REGIONS FINANCIAL CORP - FORM 8-K - EX-99.2 - SUPPLEMENTAL FINANCIAL INFORMATION

Attached files

file	filename
8-K - 8-K BODY - REGIONS FINANCIAL CORP	d8k.htm
EX-99.1 - PRESS RELEASE DATED JULY 26, 2011 - REGIONS FINANCIAL CORP	dex991.htm
EX-99.3 - VISUAL PRESENTATION OF JULY 26, 2011 - REGIONS FINANCIAL CORP	dex993.htm

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Regions Financial Corporation and Subsidiaries

Financial Supplement

Second Quarter 2011

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2011 Earnings Release

Table of Contents


	Page

Consolidated Balance Sheets		1

Consolidated Statements of Operations		2

Selected Ratios and Other Information		3

Consolidated Average Daily Balances and Yield / Rate Analysis		4-5

Loans and Deposits		6

Loan Portfolio Mix		7

Pre-Tax Pre-Provision Net Revenue (“PPNR”) and Adjusted PPNR		8

Mortgage Servicing Rights (MSR)		8

Non-Interest Income and Expense		9

Morgan Keegan Financial Highlights		10

Credit Quality

Allowance for Credit Losses, Net Charge-Offs and Related Ratios		11

Gross and Net NPA Migration		12

Troubled Debt Restructurings		12

Credit Costs		13

90+ Days Past Due Loans		14

Non-Accrual Loans (excludes loans held for sale)		14

Business Services Credit Quality - Criticized Loans		14

Residential Lending Net Charge-off Analysis		15

Investor Real Estate Analysis		16-17

Reconciliation to GAAP Financial Measures		18-21

Forward-Looking Statements		22


Regions Financial Corporation and Subsidiaries		Page 1
Financial Supplement to Second Quarter 2011 Earnings Release

Consolidated Balance Sheets (unaudited)


	Quarter Ended
($ amounts in millions)	6/30/11			3/31/11			12/31/10			9/30/10			6/30/10
Assets:
Cash and due from banks	$	2,271		$	2,042		$	1,643		$	1,898		$	2,097
Interest-bearing deposits in other banks		5,452			4,937			4,880			3,852			4,562
Federal funds sold and securities purchased under agreements to resell		251			341			396			1,137			752
Trading account assets		1,223			1,284			1,116			1,580			1,261
Securities available for sale		23,828			24,702			23,289			23,555			24,166
Securities held to maturity		21			22			24			26			28
Loans held for sale		1,141			1,552			1,485			1,587			1,162
Loans, net of unearned income		81,176			81,371			82,864			84,420			85,945
Allowance for loan losses		(3,120	)		(3,186	)		(3,185	)		(3,185	)		(3,185	)

Net loans		78,056			78,185			79,679			81,235			82,760
Other interest-earning assets		1,207			1,214			1,219			1,043			1,082
Premises and equipment, net		2,481			2,528			2,569			2,564			2,588
Interest receivable		354			441			421			512			466
Goodwill		5,561			5,561			5,561			5,561			5,561
Mortgage servicing rights (MSRs)		268			282			267			204			220
Other identifiable intangible assets		420			358			385			414			443
Other assets		8,374			8,307			9,417			8,330			8,192

Total Assets	$	130,908		$	131,756		$	132,351		$	133,498		$	135,340

Liabilities and Stockholders’ Equity:
Deposits:
Non-interest-bearing	$	28,148		$	27,480		$	25,733		$	25,300		$	22,993
Interest-bearing		68,183			68,889			68,881			69,678			73,257

Total deposits		96,331			96,369			94,614			94,978			96,250
Borrowed funds:
Short-term borrowings:
Federal funds purchased and securities sold under agreements to repurchase		1,740			2,218			2,716			2,451			1,929
Other short-term borrowings		982			964			1,221			1,210			1,035

Total short-term borrowings		2,722			3,182			3,937			3,661			2,964
Long-term borrowings		11,646			12,197			13,190			14,335			15,415

Total borrowed funds		14,368			15,379			17,127			17,996			18,379
Other liabilities		3,321			3,389			3,876			3,361			3,248

Total Liabilities		114,020			115,137			115,617			116,335			117,877

Stockholders’ equity:
Preferred stock, Series A		3,399			3,389			3,380			3,370			3,360
Common stock		13			13			13			13			13
Additional paid-in capital		19,052			19,047			19,050			19,047			19,038
Retained earnings (deficit)		(4,000	)		(4,043	)		(4,047	)		(4,070	)		(3,849	)
Treasury stock, at cost		(1,399	)		(1,400	)		(1,402	)		(1,405	)		(1,405	)
Accumulated other comprehensive income (loss), net		(177	)		(387	)		(260	)		208			306

Total Stockholders’ Equity		16,888			16,619			16,734			17,163			17,463

Total Liabilities and Stockholders’ Equity	$	130,908		$	131,756		$	132,351		$	133,498		$	135,340


Regions Financial Corporation and Subsidiaries		Page 2
Financial Supplement to Second Quarter 2011 Earnings Release

Consolidated Statements of Operations (unaudited)


	Quarter Ended
($ amounts in millions, except per share data)	6/30/11			3/31/11			12/31/10		9/30/10			6/30/10
Interest income on:
Loans, including fees	$	856		$	867		$	911	$	919		$	930
Securities:
Taxable		208			207			193		214			224
Tax-exempt		—			—			—		—			—

Total securities		208			207			193		214			224
Loans held for sale		9			13			12		10			9
Federal funds sold and securities purchased under agreements to resell		—			—			1		1			1
Trading account assets		6			7			12		8			9
Other interest-earning assets		7			6			7		6			7

Total interest income		1,086			1,100			1,136		1,158			1,180

Interest expense on:
Deposits		126			139			152		167			194
Short-term borrowings		2			3			2		3			2
Long-term borrowings		94			95			105		120			128

Total interest expense		222			237			259		290			324

Net interest income		864			863			877		868			856

Provision for loan losses		398			482			682		760			651

Net interest income after provision for loan losses		466			381			195		108			205

Non-interest income:
Service charges on deposit accounts		308			287			290		294			302
Brokerage, investment banking and capital markets		248			267			312		257			254
Mortgage income		50			45			51		66			63
Trust department income		51			50			50		49			49
Securities gains, net		24			82			333		2			—
Other		100			112			177		82			88

Total non-interest income		781			843			1,213		750			756

Non-interest expense:
Salaries and employee benefits		561			594			601		582			560
Net occupancy expense		107			109			108		110			110
Furniture and equipment expense		79			77			76		75			79
Other-than-temporary impairments		—			—			—		1			—
Regulatory charge		—			—			—		—			200
Other		451			387			481		395			377

Total non-interest expense		1,198			1,167			1,266		1,163			1,326

Income (loss) before income taxes		49			57			142		(305	)		(365	)
Income tax expense (benefit)		(60	)		(12	)		53		(150	)		(88	)

Net income (loss)	$	109		$	69		$	89	$	(155	)	$	(277	)

Net income (loss) available to common shareholders	$	55		$	17		$	36	$	(209	)	$	(335	)

Weighted-average shares outstanding—during quarter:
Basic		1,258			1,257			1,257		1,257			1,200
Diluted		1,260			1,259			1,259		1,257			1,200
Actual shares outstanding—end of quarter		1,259			1,256			1,256		1,256			1,256

Earnings (loss) per common share ⁽¹⁾:
Basic	$	0.04		$	0.01		$	0.03	$	(0.17	)	$	(0.28	)
Diluted	$	0.04		$	0.01		$	0.03	$	(0.17	)	$	(0.28	)

Cash dividends declared per common share	$	0.01		$	0.01		$	0.01	$	0.01		$	0.01

Taxable-equivalent net interest income from continuing operations	$	872		$	872		$	886	$	876		$	863

(1)	Includes preferred stock dividends


Regions Financial Corporation and Subsidiaries		Page 3
Financial Supplement to Second Quarter 2011 Earnings Release

