REGIONS FINANCIAL CORP - FORM 8-K - EX-99.2 - EXHIBIT

Attached files

file	filename
8-K - 8-K - REGIONS FINANCIAL CORP	rf-20141231x8k.htm
EX-99.3 - EXHIBIT - REGIONS FINANCIAL CORP	exh9934q14v4.htm
EX-99.1 - EXHIBIT - REGIONS FINANCIAL CORP	rf-20141231xexhibit991.htm

Exhibit 99.2

Regions Financial Corporation and Subsidiaries

Financial Supplement

Fourth Quarter 2014

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2014 Earnings Release

Table of Contents




		Page

Consolidated Balance Sheets		1

Consolidated Statements of Income		2

Selected Ratios and Other Information		4

Consolidated Average Daily Balances and Yield / Rate Analysis from Continuing Operations		5

Loans		8

Deposits		9

Pre-Tax Pre-Provision Income (“PPI”) and Adjusted PPI		10

Non-Interest Income, Mortgage Income and Wealth Management Income		11

Non-Interest Expense		12

Credit Quality
Allowance for Credit Losses, Net Charge-Offs and Related Ratios		13
Non-Accrual Loans (excludes loans held for sale), Criticized and Classified Loans - Commercial and Investor Real Estate, and Home Equity Lines of Credit - Future Principal Payment Resets		15
Early and Late Stage Delinquencies		16
Troubled Debt Restructurings		17

Reconciliation to GAAP Financial Measures
Adjusted Efficiency Ratios, Adjusted Fee Income Ratios, and Adjusted Non-Interest Income / Expense		18
Return Ratios, Tangible Common Ratios and Capital		19

Statements of Discontinued Operations		21

Forward-Looking Statements		22

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2014 Earnings Release

Consolidated Balance Sheets (unaudited)



	As of
($ amounts in millions)	12/31/2014			9/30/2014			6/30/2014			3/31/2014			12/31/2013
Assets:
Cash and due from banks	$	1,601		$	1,770		$	2,094		$	2,072		$	1,661
Interest-bearing deposits in other banks	2,303			2,993			2,705			3,114			3,612
Federal funds sold and securities purchased under agreements to resell	100			20			20			10			—
Trading account securities	106			103			100			117			111
Securities held to maturity	2,175			2,222			2,275			2,317			2,353
Securities available for sale	22,580			22,379			21,963			21,615			21,485
Loans held for sale	541			504			514			395			1,055
Loans, net of unearned income	77,307			76,607			76,513			75,680			74,609
Allowance for loan losses	(1,103		)	(1,178		)	(1,229		)	(1,261		)	(1,341		)
Net loans	76,204			75,429			75,284			74,419			73,268
Other interest-earning assets	67			91			65			86			86
Premises and equipment, net	2,193			2,192			2,194			2,194			2,216
Interest receivable	310			310			308			316			313
Goodwill	4,816			4,816			4,816			4,816			4,816
Residential mortgage servicing rights at fair value (MSRs)	257			277			276			288			297
Other identifiable intangible assets	275			287			281			294			295
Other assets	6,151			5,833			5,824			5,880			5,828
Total assets	$	119,679		$	119,226		$	118,719		$	117,933		$	117,396
Liabilities and stockholders’ equity:
Deposits:
Non-interest-bearing	$	31,747		$	31,388		$	31,277		$	31,154		$	30,083
Interest-bearing	62,453			62,742			62,545			62,239			62,370
Total deposits	94,200			94,130			93,822			93,393			92,453
Borrowed funds:
Short-term borrowings:
Federal funds purchased and securities sold under agreements to repurchase	1,753			1,893			1,818			1,981			2,182
Other short-term borrowings	500			—			—			—			—
Total short-term borrowings	2,253			1,893			1,818			1,981			2,182
Long-term borrowings	3,462			3,813			3,824			4,226			4,830
Total borrowed funds	5,715			5,706			5,642			6,207			7,012
Other liabilities	2,775			2,230			2,226			2,201			2,163
Total liabilities	102,690			102,066			101,690			101,801			101,628
Stockholders’ equity:
Preferred stock, non-cumulative perpetual	884			900			920			442			450
Common stock	14			14			14			14			14
Additional paid-in capital	18,767			19,069			19,121			19,179			19,216
Retained earnings (deficit)	(1,061		)	(1,272		)	(1,597		)	(1,897		)	(2,216		)
Treasury stock, at cost	(1,377		)	(1,377		)	(1,377		)	(1,377		)	(1,377		)
Accumulated other comprehensive income (loss), net	(238		)	(174		)	(52		)	(229		)	(319		)
Total stockholders’ equity	16,989			17,160			17,029			16,132			15,768
Total liabilities and stockholders’ equity	$	119,679		$	119,226		$	118,719		$	117,933		$	117,396

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2014 Earnings Release

Consolidated Statements of Income (unaudited)



	Quarter Ended
($ amounts in millions, except per share data)	12/31/2014			9/30/2014		6/30/2014		3/31/2014		12/31/2013
Interest income on:
Loans, including fees	$	736		$	736	$	737	$	732	$	758
Securities—taxable	151			154		156		154		151
Loans held for sale	5			5		4		8		6
Trading account securities	1			—		—		2		1
Other interest-earning assets	1			2		2		2		1
Total interest income	894			897		899		898		917
Interest expense on:
Deposits	27			26		25		27		29
Short-term borrowings	1			—		1		—		—
Long-term borrowings	46			50		51		55		56
Total interest expense	74			76		77		82		85
Net interest income	820			821		822		816		832
Provision for loan losses	8			24		35		2		79
Net interest income after provision for loan losses	812			797		787		814		753
Non-interest income:
Service charges on deposit accounts	167			181		174		173		185
Card and ATM fees	86			85		84		79		80
Mortgage income	27			39		43		40		43
Securities gains, net	12			7		6		2		—
Other	156			166		150		144		218
Total non-interest income	448			478		457		438		526
Non-interest expense:
Salaries and employee benefits	456			456		443		455		464
Net occupancy expense	93			92		90		93		91
Furniture and equipment expense	74			73		70		70		71
Other	346			205		217		199		320
Total non-interest expense	969			826		820		817		946
Income from continuing operations before income taxes	291			449		424		435		333
Income tax expense	77			127		125		128		92
Income from continuing operations	214			322		299		307		241
Discontinued operations:
Income (loss) from discontinued operations before income taxes	(5		)	5		2		19		(25		)
Income tax expense (benefit)	(2		)	2		1		7		(11		)
Income (loss) from discontinued operations, net of tax	(3		)	3		1		12		(14		)
Net income	$	211		$	325	$	300	$	319	$	227
Net income from continuing operations available to common shareholders	$	198		$	302	$	291	$	299	$	233
Net income available to common shareholders	$	195		$	305	$	292	$	311	$	219
Weighted-average shares outstanding—during quarter:
Basic	1,365			1,378		1,378		1,378		1,378
Diluted	1,377			1,389		1,390		1,390		1,395
Actual shares outstanding—end of quarter	1,354			1,379		1,378		1,378		1,378
Earnings per common share from continuing operations:
Basic	$	0.14		$	0.22	$	0.21	$	0.22	$	0.17
Diluted	$	0.14		$	0.22	$	0.21	$	0.21	$	0.17
Earnings per common share:
Basic	$	0.14		$	0.22	$	0.21	$	0.23	$	0.16
Diluted	$	0.14		$	0.22	$	0.21	$	0.22	$	0.16
Cash dividends declared per common share	$	0.05		$	0.05	$	0.05	$	0.03	$	0.03
Taxable-equivalent net interest income from continuing operations	$	837		$	837	$	837	$	831	$	846

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2014 Earnings Release

Consolidated Statements of Income (Continued) (unaudited)



	Year Ended December 31
($ amounts in millions, except per share data)	2014		2013
Interest income on:
Loans, including fees	$	2,941	$	3,005
Securities—taxable	615		603
Loans held for sale	22		29
Trading account securities	3		3
Other interest-earning assets	7		6
Total interest income	3,588		3,646
Interest expense on:
Deposits	105		135
Short-term borrowings	2		2
Long-term borrowings	202		247
Total interest expense	309		384
Net interest income	3,279		3,262
Provision for loan losses	69		138
Net interest income after provision for loan losses	3,210		3,124
Non-interest income:
Service charges on deposit accounts	695		734
Card and ATM fees	334		319
Mortgage income	149		236
Securities gains, net	27		26
Other	616		704
Total non-interest income	1,821		2,019
Non-interest expense:
Salaries and employee benefits	1,810		1,818
Net occupancy expense	368		365
Furniture and equipment expense	287		280
Other	967		1,093
Total non-interest expense	3,432		3,556
Income from continuing operations before income taxes	1,599		1,587
Income tax expense	457		452
Income from continuing operations	1,142		1,135
Discontinued operations:
Income (loss) from discontinued operations before income taxes	21		(24		)
Income tax expense (benefit)	8		(11		)
Income (loss) from discontinued operations, net of tax	13		(13		)
Net income	$	1,155	$	1,122
Net income from continuing operations available to common shareholders	$	1,090	$	1,103
Net income available to common shareholders	$	1,103	$	1,090
Weighted-average shares outstanding—during year:
Basic	1,375		1,395
Diluted	1,387		1,410
Actual shares outstanding—end of period	1,354		1,378
Earnings per common share from continuing operations:
Basic	$	0.79	$	0.79
Diluted	$	0.79	$	0.78
Earnings per common share:
Basic	$	0.80	$	0.78
Diluted	$	0.80	$	0.77
Cash dividends declared per common share	$	0.18	$	0.10
Taxable-equivalent net interest income from continuing operations	$	3,342	$	3,316

