.6
 %
Total commercial
 
 
 
53.8
%
 
53.9
%

54.3
 %
 
54.4
%
 
53.9
 %
Commercial investor real estate mortgage
 
 
 
5.6
%
 
5.3
%

5.4
 %
 
5.6
%
 
5.7
 %
Commercial investor real estate construction
 
 
 
3.1
%
 
3.3
%

3.1
 %
 
3.0
%
 
3.1
 %
Total investor real estate
 
 
 
8.7
%
 
8.6
%

8.5
 %
 
8.6
%
 
8.8
 %
Total business
 
 
 
62.5
%
 
62.5
%
 
62.8
 %
 
63.0
%
 
62.7
 %
Residential first mortgage
 
 
 
15.8
%
 
15.8
%

15.7
 %
 
15.7
%
 
15.9
 %
Home equity—first lien
 
 
 
8.2
%
 
8.2
%

8.1
 %
 
8.0
%
 
8.0
 %
Home equity—second lien
 
 
 
5.1
%
 
5.3
%

5.4
 %
 
5.6
%
 
5.9
 %
Indirect—vehicles
 
 
 
5.0
%
 
4.9
%

4.8
 %
 
4.7
%
 
4.7
 %
Indirect—other consumer
 
 
 
0.8
%
 
0.7
%
 
0.6
 %
 
0.5
%
 
0.4
 %
Consumer credit card
 
 
 
1.3
%
 
1.3
%

1.3
 %
 
1.3
%
 
1.2
 %
Other consumer
 
 
 
1.3
%
 
1.3
%

1.3
 %

1.2
%

1.2
%
Total consumer
 
 
 
37.5
%
 
37.5
%

37.2
 %
 
37.0
%
 
37.3
 %
Total Loans
 
 
 
100.0
%
 
100.0
%

100.0
 %
 
100.0
%
 
100.0
 %




17


Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2016 Earnings Release

Deposits
 
As of
 
 
 
 
 
 
 
 
 
 
 
3/31/2016
 
3/31/2016
($ amounts in millions)
3/31/2016
 
12/31/2015
 
9/30/2015
 
6/30/2015
 
3/31/2015
 
vs. 12/31/2015
 
vs. 3/31/2015
Customer Deposits
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-free deposits
$
35,153

 
$
34,862

 
$
34,117

 
$
33,810

 
$
33,553

 
$
291

 
0.8
 %
 
$
1,600

 
4.8
 %
Interest-bearing checking
21,172

 
21,902

 
21,096

 
21,315

 
21,780

 
(730
)
 
(3.3
)%
 
(608
)
 
(2.8
)%
Savings
7,768

 
7,287

 
7,184

 
7,157

 
7,146

 
481

 
6.6
 %
 
622

 
8.7
 %
Money market—domestic
26,607

 
26,468

 
26,541

 
26,417

 
26,371

 
139

 
0.5
 %
 
236

 
0.9
 %
Money market—foreign
270

 
243

 
256

 
258

 
238

 
27

 
11.1
 %
 
32

 
13.4
 %
Low-cost deposits
90,970

 
90,762

 
89,194

 
88,957

 
89,088

 
208

 
0.2
 %
 
1,882

 
2.1
 %
Time deposits
7,161

 
7,468

 
7,784

 
8,118

 
8,389

 
(307
)
 
(4.1
)%
 
(1,228
)
 
(14.6
)%
Total Customer Deposits
98,131

 
98,230

 
96,978

 
97,075

 
97,477

 
(99
)
 
(0.1
)%
 
654

 
0.7
 %
Corporate Treasury Deposits
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Time deposits
23

 
200

 
200

 
—

 
—

 
(177
)
 
(88.5
)%
 
23

 
NM

Total Deposits
$
98,154

 
$
98,430

 
$
97,178

 
$
97,075

 
$
97,477

 
$
(276
)
 
(0.3
)%
 
$
677

 
0.7
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average Balances
($ amounts in millions)
1Q16
 
4Q15
 
3Q15
 
2Q15
 
1Q15
 
1Q16 vs. 4Q15
 
1Q16 vs. 1Q15
Customer Deposits
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-free deposits
$
34,826

 
$
34,746

 
$
34,089

 
$
33,708

 
$
32,255

 
$
80

 
0.2
 %
 
$
2,571

 
8.0
 %
Interest-bearing checking
21,244

 
21,052

 
20,992

 
21,494

 
21,769

 
192

 
0.9
 %
 
(525
)
 
(2.4
)%
Savings
7,491

 
7,245

 
7,182

 
7,165

 
6,878

 
246

 
3.4
 %
 
613

 
8.9
 %
Money market—domestic
26,575

 
26,371

 
26,522

 
26,233

 
26,132

 
204

 
0.8
 %
 
443

 
1.7
 %
Money market—foreign
246

 
256

 
271

 
250

 
249

 
(10
)
 
(3.9
)%
 
(3
)
 
(1.2
)%
Low-cost deposits
90,382

 
89,670

 
89,056

 
88,850

 
87,283

 
712

 
0.8
 %
 
3,099

 
3.6
 %
Time deposits
7,277

 
7,618

 
7,958

 
8,250

 
8,500

 
(341
)
 
(4.5
)%
 
(1,223
)
 
(14.4
)%
Total Customer Deposits
97,659

 
97,288

 
97,014

 
97,100

 
95,783

 
371

 
0.4
 %
 
1,876

 
2.0
 %
Corporate Treasury Deposits
 
 
 
 
 
 
 
 
 
 


 


 
 
 


Time deposits
91

 
200

 
152

 
—

 
—

 
(109
)
 
(54.5
)%
 
91

 
NM

Total Deposits
$
97,750

 
$
97,488

 
$
97,166

 
$
97,100

 
$
95,783

 
$
262

 
0.3
 %
 
$
1,967

 
2.1
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of
End of Period Deposits by Percentage
 