Selected Ratios and Other Information


	As of and for Quarter Ended
	6/30/11			3/31/11			12/31/10			9/30/10			6/30/10
Return on average assets*		0.17	%		0.05	%		0.11	%		(0.62	)%		(0.98	)%
Return on average assets, excluding regulatory charge and related tax benefit (non-GAAP)*		0.03	%		0.05	%		0.11	%		(0.62	)%		(0.40	)%
Return on average common equity*		1.66	%		0.51	%		1.04	%		(5.91	)%		(9.62	)%
Return on average tangible common equity (non-GAAP)*		2.88	%		0.89	%		1.78	%		(10.00	)%		(16.36	)%
Return on average tangible common equity, excluding regulatory charge and related tax benefit (non-GAAP)*		0.57	%		0.89	%		1.78	%		(10.00	)%		(6.60	)%
Efficiency Ratio (non-GAAP) ⁽³⁾		68.8	%		71.3	%		72.0	%		71.6	%		69.5	%
Common equity per share	$	10.71		$	10.53		$	10.62		$	10.98		$	11.23
Tangible common book value per share (non-GAAP)	$	6.13		$	6.00		$	6.09		$	6.42		$	6.65
Stockholders’ equity to total assets		12.90	%		12.61	%		12.64	%		12.86	%		12.90	%
Tangible common stockholders’ equity to tangible assets (non-GAAP)		6.18	%		5.98	%		6.04	%		6.31	%		6.45	%
Tier 1 Common risk-based ratio (non-GAAP) ⁽¹⁾		7.9	%		7.9	%		7.9	%		7.6	%		7.7	%
Tier 1 Capital ⁽¹⁾		12.6	%		12.5	%		12.4	%		12.1	%		12.0	%
Total Risk-Based Capital ⁽¹⁾		16.2	%		16.5	%		16.4	%		16.0	%		15.9	%
Allowance for credit losses as a percentage of loans, net of unearned income ⁽²⁾		3.95	%		4.01	%		3.93	%		3.86	%		3.79	%
Allowance for loan losses as a percentage of loans, net of unearned income		3.84	%		3.92	%		3.84	%		3.77	%		3.71	%
Allowance for loan losses to non-performing loans, excluding loans held for sale		1.12	x		1.03	x		1.01	x		0.94	x		0.92	x
Net interest margin (FTE)		3.05	%		3.07	%		3.00	%		2.96	%		2.87	%
Loans, net of unearned income, to total deposits		84.3	%		84.4	%		87.6	%		88.9	%		89.3	%
Net charge-offs as a percentage of average loans*		2.71	%		2.37	%		3.22	%		3.52	%		2.99	%
Non-accrual loans, excluding loans held for sale as a percentage of loans		3.43	%		3.79	%		3.81	%		3.99	%		4.04	%
Non-performing assets (excluding loans 90 days past due) as a percentage of loans, foreclosed properties and non-performing loans held for sale		4.39	%		4.78	%		4.69	%		4.96	%		4.93	%
Non-performing assets (including loans 90 days past due) as a percentage of loans, foreclosed properties and non-performing loans held for sale		4.98	%		5.42	%		5.38	%		5.65	%		5.63	%
Associate headcount		27,261			27,557			27,829			27,898			27,895
Total branch outlets		1,769			1,771			1,772			1,774			1,774
ATMs		2,132			2,144			2,148			2,150			2,162
Morgan Keegan offices		312			319			321			329			325

*	Annualized

(1)	Current quarter Tier 1 Common, Tier 1 and Total Risk-Based Capital ratios are estimated

(2)	The allowance for credit losses reflects the allowance related to both loans on the balance sheet and exposure related to unfunded commitments and standby letters of credit

(3)	Efficiency ratio is shown on an operating basis and excludes adjustments as noted on page 19 in the Reconciliation to GAAP Financial Measures schedule


Regions Financial Corporation and Subsidiaries		Page 4
Financial Supplement to Second Quarter 2011 Earnings Release

Consolidated Average Daily Balances and Yield / Rate Analysis


	Quarter Ended
	6/30/11								3/31/11
($ 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			Average Balance			Income/ Expense		Yield/ Rate
Assets
Interest-earning assets:
Federal funds sold and securities purchased under agreements to resell	$	302		$	—		—	%	$	305		$	—		—	%
Trading account assets		1,192			7		2.36			1,162			8		2.79
Securities:
Taxable		24,768			208		3.37			24,758			207		3.39
Tax-exempt		33			—		—			30			—		—
Loans held for sale		1,141			9		3.16			1,486			13		3.55
Loans, net of unearned income		81,106			863		4.27			82,412			875		4.31
Other interest-earning assets		6,073			7		0.46			4,989			6		0.49

Total interest-earning assets		114,615			1,094		3.83			115,142			1,109		3.91
Allowance for loan losses		(3,200	)							(3,209	)
Cash and due from banks		2,247								2,164
Other non-earning assets		17,016								17,115

	$	130,678							$	131,212

Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Savings accounts	$	5,107			1		0.08		$	4,837			1		0.08
Interest-bearing transaction accounts		13,898			7		0.20			13,228			7		0.21
Money market accounts		26,805			20		0.30			27,816			21		0.31
Time deposits		22,506			98		1.75			22,971			110		1.94

Total interest-bearing deposits ⁽¹⁾		68,316			126		0.74			68,852			139		0.82
Federal funds purchased and securities sold under agreements to repurchase		2,009			1		0.20			2,167			1		0.19
Other short-term borrowings		798			1		0.50			1,068			2		0.76
Long-term borrowings		11,756			94		3.21			12,891			95		2.99

Total interest-bearing liabilities		82,879			222		1.07			84,978			237		1.13

Net interest spread							2.76								2.78

Non-interest-bearing deposits ⁽¹⁾		27,806								26,405
Other liabilities		3,197								3,145
Stockholders’ equity		16,796								16,684

	$	130,678							$	131,212

Net interest income/margin FTE basis				$	872		3.05	%				$	872		3.07	%

(1)	Total deposit costs 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 equal 0.53% and 0.59% for the quarters ended June 30, 2011 and March 31, 2011, respectively.


Regions Financial Corporation and Subsidiaries		Page 5
Financial Supplement to Second Quarter 2011 Earnings Release

Consolidated Average Daily Balances and Yield / Rate Analysis


	Quarter Ended
	12/31/10								9/30/10								6/30/10
($ 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
	Average Balance			Income/ Expense		Yield/ Rate			Average Balance			Income/ Expense		Yield/ Rate			Average Balance			Income/ Expense		Yield/ Rate
Assets
Interest-earning assets:
Federal funds sold and securities purchased under agreements to resell	$	952		$	1		0.42	%	$	1,096		$	1		0.36	%	$	345		$	1		1.16	%
Trading account assets		1,255			13		4.11			1,214			9		2.94			1,186			9		3.04
Securities:
Taxable		23,878			193		3.21			23,863			214		3.56			23,862			224		3.77
Tax-exempt		47			—		—			39			—		—			41			—		—
Loans held for sale		1,486			12		3.20			1,213			10		3.27			1,031			9		3.50
Loans, net of unearned income		84,108			920		4.34			85,616			926		4.29			87,266			936		4.30
Other interest-earning assets		5,188			6		0.46			4,308			6		0.55			6,745			8		0.48

Total interest-earning assets		116,914			1,145		3.89			117,349			1,166		3.94			120,476			1,187		3.95
Allowance for loan losses		(3,164	)							(3,223	)							(3,215	)
Cash and due from banks		2,069								2,059								2,112
Other non-earning assets		17,515								17,544								17,912

	$	133,334							$	133,729							$	137,285

Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Savings accounts	$	4,622			1		0.09		$	4,517			1		0.09		$	4,478			1		0.09
Interest-bearing transaction accounts		12,690			6		0.19			13,606			7		0.20			15,651			8		0.21
Money market accounts		28,273			23		0.32			28,088			22		0.31			27,302			32		0.47
Time deposits		23,369			122		2.07			25,161			137		2.16			26,933			153		2.28

Total interest-bearing deposits ⁽¹⁾		68,954			152		0.87			71,372			167		0.93			74,364			194		1.05
Federal funds purchased and securities sold under agreements to repurchase		3,162			—		—			2,176			1		0.18			1,798			1		0.22
Other short-term borrowings		1,056			2		0.75			866			2		0.92			847			1		0.47
Long-term borrowings		14,006			105		2.97			14,878			120		3.20			15,933			128		3.22

Total interest-bearing liabilities		87,178			259		1.18			89,292			290		1.29			92,942			324		1.40

Net interest spread							2.71								2.65								2.55

Non-interest-bearing deposits ⁽¹⁾		25,688								23,706								23,688
Other liabilities		3,422								3,349								3,063
Stockholders’ equity		17,046								17,382								17,592

	$	133,334							$	133,729							$	137,285

Net interest income/margin FTE basis				$	886		3.00	%				$	876		2.96	%				$	863		2.87	%

(1)

Total deposit costs 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 equal 0.64%, 0.70% and 0.79% for the quarters ended December 31, 2010, September 30, 2010 and June 30, 2010, respectively.


