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	exhibit993123118.htm
EX-99.1 - EXHIBIT 99.1 - REGIONS FINANCIAL CORP	rf-20181231xexhibit991.htm
8-K - 8-K - REGIONS FINANCIAL CORP	rf-20181231x8k.htm

Exhibit 99.2

Regions Financial Corporation and Subsidiaries

Financial Supplement

Fourth Quarter 2018

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth 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		8

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

Non-Interest Expense		11

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		12

Statements of Discontinued Operations		15

Credit Quality
Allowance for Credit Losses, Net Charge-Offs and Related Ratios, Adjusted Net Charge-offs and Related Ratios		16
Non-Accrual Loans (excludes loans held for sale), Criticized and Classified Loans - Business Services, and Home Equity Lines of Credit - Future Principal Payment Resets		19
Early and Late Stage Delinquencies		20
Troubled Debt Restructurings		21

Consolidated Balance Sheets		22

Loans		23

Deposits		26

Reconciliation to GAAP Financial Measures
Tangible Common Ratios and Capital		28

Forward-Looking Statements		29

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2018 Earnings Release

Financial Highlights



	Quarter Ended
($ amounts in millions, except per share data)	12/31/2018			9/30/2018			6/30/2018			3/31/2018			12/31/2017
Earnings Summary
Interest income and other financing income - taxable equivalent	$	1,171		$	1,125		$	1,088		$	1,060		$	1,043
Interest expense - taxable equivalent	188			156			136			122			102
Depreciation expense on operating lease assets	12			14			14			16			17
Net interest income and other financing income - taxable equivalent - continuing operations	971			955			938			922			924
Less: Taxable-equivalent adjustment	13			13			12			13			23
Net interest income and other financing income	958			942			926			909			901
Provision (credit) for loan losses	95			84			60			(10		)	(44		)
Net interest income and other financing income after provision (credit) for loan losses	863			858			866			919			945
Non-interest income	481			519			512			507			516
Non-interest expense	853			922			911			884			920
Income from continuing operations before income taxes	491			455			467			542			541
Income tax expense	85			85			89			128			221
Income from continuing operations	406			370			378			414			320
Income (loss) from discontinued operations before income taxes	—			274			(3		)	—			6
Income tax expense (benefit)	—			80			—			—			(9		)
Income (loss) from discontinued operations, net of tax	—			194			(3		)	—			15
Net income	$	406		$	564		$	375		$	414		$	335
Income from continuing operations available to common shareholders	$	390		$	354		$	362		$	398		$	304
Net income available to common shareholders	$	390		$	548		$	359		$	398		$	319

Earnings per common share from continuing operations - basic	$	0.38		$	0.33		$	0.32		$	0.35		$	0.26
Earnings per common share from continuing operations - diluted	0.37			0.32			0.32			0.35			0.26
Earnings per common share - basic	0.38			0.50			0.32			0.35			0.28
Earnings per common share - diluted	0.37			0.50			0.32			0.35			0.27

Balance Sheet Summary
At quarter-end—Consolidated
Loans, net of unearned income	$	83,152		$	81,821		$	80,478		$	79,822		$	79,947
Allowance for loan losses	(840		)	(840		)	(838		)	(840		)	(934		)
Assets	125,688			124,578			124,557			122,913			124,294
Deposits	94,491			93,255			95,283			96,990			96,889
Long-term borrowings - Federal Home Loan Bank advances	6,902			5,703			5,153			2,603			3,653
Long-term borrowings - Other	5,522			5,475			4,737			5,346			4,479
Stockholders' equity	15,090			14,770			15,777			15,866			16,192
Average balances—Consolidated
Loans, net of unearned income	$	81,873		$	81,022		$	79,957		$	79,891		$	79,523
Assets	123,538			123,526			122,960			123,494			123,834
Deposits	93,159			93,942			95,253			95,428			97,060
Long-term borrowings - Federal Home Loan Bank advances	5,704			5,286			3,711			4,424			2,918
Long-term borrowings - Other	5,478			5,143			5,031			5,107			4,491
Stockholders' equity	14,605			15,401			15,682			15,848			16,414

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2018 Earnings Release

Selected Ratios and Other Information



	As of and for Quarter Ended
	12/31/2018			9/30/2018			6/30/2018			3/31/2018			12/31/2017
Return on average assets* ⁽¹⁾	1.30		%	1.19		%	1.23		%	1.36		%	1.02		%
Return on average common stockholders' equity*	11.22		%	14.91		%	9.68		%	10.75		%	8.10		%
Return on average common stockholders' equity from continuing operations*	11.23		%	9.62		%	9.77		%	10.75		%	7.73		%
Return on average tangible common stockholders’ equity (non-GAAP)* ⁽²⁾	17.32		%	22.36		%	14.54		%	16.08		%	11.88		%
Return on average tangible common stockholders’ equity from continuing operations (non-GAAP)* ⁽²⁾	17.33		%	14.42		%	14.67		%	16.08		%	11.33		%
Efficiency ratio from continuing operations	58.7		%	62.6		%	62.7		%	61.9		%	63.9		%
Adjusted efficiency ratio from continuing operations (non-GAAP) ⁽²⁾	58.1		%	58.1		%	60.4		%	60.5		%	60.5		%
Common book value per share	$	13.92		$	13.22		$	13.42		$	13.40		$	13.55
Tangible common book value per share (non-GAAP) ⁽²⁾	$	9.19		$	8.62		$	8.97		$	8.98		$	9.16
Tangible common stockholders’ equity to tangible assets (non-GAAP) ⁽²⁾	7.80		%	7.60		%	8.36		%	8.54		%	8.71		%
Basel III common equity ⁽³⁾	$	10,378		$	10,481		$	11,234		$	11,206		$	11,152
Basel III common equity Tier 1 ratio ⁽³⁾	9.9		%	10.2		%	11.0		%	11.1		%	11.1		%
Tier 1 capital ratio ⁽³⁾	10.7		%	11.0		%	11.8		%	11.9		%	11.9		%
Total risk-based capital ratio ⁽³⁾	12.4		%	12.8		%	13.6		%	13.7		%	13.8		%
Leverage ratio ⁽³⁾	9.3		%	9.4		%	10.1		%	10.1		%	10.0		%
Effective tax rate ⁽⁴⁾	17.4		%	18.7		%	19.2		%	23.6		%	40.8		%
Allowance for loan losses as a percentage of loans, net of unearned income	1.01		%	1.03		%	1.04		%	1.05		%	1.17		%
Allowance for loan losses to non-performing loans, excluding loans held for sale	169		%	156		%	141		%	140		%	144		%
Net interest margin (FTE)*	3.55		%	3.50		%	3.49		%	3.46		%	3.37		%
Adjusted net interest margin (FTE) (non-GAAP)* ⁽²⁾	3.55		%	3.50		%	3.49		%	3.46		%	3.39		%
Loans, net of unearned income, to total deposits	88.0		%	87.8		%	84.5		%	82.3		%	82.5		%
Net charge-offs as a percentage of average loans*	0.46		%	0.40		%	0.32		%	0.42		%	0.31		%
Adjusted net charge-offs as a percentage of average loans (non-GAAP)* ⁽²⁾	0.46		%	0.40		%	0.32		%	0.40		%	0.31		%
Non-accrual loans, excluding loans held for sale, as a percentage of loans	0.60		%	0.66		%	0.74		%	0.75		%	0.81		%
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	0.68		%	0.76		%	0.83		%	0.85		%	0.92		%
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⁾	0.85		%	0.93		%	0.99		%	1.02		%	1.13		%
Associate headcount—full-time equivalent from continuing operations	19,969			19,869			20,326			20,666			21,014
ATMs	1,952			1,938			1,956			1,919			1,899
Branch Statistics
Full service	1,396			1,394			1,414			1,410			1,406
Drive-through/transaction service only	58			61			62			63			63
Total branch outlets	1,454			1,455			1,476			1,473			1,469




	Year Ended December 31
	2018		2017
Return on average assets ⁽¹⁾	1.27	%	1.00	%
Return on average common stockholders' equity	11.64	%	7.56	%
Return on average common stockholders' equity from continuing operations	10.33	%	7.42	%
Return on average tangible common stockholders’ equity (non-GAAP) ⁽²⁾	17.57	%	11.01	%
Return on average tangible common stockholders’ equity from continuing operations (non-GAAP) ⁽²⁾	15.59	%	10.80	%
Efficiency ratio from continuing operations	61.5	%	62.4	%
Adjusted efficiency ratio from continuing operations (non-GAAP) ⁽²⁾	59.3	%	61.4	%
Effective tax rate ⁽⁴⁾	19.8	%	33.3	%
Net interest margin (FTE) from continuing operations	3.50	%	3.32	%
Adjusted net interest margin (FTE) from continuing operations (non-GAAP) ⁽²⁾	3.50	%	3.33	%
Net charge-offs as a percentage of average loans	0.40	%	0.38	%
Adjusted net charge-offs as a percentage of average loans (non-GAAP) ⁽²⁾	0.39	%	0.38	%

*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 8, 12, 13, 14, 18, 24, 25, and 28.


(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 decreases in the effective tax rate for 2018 and the rates for the respective quarters of 2018 resulted from the lower tax rate and related benefits resulting from tax reform, beneficial adjustments for certain state tax matters, and retrospective tax accounting method changes finalized in the third and fourth quarters of 2018.


