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

Attached files

file	filename
EX-99.3 - EXHIBIT 99.3 - REGIONS FINANCIAL CORP	a930exhibit993.htm
EX-99.1 - EXHIBIT 99.1 - REGIONS FINANCIAL CORP	rf-2018930xexhibit991.htm
8-K - 8-K - REGIONS FINANCIAL CORP	rf-2018930x8k.htm

Exhibit 99.2

Regions Financial Corporation and Subsidiaries

Financial Supplement

Third Quarter 2018

Regions Financial Corporation and Subsidiaries

Financial Supplement to Third Quarter 2018 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		5

Pre-Tax Pre-Provision Income ("PPI") and Adjusted PPI		7

Non-Interest Income, Mortgage Income and Wealth Management Income		8

Non-Interest Expense		10

Reconciliation to GAAP Financial Measures
Adjusted Net Interest Income and Other Financing Income, Adjusted Net Interest Income/Margin FTE Basis, Adjusted Efficiency Ratios, Adjusted Fee Income Ratios, Adjusted Non-Interest Income / Expense, Adjusted Operating Leverage Ratios, and Return Ratios		11

Statements of Discontinued Operations		14

Credit Quality
Allowance for Credit Losses, Net Charge-Offs and Related Ratios, Adjusted Net Charge-offs and Related Ratios		15
Non-Accrual Loans (excludes loans held for sale), Criticized and Classified Loans - Business Services, and Home Equity Lines of Credit - Future Principal Payment Resets		18
Early and Late Stage Delinquencies		19
Troubled Debt Restructurings		20

Consolidated Balance Sheets		21

Loans		22

Deposits		25

Reconciliation to GAAP Financial Measures
Tangible Common Ratios and Capital		27

Forward-Looking Statements		28

Regions Financial Corporation and Subsidiaries

Financial Supplement to Third Quarter 2018 Earnings Release

Financial Highlights



	Quarter Ended
($ amounts in millions, except per share data)	9/30/2018			6/30/2018			3/31/2018			12/31/2017			9/30/2017
Earnings Summary
Interest income and other financing income - taxable equivalent	$	1,125		$	1,088		$	1,060		$	1,043		$	1,035
Interest expense - taxable equivalent	156			136			122			102			97
Depreciation expense on operating lease assets	14			14			16			17			18
Net interest income and other financing income - taxable equivalent - continuing operations	955			938			922			924			920
Less: Taxable-equivalent adjustment	13			12			13			23			23
Net interest income and other financing income	942			926			909			901			897
Provision (credit) for loan losses	84			60			(10		)	(44		)	76
Net interest income and other financing income after provision (credit) for loan losses	858			866			919			945			821
Non-interest income	519			512			507			516			482
Non-interest expense	922			911			884			920			853
Income from continuing operations before income taxes	455			467			542			541			450
Income tax expense	85			89			128			221			138
Income from continuing operations	370			378			414			320			312
Income (loss) from discontinued operations before income taxes	274			(3		)	—			6			—
Income tax expense (benefit)	80			—			—			(9		)	1
Income (loss) from discontinued operations, net of tax	194			(3		)	—			15			(1		)
Net income	$	564		$	375		$	414		$	335		$	311
Income from continuing operations available to common shareholders	$	354		$	362		$	398		$	304		$	296
Net income available to common shareholders	$	548		$	359		$	398		$	319		$	295

Earnings per common share from continuing operations - basic	$	0.33		$	0.32		$	0.35		$	0.26		$	0.25
Earnings per common share from continuing operations - diluted	0.32			0.32			0.35			0.26			0.25
Earnings per common share - basic	0.50			0.32			0.35			0.28			0.25
Earnings per common share - diluted	0.50			0.32			0.35			0.27			0.25

Balance Sheet Summary
At quarter-end—Consolidated
Loans, net of unearned income	$	81,821		$	80,478		$	79,822		$	79,947		$	79,356
Allowance for loan losses	(840		)	(838		)	(840		)	(934		)	(1,041		)
Assets	124,578			124,557			122,913			124,294			123,271
Deposits	93,255			95,283			96,990			96,889			97,591
Long-term borrowings - Federal Home Loan Bank advances	5,703			5,153			2,603			3,653			1,603
Long-term borrowings - Other	5,475			4,737			5,346			4,479			4,499
Stockholders' equity	14,770			15,777			15,866			16,192			16,624
Average balances—Consolidated
Loans, net of unearned income	$	81,022		$	79,957		$	79,891		$	79,523		$	79,585
Assets	123,526			122,960			123,494			123,834			123,433
Deposits	93,942			95,253			95,428			97,060			96,863
Long-term borrowings - Federal Home Loan Bank advances	5,286			3,711			4,424			2,918			2,655
Long-term borrowings - Other	5,143			5,031			5,107			4,491			4,036
Stockholders' equity	15,401			15,682			15,848			16,414			16,784

Regions Financial Corporation and Subsidiaries

Financial Supplement to Third Quarter 2018 Earnings Release

Selected Ratios and Other Information



	As of and for Quarter Ended
	9/30/2018			6/30/2018			3/31/2018			12/31/2017			9/30/2017
Return on average assets* ⁽¹⁾	1.19		%	1.23		%	1.36		%	1.02		%	1.00		%
Return on average common stockholders' equity*	14.91		%	9.68		%	10.75		%	8.10		%	7.33		%
Return on average tangible common stockholders’ equity (non-GAAP)* ⁽²⁾	22.36		%	14.54		%	16.08		%	11.88		%	10.62		%
Return on average tangible common stockholders’ equity from continuing operations (non-GAAP)* ⁽²⁾	14.42		%	14.67		%	16.08		%	11.33		%	10.61		%
Efficiency ratio from continuing operations	62.6		%	62.7		%	61.9		%	63.9		%	60.9		%
Adjusted efficiency ratio from continuing operations (non-GAAP) ⁽²⁾	58.1		%	60.4		%	60.5		%	60.5		%	60.8		%
Common book value per share	$	13.22		$	13.42		$	13.40		$	13.55		$	13.57
Tangible common book value per share (non-GAAP) ⁽²⁾	$	8.62		$	8.97		$	8.98		$	9.16		$	9.33
Tangible common stockholders’ equity to tangible assets (non-GAAP) ⁽²⁾	7.60		%	8.36		%	8.54		%	8.71		%	9.18		%
Basel III common equity ⁽³⁾	$	10,481		$	11,234		$	11,206		$	11,152		$	11,332
Basel III common equity Tier 1 ratio ⁽³⁾	10.2		%	11.0		%	11.1		%	11.1		%	11.3		%
Basel III common equity Tier 1 ratio—Fully Phased-In Pro-Forma (non-GAAP) ⁽²⁾⁽³⁾	10.1		%	10.9		%	11.0		%	11.0		%	11.2		%
Tier 1 capital ratio ⁽³⁾	11.0		%	11.8		%	11.9		%	11.9		%	12.1		%
Total risk-based capital ratio ⁽³⁾	12.8		%	13.6		%	13.7		%	13.8		%	14.2		%
Leverage ratio ⁽³⁾	9.4		%	10.1		%	10.1		%	10.0		%	10.2		%
Effective tax rate ⁽⁴⁾	18.7		%	19.2		%	23.6		%	40.8		%	30.8		%
Allowance for loan losses as a percentage of loans, net of unearned income	1.03		%	1.04		%	1.05		%	1.17		%	1.31		%
Allowance for loan losses to non-performing loans, excluding loans held for sale	156		%	141		%	140		%	144		%	137		%
Net interest margin (FTE)*	3.50		%	3.49		%	3.46		%	3.37		%	3.36		%
Adjusted net interest margin (FTE) (non-GAAP)* ⁽²⁾	3.50		%	3.49		%	3.46		%	3.39		%	3.36		%
Loans, net of unearned income, to total deposits	87.8		%	84.5		%	82.3		%	82.5		%	81.3		%
Net charge-offs as a percentage of average loans*	0.40		%	0.32		%	0.42		%	0.31		%	0.38		%
Adjusted net charge-offs as a percentage of average loans (non-GAAP)* ⁽²⁾	0.40		%	0.32		%	0.40		%	0.31		%	0.38		%
Non-accrual loans, excluding loans held for sale, as a percentage of loans	0.66		%	0.74		%	0.75		%	0.81		%	0.96		%
Non-performing assets (excluding loans 90 days past due) as a percentage of loans, foreclosed properties, non-marketable investments and non-performing loans held for sale	0.76		%	0.83		%	0.85		%	0.92		%	1.06		%
Non-performing assets (including loans 90 days past due) as a percentage of loans, foreclosed properties, non-marketable investments and non-performing loans held for sale ⁽⁵⁾	0.93		%	0.99		%	1.02		%	1.13		%	1.25		%
Associate headcount—full-time equivalent from continuing operations	19,869			20,326			20,666			21,014			21,391
ATMs	1,938			1,956			1,919			1,899			1,902

Branch Statistics
Full service	1,394			1,414			1,410			1,406			1,425
Drive-through/transaction service only	61			62			63			63			64
Total branch outlets	1,455			1,476			1,473			1,469			1,489

*Annualized


(1)	Calculated by dividing income from continuing operations by consolidated average assets.


(2)	See reconciliation of GAAP to non-GAAP Financial Measures on pages 7, 11, 12, 13, 17 and 27.


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


(4)	The increase in the effective tax rate in fourth quarter 2017 was driven by tax-related charges from continuing operations of $61 million in the fourth quarter associated with tax reform.


(5)	Excludes guaranteed residential first mortgages that are 90+ days past due and still accruing. Refer to the footnotes on page 19 for amounts related to these loans.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Third Quarter 2018 Earnings Release

Consolidated Statements of Income (unaudited)



	Quarter Ended
($ amounts in millions, except per share data)	9/30/2018		6/30/2018			3/31/2018			12/31/2017			9/30/2017
Interest income, including other financing income on:
Loans, including fees	$	919	$	881		$	851		$	827		$	827
Debt securities—taxable	155		156			154			151			148
Loans held for sale	4		4			3			5			3
Other earning assets	17		17			19			15			13
Operating lease assets	17		18			20			22			21
Total interest income, including other financing income	1,112		1,076			1,047			1,020			1,012
Interest expense on:
Deposits	64		57			49			42			42
Short-term borrowings	8		6			1			1			2
Long-term borrowings	84		73			72			59			53
Total interest expense	156		136			122			102			97
Depreciation expense on operating lease assets	14		14			16			17			18
Total interest expense and depreciation expense on operating lease assets	170		150			138			119			115
Net interest income and other financing income	942		926			909			901			897
Provision (credit) for loan losses	84		60			(10		)	(44		)	76
Net interest income and other financing income after provision (credit) for loan losses	858		866			919			945			821
Non-interest income:
Service charges on deposit accounts	179		175			171			171			175
Card and ATM fees	111		112			104			106			103
Wealth management income	77		77			75			73			73
Capital markets income	45		57			50			56			35
Mortgage income	32		37			38			36			32
Securities gains (losses), net	—		1			—			10			8
Other	75		53			69			64			56
Total non-interest income	519		512			507			516			482
Non-interest expense:
Salaries and employee benefits	473		511			495			479			464
Net occupancy expense	82		84			83			82			89
Furniture and equipment expense	81		81			81			80			83
Other	286		235			225			279			217
Total non-interest expense	922		911			884			920			853
Income from continuing operations before income taxes	455		467			542			541			450
Income tax expense	85		89			128			221			138
Income from continuing operations	370		378			414			320			312
Discontinued operations:
Income (loss) from discontinued operations before income taxes	274		(3		)	—			6			—
Income tax expense (benefit)	80		—			—			(9		)	1
Income (loss) from discontinued operations, net of tax	194		(3		)	—			15			(1		)
Net income	$	564	$	375		$	414		$	335		$	311
Net income from continuing operations available to common shareholders	$	354	$	362		$	398		$	304		$	296
Net income available to common shareholders	$	548	$	359		$	398		$	319		$	295
Weighted-average shares outstanding—during quarter:
Basic	1,086		1,119			1,127			1,152			1,182
Diluted	1,095		1,128			1,141			1,164			1,193
Actual shares outstanding—end of quarter	1,055		1,114			1,123			1,134			1,165
Earnings per common share from continuing operations:
Basic	$	0.33	$	0.32		$	0.35		$	0.26		$	0.25
Diluted	$	0.32	$	0.32		$	0.35		$	0.26		$	0.25
Earnings per common share:
Basic	$	0.50	$	0.32		$	0.35		$	0.28		$	0.25
Diluted	$	0.50	$	0.32		$	0.35		$	0.27		$	0.25
Cash dividends declared per common share	$	0.14	$	0.09		$	0.09		$	0.09		$	0.09
Taxable-equivalent net interest income and other financing income - Consolidated	$	956	$	938		$	922		$	924		$	921

_________

Notes:

- In the first quarter of 2018, the Company adopted new accounting guidance which resulted in trading account assets and equity securities available for sale being reclassified to other earning assets. All prior period amounts have been revised.