Regions Financial Corporation and Subsidiaries		Page 6
Financial Supplement to Second Quarter 2011 Earnings Release

Loans


	Quarter Ended
($ amounts in millions)	6/30/11		3/31/11		12/31/10		9/30/10		6/30/10		6/30/11 vs. 3/31/11					6/30/11 vs. 6/30/10
Commercial and industrial	$	23,644	$	23,149	$	22,540	$	21,501	$	21,096	$	495		2.1	%	$	2,548		12.1	%
Commercial real estate mortgage - owner-occupied		11,797		11,889		12,046		11,850		11,967		(92	)	-0.8	%		(170	)	-1.4	%
Commercial real estate construction - owner-occupied		377		430		470		522		547		(53	)	-12.3	%		(170	)	-31.1	%

Total commercial		35,818		35,468		35,056		33,873		33,610		350		1.0	%		2,208		6.6	%
Commercial investor real estate mortgage		11,836		12,932		13,621		14,489		15,152		(1,096	)	-8.5	%		(3,316	)	-21.9	%
Commercial investor real estate construction		1,595		1,895		2,287		2,975		3,778		(300	)	-15.8	%		(2,183	)	-57.8	%

Total investor real estate		13,431		14,827		15,908		17,464		18,930		(1,396	)	-9.4	%		(5,499	)	-29.0	%
Residential first mortgage		14,306		14,404		14,898		15,723		15,567		(98	)	-0.7	%		(1,261	)	-8.1	%
Home equity*		13,593		13,874		14,226		14,534		14,802		(281	)	-2.0	%		(1,209	)	-8.2	%
Indirect		1,704		1,626		1,592		1,657		1,900		78		4.8	%		(196	)	-10.3	%
Consumer credit card		1,134		—		—		—		—		1,134		100.0	%		1,134		100.0	%
Other consumer		1,190		1,172		1,184		1,169		1,136		18		1.5	%		54		4.8	%

Total Loans	$	81,176	$	81,371	$	82,864	$	84,420	$	85,945	$	(195	)	-0.2	%	$	(4,769	)	-5.5	%


	Average Balances
($ amounts in millions)	2Q11		1Q11		4Q10		3Q10		2Q10		2Q11 vs. 1Q11					2Q11 vs. 2Q10
Commercial and industrial	$	23,506	$	22,889	$	21,956	$	21,313	$	21,109	$	617		2.7	%	$	2,397		11.4	%
Commercial real estate mortgage - owner-occupied		11,826		12,012		11,944		11,944		12,005		(186	)	-1.5	%		(179	)	-1.5	%
Commercial real estate construction - owner-occupied		404		438		503		516		563		(34	)	-7.8	%		(159	)	-28.2	%

Total commercial		35,736		35,339		34,403		33,773		33,677		397		1.1	%		2,059		6.1	%
Commercial investor real estate mortgage		12,607		13,393		14,223		15,090		15,586		(786	)	-5.9	%		(2,979	)	-19.1	%
Commercial investor real estate construction		1,805		2,100		2,649		3,477		4,340		(295	)	-14.0	%		(2,535	)	-58.4	%

Total investor real estate		14,412		15,493		16,872		18,567		19,926		(1,081	)	-7.0	%		(5,514	)	-27.7	%
Residential first mortgage		14,329		14,692		15,620		15,632		15,537		(363	)	-2.5	%		(1,208	)	-7.8	%
Home equity		13,744		14,053		14,389		14,684		14,947		(309	)	-2.2	%		(1,203	)	-8.0	%
Indirect		1,681		1,628		1,606		1,776		2,028		53		3.3	%		(347	)	-17.1	%
Consumer credit card		13		—		—		—		—		13		100.0	%		13		100.0	%
Other consumer		1,191		1,207		1,218		1,184		1,151		(16	)	-1.3	%		40		3.5	%

Total Loans	$	81,106	$	82,412	$	84,108	$	85,616	$	87,266	$	(1,306	)	-1.6	%	$	(6,160	)	-7.1	%

Deposits


	Quarter Ended
($ amounts in millions)	6/30/11		3/31/11		12/31/10		9/30/10		6/30/10		6/30/11 vs. 3/31/11					6/30/11 vs. 6/30/10
Customer Deposits
Interest-free deposits	$	28,148	$	27,480	$	25,733	$	25,300	$	22,993	$	668		2.4	%	$	5,155		22.4	%
Interest-bearing checking		15,982		13,365		13,423		12,409		15,148		2,617		19.6	%		834		5.5	%
Savings		5,118		5,064		4,668		4,544		4,475		54		1.1	%		643		14.4	%
Money market - domestic		24,650		27,261		27,420		27,983		26,773		(2,611	)	-9.6	%		(2,123	)	-7.9	%
Money market - foreign		476		533		569		509		502		(57	)	-10.7	%		(26	)	-5.2	%

Low-cost deposits		74,374		73,703		71,813		70,745		69,891		671		0.9	%		4,483		6.4	%
Time deposits		21,947		22,656		22,784		24,177		26,298		(709	)	-3.1	%		(4,351	)	-16.5	%

Total customer deposits		96,321		96,359		94,597		94,922		96,189		(38	)	0.0	%		132		0.1	%

Corporate Treasury Deposits
Time deposits		10		10		17		56		61		—		0.0	%		(51	)	-83.6	%

Total Deposits	$	96,331	$	96,369	$	94,614	$	94,978	$	96,250	$	(38	)	0.0	%	$	81		0.1	%


	Average Balances
($ amounts in millions)	2Q11		1Q11		4Q10		3Q10		2Q10		2Q11 vs. 1Q11					2Q11 vs. 2Q10
Customer Deposits
Interest-free deposits	$	27,806	$	26,405	$	25,688	$	23,706	$	23,688	$	1,401		5.3	%	$	4,118		17.4	%
Interest-bearing checking		13,898		13,228		12,690		13,606		15,651		670		5.1	%		(1,753	)	-11.2	%
Savings		5,107		4,837		4,622		4,517		4,478		270		5.6	%		629		14.0	%
Money market - domestic		26,302		27,276		27,767		27,574		26,670		(974	)	-3.6	%		(368	)	-1.4	%
Money market - foreign		503		540		506		514		632		(37	)	-6.9	%		(129	)	-20.4	%

Low-cost deposits		73,616		72,286		71,273		69,917		71,119		1,330		1.8	%		2,497		3.5	%
Time deposits		22,496		22,956		23,347		25,100		26,872		(460	)	-2.0	%		(4,376	)	-16.3	%

Total customer deposits		96,112		95,242		94,620		95,017		97,991		870		0.9	%		(1,879	)	-1.9	%

Corporate Treasury Deposits
Time deposits		10		15		22		61		61		(5	)	-33.3	%		(51	)	-83.6	%

Total Deposits	$	96,122	$	95,257	$	94,642	$	95,078	$	98,052	$	865		0.9	%	$	(1,930	)	-2.0	%

*	Refer to page 15 for a breakout between 1st Lien and 2nd Lien Home Equity


Regions Financial Corporation and Subsidiaries		Page 7
Financial Supplement to Second Quarter 2011 Earnings Release

Loan Portfolio Mix

LOGO

Loan Portfolio Balances by Percentage


	Quarter Ended
	6/30/11			3/31/11			12/31/10			9/30/10			6/30/10
Commercial and industrial		29.1	%		28.5	%		27.2	%		25.5	%		24.6	%
Commercial real estate mortgage - OO		14.5	%		14.6	%		14.5	%		14.0	%		13.9	%
Commercial real estate construction - OO		0.5	%		0.5	%		0.6	%		0.6	%		0.6	%

Total commercial		44.1	%		43.6	%		42.3	%		40.1	%		39.1	%
Commercial investor real estate mortgage		14.6	%		15.9	%		16.4	%		17.2	%		17.6	%
Commercial investor real estate construction		2.0	%		2.3	%		2.8	%		3.5	%		4.4	%

Total investor real estate		16.6	%		18.2	%		19.2	%		20.7	%		22.0	%
Residential first mortgage		17.6	%		17.7	%		18.0	%		18.6	%		18.1	%
Home equity		16.7	%		17.1	%		17.2	%		17.2	%		17.2	%
Indirect		2.1	%		2.0	%		1.9	%		2.0	%		2.2	%
Consumer credit card		1.4	%		0.0	%		0.0	%		0.0	%		0.0	%
Other consumer		1.5	%		1.4	%		1.4	%		1.4	%		1.4	%

Total Loans		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

OO = Owner Occupied


Regions Financial Corporation and Subsidiaries		Page 8
Financial Supplement to Second Quarter 2011 Earnings Release

Pre-Tax Pre-Provision Net Revenue (“PPNR”) and Adjusted PPNR (non-GAAP)


	Quarter Ended
($ amounts in millions)	6/30/11			3/31/11			12/31/10			9/30/10			6/30/10		2Q11 vs. 1Q11					2Q11 vs. 2Q10
Net Interest Income (GAAP)	$	864		$	863		$	877		$	868		$	856	$	1		0.1	%	$	8		0.9	%
Non-Interest Income (GAAP)		781			843			1,213			750			756		(62	)	-7.4	%		25		3.3	%

Total Revenue (GAAP)		1,645			1,706			2,090			1,618			1,612		(61	)	-3.6	%		33		2.0	%
Non-Interest Expense (GAAP)		1,198			1,167			1,266			1,163			1,326		31		2.7	%		(128	)	-9.7	%

Pre-tax Pre-provision Net Revenue (GAAP)	$	447		$	539		$	824		$	455		$	286		(92	)	-17.1	%		161		56.3	%
Adjustments:
Regulatory charge		—			—			—			—			200		—		—			(200	)	NM
Securities gains, net		(24	)		(82	)		(333	)		(2	)		—		58		-70.7	%		(24	)	NM
Loss (gain) on sale of mortgage loans		—			3			(26	)		—			—		(3	)	NM			—		—
Leveraged lease termination gains		—			—			(59	)		—			—		—		—			—		—
Loss on early extinguishment of debt		—			—			55			—			—		—		—			—		—
Securities impairment, net		—			—			—			1			—		—		—			—		—
Branch consolidation and equipment costs		77			—			—			—			—		77		NM			77		NM

Total adjustments		53			(79	)		(363	)		(1	)		200		132		-167.1	%		(147	)	-73.5	%

Adjusted PPNR (non-GAAP)	$	500		$	460		$	461		$	454		$	486	$	40		8.7	%	$	14		2.9	%

The PPNR table above presents computations of pre-tax pre-provision net revenue excluding certain adjustments (non-GAAP). 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. 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 certain adjustments does not represent the amount that effectively accrues directly to stockholders.

