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): January 18, 2018
 

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: (800) 734-4667

Not applicable
(Former name or former address, if changed since last report.)
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))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2). Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.¨







Item 2.02 Results of Operations and Financial Condition
Item 7.01 Regulation FD Disclosure
On January 19, 2018, Regions Financial Corporation (“Regions”) will issue a press release announcing its preliminary results of operations for the year and quarter ended December 31, 2017. A copy of the press release is attached hereto as Exhibit 99.1. Supplemental financial information for the year and quarter ended December 31, 2017 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 January 19, 2018. 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 February 19, 2018.
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

  
99.2

  
99.3

  






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: January 18, 2018



Exhibit



newsrelease_logoa06.jpg
Exhibit 99.1
  
Media Contact:
  
 
  
Investor Relations Contact:
Evelyn Mitchell
  
 
  
Dana Nolan
(205) 264-4551
  
 
  
(205) 264-7040

Regions reports full year 2017 earnings of $1.2 billion, up 9 percent over the prior year, and earnings per share of $1.00, up 15 percent
Solid revenue growth and expense control produce positive operating leverage

BIRMINGHAM, Ala. - (BUSINESS WIRE) - Jan. 19, 2018 - Regions Financial Corporation (NYSE:RF) today announced earnings for the fourth quarter and full year ended December 31, 2017. For the fourth quarter, the company reported net income available to common shareholders from continuing operations of $318 million and earnings per diluted share from continuing operations of $0.27. For the full year of 2017, the company reported net income available to common shareholders from continuing operations of $1.2 billion, an increase of 9 percent over the prior year, and earnings per diluted share from continuing operations of $1.00, an increase of 15 percent. Pre-tax pre-provision income increased 4 percent over the prior year generating approximately 2 percent in positive operating leverage. Adjusted pre-tax pre-provision income(1) increased 6 percent over the prior year generating approximately 2 percent in positive operating leverage on an adjusted basis(1).

“These results reflect a strong fourth quarter and end to 2017 as our teams made clear progress in executing Regions’ strategic plan to deliver greater value for our customers and shareholders,” said Grayson Hall, Chairman and CEO. “As we look ahead to our 2018 priorities, we are moving forward with Regions’ Simplify and Grow initiative, which will further position Regions for sustainable, long-term growth. As part of this effort, we are conducting a fresh, comprehensive review of the company with the goal of consistently improving the experience customers have with Regions. We are identifying ways to streamline processes and organizational structure while expediting product and service enhancements that make it easier for people to bank with us.”

Hall added, “Earlier this month, we were also pleased to announce new investments in our associates, our products and services, and our communities as a result of the savings we expect from federal tax reform. These investments, including a more competitive minimum hourly wage and greater support for product innovation, economic development, revenue growth and more, are all key to helping Regions carry out its mission and create shared value for our customers, our associates, our communities, and our shareholders.”


1


SUMMARY OF FULL YEAR 2017 RESULTS:
 
 
Year Ended December 31
($ amounts in millions, except per share data)
 
2017
 
2016
Income from continuing operations (A)
 
$
1,257

 
$
1,158

Income (loss) from discontinued operations, net of tax
 
6

 
5

Net income
 
1,263

 
1,163

Preferred dividends (B)
 
64

 
64

Net income available to common shareholders
 
$
1,199

 
$
1,099

Net income from continuing operations available to common
shareholders (A) – (B)
 
$
1,193

 
$
1,094

 
 
 
 
 
Diluted earnings per common share from continuing operations
 
$
1.00

 
$
0.87

 
 
 
 
 
Diluted earnings per common share
 
$
1.00

 
$
0.87

 
 
 
 
 

Full-year 2017 results compared to full-year 2016:
•
Net interest income and other financing income on a fully taxable equivalent basis increased 4 percent on a reported and adjusted basis(1); the resulting net interest margin was 3.32 percent, up 18 basis points, and 3.33 percent, up 19 basis points on an adjusted basis(1).
•
Non-interest income decreased 2 percent, but was relatively stable on an adjusted basis(1).
•
Non-interest expenses remained flat, but increased 1 percent on an adjusted basis(1).
•
The company reported an efficiency ratio of 63.2 percent and an adjusted efficiency ratio(1) of 62.2 percent, in 2017, an improvement of 100 and 110 basis points, respectively, compared to the prior year.
•
Regions generated positive operating leverage of approximately 2 percent on an adjusted basis(1).
•
Average loans and leases totaled $79.8 billion, down 2 percent.
◦
Consumer lending balances increased 1 percent.
◦
Business lending balances decreased 4 percent.
•
Average deposits totaled $97.3 billion, relatively stable with the prior year.
•
Net charge-offs increased 4 basis points to 0.38 percent of average loans.
•
Non-performing loans, excluding loans held for sale, decreased 35 percent to 0.81 percent of loans outstanding.
•
Business services criticized loans decreased 32 percent.
•
Allowance for loan and lease losses decreased 19 basis points to 1.17 percent of total loans; allowance for loan and lease losses as a percent of non-performing loans increased 34 basis points to 144 percent.
•
The Common Equity Tier 1 ratio(2) was estimated at 10.9 percent at December 31, 2017. The fully phased-in pro-forma Common Equity Tier 1 ratio(1)(2) was estimated at 10.8 percent, and the loan-to-deposit ratio was 83 percent.
•
Regions returned $1.6 billion of earnings to shareholders through dividends and share repurchases.


2



SUMMARY OF FOURTH QUARTER 2017 RESULTS:
 
 
Quarter Ended
($ amounts in millions, except per share data)
 
12/31/2017
 
9/30/2017
 
12/31/2016
Income from continuing operations (A)
 
$
334

 
$
312

 
$
294

Income (loss) from discontinued operations, net of tax
 
1

 
(1
)
 
1

Net income
 
335

 
311

 
295

Preferred dividends (B)
 
16

 
16

 
16

Net income available to common shareholders
 
$
319

 
$
295

 
$
279

Net income from continuing operations available to common
shareholders (A) – (B)
 
$
318

 
$
296

 
$
278

 
 
 
 
 
 
 
Diluted earnings per common share from continuing operations
 
$
0.27

 
$
0.25

 
$
0.23

 
 
 
 
 
 
 
Diluted earnings per common share
 
$
0.27

 
$
0.25

 
$
0.23

 
 
 
 
 
 
 

Fourth quarter 2017 results compared to third quarter 2017:
•
Net interest income and other financing income on a fully taxable equivalent basis remained relatively stable but increased 1 percent on an adjusted basis(1); the resulting net interest margin was 3.37 percent, up 1 basis point, and 3.39 percent, up 3 basis points on an adjusted basis(1).
•
Non-interest income increased 8 percent, and 7 percent on an adjusted basis(1).
•
Non-interest expense increased 7 percent, and 2 percent on an adjusted basis(1).
•
Average loans and leases totaled $79.5 billion, relatively stable with the prior quarter.
◦
Consumer lending balances increased modestly.
◦
Business lending balances decreased modestly.
•
Average deposits totaled $97.1 billion, relatively stable with the prior quarter.
•
Net charge-offs decreased 7 basis points to 0.31 percent of average loans.
•
Non-performing loans, excluding loans held for sale, decreased 14 percent to 0.81 percent of loans outstanding.
•
Business services criticized loans decreased 17 percent.
•
Allowance for loan and lease losses decreased 14 basis points to 1.17 percent of total loans; the allowance for loan and lease losses attributable to direct energy loans, decreased from 6.1 percent to 4.6 percent.
•
Allowance for loan losses as a percent of non-performing loans increased 7 basis points to 144 percent.


3


Fourth quarter 2017 results compared to fourth quarter 2016:
•
Net interest income and other financing income on a fully taxable equivalent basis increased 6 percent on a reported and adjusted basis(1); the resulting net interest margin increased 21 basis points, and 23 basis points on an adjusted basis(1).
•
Non-interest income increased 6 percent on a reported and adjusted basis(1).
•
Non-interest expenses increased 6 percent, and 3 percent on an adjusted basis(1).
•
Average loans and leases decreased 1 percent.
◦
Consumer lending balances were relatively stable on an average basis.
◦
Business lending balances decreased 2 percent on an average basis.
•
Average deposits decreased 1 percent.
•
Net charge-offs decreased 10 basis points.

FOURTH QUARTER 2017 FINANCIAL RESULTS:
Selected items impacting earnings:
 
 
Quarter Ended
($ amounts in millions, except per share data)
 
12/31/2017
 
9/30/2017
 
12/31/2016
Pre-tax adjusted items:
 
 
 
 
 
 
Branch consolidation, property and equipment charges
 
$
(9
)
 
$
(5
)
 
$
(17
)
Salaries and benefits related to severance charges
 
(2
)
 
(1
)
 
(5
)
Securities gains (losses), net
 
13

 
8

 
5

Reduction in leveraged lease interest income resulting from tax reform
 
(6
)
 
—

 
—

Contribution to Regions' charitable foundation associated with tax reform
 
(40
)
 
 
 
 
Leveraged lease termination gains, net
 
—

 
1

 
—

Gain on sale of affordable housing residential mortgage loans
 
—

 
—

 
5

Tax reform adjustments through income tax expense
 
(52
)
 
—

 
—

 
 
 
 
 
 
 
Diluted EPS impact*
 
$
(0.07
)
 
$
—

 
$
(0.01
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pre-tax additional selected items**:
 
 
 
 
 
 
Operating lease impairment charges
 
$
—

 
$
(10
)
 
$
—

Pension settlement charges
 
—

 
(2
)
 
—

Hurricane-related impacts on non-interest income and expense, net
 
—

 
(13
)
 
—

Visa Class B shares expense
 
(11
)
 
(4
)
 
—

 
 
 
 
 
 
 
* Based on income taxes at a 38.5% incremental rate.
** Items represent an outsized or unusual impact to the quarter or quarterly trends, but are not considered non-GAAP adjustments.

Regions continues its ongoing efficiency initiatives, including refining its branch network while making prudent investments in new technologies, delivery channels and other areas of growth. During the fourth quarter, the company incurred $9 million of expenses associated primarily with announced branch consolidations. The company has now consolidated approximately 10 percent of its branch count over the past two years.

The company also recognized $13 million in securities gains during the fourth quarter primarily associated with the sale of securities held for employee-benefit purposes.

4



In connection with income tax reform, commonly referred to as the Tax Cuts and Jobs Act, the company incurred a $29 million tax-related charge associated primarily with the revaluation of its net deferred income tax assets. The company also revised its amortization associated with low-income housing investments resulting in an additional $23 million tax-related charge. In addition, the company reduced net interest income and other financing income by $6 million associated with leveraged leases. The company also contributed $40 million to its charitable foundation in the fourth quarter.

Regions also incurred $11 million of expense in the fourth quarter associated with Visa class B shares sold in a prior year.

Total revenue
 
 
Quarter Ended
($ amounts in millions)
 
12/31/2017
 
9/30/2017
 
12/31/2016
 
4Q17 vs. 3Q17
 
4Q17 vs. 4Q16
Net interest income and other financing income
 
$
901

 
$
898

 
$
853

 
$
3

 
0.3
 %
 
$
48

 
5.6
 %
Net interest income and other financing income - fully taxable equivalent (FTE)
 
$
924

 
$
921

 
$
874

 
$
3

 
0.3
 %
 
$
50

 
5.7
 %
Reduction in leveraged lease interest income resulting from tax reform
 
6

 
—

 
—

 
6

 
NM

 
6

 
NM

Adjusted net interest income and other financing income, taxable equivalent basis (non-GAAP)(1)
 
$
930

 
$
921

 
$
874

 
$
9

 
1.0
 %
 
$
56

 
6.4
 %
Net interest margin (FTE)
 
3.37
%
 
3.36
%
 
3.16
%
 
 
 
 
 
 
 
 
Adjusted net interest margin (FTE) (non-GAAP)(1)
 
3.39
%
 
3.36
%
 
3.16
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Service charges on deposit accounts
 
171

 
175

 
173

 
(4
)
 
(2.3
)%
 
(2
)
 
(1.2
)%
Wealth management
 
110

 
108

 
103

 
2

 
1.9
 %
 
7

 
6.8
 %
Card & ATM fees
 
106

 
103

 
103

 
3

 
2.9
 %
 
3

 
2.9
 %
Capital markets fee income and other
 
56

 
35

 
31

 
21

 
60.0
 %
 
25

 
80.6
 %
Mortgage Income
 
36

 
32

 
43

 
4

 
12.5
 %
 
(7
)
 
(16.3
)%
Bank-owned life insurance
 
20

 
20

 
20

 
—

 
NM

 
—

 
NM

Commercial credit fee income
 
18

 
17

 
19

 
1

 
5.9
 %
 
(1
)
 
(5.3
)%
Market value adjustments on employee benefit assets*
 
6

 
3

 
3

 
3

 
100.0
 %
 
3

 
100.0
 %
Securities gains (losses), net
 
13

 
8

 
5

 
5

 
62.5
 %
 
8

 
160.0
 %
Other
 
19

 
14

 
22

 
5

 
35.7
 %
 
(3
)
 
(13.6
)%
Non-interest income
 
$
555

 
$
515

 
$
522

 
$
40

 
7.8
 %
 
$
33

 
6.3
 %
Total revenue, taxable-equivalent basis
 
$
1,479

 
$
1,436

 
$
1,396

 
$
43

 
3.0
 %
 
$
83

 
5.9
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted total revenue, taxable-equivalent basis (non-GAAP)(1)
 
$
1,472

 
$
1,427

 
$
1,386

 
$
45

 
3.2
 %
 
$
86

 
6.2
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NM - Not Meaningful
* These market value adjustments relate to assets held for certain employee benefits and are offset within salaries and employee benefits expense.

5



Comparison of fourth quarter 2017 to third quarter 2017
Total revenue on a fully taxable equivalent basis was $1.5 billion, reflecting a $43 million increase over the third quarter of 2017. On an adjusted basis(1), total revenue on a fully taxable equivalent basis increased $45 million or 3 percent from the prior quarter.

Net interest income and other financing income on a fully taxable equivalent basis was $924 million. On an adjusted basis(1), net interest income and other financing income on a fully taxable equivalent basis was $930 million, an increase of 1 percent over the prior quarter. The resulting net interest margin was 3.37 percent. On an adjusted basis(1) the resulting net interest margin was 3.39 percent, an increase of 3 basis points. The adjusted basis excludes the tax-related reduction to income of $6 million associated with leveraged leases. Adjusted net interest margin and net interest income and other financing income benefited from higher market interest rates in the fourth quarter offset by the full impact of debt issued during the third quarter and lower credit-related interest recoveries.

Non-interest income totaled $555 million, an increase of $40 million or 8 percent. On an adjusted basis(1), non-interest income increased $36 million or 7 percent primarily due to increases in capital markets, mortgage, and card & ATM fees. In addition, the company incurred $10 million of impairment charges reducing the value of certain operating lease assets during the third quarter that did not repeat in the fourth quarter.

Capital markets income increased $21 million or 60 percent driven primarily by higher merger and acquisition advisory services, loan syndication income, and fees generated from the placement of permanent financing for real estate customers. As it relates to mortgage income, production declined seasonally 3 percent in the quarter while income increased $4 million or 13 percent. The increase was primarily due to valuation adjustments associated with residential mortgage servicing rights and related hedges recorded in the third quarter which did not repeat at the same level in the fourth quarter. Card & ATM fees increased $3 million or 3 percent attributable to seasonally higher interchange income.


6


Comparison of fourth quarter 2017 to fourth quarter 2016
Total revenue on a fully taxable equivalent basis increased $83 million or 6 percent compared to the fourth quarter of 2016. Adjusted(1) total revenue on a fully taxable equivalent basis increased $86 million or 6 percent.

Net interest income and other financing income on a fully taxable equivalent basis increased $50 million or 6 percent on a reported basis, and $56 million or 6 percent on an adjusted basis(1). The resulting net interest margin increased 21 basis points on a reported basis, and 23 basis points on an adjusted basis(1). Net interest margin and net interest income and other financing income benefited from higher market interest rates along with prudent deposit cost management, partially offset by lower average loan balances, the impact of debt issued during the third quarter and the tax-related reduction associated with leveraged leases.

Non-interest income increased $33 million or 6 percent on a reported basis, and $30 million or 6 percent on an adjusted basis(1) driven primarily by growth in capital markets, wealth management, and card & ATM fees, partially offset by lower mortgage income.

Capital markets income increased $25 million or 81 percent reflecting higher merger and acquisition advisory services, loan syndication income, and fees generated from the placement of permanent financing for real estate customers. Wealth management income increased $7 million or 7 percent, and card & ATM fees increased $3 million or 3 percent. However, mortgage income decreased $7 million or 16 percent compared to the prior year consistent with lower production volumes.


7


Non-interest expense
 
 
Quarter Ended
($ amounts in millions)
 
12/31/2017
 
9/30/2017
 
12/31/2016
 
4Q17 vs. 3Q17
 
4Q17 vs. 4Q16
Salaries and employee benefits
 
$
496

 
$
483

 
$
472

 
$
13

 
2.7
 %
 
$
24

 
5.1
 %
Net occupancy expense
 
83

 
91

 
89

 
(8
)
 
(8.8
)%
 
(6
)
 
(6.7
)%
Furniture and equipment expense
 
81

 
84

 
80

 
(3
)
 
(3.6
)%
 
1

 
1.3
 %
Outside services
 
48

 
41

 
41

 
7

 
17.1
 %
 
7

 
17.1
 %
FDIC insurance assessments
 
27

 
28

 
28

 
(1
)
 
(3.6
)%
 
(1
)
 
(3.6
)%
Professional, legal and regulatory expenses
 
24

 
21

 
26

 
3

 
14.3
 %
 
(2
)
 
(7.7
)%
Marketing
 
23

 
24

 
23

 
(1
)
 
(4.2
)%
 
—

 
NM

Credit/checkcard expenses
 
11

 
13

 
14

 
(2
)
 
(15.4
)%
 
(3
)
 
(21.4
)%
Branch consolidation, property and equipment charges
 
9

 
5

 
17

 
4

 
80.0
 %
 
(8
)
 
(47.1
)%
Visa class B shares expense
 
11

 
4

 
—

 
7

 
175.0
 %
 
11

 
NM

Provision (credit) for unfunded credit losses
 
(6
)
 
(8
)
 
(3
)
 
2

 
(25.0
)%
 
(3
)
 
100.0
 %
Other
 
145

 
100

 
112

 
45

 
45.0
 %
 
33

 
29.5
 %
Total non-interest expense from continuing operations
 
$
952

 
$
886

 
$
899

 
$
66

 
7.4
 %
 
$
53

 
5.9
 %
Total adjusted non-interest expense(1)
 
$
901

 
$
880

 
$
877

 
$
21

 
2.4
 %
 
$
24

 
2.7
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NM - Not Meaningful

Comparison of fourth quarter 2017 to third quarter 2017
Non-interest expense totaled $952 million in the fourth quarter, an increase of $66 million or 7 percent, and included a $40 million contribution to the company's charitable foundation. On an adjusted basis(1), non-interest expense totaled $901 million, an increase of $21 million or 2 percent. Total salaries and benefits increased $13 million or 3 percent primarily due to higher production-based incentives and health insurance costs. Outside services increased $7 million or 17 percent primarily due to additional expense related to a new Wealth Management platform, which will be offset by lower salaries and benefits costs in future quarters. Visa class B shares expense also increased $7 million. Occupancy expense decreased $8 million or 9 percent primarily due to hurricane-related expenses recorded in the third quarter.

The company's reported fourth quarter efficiency ratio was 64.3 percent and 61.1 percent on an adjusted basis(1). The adjusted efficiency ratio reflects a 60 basis point improvement compared to the third quarter. The effective tax rate was 39.0 percent compared to 30.9 percent in the third quarter, impacted by adjustments associated with

8


tax reform. Excluding these adjustments, the company's effective tax rate would have been approximately 30 percent in the fourth quarter.

Comparison of fourth quarter 2017 to fourth quarter 2016
Non-interest expense increased $53 million or 6 percent. On an adjusted basis(1), non-interest expense increased $24 million or 3 percent primarily due to higher salaries and benefits costs. Total salaries and benefits increased $24 million or 5 percent reflecting the impact of merit increases, benefits costs and higher production-based incentives compared to the fourth quarter of 2016.

Loans and Leases
 
 
Average Balances
 
 
 
 
 
 
 
 
 
 
 
($ amounts in millions)
 
4Q17
 
3Q17
 
4Q16
 
4Q17 vs. 3Q17
 
4Q17 vs. 4Q16
Commercial and industrial
 
$
35,689

 
$
35,438

 
$
35,149

 
$
251

 
0.7
 %
 
$
540

 
1.5%
Commercial real estate—owner-occupied
 
6,543

 
6,745

 
7,319

 
(202
)
 
(3.0
)%
 
(776
)
 
(10.6)%
Investor real estate
 
5,924

 
6,075

 
6,672

 
(151
)
 
(2.5
)%
 
(748
)
 
(11.2)%
Business Lending
 
48,156

 
48,258

 
49,140

 
(102
)
 
(0.2
)%
 
(984
)
 
(2.0)%
Residential first mortgage
 
13,954

 
13,808

 
13,485

 
146

 
1.1
 %
 
469

 
3.5%
Home equity
 
10,206

 
10,341

 
10,711

 
(135
)
 
(1.3
)%
 
(505
)
 
(4.7)%
Indirect—vehicles
 
2,177

 
2,156

 
2,075

 
21


1.0
 %
 
102

 
4.9%
Indirect—vehicles third-party
 
1,223

 
1,406

 
2,021

 
(183
)
 
(13.0
)%
 
(798
)
 
(39.5)%
Indirect—other consumer
 
1,400

 
1,258

 
889

 
142

 
11.3
 %
 
511

 
57.5%
Consumer credit card
 
1,238

 
1,200

 
1,146

 
38

 
3.2
 %
 
92

 
8.0%
Other consumer
 
1,169

 
1,158

 
1,122

 
11

 
0.9
 %
 
47

 
4.2%
Consumer Lending
 
31,367

 
31,327

 
31,449

 
40

 
0.1
 %
 
(82
)
 
(0.3)%
Total Loans
 
$
79,523

 
$
79,585

 
$
80,589

 
$
(62
)
 
(0.1
)%
 
$
(1,066
)
 
(1.3)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NM - Not meaningful.

Comparison of fourth quarter 2017 to third quarter 2017
Average loans and leases remained relatively stable at $79.5 billion in the fourth quarter as modest growth in the consumer lending portfolio was offset by declines in the business lending portfolio. Total new and renewed loan production increased approximately 2 percent. On an ending basis, total loans and leases were $79.9 billion, an increase of $591 million from the third quarter providing momentum going into 2018.

Average balances in the consumer lending portfolio totaled $31.4 billion in the fourth quarter reflecting a modest increase of $40 million. Growth in the consumer lending portfolio continues to be impacted by the company's decision to exit a third-party arrangement within the indirect-vehicle portfolio. Excluding the third-party indirect-vehicle portfolio, average consumer balances increased $223 million.


9


Average residential first mortgage balances increased $146 million or 1 percent, but continue to be constrained by a lack of housing supply. Home equity balances declined $135 million or 1 percent driven by declines in home equity lines of credit. Average indirect-other consumer loans increased $142 million or 11 percent as the company continued to expand and grow its point-of-sale portfolio. Consumer credit card balances increased $38 million or 3 percent consistent with an increase in active credit cards.

Average balances in the business lending portfolio totaled $48.2 billion in the fourth quarter reflecting a decrease of $102 million as growth in commercial and industrial loans was offset by declines in owner-occupied commercial real estate and investor real estate. Solid loan production trends continued in the business lending portfolio during the quarter. Commercial and industrial loans grew $672 million on an ending basis during the quarter, led by growth in specialized lending. Owner-occupied commercial real estate loans declined $94 million reflecting a slowing pace of decline, and investor real estate loans declined $101 as growth in term mortgage loans was offset by declines in construction loans. The company is encouraged by improving opportunities in 2018 as economic conditions and customer sentiment continue to modestly improve. In addition, the majority of its deliberate risk management decisions in certain industries and asset classes within the business lending portfolio is substantially complete.