(5)	Excludes guaranteed residential first mortgages that are 90+ days past due and still accruing. Refer to the footnotes on page 20 for amounts related to these loans.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2018 Earnings Release

Consolidated Statements of Income (unaudited)



	Quarter Ended
($ amounts in millions, except per share data)	12/31/2018		9/30/2018		6/30/2018			3/31/2018			12/31/2017
Interest income, including other financing income on:
Loans, including fees	$	962	$	919	$	881		$	851		$	827
Debt securities—taxable	160		155		156			154			151
Loans held for sale	4		4		4			3			5
Other earning assets	17		17		17			19			15
Operating lease assets	15		17		18			20			22
Total interest income, including other financing income	1,158		1,112		1,076			1,047			1,020
Interest expense on:
Deposits	80		64		57			49			42
Short-term borrowings	15		8		6			1			1
Long-term borrowings	93		84		73			72			59
Total interest expense	188		156		136			122			102
Depreciation expense on operating lease assets	12		14		14			16			17
Total interest expense and depreciation expense on operating lease assets	200		170		150			138			119
Net interest income and other financing income	958		942		926			909			901
Provision (credit) for loan losses	95		84		60			(10		)	(44		)
Net interest income and other financing income after provision (credit) for loan losses	863		858		866			919			945
Non-interest income:
Service charges on deposit accounts	185		179		175			171			171
Card and ATM fees	111		111		112			104			106
Wealth management income	77		77		77			75			73
Capital markets income	50		45		57			50			56
Mortgage income	30		32		37			38			36
Securities gains (losses), net	—		—		1			—			10
Other	28		75		53			69			64
Total non-interest income	481		519		512			507			516
Non-interest expense:
Salaries and employee benefits	468		473		511			495			479
Net occupancy expense	86		82		84			83			82
Furniture and equipment expense	82		81		81			81			80
Other	217		286		235			225			279
Total non-interest expense	853		922		911			884			920
Income from continuing operations before income taxes	491		455		467			542			541
Income tax expense	85		85		89			128			221
Income from continuing operations	406		370		378			414			320
Discontinued operations:
Income (loss) from discontinued operations before income taxes	—		274		(3		)	—			6
Income tax expense (benefit)	—		80		—			—			(9		)
Income (loss) from discontinued operations, net of tax	—		194		(3		)	—			15
Net income	$	406	$	564	$	375		$	414		$	335
Net income from continuing operations available to common shareholders	$	390	$	354	$	362		$	398		$	304
Net income available to common shareholders	$	390	$	548	$	359		$	398		$	319
Weighted-average shares outstanding—during quarter:
Basic	1,035		1,086		1,119			1,127			1,152
Diluted	1,043		1,095		1,128			1,141			1,164
Actual shares outstanding—end of quarter	1,025		1,055		1,114			1,123			1,134
Earnings per common share from continuing operations:
Basic	$	0.38	$	0.33	$	0.32		$	0.35		$	0.26
Diluted	$	0.37	$	0.32	$	0.32		$	0.35		$	0.26
Earnings per common share:
Basic	$	0.38	$	0.50	$	0.32		$	0.35		$	0.28
Diluted	$	0.37	$	0.50	$	0.32		$	0.35		$	0.27
Taxable-equivalent net interest income and other financing income	$	971	$	956	$	938		$	922		$	924

_________

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 Fourth Quarter 2018 Earnings Release

Consolidated Statements of Income (continued) (unaudited)



	Year Ended December 31
($ amounts in millions, except per share data)	2018		2017
Interest income, including other financing income on:
Loans, including fees	$	3,613	$	3,228
Debt securities—taxable	625		596
Loans held for sale	15		16
Other earning assets	70		53
Operating lease assets	70		94
Total interest income, including other financing income	4,393		3,987
Interest expense on:
Deposits	250		156
Short-term borrowings	30		5
Long-term borrowings	322		212
Total interest expense	602		373
Depreciation expense on operating lease assets	56		75
Total interest expense and depreciation expense on operating lease assets	658		448
Net interest income and other financing income	3,735		3,539
Provision for loan losses	229		150
Net interest income and other financing income after provision for loan losses	3,506		3,389
Non-interest income:
Service charges on deposit accounts	710		683
Card and ATM fees	438		417
Wealth management income	306		290
Capital markets income	202		161
Mortgage income	137		149
Securities gains, net	1		19
Other	225		243
Total non-interest income	2,019		1,962
Non-interest expense:
Salaries and employee benefits	1,947		1,874
Net occupancy expense	335		339
Furniture and equipment expense	325		326
Other	963		952
Total non-interest expense	3,570		3,491
Income from continuing operations before income taxes	1,955		1,860
Income tax expense	387		619
Income from continuing operations	1,568		1,241
Discontinued operations:
Income (loss) from discontinued operations before income taxes	271		19
Income tax expense (benefit)	80		(3		)
Income (loss) from discontinued operations, net of tax	191		22
Net income	$	1,759	$	1,263
Net income from continuing operations available to common shareholders	$	1,504	$	1,177
Net income available to common shareholders	$	1,695	$	1,199
Weighted-average shares outstanding—during year:
Basic	1,092		1,186
Diluted	1,102		1,198
Actual shares outstanding—end of period	1,025		1,134
Earnings per common share from continuing operations:
Basic	$	1.38	$	0.99
Diluted	$	1.36	$	0.98
Earnings per common share:
Basic	$	1.55	$	1.01
Diluted	$	1.54	$	1.00
Taxable-equivalent net interest income and other financing income	$	3,787	$	3,630

_________

Notes:

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2018 Earnings Release

Consolidated Average Daily Balances and Yield/Rate Analysis



	Quarter Ended
	12/31/2018							9/30/2018
($ 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	$	23,891		$	160	2.68	%	$	24,198		$	156	2.56	%
Loans held for sale	413			4		4.25		386			4		4.14
Loans, net of unearned income:
Commercial and industrial	38,111			430		4.46		37,410			402		4.26
Commercial real estate mortgage—owner-occupied	5,847			69		4.64		6,000			71		4.61
Commercial real estate construction—owner-occupied	349			4		4.73		311			4		4.84
Commercial investor real estate mortgage	4,275			48		4.39		4,083			44		4.25
Commercial investor real estate construction	1,815			25		5.31		1,809			24		5.06
Residential first mortgage	14,230			142		4.01		14,162			141		3.96
Home equity	9,335			111		4.75		9,543			110		4.61
Indirect—vehicles	3,109			27		3.40		3,190			27		3.33
Indirect—other consumer	2,287			51		8.77		2,042			44		8.61
Consumer credit card	1,298			43		13.06		1,271			41		12.85
Other consumer	1,217			25		8.12		1,201			24		8.12
Total loans, net of unearned income	81,873			975		4.72		81,022			932		4.56
Investment in operating leases, net	383			3		3.36		410			3		3.33
Other earning assets	2,015			17		3.26		2,440			17		2.87
Total earning assets	108,575			1,159		4.24		108,456			1,112		4.07
Allowance for loan losses	(839		)					(834		)
Cash and due from banks	1,957							2,036
Other non-earning assets	13,845							13,868
	$	123,538						$	123,526
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Savings	$	8,827		3		0.15		$	8,928		4		0.15
Interest-bearing checking	18,295			24		0.52		18,924			21		0.44
Money market	23,850			31		0.51		24,046			22		0.37
Time deposits	7,018			22		1.24		6,630			17		1.06
Total interest-bearing deposits ⁽¹⁾	57,990			80		0.54		58,528			64		0.44
Federal funds purchased and securities sold under agreements to repurchase	241			2		2.27		154			—		—
Other short-term borrowings	2,227			13		2.38		1,480			8		2.07
Long-term borrowings	11,182			93		3.28		10,429			84		3.14
Total interest-bearing liabilities	71,640			188		1.04		70,591			156		0.88
Non-interest-bearing deposits ⁽¹⁾	35,169			—		—		35,414			—		—
Total funding sources	106,809			188		0.69		106,005			156		0.58
Net interest spread						3.20							3.19
Other liabilities	2,124							2,120
Stockholders’ equity	14,605							15,401
	$	123,538						$	123,526
Net interest income and other financing income/margin FTE basis				$	971	3.55	%				$	956	3.50	%

_______


(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 0.34% and 0.27% for the quarters ended December 31, 2018 and September 30, 2018.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2018 Earnings Release

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



	Quarter Ended
	6/30/2018							3/31/2018							12/31/2017
($ 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	24,386			156		2.56		24,588			154		2.52		25,053			151		2.40
Loans held for sale	388			4		4.21		359			3		3.21		433			5		3.92
Loans, net of unearned income:
Commercial and industrial ⁽¹⁾	36,874			385		4.17		36,464			368		4.07		35,689			357		3.96
Commercial real estate mortgage—owner-occupied	6,017			71		4.67		6,117			70		4.58		6,208			71		4.48
Commercial real estate construction—owner-occupied	298			3		4.79		318			4		4.67		335			4		4.51
Commercial investor real estate mortgage	3,724			39		4.12		3,883			38		3.92		3,986			37		3.66
Commercial investor real estate construction	1,867			22		4.83		1,837			21		4.49		1,938			21		4.11
Residential first mortgage	13,980			137		3.93		13,977			135		3.86		13,954			136		3.90
Home equity	9,792			109		4.46		10,041			108		4.31		10,206			106		4.16
Indirect—vehicles	3,260			26		3.23		3,309			26		3.18		3,400			26		3.12
Indirect—other consumer	1,743			38		8.68		1,531			33		8.76		1,400			31		8.97
Consumer credit card	1,245			39		12.50		1,257			38		12.33		1,238			37		11.96
Other consumer	1,157			24		8.09		1,157			23		8.16		1,169			24		7.93
Total loans, net of unearned income ⁽¹⁾	79,957			893		4.46		79,891			864		4.35		79,523			850		4.24
Investment in operating leases, net	439			4		3.59		472			4		2.82		515			5		3.53
Other earning assets	2,558			17		2.60		2,853			19		2.71		3,336			15		1.73
Total earning assets	107,728			1,074		3.98		108,164			1,044		3.88		108,863			1,026		3.74
Allowance for loan losses	(848		)					(933		)					(1,039		)
Cash and due from banks	1,953							1,951							1,975
Other non-earning assets	14,127							14,312							14,035
	$	122,960						$	123,494						$	123,834
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Savings	$	8,981		3		0.15		$	8,615		4		0.18		$	8,378		2		0.14
Interest-bearing checking	19,534			18		0.38		19,935			16		0.32		19,261			11		0.22
Money market	24,235			19		0.30		24,601			14		0.24		25,744			13		0.20
Time deposits	6,692			17		0.98		6,813			15		0.91		6,935			16		0.88
Total interest-bearing deposits ⁽²⁾	59,442			57		0.38		59,964			49		0.33		60,318			42		0.28
Federal funds purchased and securities sold under agreements to repurchase	41			1		1.83		103			—		—		35			—		—
Other short-term borrowings	1,161			5		1.90		156			1		1.46		388			1		1.19
Long-term borrowings	8,742			73		3.35		9,531			72		3.00		7,409			59		3.13
Total interest-bearing liabilities	69,386			136		0.79		69,754			122		0.71		68,150			102		0.59
Non-interest-bearing deposits ⁽²⁾	35,811			—		—		35,464			—		—		36,742			—		—
Total funding sources	105,197			136		0.52		105,218			122		0.46		104,892			102		0.38
Net interest spread						3.19							3.17							3.15
Other liabilities	2,081							2,428							2,528
Stockholders’ equity	15,682							15,848							16,414
	$	122,960						$	123,494						$	123,834
Net interest income and other financing income/margin FTE basis				$	938	3.49	%				$	922	3.46	%				$	924	3.37	%