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2014 Earnings Release

Selected Ratios and Other Information



	As of and for Quarter Ended
	12/31/2014			9/30/2014			6/30/2014			3/31/2014			12/31/2013
Return on average assets from continuing operations*	0.66		%	1.01		%	0.99		%	1.03		%	0.79		%
Return on average tangible common stockholders’ equity (non-GAAP)* ⁽¹⁾	6.78		%	10.78		%	10.68		%	11.84		%	8.58		%
Adjusted efficiency ratio from continuing operations (non-GAAP) ⁽¹⁾	67.5		%	63.6		%	64.2		%	66.9		%	66.3		%
Common book value per share	$	11.89		$	11.79		$	11.69		$	11.38		$	11.12
Tangible common book value per share (non-GAAP) ⁽¹⁾	$	8.26		$	8.23		$	8.12		$	7.81		$	7.54
Tangible common stockholders’ equity to tangible assets (non-GAAP) ⁽¹⁾	9.75		%	9.92		%	9.84		%	9.53		%	9.24		%
Tier 1 common equity risk-based ratio (non-GAAP) ⁽¹⁾⁽²⁾	11.6		%	11.8		%	11.6		%	11.4		%	11.2		%
Basel III common equity Tier 1 ratio (non-GAAP) ⁽¹⁾⁽²⁾	11.1		%	11.2		%	11.0		%	10.8		%	10.6		%
Tier 1 capital ratio ⁽²⁾	12.5		%	12.7		%	12.5		%	11.8		%	11.7		%
Total risk-based capital ratio ⁽²⁾	15.2		%	15.5		%	15.3		%	14.9		%	14.7		%
Leverage ratio ⁽²⁾	10.9		%	11.0		%	10.8		%	10.2		%	10.0		%
Allowance for loan losses as a percentage of loans, net of unearned income	1.43		%	1.54		%	1.61		%	1.67		%	1.80		%
Allowance for loan losses to non-performing loans, excluding loans held for sale	1.33x			1.41x			1.37x			1.18x			1.24x
Net interest margin (FTE) from continuing operations*	3.17		%	3.18		%	3.24		%	3.26		%	3.26		%
Loans, net of unearned income, to total deposits	82.1		%	81.4		%	81.6		%	81.0		%	80.7		%
Net charge-offs as a percentage of average loans*	0.42		%	0.39		%	0.35		%	0.44		%	1.46		%
Adjusted net charge-offs as a percentage of average loans (non-GAAP)* ⁽¹⁾	0.42		%	0.39		%	0.35		%	0.44		%	0.67		%
Non-accrual loans, excluding loans held for sale, as a percentage of loans	1.07		%	1.09		%	1.17		%	1.41		%	1.45		%
Non-performing assets (excluding loans 90 days past due) as a percentage of loans, foreclosed properties and non-performing loans held for sale	1.28		%	1.30		%	1.37		%	1.63		%	1.74		%
Non-performing assets (including loans 90 days past due) as a percentage of loans, foreclosed properties and non-performing loans held for sale ⁽³⁾	1.57		%	1.61		%	1.69		%	1.97		%	2.08		%
Associate headcount ⁽⁴⁾	23,723			23,599			23,416			23,687			24,255
ATMs	1,997			1,995			1,990			2,002			2,029

Branch Statistics
Full service	1,584			1,589			1,592			1,592			1,624
Drive-thru/transaction service only	82			82			81			81			81
Total branch outlets	1,666			1,671			1,673			1,673			1,705

*Annualized


(1)	See reconciliation of GAAP to non-GAAP Financial Measures on pages 14 and 18-20.


(2)	Current quarter Tier 1 common, Basel III common equity Tier 1, Tier 1 capital, Total risk-based capital and Leverage ratios are estimated.


(3)	Excludes guaranteed residential first mortgages that are 90+ days past due and still accruing. Refer to the footnotes on page 16 for amounts related to these loans.


(4)	Reflects the number of active full-time and part-time associates as of the last pay period of the month.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2014 Earnings Release

Consolidated Average Daily Balances and Yield/Rate Analysis from Continuing Operations



	Quarter Ended
	12/31/2014							9/30/2014
($ amounts in millions; yields on taxable-equivalent basis)	Average Balance			Income/ Expense		Yield/ Rate		Average Balance			Income/ Expense		Yield/ Rate
Assets
Interest-earning assets:
Federal funds sold and securities purchased under agreements to resell	$	20		$	—	0.86	%	$	4		$	—	0.86	%
Trading account securities	103			1		3.70		101			—		0.94
Securities:
Taxable	24,590			151		2.44		24,264			154		2.51
Tax-exempt	2			—		—		3			—		—
Loans held for sale	480			5		3.74		512			5		3.95
Loans, net of unearned income:
Commercial and industrial	32,484			289		3.54		31,255			285		3.61
Commercial real estate mortgage—owner-occupied	8,466			104		4.89		8,886			110		4.89
Commercial real estate construction—owner-occupied	367			4		4.23		351			4		4.12
Commercial investor real estate mortgage	4,837			37		3.05		5,071			39		3.08
Commercial investor real estate construction	2,032			17		3.17		1,876			15		3.27
Residential first mortgage	12,273			121		3.91		12,212			122		3.97
Home equity	10,939			100		3.60		10,999			99		3.59
Indirect	3,627			31		3.41		3,504			30		3.39
Consumer credit card	975			28		11.23		952			27		11.33
Other consumer	1,182			22		7.40		1,173			21		7.12
Total loans, net of unearned income	77,182			753		3.87		76,279			752		3.91
Other interest-earning assets	2,387			1		0.25		3,266			2		0.25
Total interest-earning assets	104,764			911		3.45		104,429			913		3.47
Allowance for loan losses	(1,162		)					(1,214		)
Cash and due from banks	1,805							1,781
Other non-earning assets	13,835							13,792
	$	119,242						$	118,788
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Savings ⁽¹⁾	$	6,635		3		0.12		$	6,639		1		0.12
Interest-bearing checking	21,003			5		0.10		20,944			5		0.10
Money market ⁽¹⁾	25,752			7		0.11		26,348			7		0.11
Time deposits	8,683			12		0.58		8,856			13		0.56
Total interest-bearing deposits ⁽²⁾	62,073			27		0.17		62,787			26		0.17
Federal funds purchased and securities sold under agreements to repurchase	1,872			1		0.09		1,796			—		0.06
Other short-term borrowings	163			—		0.20		—			—		—
Long-term borrowings	3,618			46		5.07		3,820			50		5.12
Total interest-bearing liabilities	67,726			74		0.43		68,403			76		0.44
Non-interest-bearing deposits ⁽²⁾	31,951			—		—		31,184			—		—
Total funding sources	99,677			74		0.29		99,587			76		0.30
Net interest spread						3.02							3.03
Other liabilities	2,385							2,168
Stockholders’ equity	17,180							17,033
	$	119,242						$	118,788
Net interest income/margin FTE basis				$	837	3.17	%				$	837	3.18	%

_______


(1)	In the fourth quarter of 2014, approximately $214 million of average IRA account balances were reclassified from money market to savings. Prior period amounts have been revised to conform to the current period classification.


(2)	Total deposit costs from continuing operations may be calculated by dividing total interest expense on deposits by the sum of interest-bearing deposits and non-interest bearing deposits. The rates for total deposit costs from continuing operations equal 0.11% and 0.11% for the quarters ended December 31, 2014 and September 30, 2014 , respectively.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2014 Earnings Release

Consolidated Average Daily Balances and Yield/Rate Analysis from Continuing Operations (Continued)



	Quarter Ended
	6/30/2014							3/31/2014							12/31/2013
($ amounts in millions; yields on taxable-equivalent basis)	Average Balance			Income/ Expense		Yield/ Rate		Average Balance			Income/ Expense		Yield/ Rate		Average Balance			Income/ Expense		Yield/ Rate
Assets
Interest-earning assets:
Federal funds sold and securities purchased under agreements to resell	$	16		$	—	0.86	%	$	9		$	—	0.86	%	$	—		$	—	—	%
Trading account securities	115			—		0.76		111			2		6.31		110			1		3.86
Securities:
Taxable	23,856			156		2.62		23,872			154		2.62		23,771			151		2.52
Tax-exempt	3			—		—		4			—		—		5			—		—
Loans held for sale	413			4		3.96		854			8		3.89		625			6		3.94
Loans, net of unearned income:
Commercial and industrial	31,058			284		3.68		29,993			278		3.75		29,950			287		3.81
Commercial real estate mortgage—owner-occupied	9,170			111		4.85		9,391			111		4.81		9,613			116		4.81
Commercial real estate construction—owner-occupied	357			4		4.09		341			3		4.00		302			3		3.86
Commercial investor real estate mortgage	5,296			42		3.20		5,287			45		3.42		5,405			47		3.46
Commercial investor real estate construction	1,822			15		3.18		1,524			12		3.28		1,426			13		3.44
Residential first mortgage	12,137			121		3.99		12,127			122		4.07		12,752			126		3.92
Home equity	11,106			100		3.62		11,216			101		3.64		11,311			102		3.59
Indirect	3,376			29		3.46		3,189			29		3.66		3,014			29		3.77
Consumer credit card	926			25		11.10		926			26		11.23		910			28		11.83
Other consumer	1,142			21		7.31		1,145			20		7.26		1,160			21		7.21
Total loans, net of unearned income	76,390			752		3.95		75,139			747		4.03		75,843			772		4.04
Other interest-earning assets	2,844			2		0.25		3,469			2		0.25		2,579			1		0.24
Total interest-earning assets	103,637			914		3.54		103,458			913		3.58		102,933			931		3.59
Allowance for loan losses	(1,246		)					(1,321		)					(1,512		)
Cash and due from banks	1,767							1,817							1,807
Other non-earning assets	13,838							13,874							13,735
	$	117,996						$	117,828						$	116,963
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Savings ⁽¹⁾	$	6,673		2		0.11		$	6,434		2		0.12		$	6,245		2		0.10
Interest-bearing checking	20,476			4		0.09		20,791			5		0.09		19,815			4		0.09
Money market ⁽¹⁾	25,907			7		0.10		26,013			8		0.13		25,885			8		0.13
Time deposits	9,067			12		0.52		9,419			12		0.53		9,888			15		0.59
Total interest-bearing deposits ⁽²⁾	62,123			25		0.16		62,657			27		0.17		61,833			29		0.19
Federal funds purchased and securities sold under agreements to repurchase	2,017			1		0.09		2,097			—		0.08		2,021			—		0.07
Other short-term borrowings	54			—		0.23		—			—		—		159			—		0.20
Long-term borrowings	4,161			51		4.98		4,643			55		4.78		4,840			56		4.56
Total interest-bearing liabilities	68,355			77		0.45		69,397			82		0.48		68,853			85		0.49
Non-interest-bearing deposits ⁽²⁾	30,866			—		—		30,268			—		—		30,218			—		—
Total funding sources	99,221			77		0.31		99,665			82		0.33		99,071			85		0.34
Net interest spread						3.09							3.10							3.10
Other liabilities	2,107							2,162							2,386
Stockholders’ equity	16,668							16,001							15,506
	$	117,996						$	117,828						$	116,963
Net interest income/margin FTE basis				$	837	3.24	%				$	831	3.26	%				$	846	3.26	%

_______


(1)	In the fourth quarter of 2014, approximately $214 million of average IRA account balances were reclassified from money market to savings. Prior period amounts have been revised to conform to the current period classification.

