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

Attached files

file	filename
8-K - 8-K - REGIONS FINANCIAL CORP	rf-20151231x8k.htm
EX-99.1 - EXHIBIT 99.1 - REGIONS FINANCIAL CORP	rf-20151231xexhibit991.htm
EX-99.3 - EXHIBIT 99.3 - REGIONS FINANCIAL CORP	rf20151231exhibit993r240.htm

Exhibit 99.2

Regions Financial Corporation and Subsidiaries

Financial Supplement

Fourth Quarter 2015

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2015 Earnings Release

Table of Contents




		Page

Financial Highlights		1

Selected Ratios and Other Information		2

Consolidated Statements of Income		3

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

Pre-Tax Pre-Provision Income ("PPI") and Adjusted PPI		8

Non-Interest Income, Mortgage Income and Wealth Management Income		9

Non-Interest Expense		10

Reconciliation to GAAP Financial Measures
Adjusted Efficiency Ratios, Adjusted Fee Income Ratios, Adjusted Non-Interest Income / Expense, and Return Ratios		11

Statement of Discontinued Operations		13

Credit Quality
Allowance for Credit Losses, Net Charge-Offs and Related Ratios		14
Allowance for Credit Losses (Continued), 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

Consolidated Balance Sheets		18

Loans and Leases		19

Deposits		21

Reconciliation to GAAP Financial Measures
Tangible Common Ratios and Capital		22

Forward Looking Statements		23

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2015 Earnings Release

Financial Highlights



	Quarter Ended
($ amounts in millions, except per share data)	12/31/2015			9/30/2015			6/30/2015			3/31/2015			12/31/2014
Earnings Summary
Interest income and other financing income - taxable equivalent	$	953		$	920		$	902		$	903		$	911
Interest expense - taxable equivalent	69			65			63			71			74
Depreciation expense on operating lease assets	28			—			—			—			—
Net interest income and other financing income - taxable equivalent	856			855			839			832			837
Less: Taxable-equivalent adjustment	20			19			19			17			17
Net interest income and other financing income	836			836			820			815			820
Provision for loan losses	69			60			63			49			8
Net interest income and other financing income after provision for loan losses	767			776			757			766			812
Non-interest income	514			497			590			470			474
Non-interest expense	873			895			934			905			969
Income from continuing operations before income taxes	408			378			413			331			317
Income tax expense	120			116			124			95			98
Income from continuing operations	288			262			289			236			219
Income (loss) from discontinued operations before income taxes	(6		)	(6		)	(6		)	(4		)	(5		)
Income tax expense (benefit)	(3		)	(2		)	(2		)	(2		)	(2		)
Income (loss) from discontinued operations, net of tax	(3		)	(4		)	(4		)	(2		)	(3		)
Net income	$	285		$	258		$	285		$	234		$	216
Income from continuing operations available to common shareholders	$	272		$	246		$	273		$	220		$	203
Net income available to common shareholders	$	269		$	242		$	269		$	218		$	200

Earnings per common share from continuing operations - basic	$	0.21		$	0.19		$	0.20		$	0.16		$	0.15
Earnings per common share from continuing operations - diluted	0.21			0.19			0.20			0.16			0.15
Earnings per common share - basic	0.21			0.18			0.20			0.16			0.15
Earnings per common share - diluted	0.21			0.18			0.20			0.16			0.15

Balance Sheet Summary
At quarter-end—Consolidated
Loans, net of unearned income	$	81,162		$	81,063		$	80,149		$	78,243		$	77,307
Allowance for loan losses	(1,106		)	(1,115		)	(1,115		)	(1,098		)	(1,103		)
Assets	126,050			124,789			121,855			122,447			119,563
Deposits	98,430			97,178			97,075			97,477			94,200
Long-term debt ⁽¹⁾	8,349			7,364			3,602			3,208			3,462
Stockholders' equity	16,844			16,952			16,899			17,051			16,873
Average balances—Continuing Operations
Loans, net of unearned income	$	80,760		$	80,615		$	79,175		$	77,942		$	77,182
Assets	124,645			122,920			120,875			120,566			119,122
Deposits	97,488			97,166			97,100			95,783			94,024
Long-term debt ⁽¹⁾	7,740			6,112			2,903			3,371			3,618
Stockholders' equity	16,901			16,874			16,950			16,963			17,060


(1)	The increases in long-term debt in the third and fourth quarters of 2015 were primarily the result of FHLB advances with one to two year maturities.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2015 Earnings Release

Selected Ratios and Other Information



	As of and for Quarter Ended
	12/31/2015			9/30/2015			6/30/2015			3/31/2015			12/31/2014
Return on average assets from continuing operations*	0.87		%	0.79		%	0.90		%	0.74		%	0.68		%
Return on average tangible common stockholders’ equity (non-GAAP)* (1)	9.61		%	8.65		%	9.66		%	7.91		%	7.04		%
Adjusted efficiency ratio from continuing operations (non-GAAP) ⁽¹⁾⁽²⁾	63.4		%	66.8		%	64.5		%	64.9		%	66.1		%
Common book value per share	$	12.35		$	12.36		$	12.06		$	12.05		$	11.81
Tangible common book value per share (non-GAAP) ⁽¹⁾	$	8.52		$	8.58		$	8.37		$	8.39		$	8.18
Tangible common stockholders’ equity to tangible assets (non-GAAP) (1)	9.13		%	9.34		%	9.52		%	9.59		%	9.66		%
Basel I Tier 1 common equity risk-based ratio (non-GAAP) ⁽⁴⁾	N/A			N/A			N/A			N/A			11.7		%
Basel III common equity ⁽³⁾	$	11,543		$	11,438		$	11,527		$	11,477		N/A
Basel III common equity Tier 1 ratio ⁽³⁾	10.9		%	11.0		%	11.3		%	11.4		%	N/A
Basel III common equity Tier 1 ratio—Fully Phased-In Pro-Forma (non-GAAP) ^(1)(3)(4)	10.7		%	10.8		%	11.1		%	11.2		%	11.0		%
Tier 1 capital ratio ^(3)(4)(5)	11.7		%	11.7		%	12.1		%	12.2		%	12.5		%
Total risk-based capital ratio ^(3)(4)(5)	13.9		%	14.0		%	14.4		%	14.6		%	15.3		%
Leverage ratio ^(3)(4)(5)	10.4		%	10.4		%	10.6		%	10.6		%	10.9		%
Effective tax rate ⁽⁶⁾	29.3		%	30.7		%	30.1		%	28.7		%	31.0		%
Allowance for loan losses as a percentage of loans, net of unearned income	1.36		%	1.38		%	1.39		%	1.40		%	1.43		%
Allowance for loan losses to non-performing loans, excluding loans held for sale	1.41x			1.41x			1.49x			1.37x			1.33x
Net interest margin (FTE) from continuing operations*⁽⁹⁾	3.08		%	3.13		%	3.16		%	3.18		%	3.17		%
Loans, net of unearned income, to total deposits	82.5		%	83.4		%	82.6		%	80.3		%	82.1		%
Net charge-offs as a percentage of average loans*	0.38		%	0.30		%	0.23		%	0.28		%	0.42		%
Non-accrual loans, excluding loans held for sale, as a percentage of loans	0.96		%	0.97		%	0.94		%	1.02		%	1.07		%
Non-performing assets (excluding loans 90 days past due) as a percentage of loans, foreclosed properties and non-performing loans held for sale	1.13		%	1.14		%	1.13		%	1.24		%	1.28		%
Non-performing assets (including loans 90 days past due) as a percentage of loans, foreclosed properties and non-performing loans held for sale ⁽⁷⁾	1.39		%	1.40		%	1.38		%	1.51		%	1.57		%
Associate headcount ⁽⁸⁾	23,916			23,952			23,694			23,601			23,723
ATMs	1,962			1,966			1,960			1,966			1,997

Branch Statistics
Full service	1,548			1,549			1,549			1,551			1,584
Drive-thru/transaction service only	79			81			82			82			82
Total branch outlets	1,627			1,630			1,631			1,633			1,666

*Annualized


(1)	See reconciliation of GAAP to non-GAAP Financial Measures on pages 11 and 22.

(2)

During the fourth quarter of 2015, Regions corrected the accounting for certain leases, for which Regions is the lessor. These leases had been previously classified as capital leases but were subsequently determined to be operating leases and totaled approximately $834 million at December 31, 2015. The aggregate impact of this adjustment lowered net interest income and other financing income $15 million. Excluding the negative impact of the $15 million, the adjusted efficiency ratio would have been 62.7%. During the third quarter of 2015, approximately $23 million of FDIC insurance assessment adjustments to prior assessments were recorded. Excluding the $23 million, the adjusted efficiency ratio would have been 65.0%.


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


(4)	Regions' regulatory capital ratios for periods prior to the first quarter of 2015 have not been revised to reflect the retrospective application of new accounting guidance related to investments in qualified affordable housing projects.


(5)	Beginning in the first quarter of 2015, Regions' regulatory capital ratios are calculated pursuant to the phase-in provisions of the Basel III capital rules. All prior period ratios were calculated pursuant to the Basel I capital rules.

(6)

The effective tax rate for 2016 is expected to range between 30% and 32%. The fourth quarter of 2015 reflects the impact of higher than expected income tax benefits related to affordable housing investments. The second quarter of 2015 includes an income tax benefit related to the conclusion of certain state and federal examinations. The first quarter of 2015 includes an income tax benefit related to state deferred tax asset adjustments.


(7)	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.


(8)	Reflects the number of active full-time and part-time associates as of the last pay period of the month. The full-time equivalent number of employees for the quarters ended December 31, 2015, September 30, 2015, June 30, 2015 and March 31, 2015 were 23,393, 23,423, 23,155 and 23,062, respectively.