Categorization of Income (Loss) Related to Mortgage Servicing Rights (MSRs) ⁽¹⁾


	Quarter Ended
($ amounts in millions)	6/30/11			3/31/11			12/31/10			9/30/10		6/30/10		2Q11 vs. 1Q11				2Q11 vs. 2Q10
Mortgage income (loss) ⁽²⁾	$	(2	)	$	(11	)	$	(13	)	$	2	$	12		9	-81.8	%		(14	)	-116.7	%

	$	(2	)	$	(11	)	$	(13	)	$	2	$	12		9	-81.8	%		(14	)	-116.7	%

(1)	This table details the impact of changes in valuation of mortgage servicing rights and related hedging instruments on the applicable category(ies) in the consolidated statements of operations.

(2)	Net effect of mark-to-market impact of MSRs and derivatives used to hedge MSRs.


Regions Financial Corporation and Subsidiaries		Page 9
Financial Supplement to Second Quarter 2011 Earnings Release

Non-Interest Income and Expense


Non-Interest Income	Quarter Ended
($ amounts in millions)	6/30/11		3/31/11			12/31/10		9/30/10		6/30/10		2Q11 vs. 1Q11					2Q11 vs. 2Q10
Service charges on deposit accounts	$	308	$	287		$	290	$	294	$	302	$	21		7.3	%	$	6		2.0	%
Brokerage, investment banking and capital markets		248		267			312		257		254		(19	)	-7.1	%		(6	)	-2.4	%
Mortgage income		50		45			51		66		63		5		11.1	%		(13	)	-20.6	%
Trust department income		51		50			50		49		49		1		2.0	%		2		4.1	%
Securities gains, net		24		82			333		2		—		(58	)	-70.7	%		24		NM
Insurance income		25		28			25		25		26		(3	)	-10.7	%		(1	)	-3.8	%
Leveraged lease termination gains		—		—			59		—		—		—		—			—		—
(Loss) gain on sale of mortgage loans		—		(3	)		26		—		—		3		NM			—		—
Other		75		87			67		57		62		(12	)	-13.8	%		13		21.0	%

Total non-interest income	$	781	$	843		$	1,213	$	750	$	756		$ (62	)	-7.4	%	$	25		3.3	%


Non-Interest Expense	Quarter Ended
($ amounts in millions)	6/30/11		3/31/11			12/31/10		9/30/10		6/30/10		2Q11 vs. 1Q11					2Q11 vs. 2Q10
Salaries and employee benefits	$	561	$	594		$	601	$	582	$	560	$	(33	)	-5.6	%	$	1		0.2	%
Net occupancy expense		107		109			108		110		110		(2	)	-1.8	%		(3	)	-2.7	%
Furniture and equipment expense		79		77			76		75		79		2		2.6	%		—		—
Professional and legal fees		61		81			92		71		75		(20	)	-24.7	%		(14	)	-18.7	%
Marketing expense		17		13			14		22		18		4		30.8	%		(1	)	-5.6	%
Amortization of core deposit intangible		24		25			26		27		27		(1	)	-4.0	%		(3	)	-11.1	%
Other real estate owned expense		37		39			61		65		41		(2	)	-5.1	%		(4	)	-9.8	%
Other-than-temporary impairments, net		—		—			—		1		—		—		—			—		—
FDIC premiums		72		52			52		51		58		20		38.5	%		14		24.1	%
Branch consolidation and property and equipment charges		77		—			—		—		—		77		NM			77		NM
Loss on early extinguishment of debt		—		—			55		—		—		—		—			—		—
Regulatory charge		—		—			—		—		200		—		—			(200	)	NM
Other		163		177			181		159		158		(14	)	-7.9	%		5		3.2	%

Total non-interest expense	$	1,198	$	1,167		$	1,266	$	1,163	$	1,326	$	31		2.7	%	$	(128	)	-9.7	%

•

Non-interest income decreased $62 million, however $58 million of the decline was due to lower securities gains and $3 million was related a prior quarter loss on sale of mortgage loans. On an adjusted basis, non-interest income declined $7 million or 1% linked quarter.

•

Service charges income increased $21 million or 7% linked quarter, reflecting higher overdraft/NSF fees and interchange income. Interchange income has benefited from increasing active debit card usage; total transactions year-to-date are 12 percent higher compared to a year ago.

•

Brokerage, investment banking and capital markets income decreased $19 million to $248 million, driven by a decline in private client and capital markets revenues.

•

Mortgage income increased $5 million linked quarter, primarily reflecting improved MSR and related hedging performance.

•

Securities gains in 2Q11 of $24 million were related to repositioning the securities portfolio, and resulted in shortening the duration to less than 3 years. Approximately $4 billion of 3.5 year agency mortgage-backed securities were sold, and the majority of the proceeds were subsequently reinvested in 2 year agency mortgage-backed securities.

•

Non-interest expenses increased 3% linked quarter, however after adjusting for $77 million in charges related to branch consolidation and property and equipment charges, non-interest expenses declined 4%, and reflected lower salaries and benefits expense and a reduction in professional and legal fees.

•

Salaries and benefits expense decreased 6% linked quarter, reflecting lower headcount and payroll taxes.

•

The $20 million increase in FDIC premiums reflects new rules which went into effect on April 1st.

•

Branch consolidation and property and equipment charges reflect the consolidation approximately 40 branches. This will occur in the second half of this year and is expected to result in $19 million in pretax annual future net cost saves.


Regions Financial Corporation and Subsidiaries		Page 10
Financial Supplement to Second Quarter 2011 Earnings Release

Morgan Keegan Financial Highlights

Summary Income Statement ⁽¹⁾


	Quarter Ended
													2Q11					2Q11
($ amounts in millions)	6/30/11			3/31/11		12/31/10		9/30/10		6/30/10			vs. 1Q11					vs. 2Q10
Net interest income ⁽³⁾	$	16		$	15	$	21	$	15	$	15		$	1		6.7	%	$	1		6.7	%
Non-interest income		296			314		342		309		292			(18	)	-5.7	%		4		1.4	%
Non-interest expense		286			273		320		289		275			13		4.8	%		11		4.0	%
Regulatory charge		—			—		—		—		200			—		NM			(200	)	NM

Pre-tax Income		26			56		43		35		(168	)		(30	)	-53.6	%		194		-115.5	%
Income tax expense (benefit)		(34	)		25		26		13		12			(59	)	-236.0	%		(46	)	NM

Net income (loss)	$	60		$	31	$	17	$	22	$	(180	)		29		93.5	%		240		-133.3	%

Breakout of Revenue by Division ⁽²⁾


	Private Client			Fixed- Income Capital Markets			Equity Capital Markets			Investment Banking			Regions MK Trust			Asset Management			Interest & Other


($ amounts in millions)
Three months ended
June 30, 2011
$ amount of revenue	$	117		$	71		$	14		$	37		$	61		$	5		$	9
% of gross revenue		37.3	%		22.6	%		4.5	%		11.8	%		19.4	%		1.6	%		2.8	%

Three months ended
March 31, 2011
$ amount of revenue	$	125		$	66		$	16		$	30		$	56		$	3		$	37
% of gross revenue		37.6	%		19.8	%		4.8	%		9.0	%		16.8	%		0.9	%		11.1	%

Six Months Ended
June 30, 2011
$ amount of revenue	$	242		$	137		$	30		$	67		$	117		$	8		$	46
% of gross revenue		37.4	%		21.2	%		4.6	%		10.4	%		18.1	%		1.2	%		7.1	%
Six Months Ended

June 30, 2010
$ amount of revenue	$	233		$	151		$	27		$	63		$	101		$	9		$	40
% of gross revenue		37.3	%		24.2	%		4.4	%		10.1	%		16.2	%		1.4	%		6.4	%

•

Income tax benefit related to a portion of the regulatory settlement. Refer to Note 1 on page 18 for additional details.

•

Fixed Income Capital Markets benefited from the volatility in the markets along with long-term rates declining in the second quarter.

•

Investment Banking division was led by strong production from the healthcare and technology divisions.

•

According to ThomsonReuters, Morgan Keegan was the 9th leading firm nationally for municipal underwritings year-to-date.