Comparison of fourth quarter 2017 to fourth quarter 2016
Despite a 21 percent increase in total new and renewed loan production, average loans and leases declined $1.1 billion or 1 percent compared to the fourth quarter of 2016.

Average balances in the consumer lending portfolio decreased $82 million. Average residential first mortgage balances increased $469 million or 3 percent despite the impact from an affordable housing residential mortgage loan sale in the fourth quarter of 2016. Average indirect-other consumer loans increased $511 million or 57 percent as the company continued to successfully execute its point-of-sale lending initiatives. Average consumer credit card balances increased $92 million or 8 percent as active credit cards increased 7 percent. In addition, average other consumer loans increased $47 million or 4 percent primarily due to growth in unsecured loans generated through the branch network and improved online lending capabilities. These increases were offset by declines in indirect-vehicle and home equity balances. Average indirect-vehicle balances decreased $696 million or 17 percent reflecting the company's decision to exit a third-party arrangement, and total home equity balances decreased $505 million or 5 percent as growth in home equity loans continues to be offset by declines in home equity lines of credit.

Average balances in the business lending portfolio decreased $984 million or 2 percent primarily due to elevated loan payoffs and pay downs as well as continued de-risking within certain loan portfolios. Average direct energy loans decreased $359 million or 17 percent, average multi-family investor real estate loans decreased $198 million or 10 percent, and average medical office building loans decreased $148 million or 40 percent. In

10


addition, declines in owner-occupied commercial real estate loans reflect the competitive market and continued softness in loan demand from middle market and small business customers.

Deposits
 
 
Average Balances
 
 
 
 
 
 
 
 
 
 
 
($ amounts in millions)
 
4Q17
 
3Q17
 
4Q16
 
4Q17 vs. 3Q17
 
4Q17 vs. 4Q16
Low-cost deposits
 
$
90,125

 
$
89,934

 
$
90,992

 
$
191

 
0.2%
 
$
(867
)
 
(1.0)%
Time deposits
 
6,935

 
6,929

 
7,505

 
6

 
0.1%
 
(570
)
 
(7.6)%
Total Deposits
 
$
97,060

 
$
96,863

 
$
98,497

 
$
197

 
0.2%
 
$
(1,437
)
 
(1.5)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
($ amounts in millions)
 
4Q17
 
3Q17
 
4Q16
 
4Q17 vs. 3Q17
 
4Q17 vs. 4Q16
Consumer Bank Segment
 
$
56,921

 
$
56,980

 
$
55,638

 
$
(59
)
 
(0.1)%
 
$
1,283

 
2.3%
Corporate Bank Segment
 
28,362

 
27,607

 
28,730

 
755

 
2.7%
 
(368
)
 
(1.3)%
Wealth Management Segment
 
9,163

 
9,269

 
10,245

 
(106
)
 
(1.1)%
 
(1,082
)
 
(10.6)%
Other
 
2,614

 
3,007

 
3,884

 
(393
)
 
(13.1)%
 
(1,270
)
 
(32.7)%
Total Deposits
 
$
97,060

 
$
96,863

 
$
98,497

 
$
197

 
0.2%
 
$
(1,437
)
 
(1.5)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Comparison of fourth quarter 2017 to third quarter 2017
Total average deposit balances were $97.1 billion in the fourth quarter reflecting an increase of $197 million. Average low-cost deposits increased $191 million and represented 93 percent of total average deposits. Deposit costs remained unchanged at 17 basis points, and total funding costs were 38 basis points in the fourth quarter.

Average deposits in the Consumer segment decreased $59 million while average Corporate segment deposits increased $755 million. Average deposits in the Wealth Management segment declined $106 million or 1 percent as a result of ongoing strategic reductions of certain collateralized deposits. Average deposits in the Other segment decreased $393 million or 13 percent driven primarily by the decision to reduce higher cost retail brokered sweep deposits that were no longer a necessary component of the company's current funding strategy.

Comparison of fourth quarter 2017 to fourth quarter 2016
Total average deposit balances decreased $1.4 billion or 1 percent from the prior year, including an $867 million decrease in average low-cost deposits. Growth in average Consumer segment deposits was offset by strategic reductions in Corporate, Wealth Management, and Other segment deposits.


11


Asset quality
 
 
As of and for the Quarter Ended
($ amounts in millions)
 
12/31/2017
 
9/30/2017
 
12/31/2016
ALL/Loans, net
 
1.17%
 
1.31%
 
1.36%
Allowance for loan losses to non-performing loans, excluding loans held for sale
 
1.44x
 
1.37x
 
1.10x
Net loan charge-offs as a % of average loans, annualized
 
0.31%
 
0.38%
 
0.41%
Non-accrual loans, excluding loans held for sale/Loans, net
 
0.81%
 
0.96%
 
1.24%
NPAs (ex. 90+ past due)/Loans, foreclosed properties and non-performing loans held for sale
 
0.92%
 
1.06%
 
1.37%
NPAs (inc. 90+ past due)/Loans, foreclosed properties and non-performing loans held for sale*
 
1.13%
 
1.25%
 
1.58%
Total TDRs, excluding loans held for sale
 
$1,144
 
$1,332
 
$1,385
Total Criticized Loans—Business Services**
 
$2,456
 
$2,962
 
$3,612
* Excludes guaranteed residential first mortgages that are 90+ days past due and still accruing.
** Business services represents the combined total of commercial and investor real estate loans.

Comparison of fourth quarter 2017 to third quarter 2017
The company reported broad-based asset quality improvement during the quarter. Non-performing, criticized and troubled debt restructured loans all declined. Total non-performing loans, excluding loans held for sale, decreased 14 percent to 0.81 percent of loans outstanding, marking the lowest level in over ten years. Business services criticized and total troubled debt restructured loans decreased 17 percent and 13 percent, respectively. As expected, early and late-stage delinquencies for residential mortgage loans increased in hurricane impacted markets, and the company's $40 million hurricane-related reserve remains unchanged. Despite the increase within residential mortgage, total delinquencies, excluding government guaranteed loans, declined approximately 1 percent.

Net charge-offs totaled $63 million or 0.31 percent of average loans compared to $76 million or 0.38 percent of average loans in the previous quarter. Improving economic conditions drove broad-based improvements in credit metrics, particularly improvements in risk ratings along with payoffs and paydowns of criticized loans, resulting in a negative provision expense of $44 million. The allowance for loan and lease losses decreased 14 basis points to 1.17 percent of total loans outstanding. However, the resulting allowance for loan and lease losses as a percent of total non-accrual loans increased 7 basis points to 144 percent. Given the current phase of the credit cycle, volatility in certain credit metrics can be expected, especially related to large-dollar commercial credits, fluctuating commodity prices, and continued analysis of hurricane exposures.

12



Comparison of fourth quarter 2017 to fourth quarter 2016
Net charge-offs decreased 10 basis points compared to the fourth quarter of 2016 and represented 0.31 percent of average loans compared to 0.41 percent in the prior year. The allowance for loan and lease losses as a percent of total loans decreased 19 basis points. Total non-performing loans, excluding loans held for sale, decreased 35 percent, and total business lending criticized loans decreased 32 percent.
    
Capital and liquidity
 
 
As of and for Quarter Ended
 
 
12/31/2017
 
9/30/2017
 
12/31/2016
Basel III Common Equity Tier 1 ratio(2)
 
10.9%
 
11.3%
 
11.2%
Basel III Common Equity Tier 1 ratio — Fully Phased-In Pro-Forma (non-GAAP)(1)(2)
 
10.8%
 
11.2%
 
11.1%
Tier 1 capital ratio(2)
 
11.7%
 
12.1%
 
12.0%
Tangible common stockholders’ equity to tangible assets (non-GAAP)(1)
 
8.71%
 
9.18%
 
8.99%
Tangible common book value per share (non-GAAP)(1)
 
$9.16
 
$9.33
 
$8.95

Under the Basel III capital rules, Regions’ estimated capital ratios remain well above current regulatory requirements. The Tier 1(2) and Common Equity Tier 1(2) ratios were estimated at 11.7 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 10.8 percent on a fully phased-in basis.

During the fourth quarter, the company repurchased $500 million or 31.1 million shares of common stock and declared $103 million in dividends to common shareholders. The company’s liquidity position remained solid with its loan-to-deposit ratio at the end of the quarter at 83 percent, and as of quarter-end, the company remained fully compliant with the liquidity coverage ratio rule.

(1)
Non-GAAP, refer to pages 8, 12, 13, and 27 of the financial supplement to this earnings release
(2)
Current quarter Basel III common equity Tier 1, and Tier 1 capital ratios are estimated.

Conference Call
A replay of the earnings call will be available beginning Friday, January 19, 2018, at 2 p.m. ET through Monday, February 19, 2018. To listen by telephone, please dial 1-855-859-2056, and use access code 1997189. An archived webcast will also be available on the Investor Relations page of www.regions.com.

About Regions Financial Corporation
Regions Financial Corporation (NYSE:RF), with $124 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 1,500 banking offices and 1,900 ATMs. Additional information about Regions and its full line of products and services can be found at www.regions.com.

13



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 and leases, including operating leases.
•
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 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 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.
•
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.

14


•
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, malware, “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; disruption or damage to our systems; increased costs; losses; or adverse effects to our reputation.
•
Our ability to realize our adjusted efficiency ratio target as part of our expense management initiatives.
•
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 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 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, 2016, 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) 264-7040; Regions’ Media contact is Evelyn Mitchell at (205) 264-4551.

Use of non-GAAP financial measures
Management uses pre-tax pre-provision income (non-GAAP) and adjusted pre-tax pre-provision income (non-GAAP), as well as 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. Adjusted non-interest income (non-GAAP) and adjusted non-interest expense (non-GAAP) are used to determine adjusted pre-tax pre-provision income (non-GAAP). Net interest income and other financing income (GAAP) on a taxable-equivalent basis and non-interest income are added together to arrive at total revenue on a taxable-equivalent basis. Net interest income and other financing income on a taxable-equivalent basis is presented excluding certain adjustments related to tax reform to arrive at adjusted net interest income and other financing income on a taxable-equivalent basis (non-GAAP). 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 Company's allowance for loan losses as a percentage of non-accrual loans, or coverage ratio is an important credit metric to many investors. Much of the Company's energy exposure is collateralized and therefore requires a lower specific allowance. Adjusting the Company's total allowance for loan losses to exclude the portion attributable to energy and excluding non-accrual energy loans produces an adjusted coverage ratio that management believes could be meaningful to investors.

15



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.

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.

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

16
Exhibit
Exhibit 99.2

regionslogoa17.jpg
Regions Financial Corporation and Subsidiaries
Financial Supplement
Fourth Quarter 2017


Regions Financial Corporation and Subsidiaries                                
Financial Supplement to Fourth Quarter 2017 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 Net Interest Income/Margin FTE Basis, Adjusted Efficiency Ratios, Adjusted Fee Income Ratios, Adjusted Non-Interest Income / Expense, Adjusted Operating Leverage Ratios, and Return Ratios
 
 
 
Statements of Discontinued Operations
  
 
 
Credit Quality
  
 
Allowance for Credit Losses, Net Charge-Offs and Related Ratios
  
Non-Accrual Loans (excludes loans held for sale), Adjusted Non-Accrual Loans and Select Ratios, Criticized and Classified Loans - Business Services, and Home Equity Lines of Credit - Future Principal Payment Resets
  
Early and Late Stage Delinquencies
  
Troubled Debt Restructurings
  
 
 
Consolidated Balance Sheets
  
 
  
Loans
  
 
 
Deposits
  
 
 
Reconciliation to GAAP Financial Measures
  
 
Tangible Common Ratios and Capital
 
 
 
Forward-Looking Statements
 



Regions Financial Corporation and Subsidiaries                                
Financial Supplement to Fourth Quarter 2017 Earnings Release

Financial Highlights
 
Quarter Ended
($ amounts in millions, except per share data)
12/31/2017
 
9/30/2017
 
6/30/2017
 
3/31/2017
 
12/31/2016
Earnings Summary
 
 
 
 
 
 
 
 
 
Interest income and other financing income - taxable equivalent
$
1,043

 
$
1,036

 
$
1,011

 
$
988

 
$
978

Interest expense - taxable equivalent
102

 
97

 
89

 
85

 
79

Depreciation expense on operating lease assets
17

 
18

 
18

 
22

 
25

Net interest income and other financing income - taxable equivalent
924

 
921

 
904

 
881

 
874

Less: Taxable-equivalent adjustment
23

 
23

 
22

 
22

 
21

Net interest income and other financing income
901

 
898

 
882

 
859

 
853

Provision (credit) for loan losses
(44
)
 
76

 
48

 
70

 
48

Net interest income and other financing income after provision (credit) for loan losses
945

 
822

 
834

 
789

 
805

Non-interest income
555

 
515

 
525

 
510

 
522

Non-interest expense
952

 
886

 
909

 
877

 
899

Income from continuing operations before income taxes
548

 
451

 
450

 
422

 
428

Income tax expense
214

 
139

 
133

 
128

 
134

Income from continuing operations
334

 
312

 
317

 
294

 
294

Income (loss) from discontinued operations before income taxes
(1
)
 
(1
)
 
(1
)
 
11

 
1

Income tax expense (benefit)
(2
)
 
—

 
—

 
4

 
—

Income (loss) from discontinued operations, net of tax
1

 
(1
)
 
(1
)
 
7

 
1

Net income
$
335

 
$
311

 
$
316

 
$
301

 
$
295

Income from continuing operations available to common shareholders
$
318

 
$
296

 
$
301

 
$
278

 
$
278

Net income available to common shareholders
$
319

 
$
295

 
$
300

 
$
285

 
$
279

 

 
 
 
 
 
 
 
 
Earnings per common share from continuing operations - basic
$
0.28

 
$
0.25

 
$
0.25

 
$
0.23

 
$
0.23

Earnings per common share from continuing operations - diluted
0.27

 
0.25

 
0.25

 
0.23

 
0.23

Earnings per common share - basic
0.28

 
0.25

 
0.25

 
0.24

 
0.23

Earnings per common share - diluted
0.27

 
0.25

 
0.25

 
0.23

 
0.23

 

 
 
 
 
 
 
 
 
Balance Sheet Summary

 
 
 
 
 
 
 
 
At quarter-end—Consolidated

 
 
 
 
 
 
 
 
Loans, net of unearned income
$
79,947

 
$
79,356

 
$
80,127

 
$
79,869

 
$
80,095

Allowance for loan losses
(934
)
 
(1,041
)
 
(1,041
)
 
(1,061
)
 
(1,091
)
Assets
124,294

 
123,271

 
124,657

 
124,545

 
125,968

Deposits
96,889

 
97,591

 
98,093

 
99,424

 
99,035

Long-term borrowings
8,132

 
6,102

 
6,765

 
6,010

 
7,763

Stockholders' equity
16,192

 
16,624

 
16,897

 
16,722

 
16,664

Average balances—Continuing Operations

 
 
 
 
 
 
 
 
Loans, net of unearned income
$
79,523

 
$
79,585

 
$
80,110

 
$
80,178

 
$
80,589

Assets
123,834

 
123,433

 
123,843

 
124,810

 
124,827

Deposits
97,060

 
96,863

 
97,489

 
97,967

 
98,497

Long-term borrowings
7,409

 
6,691

 
6,748

 
7,462

 
7,084

Stockholders' equity
16,414

 
16,784

 
16,797

 
16,649

 
16,951





1

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to Fourth Quarter 2017 Earnings Release

Selected Ratios and Other Information
 
As of and for Quarter Ended
 
12/31/2017
 
9/30/2017
 
6/30/2017
 
3/31/2017
 
12/31/2016
Return on average assets from continuing operations*
1.02
%
 
0.95
%
 
0.97
%
 
0.90
%
 
0.89
%
Return on average common stockholders' equity*
8.10
%
 
7.33
%
 
7.53
%
 
7.30
%
 
6.90
%
Return on average tangible common stockholders’ equity (non-GAAP)* (1)
11.88
%
 
10.62
%
 
10.91
%
 
10.63
%
 
9.96
%
Efficiency ratio from continuing operations
64.3
%
 
61.7
%
 
63.6
%
 
63.1
%
 
64.4
%
Adjusted efficiency ratio from continuing operations (non-GAAP) (1)
61.1
%
 
61.7
%
 
63.2
%
 
62.7
%
 
63.2
%
Common book value per share
$
13.55

 
$
13.57

 
$
13.40

 
$
13.20

 
$
13.04

Tangible common book value per share (non-GAAP) (1)
$
9.16

 
$
9.33

 
$
9.28

 
$
9.08

 
$
8.95

Tangible common stockholders’ equity to tangible assets (non-GAAP) (1)
8.71
%
 
9.18
%
 
9.30
%
 
9.15
%
 
8.99
%
Basel III common equity (2)
$
11,019

 
$
11,332

 
$
11,613

 
$
11,517

 
$
11,481

Basel III common equity Tier 1 ratio (2)
10.9
%
 
11.3
%
 
11.5
%
 
11.3
%
 
11.2
%
Basel III common equity Tier 1 ratio—Fully Phased-In Pro-Forma (non-GAAP) (1)(2)
10.8
%
 
11.2
%
 
11.4
%
 
11.2
%
 
11.1
%
Tier 1 capital ratio (2)
11.7
%
 
12.1
%
 
12.3
%
 
12.1
%
 
12.0
%
Total risk-based capital ratio (2)
13.7
%
 
14.2
%
 
14.3
%
 
14.3
%
 
14.2
%
Leverage ratio (2)
9.9
%
 
10.2
%
 
10.4
%
 
10.2
%
 
10.2
%
Effective tax rate (5)
39.0
%
 
30.9
%
 
29.5
%
 
30.4
%
 
31.2
%
Allowance for loan losses as a percentage of loans, net of unearned income
1.17
%
 
1.31
%
 
1.30
%
 
1.33
%
 
1.36
%
Allowance for loan losses to non-performing loans, excluding loans held for sale
1.44
x
 
1.37
x
 
1.27x

 
1.06
x
 
1.10x

Adjusted allowance for loan losses to non-performing loans, excluding loans held for sale (non-GAAP) (1)(4)
1.98x

 
1.80x

 
1.63x

 
1.35x

 
1.38x

Net interest margin (FTE) from continuing operations*
3.37
%
 
3.36
%
 
3.32
%
 
3.25
%
 
3.16
%
Adjusted net interest margin (FTE) from continuing operations (non-GAAP)* (1)
3.39
%
 
3.36
%
 
3.32
%
 
3.25
%
 
3.16
%
Loans, net of unearned income, to total deposits
82.5
%
 
81.3
%
 
81.7
%
 
80.3
%
 
80.9
%
Net charge-offs as a percentage of average loans*
0.31
%
 
0.38
%
 
0.34
%
 
0.51
%
 
0.41
%
Non-accrual loans, excluding loans held for sale, as a percentage of loans
0.81
%
 
0.96
%
 
1.03
%
 
1.26
%
 
1.24
%
Non-performing assets (excluding loans 90 days past due) as a percentage of loans, foreclosed properties and non-performing loans held for sale
0.92
%
 
1.06
%
 
1.14
%
 
1.37
%
 
1.37
%
Non-performing assets (including loans 90 days past due) as a percentage of loans, foreclosed properties and non-performing loans held for sale (3)
1.13
%
 
1.25
%
 
1.32
%
 
1.57
%
 
1.58
%
Associate headcount—full-time equivalent
21,714

 
22,101

 
22,126

 
22,150

 
22,166

ATMs
1,899

 
1,902

 
1,899

 
1,921

 
1,906

 

 
 
 
 
 
 
 
 
Branch Statistics

 
 
 
 
 
 
 
 
Full service
1,406

 
1,425

 
1,426

 
1,455

 
1,460

Drive-through/transaction service only
63

 
64

 
66

 
68

 
67

Total branch outlets
1,469

 
1,489

 
1,492

 
1,523

 
1,527


 
Year Ended December 31
 
2017
 
2016
Return on average assets from continuing operations
0.96
%
 
0.87
%
Return on average common stockholders' equity
7.56
%
 
6.74
%
Return on average tangible common stockholders’ equity (non-GAAP) (1)
11.01
%
 
9.69
%
Efficiency ratio from continuing operations
63.2
%
 
64.2
%
Adjusted efficiency ratio from continuing operations (non-GAAP) (1)
62.2
%
 
63.3
%
Effective tax rate (5)
32.8
%
 
30.7
%
Net interest margin (FTE) from continuing operations
3.32
%
 
3.14
%
Adjusted net interest margin (FTE) from continuing operations (non-GAAP) (1)
3.33
%
 
3.14
%
Net charge-offs as a percentage of average loans
0.38
%
 
0.34
%
             
*Annualized
(1)
See reconciliation of GAAP to non-GAAP Financial Measures on pages 12, 13, 14, 18 and 27.
(2)
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.
(3)
Excludes guaranteed residential first mortgages that are 90+ days past due and still accruing. Refer to the footnotes on page 20 for amounts related to these loans.
(4)
Adjusted to exclude the allowance for loan losses and non-accrual loans related to the Direct Energy portfolio.
(5)
The increase in the effective tax rate in 2017 was driven by tax-related charges of $52 million in the fourth quarter associated with tax reform.