(9)	Excluding the negative impact of the $15 million lease adjustment discussed above, net interest margin would have been 3.13% for the fourth quarter of 2015.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2015 Earnings Release

Consolidated Statements of Income (unaudited)



	Quarter Ended
($ amounts in millions, except per share data)	12/31/2015			9/30/2015			6/30/2015			3/31/2015			12/31/2014
Interest income, including other financing income on:
Loans, including fees ⁽¹⁾	$	741		$	748		$	728		$	725		$	736
Securities—taxable ⁽²⁾	140			137			141			145			143
Loans held for sale	4			5			4			3			5
Trading account securities	1			—			1			3			1
Other earning assets ⁽²⁾	14			11			9			10			9
Operating lease assets ⁽¹⁾	33			—			—			—			—
Total interest income, including other financing income	933			901			883			886			894
Interest expense on:
Deposits	27			27			27			28			27
Short-term borrowings	—			—			1			—			1
Long-term borrowings	42			38			35			43			46
Total interest expense	69			65			63			71			74
Depreciation expense on operating lease assets ⁽¹⁾	28			—			—			—			—
Total interest expense and depreciation expense on operating lease assets	97			65			63			71			74
Net interest income and other financing income	836			836			820			815			820
Provision for loan losses	69			60			63			49			8
Net interest income and other financing income after provision for loan losses	767			776			757			766			812
Non-interest income:
Service charges on deposit accounts	166			167			168			161			167
Card and ATM fees	96			93			90			85			86
Mortgage income	37			39			46			40			27
Securities gains, net	11			7			6			5			12
Other	204			191			280			179			182
Total non-interest income	514			497			590			470			474
Non-interest expense:
Salaries and employee benefits	478			470			477			458			456
Net occupancy expense	91			90			89			91			93
Furniture and equipment expense	79			77			76			71			74
Other	225			258			292			285			346
Total non-interest expense	873			895			934			905			969
Income from continuing operations before income taxes	408			378			413			331			317
Income tax expense	120			116			124			95			98
Income from continuing operations	288			262			289			236			219
Discontinued operations:
Income (loss) from discontinued operations before income taxes	(6		)	(6		)	(6		)	(4		)	(5		)
Income tax expense (benefit)	(3		)	(2		)	(2		)	(2		)	(2		)
Income (loss) from discontinued operations, net of tax	(3		)	(4		)	(4		)	(2		)	(3		)
Net income	$	285		$	258		$	285		$	234		$	216
Net income from continuing operations available to common shareholders	$	272		$	246		$	273		$	220		$	203
Net income available to common shareholders	$	269		$	242		$	269		$	218		$	200
Weighted-average shares outstanding—during quarter:
Basic	1,301			1,319			1,335			1,346			1,365
Diluted	1,308			1,326			1,346			1,358			1,377
Actual shares outstanding—end of quarter	1,297			1,304			1,331			1,343			1,354
Earnings per common share from continuing operations:
Basic	$	0.21		$	0.19		$	0.20		$	0.16		$	0.15
Diluted	$	0.21		$	0.19		$	0.20		$	0.16		$	0.15
Earnings per common share:
Basic	$	0.21		$	0.18		$	0.20		$	0.16		$	0.15
Diluted	$	0.21		$	0.18		$	0.20		$	0.16		$	0.15
Cash dividends declared per common share	$	0.06		$	0.06		$	0.06		$	0.05		$	0.05
Taxable-equivalent net interest income and other financing income from continuing operations	$	856		$	855		$	839		$	832		$	837

_________

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

(2) Investments and related income from Federal Reserve Bank and Federal Home Loan Bank stock were reclassified from securities available for sale to other earning assets during the fourth quarter of 2015. All periods presented have been revised to reflect this presentation.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2015 Earnings Release

Consolidated Statements of Income (Continued) (unaudited)



	Year Ended December 31
($ amounts in millions, except per share data)	2015			2014
Interest income, including other financing income on:
Loans, including fees ⁽¹⁾	$	2,942		$	2,941
Securities—taxable ⁽²⁾	564			584
Loans held for sale	16			22
Trading account securities	5			3
Other earning assets ⁽²⁾	43			39
Operating lease assets ⁽¹⁾	33			—
Total interest income, including other financing income	3,603			3,589
Interest expense on:
Deposits	109			105
Short-term borrowings	1			2
Long-term borrowings	158			202
Total interest expense	268			309
Depreciation expense on operating lease assets ⁽¹⁾	28			—
Total interest expense and depreciation expense on operating lease assets	296			309
Net interest income and other financing income	3,307			3,280
Provision for loan losses	241			69
Net interest income and other financing income after provision for loan losses	3,066			3,211
Non-interest income:
Service charges on deposit accounts	662			695
Card and ATM fees	364			334
Mortgage income	162			149
Securities gains, net	29			27
Other	854			698
Total non-interest income	2,071			1,903
Non-interest expense:
Salaries and employee benefits	1,883			1,810
Net occupancy expense	361			368
Furniture and equipment expense	303			287
Other	1,060			967
Total non-interest expense	3,607			3,432
Income from continuing operations before income taxes	1,530			1,682
Income tax expense	455			548
Income from continuing operations	1,075			1,134
Discontinued operations:
Income (loss) from discontinued operations before income taxes	(22		)	21
Income tax expense (benefit)	(9		)	8
Income (loss) from discontinued operations, net of tax	(13		)	13
Net income	$	1,062		$	1,147
Net income from continuing operations available to common shareholders	$	1,011		$	1,082
Net income available to common shareholders	$	998		$	1,095
Weighted-average shares outstanding—during year:
Basic	1,325			1,375
Diluted	1,334			1,387
Actual shares outstanding—end of period	1,297			1,354
Earnings per common share from continuing operations:
Basic	$	0.76		$	0.79
Diluted	$	0.76		$	0.78
Earnings per common share:
Basic	$	0.75		$	0.80
Diluted	$	0.75		$	0.79
Cash dividends declared per common share	$	0.23		$	0.18
Taxable-equivalent net interest income and other financing income from continuing operations	$	3,382		$	3,343

_________

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2015 Earnings Release

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



	Quarter Ended
	12/31/2015							9/30/2015
($ amounts in millions; yields on taxable-equivalent basis)	Average Balance			Income/ Expense		Yield/ Rate		Average Balance			Income/ Expense		Yield/ Rate
Assets
Earning assets:
Federal funds sold and securities purchased under agreements to resell	$	10		$	—	—	%	$	3		$	—	—	%
Trading account securities	138			1		3.71		111			—		—
Securities:
Taxable ⁽¹⁾	24,325			140		2.28		23,912			137		2.28
Tax-exempt	1			—		—		1			—		—
Loans held for sale	404			4		4.18		492			5		3.58
Loans, net of unearned income:
Commercial and industrial ⁽²⁾	35,511			290		3.24		35,647			302		3.37
Commercial real estate mortgage—owner-occupied	7,675			97		5.04		7,768			99		5.04
Commercial real estate construction—owner-occupied	415			5		4.48		443			5		4.31
Commercial investor real estate mortgage	4,332			35		3.20		4,441			35		3.14
Commercial investor real estate construction	2,576			19		2.97		2,455			18		2.96
Residential first mortgage	12,753			127		3.93		12,649			123		3.86
Home equity	10,948			96		3.48		10,902			96		3.51
Indirect—vehicles	3,969			32		3.22		3,863			31		3.23
Indirect—other consumer	523			8		5.71		439			6		5.44
Consumer credit card	1,031			30		11.52		1,004			30		11.57
Other consumer	1,027			22		8.50		1,004			22		8.61
Total loans, net of unearned income ⁽²⁾	80,760			761		3.74		80,615			767		3.78
Investment in operating leases, net ⁽²⁾	852			5		2.60		—			—		—
Other earning assets ⁽¹⁾	3,709			14		1.39		3,441			11		1.21
Total earning assets	110,199			925		3.33		108,575			920		3.36
Allowance for loan losses	(1,120		)					(1,111		)
Cash and due from banks	1,642							1,687
Other non-earning assets	13,924							13,769
	$	124,645						$	122,920
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Savings	$	7,245		2		0.12		$	7,182		2		0.13
Interest-bearing checking	21,052			5		0.08		20,992			4		0.08
Money market	26,627			7		0.10		26,793			7		0.10
Time deposits	7,818			13		0.67		8,110			14		0.67
Total interest-bearing deposits ⁽³⁾	62,742			27		0.17		63,077			27		0.17
Federal funds purchased and securities sold under agreements to repurchase	10			—		—		46			—		—
Other short-term borrowings	3			—		—		250			—		—
Long-term borrowings	7,740			42		2.19		6,112			38		2.45
Total interest-bearing liabilities	70,495			69		0.39		69,485			65		0.37
Non-interest-bearing deposits ⁽³⁾	34,746			—		—		34,089			—		—
Total funding sources	105,241			69		0.26		103,574			65		0.25
Net interest spread						2.94							2.99
Other liabilities	2,503							2,472
Stockholders’ equity	16,901							16,874
	$	124,645						$	122,920
Net interest income and other financing income/margin FTE basis ⁽²⁾				$	856	3.08	%				$	855	3.13	%

_______

(1) Investments in Federal Reserve Bank and Federal Home Loan Bank stock were reclassified from securities available for sale to other earning assets during the fourth quarter of 2015. All periods presented have been revised to reflect this presentation.

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


(3)	Total deposit costs from continuing operations may be calculated by dividing total interest expense on deposits by the sum of interest-bearing deposits and non-interest bearing deposits. The rates for total deposit costs from continuing operations equal 0.11% for both quarters ended December 31, 2015 and September 30, 2015, respectively.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2015 Earnings Release