- In the first quarter of 2018, the Company adopted new accounting guidance which required certain components of net periodic pension and postretirement benefit cost to be reclassified from salaries and employee benefits to other expense. The guidance required retrospective application. Therefore, all prior period amounts impacted by this guidance have been revised.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Third Quarter 2018 Earnings Release

Consolidated Statements of Income (continued) (unaudited)



	Nine Months Ended September 30
($ amounts in millions, except per share data)	2018		2017
Interest income, including other financing income on:
Loans, including fees	$	2,651	$	2,401
Debt securities—taxable	465		445
Loans held for sale	11		11
Other earning assets	53		38
Operating lease assets	55		72
Total interest income, including other financing income	3,235		2,967
Interest expense on:
Deposits	170		114
Short-term borrowings	15		4
Long-term borrowings	229		153
Total interest expense	414		271
Depreciation expense on operating lease assets	44		58
Total interest expense and depreciation expense on operating lease assets	458		329
Net interest income and other financing income	2,777		2,638
Provision for loan losses	134		194
Net interest income and other financing income after provision for loan losses	2,643		2,444
Non-interest income:
Service charges on deposit accounts	525		512
Card and ATM fees	327		311
Wealth management income	229		217
Capital markets income	152		105
Mortgage income	107		113
Securities gains, net	1		9
Other	197		179
Total non-interest income	1,538		1,446
Non-interest expense:
Salaries and employee benefits	1,479		1,395
Net occupancy expense	249		257
Furniture and equipment expense	243		246
Other	746		673
Total non-interest expense	2,717		2,571
Income from continuing operations before income taxes	1,464		1,319
Income tax expense	302		398
Income from continuing operations	1,162		921
Discontinued operations:
Income (loss) from discontinued operations before income taxes	271		13
Income tax expense (benefit)	80		6
Income (loss) from discontinued operations, net of tax	191		7
Net income	$	1,353	$	928
Net income from continuing operations available to common shareholders	$	1,114	$	873
Net income available to common shareholders	$	1,305	$	880
Weighted-average shares outstanding—during year:
Basic	1,111		1,197
Diluted	1,121		1,209
Actual shares outstanding—end of period	1,055		1,165
Earnings per common share from continuing operations:
Basic	$	1.00	$	0.73
Diluted	$	0.99	$	0.72
Earnings per common share:
Basic	$	1.18	$	0.74
Diluted	$	1.16	$	0.73
Cash dividends declared per common share	$	0.32	$	0.225
Taxable-equivalent net interest income and other financing income - Consolidated	$	2,816	$	2,706

_________

Notes:

Regions Financial Corporation and Subsidiaries

Financial Supplement to Third Quarter 2018 Earnings Release

Consolidated Average Daily Balances and Yield/Rate Analysis



	Quarter Ended
	9/30/2018							6/30/2018
($ amounts in millions; yields on taxable-equivalent basis)	Average Balance			Income/ Expense		Yield/ Rate		Average Balance			Income/ Expense		Yield/ Rate
Assets
Earning assets:
Debt securities—taxable	$	24,198		$	156	2.56	%	$	24,386		$	156	2.56	%
Loans held for sale	386			4		4.14		388			4		4.21
Loans, net of unearned income:
Commercial and industrial	37,410			402		4.26		36,874			385		4.17
Commercial real estate mortgage—owner-occupied	6,000			71		4.61		6,017			71		4.67
Commercial real estate construction—owner-occupied	311			4		4.84		298			3		4.79
Commercial investor real estate mortgage	4,083			44		4.25		3,724			39		4.12
Commercial investor real estate construction	1,809			24		5.06		1,867			22		4.83
Residential first mortgage	14,162			141		3.96		13,980			137		3.93
Home equity	9,543			110		4.61		9,792			109		4.46
Indirect—vehicles	3,190			27		3.33		3,260			26		3.23
Indirect—other consumer	2,042			44		8.61		1,743			38		8.68
Consumer credit card	1,271			41		12.85		1,245			39		12.50
Other consumer	1,201			24		8.12		1,157			24		8.09
Total loans, net of unearned income	81,022			932		4.56		79,957			893		4.46
Investment in operating leases, net	410			3		3.33		439			4		3.59
Other earning assets	2,440			17		2.87		2,558			17		2.60
Total earning assets	108,456			1,112		4.07		107,728			1,074		3.98
Allowance for loan losses	(834		)					(848		)
Cash and due from banks	2,036							1,953
Other non-earning assets	13,868							14,127
	$	123,526						$	122,960
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Savings	$	8,928		4		0.15		$	8,981		3		0.15
Interest-bearing checking	18,924			21		0.44		19,534			18		0.38
Money market	24,046			22		0.37		24,235			19		0.30
Time deposits	6,630			17		1.06		6,692			17		0.98
Total interest-bearing deposits ⁽¹⁾	58,528			64		0.44		59,442			57		0.38
Federal funds purchased and securities sold under agreements to repurchase	154			—		—		41			1		1.83
Other short-term borrowings	1,480			8		2.07		1,161			5		1.90
Long-term borrowings	10,429			84		3.14		8,742			73		3.35
Total interest-bearing liabilities	70,591			156		0.88		69,386			136		0.79
Non-interest-bearing deposits ⁽¹⁾	35,414			—		—		35,811			—		—
Total funding sources	106,005			156		0.58		105,197			136		0.52
Net interest spread						3.19							3.19
Other liabilities	2,120							2,081
Stockholders’ equity	15,401							15,682
	$	123,526						$	122,960
Net interest income and other financing income/margin FTE basis - Consolidated				$	956	3.50	%				$	938	3.49	%

_______


(1)	Total deposit costs may be calculated by dividing total interest expense on deposits by the sum of interest-bearing deposits and non-interest bearing deposits. The rates for total deposit costs equal 0.27% and 0.24% for the quarters ended September 30, 2018 and June 30, 2018.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Third Quarter 2018 Earnings Release

Consolidated Average Daily Balances and Yield/Rate Analysis (continued)



	Quarter Ended
	3/31/2018							12/31/2017							9/30/2017
($ amounts in millions; yields on taxable-equivalent basis)	Average Balance			Income/ Expense		Yield/ Rate		Average Balance			Income/ Expense		Yield/ Rate		Average Balance			Income/ Expense		Yield/ Rate
Assets
Earning assets:
Federal funds sold and securities purchased under agreements to resell	$	1		$	—	—	%	$	3		$	—	—	%	$	—		$	—	—	%
Debt securities—taxable	24,588			154		2.52		25,053			151		2.40		25,039			149		2.34
Loans held for sale	359			3		3.21		433			5		3.92		416			3		3.10
Loans, net of unearned income:
Commercial and industrial ⁽¹⁾	36,464			368		4.07		35,689			357		3.96		35,438			357		3.98
Commercial real estate mortgage—owner-occupied	6,117			70		4.58		6,208			71		4.48		6,413			74		4.50
Commercial real estate construction—owner-occupied	318			4		4.67		335			4		4.51		332			4		4.52
Commercial investor real estate mortgage	3,883			38		3.92		3,986			37		3.66		4,065			40		3.82
Commercial investor real estate construction	1,837			21		4.49		1,938			21		4.11		2,010			21		4.05
Residential first mortgage	13,977			135		3.86		13,954			136		3.90		13,808			134		3.89
Home equity	10,041			108		4.31		10,206			106		4.16		10,341			107		4.13
Indirect—vehicles	3,309			26		3.18		3,400			26		3.12		3,562			26		2.87
Indirect—other consumer	1,531			33		8.76		1,400			31		8.97		1,258			28		8.96
Consumer credit card	1,257			38		12.33		1,238			37		11.96		1,200			37		12.18
Other consumer	1,157			23		8.16		1,169			24		7.93		1,158			22		8.00
Total loans, net of unearned income ⁽¹⁾	79,891			864		4.35		79,523			850		4.24		79,585			850		4.23
Investment in operating leases, net	472			4		2.82		515			5		3.53		586			3		2.84
Other earning assets	2,853			19		2.71		3,336			15		1.73		3,146			13		1.60
Total earning assets	108,164			1,044		3.88		108,863			1,026		3.74		108,772			1,018		3.72
Allowance for loan losses	(933		)					(1,039		)					(1,048		)
Cash and due from banks	1,951							1,975							1,867
Other non-earning assets	14,312							14,035							13,842
	$	123,494						$	123,834						$	123,433
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Savings	$	8,615		4		0.18		$	8,378		2		0.14		$	8,346		3		0.15
Interest-bearing checking	19,935			16		0.32		19,261			11		0.22		18,741			11		0.22
Money market	24,601			14		0.24		25,744			13		0.20		26,325			13		0.19
Time deposits	6,813			15		0.91		6,935			16		0.88		6,929			15		0.88
Total interest-bearing deposits ⁽²⁾	59,964			49		0.33		60,318			42		0.28		60,341			42		0.28
Federal funds purchased and securities sold under agreements to repurchase	103			—		—		35			—		—		—			—		—
Other short-term borrowings	156			1		1.46		388			1		1.19		655			2		1.19
Long-term borrowings	9,531			72		3.00		7,409			59		3.13		6,691			53		3.14
Total interest-bearing liabilities	69,754			122		0.71		68,150			102		0.59		67,687			97		0.57
Non-interest-bearing deposits ⁽²⁾	35,464			—		—		36,742			—		—		36,522			—		—
Total funding sources	105,218			122		0.46		104,892			102		0.38		104,209			97		0.37
Net interest spread						3.17							3.15							3.15
Other liabilities	2,428							2,528							2,440
Stockholders’ equity	15,848							16,414							16,784
	$	123,494						$	123,834						$	123,433
Net interest income and other financing income/margin FTE basis				$	922	3.46	%				$	924	3.37	%				$	921	3.36	%

_______

Note - In the first quarter of 2018, the Company adopted new accounting guidance, which resulted in trading account assets and equity securities available for sale being reclassified to other earning assets. All prior period amounts have been revised.


(1)	Excluding the impact of the $6 million reduction in leveraged lease interest income resulting from tax reform recorded in the fourth quarter of 2017, the commercial and industrial yield and total loans, net of unearned income yield would have been 4.03% and 4.27%, respectively.