2

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to Fourth Quarter 2017 Earnings Release

Consolidated Statements of Income (unaudited)
 
Quarter Ended
($ amounts in millions, except per share data)
12/31/2017
 
9/30/2017
 
6/30/2017
 
3/31/2017
 
12/31/2016
Interest income, including other financing income on:
 
 
 
 
 
 
 
 
 
Loans, including fees
$
827

 
$
827

 
$
801

 
$
773

 
$
773

Securities—taxable
152

 
149

 
151

 
148

 
139

Loans held for sale
5

 
3

 
4

 
4

 
5

Trading account securities
1

 
1

 
—

 
2

 
1

Other earning assets
13

 
12

 
9

 
12

 
9

Operating lease assets
22

 
21

 
24

 
27

 
30

Total interest income, including other financing income
1,020

 
1,013

 
989

 
966

 
957

Interest expense on:
 
 
 
 
 
 
 
 
 
Deposits
42

 
42

 
37

 
35

 
31

Short-term borrowings
1

 
2

 
2

 
—

 
—

Long-term borrowings
59

 
53

 
50

 
50

 
48

Total interest expense
102

 
97

 
89

 
85

 
79

Depreciation expense on operating lease assets
17

 
18

 
18

 
22

 
25

Total interest expense and depreciation expense on operating lease assets
119

 
115

 
107

 
107

 
104

Net interest income and other financing income
901

 
898

 
882

 
859

 
853

Provision (credit) for loan losses
(44
)
 
76

 
48

 
70

 
48

Net interest income and other financing income after provision (credit) for loan losses
945

 
822

 
834

 
789

 
805

Non-interest income:


 
 
 
 
 
 
 
 
Service charges on deposit accounts
171

 
175

 
169

 
168

 
173

Card and ATM fees
106

 
103

 
104

 
104

 
103

Investment management and trust fee income
59

 
58

 
57

 
56

 
57

Mortgage income
36

 
32

 
40

 
41

 
43

Securities gains (losses), net
13

 
8

 
1

 
—

 
5

Other
170

 
139

 
154

 
141

 
141

Total non-interest income
555

 
515

 
525

 
510

 
522

Non-interest expense:


 
 
 
 
 
 
 
 
Salaries and employee benefits
496

 
483

 
497

 
478

 
472

Net occupancy expense
83

 
91

 
86

 
85

 
89

Furniture and equipment expense
81

 
84

 
85

 
80

 
80

Other
292

 
228

 
241

 
234

 
258

Total non-interest expense
952

 
886

 
909

 
877

 
899

Income from continuing operations before income taxes
548

 
451

 
450

 
422

 
428

Income tax expense
214

 
139

 
133

 
128

 
134

Income from continuing operations
334

 
312


317

 
294

 
294

Discontinued operations:


 
 
 
 
 
 
 
 
Income (loss) from discontinued operations before income taxes
(1
)
 
(1
)
 
(1
)
 
11

 
1

Income tax expense (benefit)
(2
)
 
—

 
—

 
4

 
—

Income (loss) from discontinued operations, net of tax
1

 
(1
)
 
(1
)
 
7

 
1

Net income
$
335

 
$
311


$
316

 
301

 
$
295

Net income from continuing operations available to common shareholders
$
318

 
$
296

 
$
301

 
278

 
$
278

Net income available to common shareholders
$
319

 
$
295

 
$
300

 
285

 
$
279

Weighted-average shares outstanding—during quarter:


 
 
 
 
 
 
 
 
Basic
1,152

 
1,182

 
1,202

 
1,209

 
1,224

Diluted
1,164

 
1,193

 
1,212

 
1,224

 
1,234

Actual shares outstanding—end of quarter
1,134

 
1,165

 
1,199

 
1,205

 
1,215

Earnings per common share from continuing operations:


 
 
 
 
 
 
 
 
Basic
$
0.28

 
$
0.25

 
$
0.25

 
$
0.23

 
$
0.23

Diluted
$
0.27

 
$
0.25

 
$
0.25

 
$
0.23

 
$
0.23

Earnings per common share:


 
 
 
 
 
 
 
 
Basic
$
0.28

 
$
0.25

 
$
0.25

 
$
0.24

 
$
0.23

Diluted
$
0.27

 
$
0.25

 
$
0.25

 
$
0.23

 
$
0.23

Cash dividends declared per common share
$
0.09

 
$
0.09

 
$
0.07

 
$
0.065

 
$
0.065

Taxable-equivalent net interest income and other financing income from continuing operations
$
924

 
$
921

 
$
904

 
$
881

 
$
874


 



3

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to Fourth Quarter 2017 Earnings Release

Consolidated Statements of Income (continued) (unaudited)
 
Year Ended December 31
($ amounts in millions, except per share data)
2017
 
2016
Interest income, including other financing income on:
 
 
 
Loans, including fees
$
3,228

 
$
3,066

Securities—taxable
600

 
566

Loans held for sale
16

 
16

Trading account securities
4

 
5

Other earning assets
46

 
36

Operating lease assets
94

 
125

Total interest income, including other financing income
3,988

 
3,814

Interest expense on:
 
 
 
Deposits
156

 
117

Short-term borrowings
5

 
—

Long-term borrowings
212

 
196

Total interest expense
373

 
313

Depreciation expense on operating lease assets
75

 
103

Total interest expense and depreciation expense on operating lease assets
448

 
416

Net interest income and other financing income
3,540

 
3,398

Provision for loan losses
150

 
262

Net interest income and other financing income after provision for loan losses
3,390

 
3,136

Non-interest income:
 
 
 
Service charges on deposit accounts
683

 
664

Card and ATM fees
417

 
402

Investment management and trust fee income
230

 
213

Mortgage income
149

 
173

Securities gains, net
22

 
6

Other
604

 
695

Total non-interest income
2,105

 
2,153

Non-interest expense:
 
 
 
Salaries and employee benefits
1,954

 
1,913

Net occupancy expense
345

 
348

Furniture and equipment expense
330

 
317

Other
995

 
1,039

Total non-interest expense
3,624

 
3,617

Income from continuing operations before income taxes
1,871

 
1,672

Income tax expense
614

 
514

Income from continuing operations
1,257

 
1,158

Discontinued operations:
 
 
 
Income (loss) from discontinued operations before income taxes
8

 
8

Income tax expense (benefit)
2

 
3

Income (loss) from discontinued operations, net of tax
6

 
5

Net income
$
1,263

 
$
1,163

Net income from continuing operations available to common shareholders
$
1,193

 
$
1,094

Net income available to common shareholders
$
1,199

 
$
1,099

Weighted-average shares outstanding—during year:


 
 
Basic
1,186

 
1,255

Diluted
1,198

 
1,261

Actual shares outstanding—end of period
1,134

 
1,215

Earnings per common share from continuing operations:


 
 
Basic
$
1.01

 
$
0.87

Diluted
$
1.00

 
$
0.87

Earnings per common share:


 
 
Basic
$
1.01

 
$
0.87

Diluted
$
1.00

 
$
0.87

Cash dividends declared per common share
$
0.315

 
$
0.255

Taxable-equivalent net interest income and other financing income from continuing operations
$
3,630

 
$
3,482



4

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to Fourth Quarter 2017 Earnings Release

Consolidated Average Daily Balances and Yield/Rate Analysis from Continuing Operations
 
Quarter Ended
 
12/31/2017
 
9/30/2017
($ 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
$
3

 
$
—

 
—
%
 
$
—

 
$
—

 
—
%
Trading account securities
188

 
1

 
2.35


189

 
1

 
1.19

Securities:


 


 


 
 
 
 
 
 
Taxable
25,228

 
152

 
2.40

 
25,217

 
149

 
2.34

Loans held for sale
433

 
5

 
3.92

 
416

 
3

 
3.10

Loans, net of unearned income:


 


 


 
 
 
 
 
 
Commercial and industrial (1)
35,689

 
357

 
3.96

 
35,438

 
357

 
3.98

Commercial real estate mortgage—owner-occupied
6,208

 
71

 
4.48

 
6,413

 
74

 
4.50

Commercial real estate construction—owner-occupied
335

 
4

 
4.51

 
332

 
4

 
4.52

Commercial investor real estate mortgage
3,986

 
37

 
3.66

 
4,065

 
40

 
3.82

Commercial investor real estate construction
1,938

 
21

 
4.11

 
2,010

 
21

 
4.05

Residential first mortgage
13,954

 
136

 
3.90

 
13,808

 
134

 
3.89

Home equity
10,206

 
106

 
4.16

 
10,341

 
107

 
4.13

Indirect—vehicles
3,400

 
26

 
3.12

 
3,562

 
26

 
2.87

Indirect—other consumer
1,400

 
31

 
8.97

 
1,258

 
28

 
8.96

Consumer credit card
1,238

 
37

 
11.96

 
1,200

 
37

 
12.18

Other consumer
1,169

 
24

 
7.93

 
1,158

 
22

 
8.00

Total loans, net of unearned income (1)
79,523

 
850

 
4.24

 
79,585

 
850

 
4.23

Investment in operating leases, net
515

 
5

 
3.53

 
586

 
3

 
2.84

Other earning assets
2,973

 
13

 
1.69

 
2,779

 
12

 
1.64

Total earning assets
108,863

 
1,026

 
3.74

 
108,772

 
1,018

 
3.72

Allowance for loan losses
(1,039
)
 
 
 
 
 
(1,048
)
 
 
 
 
Cash and due from banks
1,975

 
 
 
 
 
1,867

 
 
 
 
Other non-earning assets
14,035

 
 
 
 
 
13,842

 


 


 
$
123,834

 
 
 
 
 
$
123,433

 
 
 
 
Liabilities and Stockholders’ Equity
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
Savings
$
8,378

 
2

 
0.14

 
$
8,346

 
3

 
0.15

Interest-bearing checking
19,261

 
11

 
0.22

 
18,741

 
11

 
0.22

Money market
25,744

 
13

 
0.20

 
26,325

 
13

 
0.19

Time deposits
6,935

 
16

 
0.88

 
6,929

 
15

 
0.88

Total interest-bearing deposits (2)
60,318

 
42

 
0.28

 
60,341

 
42

 
0.28

Federal funds purchased and securities sold under agreements to repurchase
35

 
—

 
—

 
—

 
—

 
—

Other short-term borrowings
388

 
1

 
1.19

 
655

 
2

 
1.19

Long-term borrowings
7,409

 
59

 
3.13

 
6,691

 
53

 
3.14

Total interest-bearing liabilities
68,150

 
102

 
0.59

 
67,687

 
97

 
0.57

Non-interest-bearing deposits (2)
36,742

 
—

 
—

 
36,522

 
—

 
—

Total funding sources
104,892

 
102

 
0.38

 
104,209

 
97

 
0.37

Net interest spread


 


 
3.15

 
 
 
 
 
3.15

Other liabilities
2,528

 


 


 
2,440

 
 
 
 
Stockholders’ equity
16,414

 


 


 
16,784

 
 
 
 
 
$
123,834

 


 


 
$
123,433

 
 
 
 
Net interest income and other financing income/margin FTE basis
 
 
$
924

 
3.37
%
 
 
 
$
921

 
3.36
%
_______
(1)
Excluding the impact of the $6 million reduction in leveraged lease interest income resulting from tax reform recorded in the fourth quarter of 2017, the commercial and industrial yield and total loans, net of unearned income yield would have been 4.03% and 4.27%, respectively.
(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 0.17% for both quarters ended December 31, 2017 and September 30, 2017.


5

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to Fourth Quarter 2017 Earnings Release

Consolidated Average Daily Balances and Yield/Rate Analysis from Continuing Operations (continued)
 
Quarter Ended
 
6/30/2017
 
3/31/2017
 
12/31/2016
($ 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
$
1

 
$
—

 
—
%
 
$
1

 
$
—

 
—
%
 
$
1

 
$
—

 
—
%
Trading account securities
150

 
—

 
—

 
124


2

 
6.28

 
120

 
1

 
1.72

Securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
25,269

 
151

 
2.40

 
25,069

 
148

 
2.40

 
25,086

 
139

 
2.22

Tax-exempt
—

 
—

 
—

 
1

 
—

 
—

 
1

 
—

 
—

Loans held for sale
509

 
4

 
3.43

 
541

 
4

 
2.99

 
563

 
5

 
3.22

Loans, net of unearned income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
35,596

 
347

 
3.89

 
35,330

 
331

 
3.78

 
35,149

 
326

 
3.67

Commercial real estate mortgage—owner-occupied
6,562

 
72

 
4.37

 
6,793

 
70

 
4.11

 
6,963

 
78

 
4.33

Commercial real estate construction—owner-occupied
365

 
4

 
4.54

 
346

 
4

 
4.46

 
356

 
3

 
4.34

Commercial investor real estate mortgage
4,235

 
37

 
3.40

 
4,229

 
34

 
3.25

 
4,231

 
36

 
3.31

Commercial investor real estate construction
2,205

 
21

 
3.89

 
2,246

 
20

 
3.56

 
2,441

 
22

 
3.27

Residential first mortgage
13,637

 
131

 
3.84

 
13,469

 
129

 
3.82

 
13,485

 
128

 
3.83

Home equity
10,475

 
105

 
3.98

 
10,606

 
101

 
3.85

 
10,711

 
99

 
3.69

Indirect—vehicles
3,742

 
29

 
3.07

 
3,943

 
30

 
3.08

 
4,096

 
29

 
2.82

Indirect—other consumer
1,001

 
21

 
8.33

 
937

 
19

 
8.05

 
889

 
17

 
7.82

Consumer credit card
1,164

 
34

 
11.87

 
1,166

 
34

 
11.64

 
1,146

 
33

 
11.42

Other consumer
1,128

 
22

 
7.95

 
1,113

 
23

 
8.25

 
1,122

 
23

 
8.33

Total loans, net of unearned income
80,110

 
823

 
4.10

 
80,178

 
795

 
3.98

 
80,589

 
794

 
3.91

Investment in operating leases, net
631

 
6

 
2.88

 
679

 
5

 
3.24

 
721

 
5

 
3.05

Other earning assets
2,532

 
9

 
1.54

 
3,447

 
12

 
1.37

 
3,108

 
9

 
1.24

Total earning assets
109,202

 
993

 
3.63

 
110,040

 
966

 
3.53

 
110,189

 
953

 
3.44

Allowance for loan losses
(1,069
)
 
 
 
 
 
(1,092
)
 
 
 
 
 
(1,132
)
 
 
 
 
Cash and due from banks
1,856

 
 
 
 
 
1,899

 
 
 
 
 
1,915

 


 
 
Other non-earning assets
13,854

 



 
 
13,963

 


 
 
 
13,855

 


 
 
 
$
123,843

 
 
 
 
 
$
124,810

 
 
 
 
 
$
124,827

 
 
 
 
Liabilities and Stockholders’ Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Savings
$
8,359

 
4

 
0.15

 
$
8,050

 
3

 
0.17

 
$
7,811

 
3

 
0.13

Interest-bearing checking
19,272

 
8

 
0.19

 
19,915

 
8

 
0.15

 
19,769

 
5

 
0.11

Money market
26,712

 
10

 
0.15

 
27,226

 
9

 
0.14

 
27,254

 
8

 
0.12

Time deposits
7,005

 
15

 
0.87

 
7,148

 
15

 
0.83

 
7,505

 
15

 
0.79

Total interest-bearing deposits (1)
61,348

 
37

 
0.24

 
62,339

 
35

 
0.22

 
62,339

 
31

 
0.20

Other short-term borrowings
422

 
2

 
0.99

 
289

 
—

 
—

 
—

 
—

 
—

Long-term borrowings
6,748

 
50

 
2.97

 
7,462

 
50

 
2.68

 
7,084

 
48

 
2.70

Total interest-bearing liabilities 
68,518

 
89

 
0.52

 
70,090

 
85

 
0.49

 
69,423

 
79

 
0.45

Non-interest-bearing deposits (1)
36,141

 
—

 
—

 
35,628

 
—

 
—

 
36,158

 
—

 
—

Total funding sources
104,659

 
89

 
0.34

 
105,718

 
85

 
0.32

 
105,581

 
79

 
0.30

Net interest spread
 
 
 
 
3.11

 
 
 
 
 
3.04

 
 
 
 
 
2.99

Other liabilities
2,387

 
 
 
 
 
2,443

 
 
 
 
 
2,295

 
 
 
 
Stockholders’ equity
16,797

 
 
 
 
 
16,649

 
 
 
 
 
16,951

 
 
 
 
 
$
123,843

 
 
 
 
 
$
124,810

 
 
 
 
 
$
124,827

 
 
 
 
Net interest income and other financing income/margin FTE basis
 
 
$
904

 
3.32
%
 
 
 
$
881

 
3.25
%
 
 
 
$
874

 
3.16
%
_______
(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 0.15% for quarter ended June 30, 2017, 0.14% for quarter ended March 31, 2017 and 0.13% for quarter ended December 31, 2016.

6

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to Fourth Quarter 2017 Earnings Release

Consolidated Average Daily Balances and Yield/Rate Analysis from Continuing Operations (continued)
 
Year Ended December 31
 
2017
 
2016
($ 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
$
1

 
$
—

 
—
%
 
$
4

 
$
—

 
—
%
Trading account securities
163

 
4

 
2.36

 
121

 
5

 
3.73

Securities:
 
 
 
 
 
 
 
 
 
 
 
Taxable
25,196

 
600

 
2.38

 
24,830

 
566

 
2.28

Tax-exempt
1

 
—

 
—

 
1

 
—

 
—

Loans held for sale
474

 
16

 
3.35

 
479

 
16

 
3.33

Loans, net of unearned income:


 


 


 


 


 


Commercial and industrial (1)
35,514

 
1,392

 
3.91

 
35,867

 
1,278

 
3.55

Commercial real estate mortgage—owner-occupied
6,492

 
287

 
4.36

 
7,222

 
337

 
4.59

Commercial real estate construction—owner-occupied
345

 
16

 
4.51

 
352

 
15

 
4.31

Commercial investor real estate mortgage
4,128

 
148

 
3.53

 
4,376

 
138

 
3.11

Commercial investor real estate construction
2,099

 
83

 
3.89

 
2,539

 
82

 
3.16

Residential first mortgage
13,719

 
530

 
3.86

 
13,140

 
507

 
3.86

Home equity
10,405

 
419

 
4.03

 
10,827

 
396

 
3.66

Indirect—vehicles
3,660

 
111

 
3.04

 
4,103

 
126

 
3.06

Indirect—other consumer
1,150

 
99

 
8.63

 
738

 
53

 
7.17

Consumer credit card
1,192

 
142

 
11.91

 
1,093

 
128

 
11.69

Other consumer
1,142

 
91

 
8.03

 
1,076

 
90

 
8.35

Total loans, net of unearned income (1)
79,846

 
3,318

 
4.14

 
81,333

 
3,150

 
3.86

Investment in operating leases, net
603

 
19

 
3.11

 
775

 
22

 
2.85

Other earning assets
2,931

 
46

 
1.55

 
3,469

 
36

 
1.05

Total earning assets
109,215

 
4,003

 
3.65

 
111,012

 
3,795

 
3.41

Allowance for loan losses
(1,062
)
 
 
 
 
 
(1,139
)
 
 
 
 
Cash and due from banks
1,899

 
 
 
 
 
1,824

 
 
 
 
Other non-earning assets
13,924

 
 
 
 
 
13,809

 
 
 
 
 
$
123,976

 
 
 
 
 
$
125,506

 
 
 
 
Liabilities and Stockholders’ Equity
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
Savings
$
8,284

 
12

 
0.15

 
$
7,719

 
11

 
0.14

Interest-bearing checking
19,294

 
38

 
0.19

 
20,507

 
20

 
0.10

Money market
26,498

 
45

 
0.17

 
26,909

 
31

 
0.11

Time deposits
7,003

 
61

 
0.87

 
7,415

 
55

 
0.75

Total interest-bearing deposits (2)
61,079

 
156

 
0.26

 
62,550

 
117

 
0.19

Federal funds purchased and securities sold under agreements to repurchase
9

 
—

 
—

 
—

 
—

 
—

Other short-term borrowings
439

 
5

 
1.06

 
3

 
—

 
—

Long-term borrowings
7,076

 
212

 
2.98

 
8,159

 
196

 
2.38

Total interest-bearing liabilities
68,603

 
373

 
0.54

 
70,712

 
313

 
0.44

Non-interest-bearing deposits (2)
36,262

 
—

 
—

 
35,371

 
—

 
—

Total funding sources
104,865

 
373

 
0.35

 
106,083

 
313

 
0.29

Net interest spread


 


 
3.11

 
 
 
 
 
2.97

Other liabilities
2,450

 


 


 
2,299

 
 
 
 
Stockholders’ equity
16,661

 


 


 
17,124

 
 
 
 
 
$
123,976

 


 


 
$
125,506

 
 
 
 
Net interest income and other financing income/margin FTE basis
 
 
$
3,630

 
3.32
%
 
 
 
$
3,482

 
3.14
%
_______
(1) Excluding the impact of the $6 million reduction in leveraged lease interest income resulting from tax reform recorded in the fourth quarter of 2017, the commercial and industrial yield and total loans, net of unearned income yield would have been 3.92% and 4.15%, respectively.
(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 0.16% and 0.12% for the years ended December 31, 2017 and 2016, respectively.


7

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to Fourth Quarter 2017 Earnings Release

Pre-Tax Pre-Provision Income ("PPI") and Adjusted PPI (non-GAAP)
The Pre-Tax Pre-Provision Income tables below present 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)
12/31/2017

 
9/30/2017

 
6/30/2017

 
3/31/2017

 
12/31/2016
 
4Q17 vs. 3Q17
 
4Q17 vs. 4Q16
Net income from continuing operations available to common shareholders (GAAP)
$
318

 
$
296

 
$
301

 
$
278

 
$
278

 
$
22

 
7.4
 %
 
$
40

 
14.4
 %
Preferred dividends (GAAP)
16

 
16

 
16

 
16

 
16

 
—

 
—
 %
 
—

 
—
 %
Income tax expense (GAAP)
214

 
139

 
133

 
128

 
134

 
75

 
54.0
 %
 
80

 
59.7
 %
Income from continuing operations before income taxes (GAAP)
548

 
451

 
450

 
422

 
428

 
97

 
21.5
 %
 
120

 
28.0
 %
Provision (credit) for loan losses (GAAP)
(44
)
 
76

 
48

 
70

 
48

 
(120
)
 
(157.9
)%
 
(92
)
 
(191.7
)%
Pre-tax pre-provision income from continuing operations (non-GAAP)
504

 
527

 
498

 
492

 
476

 
(23
)
 
(4.4
)%
 
28

 
5.9
 %
Other adjustments:
 
 
 
 
 
 
 
 
 
 


 


 

 


Gain on sale of affordable housing residential mortgage loans (1)
—

 
—

 
(5
)
 
—

 
(5
)
 
—

 
NM

 
5

 
(100.0
)%
Securities (gains) losses, net
(13
)
 
(8
)
 
(1
)
 
—

 
(5
)
 
(5
)
 
62.5
 %
 
(8
)
 
160.0
 %
Leveraged lease termination gains, net (3)
—

 
(1
)
 
—

 
—

 
—

 
1

 
(100.0
)%
 
—

 
NM

Reduction in leveraged lease interest income resulting from tax reform
6

 
—

 
—

 
—

 
—

 
6

 
NM

 
6

 
NM

Salaries and employee benefits—severance charges
2

 
1

 
3

 
4

 
5

 
1

 
100.0
 %
 
(3
)
 
(60.0
)%
Branch consolidation, property and equipment charges
9

 
5

 
7

 
1

 
17

 
4

 
80.0
 %
 
(8
)
 
(47.1
)%
Contribution to Regions' charitable foundation associated with tax reform
40

 
—

 
—

 
—

 
—

 
40

 
NM

 
40

 
NM

Total other adjustments
44

 
(3
)
 
4

 
5

 
12

 
47

 
NM

 
32

 
266.7
 %
Adjusted pre-tax pre-provision income from continuing operations (non-GAAP)
$
548

 
$
524

 
$
502

 
$
497

 
$
488

 
$
24

 
4.6
 %
 
$
60

 
12.3
 %

 
Year Ended
($ amounts in millions)
12/31/2017
 
12/31/2016
 
2017 vs. 2016
Net income from continuing operations available to common shareholders (GAAP)
$
1,193

 
$
1,094

 
$
99

 
9.0
 %
Preferred dividends (GAAP)
64

 
64

 
—

 
—
 %
Income tax expense (GAAP)
614

 
514

 
100

 
19.5
 %
Income from continuing operations before income taxes (GAAP)
1,871

 
1,672

 
199

 
11.9
 %
Provision for loan losses (GAAP)
150

 
262

 
(112
)
 
(42.7
)%
Pre-tax pre-provision income from continuing operations (non-GAAP)
2,021

 
1,934

 
87

 
4.5
 %
Other adjustments:
 
 
 
 
 
 


Gain on sale of affordable housing residential mortgage loans (1)
(5
)
 
(5
)
 
—

 
—
 %
Securities (gains) losses, net
(22
)
 
(6
)
 
(16
)
 
266.7
 %
Insurance proceeds (2)
—

 
(50
)
 
50

 
(100.0
)%
Leveraged lease termination gains, net (3)
(1
)
 
(8
)
 
7

 
(87.5
)%
Reduction in leveraged lease interest income resulting from tax reform
6

 
—

 
6

 
NM

Salaries and employee benefits—severance charges
10

 
21

 
(11
)
 
(52.4
)%
Professional, legal and regulatory expenses (4)
—

 
3

 
(3
)
 
(100.0
)%
Branch consolidation, property and equipment charges
22

 
58

 
(36
)
 
(62.1
)%
Contribution to Regions' charitable foundation associated with tax reform
40

 
—

 
40

 
NM

Loss on early extinguishment of debt
—

 
14

 
(14
)
 
(100.0
)%
Total other adjustments
50

 
27

 
23

 
85.2
 %
Adjusted pre-tax pre-provision income from continuing operations (non-GAAP)
$
2,071

 
$
1,961

 
$
110

 
5.6
 %
 
NM - Not Meaningful
(1)
Gain on sale of affordable housing residential mortgage loans in the fourth quarter of 2016 was due to the decision to sell approximately $171 million of loans to Freddie Mac. Approximately $91 million were sold with recourse, resulting in a deferred gain of $5 million, which was recognized during the second quarter of 2017.
(2)
Insurance proceeds recognized in 2016 are related to the previously disclosed settlement with the Department of Housing and Urban Development as well as the 2010 class-action lawsuit.
(3)
The impact of the leveraged lease termination gains, net in 2017 and 2016 were fully offset by increased tax expense.
(4)
Regions recorded $3 million of contingent legal and regulatory accruals during 2016.