 
 
3/31/2016
 
12/31/2015
 
9/30/2015
 
6/30/2015
 
3/31/2015
Customer Deposits
 
 
 
 
 
 
 
 
 
 
 
 
Interest-free deposits
 
 
 
35.8
%
 
35.4
%

35.1
 %
 
34.8
%
 
34.4
 %
Interest-bearing checking
 
 
 
21.6
%
 
22.3
%

21.7
 %
 
22.0
%
 
22.4
 %
Savings
 
 
 
7.9
%
 
7.4
%

7.4
 %
 
7.4
%
 
7.3
 %
Money market—domestic
 
 
 
27.1
%
 
26.9
%
 
27.3
 %
 
27.2
%
 
27.1
 %
Money market—foreign
 
 
 
0.3
%
 
0.2
%

0.3
 %
 
0.3
%
 
0.2
 %
Low-cost deposits
 
 
 
92.7
%
 
92.2
%

91.8
 %
 
91.7
%
 
91.4
 %
Time deposits
 
 
 
7.3
%
 
7.6
%

8.0
 %
 
8.3
%
 
8.6
 %
Total Customer Deposits
 
 
 
100.0
%
 
99.8
%

99.8
 %
 
100.0
%
 
100.0
 %
Corporate Treasury Deposits
 
 
 
 
 
 
 
 
 
 
 
 
Time deposits
 
 
 
—
%
 
0.2
%

0.2
 %
 
—
%
 
—
 %
Total Deposits
 
 
 
100.0
%
 
100.0
%

100.0
 %
 
100.0
%
 
100.0
 %



18


Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2016 Earnings Release

Reconciliation to GAAP Financial Measures
Tangible Common Ratios and Capital
The following tables provide the calculation of the end of period “tangible common stockholders’ equity” and "tangible common book value per share" ratios, a reconciliation of stockholders’ equity (GAAP) to tangible common stockholders’ equity (non-GAAP), and the fully phased-in pro-forma of Basel III common equity Tier 1 (non-GAAP).

The calculation of the fully phased-in pro-forma "Common equity Tier 1" (CET1) is based on Regions’ understanding of the Final Basel III requirements. For Regions, the Basel III framework became effective on a phased-in approach starting in 2015 with full implementation beginning in 2019. The calculation provided below includes estimated pro-forma amounts for the ratio on a fully phased-in basis. Regions’ current understanding of the final framework includes certain assumptions, 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 Regions is not currently subject to the fully phased-in capital rules, this pro-forma measure is considered to be a non-GAAP financial measure, and other entities may calculate it differently from Regions’ disclosed calculation.

A company's regulatory capital 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 broad risk categories. The aggregated dollar amount in each category is then multiplied by the prescribed risk-weighted percentage. The resulting weighted values from each of the 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. Common equity Tier 1 capital is then divided by this denominator (risk-weighted assets) to determine the common equity Tier 1 capital ratio. The amounts disclosed as risk-weighted assets are calculated consistent with banking regulatory requirements on a fully phased-in basis.

Since analysts and banking regulators may assess Regions’ capital adequacy using tangible common stockholders' equity and the fully phased-in Basel III framework, we believe that it is useful to provide investors the ability to assess Regions’ capital adequacy on these same bases.
 
 
As of and for Quarter Ended
($ amounts in millions, except per share data)
 
3/31/2016
 
12/31/2015
 
9/30/2015
 
6/30/2015
 
3/31/2015
Tangible Common Ratios—Consolidated
 


 
 
 
 
 
 
 
 
Stockholders’ equity (GAAP)
 
$
17,211

 
$
16,844

 
$
16,952

 
$
16,899

 
$
17,051

Less:
 


 
 
 
 
 
 
 
 
Preferred stock (GAAP)
 
820

 
820

 
836

 
852

 
868

Intangible assets (GAAP)
 
5,124

 
5,137

 
5,094

 
5,084

 
5,088

Deferred tax liability related to intangibles (GAAP)
 
(164
)
 
(165
)
 
(168
)
 
(170
)
 
(173
)
Tangible common stockholders’ equity (non-GAAP)
A
$
11,431

 
$
11,052

 
$
11,190

 
$
11,133

 
$
11,268

Total assets (GAAP)
 
$
125,539

 
$
126,050

 
$
124,789

 
$
121,855

 
$
122,447

Less:
 


 
 
 
 
 
 
 
 
Intangible assets (GAAP)
 
5,124

 
5,137

 
5,094

 
5,084

 
5,088

Deferred tax liability related to intangibles (GAAP)
 
(164
)
 
(165
)
 
(168
)
 
(170
)
 
(173
)
Tangible assets (non-GAAP)
B
$
120,579

 
$
121,078

 
$
119,863

 
$
116,941

 
$
117,532

Shares outstanding—end of quarter
C
1,275

 
1,297

 
1,304

 
1,331

 
1,343

Tangible common stockholders’ equity to tangible assets (non-GAAP)
A/B
9.48
%
 
9.13
%
 
9.34
%
 
9.52
%
 
9.59
%
Tangible common book value per share (non-GAAP)
A/C
$
8.97

 
$
8.52

 
$
8.58

 
$
8.37

 
$
8.39


($ amounts in millions)
 
3/31/2016
 
12/31/2015
 
9/30/2015
 
6/30/2015
 
3/31/2015

Basel III Common Equity Tier 1 Ratio—Fully Phased-In Pro-Forma (1)
 
 
 
 
 
 
 


 
 
Stockholder's equity (GAAP)
 
$
17,211

 
$
16,844

 
$
16,952

 
$
16,899

 
$
17,051

Non-qualifying goodwill and intangibles 
 
(4,947
)
 
(4,958
)
 
(4,913
)
 
(4,902
)
 