(2) Total deposit costs from continuing operations may be calculated by dividing total interest expense on deposits by the sum of interest-bearing deposits and non-interest bearing deposits. The rates for total deposit costs from continuing operations equal 0.11%, 0.12%, and 0.12% for the quarters ended June 30, 2014, March 31, 2014 and December 31, 2013, respectively.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2014 Earnings Release

Consolidated Average Daily Balances and Yield/Rate Analysis from Continuing Operations (Continued)



	Year Ended December 31
	2014							2013
($ amounts in millions; yields on taxable-equivalent basis)	Average Balance			Income/ Expense		Yield/ Rate		Average Balance			Income/ Expense		Yield/ Rate
Assets
Interest-earning assets:
Federal funds sold and securities purchased under agreements to resell	$	12		$	—	0.86	%	$	—		$	—	—	%
Trading account securities	107			3		2.92		114			3		2.24
Securities:
Taxable	24,148			615		2.55		25,349			603		2.38
Tax-exempt	3			—		—		6			—		—
Loans held for sale	564			22		3.89		864			29		3.41
Loans, net of unearned income:
Commercial and industrial	31,205			1,136		3.64		28,667			1,103		3.85
Commercial real estate mortgage—owner-occupied	8,975			436		4.86		9,767			462		4.73
Commercial real estate construction—owner-occupied	354			15		4.11		328			15		4.45
Commercial investor real estate mortgage	5,121			163		3.19		5,959			211		3.54
Commercial investor real estate construction	1,815			59		3.22		1,180			42		3.55
Residential first mortgage	12,188			486		3.99		12,827			513		4.00
Home equity	11,064			400		3.61		11,450			413		3.61
Indirect	3,426			119		3.47		2,715			109		4.00
Consumer credit card	945			106		11.23		878			107		12.14
Other consumer	1,160			84		7.27		1,153			84		7.31
Total loans, net of unearned income	76,253			3,004		3.94		74,924			3,059		4.08
Other interest-earning assets	2,989			7		0.25		2,428			6		0.25
Total interest-earning assets	104,076			3,651		3.51		103,685			3,700		3.57
Allowance for loan losses	(1,235		)					(1,680		)
Cash and due from banks	1,793							1,775
Other non-earning assets	13,834							14,025
	$	118,468						$	117,805
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Savings ⁽¹⁾	$	6,596		8		0.12		$	6,226		6		0.10
Interest-bearing checking	20,804			19		0.09		19,873			19		0.10
Money market ⁽¹⁾	26,006			29		0.11		25,768			35		0.13
Time deposits	9,003			49		0.55		11,148			75		0.67
Total interest-bearing deposits ⁽²⁾	62,409			105		0.17		63,015			135		0.21
Federal funds purchased and securities sold under agreements to repurchase	1,944			2		0.08		2,020			2		0.08
Other short-term borrowings	55			—		0.21		219			—		0.19
Long-term borrowings	4,057			202		4.98		5,206			247		4.75
Total interest-bearing liabilities	68,465			309		0.45		70,460			384		0.54
Non-interest-bearing deposits ⁽²⁾	31,072			—		—		29,631			—		—
Total funding sources	99,537			309		0.31		100,091			384		0.38
Net interest spread						3.06							3.03
Other liabilities	2,206							2,212
Stockholders’ equity	16,725							15,502
	$	118,468						$	117,805
Net interest income/margin FTE basis				$	3,342	3.21	%				$	3,316	3.20	%

_______


(1)	In 2014, approximately $207 million of average IRA account balances were reclassified from money market to savings. Prior period amounts have been revised to conform to the current period classification.


(2)	Total deposit costs from continuing operations may be calculated by dividing total interest expense on deposits by the sum of interest-bearing deposits and non-interest bearing deposits. The rates for total deposit costs from continuing operations equal 0.11% and 0.15% for the years ended December 31, 2014 and 2013, respectively.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2014 Earnings Release

Loans



	As of
												12/31/2014					12/31/2014
($ amounts in millions)	12/31/2014		9/30/2014		6/30/2014		3/31/2014		12/31/2013			vs. 9/30/2014					vs. 12/31/2013
Commercial and industrial	$	32,732	$	31,857	$	31,354	$	30,466	$	29,413		$	875		2.7	%	$	3,319		11.3	%
Commercial real estate mortgage—owner-occupied	8,263		8,666		9,024		9,257		9,495			(403		)	(4.7	)%	(1,232		)	(13.0	)%
Commercial real estate construction—owner-occupied	407		350		366		375		310			57			16.3	%	97			31.3	%
Total commercial	41,402		40,873		40,744		40,098		39,218			529			1.3	%	2,184			5.6	%
Commercial investor real estate mortgage	4,680		4,940		5,193		5,338		5,318			(260		)	(5.3	)%	(638		)	(12.0	)%
Commercial investor real estate construction	2,133		1,878		1,780		1,654		1,432			255			13.6	%	701			49.0	%
Total investor real estate	6,813		6,818		6,973		6,992		6,750			(5		)	(0.1	)%	63			0.9	%
Residential first mortgage	12,315		12,264		12,187		12,136		12,163			51			0.4	%	152			1.2	%
Home equity—first lien	6,195		6,114		6,068		6,008		5,998			81			1.3	%	197			3.3	%
Home equity—second lien	4,737		4,854		4,996		5,140		5,296			(117		)	(2.4	)%	(559		)	(10.6	)%
Indirect	3,642		3,543		3,422		3,253		3,075			99			2.8	%	567			18.4	%
Consumer credit card	1,009		964		945		917		948			45			4.7	%	61			6.4	%
Other consumer	1,194		1,177		1,178		1,136		1,161			17			1.4	%	33			2.8	%
Total consumer	29,092		28,916		28,796		28,590		28,641			176			0.6	%	451			1.6	%
Total Loans	$	77,307	$	76,607	$	76,513	$	75,680	$	74,609		$	700		0.9	%	$	2,698		3.6	%

	Average Balances
($ amounts in millions)	4Q14		3Q14		2Q14		1Q14		4Q13			4Q14 vs. 3Q14					4Q14 vs. 4Q13
Commercial and industrial	$	32,484	$	31,255	$	31,058	$	29,993	$	29,950		$	1,229		3.9	%	$	2,534		8.5	%
Commercial real estate mortgage—owner-occupied	8,466		8,886		9,170		9,391		9,613			(420		)	(4.7	)%	(1,147		)	(11.9	)%
Commercial real estate construction—owner-occupied	367		351		357		341		302			16			4.6	%	65			21.5	%
Total commercial	41,317		40,492		40,585		39,725		39,865			825			2.0	%	1,452			3.6	%
Commercial investor real estate mortgage	4,837		5,071		5,296		5,287		5,405			(234		)	(4.6	)%	(568		)	(10.5	)%
Commercial investor real estate construction	2,032		1,876		1,822		1,524		1,426			156			8.3	%	606			42.5	%
Total investor real estate	6,869		6,947		7,118		6,811		6,831			(78		)	(1.1	)%	38			0.6	%
Residential first mortgage ⁽¹⁾	12,273		12,212		12,137		12,127		12,752			61			0.5	%	(479		)	(3.8	)%
Home equity—first lien	6,161		6,096		6,052		6,014		5,963			65			1.1	%	198			3.3	%
Home equity—second lien	4,778		4,903		5,054		5,202		5,348			(125		)	(2.5	)%	(570		)	(10.7	)%
Indirect	3,627		3,504		3,376		3,189		3,014			123			3.5	%	613			20.3	%
Consumer credit card	975		952		926		926		910			23			2.4	%	65			7.1	%
Other consumer	1,182		1,173		1,142		1,145		1,160			9			0.8	%	22			1.9	%
Total consumer	28,996		28,840		28,687		28,603		29,147			156			0.5	%	(151		)	(0.5	)%
Total Loans	$	77,182	$	76,279	$	76,390	$	75,139	$	75,843		$	903		1.2	%	$	1,339		1.8	%

End of Period Loan Portfolio Balances by Percentage									As of
End of Period Loan Portfolio Balances by Percentage									12/31/2014			9/30/2014			6/30/2014		3/31/2014			12/31/2013
Commercial and industrial									42.4		%	41.6		%	41.0	%	40.3		%	39.4	%
Commercial real estate mortgage—owner-occupied									10.7		%	11.3		%	11.8	%	12.2		%	12.8	%
Commercial real estate construction—owner-occupied									0.5		%	0.5		%	0.5	%	0.5		%	0.4	%
Total commercial									53.6		%	53.4		%	53.3	%	53.0		%	52.6	%
Commercial investor real estate mortgage									6.0		%	6.4		%	6.8	%	7.0		%	7.1	%
Commercial investor real estate construction									2.8		%	2.5		%	2.3	%	2.2		%	1.9	%
Total investor real estate									8.8		%	8.9		%	9.1	%	9.2		%	9.0	%
Residential first mortgage									15.9		%	16.0		%	15.9	%	16.0		%	16.3	%
Home equity—first lien									8.0		%	8.0		%	7.9	%	8.0		%	8.0	%
Home equity—second lien									6.1		%	6.3		%	6.6	%	6.8		%	7.1	%
Indirect									4.7		%	4.6		%	4.5	%	4.3		%	4.1	%
Consumer credit card									1.3		%	1.3		%	1.2	%	1.2		%	1.3	%
Other consumer									1.6		%	1.5		%	1.5	%	1.5		%	1.6	%
Total consumer									37.6		%	37.7		%	37.6	%	37.8		%	38.4	%
Total Loans									100.0		%	100.0		%	100.0	%	100.0		%	100.0	%