(2)	Total deposit costs may be calculated by dividing total interest expense on deposits by the sum of interest-bearing deposits and non-interest bearing deposits. The rates for total deposit costs equal 0.21% for the quarter ended March 31, 2018 and 0.17% for both quarters ended December 31, 2017 and September 30, 2017.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Third Quarter 2018 Earnings Release

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

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



	Quarter Ended
($ amounts in millions)	9/30/2018			6/30/2018			3/31/2018			12/31/2017			9/30/2017			3Q18 vs. 2Q18					3Q18 vs. 3Q17
Net income from continuing operations available to common shareholders (GAAP)	$	354		$	362		$	398		$	304		$	296		$	(8	)	(2.2	)%	$	58		19.6	%
Preferred dividends (GAAP)	16			16			16			16			16			—			NM		—			NM
Income tax expense (GAAP)	85			89			128			221			138			(4		)	(4.5	)%	(53		)	(38.4	)%
Income from continuing operations before income taxes (GAAP)	455			467			542			541			450			(12		)	(2.6	)%	5			1.1	%
Provision (credit) for loan losses (GAAP)	84			60			(10		)	(44		)	76			24			40.0	%	8			10.5	%
Pre-tax pre-provision income from continuing operations (non-GAAP)	539			527			532			497			526			12			2.3	%	13			2.5	%
Other adjustments:
Securities (gains) losses, net	—			(1		)	—			(10		)	(8		)	1			(100.0	)%	8			(100.0	)%
Leveraged lease termination gains	(4		)	—			(4		)	—			(1		)	(4		)	NM		(3		)	300.0	%
Reduction in leveraged lease interest income resulting from tax reform	—			—			—			6			—			—			NM		—			NM
Salaries and employee benefits—severance charges	5			34			15			2			1			(29		)	(85.3	)%	4			400.0	%
Branch consolidation, property and equipment charges	4			1			3			9			5			3			300.0	%	(1		)	(20.0	)%
Contribution to the Regions Financial Corporation foundation	60			—			—			40			—			60			NM		60			NM
Expenses associated with residential mortgage loan sale	—			—			4			—			—			—			NM		—			NM
Total other adjustments	65			34			18			47			(3		)	31			91.2	%	68			NM
Adjusted pre-tax pre-provision income from continuing operations (non-GAAP)	$	604		$	561		$	550		$	544		$	523		$	43		7.7	%	$	81		15.5	%

NM - Not Meaningful

Regions Financial Corporation and Subsidiaries

Financial Supplement to Third Quarter 2018 Earnings Release

Non-Interest Income from Continuing Operations



	Quarter Ended
($ amounts in millions)	9/30/2018		6/30/2018			3/31/2018			12/31/2017		9/30/2017		3Q18 vs. 2Q18					3Q18 vs. 3Q17
Service charges on deposit accounts	$	179	$	175		$	171		$	171	$	175	$	4		2.3	%	$	4		2.3	%
Card and ATM fees	111		112			104			106		103		(1		)	(0.9	)%	8			7.8	%
Wealth management income	77		77			75			73		73		—			NM		4			5.5	%
Capital markets income ⁽¹⁾	45		57			50			56		35		(12		)	(21.1	)%	10			28.6	%
Mortgage income	32		37			38			36		32		(5		)	(13.5	)%	—			NM
Bank-owned life insurance	18		18			17			20		20		—			NM		(2		)	(10.0	)%
Commercial credit fee income	18		17			17			18		17		1			5.9	%	1			5.9	%
Securities gains (losses), net	—		1			—			10		8		(1		)	(100.0	)%	(8		)	(100.0	)%
Market value adjustments on employee benefit assets	7		(2		)	(1		)	6		3		9			(450.0	)%	4			133.3	%
Other	32		20			36			20		16		12			60.0	%	16			100.0	%
Total non-interest income from continuing operations	$	519	$	512		$	507		$	516	$	482	$	7		1.4	%	$	37		7.7	%

Mortgage Income



	Quarter Ended
($ amounts in millions)	9/30/2018			6/30/2018			3/31/2018			12/31/2017			9/30/2017			3Q18 vs. 2Q18					3Q18 vs. 3Q17
Production and sales	$	24		$	23		$	23		$	23		$	28		$	1		4.3	%	$	(4	)	(14.3	)%
Loan servicing	23			23			23			25			24			—			NM		(1		)	(4.2	)%
MSR and related hedge impact:
MSRs fair value increase (decrease) due to change in valuation inputs or assumptions	6			10			22			4			(9		)	(4		)	(40.0	)%	15			(166.7	)%
MSRs hedge gain (loss)	(9		)	(6		)	(20		)	(5		)	1			(3		)	50.0	%	(10		)	NM
MSRs change due to payment decay	(12		)	(13		)	(10		)	(11		)	(12		)	1			(7.7	)%	—			NM
MSR and related hedge impact	(15		)	(9		)	(8		)	(12		)	(20		)	(6		)	66.7	%	5			(25.0	)%
Total mortgage income	$	32		$	37		$	38		$	36		$	32		$	(5	)	(13.5	)%	$	—		NM

Mortgage production - purchased	$	1,012		$	1,179		$	817		$	907		$	996		$	(167	)	(14.2	)%	$	16		1.6	%
Mortgage production - refinanced	237			249			279			359			315			(12		)	(4.8	)%	(78		)	(24.8	)%
Total mortgage production ⁽²⁾	$	1,249		$	1,428		$	1,096		$	1,266		$	1,311		$	(179	)	(12.5	)%	$	(62	)	(4.7	)%

Wealth Management Income



	Quarter Ended
($ amounts in millions)	9/30/2018		6/30/2018		3/31/2018		12/31/2017		9/30/2017		3Q18 vs. 2Q18					3Q18 vs. 3Q17
Investment management and trust fee income	$	59	$	58	$	58	$	59	$	58	$	1		1.7	%	$	1	1.7	%
Investment services fee income	18		19		17		14		15		(1		)	(5.3	)%	3		20.0	%
Total wealth management income ⁽³⁾	$	77	$	77	$	75	$	73	$	73	$	—		NM		$	4	5.5	%

_________

NM - Not Meaningful


(1)	Capital markets income primarily relates to capital raising activities that includes debt securities underwriting and placement, loan syndication and placement, as well as foreign exchange, derivative and merger and acquisition advisory services.


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


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

Selected Non-Interest Income Variance Analysis

•Capital markets income decreased in the third quarter of 2018 from record levels in the second quarter of 2018 due primarily to lower merger and

acquisition advisory services income.


•	Other non-interest income increased in the third quarter of 2018 as compared to the second quarter of 2018 due primarily to an equity investment valuation adjustment and gains from the sale of low income housing investments. A decrease in net impairment charges related to certain operating lease assets also contributed to the overall increase in other non-interest income.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Third Quarter 2018 Earnings Release

Non-Interest Income from Continuing Operations



	Nine Months Ended				Year-to-Date Change 9/30/2018 vs. 9/30/2017
($ amounts in millions)	9/30/2018		9/30/2017		Amount			Percent
Service charges on deposit accounts	$	525	$	512	$	13		2.5	%
Card and ATM fees	327		311		16			5.1	%
Wealth management income	229		217		12			5.5	%
Capital markets income ⁽¹⁾	152		105		47			44.8	%
Mortgage income	107		113		(6		)	(5.3	)%
Bank-owned life insurance	53		61		(8		)	(13.1	)%
Commercial credit fee income	52		53		(1		)	(1.9	)%
Securities gains (losses), net	1		9		(8		)	(88.9	)%
Market value adjustments on employee benefit assets	4		10		(6		)	(60.0	)%
Other	88		55		33			60.0	%
Total non-interest income from continuing operations	$	1,538	$	1,446	$	92		6.4	%

Mortgage Income



	Nine Months Ended						Year-to-Date Change 9/30/2018 vs. 9/30/2017
($ amounts in millions)	9/30/2018			9/30/2017			Amount			Percent
Production and sales	$	70		$	81		$	(11	)	(13.6	)%
Loan servicing	69			71			(2		)	(2.8	)%
MSR and related hedge impact:
MSRs fair value increase (decrease) due to change in valuation inputs or assumptions	38			(12		)	50			(416.7	)%
MSRs hedge gain (loss)	(35		)	6			(41		)	NM
MSRs change due to payment decay	(35		)	(33		)	(2		)	6.1	%
MSR and related hedge impact	(32		)	(39		)	7			(17.9	)%
Total mortgage income	$	107		$	113		$	(6	)	(5.3	)%

Mortgage production - purchased	$	3,008		$	2,970		$	38		1.3	%
Mortgage production - refinanced	765			942			(177		)	(18.8	)%
Total mortgage production ⁽²⁾	$	3,773		$	3,912		$	(139	)	(3.6	)%

Wealth Management Income



	Nine Months Ended				Year-to-Date Change 9/30/2018 vs. 9/30/2017
($ amounts in millions)	9/30/2018		9/30/2017		Amount		Percent
Investment management and trust fee income	$	175	$	171	$	4	2.3	%
Investment services fee income	54		46		8		17.4	%
Total wealth management income ⁽³⁾	$	229	$	217	$	12	5.5	%

_________

NM - Not Meaningful


(1)	Capital markets income primarily relates to capital raising activities that includes debt securities underwriting and placement, loan syndication and placement, as well as foreign exchange, derivative and merger and acquisition advisory services.


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


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

Regions Financial Corporation and Subsidiaries

Financial Supplement to Third Quarter 2018 Earnings Release

Non-Interest Expense from Continuing Operations



	Quarter Ended
($ amounts in millions)	9/30/2018		6/30/2018			3/31/2018			12/31/2017			9/30/2017			3Q18 vs. 2Q18					3Q18 vs. 3Q17
Salaries and employee benefits	$	473	$	511		$	495		$	479		$	464		$	(38	)	(7.4	)%	$	9		1.9	%
Net occupancy expense	82		84			83			82			89			(2		)	(2.4	)%	(7		)	(7.9	)%
Furniture and equipment expense	81		81			81			80			83			—			NM		(2		)	(2.4	)%
Outside services	46		48			47			48			41			(2		)	(4.2	)%	5			12.2	%
FDIC insurance assessments	22		25			24			27			28			(3		)	(12.0	)%	(6		)	(21.4	)%
Professional, legal and regulatory expenses	32		33			27			23			21			(1		)	(3.0	)%	11			52.4	%
Marketing	20		25			26			23			24			(5		)	(20.0	)%	(4		)	(16.7	)%
Credit/checkcard expenses	18		13			13			11			13			5			38.5	%	5			38.5	%
Branch consolidation, property and equipment charges	4		1			3			9			5			3			300.0	%	(1		)	(20.0	)%
Visa class B shares expense	—		10			2			11			4			(10		)	(100.0	)%	(4		)	(100.0	)%
Provision (credit) for unfunded credit losses	2		(1		)	(4		)	(6		)	(8		)	3			(300.0	)%	10			(125.0	)%
Other	142		81			87			133			89			61			75.3	%	53			59.6	%
Total non-interest expense from continuing operations	$	922	$	911		$	884		$	920		$	853		$	11		1.2	%	$	69		8.1	%



	Nine Months Ended						Year-to-Date Change 9/30/18 vs. 9/30/17
($ amounts in millions)	9/30/2018			9/30/2017			Amount			Percent
Salaries and employee benefits	$	1,479		$	1,395		$	84		6.0	%
Net occupancy expense	249			257			(8		)	(3.1	)%
Furniture and equipment expense	243			246			(3		)	(1.2	)%
Outside services	141			124			17			13.7	%
FDIC insurance assessments	71			81			(10		)	(12.3	)%
Professional, legal and regulatory expenses	92			70			22			31.4	%
Marketing	71			70			1			1.4	%
Credit/checkcard expenses	44			39			5			12.8	%
Branch consolidation, property and equipment charges	8			13			(5		)	(38.5	)%
Visa class B shares expense	12			8			4			50.0	%
Provision (credit) for unfunded credit losses	(3		)	(10		)	7			(70.0	)%
Other	310			278			32			11.5	%
Total non-interest expense from continuing operations	$	2,717		$	2,571		$	146		5.7	%

_________

Note - In the first quarter of 2018, the Company adopted new accounting guidance, which required certain components of net periodic pension and postretirement benefit cost to be reclassified from salaries and employee benefits to other. The guidance required retrospective application. Therefore, all prior period amounts impacted by this guidance have been revised.

Selected Non-Interest Expense Variance Analysis


•	Salaries and employee benefits expense decreased in the third quarter of 2018 as compared to the second quarter of 2018 due primarily to lower severance charges, a decline in headcount, and lower production-based incentives.