(4,910
)
Adjustments, including all components of accumulated other comprehensive income, disallowed deferred tax assets, threshold deductions and other adjustments
 
(71
)
 
286

 
41

 
183

 
1

Preferred stock (GAAP)
 
(820
)
 
(820
)
 
(836
)
 
(852
)
 
(868
)
Basel III common equity Tier 1—Fully Phased-In Pro-Forma (non-GAAP)
D
$
11,373

 
$
11,352

 
$
11,244

 
$
11,328

 
$
11,274

Basel III risk-weighted assets—Fully Phased-In Pro-Forma (non-GAAP) (2)
E
$
106,320

 
$
106,188

 
$
104,645

 
$
102,479

 
$
101,027

Basel III common equity Tier 1 ratio—Fully Phased-In Pro-Forma (non-GAAP)
D/E
10.7
%
 
10.7
%
 
10.8
%
 
11.1
%
 
11.2
%
                
(1)
Current quarter amounts and the resulting ratio are estimated.
(2)
Regions continues to develop systems and internal controls to precisely calculate risk-weighted assets as required by Basel III on a fully phased-in basis. The amounts included above are a reasonable approximation, based on our understanding of the requirements.



19


Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2016 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 reductions of economic growth, which may adversely affect our lending and other businesses and our financial results and conditions.
•
Possible changes in trade, monetary and fiscal policies of, and other activities undertaken by, governments, agencies, central banks and similar organizations, which could have a material adverse effect on our earnings.
•
The effects of a possible downgrade in the U.S. government’s sovereign credit rating or outlook, which could result in risks to us and general economic conditions that we are not able to predict.
•
Possible changes in market interest rates or capital markets could adversely affect our revenue and expense, the value of assets and obligations, and the availability and cost of capital and liquidity.
•
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 where our allowance for loan losses may not be adequate to cover our eventual losses.
•
Possible acceleration of prepayments on mortgage-backed securities due to low interest rates, and the related acceleration of premium amortization on those securities.
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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.
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Loss of customer checking and savings account deposits as customers pursue other, higher-yield investments, which could increase our funding costs.
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Our inability to develop and gain acceptance from current and prospective customers for new products and services in a timely manner could have a negative impact on our revenue.
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The effects of any developments, changes or actions relating to any litigation or regulatory proceedings brought against us or any of our subsidiaries.
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Changes in laws and regulations affecting our businesses, such as the Dodd-Frank Act and other legislation and regulations relating to bank products and services, as well as changes in the enforcement and interpretation of such laws and regulations by applicable governmental and self-regulatory agencies, which could require us to change certain business practices, increase compliance risk, reduce our revenue, impose additional costs on us, or otherwise negatively affect our businesses.
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Our ability to obtain a regulatory non-objection (as part of the comprehensive capital analysis and review ("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 redeem preferred stock or other regulatory capital instruments, may impact our ability to return capital to stockholders and market perceptions of us.
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Our ability to comply with stress testing and capital planning requirements (as part of the CCAR process or otherwise) may continue to require a significant investment of our managerial resources due to the importance and intensity of such tests and requirements.
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Our ability to comply with applicable capital and liquidity requirements (including, among other things, the Basel III capital standards and the liquidity coverage ratio "LCR" rule), including our ability to generate capital internally or raise capital on favorable terms, and if we fail to meet requirements, our financial condition could be negatively impacted.
•
The Basel III framework calls for additional risk-based capital surcharges for globally systemically important banks. Although we are not subject to such surcharges, it is possible that in the future we may become subject to similar surcharges.
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The costs, including possibly incurring fines, penalties, or other negative 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 are a party, and which may adversely affect our results.
•
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.
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Our ability to execute on our strategic and operational plans, including our ability to fully realize the financial and non-financial benefits relating to our strategic initiatives.
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The success of our marketing efforts in attracting and retaining customers.
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Possible changes in consumer and business spending and saving habits and the related effect on our ability to increase assets and to attract deposits, which could adversely affect our net income.
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Our ability to recruit and retain talented and experienced personnel to assist in the development, management and operation of our products and services may be affected by changes in laws and regulations in effect from time to time.
•
Fraud or misconduct by our customers, employees or business partners.
•
Any inaccurate or incomplete information provided to us by our customers or counterparties.
•
The risks and uncertainties related to our acquisition and integration of other companies.

20


Regions Financial Corporation and Subsidiaries                                
Financial Supplement to First Quarter 2016 Earnings Release

Forward-Looking Statements (Continued)

•
Inability of our framework to manage risks associated with our business such as credit risk and operational risk, including third-party vendors and other service providers, which could, among other things, result in a breach of operating or security systems as a result of a cyber attack or similar act.
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The inability of our internal disclosure controls and procedures to prevent, detect or mitigate any material errors or fraudulent acts.
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The effects of geopolitical instability, including wars, conflicts and terrorist attacks and the potential impact, directly or indirectly, on our businesses.
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The effects of man-made and natural disasters, including fires, floods, droughts, tornadoes, hurricanes, and environmental damage, which may negatively affect our operations and/or our loan portfolios and increase our cost of conducting business.
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Changes in commodity market prices and conditions could adversely affect the cash flows of our borrowers operating in industries that are impacted by changes in commodity prices (including businesses indirectly impacted by commodities prices such as businesses that transport commodities or manufacture equipment used in the production of commodities), which could impair their ability to service any loans outstanding to them and/or reduce demand for loans in those industries.
•
Our inability to keep pace with technological changes could result in losing business to competitors.
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Our ability to identify and address cyber-security risks such as data security breaches, “denial of service” attacks, “hacking” and identity theft, a failure of which could disrupt our business and result in the disclosure of and/or misuse or misappropriation of confidential or proprietary information; increased costs; losses; or adverse effects to our reputation.
•
Significant disruption of, or loss of public confidence in, the Internet and services and devices used to access the Internet could affect the ability of our customers to access their accounts and conduct banking transactions.
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Possible downgrades in our credit ratings or outlook could increase the costs of funding from capital markets.
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The effects of problems encountered by other financial institutions that adversely affect us or the banking industry generally could require us to change certain business practices, reduce our revenue, impose additional costs on us, or otherwise negatively affect our businesses.
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The effects of the failure of any component of our business infrastructure provided by a third party could disrupt our businesses; result in the disclosure of and/or misuse of confidential information or proprietary information; increase our costs; negatively affect our reputation; and cause losses.
•
Our ability to receive dividends from our subsidiaries could affect our liquidity and ability to pay dividends to stockholders.
•
Changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board ("FASB") or other regulatory agencies could materially affect how we report our financial results.
•
Other risks identified from time to time in reports that we file with the Securities and Exchange Commission ("SEC").
•
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, 2015, as filed with the SEC.
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 Dana Nolan at (205) 581-7890; Regions’ Media contact is Evelyn Mitchell at (205) 264-4551.