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



	Quarter Ended
	6/30/2015							3/31/2015							12/31/2014
($ amounts in millions; yields on taxable-equivalent basis)	Average Balance			Income/ Expense		Yield/ Rate		Average Balance			Income/ Expense		Yield/ Rate		Average Balance			Income/ Expense		Yield/ Rate
Assets
Earning assets:
Federal funds sold and securities purchased under agreements to resell	$	2		$	—	—	%	$	21		$	—	—	%	$	20		$	—	—	%
Trading account securities	112			1		1.06		104			3		12.91		103			1		3.70
Securities:
Taxable ⁽¹⁾	24,114			142		2.35		24,170			145		2.43		24,082			143		2.37
Tax-exempt	2			—		—		2			—		—		2			—		—
Loans held for sale	463			4		3.44		406			3		3.46		480			5		3.74
Loans, net of unearned income:
Commercial and industrial	34,480			291		3.38		33,418			287		3.48		32,484			289		3.54
Commercial real estate mortgage—owner-occupied	7,921			97		4.89		8,143			98		4.90		8,466			104		4.89
Commercial real estate construction—owner-occupied	430			5		4.25		422			4		4.22		367			4		4.23
Commercial investor real estate mortgage	4,549			36		3.15		4,629			36		3.15		4,837			37		3.05
Commercial investor real estate construction	2,416			18		3.00		2,236			17		3.04		2,032			17		3.17
Residential first mortgage	12,471			121		3.91		12,330			121		3.97		12,273			121		3.91
Home equity	10,867			96		3.55		10,885			97		3.61		10,939			100		3.60
Indirect—vehicles	3,768			31		3.29		3,708			31		3.37		3,627			31		3.41
Indirect—other consumer	328			4		4.83		237			2		3.96		203			2		3.54
Consumer credit card	975			27		11.23		977			28		11.73		975			28		11.23
Other consumer	970			21		8.63		957			21		8.81		979			20		8.20
Total loans, net of unearned income	79,175			747		3.78		77,942			742		3.86		77,182			753		3.87
Investment in operating leases, net	—			—		—		—			—		—		—			—		—
Other earning assets ⁽¹⁾	2,659			8		1.44		3,486			10		1.11		2,916			9		1.27
Total earning assets	106,527			902		3.40		106,131			903		3.45		104,785			911		3.45
Allowance for loan losses	(1,097		)					(1,098		)					(1,162		)
Cash and due from banks	1,706							1,773							1,805
Other non-earning assets	13,739							13,760							13,694
	$	120,875						$	120,566						$	119,122
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Savings	$	7,165		3		0.12		$	6,878		2		0.14		$	6,635		3		0.12
Interest-bearing checking	21,494			4		0.08		21,769			5		0.09		21,003			5		0.10
Money market	26,483			7		0.11		26,381			7		0.11		25,752			7		0.11
Time deposits	8,250			13		0.67		8,500			14		0.65		8,683			12		0.58
Total interest-bearing deposits ⁽²⁾	63,392			27		0.17		63,528			28		0.18		62,073			27		0.17
Federal funds purchased and securities sold under agreements to repurchase	637			—		—		1,685			—		—		1,872			1		0.09
Other short-term borrowings	942			1		0.21		161			—		—		163			—		—
Long-term borrowings	2,903			35		4.83		3,371			43		5.20		3,618			46		5.07
Total interest-bearing liabilities	67,874			63		0.37		68,745			71		0.42		67,726			74		0.43
Non-interest-bearing deposits ⁽²⁾	33,708			—		—		32,255			—		—		31,951			—		—
Total funding sources	101,582			63		0.25		101,000			71		0.29		99,677			74		0.29
Net interest spread						3.03							3.03							3.02
Other liabilities	2,343							2,603							2,385
Stockholders’ equity	16,950							16,963							17,060
	$	120,875						$	120,566						$	119,122
Net interest income and other financing income/margin FTE basis				$	839	3.16	%				$	832	3.18	%				$	837	3.17	%

_______


(1)	Investments in Federal Reserve Bank and Federal Home Loan Bank stock were reclassified from securities available for sale to other earning assets during the fourth quarter of 2015. All periods presented have been revised to reflect this presentation.


(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 0.11% for each of the quarters ended June 30, 2015, March 31, 2015, and December 31, 2014, respectively.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2015 Earnings Release

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



	Year Ended December 31
	2015							2014
($ amounts in millions; yields on taxable-equivalent basis)	Average Balance			Income/ Expense		Yield/ Rate		Average Balance			Income/ Expense		Yield/ Rate
Assets
Earning assets:
Federal funds sold and securities purchased under agreements to resell	$	9		$	—	—	%	$	12		$	—	—	%
Trading account securities	117			5		4.49		107			3		2.92
Securities:
Taxable ⁽¹⁾	24,130			564		2.34		23,637			584		2.47
Tax-exempt	1			—		—		3			—		—
Loans held for sale	442			16		3.65		564			22		3.89
Loans, net of unearned income:
Commercial and industrial ⁽²⁾	34,772			1,170		3.37		31,205			1,136		3.64
Commercial real estate mortgage—owner-occupied	7,875			391		4.97		8,975			436		4.86
Commercial real estate construction—owner-occupied	428			19		4.32		354			15		4.11
Commercial investor real estate mortgage	4,487			142		3.16		5,121			163		3.19
Commercial investor real estate construction	2,421			72		2.99		1,815			59		3.22
Residential first mortgage	12,552			492		3.92		12,188			486		3.99
Home equity	10,901			385		3.54		11,064			400		3.61
Indirect—vehicles	3,828			125		3.28		3,426			119		3.47
Indirect—other consumer	383			20		5.18		201			7		3.46
Consumer credit card	997			115		11.51		945			106		11.23
Other consumer	990			86		8.63		959			77		8.07
Total loans, net of unearned income ⁽²⁾	79,634			3,017		3.79		76,253			3,004		3.94
Investment in operating leases, net ⁽²⁾	214			5		2.60		—			—		—
Other earning assets ⁽¹⁾⁽³⁾	3,324			43		1.28		3,521			39		1.11
Total earning assets	107,871			3,650		3.38		104,097			3,652		3.51
Allowance for loan losses	(1,106		)					(1,235		)
Cash and due from banks	1,702							1,793
Other non-earning assets	13,798							13,697
	$	122,265						$	118,352
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Savings	$	7,119		9		0.13		$	6,596		8		0.12
Interest-bearing checking	21,324			18		0.08		20,804			19		0.09
Money market	26,573			28		0.10		26,006			29		0.11
Time deposits	8,167			54		0.66		9,003			49		0.55
Total interest-bearing deposits ⁽⁴⁾	63,183			109		0.17		62,409			105		0.17
Federal funds purchased and securities sold under agreements to repurchase	588			—		—		1,944			2		0.08
Other short-term borrowings	338			1		0.20		55			—		—
Long-term borrowings	5,046			158		3.14		4,057			202		4.98
Total interest-bearing liabilities	69,155			268		0.39		68,465			309		0.45
Non-interest-bearing deposits ⁽⁴⁾	33,707			—		—		31,072			—		—
Total funding sources	102,862			268		0.26		99,537			309		0.31
Net interest spread						2.99							3.06
Other liabilities	2,481							2,206
Stockholders’ equity ⁽³⁾	16,922							16,609
	$	122,265						$	118,352
Net interest income and other financing income/margin FTE basis				$	3,382	3.13	%				$	3,343	3.21	%

_______

(2) During the fourth quarter of 2015, Regions corrected the accounting for approximately $214 million of year-to-date average balances of leases, for which Regions is the lessor. These leases had been previously classified as capital leases but were subsequently determined to be operating leases.


(3)	In the first quarter of 2015, the Company adopted new guidance related to the accounting for investments in qualified affordable housing projects. The guidance required retrospective application. All prior period amounts impacted by this guidance have been revised.

(4) Total deposit costs from continuing operations may be calculated by dividing total interest expense on deposits by the sum of interest-bearing deposits and non-interest bearing deposits. The rates for total deposit costs from continuing operations equal 0.11% for both years ended December 31, 2015 and 2014, respectively.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2015 Earnings Release

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

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



	Quarter Ended
($ amounts in millions)	12/31/2015			9/30/2015			6/30/2015			3/31/2015			12/31/2014			4Q15 vs. 3Q15					4Q15 vs. 4Q14
Net income from continuing operations available to common shareholders (GAAP)	$	272		$	246		$	273		$	220		$	203		$	26		10.6	%	$	69		34.0	%
Preferred dividends (GAAP)	16			16			16			16			16			—			—	%	—			—	%
Income tax expense (GAAP)	120			116			124			95			98			4			3.4	%	22			22.4	%
Income from continuing operations before income taxes (GAAP)	408			378			413			331			317			30			7.9	%	91			28.7	%
Provision for loan losses (GAAP)	69			60			63			49			8			9			15.0	%	61			NM
Pre-tax pre-provision income from continuing operations (non-GAAP)	477			438			476			380			325			39			8.9	%	152			46.8	%
Other adjustments:
Securities gains, net	(11		)	(7		)	(6		)	(5		)	(12		)	(4		)	57.1	%	1			(8.3	)%
Insurance proceeds ⁽¹⁾	(1		)	—			(90		)	—			—			(1		)	NM		(1		)	NM
Leveraged lease termination gains, net	—			(6		)	—			(2		)	—			6			(100.0	)%	—			NM
Salaries and employee benefits—severance charges	6			—			—			—			—			6			NM		6			NM
Professional, legal and regulatory expenses ⁽²⁾	—			—			48			—			100			—			NM		(100		)	(100.0	)%
Branch consolidation, property and equipment charges ⁽³⁾	6			1			27			22			10			5			NM		(4		)	(40.0	)%
Loss on early extinguishment of debt	—			—			—			43			—			—			NM		—			NM
Total other adjustments	—			(12		)	(21		)	58			98			12			(100.0	)%	(98		)	(100.0	)%
Adjusted pre-tax pre-provision income from continuing operations (non-GAAP)	$	477		$	426		$	455		$	438		$	423		$	51		12.0	%	$	54		12.8	%

NM - Not Meaningful


(1)	Insurance proceeds recognized in 2015 are related to the settlement of the previously disclosed 2010 class-action lawsuit.


(2)	Regions recorded $50 million and $100 million of contingent legal and regulatory accruals during the second quarter of 2015 and the fourth quarter of 2014, respectively, related to previously disclosed matters. The fourth quarter of 2014 accruals were settled in the second quarter of 2015 for $2 million less than originally estimated and a corresponding recovery was recognized.


(3)	Charges in the second quarter of 2015 resulted from the transfer of land, previously held for future branch expansion, to held for sale based on changes in management's intent.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2015 Earnings Release

Non-Interest Income



	Quarter Ended
($ amounts in millions)	12/31/2015		9/30/2015		6/30/2015		3/31/2015		12/31/2014		4Q15 vs. 3Q15					4Q15 vs. 4Q14
Service charges on deposit accounts	$	166	$	167	$	168	$	161	$	167	$	(1	)	(0.6	)%	$	(1	)	(0.6	)%
Card and ATM fees	96		93		90		85		86		3			3.2	%	10			11.6	%
Investment management and trust fee income	51		49		51		51		50		2			4.1	%	1			2.0	%
Mortgage income	37		39		46		40		27		(2		)	(5.1	)%	10			37.0	%
Insurance commissions and fees	34		38		33		35		31		(4		)	(10.5	)%	3			9.7	%
Capital markets fee income and other ⁽¹⁾	28		29		27		20		20		(1		)	(3.4	)%	8			40.0	%
Insurance proceeds	1		—		90		—		—		1			NM		1			NM
Commercial credit fee income	19		20		21		16		15		(1		)	(5.0	)%	4			26.7	%
Bank-owned life insurance	19		17		18		20		23		2			11.8	%	(4		)	(17.4	)%
Investment services fee income	15		15		13		12		10		—			—	%	5			50.0	%
Securities gains, net	11		7		6		5		12		4			57.1	%	(1		)	(8.3	)%
Net revenue from affordable housing	14		2		6		2		14		12			NM		—			—	%
Other	23		21		21		23		19		2			9.5	%	4			21.1	%
Total non-interest income from continuing operations	$	514	$	497	$	590	$	470	$	474	$	17		3.4	%	$	40		8.4	%