•	Other non-interest expense increased in the third quarter of 2018 as compared to the second quarter of 2018 due primarily to a $60 million contribution to the Regions Financial Corporation Foundation during the third quarter.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Third Quarter 2018 Earnings Release

Reconciliation to GAAP Financial Measures

Adjusted Net Interest Income and Other Financing Income, Adjusted Net Interest Income/Margin FTE Basis, Adjusted Efficiency Ratios, Adjusted Fee Income Ratios, Adjusted Non-Interest Income/Expense, and Adjusted Operating Leverage Ratios - Continuing Operations

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



		Quarter Ended
($ amounts in millions)		9/30/2018			6/30/2018			3/31/2018			12/31/2017			9/30/2017			3Q18 vs. 2Q18					3Q18 vs. 3Q17
Non-interest expense (GAAP)	A	$	922		$	911		$	884		$	920		$	853		$	11		1.2	%	$	69		8.1	%
Adjustments:
Contribution to the Regions Financial Corporation foundation		(60		)	—			—			(40		)	—			(60		)	NM		(60		)	NM
Branch consolidation, property and equipment charges		(4		)	(1		)	(3		)	(9		)	(5		)	(3		)	300.0	%	1			(20.0	)%
Expenses associated with residential mortgage loan sale		—			—			(4		)	—			—			—			NM		—			NM
Salary and employee benefits—severance charges		(5		)	(34		)	(15		)	(2		)	(1		)	29			(85.3	)%	(4		)	400.0	%
Adjusted non-interest expense (non-GAAP)	B	$	853		$	876		$	862		$	869		$	847		$	(23	)	(2.6	)%	$	6		0.7	%
Net interest income and other financing income (GAAP)	C	$	942		$	926		$	909		$	901		$	897		16			1.7	%	45			5.0	%
Reduction in leveraged lease interest income resulting from tax reform		—			—			—			6			—			—			NM		—			NM
Adjusted net interest income and other financing income (non-GAAP)	D	$	942		$	926		$	909		$	907		$	897		16			1.7	%	45			5.0	%
Net interest income and other financing income (GAAP)		$	942		$	926		$	909		$	901		$	897		$	16		1.7	%	$	45		5.0	%
Taxable-equivalent adjustment		13			12			13			23			23			1			8.3	%	(10		)	(43.5	)%
Net interest income and other financing income, taxable-equivalent basis - continuing operations	E	$	955		$	938		$	922		$	924		$	920		$	17		1.8	%	$	35		3.8	%
Reduction in leveraged lease interest income resulting from tax reform		—			—			—			6			—			—			NM		—			NM
Adjusted net interest income and other financing income, taxable equivalent basis (non-GAAP)	F	$	955		$	938		$	922		$	930		$	920		$	17		1.8	%	$	35		3.8	%
Net interest margin (GAAP)⁽¹⁾		3.50		%	3.49		%	3.46		%	3.37		%	3.36		%
Reduction in leveraged lease interest income resulting from tax reform		—			—			—			0.02			—
Adjusted net interest margin (non-GAAP)		3.50		%	3.49		%	3.46		%	3.39		%	3.36		%
Non-interest income (GAAP)	G	$	519		$	512		$	507		$	516		$	482		$	7		1.4	%	$	37		7.7	%
Adjustments:
Securities (gains) losses, net		—			(1		)	—			(10		)	(8		)	1			(100.0	)%	8			(100.0	)%
Leveraged lease termination gains		(4		)	—			(4		)	—			(1		)	(4		)	NM		(3		)	300.0	%
Adjusted non-interest income (non-GAAP)	H	$	515		$	511		$	503		$	506		$	473		$	4		0.8	%	$	42		8.9	%
Total revenue	C+G=I	$	1,461		$	1,438		$	1,416		$	1,417		$	1,379		$	23		1.6	%	$	82		5.9	%
Adjusted total revenue (non-GAAP)	D+H=J	$	1,457		$	1,437		$	1,412		$	1,413		$	1,370		$	20		1.4	%	$	87		6.4	%
Total revenue, taxable-equivalent basis	E+G=K	$	1,474		$	1,450		$	1,429		$	1,440		$	1,402		$	24		1.7	%	$	72		5.1	%
Adjusted total revenue, taxable-equivalent basis (non-GAAP)	F+H=L	$	1,470		$	1,449		$	1,425		$	1,436		$	1,393		$	21		1.4	%	$	77		5.5	%
Efficiency ratio (GAAP)	A/K	62.6		%	62.7		%	61.9		%	63.9		%	60.9		%
Adjusted efficiency ratio (non-GAAP)	B/L	58.1		%	60.4		%	60.5		%	60.5		%	60.8		%
Fee income ratio (GAAP)	G/K	35.2		%	35.3		%	35.5		%	35.9		%	34.3		%
Adjusted fee income ratio (non-GAAP)	H/L	35.0		%	35.2		%	35.3		%	35.3		%	33.9		%

________

NM - Not Meaningful


(1)	See computation of net interest margin on page 5.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Third Quarter 2018 Earnings Release

Reconciliation to GAAP Financial Measures



		Nine Months Ended September 30
($ amounts in millions)		2018			2017			2018 vs. 2017
Non-interest expense (GAAP)	M	$	2,717		$	2,571		$	146		5.7	%
Adjustments:
Contribution to the Regions Financial Corporation foundation		(60		)	—			(60		)	NM
Branch consolidation, property and equipment charges		(8		)	(13		)	5			(38.5	)%
Expenses associated with residential mortgage loan sale		(4		)	—			(4		)	NM
Salary and employee benefits—severance charges		(54		)	(8		)	(46		)	NM
Adjusted non-interest expense (non-GAAP)	N	$	2,591		$	2,550		$	41		1.6	%
Net interest income and other financing income (GAAP)		$	2,777		$	2,638		$	139		5.3	%
Taxable-equivalent adjustment		38			67			(29		)	(43.3	)%
Net interest income and other financing income, taxable-equivalent basis - continuing operations	O	$	2,815		$	2,705		$	110		4.1	%
Non-interest income (GAAP)	P	$	1,538		$	1,446		$	92		6.4	%
Adjustments:
Securities (gains) losses, net		(1		)	(9		)	8			(88.9	)%
Leveraged lease termination gains		(8		)	(1		)	(7		)	NM
Gain on sale of affordable housing residential mortgage loans		—			(5		)	5			(100.0	)%
Adjusted non-interest income (non-GAAP)	Q	$	1,529		$	1,431		$	98		6.8	%
Total revenue, taxable-equivalent basis	O+P=R	$	4,353		$	4,151		$	202		4.9	%
Adjusted total revenue, taxable-equivalent basis (non-GAAP)	O+Q=S	$	4,344		$	4,136		$	208		5.0	%
Operating leverage ratio (GAAP)	R-M										(0.8	)%
Adjusted operating leverage ratio (non-GAAP)	S-N										3.4	%
Efficiency ratio (GAAP)	M/R	62.4		%	61.9		%
Adjusted efficiency ratio (non-GAAP)	N/S	59.7		%	61.7		%
Fee income ratio (GAAP)	P/R	35.3		%	34.8		%
Adjusted fee income ratio (non-GAAP)	Q/S	35.2		%	34.6		%

______

NM - Not Meaningful

Regions Financial Corporation and Subsidiaries

Financial Supplement to Third Quarter 2018 Earnings Release

Reconciliation to GAAP Financial Measures

Return Ratios

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



		Quarter Ended
($ amounts in millions)		9/30/2018			6/30/2018			3/31/2018			12/31/2017			9/30/2017
RETURN ON AVERAGE TANGIBLE COMMON STOCKHOLDERS' EQUITY- CONSOLIDATED
Net income available to common shareholders (GAAP)	A	$	548		$	359		$	398		$	319		$	295
Average stockholders' equity (GAAP)		$	15,401		$	15,682		$	15,848		$	16,419		$	16,790
Less:
Average intangible assets (GAAP)		4,955			5,066			5,076			5,086			5,097
Average deferred tax liability related to intangibles (GAAP)		(97		)	(98		)	(99		)	(126		)	(155		)
Average preferred stock (GAAP)		820			820			820			820			820
Average tangible common stockholders' equity (non-GAAP)	B	$	9,723		$	9,894		$	10,051		$	10,639		$	11,028
Return on average tangible common stockholders' equity (non-GAAP)*	A/B	22.36		%	14.54		%	16.08		%	11.88		%	10.62		%



		Quarter Ended
($ amounts in millions)		9/30/2018			6/30/2018			3/31/2018			12/31/2017			9/30/2017
RETURN ON AVERAGE TANGIBLE COMMON STOCKHOLDERS' EQUITY- CONTINUING OPERATIONS
Net income from continuing operations available to common shareholders (GAAP)	C	$	354		$	362		$	398		$	304		$	296
Average stockholders' equity (GAAP)⁽¹⁾		$	15,401		$	15,682		$	15,848		$	16,419		$	16,790
Less:
Average intangible assets (GAAP)⁽¹⁾		4,955			5,066			5,076			5,086			5,097
Average deferred tax liability related to intangibles (GAAP)⁽¹⁾		(97		)	(98		)	(99		)	(126		)	(155		)
Average preferred stock (GAAP)⁽¹⁾		820			820			820			820			820
Average tangible common stockholders' equity (non-GAAP)	D	$	9,723		$	9,894		$	10,051		$	10,639		$	11,028
Return on average tangible common stockholders' equity (non-GAAP)*	C/D	14.42		%	14.67		%	16.08		%	11.33		%	10.61		%

_______

*Annualized

(1) Due to the immaterial impact of the discontinued operations, the balance sheet has not been presented on a continuing operations basis.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Third Quarter 2018 Earnings Release

Statements of Discontinued Operations (unaudited)

On April 4, 2018, Regions entered into a stock purchase agreement to sell Regions Insurance Group, Inc. and related affiliates to BB&T Insurance Holdings. The transaction closed on July 2, 2018. The transaction generated an after-tax gain of $196 million.

In connection with the agreement, the results of the entities sold are reported in the Company's consolidated statements of income separately as discontinued operations for all periods presented because the pending sale met all of the criteria for reporting as discontinuing operations at September 30, 2018.

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. The results of the entities sold are reported as discontinued operations.

The following table represents the condensed results of operations for the Regions Insurance Group, Inc. entities being sold as discontinued operations:



	Quarter Ended
($ amounts in millions, except per share data)	9/30/2018			6/30/2018			3/31/2018		12/31/2017			9/30/2017
Interest income	$	1		$	—		$	—	$	—		$	1
Interest expense	—			—			—		—			—
Net interest income	1			—			—		—			1
Non-interest income:
Securities gains (losses), net	(1		)	—			—		3			—
Insurance commissions and fees	—			35			34		36			33
Gain on sale of business	281			—			—		—			—
Other	—			—			—		1			1
Total non-interest income	280			35			34		40			34
Non-interest expense:
Salaries and employee benefits	—			25			24		23			24
Net occupancy expense	—			2			1		1			2
Furniture and equipment expense	—			1			1		1			1
Other	1			8			7		8			7
Total non-interest expense	1			36			33		33			34
Income (loss) from discontinued operations before income tax	280			(1		)	1		7			1
Income tax expense (benefit)	84			—			—		(7		)	1
Income (loss) from discontinued operations, net of tax	$	196		$	(1	)	$	1	$	14		$	—

The following table represents the condensed results of operations for both the Regions Insurance Group, Inc entities being sold and Morgan Keegan and Company, Inc. and related affiliates as discontinued operations:



	Quarter Ended
($ amounts in millions, except per share data)	9/30/2018		6/30/2018			3/31/2018		12/31/2017			9/30/2017
Income (loss) from discontinued operations before income tax	$	274	$	(3	)	$	—	$	6		$	—
Income tax expense (benefit)	80		—			—		(9		)	1
Income (loss) from discontinued operations, net of tax	$	194	$	(3	)	$	—	$	15		$	(1	)
Weighted-average shares outstanding—during quarter ⁽¹⁾:
Basic	1,086		1,119			1,127		1,152			1,182
Diluted	1,095		1,119			1,141		1,164			1,182
Earnings (loss) per common share from discontinued operations:
Basic	$	0.18	$	(0.00	)	$	0.00	$	0.01		$	(0.00	)
Diluted	$	0.18	$	(0.00	)	$	0.00	$	0.01		$	(0.00	)

________


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

Regions Financial Corporation and Subsidiaries

Financial Supplement to Third Quarter 2018 Earnings Release

Credit Quality



	As of and for Quarter Ended
($ amounts in millions)	9/30/2018			6/30/2018			3/31/2018			12/31/2017			9/30/2017
Components:
Allowance for loan losses (ALL)	$	840		$	838		$	840		$	934		$	1,041
Reserve for unfunded credit commitments	50			48			49			53			59
Allowance for credit losses (ACL)	$	890		$	886		$	889		$	987		$	1,100

Provision (credit) for loan losses	$	84		$	60		$	(10	)	$	(44	)	$	76
Provision (credit) for unfunded credit losses	2			(1		)	(4		)	(6		)	(8		)