_______

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 0.24% for the quarter ended June 30, 2018, 0.21% for the quarter ended March 31, 2018 and 0.17% for the quarter ended December 31, 2017.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2018 Earnings Release

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



	Year Ended December 31
	2018							2017
($ amounts in millions; yields on taxable-equivalent basis)	Average Balance			Income/ Expense		Yield/ Rate		Average Balance			Income/ Expense		Yield/ Rate
Assets
Earning assets:
Federal funds sold and securities purchased under agreements to resell	$	—		$	—	—	%	$	1		$	—	—	%
Debt securities—taxable	24,263			626		2.58		25,017			597		2.39
Loans held for sale	386			15		3.98		474			16		3.35
Loans, net of unearned income:
Commercial and industrial ⁽¹⁾	37,220			1,585		4.24		35,514			1,392		3.91
Commercial real estate mortgage—owner-occupied	5,995			281		4.63		6,492			287		4.36
Commercial real estate construction—owner-occupied	319			15		4.76		345			16		4.51
Commercial investor real estate mortgage	3,992			169		4.18		4,128			148		3.53
Commercial investor real estate construction	1,832			92		4.92		2,099			83		3.89
Residential first mortgage	14,088			555		3.94		13,719			530		3.86
Home equity	9,675			438		4.53		10,405			419		4.03
Indirect—vehicles	3,217			106		3.28		3,660			111		3.04
Indirect—other consumer	1,903			166		8.70		1,150			99		8.63
Consumer credit card	1,268			161		12.69		1,192			142		11.91
Other consumer	1,183			96		8.12		1,142			91		8.03
Total loans, net of unearned income ⁽¹⁾	80,692			3,664		4.52		79,846			3,318		4.14
Investment in operating leases, net	426			14		3.26		603			19		3.11
Other earning assets	2,465			70		2.84		3,274			53		1.60
Total earning assets	108,232			4,389		4.04		109,215			4,003		3.65
Allowance for loan losses	(863		)					(1,062		)
Cash and due from banks	1,975							1,899
Other non-earning assets	14,036							13,924
	$	123,380						$	123,976
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Savings	$	8,838		14		0.16		$	8,284		12		0.15
Interest-bearing checking	19,167			79		0.41		19,294			38		0.19
Money market	24,181			86		0.35		26,498			45		0.17
Time deposits	6,788			71		1.05		7,003			61		0.87
Total interest-bearing deposits ⁽²⁾	58,974			250		0.42		61,079			156		0.26
Federal funds purchased and securities sold under agreements to repurchase	135			3		1.98		9			—		—
Other short-term borrowings	1,262			27		2.15		439			5		1.06
Long-term borrowings	9,977			322		3.19		7,076			212		2.98
Total interest-bearing liabilities	70,348			602		0.86		68,603			373		0.54
Non-interest-bearing deposits ⁽²⁾	35,464			—		—		36,262			—		—
Total funding sources	105,812			602		0.57		104,865			373		0.35
Net interest spread						3.18							3.11
Other liabilities	2,187							2,450
Stockholders’ equity	15,381							16,661
	$	123,380						$	123,976
Net interest income and other financing income/margin FTE basis				$	3,787	3.50	%				$	3,630	3.32	%

_______

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

(2) Total deposit costs from continuing operations may be calculated by dividing total interest expense on deposits by the sum of interest-bearing deposits and non-interest bearing deposits. The rates for total deposit costs from continuing operations equal 0.26% and 0.16% for the years ended December 31, 2018 and 2017, respectively.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth 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)	12/31/2018		9/30/2018			6/30/2018			3/31/2018			12/31/2017			4Q18 vs. 3Q18					4Q18 vs. 4Q17
Net income from continuing operations available to common shareholders (GAAP)	$	390	$	354		$	362		$	398		$	304		$	36		10.2	%	$	86		28.3	%
Preferred dividends (GAAP)	16		16			16			16			16			—			—	%	—			—	%
Income tax expense (GAAP)	85		85			89			128			221			—			—	%	(136		)	(61.5	)%
Income from continuing operations before income taxes (GAAP)	491		455			467			542			541			36			7.9	%	(50		)	(9.2	)%
Provision (credit) for loan losses (GAAP)	95		84			60			(10		)	(44		)	11			13.1	%	139			(315.9	)%
Pre-tax pre-provision income from continuing operations (non-GAAP)	586		539			527			532			497			47			8.7	%	89			17.9	%
Other adjustments:
Securities (gains) losses, net	—		—			(1		)	—			(10		)	—			NM		10			(100.0	)%
Leveraged lease termination gains	—		(4		)	—			(4		)	—			4			(100.0	)%	—			NM
Reduction in leveraged lease interest income resulting from tax reform	—		—			—			—			6			—			NM		(6		)	(100.0	)%
Salaries and employee benefits—severance charges	7		5			34			15			2			2			40.0	%	5			250.0	%
Branch consolidation, property and equipment charges	3		4			1			3			9			(1		)	(25.0	)%	(6		)	(66.7	)%
Contribution to the Regions Financial Corporation foundation	—		60			—			—			40			(60		)	(100.0	)%	(40		)	(100.0	)%
Expenses associated with residential mortgage loan sale	—		—			—			4			—			—			NM		—			—	%
Total other adjustments	10		65			34			18			47			(55		)	(84.6	)%	(37		)	(78.7	)%
Adjusted pre-tax pre-provision income from continuing operations (non-GAAP)	$	596	$	604		$	561		$	550		$	544		$	(8	)	(1.3	)%	$	52		9.6	%



	Year Ended
($ amounts in millions)	12/31/2018			12/31/2017			2018 vs. 2017
Net income from continuing operations available to common shareholders (GAAP)	$	1,504		$	1,177		$	327		27.8	%
Preferred dividends (GAAP)	64			64			—			—	%
Income tax expense (GAAP)	387			619			(232		)	(37.5	)%
Income from continuing operations before income taxes (GAAP)	1,955			1,860			95			5.1	%
Provision for loan losses (GAAP)	229			150			79			52.7	%
Pre-tax pre-provision income from continuing operations (non-GAAP)	2,184			2,010			174			8.7	%
Other adjustments:
Gain on sale of affordable housing residential mortgage loans ⁽¹⁾	—			(5		)	5			(100.0	)%
Securities (gains) losses, net	(1		)	(19		)	18			(94.7	)%
Leveraged lease termination gains, net	(8		)	(1		)	(7		)	NM
Reduction in leveraged lease interest income resulting from tax reform	—			6			(6		)	(100.0	)%
Salaries and employee benefits—severance charges	61			10			51			NM
Branch consolidation, property and equipment charges	11			22			(11		)	(50.0	)%
Contribution to Regions Financial Corporation foundation	60			40			20			50.0	%
Expenses associated with residential mortgage loan sale	4			—			4			NM
Total other adjustments	127			53			74			139.6	%
Adjusted pre-tax pre-provision income from continuing operations (non-GAAP)	$	2,311		$	2,063		$	248		12.0	%

______

NM - Not Meaningful


(1)	In the fourth quarter of 2016, The Company sold affordable housing residential mortgage loans to Freddie Mac. Approximately $91 million were sold with recourse, resulting in a deferred gain of $5 million, which was recognized during the second quarter of 2017.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2018 Earnings Release

Non-Interest Income from Continuing Operations



	Quarter Ended
($ amounts in millions)	12/31/2018			9/30/2018		6/30/2018			3/31/2018			12/31/2017		4Q18 vs. 3Q18					4Q18 vs. 4Q17
Service charges on deposit accounts	$	185		$	179	$	175		$	171		$	171	$	6		3.4	%	$	14		8.2	%
Card and ATM fees	111			111		112			104			106		—			—	%	5			4.7	%
Wealth management income	77			77		77			75			73		—			—	%	4			5.5	%
Capital markets income ⁽¹⁾	50			45		57			50			56		5			11.1	%	(6		)	(10.7	)%
Mortgage income	30			32		37			38			36		(2		)	(6.3	)%	(6		)	(16.7	)%
Commercial credit fee income	19			18		17			17			18		1			5.6	%	1			5.6	%
Bank-owned life insurance	12			18		18			17			20		(6		)	(33.3	)%	(8		)	(40.0	)%
Securities gains (losses), net	—			—		1			—			10		—			NM		(10		)	(100.0	)%
Market value adjustments on employee benefit assets - defined benefit	(7		)	3		(1		)	(1		)	—		(10		)	(333.3	)%	(7		)	NM
Market value adjustments on employee benefit assets - other ⁽²⁾	(8		)	4		(1		)	—			6		(12		)	(300.0	)%	(14		)	(233.3	)%
Other	12			32		20			36			20		(20		)	(62.5	)%	(8		)	(40.0	)%
Total non-interest income from continuing operations	$	481		$	519	$	512		$	507		$	516	$	(38	)	(7.3	)%	$	(35	)	(6.8	)%