8

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to Fourth Quarter 2017 Earnings Release

Non-Interest Income
 
Quarter Ended
($ amounts in millions)
12/31/2017
 
9/30/2017
 
6/30/2017
 
3/31/2017
 
12/31/2016
 
4Q17 vs. 3Q17
 
4Q17 vs. 4Q16
Service charges on deposit accounts
$
171

 
$
175

 
$
169

 
$
168

 
$
173

 
$
(4
)
 
(2.3
)%
 
$
(2
)
 
(1.2
)%
Card and ATM fees
106

 
103

 
104

 
104

 
103

 
3

 
2.9
 %
 
3

 
2.9
 %
Investment management and trust fee income
59

 
58

 
57

 
56

 
57

 
1

 
1.7
 %
 
2

 
3.5
 %
Capital markets fee income and other (1)
56

 
35

 
38

 
32

 
31

 
21

 
60.0
 %
 
25

 
80.6
 %
Mortgage income
36

 
32

 
40

 
41

 
43

 
4

 
12.5
 %
 
(7
)
 
(16.3
)%
Insurance commissions and fees
37

 
35

 
36

 
37

 
34

 
2

 
5.7
 %
 
3

 
8.8
 %
Bank-owned life insurance
20

 
20

 
22

 
19

 
20

 
—

 
NM

 
—

 
NM

Commercial credit fee income
18

 
17

 
18

 
18

 
19

 
1

 
5.9
 %
 
(1
)
 
(5.3
)%
Investment services fee income
14

 
15

 
15

 
16

 
12

 
(1
)
 
(6.7
)%
 
2

 
16.7
 %
Securities gains (losses), net
13

 
8

 
1

 
—

 
5

 
5

 
62.5
 %
 
8

 
160.0
 %
Market value adjustments on employee benefit assets
6

 
3

 
2

 
5

 
3

 
3

 
100.0
 %
 
3

 
100.0
 %
Other
19

 
14

 
23

 
14

 
22

 
5

 
35.7
 %
 
(3
)
 
(13.6
)%
Total non-interest income from continuing operations
$
555

 
$
515

 
$
525

 
$
510

 
$
522

 
$
40

 
7.8
 %
 
$
33

 
6.3
 %
Mortgage Income
 
Quarter Ended
($ amounts in millions)
12/31/2017
 
9/30/2017
 
6/30/2017
 
3/31/2017
 
12/31/2016
 
4Q17 vs. 3Q17
 
4Q17 vs. 4Q16
Production and sales
$
23

 
$
28

 
$
27

 
$
26

 
$
27

 
$
(5
)
 
(17.9
)%
 
$
(4
)
 
(14.8
)%
Loan servicing
25

 
24

 
24

 
23

 
23

 
1

 
4.2
 %
 
2

 
8.7
 %
MSR and related hedge impact:


 
 
 
 
 
 
 
 
 


 


 


 


MSRs fair value increase (decrease) due to change in valuation inputs or assumptions
4

 
(9
)
 
(7
)
 
4

 
64

 
13

 
(144.4
)%
 
(60
)
 
(93.8
)%
MSRs hedge gain (loss)
(5
)
 
1

 
7

 
(2
)
 
(59
)
 
(6
)
 
NM

 
54

 
(91.5
)%
MSRs change due to payment decay
(11
)
 
(12
)
 
(11
)
 
(10
)
 
(12
)
 
1

 
(8.3
)%
 
1

 
(8.3
)%
MSR and related hedge impact
(12
)
 
(20
)

(11
)

(8
)

(7
)
 
8

 
(40.0
)%
 
(5
)
 
71.4
 %
Total mortgage income
$
36

 
$
32

 
$
40

 
$
41

 
$
43

 
$
4

 
12.5
 %
 
$
(7
)
 
(16.3
)%
 
 
 
 
 
 
 
 
 
 
 
 
 


 
 
 
 
Mortgage production - purchased
$
907

 
$
996

 
$
1,155

 
$
819

 
$
911

 
$
(89
)
 
(8.9
)%
 
$
(4
)
 
(0.4
)%
Mortgage production - refinanced
359

 
315

 
292

 
335

 
627

 
44

 
14.0
 %
 
(268
)
 
(42.7
)%
Total mortgage production (2)
$
1,266

 
$
1,311

 
$
1,447

 
$
1,154

 
$
1,538

 
$
(45
)
 
(3.4
)%
 
$
(272
)
 
(17.7
)%
 
Wealth Management Income
 
Quarter Ended
($ amounts in millions)
12/31/2017
 
9/30/2017
 
6/30/2017
 
3/31/2017
 
12/31/2016
 
4Q17 vs. 3Q17
 
4Q17 vs. 4Q16
Investment management and trust fee income
$
59

 
$
58

 
$
57

 
$
56

 
$
57

 
$
1

 
1.7
 %
 
$
2

 
3.5
%
Insurance commissions and fees
37

 
35

 
36

 
37

 
34

 
2

 
5.7
 %
 
3

 
8.8
%
Investment services fee income
14

 
15

 
15

 
16

 
12

 
(1
)
 
(6.7
)%
 
2

 
16.7
%
Total wealth management income (3)
$
110

 
$
108


$
108

 
$
109

 
$
103

 
$
2

 
1.9
 %
 
$
7

 
6.8
%
_________
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.
(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
•
Capital markets fee income and other increased in the fourth quarter of 2017 as compared to the third quarter of 2017 driven primarily by increased merger and acquisition advisory services income, loan syndication income, and fees generated from the placement of permanent financing for real estate customers.
•
Other non-interest income increased in the fourth quarter of 2017 as compared to the third quarter of 2017 due primarily to $10 million of impairment charges incurred during the third quarter that reduced the value of certain operating lease assets, which did not repeat in the fourth quarter.


9

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to Fourth Quarter 2017 Earnings Release

Non-Interest Income
 
Year Ended
 
Year-to-Date Change 12/31/17 vs. 12/31/16
($ amounts in millions)
12/31/2017
 
12/31/2016
 
Amount
 
Percent
Service charges on deposit accounts
$
683

 
$
664

 
$
19

 
2.9
 %
Card and ATM fees
417

 
402

 
15

 
3.7
 %
Investment management and trust fee income
230

 
213

 
17

 
8.0
 %
Capital markets fee income and other (1)
161

 
152

 
9

 
5.9
 %
Mortgage income
149

 
173

 
(24
)
 
(13.9
)%
Insurance commissions and fees
145

 
148

 
(3
)
 
(2.0
)%
Bank-owned life insurance
81

 
95

 
(14
)
 
(14.7
)%
Commercial credit fee income
71

 
73

 
(2
)
 
(2.7
)%
Investment services fee income
60

 
58

 
2

 
3.4
 %
Insurance proceeds
—

 
50

 
(50
)
 
(100.0
)%
Securities gains (losses), net
22

 
6

 
16

 
266.7
 %
Market value adjustments on employee benefit assets
16

 
3

 
13

 
433.3
 %
Other
70

 
116

 
(46
)
 
(39.7
)%
Total non-interest income from continuing operations
$
2,105

 
$
2,153

 
$
(48
)
 
(2.2
)%

Mortgage Income
 
Year Ended
 
Year-to-Date Change 12/31/17 vs. 12/31/16
($ amounts in millions)
12/31/2017
 
12/31/2016
 
Amount
 
Percent
Production and sales
$
104

 
$
123

 
$
(19
)
 
(15.4
)%
Loan servicing
96

 
86

 
10

 
11.6
 %
MSR and related hedge impact:


 
 
 
 
 
 
MSRs fair value increase (decrease) due to change in valuation inputs or assumptions
(8
)
 
4

 
(12
)
 
(300.0
)%
MSRs hedge gain (loss)
1

 
—

 
1

 
NM

MSRs change due to payment decay
(44
)
 
(40
)
 
(4
)
 
10.0
 %
MSR and related hedge impact
(51
)
 
(36
)
 
(15
)
 
41.7
 %
Total mortgage income
$
149

 
$
173

 
$
(24
)
 
(13.9
)%
 
 
 
 
 
 
 
 
Mortgage production - purchased
$
3,877

 
$
4,014

 
$
(137
)
 
(3.4
)%
Mortgage production - refinanced
1,301

 
1,953

 
(652
)
 
(33.4
)%
Total mortgage production (2)
$
5,178

 
$
5,967

 
$
(789
)
 
(13.2
)%

Wealth Management Income
 
Year Ended
 
Year-to-Date Change 12/31/17 vs. 12/31/16
($ amounts in millions)
12/31/2017
 
12/31/2016
 
Amount
 
Percent
Investment management and trust fee income
$
230

 
$
213

 
$
17

 
8.0
 %
Insurance commissions and fees
145

 
148

 
(3
)
 
(2.0
)%
Investment services fee income
60

 
58

 
2

 
3.4
 %
Total wealth management income (3)
$
435

 
$
419

 
$
16

 
3.8
 %
_________
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.
(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.


10

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to Fourth Quarter 2017 Earnings Release

Non-Interest Expense
 
Quarter Ended
($ amounts in millions)
12/31/2017
 
9/30/2017
 
6/30/2017
 
3/31/2017
 
12/31/2016
 
4Q17 vs. 3Q17
 
4Q17 vs. 4Q16
Salaries and employee benefits
$
496

 
$
483

 
$
497

 
$
478

 
$
472

 
$
13

 
2.7
 %

$
24

 
5.1
 %
Net occupancy expense
83

 
91

 
86

 
85

 
89

 
(8
)
 
(8.8
)%
 
(6
)
 
(6.7
)%
Furniture and equipment expense
81

 
84

 
85

 
80

 
80

 
(3
)
 
(3.6
)%
 
1

 
1.3
 %
Outside services
48

 
41

 
43

 
40

 
41

 
7

 
17.1
 %
 
7

 
17.1
 %
FDIC insurance assessments
27

 
28

 
26

 
27

 
28

 
(1
)
 
(3.6
)%
 
(1
)
 
(3.6
)%
Professional, legal and regulatory expenses
24

 
21

 
28

 
22

 
26

 
3

 
14.3
 %
 
(2
)
 
(7.7
)%
Marketing
23

 
24

 
22

 
24

 
23

 
(1
)
 
(4.2
)%
 
—

 
—
 %
Credit/checkcard expenses
11

 
13

 
12

 
14

 
14

 
(2
)
 
(15.4
)%
 
(3
)
 
(21.4
)%
Branch consolidation, property and equipment charges
9

 
5

 
7

 
1

 
17

 
4

 
80.0
 %
 
(8
)
 
(47.1
)%
Visa class B shares expense
11

 
4

 
1

 
3

 
—

 
7

 
175.0
 %
 
11

 
NM

Provision (credit) for unfunded credit losses
(6
)
 
(8
)
 
(3
)
 
1

 
(3
)
 
2

 
(25.0
)%
 
(3
)
 
100.0
 %
Other
145

 
100

 
105

 
102

 
112

 
45

 
45.0
 %
 
33

 
29.5
 %
Total non-interest expense from continuing operations
$
952

 
$
886

 
$
909

 
$
877

 
$
899

 
$
66

 
7.4
 %
 
$
53

 
5.9
 %

 
Year Ended
 
Year-to-Date Change 12/31/17 vs. 12/31/16
($ amounts in millions)
12/31/2017
 
12/31/2016
 
Amount
 
Percent
Salaries and employee benefits
$
1,954

 
$
1,913

 
$
41

 
2.1
 %
Net occupancy expense
345

 
348

 
(3
)
 
(0.9
)%
Furniture and equipment expense
330

 
317

 
13

 
4.1
 %
Outside services
172

 
154

 
18

 
11.7
 %
FDIC insurance assessments
108

 
99

 
9

 
9.1
 %
Professional, legal and regulatory expenses
95

 
89

 
6

 
6.7
 %
Marketing
93

 
101

 
(8
)
 
(7.9
)%
Credit/checkcard expenses
50

 
55

 
(5
)
 
(9.1
)%
Branch consolidation, property and equipment charges
22

 
58

 
(36
)
 
(62.1
)%
Visa class B shares expense
19

 
15

 
4

 
26.7
 %
Provision (credit) for unfunded credit losses
(16
)
 
17

 
(33
)
 
(194.1
)%
Loss on early extinguishment of debt
—

 
14

 
(14
)
 
(100.0
)%
Other
452

 
437

 
15

 
3.4
 %
Total non-interest expense from continuing operations
$
3,624

 
$
3,617

 
$
7

 
0.2
 %
_________
NM - Not Meaningful

Selected Non-Interest Expense Variance Analysis
•
Salaries and employee benefits expense increased in the fourth quarter of 2017 as compared to the third quarter of 2017 primarily due to higher production-based incentives and health insurance costs.
•
Net occupancy expense decreased in the fourth quarter of 2017 as compared to the third quarter of 2017 primarily due to hurricane-related expenses recorded in the third quarter.
•
Outside services expenses increased in the fourth quarter of 2017 as compared to the third quarter of 2017 as a result of additional expenses recorded related to a new Wealth Management platform.
•
Other non-interest expense increased in the fourth quarter of 2017 as compared to the third quarter of 2017 due primarily to a $40 million contribution that was made to Regions’ charitable foundation as a result of anticipated savings related to tax reform.




11

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to Fourth Quarter 2017 Earnings Release

Reconciliation to GAAP Financial Measures
Adjusted Net Interest Income/Margin FTE Basis, Adjusted Efficiency Ratios, Adjusted Fee Income Ratios, Adjusted Non-Interest Income/Expense, and Adjusted Operating Leverage Ratios - Continuing Operations
The table below and on the following page present computations of the net interest margin; efficiency ratio, which is a measure of productivity, generally calculated as non-interest expense divided by total revenue; and the fee income ratio, 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. Net interest income and other financing income on a taxable-equivalent basis (GAAP) is presented excluding certain adjustments related to tax reform to arrive at adjusted net interest income and other financing income on a taxable-equivalent basis (non-GAAP). 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. The table on the following page presents a computation of the operating leverage ratio (non-GAAP) which is the period to period percentage change in adjusted total revenue on a taxable-equivalent basis (non-GAAP) less the percentage change in adjusted non-interest expense (non-GAAP). 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)
 
12/31/2017
 
9/30/2017
 
6/30/2017
 
3/31/2017
 
12/31/2016
 
4Q17 vs. 3Q17
 
4Q17 vs. 4Q16
Non-interest expense (GAAP)
A
$
952

 
$
886

 
$
909

 
$
877

 
$
899

 
$
66

 
7.4
 %
 
$
53

 
5.9
 %
Adjustments:
 


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Contribution to Regions' charitable foundation associated with tax reform
 
(40
)
 
—

 
—

 
—

 
—

 
(40
)
 
NM

 
(40
)
 
NM

Branch consolidation, property and equipment charges
 
(9
)
 
(5
)
 
(7
)
 
(1
)
 
(17
)
 
(4
)
 
80.0
 %
 
8

 
(47.1
)%
Salary and employee benefits—severance charges
 
(2
)
 
(1
)
 
(3
)
 
(4
)
 
(5
)
 
(1
)
 
100.0
 %
 
3

 
(60.0
)%
Adjusted non-interest expense (non-GAAP)
B
$
901

 
$
880

 
$
899

 
$
872

 
$
877

 
$
21

 
2.4
 %
 
$
24

 
2.7
 %
Net interest income and other financing income (GAAP)
 
$
901

 
$
898

 
$
882

 
$
859

 
$
853

 
$
3

 
0.3
 %
 
$
48

 
5.6
 %
Taxable-equivalent adjustment
 
23

 
23

 
22

 
22

 
21

 
—

 
—
 %
 
2

 
9.5
 %
Net interest income and other financing income, taxable-equivalent basis
C
$
924

 
$
921

 
$
904

 
$
881

 
$
874

 
$
3

 
0.3
 %
 
$
50

 
5.7
 %
Reduction in leveraged lease interest income resulting from tax reform
 
6

 
—

 
—

 
—

 
—

 
6

 
NM

 
6

 
NM

Adjusted net interest income and other financing income, taxable equivalent basis (non-GAAP)
D
$
930

 
$
921

 
$
904

 
$
881

 
$
874

 
$
9

 
1.0
 %
 
$
56

 
6.4
 %
Net interest margin (GAAP)(1)
 
3.37
%
 
3.36
%
 
3.32
%
 
3.25
%
 
3.16
%
 
 
 
 
 
 
 
 
Reduction in leveraged lease interest income resulting from tax reform
 
0.02

 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
Adjusted net interest margin (non-GAAP)
 
3.39
%
 
3.36
%
 
3.32
%
 
3.25
%
 
3.16
%
 
 
 
 
 
 
 
 
Non-interest income (GAAP)
E
$
555

 
$
515

 
$
525

 
$
510

 
$
522

 
$
40

 
7.8
 %
 
$
33

 
6.3
 %
Adjustments:
 


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Securities (gains) losses, net
 
(13
)
 
(8
)
 
(1
)
 
—

 
(5
)
 
(5
)
 
62.5
 %
 
(8
)
 
160.0
 %
Leveraged lease termination gains, net (2)
 
—

 
(1
)
 
—

 
—

 
—

 
1

 
(100.0
)%
 
—

 
NM

Gain on sale of affordable housing residential mortgage loans (1)
 
—

 
—

 
(5
)
 
—

 
(5
)
 
—

 
NM

 
5

 
(100.0
)%
Adjusted non-interest income (non-GAAP)
F
$
542

 
$
506

 
$
519

 
$
510

 
$
512

 
$
36

 
7.1
 %
 
$
30

 
5.9
 %
Total revenue, taxable-equivalent basis
C+E=G
$
1,479

 
$
1,436

 
$
1,429

 
$
1,391

 
$
1,396

 
$
43

 
3.0
 %
 
$
83

 
5.9
 %
Adjusted total revenue, taxable-equivalent basis (non-GAAP)
D+F=H
$
1,472

 
$
1,427

 
$
1,423

 
$
1,391

 
$
1,386

 
$
45

 
3.2
 %
 
$
86

 
6.2
 %
Efficiency ratio (GAAP)
A/G
64.3
%
 
61.7
%
 
63.6
%
 
63.1
%
 
64.4
%
 
 
 
 
 
 
 
 
Adjusted efficiency ratio (non-GAAP)
B/H
61.1
%
 
61.7
%
 
63.2
%
 
62.7
%
 
63.2
%
 
 
 
 
 
 
 
 
Fee income ratio (GAAP)
E/G
37.5
%
 
35.8
%
 
36.8
%
 
36.7
%
 
37.4
%
 
 
 
 
 
 
 
 
Adjusted fee income ratio (non-GAAP)
F/H
36.8
%
 
35.4
%
 
36.5
%
 
36.6
%
 
36.9
%
 
 
 
 
 
 
 
 
________
NM - Not Meaningful
(1)
See computation of net interest margin on page 5.
(2)
See page 8 for additional information regarding these adjustments.
    

12

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to Fourth Quarter 2017 Earnings Release

Reconciliation to GAAP Financial Measures
Adjusted Net Interest Income/Margin FTE Basis, Adjusted Efficiency Ratios, Adjusted Fee Income Ratios, Adjusted Non-Interest Income/Expense, and Adjusted Operating Leverage Ratios - Continuing Operations (continued)
 
 
Year Ended December 31
($ amounts in millions)
 
2017
 
2016
 
2017 vs. 2016
Non-interest expense (GAAP)
I
$
3,624

 
$
3,617

 
$
7

 
0.2
 %
Adjustments:
 
 
 
 
 
 
 
 
Contribution to Regions' charitable foundation associated with tax reform

 
(40
)
 
—

 
(40
)
 
NM

Professional, legal and regulatory expenses (1)
 
—

 
(3
)
 
3

 
(100.0
)%
Branch consolidation, property and equipment charges
 
(22
)
 
(58
)
 
36

 
(62.1
)%
Loss on early extinguishment of debt
 
—

 
(14
)
 
14

 
(100.0
)%
Salary and employee benefits—severance charges
 
(10
)
 
(21
)
 
11

 
(52.4
)%
Adjusted non-interest expense (non-GAAP)
J
$
3,552

 
$
3,521

 
$
31

 
0.9
 %
Net interest income and other financing income (GAAP)
 
$
3,540

 
$
3,398

 
$
142

 
4.2
 %
Taxable-equivalent adjustment
 
90

 
84

 
6

 
7.1
 %
Net interest income and other financing income, taxable-equivalent basis
K
$
3,630

 
$
3,482

 
$
148

 
4.3
 %
Reduction in leveraged lease interest income resulting from tax reform
 
6

 
—

 
6

 
NM

Adjusted net interest income and other financing income, taxable equivalent basis (non-GAAP)
L
$
3,636

 
$
3,482

 
$
154

 
4.4
 %
Net interest margin (GAAP)(2)
 
3.32
%
 
3.14
%
 
 
 
 
Reduction in leveraged lease interest income resulting from tax reform
 
0.01

 
—

 
 
 
 
Adjusted net interest margin (non-GAAP)
 
3.33
%
 
3.14
%
 
 
 
 
Non-interest income (GAAP)
M
$
2,105

 
$
2,153

 
$
(48
)
 
(2.2
)%
Adjustments:
 
 
 
 
 
 
 
 
Securities (gains) losses, net
 
(22
)
 
(6
)
 
(16
)
 
266.7
 %
Insurance proceeds (1)
 
—

 
(50
)
 
50

 
(100.0
)%
Leveraged lease termination gains, net (1)
 
(1
)
 
(8
)
 
7

 
(87.5
)%
Gain on sale of affordable housing residential mortgage loans (1)
 
(5
)
 
(5
)
 
—

 
—
 %
Adjusted non-interest income (non-GAAP)
N
$
2,077

 
$
2,084

 
$
(7
)
 
(0.3
)%
Total revenue, taxable-equivalent basis
K+M=O
$
5,735

 
$
5,635

 
$
100

 
1.8
 %
Adjusted total revenue, taxable-equivalent basis (non-GAAP)
L+N=P
$
5,713

 
$
5,566

 
$
147

 
2.6
 %
Operating leverage ratio (GAAP) (3)
O-I
 
 
 
 
 
 
1.6
 %
Adjusted operating leverage ratio (non-GAAP) (3)
P-J
 
 
 
 
 
 
1.8
 %
Efficiency ratio (GAAP)
I/O
63.2
%
 
64.2
%
 
 
 
 
Adjusted efficiency ratio (non-GAAP)
J/P
62.2
%
 
63.3
%
 
 
 
 
Fee income ratio (GAAP)
M/O
36.7
%
 
38.2
%
 
 
 
 
Adjusted fee income ratio (non-GAAP)
N/P
36.4
%
 
37.5
%
 
 
 
 
________
NM - Not Meaningful
(1)
See page 8 for additional information regarding these adjustments.
(2)
See computation of net interest margin on page 7.
(3)
These ratios have been computed using whole dollar amounts, therefore the ratios may not appear to calculate due to rounding.

13

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to Fourth Quarter 2017 Earnings Release

Reconciliation to GAAP Financial Measures

Return Ratios

The tables below provide 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)
 
12/31/2017

 
9/30/2017

 
6/30/2017

 
3/31/2017

 
12/31/2016

RETURN ON AVERAGE TANGIBLE COMMON STOCKHOLDERS' EQUITY- CONSOLIDATED
 
 
 
 
 
 
 
 
 
 
Net income available to common shareholders (GAAP)
A
$
319

 
$
295

 
$
300

 
$
285

 
$
279

Average stockholders' equity (GAAP)
 
$
16,419

 
$
16,790

 
$
16,803

 
$
16,650

 
$
16,955

Less:
 
 
 
 
 
 
 
 
 
 
Average intangible assets (GAAP)
 
5,086

 
5,097

 
5,108

 
5,119

 
5,127

Average deferred tax liability related to intangibles (GAAP)
 
(126
)
 
(155
)
 
(156
)
 
(156
)
 
(158
)
Average preferred stock (GAAP)
 
820

 
820

 
820

 
820

 
820

Average tangible common stockholders' equity (non-GAAP)
B
$
10,639

 
$
11,028

 
$
11,031

 
$
10,867

 
$
11,166

Return on average tangible common stockholders' equity (non-GAAP)*
A/B
11.88
%
 
10.62
%
 
10.91
%
 
10.63
%
 
9.96
%

 
 
Year Ended
($ amounts in millions)
 
12/31/2017
 
12/31/2016
RETURN ON AVERAGE TANGIBLE COMMON STOCKHOLDERS' EQUITY- CONSOLIDATED
 
 
 
 
Net income available to common shareholders (GAAP)
C
$
1,199

 
$
1,099

Average stockholders' equity (GAAP)
 
$
16,665

 
$
17,126

Less:
 
 
 
 
Average intangible assets (GAAP)
 
5,103

 
5,125

Average deferred tax liability related to intangibles (GAAP)
 
(148
)
 
(162
)
Average preferred stock (GAAP)
 
820

 
820

Average tangible common stockholders' equity (non-GAAP)
D
$
10,890

 
$
11,343

Return on average tangible common stockholders' equity (non-GAAP)
C/D
11.01
%
 
9.69
%
________
*Annualized



14

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to Fourth Quarter 2017 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 represents the unaudited condensed results for discontinued operations.
 