Mortgage Income



	Quarter Ended
($ amounts in millions)	12/31/2015			9/30/2015			6/30/2015			3/31/2015			12/31/2014			4Q15 vs. 3Q15					4Q15 vs. 4Q14
Production and sales	$	23		$	30		$	31		$	27		$	20		$	(7	)	(23.3	)%	$	3		15.0	%
Loan servicing	20			20			20			21			21			—			—	%	(1		)	(4.8	)%
MSR and related hedge impact:
MSRs fair value increase (decrease) due to change in valuation inputs or assumptions	12			(25		)	28			(17		)	(28		)	37			(148.0	)%	40			(142.9	)%
MSRs hedge gain (loss)	(9		)	25			(22		)	17			22			(34		)	(136.0	)%	(31		)	(140.9	)%
MSRs change due to payment decay	(9		)	(11		)	(11		)	(8		)	(8		)	2			(18.2	)%	(1		)	12.5	%
MSR and related hedge impact	(6		)	(11		)	(5		)	(8		)	(14		)	5			(45.5	)%	8			(57.1	)%
Total mortgage income	$	37		$	39		$	46		$	40		$	27		$	(2	)	(5.1	)%	$	10		37.0	%

Mortgage production - purchased	$	852		$	1,057		$	1,097		$	743		$	817		$	(205	)	(19.4	)%	$	35		4.3	%
Mortgage production - refinanced	338			364			505			527			351			(26		)	(7.1	)%	(13		)	(3.7	)%
Total mortgage production ⁽²⁾	$	1,190		$	1,421		$	1,602		$	1,270		$	1,168		$	(231	)	(16.3	)%	$	22		1.9	%

Wealth Management Income



	Quarter Ended
($ amounts in millions)	12/31/2015		9/30/2015		6/30/2015		3/31/2015		12/31/2014		4Q15 vs. 3Q15					4Q15 vs. 4Q14
Investment management and trust fee income	$	51	$	49	$	51	$	51	$	50	$	2		4.1	%	$	1	2.0	%
Insurance commissions and fees	34		38		33		35		31		(4		)	(10.5	)%	3		9.7	%
Investment services fee income	15		15		13		12		10		—			—	%	5		50.0	%
Total wealth management income ⁽³⁾	$	100	$	102	$	97	$	98	$	91	$	(2	)	(2.0	)%	$	9	9.9	%

_________

NM - Not Meaningful

(1)

Capital markets fee income and other primarily relates to capital raising activities that includes securities underwriting and placement, loan syndication and placement, as well as foreign exchange, derivative and advisory services. Beginning in the fourth quarter of 2015, this category also includes revenue derived from the purchase of BlackArch Partners, a private, middle-market mergers and acquisitions advisory firm headquartered in Charlotte, North Carolina.


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


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

Selected Non-Interest Income Variance Analysis


•	Beginning in the second quarter of 2015, unused commitment fees are reported in commercial credit fee income. Prior period amounts remain in interest

income.


•	Net revenue from affordable housing includes gains resulting from the sale of certain investments. This activity resulted in increased revenue in both of the fourth quarters of 2015 and 2014.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2015 Earnings Release

Non-Interest Expense



	Quarter Ended
($ amounts in millions)	12/31/2015		9/30/2015		6/30/2015		3/31/2015		12/31/2014		4Q15 vs. 3Q15					4Q15 vs. 4Q14
Salaries and employee benefits	$	478	$	470	$	477	$	458	$	456	$	8		1.7	%	$	22		4.8	%
Net occupancy expense	91		90		89		91		93		1			1.1	%	(2		)	(2.2	)%
Furniture and equipment expense	79		77		76		71		74		2			2.6	%	5			6.8	%
Outside services	40		38		40		31		37		2			5.3	%	3			8.1	%
Marketing	23		24		25		26		24		(1		)	(4.2	)%	(1		)	(4.2	)%
Professional, legal and regulatory expenses	22		25		71		19		134		(3		)	(12.0	)%	(112		)	(83.6	)%
FDIC insurance assessments ⁽¹⁾	22		46		15		22		20		(24		)	(52.2	)%	2			10.0	%
Credit/checkcard expenses	13		15		13		13		11		(2		)	(13.3	)%	2			18.2	%
Branch consolidation, property and equipment charges	6		1		27		22		10		5			NM		(4		)	(40.0	)%
Loss on early extinguishment of debt	—		—		—		43		—		—			NM		—			NM
Other	99		109		101		109		110		(10		)	(9.2	)%	(11		)	(10.0	)%
Total non-interest expense from continuing operations	$	873	$	895	$	934	$	905	$	969	$	(22	)	(2.5	)%	$	(96	)	(9.9	)%

_________

NM - Not Meaningful


(1)	Prior to December 31, 2015, this was referred to as "deposit administrative fee".

Selected Non-Interest Expense Variance Analysis


•	Salaries and employee benefits increased in the fourth quarter of 2015 compared to the third quarter of 2015 primarily due to $6 million in severance related expenses.


•	During the second quarter of 2015 and the fourth quarter of 2014, Regions recorded $50 million and $100 million, respectively, of contingent legal and regulatory accruals related to previously disclosed matters. The fourth quarter of 2014 accruals were settled in the second quarter of 2015 for $2 million less than originally estimated and a corresponding recovery was recognized.


•	FDIC insurance assessments decreased in the fourth quarter of 2015 compared to the third quarter of 2015 due to an assessment expense of $23 million for adjustments related to prior assessments that was recorded in the third quarter. The second quarter of 2015 included a $6 million refund from over payments.


•	Branch consolidation, property and equipment charges in the first and fourth quarters of 2015 resulted from branch consolidations. The second quarter of 2015 charges resulted from the transfer of land, previously held for future branch expansion, to held for sale based on changes in management's intent.


•	Other expenses decreased in the fourth quarter of 2015 primarily as a result of a $12 million reduction in the Company's reserves for unfunded credit losses.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2015 Earnings Release

Reconciliation to GAAP Financial Measures

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

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

The following table also provides a calculation of “return on average tangible common stockholders’ equity”. Tangible common stockholders’ equity ratios have become a focus of some investors and management believes they may assist investors in analyzing the capital position of the Company absent the effects of intangible assets and preferred stock. Analysts and banking regulators have assessed Regions’ capital adequacy using the tangible common stockholders’ equity measure. Because tangible common stockholders’ equity is not formally defined by GAAP or prescribed in any amount by federal banking regulations it is currently considered to be a non-GAAP financial measure and other entities may calculate it differently than Regions’ disclosed calculations. Since analysts and banking regulators may assess Regions’ capital adequacy using tangible common stockholders’ equity, management believes that it is useful to provide investors the ability to assess Regions’ capital adequacy on this same basis.



		Quarter Ended
($ amounts in millions)		12/31/2015			9/30/2015			6/30/2015			3/31/2015			12/31/2014			4Q15 vs. 3Q15					4Q15 vs. 4Q14
ADJUSTED EFFICIENCY AND FEE INCOME RATIOS, ADJUSTED NON-INTEREST INCOME/EXPENSE- CONTINUING OPERATIONS
Non-interest expense (GAAP)		$	873		$	895		$	934		$	905		$	969		$	(22	)	(2.5	)%	$	(96	)	(9.9	)%
Adjustments:
Professional, legal and regulatory expenses ⁽¹⁾		—			—			(48		)	—			(100		)	—			NM		100			(100.0	)%
Branch consolidation, property and equipment charges ⁽²⁾		(6		)	(1		)	(27		)	(22		)	(10		)	(5		)	NM		4			(40.0	)%
Loss on early extinguishment of debt		—			—			—			(43		)	—			—			NM		—			NM
Salary and employee benefits—severance charges		(6		)	—			—			—			—			(6		)	NM		(6		)	NM
Adjusted non-interest expense (non-GAAP)	A	$	861		$	894		$	859		$	840		$	859		$	(33	)	(3.7	)%	$	2		0.2	%
Net interest income and other financing income (GAAP)		$	836		$	836		$	820		$	815		$	820		$	—		NM		$	16		2.0	%
Taxable-equivalent adjustment		20			19			19			17			17			1			5.3	%	3			17.6	%
Net interest income and other financing income, taxable-equivalent basis	B	$	856		$	855		$	839		$	832		$	837		$	1		0.1	%	$	19		2.3	%
Non-interest income (GAAP)	C	$	514		$	497		$	590		$	470		$	474		$	17		3.4	%	$	40		8.4	%
Adjustments:
Securities gains, net		(11		)	(7		)	(6		)	(5		)	(12		)	(4		)	57.1	%	1			(8.3	)%
Insurance proceeds ⁽³⁾		(1		)	—			(90		)	—			—			(1		)	NM		(1		)	NM
Leveraged lease termination gains, net		—			(6		)	—			(2		)	—			6			(100.0	)%	—			NM
Adjusted non-interest income (non-GAAP)	D	$	502		$	484		$	494		$	463		$	462		$	18		3.7	%	$	40		8.7	%
Total revenue, taxable-equivalent basis	B+C	$	1,370		$	1,352		$	1,429		$	1,302		$	1,311		$	18		1.3	%	$	59		4.5	%
Adjusted total revenue, taxable-equivalent basis (non-GAAP)	B+D=E	$	1,358		$	1,339		$	1,333		$	1,295		$	1,299		$	19		1.4	%	$	59		4.5	%
Adjusted efficiency ratio (non-GAAP) ⁽⁴⁾⁽⁵⁾	A/E	63.4		%	66.8		%	64.5		%	64.9		%	66.1		%
Adjusted fee income ratio (non-GAAP)	D/E	37.0		%	36.2		%	37.0		%	35.7		%	35.6		%

		Quarter Ended
($ amounts in millions)		12/31/2015			9/30/2015			6/30/2015			3/31/2015			12/31/2014
RETURN ON AVERAGE TANGIBLE COMMON STOCKHOLDERS' EQUITY- CONSOLIDATED
Net income available to common shareholders (GAAP)	F	$	269		$	242		$	269		$	218		$	200
Average stockholders' equity (GAAP)		$	16,889		$	16,866		$	16,946		$	16,963		$	17,074
Less:
Average intangible assets (GAAP)		5,132			5,089			5,083			5,089			5,097
Average deferred tax liability related to intangibles (GAAP)		(167		)	(169		)	(171		)	(172		)	(176		)
Average preferred stock (GAAP)		822			838			856			878			886
Average tangible common stockholders' equity (non-GAAP)	G	$	11,102		$	11,108		$	11,178		$	11,168		$	11,267
Return on average tangible common stockholders' equity (non-GAAP)*	F/G	9.61		%	8.65		%	9.66		%	7.91		%	7.04		%

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2015 Earnings Release

Reconciliation to GAAP Financial Measures

Adjusted Efficiency Ratios, Adjusted Fee Income Ratios, Adjusted Non-Interest Income/Expense, and Return Ratios (Continued)