Mortgage Income



	Quarter Ended
($ amounts in millions)	12/31/2018			9/30/2018			6/30/2018			3/31/2018			12/31/2017			4Q18 vs. 3Q18					4Q18 vs. 4Q17
Production and sales	$	15		$	24		$	23		$	23		$	23		$	(9	)	(37.5	)%	$	(8	)	(34.8	)%
Loan servicing	26			23			23			23			25			3			13.0	%	1			4.0	%
MSR and related hedge impact:
MSRs fair value increase (decrease) due to change in valuation inputs or assumptions	(20		)	6			10			22			4			(26		)	(433.3	)%	(24		)	NM
MSRs hedge gain (loss)	21			(9		)	(6		)	(20		)	(5		)	30			(333.3	)%	26			NM
MSRs change due to payment decay	(12		)	(12		)	(13		)	(10		)	(11		)	—			—	%	(1		)	9.1	%
MSR and related hedge impact	(11		)	(15		)	(9		)	(8		)	(12		)	4			(26.7	)%	1			(8.3	)%
Total mortgage income	$	30		$	32		$	37		$	38		$	36		$	(2	)	(6.3	)%	$	(6	)	(16.7	)%

Mortgage production - purchased	$	813		$	1,012		$	1,179		$	817		$	907		$	(199	)	(19.7	)%	$	(94	)	(10.4	)%
Mortgage production - refinanced	216			237			249			279			359			(21		)	(8.9	)%	(143		)	(39.8	)%
Total mortgage production ⁽³⁾	$	1,029		$	1,249		$	1,428		$	1,096		$	1,266		$	(220	)	(17.6	)%	$	(237	)	(18.7	)%

Wealth Management Income



	Quarter Ended
($ amounts in millions)	12/31/2018		9/30/2018		6/30/2018		3/31/2018		12/31/2017		4Q18 vs. 3Q18					4Q18 vs. 4Q17
Investment management and trust fee income	$	60	$	59	$	58	$	58	$	59	$	1		1.7	%	$	1	1.7	%
Investment services fee income	17		18		19		17		14		(1		)	(5.6	)%	3		21.4	%
Total wealth management income ⁽⁴⁾	$	77	$	77	$	77	$	75	$	73	$	—		—	%	$	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)	These market value adjustments relate to assets held for employee benefits that are offset within salaries and employee benefits expense.


(3)	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.


(4)	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


•	Bank-owned life insurance and market value adjustments on employee benefits assets decreased due to significant valuation declines related to market volatility in the fourth quarter of 2018.


•	Other non-interest income decreased primarily due to a net $3 million decline in the value of certain equity investments in the fourth quarter of 2018 compared to a net $8 million increase in the third quarter of 2018. In addition, leveraged lease termination gains of $4 million were recognized in the third quarter.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2018 Earnings Release

Non-Interest Income from Continuing Operations



	Year Ended					Year-to-Date Change 12/31/2018 vs. 12/31/2017
($ amounts in millions)	12/31/2018			12/31/2017		Amount			Percent
Service charges on deposit accounts	$	710		$	683	$	27		4.0	%
Card and ATM fees	438			417		21			5.0	%
Wealth management income	306			290		16			5.5	%
Capital markets income ⁽¹⁾	202			161		41			25.5	%
Mortgage income	137			149		(12		)	(8.1	)%
Commercial credit fee income	71			71		—			—	%
Bank-owned life insurance	65			81		(16		)	(19.8	)%
Securities gains (losses), net	1			19		(18		)	(94.7	)%
Market value adjustments on employee benefit assets - defined benefit	(6		)	—		(6		)	NM
Market value adjustments on employee benefit assets - other ⁽²⁾	(5		)	16		(21		)	(131.3	)%
Other	100			75		25			33.3	%
Total non-interest income from continuing operations	$	2,019		$	1,962	$	57		2.9	%

Mortgage Income



	Year Ended						Year-to-Date Change 12/31/2018 vs. 12/31/2017
($ amounts in millions)	12/31/2018			12/31/2017			Amount			Percent
Production and sales	$	85		$	104		$	(19	)	(18.3	)%
Loan servicing	95			96			(1		)	(1.0	)%
MSR and related hedge impact:
MSRs fair value increase (decrease) due to change in valuation inputs or assumptions	18			(8		)	26			(325.0	)%
MSRs hedge gain (loss)	(14		)	1			(15		)	NM
MSRs change due to payment decay	(47		)	(44		)	(3		)	6.8	%
MSR and related hedge impact	(43		)	(51		)	8			(15.7	)%
Total mortgage income	$	137		$	149		$	(12	)	(8.1	)%

Mortgage production - purchased	$	3,821		$	3,877		$	(56	)	(1.4	)%
Mortgage production - refinanced	981			1,301			(320		)	(24.6	)%
Total mortgage production ⁽³⁾	$	4,802		$	5,178		$	(376	)	(7.3	)%

Wealth Management Income



	Year Ended				Year-to-Date Change 12/31/2018 vs. 12/31/2017
($ amounts in millions)	12/31/2018		12/31/2017		Amount		Percent
Investment management and trust fee income	$	235	$	230	$	5	2.2	%
Investment services fee income	71		60		11		18.3	%
Total wealth management income ⁽⁴⁾	$	306	$	290	$	16	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)	These market value adjustments relate to assets held for certain employee benefits and are offset within salaries and employee benefits expense.


(3)	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.


(4)	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 Fourth Quarter 2018 Earnings Release

Non-Interest Expense from Continuing Operations



	Quarter Ended
($ amounts in millions)	12/31/2018			9/30/2018		6/30/2018			3/31/2018			12/31/2017			4Q18 vs. 3Q18					4Q18 vs. 4Q17
Salaries and employee benefits ⁽¹⁾	$	468		$	473	$	511		$	495		$	479		$	(5	)	(1.1	)%	$	(11	)	(2.3	)%
Net occupancy expense	86			82		84			83			82			4			4.9	%	4			4.9	%
Furniture and equipment expense	82			81		81			81			80			1			1.2	%	2			2.5	%
Outside services	46			46		48			47			48			—			—	%	(2		)	(4.2	)%
Professional, legal and regulatory expenses	27			32		33			27			23			(5		)	(15.6	)%	4			17.4	%
Marketing	21			20		25			26			23			1			5.0	%	(2		)	(8.7	)%
FDIC insurance assessments	14			22		25			24			27			(8		)	(36.4	)%	(13		)	(48.1	)%
Credit/checkcard expenses	13			18		13			13			11			(5		)	(27.8	)%	2			18.2	%
Branch consolidation, property and equipment charges	3			4		1			3			9			(1		)	(25.0	)%	(6		)	(66.7	)%
Visa class B shares expense	(2		)	—		10			2			11			(2		)	NM		(13		)	(118.2	)%
Provision (credit) for unfunded credit losses	1			2		(1		)	(4		)	(6		)	(1		)	(50.0	)%	7			(116.7	)%
Other	94			142		81			87			133			(48		)	(33.8	)%	(39		)	(29.3	)%
Total non-interest expense from continuing operations	$	853		$	922	$	911		$	884		$	920		$	(69	)	(7.5	)%	$	(67	)	(7.3	)%



	Year Ended						Year-to-Date Change 12/31/18 vs. 12/31/17
($ amounts in millions)	12/31/2018			12/31/2017			Amount			Percent
Salaries and employee benefits ⁽²⁾	$	1,947		$	1,874		$	73		3.9	%
Net occupancy expense	335			339			(4		)	(1.2	)%
Furniture and equipment expense	325			326			(1		)	(0.3	)%
Outside services	187			172			15			8.7	%
Professional, legal and regulatory expenses	119			93			26			28.0	%
Marketing	92			93			(1		)	(1.1	)%
FDIC insurance assessments	85			108			(23		)	(21.3	)%
Branch consolidation, property and equipment charges	11			22			(11		)	(50.0	)%
Visa class B shares expense	10			19			(9		)	(47.4	)%
Provision (credit) for unfunded credit losses	(2		)	(16		)	14			(87.5	)%
Other	461			461			—			—	%
Total non-interest expense from continuing operations	$	3,570		$	3,491		$	79		2.3	%

_________

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.


(1)	Salaries and employee benefits expense includes severance charges for each of the quarters. See the amounts for the respective quarters on page 8.


(2)	Salaries and employee benefits expense includes severance charges of $61 million for 2018 and $10 million for 2017.

Selected Non-Interest Expense Variance Analysis


•	FDIC insurance assessments expense decreased in the fourth quarter of 2018 as compared to the third quarter of 2018 due primarily to the discontinuation of the surcharge, partially offset by increases in the base assessment.