(1)	Certain amounts in the prior periods have been reclassified to reflect the current period presentation

(2)	“Breakout of Revenue by Division” has been adjusted to reflect changes in the company’s reporting structure

(3)

Net interest income in the Summary Income Statement is illustrated on a net basis, whereas the Breakout of Revenue by Division, revenue is illustrated on a gross basis. In the Summary Income Statement, 2Q11 excludes $2 million of gross interest income, 1Q11 and 4Q10 excludes $4 million each quarter of gross interest income and 3Q10 and 2Q10 excludes $3 million each quarter of gross interest income.


Regions Financial Corporation and Subsidiaries		Page 11
Financial Supplement to Second Quarter 2011 Earnings Release

Credit Quality


	As of and for Quarter Ended
($ amounts in millions)	6/30/11			3/31/11			12/31/10			9/30/10			6/30/10
Allowance for credit losses (ACL)	$	3,204		$	3,264		$	3,256		$	3,256		$	3,256
Allowance allocated to purchased loans		84			—			—			—			—
Provision for loan losses		398			482			682			760			651
Provision for unfunded credit losses		6			7			—			—			5
Net loans charged-off:
Commercial and industrial		49			72			128			89			87
Commercial real estate mortgage - owner-occupied		43			66			80			64			39
Commercial real estate construction - owner-occupied		1			4			4			3			3

Total commercial		93			142			212			156			129
Commercial investor real estate mortgage		247			132			202			254			203
Commercial investor real estate construction		56			42			99			171			133

Total investor real estate		303			174			301			425			336
Residential first mortgage		55			56			56			58			61
Home equity		83			94			92			102			106
Indirect		3			4			4			3			4
Other consumer		11			11			17			15			15

Total	$	548		$	481		$	682		$	759		$	651

Net loan charge-offs as a % of average loans, annualized
Commercial and industrial		0.85	%		1.27	%		2.31	%		1.66	%		1.65	%
Commercial real estate mortgage - owner-occupied		1.45	%		2.23	%		2.64	%		2.12	%		1.28	%
Commercial real estate construction - owner-occupied		1.08	%		3.74	%		3.54	%		1.95	%		2.17	%

Total commercial		1.05	%		1.63	%		2.44	%		1.83	%		1.53	%
Commercial investor real estate mortgage		7.85	%		4.00	%		5.63	%		6.67	%		5.22	%
Commercial investor real estate construction		12.56	%		8.07	%		14.91	%		19.57	%		12.33	%

Total investor real estate		8.44	%		4.56	%		7.09	%		9.09	%		6.77	%
Residential first mortgage		1.54	%		1.55	%		1.42	%		1.48	%		1.58	%
Home equity		2.43	%		2.71	%		2.53	%		2.74	%		2.84	%
Indirect		0.57	%		1.05	%		1.09	%		0.64	%		0.72	%
Other consumer		3.70	%		3.70	%		5.54	%		5.03	%		5.23	%

Total		2.71	%		2.37	%		3.22	%		3.52	%		2.99	%

Non-accrual loans, excluding loans held for sale	$	2,784		$	3,087		$	3,160		$	3,372		$	3,473
Non-performing loans held for sale		381			381			304			393			256

Non-accrual loans, including loans held for sale	$	3,165		$	3,468		$	3,464		$	3,765		$	3,729
Foreclosed properties		437			465			454			461			546

Non-performing assets (NPAs)	$	3,602		$	3,933		$	3,918		$	4,226		$	4,275

Loans past due > 90 days	$	483		$	527		$	585		$	593		$	612
Restructured loans not included in categories above ⁽¹⁾	$	1,664		$	1,553		$	1,483		$	1,299		$	1,239

Credit Ratios:
ACL/Loans, net		3.95	%		4.01	%		3.93	%		3.86	%		3.79	%
ALL/Loans, net		3.84	%		3.92	%		3.84	%		3.77	%		3.71	%
Allowance for loan losses to non-performing loans, excluding loans held for sale		1.12	x		1.03	x		1.01	x		0.94	x		0.92	x
Non-accrual loans, excluding loans held for sale/Loans		3.43	%		3.79	%		3.81	%		3.99	%		4.04	%
NPAs (ex. 90+ past due)/Loans, foreclosed properties and non-performing loans held for sale		4.39	%		4.78	%		4.69	%		4.96	%		4.93	%
NPAs (inc. 90+ past due)/Loans, foreclosed properties and non-performing loans held for sale		4.98	%		5.42	%		5.38	%		5.65	%		5.63	%

Allowance for Credit Losses


	Quarter Ended
($ amounts in millions)	6/30/11		6/30/10
Components:
Allowance for loan losses	$	3,120	$	3,185
Reserve for unfunded credit commitments		84		71

Allowance for credit losses	$	3,204	$	3,256

(1)	See page 12 for detail of restructured loans.


Regions Financial Corporation and Subsidiaries		Page 12
Financial Supplement to Second Quarter 2011 Earnings Release

Credit Quality

Gross and Net NPA Migration


	Quarter Ended
($ in millions)	6/30/11			3/31/11			12/31/10			9/30/10			6/30/10
Beginning Non-Performing Assets ⁽¹⁾	$	3,933		$	3,918		$	4,226		$	4,275		$	4,572
Additions	$	619		$	816		$	1,021		$	1,410		$	865
Resolutions ⁽²⁾		(224	)		(214	)		(348	)		(255	)		(197	)
Charge-Offs / OREO Write-Downs		(362	)		(368	)		(576	)		(497	)		(458	)

Net Additions		33			234			97			658			210

Non-Accrual Asset Sales		(226	)		(106	)		(309	)		(511	)		(336	)
OREO Sales		(138	)		(113	)		(96	)		(196	)		(171	)

Ending Non-Performing Assets ⁽¹⁾		3,602			3,933			3,918			4,226			4,275

Change Versus Previous Quarter	($	331	)	$	15		($	308	)	($	49	)	$	116

Troubled Debt Restructurings


	Quarter Ended
(in millions)	6/30/11		3/31/11		12/31/10		9/30/10		6/30/10
Accruing:
Commercial	$	69	$	72		77		23		24
Investor Real Estate		273		208		192		150		22
Residential First Mortgage		876		854		813		746		836
Home Equity		383		355		335		314		295
Other Consumer		63		64		66		66		62

Total Accruing		1,664		1,553		1,483		1,299		1,239

Non-accrual or 90+ DPD:
Commercial		164		120		105		71		34
Investor Real Estate		200		230		198		159		99
Residential First Mortgage		207		221		240		222		217
Home Equity		29		28		30		26		26
Other Consumer		—		1		—		—		—

Total Non-accrual or 90+DPD		600		600		573		478		376

Total TDR		2,264		2,153		2,056		1,777		1,615

(1)	Includes Loans Held for Sale

(2)	Includes payments and returned to accruals


Regions Financial Corporation and Subsidiaries		Page 13
Financial Supplement to Second Quarter 2011 Earnings Release

Credit Costs


	Quarter Ended
(in millions)	6/30/11			3/31/11		12/31/10			9/30/10			6/30/10
Net Charge-offs
Investor Real Estate (IRE)	$	99		$	84	$	205		$	205		$	216
Commercial		91			126		197			143			117
Consumer Real Estate		138			150		148			160			167
Other Consumer		13			15		21			18			19

Net Charge-offs excluding charge-offs from Sales / Transfers to HFS		341			375		571			526			519

Sales/Transfer to HFS		207			106		111			233			132

Total Net Charge-offs		548			481		682			759			651

Net Loss / (Gain) - HFS Sales		(1	)		—		(7	)		(2	)		(9	)
HFS Write-downs ⁽¹⁾		5			2		21			7			5
OREO expense		37			39		61			65			40

Total Credit Costs before Reserve Change		589			522		757			829			687

Reserve Increase / (Reduction)		(150	)		1		—			1			—

Total Credit Costs after Reserve Change		439			523		757			830			687

(1)

Reflects write-downs subsequent to initial move to held for sale and write-downs upon transfer to OREO


Regions Financial Corporation and Subsidiaries		Page 14
Financial Supplement to Second Quarter 2011 Earnings Release

90+ Days Past Due Loans


	Quarter Ended
($ millions)	6/30/11					3/31/11					12/31/10					9/30/10					6/30/10
Commercial and Industrial	$	7		0.03	%	$	10		0.04	%	$	9		0.04	%	$	5		0.03	%	$	7		0.03	%
Commercial Real Estate Mortgage - OO		11		0.09	%		8		0.07	%		6		0.05	%		6		0.05	%		4		0.04	%
Commercial Real Estate Construction- OO		—		0.05	%		—		0.09	%		1		0.12	%		—		0.00	%		—		0.00	%

Total Commercial	$	18		0.05	%	$	18		0.05	%	$	16		0.05	%	$	11		0.03	%	$	11		0.03	%

Commercial Investor Real Estate Mortgage		5		0.04	%		13		0.10	%		5		0.04	%		6		0.04	%		26		0.17	%
Commercial Investor Real Estate Construction		—		0.02	%		1		0.04	%		1		0.04	%		2		0.05	%		4		0.10	%

Total Investor Real Estate	$	5		0.04	%	$	14		0.09	%	$	6		0.04	%	$	8		0.04	%	$	30		0.16	%