		Year Ended December 31
($ amounts in millions)		2015			2014			2015 vs. 2014
ADJUSTED EFFICIENCY AND FEE INCOME RATIOS, ADJUSTED NON-INTEREST INCOME/EXPENSE- CONTINUING OPERATIONS
Non-interest expense (GAAP)		$	3,607		$	3,432		$	175		5.1	%
Adjustments:
Professional, legal and regulatory expenses ⁽¹⁾		(48		)	(93		)	45			(48.4	)%
Branch consolidation, property and equipment charges ⁽²⁾		(56		)	(16		)	(40		)	250.0	%
Loss on early extinguishment of debt		(43		)	—			(43		)	NM
Salary and employee benefits—severance charges		(6		)	—			(6		)	NM
Gain on sale of TDRs held for sale, net		—			35			(35		)	(100.0	)%
Adjusted non-interest expense (non-GAAP)	H	$	3,454		$	3,358		$	96		2.9	%
Net interest income and other financing income (GAAP)		$	3,307		$	3,280		$	27		0.8	%
Taxable-equivalent adjustment		75			63			12			19.0	%
Net interest income and other financing income, taxable-equivalent basis	I	$	3,382		$	3,343		$	39		1.2	%
Non-interest income (GAAP)	J	$	2,071		$	1,903		$	168		8.8	%
Adjustments:
Securities gains, net		(29		)	(27		)	(2		)	7.4	%
Insurance proceeds ⁽³⁾		(91		)	—			(91		)	NM
Leveraged lease termination gains, net		(8		)	(10		)	2			(20.0	)%
Adjusted non-interest income (non-GAAP)	K	$	1,943		$	1,866		$	77		4.1	%
Total revenue, taxable-equivalent basis	I+J	$	5,453		$	5,246		$	207		3.9	%
Adjusted total revenue, taxable-equivalent basis (non-GAAP)	I+K=L	$	5,325		$	5,209		$	116		2.2	%
Adjusted efficiency ratio (non-GAAP) ⁽⁶⁾	H/L	64.9		%	64.4		%
Adjusted fee income ratio (non-GAAP)	K/L	36.5		%	35.8		%

________

*Annualized

NM - Not Meaningful


(1)	Regions recorded $50 million and $100 million of contingent legal and regulatory accruals during the second quarter of 2015 and the fourth quarter of 2014, respectively, related to previously disclosed matters. The fourth quarter of 2014 accruals were settled in the second quarter of 2015 for $2 million less than originally estimated and a corresponding recovery was recognized.


(2)	Branch consolidation, property and equipment charges in the second quarter of 2015 resulted from the transfer of land, previously held for future branch expansion, to held for sale based on changes in management's intent.


(3)	Insurance proceeds recognized in 2015 are related to the settlement of the previously disclosed 2010 class-action lawsuit.


(4)	Excluding $23 million of FDIC insurance assessment adjustments to prior assessments recorded in the third quarter of 2015, the adjusted efficiency ratio would have been 65.0%.

(5)


(6)	Excluding the $23 million of FDIC insurance assessment adjustments recorded in the third quarter of 2015, and the $15 million negative adjustment to net interest income and other financing income related to the leases adjustment in the fourth quarter of 2015, the adjusted year-to-date efficiency ratio would have been 64.3%.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2015 Earnings Release

Statements of Discontinued Operations (unaudited)

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



	Quarter Ended
($ amounts in millions, except per share data)	12/31/2015			9/30/2015			6/30/2015			3/31/2015			12/31/2014
Non-interest expense:
Professional and legal expenses	$	5		$	7		$	5		$	4		$	5
Other	1			(1		)	1			—			—
Total non-interest expense	6			6			6			4			5
Income (loss) from discontinued operations before income tax	(6		)	(6		)	(6		)	(4		)	(5		)
Income tax expense (benefit)	(3		)	(2		)	(2		)	(2		)	(2		)
Income (loss) from discontinued operations, net of tax	$	(3	)	$	(4	)	$	(4	)	$	(2	)	$	(3	)
Weighted-average shares outstanding—during quarter ⁽¹⁾:
Basic	1,301			1,319			1,335			1,346			1,365
Diluted	1,301			1,319			1,335			1,346			1,365
Earnings (loss) per common share from discontinued operations:
Basic	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)



	Year Ended December 31
($ amounts in millions, except per share data)	2015			2014
Non-interest income:
Insurance proceeds	$	—		$	19
Total non-interest income	—			19
Non-interest expense:
Professional and legal expenses	21			(3		)
Other	1			1
Total non-interest expense	22			(2		)
Income (loss) from discontinued operations before income tax	(22		)	21
Income tax expense (benefit)	(9		)	8
Income (loss) from discontinued operations, net of tax	$	(13	)	$	13
Weighted-average shares outstanding—during year ⁽¹⁾:
Basic	1,325			1,375
Diluted	1,325			1,387
Earnings (loss) per common share from discontinued operations:
Basic	$	(0.01	)	$	0.01
Diluted	$	(0.01	)	$	0.01

_________


(1)	In a period 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 2015 Earnings Release

Credit Quality



	As of and for Quarter Ended
($ amounts in millions)	12/31/2015			9/30/2015			6/30/2015			3/31/2015			12/31/2014
Components:
Allowance for loan losses (ALL)	$	1,106		$	1,115		$	1,115		$	1,098		$	1,103
Reserve for unfunded credit commitments	52			64			64			66			65
Allowance for credit losses (ACL)	$	1,158		$	1,179		$	1,179		$	1,164		$	1,168

Provision for loan losses	$	69		$	60		$	63		$	49		$	8
Provision (credit) for unfunded credit losses	(12		)	—			(2		)	1			—

Net loans charged-off:
Commercial and industrial	43			16			4			16			23
Commercial real estate mortgage—owner-occupied	1			3			3			1			11
Commercial real estate construction—owner-occupied	—			—			—			—			—
Total commercial	44			19			7			17			34
Commercial investor real estate mortgage	(2		)	(2		)	1			2			(2		)
Commercial investor real estate construction	(7		)	—			(2		)	(2		)	(1		)
Total investor real estate	(9		)	(2		)	(1		)	—			(3		)
Residential first mortgage	5			6			4			3			6
Home equity—first lien	2			4			5			3			5
Home equity—second lien	5			7			7			7			11
Indirect—vehicles	9			6			5			6			7
Consumer credit card	8			7			8			8			8
Other consumer	14			13			11			10			15
Total consumer	43			43			40			37			52
Total	$	78		$	60		$	46		$	54		$	83
Net loan charge-offs as a % of average loans, annualized:
Commercial and industrial	0.48		%	0.18		%	0.04		%	0.20		%	0.28		%
Commercial real estate mortgage—owner-occupied	0.08		%	0.14		%	0.14		%	0.05		%	0.54		%
Commercial real estate construction—owner-occupied	(0.13		)%	(0.09		)%	(0.03		)%	(0.03		)%	(0.02		)%
Total commercial	0.40		%	0.17		%	0.06		%	0.17		%	0.33		%
Commercial investor real estate mortgage	(0.22		)%	(0.17		)%	0.09		%	0.17		%	(0.11		)%
Commercial investor real estate construction	(1.00		)%	(0.15		)%	(0.23		)%	(0.40		)%	(0.32		)%
Total investor real estate	(0.51		)%	(0.16		)%	(0.02		)%	(0.01		)%	(0.17		)%
Residential first mortgage	0.16		%	0.17		%	0.15		%	0.10		%	0.18		%
Home equity—first lien	0.11		%	0.24		%	0.30		%	0.19		%	0.29		%
Home equity—second lien	0.47		%	0.62		%	0.67		%	0.58		%	0.93		%
Indirect—vehicles	0.83		%	0.68		%	0.50		%	0.69		%	0.77		%
Consumer credit card	3.14		%	3.01		%	3.13		%	3.43		%	3.29		%
Other consumer	5.25		%	5.37		%	4.27		%	4.43		%	5.92		%
Total consumer	0.55		%	0.59		%	0.54		%	0.53		%	0.70		%
Total	0.38		%	0.30		%	0.23		%	0.28		%	0.42		%
Non-accrual loans, excluding loans held for sale	$	782		$	789		$	751		$	800		$	829
Non-performing loans held for sale	38			26			26			32			38
Non-accrual loans, including loans held for sale	820			815			777			832			867
Foreclosed properties	100			111			134			138			124
Non-performing assets (NPAs)	$	920		$	926		$	911		$	970		$	991
Loans past due > 90 days ⁽¹⁾	$	213		$	210		$	197		$	211		$	222
Accruing restructured loans not included in categories above ⁽²⁾	$	1,039		$	1,046		$	1,150		$	1,220		$	1,260
Credit Ratios:
ACL/Loans, net	1.43		%	1.45		%	1.47		%	1.49		%	1.51		%
ALL/Loans, net	1.36		%	1.38		%	1.39		%	1.40		%	1.43		%
Allowance for loan losses to non-performing loans, excluding loans held for sale	1.41x			1.41x			1.49x			1.37x			1.33x
Non-accrual loans, excluding loans held for sale/Loans, net	0.96		%	0.97		%	0.94		%	1.02		%	1.07		%
NPAs (ex. 90+ past due)/Loans, foreclosed properties and non-performing loans held for sale	1.13		%	1.14		%	1.13		%	1.24		%	1.28		%
NPAs (inc. 90+ past due)/Loans, foreclosed properties and non-performing loans held for sale ⁽¹⁾	1.39		%	1.40		%	1.38		%	1.51		%	1.57		%


(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.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2015 Earnings Release

Credit Quality (Continued)

Allowance for Credit Losses



	Year Ended December 31
($ amounts in millions)	2015			2014
Balance at beginning of year	$	1,168		$	1,419
Net loans charged off	(238		)	(307		)
Provision for loan losses	241			69
Provision (credit) for unfunded credit losses	(13		)	(13		)
Balance at end of year	$	1,158		$	1,168

Non-Accrual Loans (excludes loans held for sale)