________

NM - Not Meaningful


(1)	Regions transferred approximately $686 million of primarily performing restructured residential first mortgage loans to held for sale at the end of the fourth quarter of 2013. This transaction impacts the fourth quarter 2014 to fourth quarter 2013 and first quarter 2014 to fourth quarter 2013 average balance variances.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2014 Earnings Release

Deposits



	As of
													12/31/2014					12/31/2014
($ amounts in millions)	12/31/2014		9/30/2014		6/30/2014		3/31/2014			12/31/2013			vs. 9/30/2014					vs. 12/31/2013
Customer Deposits
Interest-free deposits	$	31,747	$	31,388	$	31,277	$	31,154		$	30,083		$	359		1.1	%	$	1,664		5.5	%
Interest-bearing checking	21,544		21,152		21,159		20,605			20,789			392			1.9	%	755			3.6	%
Savings⁽¹⁾	6,653		6,597		6,646		6,664			6,250			56			0.8	%	403			6.4	%
Money market—domestic⁽¹⁾	25,396		25,983		25,566		25,529			25,435			(587		)	(2.3	)%	(39		)	(0.2	)%
Money market—foreign	265		243		223		222			220			22			9.1	%	45			20.5	%
Low-cost deposits	85,605		85,363		84,871		84,174			82,777			242			0.3	%	2,828			3.4	%
Time deposits	8,595		8,767		8,951		9,219			9,608			(172		)	(2.0	)%	(1,013		)	(10.5	)%
Total customer deposits	94,200		94,130		93,822		93,393			92,385			70			0.1	%	1,815			2.0	%
Corporate Treasury Deposits
Time deposits	—		—		—		—			68			—			NM		(68		)	(100.0	)%
Total Deposits	$	94,200	$	94,130	$	93,822	$	93,393		$	92,453		$	70		0.1	%	$	1,747		1.9	%

	Average Balances
($ amounts in millions)	4Q14		3Q14		2Q14		1Q14			4Q13			4Q14 vs. 3Q14					4Q14 vs. 4Q13
Customer Deposits
Interest-free deposits	$	31,951	$	31,184	$	30,866	$	30,268		$	30,218		$	767		2.5	%	$	1,733		5.7	%
Interest-bearing checking	21,003		20,944		20,476		20,791			19,815			59			0.3	%	1,188			6.0	%
Savings⁽¹⁾	6,635		6,639		6,673		6,434			6,245			(4		)	(0.1	)%	390			6.2	%
Money market—domestic⁽¹⁾	25,506		26,095		25,684		25,788			25,638			(589		)	(2.3	)%	(132		)	(0.5	)%
Money market—foreign	246		253		223		225			247			(7		)	(2.8	)%	(1		)	(0.4	)%
Low-cost deposits	85,341		85,115		83,922		83,506			82,163			226			0.3	%	3,178			3.9	%
Time deposits	8,683		8,856		9,067		9,417			9,843			(173		)	(2.0	)%	(1,160		)	(11.8	)%
Total customer deposits	94,024		93,971		92,989		92,923			92,006			53			0.1	%	2,018			2.2	%
Corporate Treasury Deposits
Time deposits	—		—		—		2			45			—			NM		(45		)	(100.0	)%
Total Deposits	$	94,024	$	93,971	$	92,989	$	92,925		$	92,051		$	53		0.1	%	$	1,973		2.1	%


									As of
End of Period Deposits by Percentage										12/31/2014			9/30/2014			6/30/2014		3/31/2014			12/31/2013
Customer Deposits
Interest-free deposits										33.7		%	33.3		%	33.3	%	33.4		%	32.5	%
Interest-bearing checking										22.9		%	22.5		%	22.6	%	22.1		%	22.5	%
Savings⁽¹⁾										7.0		%	7.0		%	7.1	%	7.1		%	6.8	%
Money market—domestic⁽¹⁾										27.0		%	27.6		%	27.3	%	27.3		%	27.5	%
Money market—foreign										0.3		%	0.3		%	0.2	%	0.2		%	0.2	%
Low-cost deposits										90.9		%	90.7		%	90.5	%	90.1		%	89.5	%
Time deposits										9.1		%	9.3		%	9.5	%	9.9		%	10.4	%
Total customer deposits										100.0		%	100.0		%	100.0	%	100.0		%	99.9	%
Corporate Treasury Deposits
Time deposits										—		%	—		%	—	%	—		%	0.1	%
Total Deposits										100.0		%	100.0		%	100.0	%	100.0		%	100.0	%

________

NM - Not Meaningful


(1)	In the fourth quarter of 2014, approximately $219 million and $214 million of period end and average IRA account balances, respectively, were reclassified from money market to savings. Prior period amounts have been revised to conform to the current period classification.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2014 Earnings Release

Pre-Tax Pre-Provision Income ("PPI") and Adjusted PPI (non-GAAP)

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



	Quarter Ended
($ amounts in millions)	12/31/2014			9/30/2014			6/30/2014			3/31/2014			12/31/2013			4Q14 vs. 3Q14					4Q14 vs. 4Q13
Net income from continuing operations available to common shareholders (GAAP)	$	198		$	302		$	291		$	299		$	233		$	(104	)	(34.4	)%	$	(35	)	(15.0	)%
Preferred dividends (GAAP)⁽¹⁾	16			20			8			8			8			(4		)	(20.0	)%	8			100.0	%
Income tax expense (GAAP)	77			127			125			128			92			(50		)	(39.4	)%	(15		)	(16.3	)%
Income from continuing operations before income taxes (GAAP)	291			449			424			435			333			(158		)	(35.2	)%	(42		)	(12.6	)%
Provision for loan losses (GAAP)	8			24			35			2			79			(16		)	(66.7	)%	(71		)	(89.9	)%
Pre-tax pre-provision income from continuing operations (non-GAAP)	299			473			459			437			412			(174		)	(36.8	)%	(113		)	(27.4	)%
Other adjustments:
Securities gains, net	(12		)	(7		)	(6		)	(2		)	—			(5		)	71.4	%	(12		)	NM
Leveraged lease termination gains, net⁽²⁾	—			(9		)	—			(1		)	(39		)	9			(100.0	)%	39			(100.0	)%
Professional, legal and regulatory expenses⁽³⁾⁽⁴⁾	100			—			(7		)	—			58			100			NM		42			72.4	%
Branch consolidation and property and equipment charges	10			—			—			6			5			10			NM		5			100.0	%
Gain on sale of TDRs held for sale, net	—			—			—			(35		)	—			—			NM		—			NM
Total other adjustments	98			(16		)	(13		)	(32		)	24			114			NM		74			308.3	%
Adjusted pre-tax pre-provision income from continuing operations (non-GAAP)	$	397		$	457		$	446		$	405		$	436		$	(60	)	(13.1	)%	$	(39	)	(8.9	)%

NM - Not Meaningful


(1)	Due to the timing of the second quarter 2014 preferred stock issuance, preferred dividends in the third quarter of 2014 reflect a longer coupon period. Total third quarter 2014 preferred dividends were approximately $4 million higher than the amount expected for future quarterly coupon periods based on the current amount of preferred stock outstanding.


(2)	The majority of net leveraged lease termination gains reported during each period are offset by related income taxes.


(3)	Regions recorded $100 million of contingent legal and regulatory accruals during the fourth quarter of 2014 related to previously disclosed matters.


(4)	Regions recorded a non-tax deductible regulatory charge of $58 million during the fourth quarter of 2013 related to previously disclosed inquiries from government authorities. These matters were settled in the second quarter of 2014 for $7 million less than originally estimated.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2014 Earnings Release

Non-Interest Income



	Quarter Ended
($ amounts in millions)	12/31/2014			9/30/2014			6/30/2014			3/31/2014			12/31/2013		4Q14 vs. 3Q14					4Q14 vs. 4Q13
Service charges on deposit accounts	$	167		$	181		$	174		$	173		$	185	$	(14	)	(7.7	)%	$	(18	)	(9.7	)%
Card and ATM fees	86			85			84			79			80		1			1.2	%	6			7.5	%
Investment management and trust fee income	50			47			47			49			48		3			6.4	%	2			4.2	%
Insurance commissions and fees	31			31			32			30			28		—			NM		3			10.7	%
Mortgage income	27			39			43			40			43		(12		)	(30.8	)%	(16		)	(37.2	)%
Bank-owned life insurance	23			20			23			19			20		3			15.0	%	3			15.0	%
Capital markets fee income and other ⁽¹⁾	20			24			16			13			29		(4		)	(16.7	)%	(9		)	(31.0	)%
Commercial credit fee income	15			16			15			15			16		(1		)	(6.3	)%	(1		)	(6.3	)%
Securities gains, net	12			7			6			2			—		5			71.4	%	12			NM
Investment services fee income	10			12			11			10			8		(2		)	(16.7	)%	2			25.0	%
Leveraged lease termination gains, net	—			9			—			1			39		(9		)	(100.0	)%	(39		)	(100.0	)%
Net revenue (loss) from affordable housing	(12		)	(19		)	(17		)	(18		)	1		7			(36.8	)%	(13		)	NM
Other	19			26			23			25			29		(7		)	(26.9	)%	(10		)	(34.5	)%
Total non-interest income from continuing operations	$	448		$	478		$	457		$	438		$	526	$	(30	)	(6.3	)%	$	(78	)	(14.8	)%