21


1st Quarter Earnings Conference Call April 15, 2016 Exhibit 99.3

 
A solid start to 2016 2016 Strategic Initiatives ▪ Grow and diversify revenue streams ▪ Disciplined expense management ▪ Effectively deploy capital • Results reflect growth in total revenue, lower adjusted expenses(2) and positive operating leverage • Expanded customer base as checking accounts, households, credit cards and wealth accounts grew • Recognized by Temkin Group and Greenwich Associates for providing industry-leading customer service and customer experiences • Submitted capital plan First Quarter Highlights ($ in millions, except per share data) 1Q16 1Q15 Change Net Income(1) $257 $218 18% Diluted EPS - Continuing Operations $0.20 $0.16 25% Average Loans and Leases 81,510 77,942 5% Average Deposits 97,750 95,783 2% Total Adjusted Revenue (FTE)(2) $1.4B $1.3B 7% Adjusted efficiency ratio(2) 60.6% 64.9% 430 bps (1) Available to common shareholders (2) Non-GAAP; see appendix for reconciliation Demonstrates we are successfully executing on our strategic plan 2

 
Loans and leases reflect solid growth 1Q15 2Q15 3Q15 4Q15 1Q16 $77.9 $79.2 $80.6 $80.8 $81.5 ($ in billions) Average loan and lease balances Quarter-over-Quarter: • Loan and lease balances up $750MM or 1% • Business lending balances increased 1%, driven by Corporate Banking and Real Estate Banking • Consumer lending experienced another strong quarter as almost every category experienced growth and production increased 3% Year-over-Year: • Loan and lease balances up $4 billion or 5% • Business lending achieved solid growth as balances increased 4%; all lending groups achieved growth including Corporate Banking, Commercial Banking and Real Estate Banking • Consumer lending balances increased 5%, driven by new initiatives 3

 
Average deposits experienced growth Low-cost deposits Time deposits + Other 1Q15 2Q15 3Q15 4Q15 1Q16 87.3 88.9 89.1 89.7 90.4 8.5 $95.8 8.2 $97.1 8.1 $97.2 7.8 $97.5 7.4 $97.8 ($ in billions) Quarter-over-Quarter: • Deposits up $262MM • Low-cost deposits up $712MM or 1% • Deposit costs steady at 11 basis points • Funding costs up 2 basis points to 28 basis points Year-over-Year: • Total deposits up $2B or 2% • Low-cost deposits up $3B or 4% 4

 
Increased net interest income and other financing income and net interest margin Net Interest Income and Other Financing Income (FTE) Net Interest Margin 1Q15 2Q15 3Q15 4Q15 1Q16 $856 3.18% 3.16% 3.13% 3.08% 3.19% Quarter-over-Quarter: • Adjusted net interest income and other financing income (FTE) up $12MM or 1%(1) ◦ Primary drivers of increase were higher loan balances and increases in short-term interest rates ◦ Additionally, there were several items unlikely to repeat that benefited income, including lower premium amortization and higher dividend income related to trading assets ◦ Offset by lower dividends on Federal Reserve Stock and one less day in the quarter Year-over-Year: • Net interest income and other financing income (FTE) up $51MM or 6% ◦ Increase driven by loan growth, balance sheet optimization strategies and higher short-term rates (1) During the fourth quarter of 2015, Regions corrected the accounting for certain leases which had previously been included in loans. The cumulative effect on pre-tax income lowered net interest income and other financing income $15 million, therefore net interest income and other financing income would have been $871 million. The correction also reduced the net interest margin by 5 basis points and would have been 3.13%. The company does not expect this adjustment to have a material impact to net interest income and other financing income or net interest margin in any future reporting period. ($ in millions) 5 (1) $883 $855 $839$832

 
Non-interest income driven by growth in revenue diversification initiatives 1Q15 2Q15 3Q15 4Q15 1Q16 41 40 46 39 37 38 59 66 54 75 69 98 97 102 100 106 85 90 93 96 95 161 168 167 166 159 7 96 13 12 470 940 590 1,180 497 994 514 1,028 506 1,012 (1) Non-GAAP; see appendix for reconciliation (2) 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. Quarter-over-Quarter: • Adjusted non-interest income increased 1%(1) driven by revenue diversification initiatives • Capital markets income increased $13MM or 46% • Wealth Management income increased $6MM or 6% • Service charges declined 4%, impacted by seasonality and posting order changes that went into effect in early November 2015 • Bank owned life insurance increased $14MM Year-over-Year: • Adjusted non-interest income increased $45MM or 10%(1) driven by growth in checking accounts and credit card accounts, higher bank owned life insurance income, as well as new revenue initiatives • Capital markets income increased $21MM, more than double 1Q15 • Wealth Management income increased $8MM or 8% • Service charges declined 1% impacted by posting order changes $470 $590 $497 $514 Selected Items(1) Other Capital Markets Wealth Management Income(2) Mortgage Income Card and ATM fees Service charges on deposit accounts ($ in millions) $506 6 (2) 20 27 29 28