	As of
($ amounts in millions)	12/31/2015				9/30/2015				6/30/2015				3/31/2015				12/31/2014
Commercial and industrial	$	325	0.91	%	$	350	0.97	%	$	297	0.84	%	$	298	0.89	%	$	252	0.77	%
Commercial real estate mortgage—owner-occupied	268		3.55	%	233		3.01	%	203		2.60	%	216		2.68	%	238		2.88	%
Commercial real estate construction—owner-occupied	2		0.50	%	3		0.81	%	4		0.96	%	3		0.63	%	3		0.64	%
Total commercial	595		1.36	%	586		1.33	%	504		1.16	%	517		1.23	%	493		1.19	%
Commercial investor real estate mortgage	31		0.73	%	39		0.89	%	63		1.38	%	85		1.89	%	123		2.64	%
Commercial investor real estate construction	—		—	%	1		0.02	%	2		0.08	%	—		0.01	%	2		0.09	%
Total investor real estate	31		0.45	%	40		0.57	%	65		0.93	%	85		1.23	%	125		1.84	%
Residential first mortgage	63		0.49	%	67		0.53	%	86		0.68	%	101		0.81	%	109		0.88	%
Home equity	93		0.84	%	96		0.88	%	96		0.88	%	97		0.90	%	102		0.94	%
Total consumer	156		0.51	%	163		0.54	%	182		0.61	%	198		0.68	%	211		0.72	%
Total non-accrual loans	$	782	0.96	%	$	789	0.97	%	$	751	0.94	%	$	800	1.02	%	$	829	1.07	%

Criticized and Classified Loans—Business Services ⁽¹⁾



	As of
											12/31/2015				12/31/2015
($ amounts in millions)	12/31/2015		9/30/2015		6/30/2015		3/31/2015		12/31/2014		vs. 9/30/2015				vs. 12/31/2014
Special mention ⁽²⁾	$	1,434	$	1,416	$	1,163	$	1,097	$	1,206	$	18	1.3	%	$	228	18.9	%
Accruing classified loans	1,311		1,212		1,218		1,125		875		99		8.2	%	436		49.8	%
Non-accruing classified loans	626		626		569		602		618		—		—	%	8		1.3	%
Total	$	3,371	$	3,254	$	2,950	$	2,824	$	2,699	$	117	3.6	%	$	672	24.9	%


(1)	Business services represents the combined total of commercial and investor real estate loans.


(2)	The fourth and third quarters of 2015 increases in business services special mention ("criticized") loans were driven by some weakening in a small number of larger loans primarily within the energy portfolio.

Home Equity Lines of Credit - Future Principal Payment Resets ⁽³⁾



	As of 12/31/2015
($ amounts in millions)	First Lien		% of Total		Second Lien		% of Total		Total
2016	$	27	0.34	%	$	54	0.69	%	$	81
2017	4		0.06	%	10		0.13	%	14
2018	14		0.17	%	20		0.25	%	34
2019	94		1.20	%	83		1.06	%	177
2020	189		2.40	%	148		1.88	%	337
2021-2025	1,591		20.27	%	1,557		19.83	%	3,148
2026-2030	2,009		25.59	%	2,049		26.10	%	4,058
Thereafter	—		0.01	%	1		0.02	%	1
Total	$	3,928	50.04	%	$	3,922	49.96	%	$	7,850

(3)

The balance of Regions' home equity portfolio was $10,978 million at December 31, 2015 consisting of $7,850 million of home equity lines of credit and $3,128 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 2015 Earnings Release

Early and Late Stage Delinquencies



Accruing 30-89 Days Past Due Loans	As of
($ amounts in millions)	12/31/2015				9/30/2015				6/30/2015				3/31/2015				12/31/2014
Commercial and industrial	$	17	0.05	%	$	16	0.05	%	$	23	0.06	%	$	27	0.08	%	$	23	0.07	%
Commercial real estate mortgage—owner-occupied	31		0.42	%	41		0.53	%	38		0.49	%	30		0.37	%	34		0.41	%
Commercial real estate construction—owner-occupied	1		0.29	%	1		0.18	%	—		0.10	%	—		—	%	1		0.13	%
Total commercial	49		0.11	%	58		0.13	%	61		0.14	%	57		0.13	%	58		0.14	%
Commercial investor real estate mortgage	27		0.63	%	24		0.54	%	18		0.39	%	9		0.19	%	20		0.42	%
Commercial investor real estate construction	2		0.06	%	1		0.02	%	—		0.01	%	4		0.17	%	—		—	%
Total investor real estate	29		0.41	%	25		0.35	%	18		0.26	%	13		0.18	%	20		0.29	%
Residential first mortgage—non-guaranteed ⁽¹⁾	122		0.98	%	116		0.94	%	124		1.02	%	109		0.91	%	139		1.17	%
Home equity	84		0.76	%	98		0.89	%	84		0.77	%	101		0.93	%	111		1.02	%
Indirect—vehicles	63		1.59	%	52		1.33	%	46		1.21	%	41		1.10	%	53		1.45	%
Indirect—other consumer	3		0.57	%	2		0.33	%	1		0.14	%	—		—	%	—		—	%
Consumer credit card	12		1.08	%	11		1.13	%	10		1.02	%	11		1.14	%	13		1.32	%
Other consumer	15		1.44	%	14		1.41	%	14		1.42	%	12		0.99	%	17		1.45	%
Total consumer ⁽¹⁾	299		0.99	%	293		0.99	%	279		0.95	%	274		0.95	%	333		1.16	%
Total accruing 30-89 days past due loans ⁽¹⁾	$	377	0.47	%	$	376	0.47	%	$	358	0.45	%	$	344	0.44	%	$	411	0.53	%

Accruing 90+ Days Past Due Loans	As of
($ amounts in millions)	12/31/2015				9/30/2015				6/30/2015				3/31/2015				12/31/2014
Commercial and industrial	$	9	0.02	%	$	7	0.02	%	$	3	0.01	%	$	4	0.01	%	$	7	0.02	%
Commercial real estate mortgage—owner-occupied	3		0.03	%	6		0.08	%	2		0.02	%	7		0.09	%	5		0.06	%
Total commercial	12		0.03	%	13		0.03	%	5		0.01	%	11		0.03	%	12		0.03	%
Commercial investor real estate mortgage	4		0.10	%	2		0.05	%	1		0.01	%	2		0.05	%	3		0.06	%
Total investor real estate	4		0.06	%	2		0.03	%	1		0.01	%	2		0.03	%	3		0.04	%
Residential first mortgage—non-guaranteed ⁽²⁾	113		0.91	%	121		0.98	%	109		0.89	%	109		0.90	%	122		1.03	%
Home equity	59		0.54	%	51		0.47	%	61		0.55	%	67		0.62	%	63		0.57	%
Indirect—vehicles	9		0.22	%	8		0.20	%	6		0.18	%	6		0.16	%	7		0.20	%
Consumer credit card	12		1.12	%	11		1.07	%	11		1.10	%	12		1.25	%	12		1.21	%
Other consumer	4		0.37	%	4		0.40	%	4		0.37	%	4		0.31	%	3		0.22	%
Total consumer ⁽²⁾	197		0.66	%	195		0.66	%	191		0.65	%	198		0.69	%	207		0.72	%
Total accruing 90+ days past due loans ⁽²⁾	$	213	0.26	%	$	210	0.26	%	$	197	0.25	%	$	211	0.27	%	$	222	0.29	%

Total delinquencies ^{(1) (2)}	$	590	0.73	%	$	586	0.73	%	$	555	0.70	%	$	555	0.71	%	$	633	0.82	%


(1)	Excludes loans that are 100% guaranteed by FHA. Total 30-89 days past due guaranteed loans excluded were $26 million at 12/31/2015, $23 million at 9/30/2015, $23 million at 6/30/2015, $18 million at 3/31/2015 and $24 million at 12/31/2014.


(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 $107 at 12/31/2015, $110 million at 9/30/2015, $103 million at 6/30/2015, $116 million at 3/31/2015 and $125 million at 12/31/2014.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2015 Earnings Release

Troubled Debt Restructurings



	As of
($ amounts in millions)	12/31/2015		9/30/2015		6/30/2015		3/31/2015		12/31/2014
Current:
Commercial	$	135	$	147	$	202	$	244	$	244
Investor real estate	149		145		194		227		281
Residential first mortgage	341		334		328		333		301
Home equity	306		309		317		316		320
Consumer credit card	2		2		2		2		2
Other consumer	12		13		14		15		16
Total current	945		950		1,057		1,137		1,164
Accruing 30-89 DPD:
Commercial	11		12		16		5		7
Investor real estate	8		6		5		7		9
Residential first mortgage	57		58		53		49		55
Home equity	17		19		18		21		23
Other consumer	1		1		1		1		2
Total accruing 30-89 DPD	94		96		93		83		96
Total accruing and <90 DPD	1,039		1,046		1,150		1,220		1,260
Non-accrual or 90+ DPD:
Commercial	135		118		93		104		93
Investor real estate	22		25		31		42		67
Residential first mortgage	81		88		90		96		112
Home equity	18		21		22		24		25
Total non-accrual or 90+DPD	256		252		236		266		297
Total TDRs - Loans	$	1,295	$	1,298	$	1,386	$	1,486	$	1,557

TDRs - Held For Sale	8		14		18		19		29
Total TDRs	$	1,303	$	1,312	$	1,404	$	1,505	$	1,586


Total TDRs - Loans by Portfolio
	As of
($ amounts in millions)	12/31/2015		9/30/2015		6/30/2015		3/31/2015		12/31/2014
Total commercial TDRs	$	281	$	277	$	311	$	353	$	344
Total investor real estate TDRs	179		176		230		276		357
Total consumer TDRs	835		845		845		857		856
Total TDRs - Loans	$	1,295	$	1,298	$	1,386	$	1,486	$	1,557

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2015 Earnings Release

Consolidated Balance Sheets (unaudited)