Loans charged-off:
Commercial and industrial	$	37		$	29		$	25		$	35		$	41
Commercial real estate mortgage—owner-occupied	4			5			5			2			2
Total commercial	41			34			30			37			43
Commercial investor real estate mortgage	1			—			8			—			—
Commercial investor real estate construction	—			—			—			—			—
Total investor real estate	1			—			8			—			—
Residential first mortgage	3			1			8			2			3
Home equity—lines of credit	6			6			5			7			7
Home equity—closed-end	1			2			1			2			1
Indirect—vehicles	8			9			12			11			12
Indirect—other consumer	11			10			12			12			9
Consumer credit card	14			15			16			14			13
Other consumer	22			18			20			20			18
Total consumer	65			61			74			68			63
Total	107			95			112			105			106

Recoveries of loans previously charged-off:
Commercial and industrial	8			12			8			11			9
Commercial real estate mortgage—owner-occupied	2			2			2			3			2
Total commercial	10			14			10			14			11
Commercial investor real estate mortgage	1			1			2			13			2
Commercial investor real estate construction	1			1			—			—			1
Total investor real estate	2			2			2			13			3
Residential first mortgage	1			3			1			1			1
Home equity—lines of credit	3			4			3			5			4
Home equity—closed-end	1			1			1			1			1
Indirect—vehicles	3			4			5			4			4
Indirect—other consumer	—			—			—			1			1
Consumer credit card	2			2			2			1			2
Other consumer	3			3			4			2			3
Total consumer	13			17			16			15			16
Total	25			33			28			42			30

Net loans charged-off:
Commercial and industrial	29			17			17			24			32
Commercial real estate mortgage—owner-occupied	2			3			3			(1		)	—
Total commercial	31			20			20			23			32
Commercial investor real estate mortgage	—			(1		)	6			(13		)	(2		)
Commercial investor real estate construction	(1		)	(1		)	—			—			(1		)
Total investor real estate	(1		)	(2		)	6			(13		)	(3		)
Residential first mortgage	2			(2		)	7			1			2
Home equity—lines of credit	3			2			2			2			3
Home equity—closed-end	—			1			—			1			—
Indirect—vehicles	5			5			7			7			8
Indirect—other consumer	11			10			12			11			8
Consumer credit card	12			13			14			13			11
Other consumer	19			15			16			18			15
Total consumer	52			44			58			53			47
Total	$	82		$	62		$	84		$	63		$	76

Regions Financial Corporation and Subsidiaries

Financial Supplement to Third Quarter 2018 Earnings Release



Credit Quality (continued)

	As of and for Quarter Ended
($ amounts in millions)	9/30/2018			6/30/2018			3/31/2018			12/31/2017			9/30/2017
Net loan charge-offs as a % of average loans, annualized:
Commercial and industrial	0.31		%	0.18		%	0.18		%	0.27		%	0.36		%
Commercial real estate mortgage—owner-occupied	0.16		%	0.17		%	0.20		%	(0.06		)%	(0.02		)%
Total commercial	0.28		%	0.18		%	0.19		%	0.22		%	0.30		%
Commercial investor real estate mortgage	(0.04		)%	(0.10		)%	0.65		%	(1.26		)%	(0.25		)%
Commercial investor real estate construction	(0.23		)%	(0.25		)%	(0.04		)%	(0.16		)%	(0.15		)%
Total investor real estate	(0.10		)%	(0.15		)%	0.43		%	(0.90		)%	(0.22		)%
Residential first mortgage	0.04		%	(0.05		)%	0.21		%	0.04		%	0.05		%
Home equity—lines of credit	0.17		%	0.15		%	0.10		%	0.15		%	0.15		%
Home equity—closed-end	(0.03		)%	0.11		%	0.05		%	0.01		%	0.01		%
Indirect—vehicles	0.62		%	0.66		%	0.83		%	0.94		%	0.83		%
Indirect—other consumer	2.23		%	2.46		%	2.98		%	3.03		%	2.64		%
Consumer credit card	3.97		%	4.22		%	4.49		%	3.97		%	3.92		%
Other consumer	6.26		%	5.08		%	5.86		%	5.77		%	5.36		%
Total consumer	0.65		%	0.58		%	0.75		%	0.66		%	0.60		%
Total	0.40		%	0.32		%	0.42		%	0.31		%	0.38		%
Non-accrual loans, excluding loans held for sale	$	539		$	595		$	601		$	650		$	760
Non-performing loans held for sale	15			10			8			17			6
Non-accrual loans, including loans held for sale	554			605			609			667			766
Foreclosed properties	58			61			66			73			73
Non-marketable investments received in foreclosure	12			—			—			—			—
Non-performing assets (NPAs)	$	624		$	666		$	675		$	740		$	839
Loans past due > 90 days ⁽¹⁾	$	137		$	129		$	138		$	167		$	151
Accruing restructured loans not included in categories above ⁽²⁾	$	600		$	590		$	721		$	945		$	1,014
Credit Ratios:
ACL/Loans, net	1.09		%	1.10		%	1.11		%	1.23		%	1.39		%
ALL/Loans, net	1.03		%	1.04		%	1.05		%	1.17		%	1.31		%
Allowance for loan losses to non-performing loans, excluding loans held for sale	156		%	141		%	140		%	144		%	137		%
Non-accrual loans, excluding loans held for sale/Loans, net	0.66		%	0.74		%	0.75		%	0.81		%	0.96		%
NPAs (ex. 90+ past due)/Loans, foreclosed properties, non-marketable investments and non-performing loans held for sale	0.76		%	0.83		%	0.85		%	0.92		%	1.06		%
NPAs (inc. 90+ past due)/Loans, foreclosed properties, non-marketable investments and non-performing loans held for sale ⁽¹⁾	0.93		%	0.99		%	1.02		%	1.13		%	1.25		%


(1)	Excludes guaranteed residential first mortgages that are 90+ days past due and still accruing. Refer to the footnotes on page 19 for amounts related to these loans.


(2)	See page 20 for detail of restructured loans.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Third Quarter 2018 Earnings Release

Credit Quality (continued)

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 first quarter of 2018, Regions made the strategic decision to sell certain primarily performing troubled debt restructured, as well as, certain non-restructured interest-only residential first mortgage loans. These loans were marked down to fair value through net charge-offs. 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)		9/30/2018			6/30/2018			3/31/2018			12/31/2017			9/30/2017
Residential first mortgage net charge-offs (GAAP)	A	$	2		$	(2	)	$	7		$	1		$	2
Less: Net charge-offs associated with TDR sale		—			—			5			—			—
Adjusted residential first mortgage net charge-offs (non-GAAP)	B	$	2		$	(2	)	$	2		$	1		$	2
Total consumer net charge-offs (GAAP)	C	$	52		$	44		$	58		$	53		$	47
Less: Net charge-offs associated with TDR sale		—			—			5			—			—
Adjusted total consumer net charge-offs (non-GAAP)	D	$	52		$	44		$	53		$	53		$	47
Total net charge-offs (GAAP)	E	$	82		$	62		$	84		$	63		$	76
Less: Net charge-offs associated with TDR sale		—			—			5			—			—
Adjusted total net charge-offs (non-GAAP)	F	$	82		$	62		$	79		$	63		$	76
Average residential first mortgage loans (GAAP)	G	$	14,162		$	13,980		$	13,977		$	13,954		$	13,808
Add: Average balances of residential first mortgage loans sold		—			—			90			—			—
Average residential first mortgage loans adjusted for residential first mortgage loans sold (non-GAAP)	H	$	14,162		$	13,980		$	14,067		$	13,954		$	13,808
Average total consumer loans (GAAP)	I	$	31,409		$	31,177		$	31,272		$	31,367		$	31,327
Add: Average balances of residential first mortgage loans sold		—			—			90			—			—
Average total consumer loans adjusted for residential first mortgage loans sold (non-GAAP)	J	$	31,409		$	31,177		$	31,362		$	31,367		$	31,327
Average total loans (GAAP)	K	$	81,022		$	79,957		$	79,891		$	79,523		$	79,585
Add: Average balances of residential first mortgage loans sold		—			—			90			—			—
Average total loans adjusted for residential first mortgage loans sold (non-GAAP)	L	$	81,022		$	79,957		$	79,981		$	79,523		$	79,585
Residential first mortgage net charge-off percentage (GAAP)*	A/G	0.04		%	(0.05		)%	0.21		%	0.04		%	0.05		%
Adjusted residential first mortgage net charge-off percentage (non-GAAP)*	B/H	0.04		%	(0.05		)%	0.06		%	0.04		%	0.05		%
Total consumer net charge-off percentage (GAAP)*	C/I	0.65		%	0.58		%	0.75		%	0.66		%	0.60		%
Adjusted total consumer net charge-off percentage (non-GAAP)*	D/J	0.65		%	0.58		%	0.69		%	0.66		%	0.60		%
Total net charge-off percentage (GAAP)*	E/K	0.40		%	0.32		%	0.42		%	0.31		%	0.38		%
Adjusted total net charge-off percentage (non-GAAP)*	F/L	0.40		%	0.32		%	0.40		%	0.31		%	0.38		%

*Annualized

Regions Financial Corporation and Subsidiaries

Financial Supplement to Third Quarter 2018 Earnings Release

Non-Accrual Loans (excludes loans held for sale)



	As of
($ amounts in millions)	9/30/2018				6/30/2018				3/31/2018				12/31/2017				9/30/2017
Commercial and industrial	$	341	0.90	%	$	384	1.04	%	$	364	0.99	%	$	404	1.12	%	$	493	1.39	%
Commercial real estate mortgage—owner-occupied	80		1.36	%	98		1.63	%	102		1.69	%	118		1.90	%	140		2.22	%
Commercial real estate construction—owner-occupied	8		2.41	%	5		1.66	%	5		1.68	%	6		1.89	%	6		1.79	%
Total commercial	429		0.97	%	487		1.12	%	471		1.09	%	528		1.24	%	639		1.52	%
Commercial investor real estate mortgage	2		0.04	%	4		0.10	%	14		0.36	%	5		0.13	%	5		0.12	%
Commercial investor real estate construction	—		—	%	—		—	%	—		—	%	1		0.02	%	—		—	%
Total investor real estate	2		0.04	%	4		0.06	%	14		0.25	%	6		0.10	%	5		0.08	%
Residential first mortgage	42		0.29	%	38		0.27	%	47		0.34	%	47		0.33	%	45		0.32	%
Home equity	66		0.71	%	66		0.68	%	69		0.70	%	69		0.68	%	70		0.68	%
Indirect - vehicles	—		—	%	—		—	%	—		—	%	—		—	%	1		0.02	%
Total consumer	108		0.34	%	104		0.33	%	116		0.37	%	116		0.37	%	116		0.37	%
Total non-accrual loans	$	539	0.66	%	$	595	0.74	%	$	601	0.75	%	$	650	0.81	%	$	760	0.96	%

Criticized and Classified Loans—Business Services ⁽¹⁾



	As of
											9/30/2018					9/30/2018
($ amounts in millions)	9/30/2018		6/30/2018		3/31/2018		12/31/2017		9/30/2017		vs. 6/30/2018					vs. 6/30/2017
Accruing classified	$	550	$	560	$	813	$	915	$	1,377	$	(10	)	(1.8	)%	$	(827	)	(60.1	)%
Non-accruing classified	431		491		485		534		644		(60		)	(12.2	)%	(213		)	(33.1	)%
Total classified	981		1,051		1,298		1,449		2,021		(70		)	(6.7	)%	(1,040		)	(51.5	)%

Special mention	1,048		857		925		1,007		941		191			22.3	%	107			11.4	%
Total criticized	$	2,029	$	1,908	$	2,223	$	2,456	$	2,962	$	121		6.3	%	$	(933	)	(31.5	)%


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

Home Equity Lines of Credit - Future Principal Payment Resets ⁽²⁾



	As of 9/30/2018
($ amounts in millions)	First Lien		% of Total		Second Lien		% of Total		Total
2018	$	4	0.07	%	$	8	0.14	%	$	12
2019	54		0.89	%	45		0.76	%	99
2020	113		1.89	%	86		1.43	%	199
2021	136		2.26	%	116		1.94	%	252
2022	147		2.45	%	137		2.28	%	284
2023-2027	1,847		30.82	%	1,903		31.76	%	3,750
2028-2032	795		13.27	%	599		9.99	%	1,394
Thereafter	1		0.02	%	2		0.03	%	3
Total	$	3,097	51.67	%	$	2,896	48.33	%	$	5,993

(2)