 
Disciplined non-interest expense management 1Q15 2Q15 3Q15 4Q15 1Q16 $840 $859 $894 $861 $843 $65 $75 $1 $12 $26 Quarter-over-Quarter: • Total adjusted expenses declined $18MM or 2%(1) • Total salaries and benefits decreased $3MM or $9MM on an adjusted basis ◦ $12MM in severance expense in 1Q16 related to charges for staffing reductions, up from $6MM in 4Q15 ◦ Staffing levels declined 2% ◦ Lower expenses associated with liabilities related to employee benefits ◦ Partially offset by seasonal increases in payroll taxes of $12MM • Legal fees declined $9MM, which included a favorable legal settlement of $7MM Year-over-Year: • Total adjusted expenses increased $3MM(1) • Total salaries and benefits increased $17MM, primarily attributable to $12MM in 1Q16 severance expense; adjusted salaries and benefits increased $5MM • Legal fees declined $6MM, primarily related to a favorable legal settlement in 1Q16 (1) Non-GAAP; see appendix for reconciliation ($ in millions) Selected Items(1) Adjusted Non-Interest Expense(1) $905 $934 $895 $873 $869 7

 
Net Charge-Offs Net Charge-Offs ratio 1Q15 2Q15 3Q15 4Q15 1Q16 $54 $46 $60 $78 $68 0.28% 0.23% 0.30% 0.38% 0.34% NPLs Coverage Ratio 1Q15 2Q15 3Q15 4Q15 1Q16 $800 $751 $789 $782 $993 137% 149% 141% 141% 116% Classified Loans Special Mention 1Q15 2Q15 3Q15 4Q15 1Q16 1,727 1,787 1,838 1,937 2,640 1,097 $2,824 1,163 $2,950 1,416 $3,254 1,434 $3,371 985 $3,625 1Q15 2Q15 3Q15 4Q15 1Q16 478 471 480 479 477 666 576 483 483 464 Net charge-offs and ratio NPLs and coverage ratio(1) Criticized and classified loans(2) Troubled debt restructurings (1) Excludes loans held for sale (2) Includes commercial and investor real estate loans only (3) The All Other category includes TDRs classified as held for sale for the following periods : $19MM in 1Q15, $18MM in 2Q15, $14MM in 3Q15, $8MM in 4Q15 and $8MM in 1Q16. $1,303$1,312 $1,404$1,505 361 357 349 341 Residential First Mortgage All Other (3) Home Equity ($ in millions) ($ in millions) ($ in millions) ($ in millions) $1,276 335 Increases in NPLs and criticized and classified loans driven by risk rating migration in energy portfolio 8

 
Industry leading capital and liquidity ratios 1Q15 2Q15 3Q15 4Q15 1Q16 12.2% 12.1% 11.7% 11.7% 11.6% 1Q15 2Q15 3Q15 4Q15 1Q16 11.2% 11.1% 10.8% 10.7% 10.7% 1Q15 2Q15 3Q15 4Q15 1Q16 80% 83% 83% 83% 83% Tier 1 capital ratio(1) Common equity Tier 1 ratio – Fully phased-in pro-forma(1)(2) Loan-to-deposit ratio(3) • Returned $255MM to shareholders, including the repurchase of $175MM of common stock and $80MM in dividends • Transitional basis Basel III Common Equity Tier 1 ratio estimated at 10.9%(1), well above current regulatory minimums • At period end, Regions was fully compliant with the final Liquidity Coverage Ratio rule (1) Current quarter ratios are estimated (2) Non-GAAP; see appendix for reconciliation (3) Based on ending balances 9

 
2016 Expectations . (1) 2016 non-interest income reflects the negative impact from posting order change of approximately $10M-$15M per quarter. • Average loan growth of 3% - 5% relative to 4Q15 average balances • Average deposit growth of 2% - 4% compared to 4Q15 average balances • Net interest income and other financing income up 2% - 4% • Adjusted non-interest income up 4% - 6%(1) • Adjusted expenses flat to up modestly; full year efficiency ratio <63% • Adjusted operating leverage of 2% - 4%(1) • Net charge-offs of 25 - 35 bps; given current price of oil, expect to be at the higher end of range 10

 
Appendix 11

 
• Total commitments declined; however, direct balances increased - driven primarily by higher utilization and new loans to creditworthy borrowers • Allowance for loan and lease losses was 8% of direct energy balances at 3/31/16 vs 6% at 12/31/15 • No second lien exposure outstanding within the energy portfolio • Leveraged loans account for 12% of energy related balances; the majority are Midstream • Expectations for energy related charge-offs for the remainder of 2016 are $50-$75 million • Should oil prices average $25 a barrel through the end of 2017, Regions could experience additional charge-offs of approximately $100 million • Utilization rate has remained between 40-60% since 1Q10 Energy lending overview Total energy As of 3/31/16 As of 12/31/15 ($ in millions) Loan / Lease Balances Balances Including Related Commitments % Utilization $ Criticized % Criticized Loan / Lease Balances Balances Including Related Commitments % Utilization $ Criticized % Criticized Oilfield services and supply (OFS) $984 $1,435 69% $461 47% $969 $1,565 62% $329 34% Exploration and production (E&P) 956 1,653 58% 660 69% 910 1,748 52% 433 48% Midstream 545 1,042 52% 40 7% 441 970 45% 40 9% Downstream 87 378 23% — — 71 394 18% — — Other 144 321 45% 39 27% 142 317 45% 21 15% Total direct 2,716 4,829 56% 1,200 44% 2,533 4,994 51% 823 32% Indirect 503 1,015 50% 59 12% 519 965 54% 62 12% Direct and indirect 3,219 5,844 55% 1,259 39% 3,052 5,959 51% 885 29% Operating leases 159 159 — 72 45% 162 162 — 15 9% Total energy $3,378 $6,003 56% $1,331 39% $3,214 $6,121 53% $900 28% Note: Securities portfolio contained ~$166MM of high quality, investment grade corporate bonds that are energy related at 3/31/16, down from ~$229MM at 12/31/15. In an effort to mitigate the risk of future downgrades, the company reduced energy related corporate bond exposure, incurring a $4MM security loss. A leveraged relationship is defined as senior cash flow leverage of 3x or total cash flow leverage of 4x except for Midstream Energy which is 6x total cash flow leverage. 12