Mortgage Income



	Quarter Ended
($ amounts in millions)	12/31/2014			9/30/2014			6/30/2014			3/31/2014			12/31/2013			4Q14 vs. 3Q14					4Q14 vs. 4Q13
Production and sales	$	20		$	25		$	26		$	24		$	25		$	(5	)	(20.0	)%	$	(5	)	(20.0	)%
Loan servicing	21			21			22			21			22			—			NM		(1		)	(4.5	)%
MSR and related hedge impact:
MSRs fair value increase (decrease) including payment decay	(36		)	(8		)	(19		)	(17		)	5			(28		)	350.0	%	(41		)	NM
MSRs hedge gain (loss)	22			1			14			12			(9		)	21			NM		31			(344.4	)%
MSR and related hedge impact	(14		)	(7		)	(5		)	(5		)	(4		)	(7		)	100.0	%	(10		)	250.0	%
Total mortgage income	$	27		$	39		$	43		$	40		$	43		$	(12	)	(30.8	)%	$	(16	)	(37.2	)%

Mortgage production - purchased	$	817		$	961		$	968		$	662		$	802		$	(144	)	(15.0	)%	$	15		1.9	%
Mortgage production - refinanced	351			324			302			304			436			27			8.3	%	(85		)	(19.5	)%
Total mortgage production⁽²⁾	$	1,168		$	1,285		$	1,270		$	966		$	1,238		$	(117	)	(9.1	)%	$	(70	)	(5.7	)%

Wealth Management Income



	Quarter Ended
($ amounts in millions)	12/31/2014		9/30/2014		6/30/2014		3/31/2014		12/31/2013		4Q14 vs. 3Q14					4Q14 vs. 4Q13
Investment management and trust fee income	$	50	$	47	$	47	$	49	$	48	$	3		6.4	%	$	2	4.2	%
Insurance commissions and fees	31		31		32		30		28		—			NM		3		10.7	%
Investment services fee income	10		12		11		10		8		(2		)	(16.7	)%	2		25.0	%
Total wealth management income ⁽³⁾	$	91	$	90	$	90	$	89	$	84	$	1		1.1	%	$	7	8.3	%

_________

NM - Not Meaningful


(1)	Capital markets fee income and other primarily relates to securities underwriting and placement, loan syndications, foreign exchange and customer derivatives.


(2)	Represents total mortgage production during the period, including amounts sold into the secondary market as well as amounts retained in Regions' residential first mortgage loan portfolio.


(3)	Total Wealth Management income presented above does not include the portion of service charges on deposit accounts and similar smaller dollar amounts that are also attributable to the Wealth Management segment.

Selected Non-Interest Income Variance Analysis


•	Service charges declined $14 million dollars in the fourth quarter of 2014 primarily driven by an $8 million reserve for customer reimbursements, as well as a $4 million reduction of fees resulting from a product discontinuation during the quarter.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2014 Earnings Release

Non-Interest Expense



	Quarter Ended
($ amounts in millions)	12/31/2014		9/30/2014			6/30/2014		3/31/2014			12/31/2013		4Q14 vs. 3Q14				4Q14 vs. 4Q13
Salaries and employee benefits	$	456	$	456		$	443	$	455		$	464	$	—	NM		$	(8	)	(1.7	)%
Professional, legal and regulatory expenses⁽¹⁾⁽²⁾	134		36			30		35			104		98		272.2	%	30			28.8	%
Net occupancy expense	93		92			90		93			91		1		1.1	%	2			2.2	%
Furniture and equipment expense	74		73			70		70			71		1		1.4	%	3			4.2	%
Outside services	37		32			35		27			31		5		15.6	%	6			19.4	%
Marketing	24		23			24		24			25		1		4.3	%	(1		)	(4.0	)%
Deposit administrative fee	20		20			13		22			20		—		NM		—			NM
Branch consolidation and property and equipment charges	10		—			—		6			5		10		NM		5			100.0	%
Provision (credit) for unfunded credit losses	—		(24		)	11		—			4		24		(100.0	)%	(4		)	(100.0	)%
Gain on sale of TDRs held for sale, net	—		—			—		(35		)	—		—		NM		—			NM
Other	121		118			104		120			131		3		2.5	%	(10		)	(7.6	)%
Total non-interest expense from continuing operations	$	969	$	826		$	820	$	817		$	946	$	143	17.3	%	$	23		2.4	%

_________

NM - Not Meaningful


(1)	The fourth quarter of 2014 includes $100 million of accruals for contingent legal and regulatory items related to previously disclosed matters.


(2)	The fourth quarter of 2013 includes a non-tax deductible regulatory charge of $58 million related to previously disclosed inquiries from government authorities. The matter was settled in the second quarter of 2014 for $7 million less than originally estimated.

Selected Non-Interest Expense Variance Analysis


•	As previously announced, the Company intends to consolidate approximately 50 branches during 2015 and incurred $10 million of related expenses during the fourth quarter of 2014.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2014 Earnings Release

Credit Quality



	As of and for Quarter Ended
($ amounts in millions)	12/31/2014			9/30/2014			6/30/2014			3/31/2014			12/31/2013
Components:
Allowance for loan losses (ALL)	$	1,103		$	1,178		$	1,229		$	1,261		$	1,341
Reserve for unfunded credit commitments	65			65			89			78			78
Allowance for credit losses (ACL)	$	1,168		$	1,243		$	1,318		$	1,339		$	1,419

Provision for loan losses	$	8		$	24		$	35		$	2		$	79
Provision (credit) for unfunded credit losses	—			(24		)	11			—			4

Net loans charged-off:
Commercial and industrial	23			15			15			10			36
Commercial real estate mortgage—owner-occupied	11			12			11			13			27
Commercial real estate construction—owner-occupied	—			1			—			1			(1		)
Total commercial	34			28			26			24			62
Commercial investor real estate mortgage	(2		)	—			2			1			(2		)
Commercial investor real estate construction	(1		)	(1		)	(2		)	—			(1		)
Total investor real estate	(3		)	(1		)	—			1			(3		)
Residential first mortgage ⁽³⁾	6			6			7			9			164
Home equity—first lien	5			4			3			7			8
Home equity—second lien	11			9			8			14			18
Indirect	7			6			4			7			6
Consumer credit card	8			8			8			8			8
Other consumer	15			15			11			12			15
Total consumer ⁽³⁾	52			48			41			57			219
Total ⁽³⁾	$	83		$	75		$	67		$	82		$	278
Net loan charge-offs as a % of average loans, annualized:
Commercial and industrial	0.28		%	0.19		%	0.20		%	0.14		%	0.48		%
Commercial real estate mortgage—owner-occupied	0.54		%	0.52		%	0.46		%	0.58		%	1.13		%
Commercial real estate construction—owner-occupied	(0.02		)%	1.65		%	0.05		%	0.47		%	(0.10		)%
Total commercial	0.33		%	0.27		%	0.25		%	0.25		%	0.63		%
Commercial investor real estate mortgage	(0.11		)%	(0.03		)%	0.12		%	0.10		%	(0.13		)%
Commercial investor real estate construction	(0.32		)%	(0.16		)%	(0.36		)%	(0.13		)%	(0.44		)%
Total investor real estate	(0.17		)%	(0.07		)%	—		%	0.05		%	(0.20		)%
Residential first mortgage ⁽³⁾	0.18		%	0.22		%	0.20		%	0.32		%	5.10		%
Home equity—first lien	0.29		%	0.25		%	0.24		%	0.44		%	0.51		%
Home equity—second lien	0.93		%	0.73		%	0.62		%	1.13		%	1.35		%
Indirect	0.77		%	0.70		%	0.53		%	0.85		%	0.78		%
Consumer credit card	3.29		%	3.30		%	3.53		%	3.63		%	3.65		%
Other consumer	4.90		%	4.99		%	3.84		%	4.14		%	5.04		%
Total consumer ⁽³⁾	0.70		%	0.67		%	0.57		%	0.81		%	2.98		%
Total ⁽³⁾	0.42		%	0.39		%	0.35		%	0.44		%	1.46		%
Non-accrual loans, excluding loans held for sale	$	829		$	837		$	899		$	1,070		$	1,082
Non-performing loans held for sale	38			38			20			40			82
Non-accrual loans, including loans held for sale	867			875			919			1,110			1,164
Foreclosed properties	124			125			128			129			136
Non-performing assets (NPAs)	$	991		$	1,000		$	1,047		$	1,239		$	1,300
Loans past due > 90 days ⁽¹⁾	$	222		$	233		$	251		$	257		$	256
Accruing restructured loans not included in categories above ⁽²⁾	$	1,260		$	1,319		$	1,412		$	1,578		$	1,676
Accruing restructured loans held for sale not included in categories above ⁽²⁾	$	1		$	1		$	7		$	11		$	545
Credit Ratios:
ACL/Loans, net	1.51		%	1.62		%	1.72		%	1.77		%	1.90		%
ALL/Loans, net	1.43		%	1.54		%	1.61		%	1.67		%	1.80		%
Allowance for loan losses to non-performing loans, excluding loans held for sale	1.33x			1.41x			1.37x			1.18x			1.24x
Non-accrual loans, excluding loans held for sale/Loans, net	1.07		%	1.09		%	1.17		%	1.41		%	1.45		%
NPAs (ex. 90+ past due)/Loans, foreclosed properties and non-performing loans held for sale	1.28		%	1.30		%	1.37		%	1.63		%	1.74		%
NPAs (inc. 90+ past due)/Loans, foreclosed properties and non-performing loans held for sale ⁽¹⁾	1.57		%	1.61		%	1.69		%	1.97		%	2.08		%


(1)	Excludes guaranteed residential first mortgages that are 90+ days past due and still accruing. Refer to the footnotes on page 16 for amounts related to these loans.


(2)	See page 17 for detail of restructured loans.