	As of
($ amounts in millions)	12/31/2015			9/30/2015			6/30/2015			3/31/2015			12/31/2014
Assets:
Cash and due from banks	$	1,382		$	1,726		$	1,661		$	1,737		$	1,601
Interest-bearing deposits in other banks	3,932			3,217			2,094			4,224			2,303
Federal funds sold and securities purchased under agreements to resell	—			65			—			65			100
Trading account securities	143			106			110			107			106
Securities held to maturity	1,946			2,001			2,067			2,129			2,175
Securities available for sale ⁽¹⁾	22,710			22,034			22,045			22,375			22,053
Loans held for sale	448			453			511			491			541
Loans, net of unearned income ⁽²⁾	81,162			81,063			80,149			78,243			77,307
Allowance for loan losses	(1,106		)	(1,115		)	(1,115		)	(1,098		)	(1,103		)
Net loans	80,056			79,948			79,034			77,145			76,204
Other earning assets ⁽¹⁾⁽²⁾	1,652			773			697			587			616
Premises and equipment, net	2,152			2,122			2,147			2,174			2,193
Interest receivable	319			316			305			313			310
Goodwill	4,878			4,831			4,816			4,816			4,816
Residential mortgage servicing rights at fair value (MSRs)	252			241			268			239			257
Other identifiable intangible assets	259			263			268			272			275
Other assets	5,921			6,693			5,832			5,773			6,013
Total assets	$	126,050		$	124,789		$	121,855		$	122,447		$	119,563
Liabilities and stockholders’ equity:
Deposits:
Non-interest-bearing	$	34,862		$	34,117		$	33,810		$	33,553		$	31,747
Interest-bearing	63,568			63,061			63,265			63,924			62,453
Total deposits	98,430			97,178			97,075			97,477			94,200
Borrowed funds:
Short-term borrowings:
Federal funds purchased and securities sold under agreements to repurchase	—			—			96			2,085			1,753
Other short-term borrowings	10			—			1,750			—			500
Total short-term borrowings	10			—			1,846			2,085			2,253
Long-term borrowings	8,349			7,364			3,602			3,208			3,462
Total borrowed funds	8,359			7,364			5,448			5,293			5,715
Other liabilities	2,417			3,295			2,433			2,626			2,775
Total liabilities	109,206			107,837			104,956			105,396			102,690
Stockholders’ equity:
Preferred stock, non-cumulative perpetual	820			836			852			868			884
Common stock	13			13			14			14			14
Additional paid-in capital	17,883			18,019			18,355			18,604			18,767
Retained earnings (deficit)	(115		)	(400		)	(658		)	(943		)	(1,177		)
Treasury stock, at cost	(1,377		)	(1,377		)	(1,377		)	(1,377		)	(1,377		)
Accumulated other comprehensive income (loss), net	(380		)	(139		)	(287		)	(115		)	(238		)
Total stockholders’ equity	16,844			16,952			16,899			17,051			16,873
Total liabilities and stockholders’ equity	$	126,050		$	124,789		$	121,855		$	122,447		$	119,563

_________

(2) During the fourth quarter of 2015, certain capital leases, for which Regions is the lessor, were determined to be operating leases resulting in their reclassification out of loans into other earning assets. These lease balances were $834 million at year-end.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2015 Earnings Release

Loans and Leases



	As of
											12/31/2015					12/31/2015
($ amounts in millions)	12/31/2015		9/30/2015		6/30/2015		3/31/2015		12/31/2014		vs. 9/30/2015					vs. 12/31/2014
Commercial and industrial	$	35,821	$	35,906	$	35,347	$	33,681	$	32,732	$	(85	)	(0.2	)%	$	3,089		9.4	%
Commercial real estate mortgage—owner-occupied	7,538		7,741		7,797		8,043		8,263		(203		)	(2.6	)%	(725		)	(8.8	)%
Commercial real estate construction—owner-occupied	423		406		448		437		407		17			4.2	%	16			3.9	%
Total commercial ⁽¹⁾	43,782		44,053		43,592		42,161		41,402		(271		)	(0.6	)%	2,380			5.7	%
Commercial investor real estate mortgage	4,255		4,386		4,509		4,499		4,680		(131		)	(3.0	)%	(425		)	(9.1	)%
Commercial investor real estate construction	2,692		2,525		2,419		2,422		2,133		167			6.6	%	559			26.2	%
Total investor real estate	6,947		6,911		6,928		6,921		6,813		36			0.5	%	134			2.0	%
Total business ⁽¹⁾	50,729		50,964		50,520		49,082		48,215		(235		)	(0.5	)%	2,514			5.2	%
Residential first mortgage	12,811		12,730		12,589		12,418		12,315		81			0.6	%	496			4.0	%
Home equity—first lien	6,696		6,577		6,424		6,261		6,195		119			1.8	%	501			8.1	%
Home equity—second lien	4,282		4,370		4,475		4,593		4,737		(88		)	(2.0	)%	(455		)	(9.6	)%
Indirect—vehicles	3,984		3,895		3,782		3,701		3,642		89			2.3	%	342			9.4	%
Indirect—other consumer	545		490		383		272		206		55			11.2	%	339			164.6	%
Consumer credit card	1,075		1,016		992		966		1,009		59			5.8	%	66			6.5	%
Other consumer	1,040		1,021		984		950		988		19			1.9	%	52			5.3	%
Total consumer	30,433		30,099		29,629		29,161		29,092		334			1.1	%	1,341			4.6	%
Total Loans	$	81,162	$	81,063	$	80,149	$	78,243	$	77,307	$	99		0.1	%	$	3,855		5.0	%
Operating leases previously reported as capital leases	834		—		—		—		—		834			NM		834			NM
Adjusted Total Loans and Leases (non-GAAP)⁽¹⁾	$	81,996	$	81,063	$	80,149	$	78,243	$	77,307	$	933		1.2	%	$	4,689		6.1	%

	Average Balances
($ amounts in millions)	4Q15		3Q15		2Q15		1Q15		4Q14		4Q15 vs. 3Q15					4Q15 vs. 4Q14
Commercial and industrial	$	35,511	$	35,647	$	34,480	$	33,418	$	32,484	$	(136	)	(0.4	)%	$	3,027		9.3	%
Commercial real estate mortgage—owner-occupied	7,675		7,768		7,921		8,143		8,466		(93		)	(1.2	)%	(791		)	(9.3	)%
Commercial real estate construction—owner-occupied	415		443		430		422		367		(28		)	(6.3	)%	48			13.1	%
Total commercial	43,601		43,858		42,831		41,983		41,317		(257		)	(0.6	)%	2,284			5.5	%
Commercial investor real estate mortgage	4,332		4,441		4,549		4,629		4,837		(109		)	(2.5	)%	(505		)	(10.4	)%
Commercial investor real estate construction	2,576		2,455		2,416		2,236		2,032		121			4.9	%	544			26.8	%
Total investor real estate	6,908		6,896		6,965		6,865		6,869		12			0.2	%	39			0.6	%
Total business	50,509		50,754		49,796		48,848		48,186		(245		)	(0.5	)%	2,323			4.8	%
Residential first mortgage	12,753		12,649		12,471		12,330		12,273		104			0.8	%	480			3.9	%
Home equity—first lien	6,643		6,510		6,355		6,234		6,161		133			2.0	%	482			7.8	%
Home equity—second lien	4,305		4,392		4,512		4,651		4,778		(87		)	(2.0	)%	(473		)	(9.9	)%
Indirect—vehicles	3,969		3,863		3,768		3,708		3,627		106			2.7	%	342			9.4	%
Indirect—other consumer	523		439		328		237		203		84			19.1	%	320			157.6	%
Consumer credit card	1,031		1,004		975		977		975		27			2.7	%	56			5.7	%
Other consumer	1,027		1,004		970		957		979		23			2.3	%	48			4.9	%
Total consumer	30,251		29,861		29,379		29,094		28,996		390			1.3	%	1,255			4.3	%
Total Loans	$	80,760	$	80,615	$	79,175	$	77,942	$	77,182	$	145		0.2	%	$	3,578		4.6	%
Operating leases previously reported as capital leases	852		—		—		—		—		852			NM		852			NM
Adjusted Total Loans and Leases (non-GAAP) ⁽¹⁾	$	81,612	$	80,615	$	79,175	$	77,942	$	77,182	$	997		1.2	%	$	4,430		5.7	%
_________
(1) Regions believes including the impact of the operating leases, reported as capital leases prior to the fourth quarter of 2015, provides a meaningful calculation of loan and lease
growth rates and presents them on the same basis as that applied by management. Adjusting the December 31, 2015 ending balances of total commercial and business loan
categories to include the impact of the operating leases, loan and lease growth rates would have been 1.3% and 1.2%, respectively, compared to September 30, 2015, and 7.8%
and 6.9%, respectively, compared to December 31, 2014.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2015 Earnings Release



Loans and Leases (Continued)
End of Period Loan Portfolio Balances by Percentage	As of
End of Period Loan Portfolio Balances by Percentage	12/31/2015		9/30/2015		6/30/2015		3/31/2015		12/31/2014
Commercial and industrial	44.1	%	44.3	%	44.1	%	43.0	%	42.4	%
Commercial real estate mortgage—owner-occupied	9.3	%	9.5	%	9.7	%	10.3	%	10.7	%
Commercial real estate construction—owner-occupied	0.5	%	0.5	%	0.6	%	0.6	%	0.5	%
Total commercial	53.9	%	54.3	%	54.4	%	53.9	%	53.6	%
Commercial investor real estate mortgage	5.3	%	5.4	%	5.6	%	5.7	%	6.0	%
Commercial investor real estate construction	3.3	%	3.1	%	3.0	%	3.1	%	2.8	%
Total investor real estate	8.6	%	8.5	%	8.6	%	8.8	%	8.8	%
Total business	62.5	%	62.8	%	63.0	%	62.7	%	62.4	%
Residential first mortgage	15.8	%	15.7	%	15.7	%	15.9	%	15.9	%
Home equity—first lien	8.2	%	8.1	%	8.0	%	8.0	%	8.0	%
Home equity—second lien	5.3	%	5.4	%	5.6	%	5.9	%	6.1	%
Indirect—vehicles	4.9	%	4.8	%	4.7	%	4.7	%	4.7	%
Indirect—other consumer	0.7	%	0.6	%	0.5	%	0.4	%	0.3	%
Consumer credit card	1.3	%	1.3	%	1.3	%	1.2	%	1.3	%
Other consumer	1.3	%	1.3	%	1.2	%	1.2	%	1.3	%
Total consumer	37.5	%	37.2	%	37.0	%	37.3	%	37.6	%
Total Loans	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2015 Earnings Release

Deposits



	As of
													12/31/2015					12/31/2015
($ amounts in millions)	12/31/2015		9/30/2015		6/30/2015		3/31/2015			12/31/2014			vs. 9/30/2015					vs. 12/31/2014
Customer Deposits
Interest-free deposits	$	34,862	$	34,117	$	33,810	$	33,553		$	31,747		$	745		2.2	%	$	3,115		9.8	%
Interest-bearing checking	21,902		21,096		21,315		21,780			21,544			806			3.8	%	358			1.7	%
Savings	7,287		7,184		7,157		7,146			6,653			103			1.4	%	634			9.5	%
Money market—domestic	26,468		26,541		26,417		26,371			25,396			(73		)	(0.3	)%	1,072			4.2	%
Money market—foreign	243		256		258		238			265			(13		)	(5.1	)%	(22		)	(8.3	)%
Low-cost deposits	90,762		89,194		88,957		89,088			85,605			1,568			1.8	%	5,157			6.0	%
Time deposits	7,468		7,784		8,118		8,389			8,595			(316		)	(4.1	)%	(1,127		)	(13.1	)%
Total Customer Deposits	98,230		96,978		97,075		97,477			94,200			1,252			1.3	%	4,030			4.3	%
Corporate Treasury Deposits
Time deposits	200		200		—		—			—			—			NM		200			NM
Total Deposits	$	98,430	$	97,178	$	97,075	$	97,477		$	94,200		$	1,252		1.3	%	$	4,230		4.5	%