•	Other non-interest expense decreased in the fourth quarter of 2018 as compared to the third 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 Fourth 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)		12/31/2018			9/30/2018			6/30/2018			3/31/2018			12/31/2017			4Q18 vs. 3Q18					4Q18 vs. 4Q17
Non-interest expense (GAAP)	A	$	853		$	922		$	911		$	884		$	920		$	(69	)	(7.5	)%	$	(67	)	(7.3	)%
Adjustments:
Contribution to the Regions Financial Corporation foundation		—			(60		)	—			—			(40		)	60			(100.0	)%	40			(100.0	)%
Branch consolidation, property and equipment charges		(3		)	(4		)	(1		)	(3		)	(9		)	1			(25.0	)%	6			(66.7	)%
Expenses associated with residential mortgage loan sale		—			—			—			(4		)	—			—			NM		—			—	%
Salary and employee benefits—severance charges		(7		)	(5		)	(34		)	(15		)	(2		)	(2		)	40.0	%	(5		)	250.0	%
Adjusted non-interest expense (non-GAAP)	B	$	843		$	853		$	876		$	862		$	869		$	(10	)	(1.2	)%	$	(26	)	(3.0	)%
Net interest income and other financing income (GAAP)	C	$	958		$	942		$	926		$	909		$	901		16			1.7	%	57			6.3	%
Reduction in leveraged lease interest income resulting from tax reform		—			—			—			—			6			—			—	%	(6		)	(100.0	)%
Adjusted net interest income and other financing income (non-GAAP)	D	$	958		$	942		$	926		$	909		$	907		16			1.7	%	51			5.6	%
Net interest income and other financing income (GAAP)		$	958		$	942		$	926		$	909		$	901		$	16		1.7	%	$	57		6.3	%
Taxable-equivalent adjustment		13			13			12			13			23			—			—	%	(10		)	(43.5	)%
Net interest income and other financing income, taxable-equivalent basis - continuing operations	E	$	971		$	955		$	938		$	922		$	924		$	16		1.7	%	$	47		5.1	%
Reduction in leveraged lease interest income resulting from tax reform		—			—			—			—			6			—			NM		(6		)	(100.0	)%
Adjusted net interest income and other financing income, taxable equivalent basis (non-GAAP)	F	$	971		$	955		$	938		$	922		$	930		$	16		1.7	%	$	41		4.4	%
Net interest margin (GAAP)⁽¹⁾		3.55		%	3.50		%	3.49		%	3.46		%	3.37		%
Reduction in leveraged lease interest income resulting from tax reform		—			—			—			—			0.02
Adjusted net interest margin (non-GAAP)		3.55		%	3.50		%	3.49		%	3.46		%	3.39		%
Non-interest income (GAAP)	G	$	481		$	519		$	512		$	507		$	516		$	(38	)	(7.3	)%	$	(35	)	(6.8	)%
Adjustments:
Securities (gains) losses, net		—			—			(1		)	—			(10		)	—			NM		10			(100.0	)%
Leveraged lease termination gains		—			(4		)	—			(4		)	—			4			(100.0	)%	—			—	%
Adjusted non-interest income (non-GAAP)	H	$	481		$	515		$	511		$	503		$	506		$	(34	)	(6.6	)%	$	(25	)	(4.9	)%
Total revenue	C+G=I	$	1,439		$	1,461		$	1,438		$	1,416		$	1,417		$	(22	)	(1.5	)%	$	22		1.6	%
Adjusted total revenue (non-GAAP)	D+H=J	$	1,439		$	1,457		$	1,437		$	1,412		$	1,413		$	(18	)	(1.2	)%	$	26		1.8	%
Total revenue, taxable-equivalent basis	E+G=K	$	1,452		$	1,474		$	1,450		$	1,429		$	1,440		$	(22	)	(1.5	)%	$	12		0.8	%
Adjusted total revenue, taxable-equivalent basis (non-GAAP)	F+H=L	$	1,452		$	1,470		$	1,449		$	1,425		$	1,436		$	(18	)	(1.2	)%	$	16		1.1	%
Efficiency ratio (GAAP)	A/K	58.7		%	62.6		%	62.7		%	61.9		%	63.9		%
Adjusted efficiency ratio (non-GAAP)	B/L	58.1		%	58.1		%	60.4		%	60.5		%	60.5		%
Fee income ratio (GAAP)	G/K	33.1		%	35.2		%	35.3		%	35.5		%	35.9		%
Adjusted fee income ratio (non-GAAP)	H/L	33.1		%	35.0		%	35.2		%	35.3		%	35.3		%

________

NM - Not Meaningful


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

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2018 Earnings Release

Reconciliation to GAAP Financial Measures



		Year Ended December 31
($ amounts in millions)		2018			2017			2018 vs. 2017
Non-interest expense (GAAP)	M	$	3,570		$	3,491		$	79		2.3	%
Adjustments:
Contribution to the Regions Financial Corporation foundation		(60		)	(40		)	(20		)	50.0	%
Branch consolidation, property and equipment charges		(11		)	(22		)	11			(50.0	)%
Expenses associated with residential mortgage loan sale		(4		)	—			(4		)	NM
Salary and employee benefits—severance charges		(61		)	(10		)	(51		)	NM
Adjusted non-interest expense (non-GAAP)	N	$	3,434		$	3,419		$	15		0.4	%
Net interest income and other financing income (GAAP)	O	$	3,735		$	3,539		$	196		5.5	%
Reduction in leveraged lease interest income resulting from tax reform		—			6			(6		)	(100.0	)%
Adjusted net interest income and other financing income (non-GAAP)	P	3,735			3,545			$	190		5.4	%
Net interest income and other financing income (GAAP)		$	3,735		$	3,539		$	196		5.5	%
Taxable-equivalent adjustment		51			90			(39		)	(43.3	)%
Net interest income and other financing income, taxable-equivalent basis - continuing operations	Q	$	3,786		$	3,629		$	157		4.3	%
Reduction in leveraged lease interest income resulting from tax reform		—			6			(6		)	(100.0	)%
Adjusted net interest income and other financing income, taxable equivalent basis (non-GAAP)	R	$	3,786		$	3,635		$	151		4.2	%
Net interest margin (GAAP)		3.50		%	3.32		%
Reduction in leveraged lease interest income resulting from tax reform		—			0.01
Adjusted net interest margin (non-GAAP)		3.50		%	3.33		%
Non-interest income (GAAP)	S	$	2,019		$	1,962		$	57		2.9	%
Adjustments:
Securities (gains) losses, net		(1		)	(19		)	18			(94.7	)%
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)	T	$	2,010		$	1,937		$	73		3.8	%
Total revenue	O+S=U	$	5,754		$	5,501		$	253		4.6	%
Adjusted total revenue (non-GAAP)	P+T=V	$	5,745		$	5,482		$	263		4.8	%
Total revenue, taxable-equivalent basis	Q+S=W	$	5,805		$	5,591		$	214		3.8	%
Adjusted total revenue, taxable-equivalent basis (non-GAAP)	R+T=X	$	5,796		$	5,572		$	224		4.0	%
Operating leverage ratio (GAAP)	W-M										1.5	%
Adjusted operating leverage ratio (non-GAAP)	X-N										3.6	%
Efficiency ratio (GAAP)	M/W	61.5		%	62.4		%
Adjusted efficiency ratio (non-GAAP)	N/X	59.3		%	61.4		%
Fee income ratio (GAAP)	S/W	34.8		%	35.1		%
Adjusted fee income ratio (non-GAAP)	T/X	34.7		%	34.8		%

______

NM - Not Meaningful

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth 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)		12/31/2018			9/30/2018			6/30/2018			3/31/2018			12/31/2017
RETURN ON AVERAGE TANGIBLE COMMON STOCKHOLDERS' EQUITY- CONSOLIDATED
Net income available to common shareholders (GAAP)	A	$	390		$	548		$	359		$	398		$	319
Average stockholders' equity (GAAP)		$	14,605		$	15,401		$	15,682		$	15,848		$	16,419
Less:
Average intangible assets (GAAP)		4,947			4,955			5,066			5,076			5,086
Average deferred tax liability related to intangibles (GAAP)		(95		)	(97		)	(98		)	(99		)	(126		)
Average preferred stock (GAAP)		820			820			820			820			820
Average tangible common stockholders' equity (non-GAAP)	B	$	8,933		$	9,723		$	9,894		$	10,051		$	10,639
Return on average tangible common stockholders' equity (non-GAAP)*	A/B	17.32		%	22.36		%	14.54		%	16.08		%	11.88		%



		Quarter Ended
($ amounts in millions)		12/31/2018			9/30/2018			6/30/2018			3/31/2018			12/31/2017
RETURN ON AVERAGE TANGIBLE COMMON STOCKHOLDERS' EQUITY- CONTINUING OPERATIONS
Net income from continuing operations available to common shareholders (GAAP)	C	$	390		$	354		$	362		$	398		$	304
Average stockholders' equity (GAAP)⁽¹⁾		$	14,605		$	15,401		$	15,682		$	15,848		$	16,419
Less:
Average intangible assets (GAAP)⁽¹⁾		4,947			4,955			5,066			5,076			5,086
Average deferred tax liability related to intangibles (GAAP)⁽¹⁾		(95		)	(97		)	(98		)	(99		)	(126		)
Average preferred stock (GAAP)⁽¹⁾		820			820			820			820			820
Average tangible common stockholders' equity (non-GAAP)	D	$	8,933		$	9,723		$	9,894		$	10,051		$	10,639
Return on average tangible common stockholders' equity (non-GAAP)*	C/D	17.33		%	14.42		%	14.67		%	16.08		%	11.33		%



		Year Ended
($ amounts in millions)		2018			2017
RETURN ON AVERAGE TANGIBLE COMMON STOCKHOLDERS' EQUITY- CONSOLIDATED
Net income available to common shareholders (GAAP)	E	$	1,695		$	1,199
Average stockholders' equity (GAAP)		$	15,381		$	16,665
Less:
Average intangible assets (GAAP)		5,010			5,103
Average deferred tax liability related to intangibles (GAAP)		(97		)	(148		)
Average preferred stock (GAAP)		820			820
Average tangible common stockholders' equity (non-GAAP)	F	$	9,648		$	10,890
Return on average tangible common stockholders' equity (non-GAAP)	E/F	17.57		%	11.01		%



		Year Ended
($ amounts in millions)		2018			2017
RETURN ON AVERAGE TANGIBLE COMMON STOCKHOLDERS' EQUITY- CONTINUING OPERATIONS
Net income from continuing operations available to common shareholders (GAAP)	G	$	1,504		$	1,177
Average stockholders' equity (GAAP)⁽¹⁾		$	15,381		$	16,665
Less:
Average intangible assets (GAAP)⁽¹⁾		5,010			5,103
Average deferred tax liability related to intangibles (GAAP)⁽¹⁾		(97		)	(148		)
Average preferred stock (GAAP)⁽¹⁾		820			820
Average tangible common stockholders' equity (non-GAAP)	H	$	9,648		$	10,890
Return on average tangible common stockholders' equity (non-GAAP)	G/H	15.59		%	10.80		%