Quarter Ended
($ amounts in millions, except per share data)
12/31/2017
 
9/30/2017
 
6/30/2017
 
3/31/2017
 
12/31/2016
Non-interest expense:
 
 
 
 
 
 
 
 
 
Professional and legal expenses/(recoveries)
$
—

 
$
1

 
$
—

 
$
(11
)
 
$
(1
)
Other
1

 
—

 
1

 
—

 
—

Total non-interest expense
1

 
1

 
1

 
(11
)
 
(1
)
Income (loss) from discontinued operations before income tax
(1
)
 
(1
)
 
(1
)
 
11

 
1

Income tax expense (benefit)
(2
)
 
—

 
—

 
4

 
—

Income (loss) from discontinued operations, net of tax
$
1

 
$
(1
)
 
$
(1
)
 
$
7

 
$
1

Weighted-average shares outstanding—during quarter (1):
 
 
 
 
 
 
 
 
 
Basic
1,152

 
1,182

 
1,202

 
1,209

 
1,224

Diluted
1,164

 
1,182

 
1,202

 
1,224

 
1,234

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

 
$
(0.00
)
 
$
(0.00
)
 
$
0.01

 
$
0.00

Diluted
$
0.00

 
$
(0.00
)
 
$
(0.00
)
 
$
0.01

 
$
0.00

 
 
 
 
 
 
Year Ended December 31
($ amounts in millions, except per share data)
2017
 
2016
Non-interest expense:
 
 
 
Professional and legal expenses/(recoveries)
$
(10
)
 
$
(9
)
Other
2

 
1

Total non-interest expense
(8
)
 
(8
)
Income (loss) from discontinued operations before income tax
8

 
8

Income tax expense (benefit)
2

 
3

Income (loss) from discontinued operations, net of tax
$
6

 
$
5

Weighted-average shares outstanding—during year (1):
 
 
 
Basic
1,186

 
1,255

Diluted
1,198

 
1,261

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

 
$
0.00

Diluted
$
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.




15

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to Fourth Quarter 2017 Earnings Release

Credit Quality

As of and for Quarter Ended
($ amounts in millions)
12/31/2017

9/30/2017

6/30/2017

3/31/2017

12/31/2016
Components:









Allowance for loan losses (ALL)
$
934


$
1,041


$
1,041


$
1,061


$
1,091

Reserve for unfunded credit commitments
53


59


67


70


69

Allowance for credit losses (ACL)
$
987


$
1,100


$
1,108


$
1,131


$
1,160
















Provision (credit) for loan losses
$
(44
)

$
76


$
48


$
70


$
48

Provision (credit) for unfunded credit losses
(6
)

(8
)

(3
)

1


(3
)















Loans charged-off:
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
35

 
$
41

 
$
36

 
$
47

 
$
38

Commercial real estate mortgage—owner-occupied
2

 
2

 
2

 
11

 
3

Total commercial
37

 
43

 
38

 
58

 
41

Commercial investor real estate mortgage
—

 
—

 
1

 
1

 
—

Commercial investor real estate construction
—

 
—

 
—

 
—

 
—

Total investor real estate
—

 
—

 
1

 
1

 
—

Residential first mortgage
2

 
3

 
3

 
3

 
4

Home equity—lines of credit
7

 
7

 
8

 
7

 
8

Home equity—closed-end
2

 
1

 
1

 
2

 
3

Indirect—vehicles
11

 
12

 
11

 
15

 
15

Indirect—other consumer
12

 
9

 
5

 
6

 
5

Consumer credit card
14

 
13

 
14

 
13

 
12

Other consumer
20

 
18

 
18

 
19

 
22

Total consumer
68

 
63

 
60

 
65

 
69

Total
105

 
106

 
99

 
124

 
110

 
 
 
 
 
 
 
 
 
 
Recoveries of loans previously charged-off:
 
 
 
 
 
 
 
 
 
Commercial and industrial
11

 
9

 
8

 
5

 
7

Commercial real estate mortgage—owner-occupied
3

 
2

 
3

 
1

 
2

Total commercial
14

 
11

 
11

 
6

 
9

Commercial investor real estate mortgage
13

 
2

 
4

 
2

 
2

Commercial investor real estate construction
—

 
1

 
1

 
—

 
1

Total investor real estate
13

 
3

 
5

 
2

 
3

Residential first mortgage
1

 
1

 
1

 
1

 
1

Home equity—lines of credit
5

 
4

 
4

 
4

 
5

Home equity—closed-end
1

 
1

 
1

 
1

 
—

Indirect—vehicles
4

 
4

 
5

 
5

 
4

Indirect—other consumer
1

 
1

 
—

 
—

 
1

Consumer credit card
1

 
2

 
2

 
1

 
2

Other consumer
2

 
3

 
2

 
4

 
2

Total consumer
15

 
16

 
15

 
16

 
15

Total
42

 
30

 
31

 
24

 
27

 
 
 
 
 
 
 
 
 
 
Net loans charged-off:














Commercial and industrial
24


32


28


42


31

Commercial real estate mortgage—owner-occupied
(1
)

—


(1
)

10


1

Total commercial
23


32


27


52


32

Commercial investor real estate mortgage
(13
)

(2
)

(3
)

(1
)

(2
)
Commercial investor real estate construction
—


(1
)

(1
)

—


(1
)
Total investor real estate
(13
)

(3
)

(4
)

(1
)

(3
)
Residential first mortgage
1


2


2


2


3

Home equity—lines of credit
2


3


4


3


3

Home equity—closed-end
1


—


—


1


3

Indirect—vehicles
7


8


6


10


11

Indirect—other consumer
11

 
8

 
5

 
6

 
4

Consumer credit card
13


11


12


12


10

Other consumer
18


15


16


15


20

Total consumer
53


47


45


49


54

Total
$
63


$
76


$
68


$
100


$
83

 
 
 
 
 
 
 
 
 
 

16

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to Fourth Quarter 2017 Earnings Release

Credit Quality (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of and for Quarter Ended
($ amounts in millions)
12/31/2017
 
9/30/2017
 
6/30/2017
 
3/31/2017
 
12/31/2016
Net loan charge-offs as a % of average loans, annualized:









Commercial and industrial
0.27
 %

0.36
 %

0.31
 %

0.48
 %

0.34
 %
Commercial real estate mortgage—owner-occupied
(0.06
)%

(0.02
)%

(0.03
)%

0.59
 %

0.10
 %
Total commercial
0.22
 %

0.30
 %

0.25
 %

0.49
 %

0.30
 %
Commercial investor real estate mortgage
(1.26
)%

(0.25
)%

(0.30
)%

(0.07
)%

(0.16
)%
Commercial investor real estate construction
(0.16
)%

(0.15
)%

(0.17
)%

(0.02
)%

(0.12
)%
Total investor real estate
(0.90
)%

(0.22
)%

(0.26
)%

(0.05
)%

(0.15
)%
Residential first mortgage
0.04
 %

0.05
 %

0.06
 %

0.08
 %

0.10
 %
Home equity—lines of credit
0.15
 %

0.15
 %

0.20
 %

0.19
 %

0.25
 %
Home equity—closed-end
0.01
 %

0.01
 %

0.08
 %

0.10
 %

0.16
 %
Indirect—vehicles
0.94
 %

0.83
 %

0.71
 %

1.01
 %

0.94
 %
Indirect—other consumer
3.03
 %
 
2.64
 %
 
2.00
 %
 
2.43
 %
 
2.16
 %
Consumer credit card
3.97
 %

3.92
 %

4.20
 %

3.93
 %

3.61
 %
Other consumer
5.77
 %

5.36
 %

5.39
 %

5.69
 %

6.90
 %
Total consumer
0.66
 %

0.60
 %

0.58
 %

0.64
 %

0.68
 %
Total
0.31
 %

0.38
 %

0.34
 %

0.51
 %

0.41
 %
Non-accrual loans, excluding loans held for sale
$
650


$
760


$
823


$
1,004


$
995

Non-performing loans held for sale
17


6


8


8


13

Non-accrual loans, including loans held for sale
667


766


831


1,012


1,008

Foreclosed properties
73


73


81


81


90

Non-performing assets (NPAs)
$
740


$
839


$
912


$
1,093


$
1,098

Loans past due > 90 days (1)
$
167


$
151


$
146


$
164


$
170

Accruing restructured loans not included in categories above (2)
$
945


$
1,014


$
1,141


$
1,036


$
1,010

Credit Ratios:














ACL/Loans, net
1.23
 %

1.39
 %

1.38
 %

1.42
 %

1.45
 %
ALL/Loans, net
1.17
 %

1.31
 %

1.30
 %

1.33
 %

1.36
 %
Allowance for loan losses to non-performing loans, excluding loans held for sale
1.44x


1.37x


1.27x


1.06x


1.10x

Adjusted allowance for loan losses to non-performing loans, excluding loans held for sale (non-GAAP) (3)
1.98x

 
1.80x

 
1.63x

 
1.35x

 
1.38x

Non-accrual loans, excluding loans held for sale/Loans, net
0.81
 %

0.96
 %

1.03
 %

1.26
 %

1.24
 %
NPAs (ex. 90+ past due)/Loans, foreclosed properties and non-performing loans held for sale
0.92
 %

1.06
 %

1.14
 %

1.37
 %

1.37
 %
NPAs (inc. 90+ past due)/Loans, foreclosed properties and non-performing loans held for sale (1)
1.13
 %

1.25
 %

1.32
 %

1.57
 %

1.58
 %
            
(1)
Excludes guaranteed residential first mortgages that are 90+ days past due and still accruing. Refer to the footnotes on page 22 for amounts related to these loans.
(2)
See page 21 for detail of restructured loans.
(3)
See reconciliation of GAAP to non-GAAP Financial Measures on page 18.


Allowance for Credit Losses
 
 
 
 
Year Ended December 31
($ amounts in millions)
2017
 
2016
Balance at beginning of year
$
1,160

 
$
1,158

Net loans charged off
(307
)
 
(277
)
Provision for loan losses
150

 
262

Provision (credit) for unfunded credit losses
(16
)
 
17

Balance at end of year
$
987

 
$
1,160







17

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to Fourth Quarter 2017 Earnings Release

Non-Accrual Loans (excludes loans held for sale)
 
As of
($ amounts in millions)
12/31/2017
 
9/30/2017
 
6/30/2017
 
3/31/2017
 
12/31/2016
Commercial and industrial
$
404

 
1.12
%
 
$
493

 
1.39
%
 
$
540

 
1.51
%
 
$
666

 
1.89
%
 
$
623

 
1.78
%
Commercial real estate mortgage—owner-occupied
118

 
1.90
%
 
140

 
2.22
%
 
148

 
2.30
%
 
186

 
2.80
%
 
210

 
3.06
%
Commercial real estate construction—owner-occupied
6

 
1.89
%
 
6

 
1.79
%
 
3

 
0.72
%
 
4

 
1.08
%
 
3

 
0.92
%
Total commercial
528

 
1.24
%
 
639

 
1.52
%
 
691

 
1.63
%
 
856

 
2.03
%
 
836

 
1.98
%
Commercial investor real estate mortgage
5

 
0.13
%
 
5

 
0.12
%
 
12

 
0.30
%
 
17

 
0.39
%
 
17

 
0.42
%
Commercial investor real estate construction
1

 
0.02
%
 
—

 
—
%
 
—

 
—
%
 
—

 
—
%
 
—

 
—
%
Total investor real estate
6

 
0.10
%
 
5

 
0.08
%
 
12

 
0.19
%
 
17

 
0.26
%
 
17

 
0.27
%
Residential first mortgage
47

 
0.33
%
 
45

 
0.32
%
 
46

 
0.33
%
 
50

 
0.37
%
 
50

 
0.38
%
Home equity
69

 
0.68
%
 
70

 
0.68
%
 
73

 
0.70
%
 
81

 
0.77
%
 
92

 
0.86
%
Indirect - vehicles
—

 
—
%
 
1

 
0.02
%
 
1

 
0.02
%
 
—

 
—
%
 
—

 
—
%
Total consumer
116

 
0.37
%
 
116

 
0.37
%
 
120

 
0.38
%
 
131

 
0.42
%
 
142

 
0.45
%
Total non-accrual loans
$
650

 
0.81
%
 
$
760

 
0.96
%
 
$
823

 
1.03
%
 
$
1,004

 
1.26
%
 
$
995

 
1.24
%

Adjusted Non-Accrual Loans and Select Ratios (non-GAAP)
The table below presents computations of the adjusted allowance for loan losses to non-performing loans, excluding loans held for sale ratio (non-GAAP), generally calculated as adjusted allowance for loan losses divided by adjusted total non-accrual loans, excluding loans held for sale. The allowance for loan losses (GAAP) is presented excluding the portion of the allowance related to direct energy loans to arrive at the adjusted allowance for loan losses (non-GAAP). Total non-accrual loans (GAAP) is presented excluding direct energy non-accrual loans to arrive at adjusted total non-accrual loans, excluding loans held for sale (non-GAAP), which is the denominator for the allowance for loan losses to non-accrual loans ratio. Management believes that excluding the portion of the allowance for loan losses related to direct energy loans and the direct energy non-accrual loans will assist investors in analyzing the Company's credit quality performance absent the volatility that has been experienced by energy businesses. Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, are not audited, and should not be considered in isolation, or as a substitute for analyses of results as reported under GAAP.
 
As of
($ amounts in millions)
12/31/2017
 
9/30/2017
 
6/30/2017
 
3/31/2017
 
12/31/2016
Allowance for loan losses (GAAP)
$
934

 
$
1,041

 
$
1,041

 
$
1,061

 
$
1,091

Less: Direct energy portion
82

 
115

 
136

 
123

 
147

Adjusted allowance for loan losses (non-GAAP)
$
852

 
$
926

 
$
905

 
$
938

 
$
944

 
 
 
 
 
 
 
 
 
 
Total non-accrual loans (GAAP)
$
650

 
$
760

 
$
823

 
$
1,004

 
$
995

Less: Direct energy non-accrual loans
220

 
247

 
267

 
310

 
311

Adjusted total non-accrual loans (non-GAAP)
$
430

 
$
513

 
$
556

 
$
694

 
$
684

Allowance for loan losses to non-performing loans, excluding loans held for sale (GAAP)
1.44x

 
1.37x

 
1.27x

 
1.06x

 
1.10x

Adjusted allowance for loan losses to non-performing loans, excluding loans held for sale (non-GAAP)
1.98x

 
1.80x

 
1.63x

 
1.35x

 
1.38x


Criticized and Classified Loans—Business Services (1)
 
As of
 
 
 
 
 
 
 
 
 
 
 
12/31/2017
 
12/31/2017
($ amounts in millions)
12/31/2017
 
9/30/2017
 
6/30/2017
 
3/31/2017
 
12/31/2016
 
vs. 9/30/2017
 
vs. 12/31/2016
Accruing classified
$
915

 
$
1,377

 
$
1,415

 
$
1,522

 
$
1,553

 
$
(462
)
 
(33.6
)%
 
$
(638
)
 
(41.1
)%
Non-accruing classified
534

 
644

 
703

 
873

 
853

 
(110
)
 
(17.1
)%
 
(319
)
 
(37.4
)%
Total classified
1,449

 
2,021

 
2,118

 
2,395

 
2,406

 
(572
)
 
(28.3
)%
 
(957
)
 
(39.8
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Special mention
1,007

 
941

 
1,162

 
1,143

 
1,206

 
66

 
7.0
 %
 
(199
)
 
(16.5
)%
Total criticized
$
2,456

 
$
2,962

 
$
3,280

 
$
3,538

 
$
3,612

 
$
(506
)
 
(17.1
)%
 
$
(1,156
)
 
(32.0
)%
                 
(1)
Business services represents the combined total of commercial and investor real estate loans.










18

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to Fourth Quarter 2017 Earnings Release




Home Equity Lines of Credit - Future Principal Payment Resets (2) 
 
As of 12/31/2017
($ amounts in millions)
First Lien
 
% of Total
 
Second Lien
 
% of Total
 
Total
2018
$
11

 
0.16
%
 
$
18

 
0.27
%
 
$
29

2019
63

 
0.96
%
 
55

 
0.84
%
 
118

2020
132

 
2.01
%
 
102

 
1.55
%
 
234

2021
154

 
2.35
%
 
136

 
2.07
%
 
290

2022
170

 
2.58
%
 
155

 
2.37
%
 
325

2023-2027
2,140

 
32.56
%
 
2,180

 
33.18
%
 
4,320

2028-2032
720

 
10.96
%
 
534

 
8.12
%
 
1,254

Thereafter
—

 
0.01
%
 
1

 
0.01
%
 
1

Total
$
3,390

 
51.59
%
 
$
3,181

 
48.41
%
 
$
6,571

                 
(2)
The balance of Regions' home equity portfolio was $10,164 million at December 31, 2017 consisting of $6,571 million of home equity lines of credit and $3,593 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.


19

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to Fourth Quarter 2017 Earnings Release

Early and Late Stage Delinquencies

Accruing 30-89 Days Past Due Loans
As of
($ amounts in millions)
12/31/2017
 
9/30/2017
 
6/30/2017
 
3/31/2017
 
12/31/2016
Commercial and industrial
$
35

 
0.10
%
 
$
46

 
0.13
%
 
$
23

 
0.06
%
 
$
20

 
0.06
%
 
$
70

 
0.20
%
Commercial real estate mortgage—owner-occupied
26

 
0.41
%
 
20

 
0.31
%
 
31

 
0.47
%
 
24

 
0.36
%
 
36

 
0.52
%
Commercial real estate construction—owner-occupied
—

 
0.07
%
 
—

 
0.01
%
 
1

 
0.18
%
 
—

 
0.01
%
 
1

 
0.39
%
Total commercial
61

 
0.14
%
 
66

 
0.16
%
 
55

 
0.13
%
 
44

 
0.10
%
 
107

 
0.25
%
Commercial investor real estate mortgage
2

 
0.05
%
 
7

 
0.18
%
 
17

 
0.42
%
 
11

 
0.25
%
 
14

 
0.33
%
Commercial investor real estate construction
—

 
—
%
 
29

 
1.47
%
 
—

 
0.01
%
 
32

 
1.46
%
 
—

 
—
%
Total investor real estate
2

 
0.03
%
 
36

 
0.60
%
 
17

 
0.28
%
 
43

 
0.66
%
 
14

 
0.21
%
Residential first mortgage—non-guaranteed (1)
135

 
0.99
%
 
111

 
0.82
%
 
105

 
0.77
%
 
108

 
0.82
%
 
128

 
0.98
%
Home equity
80

 
0.79
%
 
89

 
0.87
%
 
76

 
0.73
%
 
72

 
0.68
%
 
82

 
0.77
%
Indirect—vehicles
61

 
1.84
%
 
58

 
1.66
%
 
54

 
1.47
%
 
51

 
1.33
%
 
70

 
1.73
%
Indirect—other consumer
14

 
0.96
%
 
13

 
0.98
%
 
9

 
0.78
%
 
6

 
0.62
%
 
8

 
0.87
%
Consumer credit card
18

 
1.40
%
 
18

 
1.50
%
 
14

 
1.20
%
 
15

 
1.27
%
 
16

 
1.29
%
Other consumer
17

 
1.41
%
 
16

 
1.43
%
 
14

 
1.21
%
 
13

 
1.16
%
 
18

 
1.64
%
Total consumer (1)
325

 
1.05
%
 
305

 
0.99
%
 
272

 
0.87
%
 
265

 
0.86
%
 
322

 
1.04
%
Total accruing 30-89 days past due loans (1)
$
388

 
0.49
%
 
$
407

 
0.52
%
 
$
344

 
0.43
%
 
$
352

 
0.44
%
 
$
443

 
0.56
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accruing 90+ Days Past Due Loans
As of
($ amounts in millions)
12/31/2017
 
9/30/2017
 
6/30/2017
 
3/31/2017
 
12/31/2016
Commercial and industrial
$
4

 
0.01
%
 
$
5

 
0.01
%
 
$
4

 
0.01
%
 
$
5

 
0.01
%
 
$
6

 
0.02
%
Commercial real estate mortgage—owner-occupied
1

 
0.02
%
 
4

 
0.06
%
 
2

 
0.03
%
 
5

 
0.08
%
 
2

 
0.04
%
Total commercial
5

 
0.01
%
 
9

 
0.02
%
 
6

 
0.01
%
 
10

 
0.02
%
 
8

 
0.02
%
Commercial investor real estate mortgage
1

 
0.02
%
 
—

 
—
%
 
—

 
—
%
 
—

 
—
%
 
—

 
0.01
%
Total investor real estate
1

 
0.02
%
 
—

 
0.01
%
 
—

 
—
%
 
—

 
—
%
 
—

 
—
%
Residential first mortgage—non-guaranteed (2)
92

 
0.67
%
 
80

 
0.60
%
 
84

 
0.61
%
 
95

 
0.72
%
 
99

 
0.76
%
Home equity
37

 
0.36
%
 
33

 
0.32
%
 
30

 
0.28
%
 
32

 
0.30
%
 
33

 
0.31
%
Indirect—vehicles
9

 
0.27
%
 
9

 
0.27
%
 
8

 
0.22
%
 
8

 
0.21
%
 
10

 
0.25
%
Consumer credit card
19

 
1.45
%
 
16

 
1.29
%
 
15

 
1.25
%
 
15

 
1.30
%
 
15

 
1.24
%
Other consumer
4

 
0.35
%
 
4

 
0.31
%
 
3

 
0.30
%
 
4

 
0.41
%
 
5

 
0.41
%
Total consumer (2)
161

 
0.52
%
 
142

 
0.46
%
 
140

 
0.45
%
 
154

 
0.50
%
 
162

 
0.52
%
Total accruing 90+ days past due loans (2)
$
167

 
0.21
%
 
$
151

 
0.19
%
 
$
146

 
0.18
%
 
$
164

 
0.21
%
 
$
170

 
0.21
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total delinquencies (1) (2)
$
555

 
0.70
%
 
$
558

 
0.71
%
 
$
490

 
0.61
%
 
$
516

 
0.65
%
 
$
613

 
0.77
%
                 
(1)
Excludes loans that are 100% guaranteed by FHA. Total 30-89 days past due guaranteed loans excluded were $45 million at 12/31/2017, $38 million at 9/30/2017, $33 million at 6/30/2017, $29 million at 3/31/2017, and $34 million at 12/31/2016.
(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 $124 million at 12/31/2017 $94 million at 9/30/2017, $85 million at 6/30/2017, $100 million at 3/31/2017, and $113 million at 12/31/2016.