 
Energy lending - Oil Field Services and Exploration & Production detail Type As of3/31/16 # of Clients* Commentary Marine $470 9 Shelf operators remain under stress. Additional stress is expected in 2016 as deepwater contracts mature and competition in the spot market intensifies. Integrated OFS 231 10 Average utilization is 48% indicating clients have liquidity to weather cycle. Expect continued downward risk movement in this segment through 2016. Compression 135 4 Linked to movement of natural gas; sector is stable and lower risk. Fluid Management 50 3 Remains a high risk sector. Pre-drilling / Drilling 76 2 Reduced capex spending of many E&P companies impacted current and future cash flows; however, Regions' larger borrowers remain liquid. Sand 22 2 Remains a high risk sector. Total Oil Field Services (OFS) $984 30 Exploration and production (E&P) $956 30** Total OFS and E&P $1,940 • 55% shared national credit (SNC) loans • 69% utilization rate compared to 62% in 4Q15 • 98% Non-pass rated (criticized) loans paying as agreed E&P Portfolio • Majority of borrowing is senior secured • 93% shared national credit (SNC) loans • 58% utilization rate compared to 52% in 4Q15 • Essentially all non-pass rated (criticized) loans paying as agreed *Represents the number of clients that comprise 75% of the loan balances outstanding. **Represents the number of clients that comprise 90% of the loan balances outstanding. OFS Portfolio 13

 
Loan balances by select states Texas Louisiana Note: Intelligence from our customer assistance program (CAP) reveals no noticeable increase in assistance requests in these markets to date. Commercial - Non-Energy, $4,323 Commercial - Energy (Direct), $1,387 Consumer Non- Real Estate Secured, $880 Consumer Real Estate Secured, $861 Investor Real Estate, $1,489 Investor Real Estate Balances by City ($ in millions) Office Retail Multi-Family Single Family Other Total Houston $13 $48 $333 $102 $17 $513 Dallas 199 28 191 46 68 532 San Antonio — 26 78 51 43 198 Other 29 43 157 2 15 246 Total $241 $145 $759 $201 $143 $1,489 Investor Real Estate Balances by City ($ in millions) Office Retail Multi-Family Single Family Other Total Baton Rouge $48 $4 $21 $38 $19 $130 New Orleans 6 8 1 2 16 33 Other 3 44 23 2 23 95 Total $57 $56 $45 $42 $58 $258 Commercial - Non-Energy, $2,258 Commercial - Energy (Direct), $556 Consumer Non-Real Estate Secured, $282 Consumer Real Estate Secured, $1,099 Investor Real Estate, $258 14 $4.5B$8.9B

 
Loan balances by select states Alabama Mississippi Commercial - Non- Energy, $5,470 Consumer Real Estate Secured, $3,545 Consumer Non-Real Estate Secured, $856 Investor Real Estate, $370 Commercial - Energy (Direct), $54 Commercial - Non-Energy, $1,513 Commercial - Energy (Direct), $70 Consumer Non-Real Estate Secured, $334 Consumer Real Estate Secured, $965 Investor Real Estate, $194 15 $3.1B$10.3B Investor Real Estate Balances by City ($ in millions) Office Retail Multi-Family Single Family Other Total Birmingham $49 $42 $29 $17 $24 $161 Huntsville 49 12 6 11 7 85 Mobile / Baldwin County 2 17 2 2 16 39 Other 9 20 20 15 21 85 Total $109 $91 $57 $45 $68 $370 Investor Real Estate Balances by City ($ in millions) Office Retail Multi-Family Single Family Other Total North Mississippi $0 $0 $0 $0 $97 $97 Gulfport / Biloxi / Pascagoula 1 — 20 1 13 35 Jackson / Other 5 2 49 1 5 62 Total $6 $2 $69 $2 $115 $194