______

*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 Fourth 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 sale met all of the criteria for reporting as discontinuing operations at December 31, 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)	12/31/2018		9/30/2018			6/30/2018			3/31/2018		12/31/2017
Interest income	$	—	$	1		$	—		$	—	$	—
Interest expense	—		—			—			—		—
Net interest income	—		1			—			—		—
Non-interest income:
Securities gains (losses), net	—		(1		)	—			—		3
Insurance commissions and fees	—		—			35			34		36
Gain on sale of business	—		281			—			—		—
Other	—		—			—			—		1
Total non-interest income	—		280			35			34		40
Non-interest expense:
Salaries and employee benefits	—		—			25			24		23
Net occupancy expense	—		—			2			1		1
Furniture and equipment expense	—		—			1			1		1
Other	—		1			8			7		8
Total non-interest expense	—		1			36			33		33
Income (loss) from discontinued operations before income tax	—		280			(1		)	1		7
Income tax expense (benefit)	—		84			—			—		(7		)
Income (loss) from discontinued operations, net of tax	$	—	$	196		$	(1	)	$	1	$	14

The following tables 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)	12/31/2018		9/30/2018		6/30/2018			3/31/2018		12/31/2017
Income (loss) from discontinued operations before income tax	$	—	$	274	$	(3	)	$	—	$	6
Income tax expense (benefit)	—		80		—			—		(9		)
Income (loss) from discontinued operations, net of tax	$	—	$	194	$	(3	)	$	—	$	15
Weighted-average shares outstanding—during quarter ⁽¹⁾:
Basic	1,035		1,086		1,119			1,127		1,152
Diluted	1,043		1,095		1,119			1,141		1,164
Earnings (loss) per common share from discontinued operations:
Basic	$	0.00	$	0.18	$	(0.00	)	$	0.00	$	0.01
Diluted	$	0.00	$	0.18	$	(0.00	)	$	0.00	$	0.01



	Year Ended December 31
($ amounts in millions, except per share data)	2018		2017
Income (loss) from discontinued operations before income tax	$	271	$	19
Income tax expense (benefit)	80		(3		)
Income (loss) from discontinued operations, net of tax	$	191	$	22
Weighted-average shares outstanding—during year ⁽¹⁾:
Basic	1,092		1,186
Diluted	1,102		1,198
Earnings (loss) per common share from discontinued operations:
Basic	$	0.18	$	0.02
Diluted	$	0.17	$	0.02

________


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

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2018 Earnings Release

Credit Quality



	As of and for Quarter Ended
($ amounts in millions)	12/31/2018			9/30/2018			6/30/2018			3/31/2018			12/31/2017
Components:
Allowance for loan losses (ALL)	$	840		$	840		$	838		$	840		$	934
Reserve for unfunded credit commitments	51			50			48			49			53
Allowance for credit losses (ACL)	$	891		$	890		$	886		$	889		$	987

Provision (credit) for loan losses	$	95		$	84		$	60		$	(10	)	$	(44	)
Provision (credit) for unfunded credit losses	1			2			(1		)	(4		)	(6		)

Loans charged-off:
Commercial and industrial	$	39		$	37		$	29		$	25		$	35
Commercial real estate mortgage—owner-occupied	4			4			5			5			2
Total commercial	43			41			34			30			37
Commercial investor real estate mortgage	—			1			—			8			—
Commercial investor real estate construction	—			—			—			—			—
Total investor real estate	—			1			—			8			—
Residential first mortgage	2			3			1			8			2
Home equity—lines of credit	8			6			6			5			7
Home equity—closed-end	2			1			2			1			2
Indirect—vehicles	9			8			9			12			11
Indirect—other consumer	15			11			10			12			12
Consumer credit card	16			14			15			16			14
Other consumer	24			22			18			20			20
Total consumer	76			65			61			74			68
Total	119			107			95			112			105

Recoveries of loans previously charged-off:
Commercial and industrial	9			8			12			8			11
Commercial real estate mortgage—owner-occupied	2			2			2			2			3
Total commercial	11			10			14			10			14
Commercial investor real estate mortgage	1			1			1			2			13
Commercial investor real estate construction	1			1			1			—			—
Total investor real estate	2			2			2			2			13
Residential first mortgage	1			1			3			1			1
Home equity—lines of credit	3			3			4			3			5
Home equity—closed-end	1			1			1			1			1
Indirect—vehicles	3			3			4			5			4
Indirect—other consumer	—			—			—			—			1
Consumer credit card	1			2			2			2			1
Other consumer	2			3			3			4			2
Total consumer	11			13			17			16			15
Total	24			25			33			28			42

Net loans charged-off:
Commercial and industrial	30			29			17			17			24
Commercial real estate mortgage—owner-occupied	2			2			3			3			(1		)
Total commercial	32			31			20			20			23
Commercial investor real estate mortgage	(1		)	—			(1		)	6			(13		)
Commercial investor real estate construction	(1		)	(1		)	(1		)	—			—
Total investor real estate	(2		)	(1		)	(2		)	6			(13		)
Residential first mortgage	1			2			(2		)	7			1
Home equity—lines of credit	5			3			2			2			2
Home equity—closed-end	1			—			1			—			1
Indirect—vehicles	6			5			5			7			7
Indirect—other consumer	15			11			10			12			11
Consumer credit card	15			12			13			14			13
Other consumer	22			19			15			16			18
Total consumer	65			52			44			58			53
Total	$	95		$	82		$	62		$	84		$	63

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2018 Earnings Release



Credit Quality (continued)

	As of and for Quarter Ended
($ amounts in millions)	12/31/2018			9/30/2018			6/30/2018			3/31/2018			12/31/2017
Net loan charge-offs as a % of average loans, annualized:
Commercial and industrial	0.32		%	0.31		%	0.18		%	0.18		%	0.27		%
Commercial real estate mortgage—owner-occupied	0.16		%	0.16		%	0.17		%	0.20		%	(0.06		)%
Total commercial	0.29		%	0.28		%	0.18		%	0.19		%	0.22		%
Commercial investor real estate mortgage	(0.06		)%	(0.04		)%	(0.10		)%	0.65		%	(1.26		)%
Commercial investor real estate construction	(0.12		)%	(0.23		)%	(0.25		)%	(0.04		)%	(0.16		)%
Total investor real estate	(0.07		)%	(0.10		)%	(0.15		)%	0.43		%	(0.90		)%
Residential first mortgage	0.04		%	0.04		%	(0.05		)%	0.21		%	0.04		%
Home equity—lines of credit	0.35		%	0.17		%	0.15		%	0.10		%	0.15		%
Home equity—closed-end	0.10		%	(0.03		)%	0.11		%	0.05		%	0.01		%
Indirect—vehicles	0.71		%	0.62		%	0.66		%	0.83		%	0.94		%
Indirect—other consumer	2.58		%	2.23		%	2.46		%	2.98		%	3.03		%
Consumer credit card	4.16		%	3.97		%	4.22		%	4.49		%	3.97		%
Other consumer	7.23		%	6.26		%	5.08		%	5.86		%	5.77		%
Total consumer	0.80		%	0.65		%	0.58		%	0.75		%	0.66		%
Total	0.46		%	0.40		%	0.32		%	0.42		%	0.31		%
Non-accrual loans, excluding loans held for sale	$	496		$	539		$	595		$	601		$	650
Non-performing loans held for sale	10			15			10			8			17
Non-accrual loans, including loans held for sale	506			554			605			609			667
Foreclosed properties	52			58			61			66			73
Non-marketable investments received in foreclosure	8			12			—			—			—
Non-performing assets (NPAs)	$	566		$	624		$	666		$	675		$	740
Loans past due > 90 days ⁽¹⁾	$	143		$	137		$	129		$	138		$	167
Accruing restructured loans not included in categories above ⁽²⁾	$	488		$	600		$	590		$	721		$	945
Credit Ratios:
ACL/Loans, net	1.07		%	1.09		%	1.10		%	1.11		%	1.23		%
ALL/Loans, net	1.01		%	1.03		%	1.04		%	1.05		%	1.17		%
Allowance for loan losses to non-performing loans, excluding loans held for sale	169		%	156		%	141		%	140		%	144		%
Non-accrual loans, excluding loans held for sale/Loans, net	0.60		%	0.66		%	0.74		%	0.75		%	0.81		%
NPAs (ex. 90+ past due)/Loans, foreclosed properties, non-marketable investments and non-performing loans held for sale	0.68		%	0.76		%	0.83		%	0.85		%	0.92		%
NPAs (inc. 90+ past due)/Loans, foreclosed properties, non-marketable investments and non-performing loans held for sale ⁽¹⁾	0.85		%	0.93		%	0.99		%	1.02		%	1.13		%


(1)	Excludes guaranteed residential first mortgages that are 90+ days past due and still accruing. Refer to the footnotes on page 20 for amounts related to these loans.


(2)	See page 21 for detail of restructured loans.



Allowance for Credit Losses
	Year Ended December 31
($ amounts in millions)	2018			2017
Balance at beginning of year	$	987		$	1,160
Net loans charged off	(323		)	(307		)
Provision for loan losses	229			150
Provision (credit) for unfunded credit losses	(2		)	(16		)
Balance at end of year	$	891		$	987

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth 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.