Residential First Mortgage		296		2.07	%		315		2.18	%		359		2.41	%		369		2.35	%		349		2.24	%
Home Equity		158		1.16	%		174		1.26	%		198		1.39	%		198		1.36	%		215		1.45	%
Direct		1		0.16	%		1		0.13	%		1		0.13	%		2		0.21	%		1		0.14	%
Indirect		2		0.10	%		2		0.13	%		2		0.13	%		2		0.14	%		3		0.12	%
Consumer Credit Card		—		0.00	%		—		0.00	%		—		0.00	%		—		0.00	%		—		0.00	%
Other Consumer		3		0.79	%		3		0.86	%		3		0.88	%		3		0.79	%		3		0.90	%

Total Consumer	$	460		1.44	%	$	495		1.59	%	$	563		1.76	%	$	574		1.74	%	$	571		1.71	%

Total 90+ Days Past Due Loans	$	483		0.60	%	$	527		0.65	%	$	585		0.71	%	$	593		0.70	%	$	612		0.71	%


Non-Accrual Loans (excludes loans held for sale)

	Quarter Ended
($ millions)	6/30/11					3/31/11					12/31/10					9/30/10					6/30/10
Commercial & Industrial	$	525		2.22	%	$	446		1.93	%	$	467		2.07	%	$	502		2.33	%	$	479		2.27	%
Commercial Real Estate Mortgage - OO		687		5.82	%		648		5.45	%		606		5.03	%		616		5.20	%		680		5.68	%
Commercial Real Estate Construction - OO		28		7.57	%		31		7.20	%		29		6.19	%		35		6.65	%		37		6.77	%

Total Commercial	$	1,240		3.46	%	$	1,125		3.17	%	$	1,102		3.14	%	$	1,153		3.40	%	$	1,196		3.56	%

Commercial Investor Real Estate Mortgage		820		6.93	%		1,142		8.83	%		1,265		9.28	%		1,347		9.30	%		1,286		8.49	%
Commercial Investor Real Estate Construction		371		23.25	%		448		23.64	%		452		19.76	%		561		18.87	%		754		19.94	%

Total Investor Real Estate	$	1,191		8.87	%	$	1,590		10.73	%	$	1,717		10.79	%	$	1,908		10.93	%	$	2,040		10.77	%

Residential First Mortgage		288		2.01	%		303		2.10	%		285		1.92	%		267		1.70	%		212		1.36	%
Home Equity		65		0.48	%		69		0.50	%		56		0.40	%		44		0.30	%		25		0.17	%
Direct		—		0.00	%		—		0.00	%		—		0.00	%		—		0.00	%		—		0.00	%
Indirect		—		0.00	%		—		0.00	%		—		0.00	%		—		0.00	%		—		0.00	%
Consumer Credit Card		—		0.00	%		—		0.00	%		—		0.00	%		—		0.00	%		—		0.00	%
Other Consumer		—		0.00	%		—		0.00	%		—		0.00	%		—		0.00	%		—		0.00	%

Total Consumer	$	353		1.11	%	$	372		1.20	%	$	341		1.07	%	$	311		0.94	%	$	237		0.71	%

Total Non-Accrual Loans	$	2,784		3.43	%	$	3,087		3.79	%	$	3,160		3.81	%	$	3,372		3.99	%	$	3,473		4.04	%

Change versus pervious quarter		(303	)				(73	)				(212	)				(101	)			$	(233	)

OO = Owner Occupied

Business Services Credit Quality - Criticized Loans

LOGO


Regions Financial Corporation and Subsidiaries		Page 15
Financial Supplement to Second Quarter 2011 Earnings Release

Residential Lending Net Charge-off Analysis


		Quarter Ended
		6/30/2011															3/31/2011
		First Liens									Junior Liens			Total ⁽¹⁾			First Liens									Junior Liens			Total ⁽¹⁾
($ in millions)		Residential Mortgage			Home Equity			Total First Liens			Home Equity						Residential Mortgage			Home Equity			Total First Liens			Home Equity
Florida	Net Charge-off %*		2.88	%		2.05	%		2.65	%		6.10	%		3.64	%		2.84	%		3.10	%		2.91	%		6.79	%		4.04	%
	$ Losses	$	39.0		$	10.4		$	49.4		$	45.8		$	95.2		$	38.8		$	15.7		$	54.5		$	52.2		$	106.7
	Balance	$	5,413.1		$	2,014.9		$	7,428.0		$	2,967.5		$	10,395.5		$	5,482.4		$	2,040.5		$	7,522.9		$	3,067.4		$	10,590.3
	Original LTV		71.6	%		65.4	%					75.7	%

All Other	Net Charge-off %*		0.72	%		0.64	%		0.70	%		1.76	%		0.98	%		0.76	%		0.65	%		0.73	%		1.64	%		0.97	%
States	$ Losses	$	16.1		$	6.5		$	22.6		$	20.5		$	43.1		$	17.2		$	6.6		$	23.8		$	19.4		$	43.2
	Balance	$	8,893.1		$	3,996.2		$	12,889.3		$	4,614.1		$	17,503.4		$	8,921.9		$	4,059.9		$	12,981.8		$	4,706.5		$	17,688.3
	Original LTV		73.8	%		66.8	%					79.3	%

Totals	Net Charge-off %*		1.54	%		1.11	%		1.41	%		3.46	%		1.97	%		1.55	%		1.47	%		1.52	%		3.68	%		2.11	%
	$ Losses	$	55.1		$	16.9		$	72.0		$	66.3		$	138.3		$	56.0		$	22.3		$	78.3		$	71.6		$	149.9
	Balance	$	14,306.2		$	6,011.1		$	20,317.3		$	7,581.6		$	27,898.9		$	14,404.3		$	6,100.4		$	20,504.7		$	7,773.9		$	28,278.6
	Original LTV		73.0	%		66.3	%					77.8	%

⁽¹⁾	Total line item include first liens on residential first mortgage and home equity, as well as junior liens on home equity

•

22% Florida junior lien concentration driving results

•

Junior lien, Florida net charge-offs represent 55% of 2Q11 net charge-offs but just 22% of Home Equity outstanding balances.

•

Net Home Equity charge-offs in Florida approximately 3.5 times non-Florida net charge-off rate

•

Home Equity origination quality solid with an average FICO of 774 and an average LTV of 62%; Property value declines driving losses

LOGO

Notes:

* Recoveries are pro-rated based on charge-off balances.

* Balances shown on an ending basis. Net loss rates calculated using average balances


Regions Financial Corporation and Subsidiaries		Page 16
Financial Supplement to Second Quarter 2011 Earnings Release

Investor Real Estate Analysis

LOGO


Regions Financial Corporation and Subsidiaries		Page 17
Financial Supplement to Second Quarter 2011 Earnings Release

Investor Real Estate Analysis

LOGO


Regions Financial Corporation and Subsidiaries		Page 18
Financial Supplement to Second Quarter 2011 Earnings Release

Reconciliation to GAAP Financial Measures

The table below presents computations of earnings and certain other financial measures excluding regulatory charge and related tax benefit (non-GAAP). The regulatory charge and related tax benefit are included in financial results presented in accordance with generally accepted accounting principles (GAAP). Regions believes that the exclusion of the regulatory charge and related tax benefit in expressing earnings and certain other financial measures, including “earnings (loss) per common share, excluding regulatory charge and related tax benefit”, “return on average assets, excluding regulatory charge and related tax benefit” and “return on average tangible common stockholders’ equity, excluding regulatory charge and related tax benefit” (explained on next page) 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 because management does not consider the regulatory charge and related tax benefit to be relevant to ongoing operating results. Management and the Board of Directors utilize these non-GAAP financial measures for the following purposes: preparation of Regions’ operating budgets; monthly financial performance reporting; monthly close-out “flash” reporting of consolidated results (management only); and presentations to investors of company performance. Regions believes that presenting these non-GAAP financial measures will permit investors to assess the performance of the Company on the same basis as that applied by management and the Board of Directors. Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied and are not audited. To mitigate these limitations, Regions has policies and procedures in place to identify and address expenses that qualify for non-GAAP presentation, including authorization and system controls to ensure accurate period to period comparisons. 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 the regulatory charge and related tax benefit does not represent the amount that effectively accrues directly to stockholders (i.e. the regulatory charge is a reduction in earnings and stockholders’ equity).