The balance of Regions' home equity portfolio was $9,435 million at September 30, 2018 consisting of $5,993 million of home equity lines of credit and $3,442 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 Third Quarter 2018 Earnings Release

Early and Late Stage Delinquencies



Accruing 30-89 Days Past Due Loans	As of
($ amounts in millions)	9/30/2018				6/30/2018				3/31/2018				12/31/2017				9/30/2017
Commercial and industrial	$	45	0.12	%	$	18	0.05	%	$	70	0.19	%	$	35	0.10	%	$	46	0.13	%
Commercial real estate mortgage—owner-occupied	18		0.31	%	16		0.28	%	28		0.46	%	26		0.41	%	20		0.31	%
Commercial real estate construction—owner-occupied	—		—	%	3		0.84	%	—		—	%	—		0.07	%	—		0.01	%
Total commercial	63		0.14	%	37		0.08	%	98		0.23	%	61		0.14	%	66		0.16	%
Commercial investor real estate mortgage	6		0.13	%	6		0.14	%	1		0.02	%	2		0.05	%	7		0.18	%
Commercial investor real estate construction	—		—	%	—		0.01	%	29		1.61	%	—		—	%	29		1.47	%
Total investor real estate	6		0.09	%	6		0.10	%	30		0.54	%	2		0.03	%	36		0.60	%
Residential first mortgage—non-guaranteed ⁽¹⁾	89		0.65	%	82		0.60	%	89		0.66	%	135		0.99	%	111		0.82	%
Home equity	77		0.81	%	77		0.79	%	84		0.85	%	80		0.79	%	89		0.87	%
Indirect—vehicles	51		1.64	%	49		1.51	%	49		1.47	%	61		1.84	%	58		1.66	%
Indirect—other consumer	16		0.76	%	11		0.59	%	13		0.78	%	14		0.96	%	13		0.98	%
Consumer credit card	19		1.50	%	16		1.32	%	17		1.33	%	18		1.40	%	18		1.50	%
Other consumer	20		1.62	%	16		1.40	%	15		1.32	%	17		1.41	%	16		1.43	%
Total consumer ⁽¹⁾	272		0.88	%	251		0.82	%	267		0.87	%	325		1.05	%	305		0.99	%
Total accruing 30-89 days past due loans ⁽¹⁾	$	341	0.42	%	$	294	0.37	%	$	395	0.50	%	$	388	0.49	%	$	407	0.52	%

Accruing 90+ Days Past Due Loans	As of
($ amounts in millions)	9/30/2018				6/30/2018				3/31/2018				12/31/2017				9/30/2017
Commercial and industrial	$	4	0.01	%	$	4	0.01	%	$	5	0.01	%	$	4	0.01	%	$	5	0.01	%
Commercial real estate mortgage—owner-occupied	2		0.02	%	1		0.01	%	1		0.01	%	1		0.02	%	4		0.06	%
Total commercial	6		0.01	%	5		0.01	%	6		0.01	%	5		0.01	%	9		0.02	%
Commercial investor real estate mortgage	—		—	%	—		—	%	—		—	%	1		0.02	%	—		—	%
Total investor real estate	—		—	%	—		—	%	—		—	%	1		0.02	%	—		0.01	%
Residential first mortgage—non-guaranteed ⁽²⁾	61		0.44	%	63		0.46	%	69		0.52	%	92		0.67	%	80		0.60	%
Home equity	39		0.42	%	31		0.32	%	33		0.33	%	37		0.36	%	33		0.32	%
Indirect—vehicles	9		0.28	%	8		0.24	%	8		0.25	%	9		0.27	%	9		0.27	%
Indirect—other consumer	1		0.03	%	—		—	%	—		—	%	—		—	%	—		—	%
Consumer credit card	17		1.36	%	17		1.31	%	17		1.40	%	19		1.45	%	16		1.29	%
Other consumer	4		0.32	%	5		0.36	%	5		0.40	%	4		0.35	%	4		0.31	%
Total consumer ⁽²⁾	131		0.42	%	124		0.40	%	132		0.43	%	161		0.52	%	142		0.46	%
Total accruing 90+ days past due loans ⁽²⁾	$	137	0.17	%	$	129	0.16	%	$	138	0.17	%	$	167	0.21	%	$	151	0.19	%

Total delinquencies ^{(1) (2)}	$	478	0.59	%	$	423	0.53	%	$	533	0.67	%	$	555	0.70	%	$	558	0.71	%


(1)	Excludes loans that are 100% guaranteed by FHA. Total 30-89 days past due guaranteed loans excluded were $36 million at 9/30/2018, $28 million at 6/30/2018, $31 million at 3/31/2018, $45 million at 12/31/2017, and $38 million at 9/30/2017.


(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 $83 million at 9/30/2018, $105 million at 6/30/2018, $127 million at 3/31/2018, $124 million at 12/31/2017, and $94 million at 9/30/2017.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Third Quarter 2018 Earnings Release

Troubled Debt Restructurings



	As of
($ amounts in millions)	9/30/2018		6/30/2018		3/31/2018		12/31/2017		9/30/2017
Current:
Commercial	$	169	$	157	$	197	$	215	$	252
Investor real estate	44		35		54		90		75
Residential first mortgage	143		134		131		318		332
Home equity	188		206		221		233		245
Consumer credit card	1		1		1		1		1
Other consumer	6		6		7		8		8
Total current	551		539		611		865		913
Accruing 30-89 DPD:
Commercial	1		1		36		17		10
Investor real estate	5		5		29		—		29
Residential first mortgage	28		31		31		50		49
Home equity	15		13		13		12		12
Other consumer	—		1		1		1		1
Total accruing 30-89 DPD	49		51		110		80		101
Total accruing and <90 DPD	600		590		721		945		1,014
Non-accrual or 90+ DPD:
Commercial	195		178		194		115		238
Investor real estate	—		1		10		1		1
Residential first mortgage	42		44		57		69		64
Home equity	15		14		14		14		15
Total non-accrual or 90+DPD	252		237		275		199		318
Total TDRs - Loans	$	852	$	827	$	996	$	1,144	$	1,332
TDRs - Held For Sale	6		11		7		13		1
Total TDRs	$	858	$	838	$	1,003	$	1,157	$	1,333


Total TDRs - Loans by Portfolio
	As of
($ amounts in millions)	9/30/2018		6/30/2018		3/31/2018		12/31/2017		9/30/2017
Total commercial TDRs	$	365	$	336	$	427	$	347	$	500
Total investor real estate TDRs	49		41		93		91		105
Total consumer TDRs	438		450		476		706		727
Total TDRs - Loans	$	852	$	827	$	996	$	1,144	$	1,332

Regions Financial Corporation and Subsidiaries

Financial Supplement to Third Quarter 2018 Earnings Release

Consolidated Balance Sheets (unaudited)



	As of
($ amounts in millions)	9/30/2018			6/30/2018			3/31/2018			12/31/2017			9/30/2017
Assets:
Cash and due from banks	$	1,911		$	1,844		$	1,766		$	2,012		$	1,829
Interest-bearing deposits in other banks	1,584			2,442			1,419			1,899			1,932
Federal funds sold and securities purchased under agreements to resell	—			—			—			70			—
Debt securities held to maturity	1,524			1,568			1,611			1,658			1,703
Debt securities available for sale	22,671			22,935			23,085			23,403			23,461
Loans held for sale	331			490			452			348			388
Loans, net of unearned income	81,821			80,478			79,822			79,947			79,356
Allowance for loan losses	(840		)	(838		)	(840		)	(934		)	(1,041		)
Net loans	80,981			79,640			78,982			79,013			78,315
Other earning assets	1,801			1,672			1,640			1,891			1,812
Premises and equipment, net	2,051			2,050			2,065			2,064			2,057
Interest receivable	360			347			328			337			319
Goodwill	4,829			4,904			4,904			4,904			4,904
Residential mortgage servicing rights at fair value (MSRs)	406			362			356			336			335
Other identifiable intangible assets	122			156			167			177			187
Other assets	6,007			6,147			6,138			6,182			6,029
Total assets	$	124,578		$	124,557		$	122,913		$	124,294		$	123,271
Liabilities and stockholders’ equity:
Deposits:
Non-interest-bearing	$	35,354		$	36,055		$	36,935		$	36,127		$	37,293
Interest-bearing	57,901			59,228			60,055			60,762			60,298
Total deposits	93,255			95,283			96,990			96,889			97,591
Borrowed funds:
Short-term borrowings:
Other short-term borrowings	3,250			1,400			—			500			600
Total short-term borrowings	3,250			1,400			—			500			600
Long-term borrowings	11,178			9,890			7,949			8,132			6,102
Total borrowed funds	14,428			11,290			7,949			8,632			6,702
Other liabilities	2,125			2,207			2,108			2,581			2,354
Total liabilities	109,808			108,780			107,047			108,102			106,647
Stockholders’ equity:
Preferred stock, non-cumulative perpetual	820			820			820			820			820
Common stock	11			12			12			12			12
Additional paid-in capital	14,122			15,389			15,639			15,858			16,344
Retained earnings	2,582			2,182			1,923			1,628			1,279
Treasury stock, at cost	(1,371		)	(1,371		)	(1,377		)	(1,377		)	(1,377		)
Accumulated other comprehensive income (loss), net	(1,394		)	(1,255		)	(1,151		)	(749		)	(454		)
Total stockholders’ equity	14,770			15,777			15,866			16,192			16,624
Total liabilities and stockholders’ equity	$	124,578		$	124,557		$	122,913		$	124,294		$	123,271

_________

Note - In the first quarter of 2018, the Company adopted new accounting guidance which resulted in trading account assets and equity securities available for sale being reclassified to other earning assets. All prior period amounts have been revised.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Third Quarter 2018 Earnings Release

End of Period Loans



	As of
											9/30/2018					9/30/2018
($ amounts in millions)	9/30/2018		6/30/2018		3/31/2018		12/31/2017		9/30/2017		vs 6/30/2018					vs. 9/30/2017
Commercial and industrial	$	38,036	$	37,079	$	36,787	$	36,115	$	35,443	$	957		2.6	%	$	2,593		7.3	%
Commercial real estate mortgage—owner-occupied	5,943		6,006		6,044		6,193		6,284		(63		)	(1.0	)%	(341		)	(5.4	)%
Commercial real estate construction—owner-occupied	326		304		306		332		335		22			7.2	%	(9		)	(2.7	)%
Total commercial	44,305		43,389		43,137		42,640		42,062		916			2.1	%	2,243			5.3	%
Commercial investor real estate mortgage	4,205		3,882		3,742		4,062		3,999		323			8.3	%	206			5.2	%
Commercial investor real estate construction	1,838		1,879		1,845		1,772		1,936		(41		)	(2.2	)%	(98		)	(5.1	)%
Total investor real estate	6,043		5,761		5,587		5,834		5,935		282			4.9	%	108			1.8	%
Total business	50,348		49,150		48,724		48,474		47,997		1,198			2.4	%	2,351			4.9	%
Residential first mortgage ⁽¹⁾	14,220		14,111		13,892		14,061		13,903		109			0.8	%	317			2.3	%
Home equity—lines of credit ⁽²⁾	5,993		6,165		6,355		6,571		6,693		(172		)	(2.8	)%	(700		)	(10.5	)%
Home equity—closed-end ⁽³⁾	3,442		3,514		3,561		3,593		3,583		(72		)	(2.0	)%	(141		)	(3.9	)%
Indirect—vehicles	2,429		2,377		2,326		2,184		2,176		52			2.2	%	253			11.6	%
Indirect—vehicles third-party	717		842		984		1,142		1,313		(125		)	(14.8	)%	(596		)	(45.4	)%
Indirect—other consumer	2,179		1,889		1,611		1,467		1,318		290			15.4	%	861			65.3	%
Consumer credit card	1,273		1,264		1,237		1,290		1,214		9			0.7	%	59			4.9	%
Other consumer	1,220		1,166		1,132		1,165		1,159		54			4.6	%	61			5.3	%
Total consumer	31,473		31,328		31,098		31,473		31,359		145			0.5	%	114			0.4	%
Total Loans	$	81,821	$	80,478	$	79,822	$	79,947	$	79,356	$	1,343		1.7	%	$	2,465		3.1	%

_______


(1)	Regions sold $254 million of residential first mortgage loans during the first quarter of 2018. The loans sold consisted primarily of performing troubled debt restructured loans, as well as certain non-restructured interest-only loans.