		Quarter Ended															Year Ended
($ amounts in millions)		12/31/2018			9/30/2018			6/30/2018			3/31/2018			12/31/2017			12/31/2018			12/31/2017
Residential first mortgage net charge-offs (GAAP)	A	$	1		$	2		$	(2	)	$	7		$	1		$	8		$	7
Less: Net charge-offs associated with TDR sale		—			—			—			5			—			5			—
Adjusted residential first mortgage net charge-offs (non-GAAP)	B	$	1		$	2		$	(2	)	$	2		$	1		$	3		$	7
Total consumer net charge-offs (GAAP)	C	$	65		$	52		$	44		$	58		$	53		$	219		$	194
Less: Net charge-offs associated with TDR sale		—			—			—			5			—			5			—
Adjusted total consumer net charge-offs (non-GAAP)	D	$	65		$	52		$	44		$	53		$	53		$	214		$	194
Total net charge-offs (GAAP)	E	$	95		$	82		$	62		$	84		$	63		$	323		$	307
Less: Net charge-offs associated with TDR sale		—			—			—			5			—			5			—
Adjusted total net charge-offs (non-GAAP)	F	$	95		$	82		$	62		$	79		$	63		$	318		$	307
Average residential first mortgage loans (GAAP)	G	$	14,230		$	14,162		$	13,980		$	13,977		$	13,954		$	14,088		$	13,719
Add: Average balances of residential first mortgage loans sold		—			—			—			90			—			214			—
Average residential first mortgage loans adjusted for residential first mortgage loans sold (non-GAAP)	H	$	14,230		$	14,162		$	13,980		$	14,067		$	13,954		$	14,302		$	13,719
Average total consumer loans (GAAP)	I	$	31,476		$	31,409		$	31,177		$	31,272		$	31,367		$	31,334		$	31,268
Add: Average balances of residential first mortgage loans sold		—			—			—			90			—			214			—
Average total consumer loans adjusted for residential first mortgage loans sold (non-GAAP)	J	$	31,476		$	31,409		$	31,177		$	31,362		$	31,367		$	31,548		$	31,268
Average total loans (GAAP)	K	$	81,873		$	81,022		$	79,957		$	79,891		$	79,523		$	80,692		$	79,846
Add: Average balances of residential first mortgage loans sold		—			—			—			90			—			214			—
Average total loans adjusted for residential first mortgage loans sold (non-GAAP)	L	$	81,873		$	81,022		$	79,957		$	79,981		$	79,523		$	80,906		$	79,846
Residential first mortgage net charge-off percentage (GAAP)*	A/G	0.04		%	0.04		%	(0.05		)%	0.21		%	0.04		%	0.06		%	0.05		%
Adjusted residential first mortgage net charge-off percentage (non-GAAP)*	B/H	0.04		%	0.04		%	(0.05		)%	0.06		%	0.04		%	0.02		%	0.05		%
Total consumer net charge-off percentage (GAAP)*	C/I	0.80		%	0.65		%	0.58		%	0.75		%	0.66		%	0.70		%	0.62		%
Adjusted total consumer net charge-off percentage (non-GAAP)*	D/J	0.80		%	0.65		%	0.58		%	0.69		%	0.66		%	0.68		%	0.62		%
Total net charge-off percentage (GAAP)*	E/K	0.46		%	0.40		%	0.32		%	0.42		%	0.31		%	0.40		%	0.38		%
Adjusted total net charge-off percentage (non-GAAP)*	F/L	0.46		%	0.40		%	0.32		%	0.40		%	0.31		%	0.39		%	0.38		%

*Annualized

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2018 Earnings Release

Non-Accrual Loans (excludes loans held for sale)



	As of
($ amounts in millions)	12/31/2018				9/30/2018				6/30/2018				3/31/2018				12/31/2017
Commercial and industrial	$	307	0.78	%	$	341	0.90	%	$	384	1.04	%	$	364	0.99	%	$	404	1.12	%
Commercial real estate mortgage—owner-occupied	67		1.21	%	80		1.36	%	98		1.63	%	102		1.69	%	118		1.90	%
Commercial real estate construction—owner-occupied	8		2.16	%	8		2.41	%	5		1.66	%	5		1.68	%	6		1.89	%
Total commercial	382		0.85	%	429		0.97	%	487		1.12	%	471		1.09	%	528		1.24	%
Commercial investor real estate mortgage	11		0.22	%	2		0.04	%	4		0.10	%	14		0.36	%	5		0.13	%
Commercial investor real estate construction	—		—	%	—		—	%	—		—	%	—		—	%	1		0.02	%
Total investor real estate	11		0.16	%	2		0.04	%	4		0.06	%	14		0.25	%	6		0.10	%
Residential first mortgage	40		0.28	%	42		0.29	%	38		0.27	%	47		0.34	%	47		0.33	%
Home equity	63		0.68	%	66		0.71	%	66		0.68	%	69		0.70	%	69		0.68	%
Total consumer	103		0.33	%	108		0.34	%	104		0.33	%	116		0.37	%	116		0.37	%
Total non-accrual loans	$	496	0.60	%	$	539	0.66	%	$	595	0.74	%	$	601	0.75	%	$	650	0.81	%

Criticized and Classified Loans—Business Services ⁽¹⁾



	As of
											12/31/2018					12/31/2018
($ amounts in millions)	12/31/2018		9/30/2018		6/30/2018		3/31/2018		12/31/2017		vs. 9/30/2018					vs. 12/31/2017
Accruing classified	$	590	$	550	$	560	$	813	$	915	$	40		7.3	%	$	(325	)	(35.5	)%
Non-accruing classified	393		431		491		485		534		(38		)	(8.8	)%	(141		)	(26.4	)%
Total classified	983		981		1,051		1,298		1,449		2			0.2	%	(466		)	(32.2	)%

Special mention	939		1,048		857		925		1,007		(109		)	(10.4	)%	(68		)	(6.8	)%
Total criticized	$	1,922	$	2,029	$	1,908	$	2,223	$	2,456	$	(107	)	(5.3	)%	$	(534	)	(21.7	)%


(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 12/31/2018
($ amounts in millions)	First Lien		% of Total		Second Lien		% of Total		Total
2019	$	50	0.85	%	$	47	0.81	%	$	97
2020	109		1.85	%	81		1.37	%	190
2021	128		2.18	%	112		1.91	%	240
2022	140		2.39	%	132		2.24	%	272
2023	172		2.94	%	161		2.74	%	333
2024-2028	2,401		40.90	%	2,280		38.84	%	4,681
2029-2033	34		0.57	%	22		0.38	%	56
Thereafter	1		0.01	%	1		0.02	%	2
Total	$	3,035	51.69	%	$	2,836	48.31	%	$	5,871

(2)

The balance of Regions' home equity portfolio was $9,257 million at December 31, 2018 consisting of $5,871 million of home equity lines of credit and $3,386 million of closed-end home equity loans. The home equity lines of credit presented in the table above are based on maturity date for lines with a balloon payment and draw period expiration date for lines that convert to a repayment period. The closed-end loans were primarily originated as amortizing loans, and were therefore excluded from the table above.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2018 Earnings Release

Early and Late Stage Delinquencies



Accruing 30-89 Days Past Due Loans	As of
($ amounts in millions)	12/31/2018				9/30/2018				6/30/2018				3/31/2018				12/31/2017
Commercial and industrial ⁽³⁾	$	102	0.26	%	$	45	0.12	%	$	18	0.05	%	$	70	0.19	%	$	35	0.10	%
Commercial real estate mortgage—owner-occupied	19		0.34	%	18		0.31	%	16		0.28	%	28		0.46	%	26		0.41	%
Commercial real estate construction—owner-occupied	—		—	%	—		—	%	3		0.84	%	—		—	%	—		0.07	%
Total commercial	121		0.27	%	63		0.14	%	37		0.08	%	98		0.23	%	61		0.14	%
Commercial investor real estate mortgage	6		0.12	%	6		0.13	%	6		0.14	%	1		0.02	%	2		0.05	%
Commercial investor real estate construction	—		—	%	—		—	%	—		0.01	%	29		1.61	%	—		—	%
Total investor real estate	6		0.09	%	6		0.09	%	6		0.10	%	30		0.54	%	2		0.03	%
Residential first mortgage—non-guaranteed ⁽¹⁾	101		0.73	%	89		0.65	%	82		0.60	%	89		0.66	%	135		0.99	%
Home equity	73		0.78	%	77		0.81	%	77		0.79	%	84		0.85	%	80		0.79	%
Indirect—vehicles	51		1.69	%	51		1.64	%	49		1.51	%	49		1.47	%	61		1.84	%
Indirect—other consumer	20		0.85	%	16		0.76	%	11		0.59	%	13		0.78	%	14		0.96	%
Consumer credit card	21		1.58	%	19		1.50	%	16		1.32	%	17		1.33	%	18		1.40	%
Other consumer	20		1.60	%	20		1.62	%	16		1.40	%	15		1.32	%	17		1.41	%
Total consumer ⁽¹⁾	286		0.92	%	272		0.88	%	251		0.82	%	267		0.87	%	325		1.05	%
Total accruing 30-89 days past due loans ⁽¹⁾	$	413	0.50	%	$	341	0.42	%	$	294	0.37	%	$	395	0.50	%	$	388	0.49	%

Accruing 90+ Days Past Due Loans	As of
($ amounts in millions)	12/31/2018				9/30/2018				6/30/2018				3/31/2018				12/31/2017
Commercial and industrial	$	8	0.02	%	$	4	0.01	%	$	4	0.01	%	$	5	0.01	%	$	4	0.01	%
Commercial real estate mortgage—owner-occupied	—		—	%	2		0.02	%	1		0.01	%	1		0.01	%	1		0.02	%
Total commercial	8		0.02	%	6		0.01	%	5		0.01	%	6		0.01	%	5		0.01	%
Commercial investor real estate mortgage	—		—	%	—		—	%	—		—	%	—		—	%	1		0.02	%
Total investor real estate	—		—	%	—		—	%	—		—	%	—		—	%	1		0.02	%
Residential first mortgage—non-guaranteed ⁽²⁾	66		0.47	%	61		0.44	%	63		0.46	%	69		0.52	%	92		0.67	%
Home equity	34		0.37	%	39		0.42	%	31		0.32	%	33		0.33	%	37		0.36	%
Indirect—vehicles	9		0.28	%	9		0.28	%	8		0.24	%	8		0.25	%	9		0.27	%
Indirect—other consumer	1		0.06	%	1		0.03	%	—		—	%	—		—	%	—		—	%
Consumer credit card	20		1.48	%	17		1.36	%	17		1.31	%	17		1.40	%	19		1.45	%
Other consumer	5		0.42	%	4		0.32	%	5		0.36	%	5		0.40	%	4		0.35	%
Total consumer ⁽²⁾	135		0.43	%	131		0.42	%	124		0.40	%	132		0.43	%	161		0.52	%
Total accruing 90+ days past due loans ⁽²⁾	$	143	0.17	%	$	137	0.17	%	$	129	0.16	%	$	138	0.17	%	$	167	0.21	%

Total delinquencies ^{(1) (2)}	$	556	0.67	%	$	478	0.59	%	$	423	0.53	%	$	533	0.67	%	$	555	0.70	%


(1)	Excludes loans that are 100% guaranteed by FHA. Total 30-89 days past due guaranteed loans excluded were $37 million at 12/31/2018, $36 million at 9/30/2018, $28 million at 6/30/2018, $31 million at 3/31/2018, $45 million at 12/31/2017.