	Average Balances
($ amounts in millions)	4Q15		3Q15		2Q15		1Q15			4Q14			4Q15 vs. 3Q15					4Q15 vs. 4Q14
Customer Deposits
Interest-free deposits	$	34,746	$	34,089	$	33,708	$	32,255		$	31,951		$	657		1.9	%	$	2,795		8.7	%
Interest-bearing checking	21,052		20,992		21,494		21,769			21,003			60			0.3	%	49			0.2	%
Savings	7,245		7,182		7,165		6,878			6,635			63			0.9	%	610			9.2	%
Money market—domestic	26,371		26,522		26,233		26,132			25,506			(151		)	(0.6	)%	865			3.4	%
Money market—foreign	256		271		250		249			246			(15		)	(5.5	)%	10			4.1	%
Low-cost deposits	89,670		89,056		88,850		87,283			85,341			614			0.7	%	4,329			5.1	%
Time deposits	7,618		7,958		8,250		8,500			8,683			(340		)	(4.3	)%	(1,065		)	(12.3	)%
Total Customer Deposits	97,288		97,014		97,100		95,783			94,024			274			0.3	%	3,264			3.5	%
Corporate Treasury Deposits
Time deposits	200		152		—		—			—			48			31.6	%	200			NM
Total Deposits	$	97,488	$	97,166	$	97,100	$	95,783		$	94,024		$	322		0.3	%	$	3,464		3.7	%


									As of
End of Period Deposits by Percentage										12/31/2015			9/30/2015			6/30/2015		3/31/2015			12/31/2014
Customer Deposits
Interest-free deposits										35.4		%	35.1		%	34.8	%	34.4		%	33.7	%
Interest-bearing checking										22.3		%	21.7		%	22.0	%	22.4		%	22.9	%
Savings										7.4		%	7.4		%	7.4	%	7.3		%	7.0	%
Money market—domestic										26.9		%	27.3		%	27.2	%	27.1		%	27.0	%
Money market—foreign										0.2		%	0.3		%	0.3	%	0.2		%	0.3	%
Low-cost deposits										92.2		%	91.8		%	91.7	%	91.4		%	90.9	%
Time deposits										7.6		%	8.0		%	8.3	%	8.6		%	9.1	%
Total Customer Deposits										99.8		%	99.8		%	100.0	%	100.0		%	100.0	%
Corporate Treasury Deposits
Time deposits										0.2		%	0.2		%	—	%	—		%	—	%
Total Deposits										100.0		%	100.0		%	100.0	%	100.0		%	100.0	%

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2015 Earnings Release

Reconciliation to GAAP Financial Measures

Tangible Common Ratios and Capital

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

The calculation of the fully phased-in pro-forma "Common equity Tier 1" (CET1) is based on Regions’ understanding of the Final Basel III requirements. For Regions, the Basel III framework became effective on a phased-in approach starting in 2015 with full implementation beginning in 2019. The calculation provided below includes estimated pro-forma amounts for the ratio on a fully phased-in basis. Regions’ current understanding of the final framework includes certain assumptions, including the Company’s interpretation of the requirements, and informal feedback received through the regulatory process. Regions’ understanding of the framework is evolving and will likely change as analysis and discussions with regulators continue. Because Regions is not currently subject to the fully-phased in capital rules, this pro-forma measure is considered to be a non-GAAP financial measure, and other entities may calculate it differently from Regions’ disclosed calculation.

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

Since analysts and banking regulators may assess Regions’ capital adequacy using tangible common stockholders' equity and the fully phased-in Basel III framework, we believe that it is useful to provide investors the ability to assess Regions’ capital adequacy on these same bases.



		As of and for Quarter Ended
($ amounts in millions, except per share data)		12/31/2015			9/30/2015			6/30/2015			3/31/2015			12/31/2014
Tangible Common Ratios—Consolidated
Stockholders’ equity (GAAP)		$	16,844		$	16,952		$	16,899		$	17,051		$	16,873
Less:
Preferred stock (GAAP)		820			836			852			868			884
Intangible assets (GAAP)		5,137			5,094			5,084			5,088			5,091
Deferred tax liability related to intangibles (GAAP)		(165		)	(168		)	(170		)	(173		)	(172		)
Tangible common stockholders’ equity (non-GAAP)	A	$	11,052		$	11,190		$	11,133		$	11,268		$	11,070
Total assets (GAAP)		$	126,050		$	124,789		$	121,855		$	122,447		$	119,563
Less:
Intangible assets (GAAP)		5,137			5,094			5,084			5,088			5,091
Deferred tax liability related to intangibles (GAAP)		(165		)	(168		)	(170		)	(173		)	(172		)
Tangible assets (non-GAAP)	B	$	121,078		$	119,863		$	116,941		$	117,532		$	114,644
Shares outstanding—end of quarter	C	1,297			1,304			1,331			1,343			1,354
Tangible common stockholders’ equity to tangible assets (non-GAAP)	A/B	9.13		%	9.34		%	9.52		%	9.59		%	9.66		%
Tangible common book value per share (non-GAAP)	A/C	$	8.52		$	8.58		$	8.37		$	8.39		$	8.18



($ amounts in millions)		12/31/2015			9/30/2015			6/30/2015			3/31/2015
Basel III Common Equity Tier 1 Ratio—Fully Phased-In Pro-Forma ⁽¹⁾
Stockholder's equity (GAAP)		$	16,844		$	16,952		$	16,899		$	17,051
Non-qualifying goodwill and intangibles		(4,958		)	(4,913		)	(4,902		)	(4,910		)
Adjustments, including all components of accumulated other comprehensive income, disallowed deferred tax assets, threshold deductions and other adjustments		286			41			183			1
Preferred stock (GAAP)		(820		)	(836		)	(852		)	(868		)
Basel III common equity Tier 1—Fully Phased-In Pro-Forma (non-GAAP)	D	$	11,352		$	11,244		$	11,328		$	11,274
Basel III risk-weighted assets—Fully Phased-In Pro-Forma (non-GAAP) ⁽²⁾	E	$	105,938		$	104,645		$	102,479		$	101,027
Basel III common equity Tier 1 ratio—Fully Phased-In Pro-Forma (non-GAAP)	D/E	10.7		%	10.8		%	11.1		%	11.2		%


(1)	Current quarter amounts and the resulting ratio are estimated. Regulatory capital measures for periods prior to the first quarter of 2015 were not revised to reflect the retrospective application of new accounting guidance related to investments in qualified affordable housing projects. As a result, those calculations have been removed from the table.


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

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2015 Earnings Release

Forward-Looking Statements

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


•	Current and future economic and market conditions in the United States generally or in the communities we serve, including the effects of declines in property values, unemployment rates and potential reductions of economic growth, which may adversely affect our lending and other businesses and our financial results and conditions.


•	Possible changes in trade, monetary and fiscal policies of, and other activities undertaken by, governments, agencies, central banks and similar organizations, which could have a material adverse effect on our earnings.


•	The effects of a possible downgrade in the U.S. government’s sovereign credit rating or outlook, which could result in risks to us and general economic conditions that we are not able to predict.


•	Possible changes in market interest rates or capital markets could adversely affect our revenue and expense, the value of assets and obligations, and the availability and cost of capital and liquidity.


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


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


•	Changes in the speed of loan prepayments, loan origination and sale volumes, charge-offs, loan loss provisions or actual loan losses where our allowance for loan losses may not be adequate to cover our eventual losses.


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


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


•	Loss of customer checking and savings account deposits as customers pursue other, higher-yield investments, which could increase our funding costs.


•	Our inability to develop and gain acceptance from current and prospective customers for new products and services in a timely manner could have a negative impact on our revenue.

•

Changes in laws and regulations affecting our businesses, such as the Dodd-Frank Act and other legislation and regulations relating to bank products and services, as well as changes in the enforcement and interpretation of such laws and regulations by applicable governmental and self-regulatory agencies, which could require us to change certain business practices, increase compliance risk, reduce our revenue, impose additional costs on us, or otherwise negatively affect our businesses.

•

Our ability to obtain no regulatory objection (as part of the comprehensive capital analysis and review ("CCAR") process or otherwise) to take certain capital actions, including paying dividends and any plans to increase common stock dividends, repurchase common stock under current or future programs, or redeem preferred stock or other regulatory capital instruments, may impact our ability to return capital to stockholders and market perceptions of us.


•	Our ability to comply with applicable capital and liquidity requirements (including the Basel III capital standards), including our ability to generate capital internally or raise capital on favorable terms, and if we fail to meet requirements, our financial condition could be negatively impacted.


•	The costs, including possibly incurring fines, penalties, or other negative effects (including reputational harm) of any adverse judicial, administrative, or arbitral rulings or proceedings, regulatory enforcement actions, or other legal actions to which we or any of our subsidiaries are a party, and which may adversely affect our results.


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


•	Possible changes in consumer and business spending and saving habits and the related effect on our ability to increase assets and to attract deposits, which could adversely affect our net income.


•	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, which could, among other things, result in a breach of operating or security systems as a result of a cyber attack or similar act.


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


•	The effects of geopolitical instability, including wars, conflicts and terrorist attacks and the potential impact, directly or indirectly on our businesses.


•	The effects of man-made and natural disasters, including fires, floods, droughts, tornadoes, hurricanes, and environmental damage, which may negatively affect our operations and/or our loan portfolios and increase our cost of conducting business.


•	Our inability to keep pace with technological changes could result in losing business to competitors.


•	Our ability to identify and address cyber-security risks such as data security breaches, "denial of service" attacks, "hacking" and identity theft, a failure of which could disrupt our business and result in the disclosure of and/or misuse or misappropriation of confidential or proprietary information; increased costs; losses; or adverse effects to our reputation.


•	Possible downgrades in our credit ratings or outlook could increase the costs of funding from capital markets.


•	The effects of problems encountered by other financial institutions that adversely affect us or the banking industry generally could require us to change certain business practices, reduce our revenue, impose additional costs on us, or otherwise negatively affect our businesses.


•	The effects of the failure of any component of our business infrastructure provided by a third party could disrupt our businesses; result in the disclosure of and/or misuse of confidential information or proprietary information; increase our costs; negatively affect our reputation; and cause losses.


•	Our ability to receive dividends from our subsidiaries could affect our liquidity and ability to pay dividends to stockholders.


•	Changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies could materially affect how we report our financial results.


•	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, 2014, as filed with the Securities and Exchange Commission.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2015 Earnings Release

Forward-Looking Statements (Continued)

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.

Attached files

Stock widget

Investing forum

REGIONS FINANCIAL CORP Reports