20

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to Fourth Quarter 2017 Earnings Release

Troubled Debt Restructurings
 
 
As of
($ amounts in millions)
12/31/2017
 
9/30/2017
 
6/30/2017
 
3/31/2017
 
12/31/2016
Current:
 
 
 
 
 
 
 
 
 
Commercial
$
215

 
$
252

 
$
348

 
$
250

 
$
230

Investor real estate
90

 
75

 
96

 
68

 
86

Residential first mortgage
318

 
332

 
342

 
334

 
325

Home equity
233

 
245

 
257

 
266

 
272

Consumer credit card
1

 
1

 
1

 
2

 
2

Other consumer
8

 
8

 
9

 
10

 
10

Total current
865

 
913

 
1,053

 
930

 
925

Accruing 30-89 DPD:

 
 
 
 
 
 
 
 
Commercial
17

 
10

 
18

 
3

 
11

Investor real estate
—

 
29

 
12

 
41

 
4

Residential first mortgage
50

 
49

 
46

 
51

 
55

Home equity
12

 
12

 
11

 
11

 
14

Other consumer
1

 
1

 
1

 
—

 
1

Total accruing 30-89 DPD
80

 
101

 
88

 
106

 
85

Total accruing and <90 DPD
945

 
1,014

 
1,141

 
1,036

 
1,010

Non-accrual or 90+ DPD:

 
 
 
 
 
 
 
 
Commercial
115

 
238

 
227

 
238

 
279

Investor real estate
1

 
1

 
2

 
4

 
5

Residential first mortgage
69

 
64

 
66

 
71

 
74

Home equity
14

 
15

 
14

 
15

 
17

Total non-accrual or 90+DPD
199

 
318

 
309

 
328

 
375

Total TDRs - Loans
$
1,144

 
$
1,332

 
$
1,450

 
$
1,364

 
$
1,385

TDRs - Held For Sale
13

 
1

 
3

 
7

 
3

Total TDRs
$
1,157

 
$
1,333

 
$
1,453

 
$
1,371

 
$
1,388

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total TDRs - Loans by Portfolio
 
 
 
 
 
 
 
 
 
 
As of
($ amounts in millions)
12/31/2017

 
9/30/2017

 
6/30/2017

 
3/31/2017

 
12/31/2016

Total commercial TDRs
$
347


$
500


$
593


$
491


$
520

Total investor real estate TDRs
91


105


110


113


95

Total consumer TDRs
706


727


747


760


770

Total TDRs - Loans
$
1,144


$
1,332


$
1,450


$
1,364


$
1,385



21

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to Fourth Quarter 2017 Earnings Release

Consolidated Balance Sheets (unaudited)
 
As of
($ amounts in millions)
12/31/2017
 
9/30/2017
 
6/30/2017
 
3/31/2017
 
12/31/2016
Assets:
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
2,012

 
$
1,829

 
$
1,873

 
$
1,736

 
$
1,853

Interest-bearing deposits in other banks
1,899

 
1,932

 
2,258

 
2,638

 
3,583

Federal funds sold and securities purchased under agreements to resell
70

 
—

 
—

 
—

 
15

Trading account securities
189

 
193

 
178

 
126

 
124

Securities held to maturity
1,658

 
1,703

 
1,754

 
1,777

 
1,362

Securities available for sale
23,628

 
23,659

 
23,608

 
23,521

 
23,781

Loans held for sale
348

 
388

 
573

 
512

 
718

Loans, net of unearned income
79,947

 
79,356

 
80,127

 
79,869

 
80,095

Allowance for loan losses
(934
)
 
(1,041
)
 
(1,041
)
 
(1,061
)
 
(1,091
)
Net loans
79,013

 
78,315


79,086

 
78,808

 
79,004

Other earning assets
1,477

 
1,421

 
1,537

 
1,562

 
1,644

Premises and equipment, net
2,064

 
2,057

 
2,060

 
2,088

 
2,096

Interest receivable
337

 
319

 
313

 
308

 
319

Goodwill
4,904

 
4,904

 
4,904

 
4,904

 
4,904

Residential mortgage servicing rights at fair value (MSRs)
336

 
335

 
346

 
326

 
324

Other identifiable intangible assets
177

 
187

 
198

 
209

 
221

Other assets
6,182

 
6,029

 
5,955

 
6,030

 
6,020

Total assets
$
124,294

 
$
123,271


$
124,643

 
$
124,545

 
$
125,968

Liabilities and stockholders’ equity:
 
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
 
Non-interest-bearing
$
36,127

 
$
37,293

 
$
37,119

 
$
37,022

 
$
36,046

Interest-bearing
60,762

 
60,298

 
60,974

 
62,402

 
62,989

Total deposits
96,889

 
97,591


98,093

 
99,424

 
99,035

Borrowed funds:
 
 
 
 
 
 
 
 
 
Short-term borrowings:
 
 
 
 
 
 
 
 
 
Other short-term borrowings
500

 
600

 
600

 
—

 
—

Total short-term borrowings
500


600


600

 
—

 
—

Long-term borrowings
8,132

 
6,102

 
6,765

 
6,010

 
7,763

Total borrowed funds
8,632

 
6,702


7,365

 
6,010


7,763

Other liabilities
2,581

 
2,354

 
2,292

 
2,389

 
2,506

Total liabilities
108,102

 
106,647


107,750

 
107,823

 
109,304

Stockholders’ equity:


 
 
 
 
 
 
 
 
Preferred stock, non-cumulative perpetual
820

 
820

 
820

 
820

 
820

Common stock
12

 
12

 
12

 
12

 
13

Additional paid-in capital
15,858

 
16,344

 
16,828

 
16,959

 
17,092

Retained earnings
1,495

 
1,279

 
1,089

 
873

 
666

Treasury stock, at cost
(1,377
)
 
(1,377
)
 
(1,377
)
 
(1,377
)
 
(1,377
)
Accumulated other comprehensive income (loss), net
(616
)
 
(454
)
 
(479
)
 
(565
)
 
(550
)
Total stockholders’ equity
16,192

 
16,624


16,893

 
16,722

 
16,664

Total liabilities and stockholders’ equity
$
124,294

 
$
123,271


$
124,643

 
$
124,545

 
$
125,968

 






22

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to Fourth Quarter 2017 Earnings Release

End of Period Loans
 
As of
 
 
 
 
 
 
 
 
 
 
 
12/30/2017
 
12/31/2017
($ amounts in millions)
12/31/2017
 
9/30/2017
 
6/30/2017
 
3/31/2017
 
12/31/2016
 
vs. 9/30/2017
 
vs. 12/31/2016
Commercial and industrial
$
36,115

 
$
35,443

 
$
35,656

 
$
35,227

 
$
35,012

 
$
672

 
1.9
 %
 
$
1,103

 
3.2
 %
Commercial real estate mortgage—owner-occupied
6,193

 
6,284

 
6,445

 
6,658

 
6,867

 
(91
)
 
(1.4
)%
 
(674
)
 
(9.8
)%
Commercial real estate construction—owner-occupied
332

 
335

 
388

 
357

 
334

 
(3
)
 
(0.9
)%
 
(2
)
 
(0.6
)%
Total commercial
42,640

 
42,062

 
42,489

 
42,242


42,213

 
578

 
1.4
 %
 
427

 
1.0
 %
Commercial investor real estate mortgage
4,062

 
3,999

 
4,126

 
4,277

 
4,087

 
63

 
1.6
 %
 
(25
)
 
(0.6
)%
Commercial investor real estate construction
1,772

 
1,936

 
2,163

 
2,205

 
2,387

 
(164
)
 
(8.5
)%
 
(615
)
 
(25.8
)%
Total investor real estate
5,834

 
5,935

 
6,289

 
6,482


6,474

 
(101
)
 
(1.7
)%
 
(640
)
 
(9.9
)%
Total business
48,474

 
47,997

 
48,778

 
48,724


48,687

 
477

 
1.0
 %
 
(213
)
 
(0.4
)%
Residential first mortgage
14,061

 
13,903

 
13,765

 
13,565

 
13,440

 
158

 
1.1
 %
 
621

 
4.6
 %
Home equity—lines of credit (1)
6,571

 
6,693

 
6,848

 
7,016

 
7,233

 
(122
)
 
(1.8
)%
 
(662
)
 
(9.2
)%
Home equity—closed-end (2)
3,593

 
3,583

 
3,571

 
3,517

 
3,454

 
10

 
0.3
 %
 
139

 
4.0
 %
Indirect—vehicles
2,184

 
2,176

 
2,147

 
2,108

 
2,087

 
8

 
0.4
 %
 
97

 
4.6
 %
Indirect—vehicles third-party
1,142

 
1,313

 
1,506

 
1,720

 
1,953

 
(171
)
 
(13.0
)%
 
(811
)
 
(41.5
)%
Indirect—other consumer
1,467

 
1,318

 
1,188

 
957

 
920

 
149

 
11.3
 %
 
547

 
59.5
 %
Consumer credit card
1,290

 
1,214

 
1,183

 
1,151

 
1,196

 
76

 
6.3
 %
 
94

 
7.9
 %
Other consumer
1,165

 
1,159

 
1,141

 
1,111

 
1,125

 
6

 
0.5
 %
 
40

 
3.6
 %
Total consumer
31,473

 
31,359

 
31,349

 
31,145


31,408

 
114

 
0.4
 %
 
65

 
0.2
 %
Total Loans
$
79,947

 
$
79,356

 
$
80,127

 
$
79,869


$
80,095

 
$
591

 
0.7
 %
 
$
(148
)
 
(0.2
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
_______
(1)
The balance of Regions' home equity lines of credit consists of $3,390 million of first lien and $3,181 million of second lien at 12/31/2017.
(2)
The balance of Regions' closed-end home equity loans consists of $3,276 million of first lien and $317 million of second lien at 12/31/2017.

 
As of
End of Period Loans by Percentage
12/31/2017
 
9/30/2017
 
6/30/2017
 
3/31/2017
 
12/31/2016
Commercial and industrial
45.2
%
 
44.7
%
 
44.5
%
 
44.1
%
 
43.7
%
Commercial real estate mortgage—owner-occupied
7.7
%
 
7.9
%
 
8.0
%
 
8.3
%
 
8.6
%
Commercial real estate construction—owner-occupied
0.4
%
 
0.4
%
 
0.5
%
 
0.4
%
 
0.4
%
Total commercial
53.3
%
 
53.0
%
 
53.0
%
 
52.8
%
 
52.7
%
Commercial investor real estate mortgage
5.1
%
 
5.0
%
 
5.1
%
 
5.4
%
 
5.1
%
Commercial investor real estate construction
2.2
%
 
2.5
%
 
2.7
%
 
2.8
%
 
3.0
%
Total investor real estate
7.3
%
 
7.5
%
 
7.8
%
 
8.2
%
 
8.1
%
Total business
60.6
%
 
60.5
%
 
60.8
%
 
61.0
%
 
60.8
%
Residential first mortgage
17.6
%
 
17.5
%
 
17.2
%
 
17.0
%
 
16.8
%
Home equity—lines of credit
8.2
%
 
8.4
%
 
8.5
%
 
8.8
%
 
9.0
%
Home equity—closed-end
4.5
%
 
4.5
%
 
4.5
%
 
4.4
%
 
4.3
%
Indirect—vehicles
2.7
%
 
2.7
%
 
2.7
%
 
2.6
%
 
2.6
%
Indirect—vehicles third-party
1.4
%
 
1.7
%
 
1.9
%
 
2.2
%
 
2.4
%
Indirect—other consumer
1.9
%
 
1.7
%
 
1.5
%
 
1.2
%
 
1.2
%
Consumer credit card
1.6
%
 
1.5
%
 
1.5
%
 
1.4
%
 
1.5
%
Other consumer
1.5
%
 
1.5
%
 
1.4
%
 
1.4
%
 
1.4
%
Total consumer
39.4
%
 
39.5
%
 
39.2
%
 
39.0
%
 
39.2
%
Total Loans
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%


23

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to Fourth Quarter 2017 Earnings Release

Average Balances of Loans
 
Average Balances
($ amounts in millions)
4Q17
 
3Q17
 
2Q17
 
1Q17
 
4Q16
 
4Q17 vs. 3Q17
 
4Q17 vs. 4Q16
Commercial and industrial
$
35,689

 
$
35,438

 
$
35,596

 
$
35,330

 
$
35,149

 
$
251

 
0.7
 %
 
$
540

 
1.5
 %
Commercial real estate mortgage—owner-occupied
6,208

 
6,413

 
6,562

 
6,793

 
6,963

 
(205
)
 
(3.2
)%
 
(755
)
 
(10.8
)%
Commercial real estate construction—owner-occupied
335

 
332

 
365

 
346

 
356

 
3

 
0.9
 %
 
(21
)
 
(5.9
)%
Total commercial
42,232

 
42,183

 
42,523

 
42,469

 
42,468

 
49

 
0.1
 %
 
(236
)
 
(0.6
)%
Commercial investor real estate mortgage
3,986

 
4,065

 
4,235

 
4,229

 
4,231

 
(79
)
 
(1.9
)%
 
(245
)
 
(5.8
)%
Commercial investor real estate construction
1,938

 
2,010

 
2,205

 
2,246

 
2,441

 
(72
)
 
(3.6
)%
 
(503
)
 
(20.6
)%
Total investor real estate
5,924

 
6,075

 
6,440

 
6,475

 
6,672

 
(151
)
 
(2.5
)%
 
(748
)
 
(11.2
)%
Total business
48,156

 
48,258

 
48,963

 
48,944

 
49,140

 
(102
)
 
(0.2
)%
 
(984
)
 
(2.0
)%
Residential first mortgage
13,954

 
13,808

 
13,637

 
13,469

 
13,485

 
146

 
1.1
 %
 
469

 
3.5
 %
Home equity—lines of credit
6,625

 
6,763

 
6,941

 
7,124

 
7,308

 
(138
)
 
(2.0
)%
 
(683
)
 
(9.3
)%
Home equity—closed-end
3,581

 
3,578

 
3,534

 
3,482

 
3,403

 
3

 
0.1
 %
 
178

 
5.2
 %
Indirect—vehicles
2,177

 
2,156

 
2,131

 
2,108

 
2,075

 
21

 
1.0
 %
 
102

 
4.9
 %
Indirect—vehicles third-party
1,223

 
1,406

 
1,611

 
1,835

 
2,021

 
(183
)
 
(13.0
)%
 
(798
)
 
(39.5
)%
Indirect—other consumer
1,400

 
1,258

 
1,001

 
937

 
889

 
142

 
11.3
 %
 
511

 
57.5
 %
Consumer credit card
1,238

 
1,200

 
1,164

 
1,166

 
1,146

 
38

 
3.2
 %
 
92

 
8.0
 %
Other consumer
1,169

 
1,158

 
1,128

 
1,113

 
1,122

 
11

 
0.9
 %
 
47

 
4.2
 %
Total consumer
31,367

 
31,327

 
31,147

 
31,234

 
31,449

 
40

 
0.1
 %
 
(82
)
 
(0.3
)%
Total Loans
$
79,523

 
$
79,585

 
$
80,110

 
$
80,178

 
$
80,589

 
$
(62
)
 
(0.1
)%
 
$
(1,066
)
 
(1.3
)%


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
Average Balances
 
Twelve Months Ended December 31
($ amounts in millions)
2017
 
2016
 
2017 vs. 2016
Commercial and industrial
$
35,514

 
$
35,867

 
$
(353
)
 
(1.0
)%
Commercial real estate mortgage—owner-occupied
6,492

 
7,222

 
(730
)
 
(10.1
)%
Commercial real estate construction—owner-occupied
345

 
352

 
(7
)
 
(2.0
)%
Total commercial
42,351

 
43,441

 
(1,090
)
 
(2.5
)%
Commercial investor real estate mortgage
4,128

 
4,376

 
(248
)
 
(5.7
)%
Commercial investor real estate construction
2,099

 
2,539

 
(440
)
 
(17.3
)%
Total investor real estate
6,227

 
6,915

 
(688
)
 
(9.9
)%
Total business
48,578

 
50,356

 
(1,778
)
 
(3.5
)%
Residential first mortgage
13,719

 
13,140

 
579

 
4.4
 %
Home equity—lines of credit
6,861

 
7,547

 
(686
)
 
(9.1
)%
Home equity—closed-end
3,544

 
3,280

 
264

 
8.0
 %
Indirect—vehicles
2,143

 
2,078

 
65

 
3.1
 %
Indirect—vehicles third-party
1,517

 
2,025

 
(508
)
 
(25.1
)%
Indirect—other consumer
1,150

 
738

 
412

 
55.8
 %
Consumer credit card
1,192

 
1,093

 
99

 
9.1
 %
Other consumer
1,142

 
1,076

 
66

 
6.1
 %
Total consumer
31,268

 
30,977

 
291

 
0.9
 %
Total Loans
$
79,846

 
$
81,333

 
$
(1,487
)
 
(1.8
)%


24

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to Fourth Quarter 2017 Earnings Release

End of Period Deposits
 
As of
 
 
 
 
 
 
 
 
 
 
 
12/31/2017
 
12/31/2017
($ amounts in millions)
12/31/2017
 
9/30/2017
 
6/30/2017
 
3/31/2017
 
12/31/2016
 
vs. 9/30/2017
 
vs. 12/31/2016
Customer Deposits
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-free deposits
$
36,127

 
$
37,293

 
$
37,119

 
$
37,022

 
$
36,046

 
$
(1,166
)
 
(3.1
)%
 
$
81

 
0.2
 %
Interest-bearing checking
20,161

 
18,976

 
19,233

 
19,668

 
20,259

 
1,185

 
6.2
 %
 
(98
)
 
(0.5
)%
Savings
8,413

 
8,364

 
8,346

 
8,367

 
7,840

 
49

 
0.6
 %
 
573

 
7.3
 %
Money market—domestic
25,306

 
25,886

 
26,384

 
27,207

 
27,293

 
(580
)
 
(2.2
)%
 
(1,987
)
 
(7.3
)%
Money market—foreign
23

 
36

 
71

 
96

 
186

 
(13
)
 
(36.1
)%
 
(163
)
 
(87.6
)%
Low-cost deposits
90,030

 
90,555

 
91,153

 
92,360

 
91,624

 
(525
)
 
(0.6
)%
 
(1,594
)
 
(1.7
)%
Time deposits
6,859

 
7,036

 
6,940

 
7,064

 
7,183

 
(177
)
 
(2.5
)%
 
(324
)
 
(4.5
)%
Total Customer Deposits
96,889

 
97,591

 
98,093

 
99,424

 
98,807

 
(702
)
 
(0.7
)%
 
(1,918
)
 
(1.9
)%
Corporate Treasury Deposits


 
 
 
 
 
 
 
 
 
 
 


 
 
 


Time deposits
—

 
—

 
—

 
—

 
228

 
—

 
NM

 
(228
)
 
(100.0
)%
Total Deposits
$
96,889

 
$
97,591

 
$
98,093

 
$
99,424

 
$
99,035

 
$
(702
)
 
(0.7
)%
 
$
(2,146
)
 
(2.2
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of
 
 
 
 
 
 
 
 
 
 
 
12/31/2017
 
12/31/2017
($ amounts in millions)
12/31/2017
 
9/30/2017
 
6/30/2017
 
3/31/2017
 
12/31/2016
 
vs. 9/30/2017
 
vs. 12/31/2016
Consumer Bank Segment
$
57,475

 
$
57,592

 
$
57,761

 
$
58,083

 
$
56,267

 
$
(117
)
 
(0.2
)%
 
$
1,208

 
2.1
 %
Corporate Bank Segment
28,023

 
27,217

 
27,715

 
27,836

 
28,280

 
806

 
3.0
 %
 
(257
)
 
(0.9
)%
Wealth Management Segment
9,162

 
9,826

 
9,568

 
10,169

 
10,438

 
(664
)
 
(6.8
)%
 
(1,276
)
 
(12.2
)%
Other (1)
2,229

 
2,956

 
3,049

 
3,336

 
4,050

 
(727
)
 
(24.6
)%
 
(1,821
)
 
(45.0
)%
Total Deposits
$
96,889

 
$
97,591

 
$
98,093

 
$
99,424

 
$
99,035

 
$
(702
)
 
(0.7
)%
 
$
(2,146
)
 
(2.2
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of
 
 
 
 
 
 
 
 
 
 
 
12/31/2017
 
12/31/2017
($ amounts in millions)
12/31/2017
 
9/30/2017
 
6/30/2017
 
3/31/2017
 
12/31/2016
 
9/30/2017
 
12/31/2016
Wealth Management - Private Wealth
$
7,953

 
$
7,671

 
$
7,766

 
$
7,942

 
$
8,086

 
$
282

 
3.7
 %
 
$
(133
)
 
(1.6
)%
Wealth Management - Institutional Services
1,209

 
2,155

 
1,802

 
2,227

 
2,352

 
(946
)
 
(43.9
)%
 
(1,143
)
 
(48.6
)%
Total Wealth Management Segment Deposits
$
9,162

 
$
9,826

 
$
9,568

 
$
10,169

 
$
10,438

 
$
(664
)
 
(6.8
)%
 
$
(1,276
)
 
(12.2
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of
End of Period Deposits by Percentage
 
 
 
12/31/2017
 
9/30/2017
 
6/30/2017
 
3/31/2017
 
12/31/2016
Customer Deposits
 
 
 
 
 
 
 
 
 
 
 
 
Interest-free deposits
 
 
 
37.3
%
 
38.2
%

37.8
 %
 
37.2
%
 
36.4
 %
Interest-bearing checking
 
 
 
20.8
%
 
19.4
%

19.6
 %
 
19.8
%
 
20.5
 %
Savings
 
 
 
8.7
%
 
8.6
%

8.5
 %
 
8.4
%
 
7.9
 %
Money market—domestic
 
 
 
26.1
%
 
26.5
%
 
26.9
 %
 
27.4
%
 
27.5
 %
Money market—foreign
 
 
 
—
%
 
0.1
%

0.1
 %
 
0.1
%
 
0.2
 %
Low-cost deposits
 
 
 
92.9
%
 
92.8
%

92.9
 %
 
92.9
%
 
92.5
 %
Time deposits
 
 
 
7.1
%
 
7.2
%

7.1
 %
 
7.1
%
 
7.3
 %
Total Customer Deposits
 
 
 
100.0
%
 
100.0
%

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

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

100.0
 %
 
100.0
%
 
100.0
 %
                
(1)
Consists primarily of brokered deposits.