(3)

Includes $151 million in residential first mortgage net charge-offs on loans transferred to loans held for sale during the fourth quarter of 2013. Excluding these net charge-offs, the adjusted net charge-off percentage for residential first mortgages for the fourth quarter of 2013 would have been 0.41% (non-GAAP). Excluding these net charge-offs, the adjusted net charge-off percentage for total consumer loans for the fourth quarter of 2013 would have been 0.93% (non-GAAP). The adjusted net charge-off percentage for all loans would have been 0.67% (non-GAAP). See page 14 for a reconciliation of these GAAP to non-GAAP net charge-off ratios.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2014 Earnings Release

Credit Quality (Continued)

Allowance for Credit Losses



	Year Ended December 31
($ amounts in millions)	2014			2013
Balance at beginning of year	$	1,419		$	2,002
Net loans charged off	(307		)	(716		)
Provision for loan losses	69			138
Provision (credit) for unfunded credit losses	(13		)	(5		)
Balance at end of year	$	1,168		$	1,419

Adjusted Net Charge-Offs and Ratios (non-GAAP)

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



		As of and for Quarter Ended
($ amounts in millions)		12/31/2014			9/30/2014			6/30/2014			3/31/2014			12/31/2013
Residential first mortgage net charge-offs (GAAP)	A	$	6		$	6		$	7		$	9		$	164
Less: Net charge-offs associated with transfer to loans held for sale		—			—			—			—			151
Adjusted residential first mortgage net charge-offs (non-GAAP)	B	$	6		$	6		$	7		$	9		$	13
Total consumer net charge-offs (GAAP)	C	$	52		$	48		$	41		$	57		$	219
Less: Net charge-offs associated with transfer to loans held for sale		—			—			—			—			151
Adjusted total consumer net charge-offs (non-GAAP)	D	$	52		$	48		$	41		$	57		$	68
Total net charge-offs (GAAP)	E	$	83		$	75		$	67		$	82		$	278
Less: Net charge-offs associated with transfer to loans held for sale		—			—			—			—			151
Adjusted net charge-offs (non-GAAP)	F	$	83		$	75		$	67		$	82		$	127
Average residential first mortgage loans (GAAP)	G	$	12,273		$	12,212		$	12,137		$	12,127		$	12,752
Add: Average balances of residential first mortgage loans transferred to loans held for sale		—			—			—			—			74
Adjusted average residential first mortgage loans (non-GAAP)	H	$	12,273		$	12,212		$	12,137		$	12,127		$	12,826
Average total consumer loans (GAAP)	I	$	28,996		$	28,840		$	28,687		$	28,603		$	29,147
Add: Average balances of residential first mortgage loans transferred to loans held for sale		—			—			—			—			74
Adjusted average total consumer loans (non-GAAP)	J	$	28,996		$	28,840		$	28,687		$	28,603		$	29,221
Total average loans (GAAP)	K	$	77,182		$	76,279		$	76,390		$	75,139		$	75,843
Add: Average balances of residential first mortgage loans transferred to loans held for sale		—			—			—			—			74
Adjusted total average loans (non-GAAP)	L	$	77,182		$	76,279		$	76,390		$	75,139		$	75,917
Residential first mortgage net charge-off percentage (GAAP)*	A/G	0.18		%	0.22		%	0.20		%	0.32		%	5.10		%
Adjusted residential first mortgage net charge-off percentage (non-GAAP)*	B/H	0.18		%	0.22		%	0.20		%	0.32		%	0.41		%
Total consumer net charge-off percentage (GAAP)*	C/I	0.70		%	0.67		%	0.57		%	0.81		%	2.98		%
Adjusted total consumer net charge-off percentage (non-GAAP)*	D/J	0.70		%	0.67		%	0.57		%	0.81		%	0.93		%
Total net charge-off percentage (GAAP)*	E/K	0.42		%	0.39		%	0.35		%	0.44		%	1.46		%
Adjusted total net charge-off percentage (non-GAAP)*	F/L	0.42		%	0.39		%	0.35		%	0.44		%	0.67		%

________

* Annualized



	Year Ended December 31
($ amounts in millions)	2014		2013		2014 vs 2013
Total net charge-offs (GAAP)	$	307	$	716	$	(409	)	(57.1	)%
Less: Net charge-offs associated with transfer to loans held for sale	—		151		(151		)	(100.0	)%
Adjusted net charge-offs (non-GAAP)	$	307	$	565	$	(258	)	(45.7	)%

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2014 Earnings Release

Non-Accrual Loans (excludes loans held for sale)



	As of
($ amounts in millions)	12/31/2014				9/30/2014				6/30/2014				3/31/2014				12/31/2013
Commercial and industrial	$	252	0.77	%	$	199	0.62	%	$	200	0.64	%	$	280	0.92	%	$	257	0.87	%
Commercial real estate mortgage—owner-occupied	238		2.88	%	278		3.20	%	294		3.25	%	307		3.31	%	303		3.19	%
Commercial real estate construction—owner-occupied	3		0.64	%	2		0.56	%	8		2.32	%	16		4.31	%	17		5.33	%
Total Commercial	493		1.19	%	479		1.17	%	502		1.23	%	603		1.50	%	577		1.47	%
Commercial investor real estate mortgage	123		2.64	%	133		2.69	%	158		3.05	%	209		3.91	%	238		4.47	%
Commercial investor real estate construction	2		0.09	%	2		0.11	%	9		0.49	%	8		0.51	%	10		0.70	%
Total Investor Real Estate	125		1.84	%	135		1.98	%	167		2.39	%	217		3.11	%	248		3.67	%
Residential first mortgage	109		0.88	%	117		0.96	%	119		0.98	%	136		1.12	%	146		1.21	%
Home equity	102		0.94	%	106		0.97	%	111		1.00	%	114		1.02	%	111		0.98	%
Total Consumer	211		0.72	%	223		0.77	%	230		0.80	%	250		0.87	%	257		0.90	%
Total Non-Accrual Loans	$	829	1.07	%	$	837	1.09	%	$	899	1.17	%	$	1,070	1.41	%	$	1,082	1.45	%

Criticized and Classified Loans—Commercial and Investor Real Estate



	As of
											12/31/2014					12/31/2014
($ amounts in millions)	12/31/2014		9/30/2014		6/30/2014		3/31/2014		12/31/2013		vs. 9/30/2014					vs. 12/31/2013
Special Mention	$	1,206	$	1,297	$	1,327	$	1,067	$	927	$	(91	)	(7.0	)%	$	279		30.1	%
Accruing Classified Loans	875		1,074		1,055		1,094		1,263		(199		)	(18.5	)%	(388		)	(30.7	)%
Non-Accruing Classified Loans	618		614		669		820		825		4			0.7	%	(207		)	(25.1	)%
Total	$	2,699	$	2,985	$	3,051	$	2,981	$	3,015	$	(286	)	(9.6	)%	$	(316	)	(10.5	)%

Home Equity Lines of Credit - Future Principal Payment Resets⁽¹⁾



	As of 12/31/2014
($ amounts in millions)	First Lien		% of Total		Second Lien		% of Total		Total
2015	$	26	0.31	%	$	188	2.22	%	$	214
2016	28		0.34	%	38		0.45	%	66
2017	5		0.06	%	11		0.13	%	16
2018	15		0.18	%	25		0.29	%	40
2019	116		1.37	%	105		1.24	%	221
2020-2024	1,475		17.42	%	1,322		15.62	%	2,797
2025-2029	2,418		28.56	%	2,688		31.75	%	5,106
Thereafter	2		0.02	%	4		0.04	%	6
Total	$	4,085	48.26	%	$	4,381	51.74	%	$	8,466

(1)

The balance of Regions' home equity portfolio was $10,932 million at December 31, 2014 consisting of $8,466 million of home equity lines of credit and $2,466 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.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2014 Earnings Release

Early and Late Stage Delinquencies



Accruing 30-89 Days Past Due Loans	As of
($ amounts in millions)	12/31/2014				9/30/2014				6/30/2014				3/31/2014				12/31/2013
Commercial and industrial	$	23	0.07	%	$	57	0.18	%	$	35	0.11	%	$	27	0.09	%	$	43	0.15	%
Commercial real estate mortgage—owner-occupied	34		0.41	%	38		0.44	%	56		0.63	%	37		0.39	%	56		0.59	%
Commercial real estate construction—owner-occupied	1		0.13	%	2		0.71	%	1		0.21	%	—		0.10	%	—		0.06	%
Total Commercial	58		0.14	%	97		0.24	%	92		0.23	%	64		0.16	%	99		0.25	%
Commercial investor real estate mortgage	20		0.42	%	38		0.78	%	61		1.17	%	75		1.41	%	35		0.66	%
Commercial investor real estate construction	—		—	%	12		0.61	%	—		0.01	%	2		0.15	%	5		0.32	%
Total Investor Real Estate	20		0.29	%	50		0.73	%	61		0.87	%	77		1.11	%	40		0.59	%
Residential first mortgage—non-guaranteed ⁽¹⁾	139		1.17	%	142		1.20	%	153		1.30	%	146		1.24	%	187		1.58	%
Home equity	111		1.02	%	115		1.05	%	111		1.00	%	123		1.10	%	146		1.30	%
Indirect	53		1.45	%	47		1.33	%	45		1.31	%	42		1.28	%	50		1.62	%
Consumer credit card	13		1.32	%	13		1.29	%	11		1.13	%	11		1.26	%	13		1.38	%
Other consumer	17		1.45	%	18		1.52	%	18		1.53	%	16		1.39	%	19		1.64	%
Total Consumer ⁽¹⁾	333		1.16	%	335		1.18	%	338		1.19	%	338		1.20	%	415		1.47	%
Total Accruing 30-89 Days Past Due Loans ⁽¹⁾	$	411	0.53	%	$	482	0.63	%	$	491	0.64	%	$	479	0.64	%	$	554	0.75	%