(2)	The balance of Regions' home equity lines of credit consists of $3,097 million of first lien and $2,896 million of second lien at 9/30/2018.


(3)	The balance of Regions' closed-end home equity loans consists of $3,137 million of first lien and $305 million of second lien at 9/30/2018.



	As of
End of Period Loans by Percentage	9/30/2018		6/30/2018		3/31/2018		12/31/2017		9/30/2017
Commercial and industrial	46.5	%	46.1	%	46.1	%	45.2	%	44.7	%
Commercial real estate mortgage—owner-occupied	7.3	%	7.5	%	7.6	%	7.7	%	7.9	%
Commercial real estate construction—owner-occupied	0.4	%	0.4	%	0.4	%	0.4	%	0.4	%
Total commercial	54.2	%	54.0	%	54.1	%	53.3	%	53.0	%
Commercial investor real estate mortgage	5.1	%	4.8	%	4.7	%	5.1	%	5.0	%
Commercial investor real estate construction	2.2	%	2.3	%	2.3	%	2.2	%	2.5	%
Total investor real estate	7.3	%	7.1	%	7.0	%	7.3	%	7.5	%
Total business	61.5	%	61.1	%	61.1	%	60.6	%	60.5	%
Residential first mortgage	17.4	%	17.5	%	17.4	%	17.6	%	17.5	%
Home equity—lines of credit	7.3	%	7.7	%	8.0	%	8.2	%	8.4	%
Home equity—closed-end	4.2	%	4.4	%	4.5	%	4.5	%	4.5	%
Indirect—vehicles	3.0	%	3.0	%	2.9	%	2.7	%	2.7	%
Indirect—vehicles third-party	0.9	%	1.0	%	1.2	%	1.4	%	1.7	%
Indirect—other consumer	2.6	%	2.3	%	2.0	%	1.9	%	1.7	%
Consumer credit card	1.6	%	1.6	%	1.5	%	1.6	%	1.5	%
Other consumer	1.5	%	1.4	%	1.4	%	1.5	%	1.5	%
Total consumer	38.5	%	38.9	%	38.9	%	39.4	%	39.5	%
Total Loans	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

Regions Financial Corporation and Subsidiaries

Financial Supplement to Third Quarter 2018 Earnings Release

Average Balances of Loans



	Average Balances
($ amounts in millions)	3Q18		2Q18		1Q18		4Q17		3Q17		3Q18 vs. 2Q18					3Q18 vs. 3Q17
Commercial and industrial	$	37,410	$	36,874	$	36,464	$	35,689	$	35,438	$	536		1.5	%	$	1,972		5.6	%
Commercial real estate mortgage—owner-occupied	6,000		6,017		6,117		6,208		6,413		(17		)	(0.3	)%	(413		)	(6.4	)%
Commercial real estate construction—owner-occupied	311		298		318		335		332		13			4.4	%	(21		)	(6.3	)%
Total commercial	43,721		43,189		42,899		42,232		42,183		532			1.2	%	1,538			3.6	%
Commercial investor real estate mortgage	4,083		3,724		3,883		3,986		4,065		359			9.6	%	18			0.4	%
Commercial investor real estate construction	1,809		1,867		1,837		1,938		2,010		(58		)	(3.1	)%	(201		)	(10.0	)%
Total investor real estate	5,892		5,591		5,720		5,924		6,075		301			5.4	%	(183		)	(3.0	)%
Total business	49,613		48,780		48,619		48,156		48,258		833			1.7	%	1,355			2.8	%
Residential first mortgage	14,162		13,980		13,977		13,954		13,808		182			1.3	%	354			2.6	%
Home equity—lines of credit	6,068		6,259		6,465		6,625		6,763		(191		)	(3.1	)%	(695		)	(10.3	)%
Home equity—closed-end	3,475		3,533		3,576		3,581		3,578		(58		)	(1.6	)%	(103		)	(2.9	)%
Indirect—vehicles	2,414		2,351		2,248		2,177		2,156		63			2.7	%	258			12.0	%
Indirect—vehicles third-party	776		909		1,061		1,223		1,406		(133		)	(14.6	)%	(630		)	(44.8	)%
Indirect—other consumer	2,042		1,743		1,531		1,400		1,258		299			17.2	%	784			62.3	%
Consumer credit card	1,271		1,245		1,257		1,238		1,200		26			2.1	%	71			5.9	%
Other consumer	1,201		1,157		1,157		1,169		1,158		44			3.8	%	43			3.7	%
Total consumer	31,409		31,177		31,272		31,367		31,327		232			0.7	%	82			0.3	%
Total loans	$	81,022	$	79,957	$	79,891	$	79,523	$	79,585	$	1,065		1.3	%	$	1,437		1.8	%

Adjusted Average Balances of Loans (non-GAAP)

Regions believes adjusting total average loans for the impact of the first quarter 2018 residential first mortgage loan sale and the indirect vehicles third-party exit portfolio, provides a meaningful calculation of loan growth rates and presents them on the same basis as that applied by management.



	Average Balances
($ amounts in millions)	3Q18		2Q18		1Q18		4Q17		3Q17		3Q18 vs. 2Q18					3Q18 vs. 3Q17
Total consumer loans	$	31,409	$	31,177	$	31,272	$	31,367	$	31,327	$	232		0.7	%	$	82		0.3	%
Less: Balances of residential first mortgage loans sold⁽¹⁾	—		—		164		254		254		—			NM		(254		)	(100.0	)%
Less: Indirect—vehicles third-party	776		909		1,061		1,223		1,406		(133		)	(14.6	)%	(630		)	(44.8	)%
Adjusted total consumer loans (non-GAAP)	$	30,633	$	30,268	$	30,047	$	29,890	$	29,667	$	365		1.2	%	$	966		3.3	%
Total loans	$	81,022	$	79,957	$	79,891	$	79,523	$	79,585	1,065			1.3	%	1,437			1.8	%
Less: Balances of residential first mortgage loans sold⁽¹⁾	—		—		164		254		254		—			NM		(254		)	(100.0	)%
Less: Indirect—vehicles third-party	776		909		1,061		1,223		1,406		(133		)	(14.6	)%	(630		)	(44.8	)%
Adjusted total loans (non-GAAP)	$	80,246	$	79,048	$	78,666	$	78,046	$	77,925	$	1,198		1.5	%	$	2,321		3.0	%

________

(1) Adjustments to average loan balances assume a simple day-weighted average impact for the first quarter of 2018, and are equal to the ending balance of the residential first mortgage loans sold for the prior periods.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Third Quarter 2018 Earnings Release

Average Balances of Loans (continued)



	Average Balances
	Nine Months Ended September 30
($ amounts in millions)	2018		2017		2018 vs. 2017
Commercial and industrial	$	36,919	$	35,455	$	1,464		4.1	%
Commercial real estate mortgage—owner-occupied	6,044		6,588		(544		)	(8.3	)%
Commercial real estate construction—owner-occupied	309		348		(39		)	(11.2	)%
Total commercial	43,272		42,391		881			2.1	%
Commercial investor real estate mortgage	3,897		4,176		(279		)	(6.7	)%
Commercial investor real estate construction	1,838		2,153		(315		)	(14.6	)%
Total investor real estate	5,735		6,329		(594		)	(9.4	)%
Total business	49,007		48,720		287			0.6	%
Residential first mortgage	14,040		13,639		401			2.9	%
Home equity—lines of credit	6,263		6,941		(678		)	(9.8	)%
Home equity—closed-end	3,528		3,532		(4		)	(0.1	)%
Indirect—vehicles	2,338		2,132		206			9.7	%
Indirect—vehicles third-party	914		1,616		(702		)	(43.4	)%
Indirect—other consumer	1,774		1,066		708			66.4	%
Consumer credit card	1,258		1,177		81			6.9	%
Other consumer	1,172		1,133		39			3.4	%
Total consumer	31,287		31,236		51			0.2	%
Total Loans	$	80,294	$	79,956	$	338		0.4	%

Adjusted Average Balances of Loans (non-GAAP)



	Average Balances
	Nine Months Ended September 30
($ amounts in millions)	2018		2017		2018 vs. 2017
Total consumer loans	$	31,287	$	31,236	$	51		0.2	%
Less: Balances of residential first mortgage loans sold⁽¹⁾	54		254		(200		)	(78.7	)%
Less: Indirect—vehicles third-party	914		1,616		(702		)	(43.4	)%
Adjusted total consumer loans (non-GAAP)	$	30,319	$	29,366	$	953		3.2	%
Total Loans	$	80,294	$	79,956	$	338		0.4	%
Less: Balances of residential first mortgage loans sold⁽¹⁾	54		254		(200		)	(78.7	)%
Less: Indirect—vehicles third-party	914		1,616		(702		)	(43.4	)%
Adjusted total loans (non-GAAP)	$	79,326	$	78,086	$	1,240		1.6	%

________

(1) Adjustments to average loan balances assume a simple day-weighted average impact for the nine months ended September 30, 2018, and are equal to the ending balance of the residential first mortgage loans sold for the prior periods.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Third Quarter 2018 Earnings Release

End of Period Deposits



	As of
												9/30/2018					9/30/2018
($ amounts in millions)	9/30/2018		6/30/2018		3/31/2018		12/31/2017		9/30/2017			vs. 6/30/2018					vs. 9/30/2017
Customer Deposits
Interest-free deposits	$	35,354	$	36,055	$	36,935	$	36,127	$	37,293		$	(701	)	(1.9	)%	$	(1,939	)	(5.2	)%
Interest-bearing checking	18,586		19,403		19,916		20,161		18,976			(817		)	(4.2	)%	(390		)	(2.1	)%
Savings	8,900		8,971		8,983		8,413		8,364			(71		)	(0.8	)%	536			6.4	%
Money market—domestic	23,896		24,255		24,478		25,306		25,886			(359		)	(1.5	)%	(1,990		)	(7.7	)%
Money market—foreign	—		—		18		23		36			—			NM		(36		)	(100.0	)%
Low-cost deposits	86,736		88,684		90,330		90,030		90,555			(1,948		)	(2.2	)%	(3,819		)	(4.2	)%
Time deposits	6,519		6,599		6,660		6,859		7,036			(80		)	(1.2	)%	(517		)	(7.3	)%
Total Deposits	$	93,255	$	95,283	$	96,990	$	96,889	$	97,591		$	(2,028	)	(2.1	)%	$	(4,336	)	(4.4	)%

	As of
												9/30/2018					9/30/2018
($ amounts in millions)	9/30/2018		6/30/2018		3/31/2018		12/31/2017		9/30/2017			vs. 6/30/2018					vs. 9/30/2017
Consumer Bank Segment	$	57,939	$	58,713	$	59,266	$	57,475	$	57,592		$	(774	)	(1.3	)%	$	347		0.6	%
Corporate Bank Segment	26,002		26,873		27,569		28,023		27,217			(871		)	(3.2	)%	(1,215		)	(4.5	)%
Wealth Management Segment	8,018		8,334		8,702		9,162		9,826			(316		)	(3.8	)%	(1,808		)	(18.4	)%
Other ⁽¹⁾	1,296		1,363		1,453		2,229		2,956			(67		)	(4.9	)%	(1,660		)	(56.2	)%
Total Deposits	$	93,255	$	95,283	$	96,990	$	96,889	$	97,591		$	(2,028	)	(2.1	)%	$	(4,336	)	(4.4	)%

	As of
												9/30/2018					9/30/2018
($ amounts in millions)	9/30/2018		6/30/2018		3/31/2018		12/31/2017		9/30/2017			vs. 6/30/2018					vs. 9/30/2017
Wealth Management - Private Wealth	$	7,035	$	7,248	$	7,581	$	7,953	$	7,671		$	(213	)	(2.9	)%	$	(636	)	(8.3	)%
Wealth Management - Institutional Services	983		1,086		1,121		1,209		2,155			(103		)	(9.5	)%	(1,172		)	(54.4	)%
Total Wealth Management Segment Deposits	$	8,018	$	8,334	$	8,702	$	9,162	$	9,826		$	(316	)	(3.8	)%	$	(1,808	)	(18.4	)%