25

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to Fourth Quarter 2017 Earnings Release

Average Balances of Deposits
 
Average Balances
($ amounts in millions)
4Q17
 
3Q17
 
2Q17
 
1Q17
 
4Q16
 
4Q17 vs. 3Q17
 
4Q17 vs. 4Q16
Customer Deposits
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-free deposits
$
36,742

 
$
36,522

 
$
36,141

 
$
35,628

 
$
36,158

 
$
220

 
0.6
 %
 
$
584

 
1.6
 %
Interest-bearing checking
19,261

 
18,741

 
19,272

 
19,915

 
19,769

 
520

 
2.8
 %
 
(508
)
 
(2.6
)%
Savings
8,378

 
8,346

 
8,359

 
8,050

 
7,811

 
32

 
0.4
 %
 
567

 
7.3
 %
Money market—domestic
25,716

 
26,265

 
26,630

 
27,083

 
27,039

 
(549
)
 
(2.1
)%
 
(1,323
)
 
(4.9
)%
Money market—foreign
28

 
60

 
82

 
143

 
215

 
(32
)
 
(53.3
)%
 
(187
)
 
(87.0
)%
Low-cost deposits
90,125

 
89,934

 
90,484

 
90,819

 
90,992

 
191

 
0.2
 %
 
(867
)
 
(1.0
)%
Time deposits
6,935

 
6,929

 
7,005

 
7,099

 
7,300

 
6

 
0.1
 %
 
(365
)
 
(5.0
)%
Total Customer Deposits
97,060

 
96,863

 
97,489

 
97,918

 
98,292

 
197

 
0.2
 %
 
(1,232
)
 
(1.3
)%
Corporate Treasury Deposits
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Time deposits
—

 
—

 
—

 
49

 
205

 
—

 
NM

 
(205
)
 
(100.0
)%
Total Deposits
$
97,060

 
$
96,863

 
$
97,489

 
$
97,967

 
$
98,497

 
$
197

 
0.2
 %
 
$
(1,437
)
 
(1.5
)%
 
Average Balances
($ amounts in millions)
4Q17
 
3Q17
 
2Q17
 
1Q17
 
4Q16
 
4Q17 vs. 3Q17
 
4Q17 vs. 4Q16
Consumer Bank Segment
$
56,921

 
$
56,980

 
$
57,133

 
$
56,243

 
$
55,638

 
$
(59
)
 
(0.1
)%
 
$
1,283

 
2.3
 %
Corporate Bank Segment
28,362

 
27,607

 
27,584

 
28,165

 
28,730

 
755

 
2.7
 %
 
(368
)
 
(1.3
)%
Wealth Management Segment
9,163

 
9,269

 
9,545

 
10,041

 
10,245

 
(106
)
 
(1.1
)%
 
(1,082
)
 
(10.6
)%
Other (1)
2,614

 
3,007

 
3,227

 
3,518

 
3,884

 
(393
)
 
(13.1
)%
 
(1,270
)
 
(32.7
)%
Total Deposits
$
97,060

 
$
96,863

 
$
97,489

 
$
97,967

 
$
98,497

 
$
197

 
0.2
 %
 
$
(1,437
)
 
(1.5
)%
 
Average Balances
($ amounts in millions)
4Q17
 
3Q17
 
2Q17
 
1Q17
 
4Q16
 
4Q17 vs. 3Q17
 
4Q17 vs. 4Q16
Wealth Management - Private Wealth
$
7,798

 
$
7,750

 
$
7,839

 
$
7,957

 
$
7,766

 
$
48

 
0.6
 %
 
$
32

 
0.4
 %
Wealth Management - Institutional Services
1,365

 
1,519

 
1,706

 
2,084

 
2,479

 
(154
)
 
(10.1
)%
 
(1,114
)
 
(44.9
)%
Total Wealth Management Segment Deposits
$
9,163

 
$
9,269

 
$
9,545

 
$
10,041

 
$
10,245


$
(106
)
 
(1.1
)%
 
$
(1,082
)
 
(10.6
)%
 
Average Balances
 
Twelve Months Ended December 31
($ amounts in millions)
2017
 
2016
 
2017 vs. 2016
Customer Deposits
 
 
 
 

 

Interest-free deposits
$
36,262

 
$
35,371

 
$
891

 
2.5
 %
Interest-bearing checking
19,294

 
20,507

 
(1,213
)
 
(5.9
)%
Savings
8,284

 
7,719

 
565

 
7.3
 %
Money market—domestic
26,420

 
26,662

 
(242
)
 
(0.9
)%
Money market—foreign
78

 
247

 
(169
)
 
(68.4
)%
Low-cost deposits
90,338

 
90,506

 
(168
)
 
(0.2
)%
Time deposits
6,991

 
7,273

 
(282
)
 
(3.9
)%
Total Customer Deposits
97,329

 
97,779

 
(450
)
 
(0.5
)%
Corporate Treasury Deposits
 
 
 
 

 

Time deposits
12

 
142

 
(130
)
 
(91.5
)%
Total Deposits
$
97,341

 
$
97,921

 
$
(580
)
 
(0.6
)%
 
Average Balances
 
Twelve Months Ended December 31
($ amounts in millions)
2017
 
2016
 
2017 vs. 2016
Consumer Bank Segment
$
56,822

 
$
54,758

 
$
2,064

 
3.8
 %
Corporate Bank Segment
27,929

 
28,065

 
(136
)
 
(0.5
)%
Wealth Management Segment
9,501

 
11,116

 
(1,615
)
 
(14.5
)%
Other (1)
3,089

 
3,982

 
(893
)
 
(22.4
)%
Total Deposits
$
97,341

 
$
97,921

 
$
(580
)
 
(0.6
)%
 
Average Balances
 
Twelve Months Ended December 31
($ amounts in millions)
2017
 
2016
 
2017 vs. 2016
Wealth Management - Private Wealth
$
7,835

 
$
7,638

 
$
197

 
2.6
 %
Wealth Management - Institutional Services
1,666

 
3,478

 
(1,812
)
 
(52.1
)%
Total Wealth Management Segment Deposits
$
9,501

 
$
11,116

 
$
(1,615
)
 
(14.5
)%
                
(1)
Consists primarily of brokered deposits.

26

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to Fourth Quarter 2017 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 analyses 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)
 
12/31/2017
 
9/30/2017
 
6/30/2017
 
3/31/2017
 
12/31/2016
Tangible Common Ratios—Consolidated
 


 
 
 
 
 
 
 
 
Stockholders’ equity (GAAP)
 
$
16,192

 
$
16,624

 
$
16,893

 
$
16,722

 
$
16,664

Less:
 


 
 
 
 
 
 
 
 
Preferred stock (GAAP)
 
820

 
820

 
820

 
820

 
820

Intangible assets (GAAP)
 
5,081

 
5,091

 
5,102

 
5,113

 
5,125

Deferred tax liability related to intangibles (GAAP)
 
(99
)
 
(154
)
 
(156
)
 
(156
)
 
(155
)
Tangible common stockholders’ equity (non-GAAP)
A
$
10,390

 
$
10,867

 
$
11,127

 
$
10,945

 
$
10,874

Total assets (GAAP)
 
$
124,294

 
$
123,271

 
$
124,643

 
$
124,545

 
$
125,968

Less:
 


 
 
 
 
 
 
 
 
Intangible assets (GAAP)
 
5,081

 
5,091

 
5,102

 
5,113

 
5,125

Deferred tax liability related to intangibles (GAAP)
 
(99
)
 
(154
)
 
(155
)
 
(156
)
 
(155
)
Tangible assets (non-GAAP)
B
$
119,312

 
$
118,334

 
$
119,696

 
$
119,588

 
$
120,998

Shares outstanding—end of quarter
C
1,134

 
1,165

 
1,199

 
1,205

 
1,215

Tangible common stockholders’ equity to tangible assets (non-GAAP)
A/B
8.71
%
 
9.18
%
 
9.30
%
 
9.15
%
 
8.99
%
Tangible common book value per share (non-GAAP)
A/C
$
9.16

 
$
9.33

 
$
9.28

 
$
9.08

 
$
8.95


 
 
As of and for Quarter Ended
($ amounts in millions)
 
12/31/2017
 
9/30/2017
 
6/30/2017
 
3/31/2017
 
12/31/2016
Basel III Common Equity Tier 1 Ratio—Fully Phased-In Pro-Forma (1)
 
 
 
 
 
 
 


 
 
Stockholder's equity (GAAP)
 
$
16,192

 
$
16,624

 
$
16,893

 
$
16,722

 
$
16,664

Non-qualifying goodwill and intangibles 
 
(4,972
)
 
(4,922
)
 
(4,932
)
 
(4,943
)
 
(4,955
)
Adjustments, including all components of accumulated other comprehensive income, disallowed deferred tax assets, threshold deductions and other adjustments
 
578

 
411

 
432

 
510

 
489

Preferred stock (GAAP)
 
(820
)
 
(820
)
 
(820
)
 
(820
)
 
(820
)
Basel III common equity Tier 1—Fully Phased-In Pro-Forma (non-GAAP)
D
$
10,978

 
$
11,293

 
$
11,573

 
$
11,469

 
$
11,378

Basel III risk-weighted assets—Fully Phased-In Pro-Forma (non-GAAP) (2)
E
$
101,437

 
$
100,857

 
$
101,894

 
$
102,199

 
$
102,975

Basel III common equity Tier 1 ratio—Fully Phased-In Pro-Forma (non-GAAP)
D/E
10.8
%
 
11.2
%
 
11.4
%
 
11.2
%
 
11.1
%
                
(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.


27

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to Fourth Quarter 2017 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, any repricing of assets, 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, adverse consequences related to tax reform, or other factors.
•
Possible changes in the creditworthiness of customers and the possible impairment of the collectability of loans and leases, including operating leases.
•
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 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 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.
•
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.

28

Regions Financial Corporation and Subsidiaries                                
Financial Supplement to Fourth Quarter 2017 Earnings Release

•
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, malware, “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; disruption or damage to our systems; increased costs; losses; or adverse effects to our reputation.
•
Our ability to realize our adjusted efficiency ratio target as part of our expense management initiatives.
•
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 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 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, 2016, 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) 264-7040; Regions’ Media contact is Evelyn Mitchell at (205) 264-4551.

29

rfexhibit993v3
4th Quarter Earnings Conference Call January 19, 2018 Exhibit 99.3

 
ON TRACK TO MEET LONG-TERM FINANCIAL TARGETS 2017 results Net income up 9% - EPS up 15% 2 GROW AND DIVERSIFY REVENUE DISCIPLINCED EXPENSE MANAGEMENT OPTIMIZE AND EFFECTIVELY DEPLOY CAPITAL • Reported total revenue (FTE) +2%; adjusted total revenue (FTE)(1) +3% ◦ Capital markets + 6% ◦ Service charges +3% ◦ Wealth management +4% ◦ Card & ATM fees +4% • Reported NIM +18 bps; adjusted NIM(1) +19bps • Checking accounts +1.5% • Credit card accounts +7% • Wealth Management households +14% • Reported expenses relatively unchanged; adjusted expenses (1) +0.9% • Salaries and benefits +2% • Staffing reductions –2% • Square footage reductions – 4% • Full-year efficiency ratio 63.2%; adjusted efficiency ratio(1) 62.2% • Reported PPI +4%; adjusted PPI (1) +6% • Reported and adjusted operating leverage(1) +2% • Net charge-offs 38 bps • Prudent loan management and improved credit metrics • Strategic reduction of high cost deposits • Capital returned to shareholders $1.6B; 42% over the prior year • Consolidated 59 branches in 2017; 162 branches since 2015 • Capital investments in the businesses (1) Non-GAAP; see appendix for reconciliation

 
Asset Sensitivity Significant funding advantage driven by low-cost deposit base, accretive fixed-rate reinvestments Stable Asset Quality Broad-based credit metric improvements, ample reserves for hurricane and energy losses Capital Return Capital sufficient for organic growth, strategic opportunities, robust shareholder returns Efficiency Opportunities Identify and execute additional opportunities to increase revenues and reduce expenses through our Simplify and Grow initiative 4Q17 Deposit costs of 17 bps Lowest NPLs in 10 years $1.6B Returned to shareholders in 2017 3 Managing for long-term performance Opportunities to drive growth and efficiencies

 
Impact of tax reform 4 DriverArea Impacted Impact $6M NII/NIM Reduction in leveraged lease interest income; resulted in a 2 basis point reduction in 4Q17 NIM $29M Increased tax expense primarily attributable to revaluationof net deferred income tax assetsTax Expense $23M Increased tax expense from revised amortization associatedwith low-income housing investmentsTax Expense $130M* Revaluation of net deferred income tax assets included in accumulated other comprehensive income reduced regulatory capital; reduced estimated CET1 ratio by ~10bps* Regulatory Capital -4 bps Reset of fully-taxable equivalent benefit provided primarily from tax advantaged loans; 1Q18 NIM will be negatively impacted NIM * Expect to reverse negative impact in 1Q18 based on proposed changes by accounting rule makers.

 
Average loans and leases Business Lending Consumer Lending 4Q16 1Q17 2Q17 3Q17 4Q17 49.1 49.0 49.0 48.3 48.1 31.5 $80.6 31.2 $80.2 31.1 $80.1 31.3 $79.6 31.4 $79.5 Prudently managing loans Transitioning to growth ($ in billions) Quarter-over-Quarter: • Average Consumer lending increased $40 million ◦ Excluding third-party indirect-vehicle run-off, average consumer loans increased $223 million ◦ Solid growth in residential mortgage, indirect-other consumer, and consumer credit card partially offset by declines in home equity • Average Business lending decreased $102 million; increased approximately $500 million on an ending basis ◦ C&I loans grew $672 million on an ending basis; driven by specialized lending ◦ Owner-occupied CRE loans declined $94 million; reflecting slower pace of decline ◦ Investor Real Estate loans declined $101 million; growth in term mortgage offset by declines in construction loans • Total loans and leases ended year $424 million above 4Q17 average balance Year-over-Year (4Q17 vs 4Q16): • Average loan and lease balances declined $1.1 billion • Average Consumer lending portfolio decreased $82 million; excluding third- party indirect-vehicle increased $716 million • Average Business lending portfolio declined $984 million 5 Business Lending Consumer Lending 4Q16 1Q17 2Q17 3Q17 4Q17 48.7 48.7 48.8 48.0 48.5 31.4 $80.1 31.2 $79.9 31.3 $80.1 31.4 $79.4 31.4 $79.9 2018 Expectations: Excluding third-party indirect-vehicle portfolio, full- year average loans expected to grow in the low single digits; Full-year expected decline in average third-party indirect-vehicle ~ $700 million Ending loans and leases ($ in billions)

 
Low-cost deposits Time deposits + Other 4Q16 1Q17 2Q17 3Q17 4Q17 91.0 90.8 90.5 89.9 90.1 7.5 $98.5 7.2 $98.0 7.0 $97.5 7.0 $96.9 7.0 $97.1 Average deposits by type Quarter-over-Quarter: • Continued deliberate strategy to reduce higher cost deposits: ◦ Average Wealth Management deposits decreased $106 million; strategic reduction of certain collateralized deposits ◦ Average Other deposits declined $393 million; strategic reduction of retail brokered sweep deposits • Average Consumer deposits decreased $59 million • Average Corporate deposits seasonal increase of $755 million • Deposit costs remained unchanged at 17 bps • Funding costs remained low at 38 bps Year-over-Year (4Q17 vs 4Q16): • Average deposits decreased $1.4 billion • Average Consumer deposits increased $1.3 billion • Average Corporate deposits decreased $368 million • Average Wealth Management deposits decreased $1.1 billion • Average Other deposits decreased $1.3 billion • Deposit costs increased 4 bps year-over-year Optimizing deposit mix ($ in billions) 6 ($ in billions) Average deposits by segment Consumer Bank Corporate Bank Wealth Management Other 4Q16 1Q17 2Q17 3Q17 4Q17 55.6 56.2 57.1 57.0 56.9 28.7 28.2 27.6 27.6 28.4 10.2 10.0 9.5 9.3 9.2 4.0 $98.5 3.6 $98.0 3.3 $97.5 3.0 $96.9 2.6 $97.1 2018 Expectations: Full-year average deposits are expected to grow in the low single digits, excluding brokered and Wealth Institutional Services deposits (1) Wealth Management segment deposits include Private Wealth Management and Institutional Services deposits. A break-out of these components is provided in the Company's quarterly Earning Supplement. (2) Other deposits consist primarily of brokered deposits. (1) (2)

 
$57 $8 $28 $3 Deposits by Customer Type(1) (Retail vs. Business) Other Segment Deposit advantage Non-Interest Bearing Deposits by Customer Type(1) • Retail deposits consist of consumer and private wealth accounts and represent 67% of total deposits • Business deposits consist of corporate, institutional services and other accounts and represent 33% of total deposits • 38% of total average 4Q17 deposits are non-interest bearing deposits • Approximately 43% of our consumer low-cost deposit dollars have been customers for over 10 years Interest Bearing Deposits by Customer Type(1) 4Q16 1Q17 2Q17 3Q17 4Q17 18 19 19 19 19 18 $36 17 $36 17 $36 18 $37 18 $37 4Q16 1Q17 2Q17 3Q17 4Q17 45 46 45 45 46 17 $62 16 $62 16 $61 15 $60 14 $60 7 Consumer Segment Private Wealth* Corporate Segment Institutional Services* $1 * Private Wealth Management and Institutional Services deposits are combined into the Wealth Management Segment. (1) Average Balances ($ in billions)4Q17 ($ in billions) ($ in billions)

 
2018 Expectations: Adjusted full-year net interest income(1) growth of 3%-5% Net interest income(1) and net interest margin Net Interest Income (FTE) Net Interest Margin Adjusted NIM Adjusted NII (FTE) 4Q16 1Q17 2Q17 3Q17 4Q17 $874 $881 $904 $921 3.16% 3.25% 3.32% 3.36% 3.37% 3.39% 6 $930 Increasing net interest income(1) and net interest margin Quarter-over-Quarter: • Reported net interest income (FTE)(1)(NII) increased $3 million; net interest margin (NIM) increased 1 basis point to 3.37%; adjusted NII(1) (2)(FTE) increased $9 million; adjusted NIM(2) increased 3 basis points to 3.39% ◦ Adjusted basis excludes tax-related reduction to income of $6 million associated with leveraged leases ◦ Increase driven by higher market interest rates offset by full impact of 3Q17 debt issuance, and lower credit-related interest recoveries • Expect 1Q18 net interest income(1) to grow modestly despite 2 fewer days in the quarter, which reduces NII ~$10 million, but benefits NIM approximately 4 basis points ◦ Expect 1Q18 NIM to be re-set downward ~4 bps as tax reform reduces future tax-equivalent benefit Year-over-Year (4Q17 vs 4Q16): • Net interest income(1)(FTE) increased $50 million or 6%; net interest margin increased 21 bps; adjusted NII(1)(2)(FTE) increased $56 million or 6%; adjusted NIM(2) increased 23 bps ◦ Increase from higher market interest rates along with prudent deposit cost management, partially offset by lower average loan balances and impact of 3Q17 debt issuance ($ in millions) 8 (1) Net interest income and other financing income on a fully tax-equivalent basis (FTE) (2) Non-GAAP; see appendix for reconciliation (1) 924 (2)(2)

 
Non-interest income Mortgage income Capital markets Other Wealth management income Card and ATM fees Service charges on deposit accounts Selected items 4Q16 1Q17 2Q17 3Q17 4Q17 43 41 40 32 36 31 32 38 35 56 59 56 60 53 63 103 109 108 108 110 103 104 104 103 106 173 168 $510 169 175 171 10 $522 6 $525 9 $515 13 $555 Well-positioned for non-interest income growth (1) Non-GAAP; see appendix for reconciliation (2) 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: • Non-interest income increased $40 million or 8%; adjusted non- interest income(1) increased $36 million or 7% ◦ Record quarter for capital markets up 60%, driven by higher M&A fees, loan syndication income and fees from placement of permanent financing for real estate customers ◦ Mortgage production decreased seasonally 3%; income increased 13% due to elevated 3Q17 MSR and related hedge valuation adjustments that did not repeat at same level ◦ Card & ATM fees increased 3% due to seasonally higher interchange income ◦ 3Q17 results included $10 million operating lease impairment which did not repeat Year-over-Year (4Q17 vs 4Q16): • Non-interest income increased $33 million or 6%; adjusted non- interest income(1) increased $30 million or 6% ◦ Growth in capital markets, wealth management, and card & ATM fees, partially offset by lower mortgage income ($ in millions) 9 (2) (1) 2018 Expectations: Full-year adjusted non-interest income expected to grow 3%-6%

 
Non-interest expense 4Q16 1Q17 2Q17 3Q17 4Q17 63.2% 62.7% 63.2% 61.7% 61.1% 877 872 899 880 901 22 $899 5 $877 10 $909 6 $886 51 $952 Disciplined expense management Quarter-over-Quarter: • Non-interest expense increased $66 million or 7%; adjusted non- interest expense(1) increased $21 million or 2% ◦ Salaries and benefits increased $13 million or 3% primarily due higher production-based incentives and health insurance costs ◦ Outside services increased $7 million or 17% reflecting costs from launch of new Regions Wealth Platform; increase will be offset by decreases in other expense categories, primarily salaries and benefits • 4Q17 efficiency ratio was 64.3%; adjusted efficiency ratio(1) improved 60 bps to 61.1% • 4Q17 effective tax rate was 39%; excluding revaluation adjustments effective tax rate would have been approximately 30% Year-over-Year (4Q17 vs 4Q16): • Non-interest expense increased $53 million or 6%; adjusted non- interest expense(1) increased $24 million or 3% ◦ Salaries and benefits increased $24 million or 5% due to higher production-based incentives, benefits and merit increases (1) Non-GAAP; see appendix for reconciliation ($ in millions) Selected Items(1)Adjusted Non-Interest Expense(1) 10 2018 Expectations: Full-year adjusted non-interest expense relatively stable; full-year adjusted efficiency ratio <60%, adjusted operating leverage of 3%-5%, and effective tax rate in the 20-22% range Adjusted efficiency ratio(1)

 
• Broad-based asset quality improvement; non-performing loans, criticized, and troubled debt restructured loans all declined • Negative provision of $44 million resulting in $107 million decrease in allowance for loan losses • NPLs(1) decreased $110 million or 14%, representing 0.81% of loans outstanding, representing the lowest level in over 10 years • Criticized Business loans decreased 17% and troubled debt restructured loans decreased 13% • Net charge-offs decreased $13 million or 17%, representing 31 bps of average loans; full-year net-charge offs were 38 bps of average loans 2018 Expectations: Full-year net charge-offs of 35-50 bps NPLs and coverage ratio(1) 4Q16 1Q17 2Q17 3Q17 4Q17 311 310 267 247 220 684 $995 694 $1,004 556 $823 513 $760 430 $650 110% 106% 127% 137% 144% 138% 135% 163% 180% 198% Coverage ratio excluding Direct Energy Improving asset quality Criticized (Direct Energy) Criticized (Non-Energy) 4Q16 1Q17 2Q17 3Q17 4Q17 971 867 755 655 565 2,641 $3,612 2,671 $3,538 2,525 $3,280 2,307 $2,962 1,891 $2,456 ($ in millions) ($ in millions) ($ in millions) 11 Criticized Business Loans (1) Excludes loans held for sale (2) Non-GAAP; see appendix for reconciliation Net charge-offs and ratio (2) NPLs (Non-Energy) (1) Coverage Ratio Net Charge-Offs (Direct Energy) Net Charge-Offs (Non-Energy) Net Charge-Offs ratio 4Q16 1Q17 2Q17 3Q17 4Q17 14 13 18 28 16 69 $83 87 $100 50 $68 48 $76 47 $63 0.41% 0.51% 0.34% 0.38% 0.31% NPLs (Direct Energy)(1)

 
Industry leading capital and liquidity ratios • Repurchased $500 million or 31.1 million shares of common stock in 4Q17, and declared $103 million in dividends to common shareholders • Basel III common equity tier 1 ratio estimated at 10.9%(1); Fully phased-in Basel III common equity tier 1 ratio estimated at 10.8%(1)(2), well above regulatory minimums • At period-end, Regions was fully compliant with the Liquidity Coverage Ratio rule • Regulatory capital reduced ~$130 million from DTA revaluations in AOCI; reduced CET1 ~10 bps - expect to reverse adjustment in 1Q18 (1) Current quarter ratios are estimated (2) Non-GAAP; see appendix for reconciliation (3) Based on ending balances 12 Tier 1 capital ratio(1) Common equity Tier 1 ratio – Fully phased-in pro-forma(1)(2) Loan-to-deposit ratio(3) 4Q16 1Q17 2Q17 3Q17 4Q17 12.0% 12.1% 12.3% 12.1% 11.7% 4Q16 1Q17 2Q17 3Q17 4Q17 11.1% 11.2% 11.4% 11.2% 10.8% 4Q16 1Q17 2Q17 3Q17 4Q17 81% 80% 82% 81% 83%

 
Long-term targets and 2018 expectations 13 • Adjusted ROATCE of 14 to 16%(1)(2) • Full-year average loans are expected to grow in the low single digits, excluding impact of third- party indirect-vehicle portfolio • Full-year average deposits are expected to grow in the low single digits, excluding brokered and Wealth Institutional Services deposits(3) • Adjusted operating leverage of approximately 3% - 5%(1) – Adjusted net interest income and other financing income growth of 3% - 5%(1) – Adjusted non-interest income growth of 3% - 6%(1) – Adjusted non-interest expenses relatively stable(1) – Adjusted efficiency ratio < 60%(1) • Effective income tax rate of 20-22% • Net charge-offs of 35-50 bps(4) (1) The reconciliation with respect to forward-looking non-GAAP measures is expected to be consistent with actual non-GAAP reconciliations included in attached appendix or previous filings with the SEC. (2) This long-term target has been updated to reflect the impact of corporate income tax reform. (3) Private Wealth Management and Institutional Services deposits are combined into the Wealth Management Segment. Total Other segment deposits consists primarily of brokered deposits. A break- out of these components is provided in the Company's quarterly Earnings Supplement. (4) Based on recent performance and current market conditions, we expect to be at the lower end of the range. 2018 Expectations