Accruing 90+ Days Past Due Loans	As of
($ amounts in millions)	12/31/2014				9/30/2014				6/30/2014				3/31/2014				12/31/2013
Commercial and industrial	$	7	0.02	%	$	5	0.02	%	$	9	0.03	%	$	7	0.02	%	$	6	0.02	%
Commercial real estate mortgage—owner-occupied	5		0.06	%	6		0.07	%	5		0.05	%	3		0.04	%	6		0.06	%
Total Commercial	12		0.03	%	11		0.03	%	14		0.03	%	10		0.03	%	12		0.03	%
Commercial investor real estate mortgage	3		0.06	%	5		0.10	%	17		0.32	%	2		0.04	%	6		0.10	%
Total Investor Real Estate	3		0.04	%	5		0.07	%	17		0.24	%	2		0.03	%	6		0.08	%
Residential first mortgage—non-guaranteed ⁽²⁾	122		1.03	%	131		1.10	%	136		1.15	%	154		1.31	%	142		1.21	%
Home equity	63		0.57	%	66		0.60	%	65		0.58	%	71		0.63	%	75		0.66	%
Indirect	7		0.20	%	6		0.18	%	5		0.16	%	5		0.15	%	5		0.17	%
Consumer credit card	12		1.21	%	11		1.15	%	11		1.19	%	12		1.30	%	12		1.28	%
Other consumer	3		0.22	%	3		0.26	%	3		0.27	%	3		0.27	%	4		0.29	%
Total Consumer ⁽²⁾	207		0.72	%	217		0.76	%	220		0.78	%	245		0.87	%	238		0.84	%
Total Accruing 90+ Days Past Due Loans ⁽²⁾	$	222	0.29	%	$	233	0.31	%	$	251	0.33	%	$	257	0.34	%	$	256	0.34	%

Total Delinquencies ^{(1) (2)}	$	633	0.82	%	$	715	0.94	%	$	742	0.97	%	$	736	0.98	%	$	810	1.09	%


(1)	Excludes loans that are 100% guaranteed by FHA. Total 30-89 days past due guaranteed loans excluded were $24 million at 12/31/14, $21 million at 9/30/14, $19 million at 6/30/14, $16 million at 3/31/14, and $17 million at 12/31/13.


(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 $125 million at 12/31/14, $121 million at 9/30/14, $88 million at 6/30/14, $94 million at 3/31/14, and $106 million at 12/31/13.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2014 Earnings Release

Troubled Debt Restructurings



	As of
($ amounts in millions)	12/31/2014		9/30/2014		6/30/2014		3/31/2014		12/31/2013
Current:
Commercial	$	244	$	278	$	332	$	408	$	441
Investor real estate	281		304		321		441		498
Residential first mortgage	301		269		261		240		212
Home equity	320		326		332		334		332
Consumer credit card	2		2		2		2		2
Other consumer	16		17		20		22		25
Total Current	1,164		1,196		1,268		1,447		1,510
Accruing 30-89 DPD:
Commercial	7		11		23		18		27
Investor real estate	9		24		34		18		13
Residential first mortgage	55		61		61		70		95
Home equity	23		25		24		23		29
Other consumer	2		2		2		2		2
Total Accruing 30-89 DPD	96		123		144		131		166
Total Accruing and <90 DPD	1,260		1,319		1,412		1,578		1,676
Non-accrual or 90+ DPD:
Commercial	93		145		146		207		156
Investor real estate	67		70		96		145		157
Residential first mortgage	112		122		130		147		156
Home equity	25		25		27		29		30
Total Non-accrual or 90+DPD	297		362		399		528		499
Total TDRs - Loans	$	1,557	$	1,681	$	1,811	$	2,106	$	2,175

TDRs - Held For Sale ⁽¹⁾	29		13		16		38		579
Total TDRs	$	1,586	$	1,694	$	1,827	$	2,144	$	2,754


Total TDRs - Loans by Portfolio
	As of
($ amounts in millions)	12/31/2014		9/30/2014		6/30/2014		3/31/2014		12/31/2013
Total Commercial TDRs	$	344	$	434	$	501	$	633	$	624
Total Investor Real Estate TDRs	357		398		451		604		668
Total Consumer TDRs	856		849		859		869		883
Total TDRs - Loans	$	1,557	$	1,681	$	1,811	$	2,106	$	2,175


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

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2014 Earnings Release

Reconciliation to GAAP Financial Measures—Continuing Operations

Adjusted Efficiency Ratios, Adjusted Fee Income Ratios, and Adjusted Non-Interest Income/Expense

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



		Quarter Ended
($ amounts in millions)		12/31/2014			9/30/2014			6/30/2014			3/31/2014			12/31/2013			4Q14 vs. 3Q14					4Q14 vs. 4Q13
Non-interest expense (GAAP)		$	969		$	826		$	820		$	817		$	946		$	143		17.3	%	$	23		2.4	%
Adjustments:
Professional, legal and regulatory expenses⁽¹⁾⁽²⁾		(100		)	—			7			—			(58		)	(100		)	NM		(42		)	72.4	%
Branch consolidation and property and equipment charges		(10		)	—			—			(6		)	(5		)	(10		)	NM		(5		)	100.0	%
Gain on sale of TDRs held for sale, net		—			—			—			35			—			—			NM		—			NM
Adjusted non-interest expense (non-GAAP)	A	$	859		$	826		$	827		$	846		$	883		$	33		4.0	%	$	(24	)	(2.7	)%
Net interest income (GAAP)		$	820		$	821		$	822		$	816		$	832		$	(1	)	(0.1	)%	$	(12	)	(1.4	)%
Taxable-equivalent adjustment		17			16			15			15			14			1			6.3	%	3			21.4	%
Net interest income, taxable-equivalent basis	B	$	837		$	837		$	837		$	831		$	846		$	—		NM		$	(9	)	(1.1	)%
Non-interest income (GAAP)	C	$	448		$	478		$	457		$	438		$	526		$	(30	)	(6.3	)%	$	(78	)	(14.8	)%
Adjustments:
Securities gains, net		(12		)	(7		)	(6		)	(2		)	—			(5		)	71.4	%	(12		)	NM
Leveraged lease termination gains, net		—			(9		)	—			(1		)	(39		)	9			(100.0	)%	39			(100.0	)%
Adjusted non-interest income (non-GAAP)	D	$	436		$	462		$	451		$	435		$	487		$	(26	)	(5.6	)%	$	(51	)	(10.5	)%
Total revenue, taxable-equivalent basis	B+C	$	1,285		$	1,315		$	1,294		$	1,269		$	1,372		$	(30	)	(2.3	)%	$	(87	)	(6.3	)%
Adjusted total revenue, taxable-equivalent basis (non-GAAP)	B+D=E	$	1,273		$	1,299		$	1,288		$	1,266		$	1,333		$	(26	)	(2.0	)%	$	(60	)	(4.5	)%
Adjusted efficiency ratio (non-GAAP)	A/E	67.5		%	63.6		%	64.2		%	66.9		%	66.3		%
Adjusted fee income ratio (non-GAAP)	D/E	34.3		%	35.6		%	35.0		%	34.4		%	36.5		%



		Year Ended December 31
($ amounts in millions)		2014			2013			2014 vs. 2013
Non-interest expense (GAAP)		$	3,432		$	3,556		$	(124	)	(3.5	)%
Adjustments:
Professional, legal and regulatory expenses⁽¹⁾⁽²⁾		(93		)	(58		)	(35		)	60.3	%
Branch consolidation and property and equipment charges		(16		)	(5		)	(11		)	220.0	%
Gain on sale of TDRs held for sale, net		35			—			35			NM
Loss on early extinguishment of debt		—			(61		)	61			(100.0	)%
Adjusted non-interest expense (non-GAAP)	F	$	3,358		$	3,432		$	(74	)	(2.2	)%
Net interest income (GAAP)		$	3,279		$	3,262		$	17		0.5	%
Taxable-equivalent adjustment		63			54			9			16.7	%
Net interest income, taxable-equivalent basis	G	$	3,342		$	3,316		$	26		0.8	%
Non-interest income (GAAP)	H	$	1,821		$	2,019		$	(198	)	(9.8	)%
Adjustments:
Securities gains, net		(27		)	(26		)	(1		)	3.8	%
Leveraged lease termination gains, net		(10		)	(39		)	29			(74.4	)%
Gain on sale of other assets⁽³⁾		—			(24		)	24			(100.0	)%
Adjusted non-interest income (non-GAAP)	I	$	1,784		$	1,930		$	(146	)	(7.6	)%
Total revenue, taxable-equivalent basis	G+H	$	5,163		$	5,335		$	(172	)	(3.2	)%
Adjusted total revenue, taxable-equivalent basis (non-GAAP)	G+I=J	$	5,126		$	5,246		$	(120	)	(2.3	)%
Adjusted efficiency ratio (non-GAAP)	F/J	65.5		%	65.4		%
Adjusted fee income ratio (non-GAAP)	I/J	34.8		%	36.8		%

________

NM - Not Meaningful


(1)	Regions recorded $100 million of contingent legal and regulatory accruals during the fourth quarter of 2014 related to previously disclosed matters.


(2)	Regions recorded a non-tax deductible regulatory charge of $58 million during the fourth quarter of 2013 related to previously disclosed inquiries from government authorities. These matters were settled in the second quarter of 2014 for $7 million less than originally estimated.