									As of
End of Period Deposits by Percentage									9/30/2018			6/30/2018			3/31/2018		12/31/2017			9/30/2017
Customer Deposits
Interest-free deposits									37.9		%	37.8		%	38.1	%	37.3		%	38.2	%
Interest-bearing checking									19.9		%	20.4		%	20.5	%	20.8		%	19.4	%
Savings									9.6		%	9.4		%	9.3	%	8.7		%	8.6	%
Money market—domestic									25.6		%	25.5		%	25.2	%	26.1		%	26.5	%
Money market—foreign									—		%	—		%	—	%	—		%	0.1	%
Low-cost deposits									93.0		%	93.1		%	93.1	%	92.9		%	92.8	%
Time deposits									7.0		%	6.9		%	6.9	%	7.1		%	7.2	%
Total Deposits									100.0		%	100.0		%	100.0	%	100.0		%	100.0	%


(1)	Consists primarily of brokered deposits.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Third Quarter 2018 Earnings Release

Average Balances of Deposits



	Average Balances
($ amounts in millions)	3Q18		2Q18		1Q18		4Q17		3Q17		3Q18 vs. 2Q18					3Q18 vs. 3Q17
Customer Deposits
Interest-free deposits	$	35,414	$	35,811	$	35,464	$	36,742	$	36,522	$	(397	)	(1.1	)%	$	(1,108	)	(3.0	)%
Interest-bearing checking	18,924		19,534		19,935		19,261		18,741		(610		)	(3.1	)%	183			1.0	%
Savings	8,928		8,981		8,615		8,378		8,346		(53		)	(0.6	)%	582			7.0	%
Money market—domestic	24,046		24,225		24,580		25,716		26,265		(179		)	(0.7	)%	(2,219		)	(8.4	)%
Money market—foreign	—		10		21		28		60		(10		)	(100.0	)%	(60		)	(100.0	)%
Low-cost deposits	87,312		88,561		88,615		90,125		89,934		(1,249		)	(1.4	)%	(2,622		)	(2.9	)%
Time deposits	6,522		6,632		6,787		6,935		6,929		(110		)	(1.7	)%	(407		)	(5.9	)%
Total Customer Deposits	93,834		95,193		95,402		97,060		96,863		(1,359		)	(1.4	)%	(3,029		)	(3.1	)%
Corporate treasury deposits	108		60		26		—		—		48			80.0	%	108			NM
Total Deposits	$	93,942	$	95,253	$	95,428	$	97,060	$	96,863	$	(1,311	)	(1.4	)%	$	(2,921	)	(3.0	)%



	Average Balances
($ amounts in millions)	3Q18		2Q18		1Q18		4Q17		3Q17		3Q18 vs. 2Q18					3Q18 vs. 3Q17
Consumer Bank Segment	$	57,684	$	58,152	$	57,146	$	56,921	$	56,980	$	(468	)	(0.8	)%	$	704		1.2	%
Corporate Bank Segment	26,563		27,160		27,672		28,362		27,607		(597		)	(2.2	)%	(1,044		)	(3.8	)%
Wealth Management Segment	8,235		8,528		8,942		9,163		9,269		(293		)	(3.4	)%	(1,034		)	(11.2	)%
Other ⁽¹⁾	1,460		1,413		1,668		2,614		3,007		47			3.3	%	(1,547		)	(51.4	)%
Total Deposits	$	93,942	$	95,253	$	95,428	$	97,060	$	96,863	$	(1,311	)	(1.4	)%	$	(2,921	)	(3.0	)%



	Average Balances
($ amounts in millions)	3Q18		2Q18		1Q18		4Q17		3Q17		3Q18 vs. 2Q18					3Q18 vs. 3Q17
Wealth Management - Private Wealth	$	7,250	$	7,430	$	7,765	$	7,798	$	7,750	$	(180	)	(2.4	)%	$	(500	)	(6.5	)%
Wealth Management - Institutional Services	985		1,098		1,177		1,365		1,519		(113		)	(10.3	)%	(534		)	(35.2	)%
Total Wealth Management Segment Deposits	$	8,235	$	8,528	$	8,942	$	9,163	$	9,269	$	(293	)	(3.4	)%	$	(1,034	)	(11.2	)%



	Average Balances
	Nine Months Ended September 30
($ amounts in millions)	2018		2017		2018 vs. 2017
Customer Deposits
Interest-free deposits	$	35,563	$	36,100	$	(537	)	(1.5	)%
Interest-bearing checking	19,461		19,305		156			0.8	%
Savings	8,842		8,253		589			7.1	%
Money market—domestic	24,282		26,656		(2,374		)	(8.9	)%
Money market—foreign	10		95		(85		)	(89.5	)%
Low-cost deposits	88,158		90,409		(2,251		)	(2.5	)%
Time deposits	6,646		7,010		(364		)	(5.2	)%
Total Customer Deposits	94,804		97,419		(2,615		)	(2.7	)%
Corporate Treasury Deposits
Time deposits	65		16		49			306.3	%
Total Deposits	$	94,869	$	97,435	$	(2,566	)	(2.6	)%




	Average Balances
	Nine Months Ended September 30
($ amounts in millions)	2018		2017		2018 vs. 2017
Consumer Bank Segment	$	57,663	$	56,788	$	875		1.5	%
Corporate Bank Segment	27,127		27,783		(656		)	(2.4	)%
Wealth Management Segment	8,566		9,615		(1,049		)	(10.9	)%
Other ⁽¹⁾	1,513		3,249		(1,736		)	(53.4	)%
Total Deposits	$	94,869	$	97,435	$	(2,566	)	(2.6	)%




	Average Balances
	Nine Months Ended September 30
($ amounts in millions)	2018		2017		2018 vs. 2017
Wealth Management - Private Wealth	$	7,480	$	7,847	$	(367	)	(4.7	)%
Wealth Management - Institutional Services	1,086		1,768		(682		)	(38.6	)%
Total Wealth Management Segment Deposits	$	8,566	$	9,615	$	(1,049	)	(10.9	)%


(1)	Consists primarily of brokered deposits.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Third Quarter 2018 Earnings Release

Reconciliation to GAAP Financial Measures

Tangible Common Ratios and Capital

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

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

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

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



		As of and for Quarter Ended
($ amounts in millions, except per share data)		9/30/2018			6/30/2018			3/31/2018			12/31/2017			9/30/2017
Tangible Common Ratios—Consolidated
Stockholders’ equity (GAAP)		$	14,770		$	15,777		$	15,866		$	16,192		$	16,624
Less:
Preferred stock (GAAP)		820			820			820			820			820
Intangible assets (GAAP)		4,951			5,060			5,071			5,081			5,091
Deferred tax liability related to intangibles (GAAP)		(95		)	(97		)	(99		)	(99		)	(154		)
Tangible common stockholders’ equity (non-GAAP)	A	$	9,094		$	9,994		$	10,074		$	10,390		$	10,867
Total assets (GAAP)		$	124,578		$	124,557		$	122,913		$	124,294		$	123,271
Less:
Intangible assets (GAAP)		4,951			5,060			5,071			5,081			5,091
Deferred tax liability related to intangibles (GAAP)		(95		)	(97		)	(99		)	(99		)	(154		)
Tangible assets (non-GAAP)	B	$	119,722		$	119,594		$	117,941		$	119,312		$	118,334
Shares outstanding—end of quarter	C	1,055			1,114			1,123			1,134			1,165
Tangible common stockholders’ equity to tangible assets (non-GAAP)	A/B	7.60		%	8.36		%	8.54		%	8.71		%	9.18		%
Tangible common book value per share (non-GAAP)	A/C	$	8.62		$	8.97		$	8.98		$	9.16		$	9.33



		As of and for Quarter Ended
($ amounts in millions)		9/30/2018			6/30/2018			3/31/2018			12/31/2017			9/30/2017
Basel III Common Equity Tier 1 Ratio—Fully Phased-In Pro-Forma ⁽¹⁾
Stockholder's equity (GAAP)		$	14,770		$	15,777		$	15,866		$	16,192		$	16,624
Non-qualifying goodwill and intangibles		(4,845		)	(4,953		)	(4,961		)	(4,972		)	(4,922		)
Adjustments, including all components of accumulated other comprehensive income, disallowed deferred tax assets, threshold deductions and other adjustments		1,376			1,230			1,121			712			411
Preferred stock (GAAP)		(820		)	(820		)	(820		)	(820		)	(820		)
Basel III common equity Tier 1—Fully Phased-In Pro-Forma (non-GAAP)	D	$	10,481		$	11,234		$	11,206		$	11,112		$	11,293
Basel III risk-weighted assets—Fully Phased-In Pro-Forma (non-GAAP) ⁽²⁾	E	$	103,807		$	102,819		$	101,482		$	101,498		$	100,857
Basel III common equity Tier 1 ratio—Fully Phased-In Pro-Forma (non-GAAP)	D/E	10.1		%	10.9		%	11.0		%	11.0		%	11.2		%


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


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

Regions Financial Corporation and Subsidiaries

Financial Supplement to Third Quarter 2018 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. Therefore, we caution you against relying on any of these forward-looking 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 possible declines in property values, increases in unemployment rates and potential reductions of economic growth, which may adversely affect our lending and other businesses and our financial results and conditions.


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


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


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


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


•	The effect of changes in tax laws, including the effect of Tax Reform and any future interpretations of or amendments to Tax Reform, which may impact our earnings, capital ratios and our ability to return capital to shareholders.


•	Possible changes in the creditworthiness of customers and the possible impairment of the collectability of loans and leases, including operating leases.


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


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


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


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


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


•	Our inability to develop and gain acceptance from current and prospective customers for new products and services and the enhancement of existing products and services to meet customers’ needs and respond to emerging technological trends in a timely manner could have a negative impact on our revenue.


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

•

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

•

Our ability to obtain a regulatory non-objection (as part of the CCAR process or otherwise) to take certain capital actions, including paying dividends and any plans to increase common stock dividends, repurchase common stock under current or future programs, or redeem preferred stock or other regulatory capital instruments, may impact our ability to return capital to stockholders and market perceptions of us.


•	Our ability to comply with stress testing and capital planning requirements (as part of the CCAR process or otherwise) may continue to require a significant investment of our managerial resources due to the importance and intensity of such tests and requirements.


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


•	The effects of any developments, changes or actions relating to any litigation or regulatory proceedings brought against us or any of our subsidiaries.


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


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


•	Our ability to execute on our strategic and operational plans, including our ability to fully realize the financial and non-financial benefits relating to our strategic initiatives.


•	The risks and uncertainties related to our acquisition or divestiture of businesses.


•	The success of our marketing efforts in attracting and retaining customers.


•	Our ability to recruit and retain talented and experienced personnel to assist in the development, management and operation of our products and services may be affected by changes in laws and regulations in effect from time to time.


•	Fraud or misconduct by our customers, employees or business partners.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Third Quarter 2018 Earnings Release


•	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 or failure to deliver our services effectively.


•	Dependence on key suppliers or vendors to obtain equipment and other supplies for our business on acceptable terms.


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


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


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

•

Changes in commodity market prices and conditions could adversely affect the cash flows of our borrowers operating in industries that are impacted by changes in commodity prices (including businesses indirectly impacted by commodities prices such as businesses that transport commodities or manufacture equipment used in the production of commodities), which could impair their ability to service any loans outstanding to them and/or reduce demand for loans in those industries.

•

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


•	Our ability to realize our adjusted efficiency ratio target as part of our expense management initiatives.


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


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


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


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


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


•	Other risks identified from time to time in reports that we file with the SEC.


•	Fluctuations in the price of our common stock and inability to complete stock repurchases in the time frame and/or on the terms anticipated.


•	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, 2017 as filed with the SEC.

The words "future," “anticipates,” "assumes," “intends,” “plans,” “seeks,” “believes,” "predicts," "potential," "objectives," “estimates,” “expects,” “targets,” “projects,” “outlook,” “forecast,” "would," “will,” “may,” “might,” “could,” “should,” “can,” and similar terms and 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. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible to predict all of them. We assume no obligation and do not intend to update or revise any forward-looking statements that are made from time to time, either as a result of future developments, new information or otherwise, except as may be required by law.

Regions’ Investor Relations contact is Dana Nolan at (205) 264-7040; Regions’ Media contact is Evelyn Mitchell at (205) 264-4551.

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