 
Appendix 14

 
Selected items impacting earnings • Incurred $9 million of expenses associated primarily with previously announced branch closures • Recognized $13 million in securities gains primarily associated with the sale of securities held for employee benefit purposes • Incurred $11 million of expense associated with Visa class B shares sold in a prior year • In connection with income tax reform: ◦ Incurred a $29 million tax-related charge primarily attributable to revaluation of net deferred income tax assets ◦ Revised amortization associated with low income housing investments resulting in an additional $23 million tax-related charge ◦ Reduced interest income associated with leveraged leases by $6 million ◦ Contributed $40 million to Regions' charitable foundation 15 * Based on income taxes at a 38.5% incremental rate. ** Items represent an outsized or unusual impact to the quarter or quarterly trends, but are not considered non-GAAP adjustments. Quarter Ended ($ amounts in millions, except per share data) 12/31/2017 9/30/2017 12/31/2016 Pre-tax adjusted items: Branch consolidation, property and equipment charges $ (9) $ (5) $ (17) Salaries and benefits related to severance charges (2) (1) (5) Securities gains (losses), net 13 8 5 Reduction in leveraged lease interest income resulting from tax reform (6) — — Contribution to Regions' charitable foundation associated with tax reform (40) Leveraged lease termination gains, net — 1 — Gain on sale of affordable housing residential mortgage loans — — 5 Tax reform adjustments through income tax expense (52) — — Diluted EPS impact* $ (0.07) $ — $ (0.01) Pre-tax additional selected items**: Operating lease impairment charges $ — $ (10) $ — Pension settlement charges — (2) — Hurricane-related impacts on non-interest income and expense, net — (13) — Visa Class B shares expense (11) (4) —

 
Quarter-over-Quarter: • Pre-tax pre-provision income(1) decreased $23 million or 4%; adjusted pre-tax pre- provision income(1) increased $24 million or 5%, reflecting highest level since 3Q08 • Asset sensitive profile supports net interest income growth despite lower average loan balances • Efficiency remains a top priority as evidenced by solid expense management Year-over-Year (4Q17 vs 4Q16): • Pre-tax pre-provision income(1) increased $28 million or 6%; adjusted pre-tax pre- provision income(1) increased $60 million or 12% Pre-tax pre-provision income Selected Items Pre-tax pre-provision income Adjusted pre-tax pre-provision income 4Q16 1Q17 2Q17 3Q17 4Q17 476 $488 492 $497 498 $502 527 $524 504 $548 (5) (1) (1) (1) Non-GAAP; see appendix for reconciliation 16 (1) 44 12 5 4 (3) (1)

 
Commercial retail lending overview As of 12/31/17 ($ in millions) Loan Balances Total Commitments Including Outstanding Balances % Utilization $ Criticized % Criticized # of Clients * REITs $1,343 $2,883 47% — — 31 Investor real estate (IRE) 906 961 94% 15 2% 271 C&I 1,250 2,464 51% 25 2% 7,254 CRE-OO 643 674 95% 30 5% 1,231 Asset Based Lending 443 1,492 30% 26 6% 26 Total Retail (1) $4,585 $8,474 54% $96 2% 8,813 • Approximately $200 million of outstanding balances across the REIT and IRE portfolios relate to shopping malls • Portfolio exposure to REITs specializing in enclosed malls consists of three investment grade clients; however, the risk ratings on two clients have been further adjusted to reflect Regions' perceived additional risk from the retail operating environment • IRE portfolio is widely distributed, largest tenants typically include 'basic needs' anchors • C&I retail portfolio is also widely distributed; largest categories include: ◦ Motor vehicle & parts dealers ~$420 million outstanding to ~1,100 clients ◦ Building materials, garden equipment & supplies ~$150 million outstanding to ~700 clients ◦ Non-store retailers ~$125 million outstanding to ~300 clients ◦ Less than $40 million outstanding to clothing & accessories • CRE-OO portfolio consists primarily of small strip malls and convenience stores • Asset Based Lending portfolio is collateralized primarily by inventory and accounts receivable • Generally, well-placed retail centers continue to perform well with low vacancy rates • Regions has not been impacted by recent big name bankruptcies; continue to watch the sector closely • Securities portfolio includes ~$787 million of post-crisis issued AAA rated CMBS with exposure to retail within the diversified collateral pool; protected with 36% credit enhancement, and losses expected to be de minimis in severely adverse scenario; portfolio also includes ~$65 million in retail related high quality, investment grade corporate bonds (1) Does not include $26 million of retail related operating leases. * Represents the number of clients with loan balances outstanding. Total retail 17

 
• Total outstandings and commitments declined primarily due to paydowns and payoffs • Allowance for loan and lease losses was 4.6% of direct energy balances at 12/31/17 vs 6.1% at 9/30/17 • Energy charge-offs were $16 million for 4Q17 and $75 million for 2017 • Line of Credit utilization rate has remained between 40-60% since 1Q15. We expect utilization to increase in 2018 as companies increase their CAPX in light of rising oil prices • 12% of direct energy loans are on non-accrual status • Securities portfolio contained ~$3MM of high quality, investment grade corporate bonds that are energy related at 12/31/17, unchanged from 9/30/17 Energy lending overview Total energy A leveraged relationship is defined as senior cash flow leverage of 3x or total cash flow leverage of 4x except for Midstream Energy which is 6x total cash flow leverage. (1) Non-GAAP; see appendix for reconciliation 18 As of 12/31/17 As of 9/30/17 ($ in millions) Loan / Lease Balances Total Commitments Including Outstanding Balances % Utilization $ Criticized % Criticized Loan / Lease Balances Total Commitments Including Outstanding Balances % Utilization $ Criticized % Criticized Oilfield services and supply (OFS) $467 $673 69% $246 53% $513 $758 68% $274 53% Exploration and production (E&P) 654 1,217 54% 260 40% 699 1,330 53% 354 51% Midstream 486 1,183 41% 44 9% 524 1,225 43% 12 2% Downstream 70 276 25% 15 21% 72 277 26% 15 21% Other 90 295 31% — —% 94 234 40% — —% Total direct 1,767 3,644 48% 565 32% 1,902 3,824 50% 655 34% Indirect 578 986 59% 93 16% 572 935 61% 112 20% Direct and indirect 2,345 4,630 51% 658 28% 2,474 4,759 52% 767 31% Operating leases 55 55 — 19 35% 66 66 — 28 42% Loans held for sale 10 10 — 10 100% 1 1 — 1 100% Total energy $2,410 $4,695 51% $687 29% $2,541 $4,826 53% $796 31%

 
Energy lending - oil field services and exploration & production detail Type As of12/31/17 # of Clients* Commentary Marine $323 7 Sector remains under stress and recovery is not forecast during 2018. Contract coverage continues to decline. Integrated OFS 84 6 Stabilized conditions for companies servicing onshore activity. Average utilization remains around 32% indicating clients have ample liquidity. Compression 51 2 Linked to movement of natural gas. Sector is more stable and lower risk than other sectors. Fluid Management 3 1 Exposure is minimal after recent payoffs. Pre-drilling / Drilling 6 2 Outlook for onshore drillers has stabilized. Offshore drillers remain stressed; however Regions only has minimal exposure to offshore drillers. Total Oil Field Services (OFS) $467 18 Exploration and Production (E&P) $654 25** Total OFS and E&P $1,121 • 32% shared national credit (SNC) loans • 69% utilization rate compared to 68% in 3Q17 • 82% Non-pass rated (criticized) loans paying as agreed E&P Portfolio *Represents the number of clients that comprise 75% of the loan balances outstanding. **Represents the number of clients that comprise 90% of the loan balances outstanding. OFS Portfolio 19 • Majority of borrowing is senior secured • 96% shared national credit (SNC) loans • 54% utilization rate compared to 53% in 3Q17 • All non-pass rated (criticized) loans paying as agreed ($ in millions)

 
Commercial - Non- Energy, $4,209 Investor Real Estate, $1,018 Consumer Real Estate Secured, $1,210 Consumer Non-Real Estate Secured, $1,035 Commercial - Energy (Direct), $933 Commercial - Non-Energy, $2,309 Investor Real Estate, $114 Consumer Real Estate Secured, $1,153 Consumer Non-Real Estate Secured, $296 Commercial - Energy (Direct), $397 Loan balances by select states Texas Louisiana Investor Real Estate ($ in millions) Office Retail Multi-Family SingleFamily Other Total Baton Rouge $32 $1 $7 $10 $0 $50 New Orleans 1 5 1 — 5 12 Other 4 1 31 1 15 52 Total $37 $7 $39 $11 $20 $114 Investor Real Estate ($ in millions) Office Retail Multi-Family Single Family Other Total Houston $55 $42 $107 $83 $22 $309 Dallas 186 31 112 64 28 421 San Antonio — 26 32 12 29 99 Other 9 69 90 9 12 189 Total $250 $168 $341 $168 $91 $1,018 20 $4.3B$8.4B

 
Loan balances by select states (continued) Alabama Mississippi Commercial - Non- Energy, $5,035 Investor Real Estate, $279 Consumer Real Estate Secured, $3,578 Consumer Non-Real Estate Secured, $805 Commercial - Non-Energy, $1,442 Investor Real Estate, $116 Consumer Real Estate Secured, $925 Consumer Non-Real Estate Secured, $365 Commercial - Energy (Direct), $26 21 $2.9B$9.7B Investor Real Estate ($ in millions) Office Retail Multi-Family Single Family Other Total Birmingham $15 $21 $6 $17 $20 $79 Huntsville 81 6 2 5 3 97 Mobile / Baldwin County 2 10 3 1 28 44 Other 7 19 18 7 8 59 Total $105 $56 $29 $30 $59 $279 Investor Real Estate ($ in millions) Office Retail Multi-Family Single Family Other Total North Mississippi — — — — $79 $79 Jackson/Other 4 4 6 1 3 18 Gulfport / Biloxi / Pascagoula — — 19 — — 19 Total $4 $4 $25 $1 $82 $116 Commercial- Energy (Direct), $20

 
Loan balances by select states (continued) Florida Commercial - Non- Energy, $5,614 Investor Real Estate, $1,346 Consumer Real Estate Secured, $7,931 Consumer Non-Real Estate Secured, $1,307 22 $16.2B Investor Real Estate ($ in millions) Office Retail Multi-Family Single Family Other Total Miami-Fort Lauderdale CBSA/Key West $32 $155 $109 $29 $153 $478 Tampa/Sarasota 130 18 32 50 177 407 Orlando 9 5 63 34 76 187 Jacksonville 5 18 — 8 11 42 Other 19 19 2 122 70 232 Total $195 $215 $206 $243 $487 $1,346 Commercial- Energy (Direct), $0

 
Non-GAAP reconciliation: non-interest income, non- interest expense, operating leverage and efficiency ratio NM - Not Meaningful 23 The table below and on the following page present computations of the net interest margin; efficiency ratio, which is a measure of productivity, generally calculated as non-interest expense divided by total revenue; and the fee income ratio, 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. Net interest income and other financing income (GAAP) on a taxable-equivalent basis is presented excluding certain adjustments related to tax reform to arrive at adjusted net interest income and other financing income on a taxable-equivalent basis (non-GAAP). 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. The table on the following page presents a computation of the operating leverage ratio (non-GAAP) which is the period to period percentage change in adjusted total revenue on a taxable-equivalent basis (non-GAAP) less the percentage change in adjusted non-interest expense (non-GAAP). 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) 12/31/2017 9/30/2017 6/30/2017 3/31/2017 12/31/2016 4Q17 vs. 3Q17 4Q17 vs. 4Q16 Non-interest expense (GAAP) A $ 952 $ 886 $ 909 $ 877 $ 899 $ 66 7.4 % $ 53 5.9 % Adjustments: Contribution to Regions' charitable foundation associated with tax reform (40) — — — — (40) NM (40) NM Branch consolidation, property and equipment charges (9) (5) (7) (1) (17) (4) 80.0 % 8 (47.1)% Salary and employee benefits—severance charges (2) (1) (3) (4) (5) (1) 100.0 % 3 (60.0)% Adjusted non-interest expense (non-GAAP) B $ 901 $ 880 $ 899 $ 872 $ 877 $ 21 2.4 % $ 24 2.7 % Net interest income and other financing income (GAAP) $ 901 $ 898 $ 882 $ 859 $ 853 $ 3 0.3 % $ 48 5.6 % Taxable-equivalent adjustment 23 23 22 22 21 — — % 2 9.5 % Net interest income and other financing income, taxable-equivalent basis C $ 924 $ 921 $ 904 $ 881 $ 874 $ 3 0.3 % $ 50 5.7 % Revision of allocated income associated with leveraged leases resulting from tax reform 6 — — — — 6 NM 6 NM Adjusted net interest income and other financing income, taxable equivalent basis (non-GAAP) D $ 930 $ 921 $ 904 $ 881 $ 874 $ 9 1.0 % $ 56 6.4 % Net interest margin (GAAP) 3.37% 3.36% 3.32% 3.25% 3.16% Revision of allocated income associated with leveraged leases resulting from tax reform 0.02 — — — — Adjusted net interest margin (non-GAAP) 3.39% 3.36% 3.32% 3.25% 3.16% Non-interest income (GAAP) E $ 555 $ 515 $ 525 $ 510 $ 522 $ 40 7.8 % $ 33 6.3 % Adjustments: Securities (gains) losses, net (13) (8) (1) — (5) (5) 62.5 % (8) 160.0 % Leveraged lease termination gains, net — (1) — — — 1 (100.0)% — NM Gain on sale of affordable housing residential mortgage loans — — (5) — (5) — NM 5 (100.0)% Adjusted non-interest income (non-GAAP) F $ 542 $ 506 $ 519 $ 510 $ 512 $ 36 7.1 % $ 30 5.9 % Total revenue, taxable-equivalent basis C+E=G $ 1,479 $ 1,436 $ 1,429 $ 1,391 $ 1,396 $ 43 3.0 % $ 83 5.9 % Adjusted total revenue, taxable-equivalent basis (non-GAAP) D+F=H $ 1,472 $ 1,427 $ 1,423 $ 1,391 $ 1,386 $ 45 3.2 % $ 86 6.2 % Efficiency ratio (GAAP) A/G 64.3% 61.7% 63.6% 63.1% 64.4% Adjusted efficiency ratio (non-GAAP) B/H 61.1% 61.7% 63.2% 62.7% 63.2% Fee income ratio (GAAP) E/G 37.5% 35.8% 36.8% 36.7% 37.4% Adjusted fee income ratio (non-GAAP) F/H 36.8% 35.4% 36.5% 36.6% 36.9%

 
Non-GAAP reconciliation continued: non-interest income, non-interest expense, operating leverage and efficiency ratio NM - Not Meaningful (1) These ratios have been computed using whole dollar amounts, therefore the ratios may not appear to calculate due to rounding. 24 Year Ended December 31 ($ amounts in millions) 2017 2016 2017 vs. 2016 Non-interest expense (GAAP) I $ 3,624 $ 3,617 $ 7 0.2 % Adjustments: Contribution to Regions' charitable foundation associated with tax reform (40) — (40) NM Professional, legal and regulatory expenses — (3) 3 (100.0)% Branch consolidation, property and equipment charges (22) (58) 36 (62.1)% Loss on early extinguishment of debt — (14) 14 (100.0)% Salary and employee benefits—severance charges (10) (21) 11 (52.4)% Adjusted non-interest expense (non-GAAP) J $ 3,552 $ 3,521 $ 31 0.9 % Net interest income and other financing income (GAAP) $ 3,540 $ 3,398 $ 142 4.2 % Taxable-equivalent adjustment 90 84 6 7.1 % Net interest income and other financing income, taxable-equivalent basis K $ 3,630 $ 3,482 $ 148 4.3 % Revision of allocated income associated with leveraged leases resulting from tax reform 6 — 6 NM Adjusted net interest income and other financing income, taxable equivalent basis (non-GAAP) L $ 3,636 $ 3,482 $ 154 4.4 % Net interest margin (GAAP) 3.32% 3.14% Revision of allocated income associated with leveraged leases resulting from tax reform 0.01 — Adjusted net interest margin (non-GAAP) 3.33% 3.14% Non-interest income (GAAP) M $ 2,105 $ 2,153 $ (48) (2.2)% Adjustments: Securities (gains) losses, net (22) (6) (16) 266.7 % Insurance proceeds — (50) 50 (100.0)% Leveraged lease termination gains, net (1) (8) 7 (87.5)% Gain on sale of affordable housing residential mortgage loans (5) (5) — — % Adjusted non-interest income (non-GAAP) N $ 2,077 $ 2,084 $ (7) (0.3)% Total revenue, taxable-equivalent basis K+M=O $ 5,735 $ 5,635 $ 100 1.8 % Adjusted total revenue, taxable-equivalent basis (non-GAAP) L+N=P $ 5,713 $ 5,566 $ 147 2.6 % Operating leverage ratio (GAAP)(1) O-I 1.6 % Adjusted operating leverage ratio (non-GAAP)(1) P-J 1.8 % Efficiency ratio (GAAP) I/O 63.2% 64.2% Adjusted efficiency ratio (non-GAAP) J/P 62.2% 63.3% Fee income ratio (GAAP) M/O 36.7% 38.2% Adjusted fee income ratio (non-GAAP) N/P 36.4% 37.5%

 
Non-GAAP reconciliation: pre-tax pre-provision income The Pre-Tax Pre-Provision Income tables below present 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.   NM - Not Meaningful . 25 Quarter Ended ($ amounts in millions) 12/31/2017 9/30/2017 6/30/2017 3/31/2017 12/31/2016 4Q17 vs. 3Q17 4Q17 vs. 4Q16 Net income from continuing operations available to common shareholders (GAAP) $ 318 $ 296 $ 301 $ 278 $ 278 $ 22 7.4 % $ 40 14.4 % Preferred dividends (GAAP) 16 16 16 16 16 — — % — — % Income tax expense (GAAP) 214 139 133 128 134 75 54.0 % 80 59.7 % Income from continuing operations before income taxes (GAAP) 548 451 450 422 428 97 21.5 % 120 28.0 % Provision (credit) for loan losses (GAAP) (44) 76 48 70 48 (120) (157.9)% (92) (191.7)% Pre-tax pre-provision income from continuing operations (non-GAAP) 504 527 498 492 476 (23) (4.4)% 28 5.9 % Other adjustments: Gain on sale of affordable housing residential mortgage loans — — (5) — (5) — NM 5 (100.0)% Securities (gains) losses, net (13) (8) (1) — (5) (5) 62.5 % (8) 160.0 % Leveraged lease termination gains, net — (1) — — — 1 (100.0)% — NM Reduction in leveraged lease interest income resulting from tax reform 6 — — — — 6 NM 6 NM Salaries and employee benefits—severance charges 2 1 3 4 5 1 100.0 % (3) (60.0)% Branch consolidation, property and equipment charges 9 5 7 1 17 4 80.0 % (8) (47.1)% Contribution to Regions' charitable foundation associated with tax reform 40 — — — — 40 NM 40 NM Total other adjustments 44 (3) 4 5 12 47 NM 32 266.7 % Adjusted pre-tax pre-provision income from continuing operations (non- GAAP) $ 548 $ 524 $ 502 $ 497 $ 488 $ 24 4.6 % $ 60 12.3 %

 
Non-GAAP reconciliation continued: pre-tax pre- provision income NM - Not Meaningful 26 Year Ended ($ amounts in millions) 12/31/2017 12/31/2016 2017 vs. 2016 Net income from continuing operations available to common shareholders (GAAP) $ 1,193 $ 1,094 $ 99 9.0 % Preferred dividends (GAAP) 64 64 — — % Income tax expense (GAAP) 614 514 100 19.5 % Income from continuing operations before income taxes (GAAP) 1,871 1,672 199 11.9 % Provision for loan losses (GAAP) 150 262 (112) (42.7)% Pre-tax pre-provision income from continuing operations (non-GAAP) 2,021 1,934 87 4.5 % Other adjustments: Gain on sale of affordable housing residential mortgage loans (5) (5) — — % Securities (gains) losses, net (22) (6) (16) 266.7 % Insurance proceeds — (50) 50 (100.0)% Leveraged lease termination gains, net (1) (8) 7 (87.5)% Reduction in leveraged lease interest income resulting from tax reform 6 — 6 NM Salaries and employee benefits—severance charges 10 21 (11) (52.4)% Professional, legal and regulatory expenses — 3 (3) (100.0)% Branch consolidation, property and equipment charges 22 58 (36) (62.1)% Contribution to Regions' charitable foundation associated with tax reform 40 — 40 NM Loss on early extinguishment of debt — 14 (14) (100.0)% Total other adjustments 50 27 23 85.2 % Adjusted pre-tax pre-provision income from continuing operations (non-GAAP) $ 2,071 $ 1,961 $ 110 5.6 %

 
The table below presents computations of the adjusted allowance for loan losses to non-performing loans, excluding loans held for sale ratio (non-GAAP), generally calculated as adjusted allowance for loan losses divided by adjusted total non-accrual loans, excluding loans held for sale. The allowance for loan losses (GAAP) is presented excluding the portion of the allowance related to direct energy loans to arrive at the adjusted allowance for loan losses (non-GAAP). Total non-accrual loans (GAAP) is presented excluding direct energy non-accrual loans to arrive at adjusted total non-accrual loans, excluding loans held for sale (non-GAAP), which is the denominator for the allowance for loan losses to non-accrual loans ratio. Management believes that excluding the portion of the allowance for loan losses related to direct energy loans and the direct energy non-accrual loans will assist investors in analyzing the Company's credit quality performance absent the volatility that has been experienced by energy businesses. Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, are not audited, and should not be considered in isolation, or as a substitute for analyses of results as reported under GAAP. Non-GAAP reconciliation: adjusted allowance for loan losses to non-performing loans, excluding loans held for sale 27 As of ($ amounts in millions) 12/31/2017 9/30/2017 6/30/2017 3/31/2017 12/31/2016 Allowance for loan losses (GAAP) $ 934 $ 1,041 $ 1,041 $ 1,061 $ 1,091 Less: Direct energy portion 82 115 136 123 147 Adjusted allowance for loan losses (non-GAAP) $ 852 $ 926 $ 905 $ 938 $ 944 Total non-accrual loans (GAAP) $ 650 $ 760 $ 823 $ 1,004 $ 995 Less: Direct energy non-accrual loans 220 247 267 310 311 Adjusted total non-accrual loans (non-GAAP) $ 430 $ 513 $ 556 $ 694 $ 684 Allowance for loan losses to non-performing loans, excluding loans held for sale (GAAP) 1.44x 1.37x 1.27x 1.06x 1.10x Adjusted allowance for loan losses to non-performing loans, excluding loans held for sale (non-GAAP) 1.98x 1.80x 1.63x 1.35x 1.38x

 
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. 28 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 analyses 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) 12/31/2017 9/30/2017 6/30/2017 3/31/2017 12/31/2016 Basel III Common Equity Tier 1 Ratio—Fully Phased-In Pro-Forma (1) Stockholder's equity (GAAP) $ 16,192 $ 16,624 $ 16,893 $ 16,722 $ 16,664 Non-qualifying goodwill and intangibles (4,972) (4,922) (4,932) (4,943) (4,955) Adjustments, including all components of accumulated other comprehensive income, disallowed deferred tax assets, threshold deductions and other adjustments 578 411 432 510 489 Preferred stock (GAAP) (820) (820) (820) (820) (820) Basel III common equity Tier 1—Fully Phased-In Pro-Forma (non-GAAP) D $ 10,978 $ 11,293 $ 11,573 $ 11,469 $ 11,378 Basel III risk-weighted assets—Fully Phased-In Pro-Forma (non-GAAP) (2) E $ 101,437 $ 100,857 $ 101,894 $ 102,199 $ 102,975 Basel III common equity Tier 1 ratio—Fully Phased-In Pro-Forma (non-GAAP) D/E 10.8% 11.2% 11.4% 11.2% 11.1%

 
Forward-looking statements 29 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, any repricing of assets, 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, adverse consequences related to tax reform, or other factors. • Possible changes in the creditworthiness of customers and the possible impairment of the collectability of loans and leases, including operating leases. • 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 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 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. • 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, malware, “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; disruption or damage to our systems; increased costs; losses; or adverse effects to our reputation. • Our ability to realize our adjusted efficiency ratio target as part of our expense management initiatives. • 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 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 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, 2016, 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) 264-7040; Regions’ Media contact is Evelyn Mitchell at (205) 264-4551. Forward-looking statements (continued) 30

 
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