(3)	Gain on sale on a non-core portion of a Wealth Management business.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2014 Earnings Release

Reconciliation to GAAP Financial Measures

Return Ratios, Tangible Common Ratios, Capital

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

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

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



		As of and for Quarter Ended
($ amounts in millions, except per share data)		12/31/2014			9/30/2014			6/30/2014			3/31/2014			12/31/2013
RETURN ON AVERAGE TANGIBLE COMMON STOCKHOLDERS’ EQUITY
Net income available to common shareholders (GAAP)	A	$	195		$	305		$	292		$	311		$	219
Average stockholders’ equity (GAAP)		$	17,194		$	17,049		$	16,680		$	16,002		$	15,504
Less:
Average intangible assets (GAAP)		5,097			5,105			5,104			5,107			5,118
Average deferred tax liability related to intangibles (GAAP)		(176		)	(182		)	(184		)	(187		)	(189		)
Average preferred stock (GAAP)		886			903			779			444			452
Average tangible common stockholders’ equity (non-GAAP)	B	$	11,387		$	11,223		$	10,981		$	10,638		$	10,123
Return on average tangible common stockholders’ equity (non-GAAP)⁽¹⁾	A/B	6.78		%	10.78		%	10.68		%	11.84		%	8.58		%
TANGIBLE COMMON RATIOS—CONSOLIDATED
Stockholders’ equity (GAAP)		$	16,989		$	17,160		$	17,029		$	16,132		$	15,768
Less:
Preferred stock (GAAP)		884			900			920			442			450
Intangible assets (GAAP)		5,091			5,103			5,097			5,110			5,111
Deferred tax liability related to intangibles (GAAP)		(172		)	(181		)	(183		)	(186		)	(188		)
Tangible common stockholders’ equity (non-GAAP)	C	$	11,186		$	11,338		$	11,195		$	10,766		$	10,395
Total assets (GAAP)		$	119,679		$	119,226		$	118,719		$	117,933		$	117,396
Less:
Intangible assets (GAAP)		5,091			5,103			5,097			5,110			5,111
Deferred tax liability related to intangibles (GAAP)		(172		)	(181		)	(183		)	(186		)	(188		)
Tangible assets (non-GAAP)	D	$	114,760		$	114,304		$	113,805		$	113,009		$	112,473
Shares outstanding—end of quarter	E	1,354			1,379			1,378			1,378			1,378
Tangible common stockholders’ equity to tangible assets (non-GAAP)	C/D	9.75		%	9.92		%	9.84		%	9.53		%	9.24		%
Tangible common book value per share (non-GAAP)	C/E	$	8.26		$	8.23		$	8.12		$	7.81		$	7.54

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2014 Earnings Release

Reconciliation to GAAP Financial Measures

Return Ratios, Tangible Common Ratios, Capital (Continued)



		As of and for Quarter Ended
($ amounts in millions)		12/31/2014			9/30/2014			6/30/2014			3/31/2014			12/31/2013
TIER 1 COMMON RISK-BASED RATIO⁽²⁾ —CONSOLIDATED
Stockholders’ equity (GAAP)		$	16,989		$	17,160		$	17,029		$	16,132		$	15,768
Accumulated other comprehensive (income) loss		238			174			52			229			319
Non-qualifying goodwill and intangibles		(4,809		)	(4,808		)	(4,797		)	(4,804		)	(4,798		)
Disallowed servicing assets		(27		)	(29		)	(28		)	(29		)	(31		)
Tier 1 capital (regulatory)		$	12,391		$	12,497		$	12,256		$	11,528		$	11,258
Preferred stock (GAAP)		(884		)	(900		)	(920		)	(442		)	(450		)
Tier 1 common equity (non-GAAP)	F	$	11,507		$	11,597		$	11,336		$	11,086		$	10,808
Risk-weighted assets (regulatory)	G	$	98,974		$	98,381		$	98,098		$	97,418		$	96,416
Tier 1 common risk-based ratio (non-GAAP)	F/G	11.6		%	11.8		%	11.6		%	11.4		%	11.2		%
BASEL III COMMON EQUITY TIER 1 RATIO ⁽²⁾
Stockholder's equity (GAAP)		$	16,989		$	17,160		$	17,029		$	16,132		$	15,768
Non-qualifying goodwill and intangibles⁽³⁾		(4,906		)	(4,918		)	(4,911		)	(4,923		)	(4,922		)
Adjustments, including all components of accumulated other comprehensive income, disallowed deferred tax assets, threshold deductions and other adjustments		116			36			(100		)	61			130
Preferred stock (GAAP)		(884		)	(900		)	(920		)	(442		)	(450		)
Basel III common equity Tier 1 (non-GAAP)	H	$	11,315		$	11,378		$	11,098		$	10,828		$	10,526
Basel III risk-weighted assets (non-GAAP)⁽⁴⁾	I	$	101,997		$	101,390		$	100,968		$	100,566		$	99,483
Basel III common equity Tier 1 ratio (non-GAAP)	H/I	11.1		%	11.2		%	11.0		%	10.8		%	10.6		%


(1)	Annualized


(2)	Current quarter amounts and the resulting ratio are estimated.


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


(4)	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

Financial Supplement to Fourth Quarter 2014 Earnings Release

Statements of Discontinued Operations (unaudited)

On January 11, 2012, Regions entered into a stock purchase agreement to sell Morgan Keegan and Company, Inc. and related affiliates to Raymond James Financial Inc. The sale was closed on April 2, 2012. Regions Investment Management, Inc. (formerly known as Morgan Asset Management, Inc.) and Regions Trust were not included in the sale. In connection with the agreement, the results of the entities sold are reported as discontinued operations. The following table represents the unaudited condensed results of operations for discontinued operations.



	Quarter Ended
($ amounts in millions, except per share data)	12/31/2014			9/30/2014		6/30/2014			3/31/2014			12/31/2013
Non-interest income:
Insurance proceeds	$	—		$	19	$	—		$	—		$	—
Total non-interest income	—			19		—			—			—
Non-interest expense:
Professional and legal expenses	5			14		(3		)	(19		)	24
Other	—			—		1			—			1
Total non-interest expense	5			14		(2		)	(19		)	25
Income (loss) from discontinued operations before income tax	(5		)	5		2			19			(25		)
Income tax expense (benefit)	(2		)	2		1			7			(11		)
Income (loss) from discontinued operations, net of tax	$	(3	)	$	3	$	1		$	12		$	(14	)
Weighted-average shares outstanding—during quarter ⁽¹⁾:
Basic	1,365			1,378		1,378			1,378			1,378
Diluted	1,365			1,389		1,390			1,390			1,378
Earnings (loss) per common share from discontinued operations:
Basic	$	(0.00	)	$	0.00	$	0.00		$	0.01		$	(0.01	)
Diluted	$	(0.00	)	$	0.00	$	0.00		$	0.01		$	(0.01	)

_________


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

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2014 Earnings Release

Forward-Looking Statements

This release may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, which reflect Regions’ current views with respect to future events and financial performance. Forward-looking statements are not based on historical information, but rather are related to future operations, strategies, financial results or other developments. Forward-looking statements are based on management’s expectations as well as certain assumptions and estimates made by, and information available to, management at the time the statements are made. Those statements are based on general assumptions and are subject to various risks, uncertainties and other factors that may cause actual results to differ materially from the views, beliefs and projections expressed in such statements. These risks, uncertainties and other factors include, but are not limited to, those described below:


•	Current and future economic and market conditions in the United States generally or in the communities we serve, including the effects of declines in property values, unemployment rates and potential reduction of economic growth.


•	Possible changes in trade, monetary and fiscal policies of, and other activities undertaken by, governments, agencies, central banks and similar organizations.


•	The effects of a possible downgrade in the U.S. government’s sovereign credit rating or outlook.


•	Possible changes in market interest rates.


•	Any impairment of our goodwill or other intangibles, or any adjustment of valuation allowances on our deferred tax assets due to adverse changes in the economic environment, declining operations of the reporting unit, or other factors.


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


•	Changes in the speed of loan prepayments, loan origination and sale volumes, charge-offs, loan loss provisions or actual loan losses.


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


•	Our ability to effectively compete with other financial services companies, some of whom possess greater financial resources than we do and are subject to different regulatory standards than we are.


•	Loss of customer checking and savings account deposits as customers pursue other, higher-yield investments.


•	Our ability to develop and gain acceptance from current and prospective customers for new products and services in a timely manner.


•	Changes in laws and regulations affecting our businesses, including changes in the enforcement and interpretation of such laws and regulations by applicable governmental and self-regulatory agencies.


•	Our ability to obtain regulatory approval (as part of the CCAR process or otherwise) to take certain capital actions, including paying dividends and any plans to increase common stock dividends, repurchase common stock under current or future programs, or redeem preferred stock or other regulatory capital instruments.


•	Our ability to comply with applicable capital and liquidity requirements (including finalized Basel III capital standards), including our ability to generate capital internally or raise capital on favorable terms.


•	The costs and other effects (including reputational harm) of any adverse judicial, administrative, or arbitral rulings or proceedings, regulatory enforcement actions, or other legal actions to which we or any of our subsidiaries are a party.


•	Any adverse change to our ability to collect interchange fees in a profitable manner, whether such change is the result of regulation, litigation, legislation, or other governmental action.


•	Our ability to manage fluctuations in the value of assets and liabilities and off-balance sheet exposure so as to maintain sufficient capital and liquidity to support our business.


•	Possible changes in consumer and business spending and saving habits and the related effect on our ability to increase assets and to attract deposits.


•	Any inaccurate or incomplete information provided to us by our customers or counterparties.


•	Inability of our framework to manage risks associated with our business such as credit risk and operational risk, including third-party vendors and other service providers.


•	The inability of our internal disclosure controls and procedures to prevent, detect or mitigate any material errors or fraudulent acts.


•	The effects of geopolitical instability, including wars, conflicts and terrorist attacks.


•	The effects of man-made and natural disasters, including fires, floods, droughts, tornadoes, hurricanes and environmental damage.


•	Our ability to keep pace with technological changes.


•	Our ability to identify and address cyber-security risks such as data security breaches, “denial of service” attacks, “hacking” and identity theft.


•	Possible downgrades in our credit ratings or outlook.


•	The effects of problems encountered by other financial institutions that adversely affect us or the banking industry generally.


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


•	Our ability to receive dividends from our subsidiaries.


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


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

The foregoing list of factors is not exhaustive. For discussion of these and other factors that may cause actual results to differ from expectations, look under the captions “Forward-Looking Statements” and “Risk Factors” of Regions’ Annual Report on Form 10-K for the year ended December 31, 2013, as filed with the Securities and Exchange Commission.

The words “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “targets,” “projects,” “outlook,” “forecast,” “will,” “may,” “could,” “should,” “can,” and similar expressions often signify forward-looking statements. You should not place undue reliance on any forward-looking statements, which speak only as of the date made. We assume no obligation to update or revise any forward-looking statements that are made from time to time.

Regions’ Investor Relations contacts are List Underwood and Dana Nolan at (205) 581-7890; Regions’ Media contact is Evelyn Mitchell at (205) 264-4551.

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