		As of and for Quarter Ended
($ amounts in millions, except per share data)		06/30/11			03/31/11			12/31/10			09/30/10			06/30/10
Income (loss):
Net income (loss) (GAAP)		$	109		$	69		$	89		$	(155	)	$	(277	)
Preferred dividends and accretion (GAAP)			(54	)		(52	)		(53	)		(54	)		(58	)

Net income (loss) available to common shareholders (GAAP)	A	$	55		$	17		$	36		$	(209	)	$	(335	)
Net income (loss) available to common shareholders (GAAP)		$	55		$	17		$	36		$	(209	)	$	(335	)

Regulatory charge and related tax benefit ⁽¹⁾			(44	)		—			—			—			200

Net income (loss) available to common shareholders, excluding regulatory charge and related tax benefit (non-GAAP)	B	$	11		$	17		$	36		$	(209	)	$	(135	)

Weighted-average diluted shares	C		1,260			1,259			1,259			1,257			1,200

Earnings (loss) per common share - diluted (GAAP)	A/C		0.04			0.01			0.03			(0.17	)		(0.28	)

Earnings (loss) per common share, excluding regulatory charge and related tax benefit - diluted (non-GAAP)	B/C		0.01			0.01			0.03			(0.17	)		(0.11	)

(1)

In the second quarter of 2010, Regions recorded a $200 million charge to account for a probable, reasonably estimable loss related to a pending settlement of regulatory matters. At that time, Regions assumed that the entire charge would be non-deductible for income tax purposes. The settlement was finalized during the second quarter of 2011. At the time of settlement, Regions had better information related to tax implications. Approximately $125 million of the settlement charge will be deductible for federal income tax purposes. Accordingly, during the second quarter of 2011, Regions adjusted federal income taxes to account for the impact of the deduction. The adjustment reduced Regions’ provision for income taxes. The schedule above reduces net income available to common shareholders (GAAP) for the quarter ended June 30, 2011 by the related federal income tax benefit to arrive at the non-GAAP measure.


Regions Financial Corporation and Subsidiaries		Page 19
Financial Supplement to Second Quarter 2011 Earnings Release

Reconciliation to GAAP Financial Measures

The table below presents computations of the efficiency ratio (non-GAAP), which is a measure of productivity, generally calculated as non-interest expense divided by total revenue. Management uses the efficiency ratio to monitor performance and believes this measure provides meaningful information to investors. Non-interest expense (GAAP) is presented excluding certain adjustments to arrive at adjusted non-interest expense (non-GAAP), which is the numerator for the efficiency ratio. Net interest income on a fully taxable-equivalent basis (GAAP) and non-interest income (GAAP) are added together to arrive at total revenue (GAAP). Adjustments are made to arrive at adjusted total revenue (non-GAAP), which is the denominator for the efficiency ratio. Regions believes that the exclusion of these adjustments provides a meaningful base for period-to-period comparisons, which management believes will assist investors in analyzing the operating results of the Company and predicting future performance. These non-GAAP financial measures are also used by management to assess the performance of Regions’ business. It is possible that the activities related to the adjustments may recur; however, management does not consider the activities related to the adjustments to be indications of ongoing operations. Regions believes that presentation of these non-GAAP financial measures will permit investors to assess the performance of the Company on the same basis as that applied by management.


		As of and for Quarter Ended
($ amounts in millions)		06/30/11			03/31/11			12/31/10			09/30/10			06/30/10
Non-interest expense (GAAP)		$	1,198		$	1,167		$	1,266		$	1,163		$	1,326
Adjustments:
Regulatory charge			—			—			—			—			(200	)
Loss on early extinguishment of debt			—			—			(55	)		—			—
Securities impairment, net			—			—			—			(1	)		—
Branch consolidation and property and equipment charges			(77	)		—			—			—			—

Adjusted non-interest expense (non-GAAP)	D	$	1,121		$	1,167		$	1,211		$	1,162		$	1,126

Net interest income, taxable-equivalent basis (GAAP)		$	872		$	872		$	886		$	876		$	863
Non-interest income (GAAP)			781			843			1,213			750			756
Adjustments:
Securities gains, net			(24	)		(82	)		(333	)		(2	)		—
Leveraged lease termination gains			—			—			(59	)		—			—
Loss (gain) on sale of mortgage loans			—			3			(26	)		—			—

Adjusted non-interest income (non-GAAP)			757			764			795			748			756

Adjusted total revenue (non-GAAP)	E	$	1,629		$	1,636		$	1,681		$	1,624		$	1,619

Efficiency ratio (non-GAAP)	D/E		68.8	%		71.3	%		72.0	%		71.6	%		69.5	%


Regions Financial Corporation and Subsidiaries		Page 20
Financial Supplement to Second Quarter 2011 Earnings Release

Reconciliation to GAAP Financial Measures

The following tables provide calculations of “return on average tangible common stockholders’ equity”, end of period “tangible common stockholders’ equity” ratios and a reconciliation of stockholders’ equity (GAAP) to Tier 1 capital (regulatory) and to “Tier 1 common equity” (non-GAAP). Tangible common stockholders’ equity ratios have become a focus of some investors and management believes they may assist investors in analyzing the capital position of the Company absent the effects of intangible assets and preferred stock. Traditionally, the Federal Reserve and other banking regulatory bodies have assessed a bank’s capital adequacy based on Tier 1 capital, the calculation of which is codified in federal banking regulations. In connection with the Supervisory Capital Assessment Program (“SCAP”), these regulators began supplementing their assessment of the capital adequacy of a bank based on a variation of Tier 1 capital, known as Tier 1 common equity. While not codified, analysts and banking regulators have assessed Regions’ capital adequacy using the tangible common stockholders’ equity and/or the Tier 1 common equity measure. Because tangible common stockholders’ and Tier 1 common equity are not formally defined by GAAP or codified in the federal banking regulations, these measures are considered to be non-GAAP financial measures and other entities may calculate them differently than Regions’ disclosed calculations. Since analysts and banking regulators may assess Regions’ capital adequacy using tangible common stockholders’ equity and Tier 1 common equity, we believe that it is useful to provide investors the ability to assess Regions’ capital adequacy on these same bases.

Tier 1 common equity is often expressed as a percentage of risk-weighted assets. Under the risk-based capital framework, a company’s balance sheet assets and credit equivalent amounts of off-balance sheet items are assigned to one of four broad risk categories. The aggregated dollar amount in each category is then multiplied by the risk-weighted category. The resulting weighted values from each of the four categories are added together and this sum is the risk-weighted assets total that, as adjusted, comprises the denominator of certain risk-based capital ratios. Tier 1 capital is then divided by this denominator (risk-weighted assets) to determine the Tier 1 capital ratio. Adjustments are made to Tier 1 capital to arrive at Tier 1 common equity. Tier 1 common equity is also divided by the risk-weighted assets to determine the Tier 1 common equity ratio. The amounts disclosed as risk-weighted assets are calculated consistent with banking regulatory requirements.


		As of and for Quarter Ended
($ amounts in millions, except per share data)		06/30/11			03/31/11			12/31/10			09/30/10			06/30/10
RETURN ON AVERAGE ASSETS
Average assets (GAAP)	F	$	130,678		$	131,212		$	133,334		$	133,729		$	137,285
Return on average assets (GAAP) ⁽¹⁾	A/F		0.17	%		0.05	%		0.11	%		-0.62	%		-0.98	%

Return on average assets, excluding regulatory charge and related tax benefit (non-GAAP) ⁽¹⁾	B/F		0.03	%		0.05	%		0.11	%		-0.62	%		-0.40	%

RETURN ON AVERAGE TANGIBLE COMMON STOCKHOLDERS’ EQUITY
Average stockholders’ equity (GAAP)		$	16,796		$	16,684		$	17,046		$	17,382		$	17,559
Less: Average intangible assets (GAAP)			5,909			5,935			5,961			5,989			6,019
Average deferred tax liability related to intangibles (GAAP)			(230	)		(237	)		(243	)		(250	)		(257	)
Average preferred equity (GAAP)			3,392			3,383			3,374			3,364			3,576

Average tangible common stockholders’ equity (non-GAAP)	G	$	7,725		$	7,603		$	7,954		$	8,279		$	8,221
Return on average tangible common stockholders’ equity (GAAP) ⁽¹⁾	A/G		2.88	%		0.89	%		1.78	%		-10.00	%		-16.36	%

Return on average tangible common stockholders’ equity, excluding regulatory charge and related tax benefit (non-GAAP) ⁽¹⁾	B/G		0.57	%		0.89	%		1.78	%		-10.00	%		-6.60	%

TANGIBLE COMMON RATIOS
Stockholders’ equity (GAAP)		$	16,888		$	16,619		$	16,734		$	17,163		$	17,463
Less: Preferred equity (GAAP)			3,399			3,389			3,380			3,370			3,360
Intangible assets (GAAP)			5,981			5,919			5,946			5,975			6,004
Deferred tax liability related to intangibles (GAAP)			(227	)		(233	)		(240	)		(246	)		(253	)

Tangible common stockholders’ equity (non-GAAP)	H	$	7,735		$	7,544		$	7,648		$	8,064		$	8,352
Total assets (GAAP)		$	130,908		$	131,756		$	132,351		$	133,498		$	135,340
Less: Intangible assets (GAAP)			5,981			5,919			5,946			5,975			6,004
Deferred tax liability related to intangibles (GAAP)			(227	)		(233	)		(240	)		(246	)		(253	)