 
Non-GAAP reconciliation: Non-interest income, non-interest expense and efficiency ratio NM - Not Meaningful (1) Regions recorded $50 million and $100 million of contingent legal and regulatory accruals during the second quarter of 2015 and the fourth quarter of 2014, respectively, related to previously disclosed matters. The fourth quarter of 2014 accruals were settled in the second quarter of 2015 for $2 million less than originally estimated and a corresponding recovery was recognized. (2) Branch consolidation, property and equipment charges in the second quarter of 2015 resulted from the transfer of land, previously held for future branch expansion, to held for sale based on changes in management's intent. (3) Insurance proceeds are related to the settlement of the previously disclosed 2010 class-action lawsuit. (4) Excluding $23 million of FDIC insurance assessment adjustments to prior assessments recorded in the third quarter of 2015, the adjusted efficiency ratio would have been 65.0%. (5) During the fourth quarter of 2015, Regions corrected the accounting for certain leases, for which Regions is the lessor. These leases had been previously classified as capital leases but were subsequently determined to be operating leases. The aggregate impact of this adjustment lowered net interest income and other financing income $15 million. Excluding the negative impact of the $15 million, the adjusted efficiency ratio would have been 62.7%. The table below presents computations of the efficiency ratio (non-GAAP), which is a measure of productivity, generally calculated as non-interest expense divided by total revenue. Management uses this ratio to monitor performance and believes this measure provides meaningful information to investors. Non-interest expense (GAAP) is presented excluding certain adjustments to arrive at adjusted non-interest expense (non-GAAP), which is the numerator for the efficiency ratio. Non-interest income (GAAP) is presented excluding certain adjustments to arrive at adjusted non-interest income (non- GAAP). Net interest income and other financing income on a taxable-equivalent basis and non-interest income are added together to arrive at total revenue on a taxable-equivalent basis. Adjustments are made to arrive at adjusted total revenue on a taxable-equivalent basis (non-GAAP), which is the denominator for the efficiency ratio. Regions believes that the exclusion of these adjustments provides a meaningful base for period-to-period comparisons, which management believes will assist investors in analyzing the operating results of the Company and predicting future performance. These non-GAAP financial measures are also used by management to assess the performance of Regions’ business. It is possible that the activities related to the adjustments may recur; however, management does not consider the activities related to the adjustments to be indications of ongoing operations. Regions believes that presentation of these non-GAAP financial measures will permit investors to assess the performance of the Company on the same basis as that applied by management. Quarter Ended ($ amounts in millions) 3/31/2016 12/31/2015 9/30/2015 6/30/2015 3/31/2015 1Q16 vs. 4Q15 1Q16 vs. 1Q15 ADJUSTED EFFICIENCY RATIO, ADJUSTED NON-INTEREST INCOME/EXPENSE- CONTINUING OPERATIONS Non-interest expense (GAAP) $ 869 $ 873 $ 895 $ 934 $ 905 $ (4) (0.5)% $ (36) (4.0)% Adjustments: Professional, legal and regulatory expenses(1) — — — (48) — — NM — NM Branch consolidation, property and equipment charges(2) (14) (6) (1) (27) (22) (8) 133.3 % 8 (36.4)% Loss on early extinguishment of debt — — — — (43) — NM 43 (100.0)% Salary and employee benefits—severance charges (12) (6) — — — (6) 100.0 % (12) NM Adjusted non-interest expense (non-GAAP) A $ 843 $ 861 $ 894 $ 859 $ 840 $ (18) (2.1)% $ 3 0.4 % Net interest income and other financing income (GAAP) $ 862 $ 836 $ 836 $ 820 $ 815 $ 26 3.1 % $ 47 5.8 % Taxable-equivalent adjustment 21 20 19 19 17 1 5.0 % 4 23.5 % Net interest income and other financing income, taxable-equivalent basis B $ 883 $ 856 $ 855 $ 839 $ 832 $ 27 3.2 % $ 51 6.1 % Non-interest income (GAAP) C $ 506 $ 514 $ 497 $ 590 $ 470 $ (8) (1.6)% $ 36 7.7 % Adjustments: Securities (gains) losses, net 5 (11) (7) (6) (5) 16 (145.5)% 10 (200.0)% Insurance proceeds(3) (3) (1) — (90) — (2) 200.0 % (3) NM Leveraged lease termination gains, net — — (6) — (2) — NM 2 (100.0)% Adjusted non-interest income (non-GAAP) D $ 508 $ 502 $ 484 $ 494 $ 463 $ 6 1.2 % $ 45 9.7 % Total revenue, taxable-equivalent basis B+C $ 1,389 $ 1,370 $ 1,352 $ 1,429 $ 1,302 $ 19 1.4 % $ 87 6.7 % Adjusted total revenue, taxable-equivalent basis (non-GAAP) B+D=E $ 1,391 $ 1,358 $ 1,339 $ 1,333 $ 1,295 $ 33 2.4 % $ 96 7.4 % Adjusted efficiency ratio (non-GAAP)(4)(5) A/E 60.6% 63.4% 66.8% 64.5% 64.9% 16

 
Non-GAAP reconciliation: Basel III common equity Tier 1 ratio – fully phased-in pro-forma (1) Current quarter amounts and the resulting ratio are estimated. (2) Regions continues to develop systems and internal controls to precisely calculate risk-weighted assets as required by Basel III on a fully phased-in basis. The amount included above is a reasonable approximation, based on our understanding of the requirements. As of and for Quarter Ended 17 The calculation of the fully phased-in pro-forma "Common equity Tier 1" (CET1) is based on Regions’ understanding of the Final Basel III requirements. For Regions, the Basel III framework became effective on a phased-in approach starting in 2015 with full implementation beginning in 2019. The calculation provided below includes estimated pro-forma amounts for the ratio on a fully phased-in basis. Regions’ current understanding of the final framework includes certain assumptions, 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 Regions is not currently subject to the fully-phased in capital rules, this pro-forma measure is considered to be a non-GAAP financial measure, and other entities may calculate it differently from Regions’ disclosed calculation.   A company's regulatory capital 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 broad risk categories. The aggregated dollar amount in each category is then multiplied by the prescribed risk-weighted percentage. The resulting weighted values from each of the 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. Common equity Tier 1 capital is then divided by this denominator (risk-weighted assets) to determine the common equity Tier 1 capital ratio. The amounts disclosed as risk-weighted assets are calculated consistent with banking regulatory requirements on a fully phased-in basis.   Since analysts and banking regulators may assess Regions’ capital adequacy using the fully phased-in Basel III framework, we believe that it is useful to provide investors the ability to assess Regions’ capital adequacy on this same basis. ($ amounts in millions) 3/31/2016 12/31/2015 9/30/2015 6/30/2015 3/31/2015 Basel III Common Equity Tier 1 Ratio—Fully Phased-In Pro-Forma (1) Stockholder's equity (GAAP) $ 17,211 $ 16,844 $ 16,952 $ 16,899 $ 17,051 Non-qualifying goodwill and intangibles (4,947) (4,958) (4,913) (4,902) (4,910) Adjustments, including all components of accumulated other comprehensive income, disallowed deferred tax assets, threshold deductions and other adjustments (71) 286 41 183 1 Preferred stock (GAAP) (820) (820) (836) (852) (868) Basel III common equity Tier 1—Fully Phased-In Pro-Forma (non-GAAP) A $ 11,373 $ 11,352 $ 11,244 $ 11,328 $ 11,274 Basel III risk-weighted assets—Fully Phased-In Pro-Forma (non-GAAP) (2) B $ 106,320 $ 106,188 $ 104,645 $ 102,479 $ 101,027 Basel III common equity Tier 1 ratio—Fully Phased-In Pro-Forma (non-GAAP) A/B 10.7% 10.7% 10.8% 11.1% 11.2 %