Tangible assets (non-GAAP)	I	$	125,154		$	126,070		$	126,645		$	127,769		$	129,589
Shares outstanding—end of quarter	J		1,259			1,256			1,256			1,256			1,256
Tangible common stockholders’ equity to tangible assets (non-GAAP)	H/I		6.18	%		5.98	%		6.04	%		6.31	%		6.45	%
Tangible common book value per share (non-GAAP)	H/J	$	6.13		$	6.00		$	6.09		$	6.42		$	6.65

TIER 1 COMMON RISK-BASED RATIO ⁽²⁾
Stockholders’ equity (GAAP)		$	16,888		$	16,619		$	16,734		$	17,163		$	17,463
Accumulated other comprehensive (income) loss			177			387			260			(208	)		(306	)
Non-qualifying goodwill and intangibles			(5,668	)		(5,686	)		(5,706	)		(5,729	)		(5,752	)
Disallowed deferred tax assets			(499	)		(463	)		(424	)		(427	)		(443	)
Disallowed servicing assets			(35	)		(28	)		(27	)		(20	)		(22	)
Qualifying non-controlling interests			92			92			92			92			92
Qualifying trust preferred securities			846			846			846			846			846

Tier 1 capital (regulatory)		$	11,801		$	11,767		$	11,775		$	11,717		$	11,878
Qualifying non-controlling interests			(92	)		(92	)		(92	)		(92	)		(92	)
Qualifying trust preferred securities			(846	)		(846	)		(846	)		(846	)		(846	)
Preferred stock			(3,399	)		(3,389	)		(3,380	)		(3,370	)		(3,360	)

Tier 1 common equity (non-GAAP)	K	$	7,464		$	7,440		$	7,457		$	7,409		$	7,580
Risk-weighted assets (regulatory)	L		93,855			93,929			94,966			97,088			98,653
Tier 1 common risk-based ratio (non-GAAP)	K/L		7.9	%		7.9	%		7.9	%		7.6	%		7.7	%

(1)	Income statement amounts have been annualized in calculation

(2)	Current quarter amount and the resulting ratio is estimated


Regions Financial Corporation and Subsidiaries		Page 21
Financial Supplement to Second Quarter 2011 Earnings Release

Reconciliation to GAAP Financial Measures

The following tables provide calculations of Tier 1 capital and Tier 1 common, based on Regions’ current understanding of Basel III requirements. Regions currently calculates its risk-based capital ratios under guidelines adopted by the Federal Reserve based on the 1988 Capital Accord (“Basel I”) of the Basel Committee on Banking Supervision (the “Basel Committee”). In December 2010, the Basel Committee released its final framework for Basel III, which will strengthen international capital and liquidity regulation. When implemented by U.S. bank regulatory agencies and fully phased-in, Basel III will change capital requirements and place greater emphasis on common equity. Implementation of Basel III will begin on January 1, 2013, and will be phased in over a multi-year period. The U.S. bank regulatory agencies have not yet finalized regulations governing the implementation of Basel III. Accordingly, the calculations provided below are estimates, based on Regions’ current understanding of the framework, including the Company’s reading of the requirements, and informal feedback received through the regulatory process. Regions’ understanding of the framework is evolving and will likely change as the regulations are finalized. Because the Basel III implementation regulations are not formally defined by GAAP and have not yet been finalized and codified, these measures are considered to be non-GAAP financial measures, and other entities may calculate them differently from Regions’ disclosed calculations. Since analysts and banking regulators may assess Regions’ capital adequacy using the Basel III framework, we believe that it is useful to provide investors the ability to assess Regions’ capital adequacy on the same basis.


($ amounts in millions)	06/30/11
Stockholders’ equity (GAAP)		16,888
Non-qualifying goodwill and intangibles ⁽¹⁾		(5,754	)
Adjustments, including other comprehensive income related to cash flow hedges, disallowed deferred tax assets, threshold deductions and other adjustments		(877	)

		10,257
Qualifying non-controlling interests		4

Basel III Tier 1 Capital (non-GAAP)		10,261
Basel III Tier 1 Capital (non-GAAP)		10,261
Preferred Stock		(3,398	)
Qualifying non-controlling interests		(4	)

Basel III Tier 1 Common (non-GAAP)		6,859

Basel I risk-weighted assets		93,855
Basel III risk-weighted assets ⁽²⁾		95,363
				Minimum

Basel III Tier 1 Capital Ratio		10.8	%	8.5	%
Basel III Tier 1 Common Ratio		7.2	%	7.0	%

(1)	Under Basel III, regulatory capital must be reduced by purchased credit card relationship intangible assets. These assets are partially allowed in Basel I capital.

(2)	Regions continues to develop systems and internal controls to precisely calculate risk-weighted assets as required by Basel III. The amount included above is a reasonable approximation, based on our understanding of the requirements.


Regions Financial Corporation and Subsidiaries		Page 22
Financial Supplement to Second Quarter 2011 Earnings Release

Forward-Looking Statements

This supplement may include forward-looking statements which reflect Regions’ current views with respect to future events and financial performance. The Private Securities Litigation Reform Act of 1995 (“the Act”) provides a safe harbor for forward-looking statements which are identified as such and are accompanied by the identification of important factors that could cause actual results to differ materially from the forward-looking statements. For these statements, we, together with our subsidiaries, claim the protection afforded by the safe harbor in the Act. 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:

•

The Dodd-Frank Wall Street Reform and Consumer Protection Act became law on July 21, 2010 and a number of legislative, regulatory and tax proposals remain pending. Additionally, the U.S. Treasury and federal banking regulators continue to implement, but are also beginning to wind down, a number of programs to address capital and liquidity issues in the banking system. Proposed rules, including those that are part of the Basel III process, could require banking institutions to increase levels of capital. All of the foregoing may have significant effects on Regions and the financial services industry, the exact nature of which cannot be determined at this time.

•

The impact of compensation and other restrictions imposed under the Troubled Asset Relief Program (“TARP”) until Regions repays the outstanding preferred stock and warrant issued under TARP including restrictions on Regions’ ability to attract and retain talented executives and associates.

•

Possible additional loan losses, impairment of goodwill and other intangibles, and adjustment of valuation allowances on deferred tax assets and the impact on earnings and capital.

•

Possible changes in interest rates may increase funding costs and reduce earning asset yields, thus reducing margins. Increases in benchmark interest rates would also increase debt service requirements for customers whose terms include a variable interest rate, which may negatively impact the ability of borrowers to pay as contractually obligated.

•

Possible changes in general economic and business conditions in the United States in general and in the communities Regions serves in particular, including any prolonging or worsening of the current unfavorable economic conditions, including unemployment levels.

•

Possible changes in the creditworthiness of customers and the possible impairment of the collectability of loans.

•

Possible changes in trade, monetary and fiscal policies, laws and regulations, and other activities of governments, agencies, and similar organizations may have an adverse effect on business.

•

The current stresses in the financial and real estate markets, including possible continued deterioration in property values.

•

Regions’ 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 Regions’ business.

•

Regions’ ability to expand into new markets and to maintain profit margins in the face of competitive pressures.

•

Regions’ ability to develop competitive new products and services in a timely manner and the acceptance of such products and services by Regions’ customers and potential customers.

•

Regions’ ability to keep pace with technological changes.

•

Regions’ ability to effectively manage credit risk, interest rate risk, market risk, operational risk, legal risk, liquidity risk, and regulatory and compliance risk.

•

Regions’ ability to ensure adequate capitalization which is impacted by inherent uncertainties in forecasting credit losses.

•

The cost and other effects of material contingencies, including litigation contingencies and any adverse judicial, administrative or arbitral rulings or proceedings.

•

The effects of increased competition from both banks and non-banks.

•

The effects of geopolitical instability and risks such as terrorist attacks.

•

Possible changes in consumer and business spending and saving habits could affect Regions’ ability to increase assets and to attract deposits.

•

The effects of weather and natural disasters such as floods, droughts, wind, tornados and hurricanes and the effects of man-made disasters.

•

Possible downgrades in ratings issued by rating agencies

•

Potential dilution of holders of shares of Regions’ common stock resulting from the U.S. Treasury’s investment in TARP.

•

Possible changes in the speed of loan prepayments by Regions’ customers and loan origination or sales volumes.

•

Possible acceleration of prepayments on mortgage-backed securities due to low interest rates and the related acceleration of premium amortization on those securities.

•

The effects of problems encountered by larger or similar financial institutions that adversely affect Regions or the banking industry generally.

•

Regions’ ability to receive dividends from its subsidiaries.

•

The effects of the failure of any component of Regions’ business infrastructure which is provided by a third party.

•

Changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies.

•

The effects of any damage to Regions’ reputation resulting from developments related to any of the items identified above.

The words “believe,” “expect,” “anticipate,” “project,” 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.

The foregoing list of factors is not exhaustive; for discussion of these and other risks that may cause actual results to differ from expectations, look under the captions “Forward-Looking Statements” and “Risk Factors” in Regions’ Annual Report on Form 10-K for the year ended December 31, 2010 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2011, as on file with the Securities and Exchange Commission.

Regions’ Investor Relations contact is List Underwood at (205) 801-0265; Regions’ Media contact is Tim Deighton at (205) 264-4551

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