 
Forward-looking statements This presentation 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 reductions of economic growth, which may adversely affect our lending and other businesses and our financial results and conditions. • Possible changes in trade, monetary and fiscal policies of, and other activities undertaken by, governments, agencies, central banks and similar organizations, which could have a material adverse effect on our earnings. • The effects of a possible downgrade in the U.S. government’s sovereign credit rating or outlook, which could result in risks to us and general economic conditions that we are not able to predict. • Possible changes in market interest rates or capital markets could adversely affect our revenue and expense, the value of assets and obligations, and the availability and cost of capital and liquidity. • 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 where our allowance for loan losses may not be adequate to cover our eventual 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, which could increase our funding costs. • Our inability to develop and gain acceptance from current and prospective customers for new products and services in a timely manner could have a negative impact on our revenue. • The effects of any developments, changes or actions relating to any litigation or regulatory proceedings brought against us or any of our subsidiaries. • Changes in laws and regulations affecting our businesses, such as the Dodd-Frank Act and other legislation and regulations relating to bank products and services, as well as changes in the enforcement and interpretation of such laws and regulations by applicable governmental and self-regulatory agencies, which could require us to change certain business practices, increase compliance risk, reduce our revenue, impose additional costs on us, or otherwise negatively affect our businesses. • Our ability to obtain a regulatory non-objection (as part of the comprehensive capital analysis and review ("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 redeem preferred stock or other regulatory capital instruments, may impact our ability to return capital to stockholders and market perceptions of us. • Our ability to comply with stress testing and capital planning requirements (as part of the CCAR process or otherwise) may continue to require a significant investment of our managerial resources due to the importance and intensity of such tests and requirements. • Our ability to comply with applicable capital and liquidity requirements (including, among other things, the Basel III capital standards and the liquidity coverage ratio "LCR" rule), including our ability to generate capital internally or raise capital on favorable terms, and if we fail to meet requirements, our financial condition could be negatively impacted. • The Basel III framework calls for additional risk-based capital surcharges for globally systemically important banks. Although we are not subject to such surcharges, it is possible that in the future we may become subject to similar surcharges. • The costs, including possibly incurring fines, penalties, or other negative 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 are a party, and which may adversely affect our results. • 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. 18

 
Forward-looking statements continued 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, 2015, 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. • Our ability to execute on our strategic and operational plans, including our ability to fully realize the financial and non-financial benefits relating to our strategic initiatives. • The success of our marketing efforts in attracting and retaining customers. • Possible changes in consumer and business spending and saving habits and the related effect on our ability to increase assets and to attract deposits, which could adversely affect our net income. • Our ability to recruit and retain talented and experienced personnel to assist in the development, management and operation of our products and services may be affected by changes in laws and regulations in effect from time to time. • Fraud or misconduct by our customers, employees or business partners. • Any inaccurate or incomplete information provided to us by our customers or counterparties. • The risks and uncertainties related to our acquisition and integration of other companies. • Inability of our framework to manage risks associated with our business such as credit risk and operational risk, including third-party vendors and other service providers, which could, among other things, result in a breach of operating or security systems as a result of a cyber attack or similar act. • 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 and the potential impact, directly or indirectly, on our businesses. • The effects of man-made and natural disasters, including fires, floods, droughts, tornadoes, hurricanes, and environmental damage, which may negatively affect our operations and/or our loan portfolios and increase our cost of conducting business. • Changes in commodity market prices and conditions could adversely affect the cash flows of our borrowers operating in industries that are impacted by changes in commodity prices (including businesses indirectly impacted by commodities prices such as businesses that transport commodities or manufacture equipment used in the production of commodities), which could impair their ability to service any loans outstanding to them and/or reduce demand for loans in those industries. • Our inability to keep pace with technological changes could result in losing business to competitors. • Our ability to identify and address cyber-security risks such as data security breaches, “denial of service” attacks, “hacking” and identity theft, a failure of which could disrupt our business and result in the disclosure of and/or misuse or misappropriation of confidential or proprietary information; increased costs; losses; or adverse effects to our reputation. • Significant disruption of, or loss of public confidence in, the Internet and services and devices used to access the Internet could affect the ability of our customers to access their accounts and conduct banking transactions. • Possible downgrades in our credit ratings or outlook could increase the costs of funding from capital markets. • The effects of problems encountered by other financial institutions that adversely affect us or the banking industry generally could require us to change certain business practices, reduce our revenue, impose additional costs on us, or otherwise negatively affect our businesses. • The effects of the failure of any component of our business infrastructure provided by a third party could disrupt our businesses; result in the disclosure of and/or misuse of confidential information or proprietary information; increase our costs; negatively affect our reputation; and cause losses. • Our ability to receive dividends from our subsidiaries could affect our liquidity and ability to pay dividends to stockholders. • Changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board ("FASB") or other regulatory agencies could materially affect how we report our financial results. • Other risks identified from time to time in reports that we file with the Securities and Exchange Commission ("SEC"). • The effects of any damage to our reputation resulting from developments related to any of the items identified above. 19

 
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