(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 $84 million at 12/31/2018, $83 million at 9/30/2018, $105 million at 6/30/2018, $127 million at 3/31/2018, and $124 million at 12/31/2017.


(3)	The increase in the fourth quarter of 2018, as compared to the third quarter of 2018, related primarily to one large commercial loan that was subsequently resolved in January 2019.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2018 Earnings Release

Troubled Debt Restructurings



	As of
($ amounts in millions)	12/31/2018		9/30/2018		6/30/2018		3/31/2018		12/31/2017
Current:
Commercial	$	103	$	169	$	157	$	197	$	215
Investor real estate	13		44		35		54		90
Residential first mortgage	139		143		134		131		318
Home equity	179		188		206		221		233
Consumer credit card	1		1		1		1		1
Other consumer	5		6		6		7		8
Total current	440		551		539		611		865
Accruing 30-89 DPD:
Commercial	5		1		1		36		17
Investor real estate	1		5		5		29		—
Residential first mortgage	31		28		31		31		50
Home equity	10		15		13		13		12
Other consumer	1		—		1		1		1
Total accruing 30-89 DPD	48		49		51		110		80
Total accruing and <90 DPD	488		600		590		721		945
Non-accrual or 90+ DPD:
Commercial	183		195		178		194		115
Investor real estate	5		—		1		10		1
Residential first mortgage	38		42		44		57		69
Home equity	15		15		14		14		14
Total non-accrual or 90+DPD	241		252		237		275		199
Total TDRs - Loans	$	729	$	852	$	827	$	996	$	1,144
TDRs - Held For Sale	5		6		11		7		13
Total TDRs	$	734	$	858	$	838	$	1,003	$	1,157


Total TDRs - Loans by Portfolio
	As of
($ amounts in millions)	12/31/2018		9/30/2018		6/30/2018		3/31/2018		12/31/2017
Total commercial TDRs	$	291	$	365	$	336	$	427	$	347
Total investor real estate TDRs	19		49		41		93		91
Total consumer TDRs	419		438		450		476		706
Total TDRs - Loans	$	729	$	852	$	827	$	996	$	1,144

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2018 Earnings Release

Consolidated Balance Sheets (unaudited)



	As of
($ amounts in millions)	12/31/2018			9/30/2018			6/30/2018			3/31/2018			12/31/2017
Assets:
Cash and due from banks	$	2,018		$	1,911		$	1,844		$	1,766		$	2,012
Interest-bearing deposits in other banks	1,520			1,584			2,442			1,419			1,899
Federal funds sold and securities purchased under agreements to resell	—			—			—			—			70
Debt securities held to maturity	1,482			1,524			1,568			1,611			1,658
Debt securities available for sale	22,729			22,671			22,935			23,085			23,403
Loans held for sale	304			331			490			452			348
Loans, net of unearned income	83,152			81,821			80,478			79,822			79,947
Allowance for loan losses	(840		)	(840		)	(838		)	(840		)	(934		)
Net loans	82,312			80,981			79,640			78,982			79,013
Other earning assets	1,719			1,801			1,672			1,640			1,891
Premises and equipment, net	2,045			2,051			2,050			2,065			2,064
Interest receivable	375			360			347			328			337
Goodwill	4,829			4,829			4,904			4,904			4,904
Residential mortgage servicing rights at fair value (MSRs)	418			406			362			356			336
Other identifiable intangible assets	115			122			156			167			177
Other assets	5,822			6,007			6,147			6,138			6,182
Total assets	$	125,688		$	124,578		$	124,557		$	122,913		$	124,294
Liabilities and stockholders’ equity:
Deposits:
Non-interest-bearing	$	35,053		$	35,354		$	36,055		$	36,935		$	36,127
Interest-bearing	59,438			57,901			59,228			60,055			60,762
Total deposits	94,491			93,255			95,283			96,990			96,889
Borrowed funds:
Short-term borrowings:
Other short-term borrowings	1,600			3,250			1,400			—			500
Total short-term borrowings	1,600			3,250			1,400			—			500
Long-term borrowings	12,424			11,178			9,890			7,949			8,132
Total borrowed funds	14,024			14,428			11,290			7,949			8,632
Other liabilities	2,083			2,125			2,207			2,108			2,581
Total liabilities	110,598			109,808			108,780			107,047			108,102
Stockholders’ equity:
Preferred stock, non-cumulative perpetual	820			820			820			820			820
Common stock	11			11			12			12			12
Additional paid-in capital	13,766			14,122			15,389			15,639			15,858
Retained earnings	2,828			2,582			2,182			1,923			1,628
Treasury stock, at cost	(1,371		)	(1,371		)	(1,371		)	(1,377		)	(1,377		)
Accumulated other comprehensive income (loss), net	(964		)	(1,394		)	(1,255		)	(1,151		)	(749		)
Total stockholders’ equity	15,090			14,770			15,777			15,866			16,192
Total liabilities and stockholders’ equity	$	125,688		$	124,578		$	124,557		$	122,913		$	124,294

_________

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 Fourth Quarter 2018 Earnings Release

End of Period Loans



	As of
											12/31/2018					12/31/2018
($ amounts in millions)	12/31/2018		9/30/2018		6/30/2018		3/31/2018		12/31/2017		vs 9/30/2018					vs. 12/31/2017
Commercial and industrial ⁽¹⁾	$	39,282	$	38,036	$	37,079	$	36,787	$	36,115	$	1,246		3.3	%	$	3,167		8.8	%
Commercial real estate mortgage—owner-occupied ⁽²⁾	5,549		5,943		6,006		6,044		6,193		(394		)	(6.6	)%	(644		)	(10.4	)%
Commercial real estate construction—owner-occupied	384		326		304		306		332		58			17.8	%	52			15.7	%
Total commercial	45,215		44,305		43,389		43,137		42,640		910			2.1	%	2,575			6.0	%
Commercial investor real estate mortgage ⁽²⁾	4,650		4,205		3,882		3,742		4,062		445			10.6	%	588			14.5	%
Commercial investor real estate construction	1,786		1,838		1,879		1,845		1,772		(52		)	(2.8	)%	14			0.8	%
Total investor real estate	6,436		6,043		5,761		5,587		5,834		393			6.5	%	602			10.3	%
Total business	51,651		50,348		49,150		48,724		48,474		1,303			2.6	%	3,177			6.6	%
Residential first mortgage ⁽³⁾	14,276		14,220		14,111		13,892		14,061		56			0.4	%	215			1.5	%
Home equity—lines of credit ⁽⁴⁾	5,871		5,993		6,165		6,355		6,571		(122		)	(2.0	)%	(700		)	(10.7	)%
Home equity—closed-end ⁽⁵⁾	3,386		3,442		3,514		3,561		3,593		(56		)	(1.6	)%	(207		)	(5.8	)%
Indirect—vehicles	2,445		2,429		2,377		2,326		2,184		16			0.7	%	261			12.0	%
Indirect—vehicles third-party	608		717		842		984		1,142		(109		)	(15.2	)%	(534		)	(46.8	)%
Indirect—other consumer	2,349		2,179		1,889		1,611		1,467		170			7.8	%	882			60.1	%
Consumer credit card	1,345		1,273		1,264		1,237		1,290		72			5.7	%	55			4.3	%
Other consumer	1,221		1,220		1,166		1,132		1,165		1			0.1	%	56			4.8	%
Total consumer	31,501		31,473		31,328		31,098		31,473		28			0.1	%	28			0.1	%
Total Loans	$	83,152	$	81,821	$	80,478	$	79,822	$	79,947	$	1,331		1.6	%	$	3,205		4.0	%

_______


(1)	As of December 31, 2018, approximately $263 million of purchasing card balances previously recognized in other assets were reclassified to commercial and industrial loans.


(2)	As of December 31, 2018, approximately $345 million of senior assisted living balances were reclassified from commercial real estate mortgage—owner-occupied to commercial investor real estate mortgage. The reclassification had a negligible impact on average balances.


(3)	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.


(4)	The balance of Regions' home equity lines of credit consists of $3,035 million of first lien and $2,836 million of second lien at 12/31/2018.


(5)	The balance of Regions' closed-end home equity loans consists of $3,079 million of first lien and $307 million of second lien at 12/31/2018.



	As of
End of Period Loans by Percentage	12/31/2018		9/30/2018		6/30/2018		3/31/2018		12/31/2017
Commercial and industrial	47.2	%	46.5	%	46.1	%	46.1	%	45.2	%
Commercial real estate mortgage—owner-occupied	6.7	%	7.3	%	7.5	%	7.6	%	7.7	%
Commercial real estate construction—owner-occupied	0.5	%	0.4	%	0.4	%	0.4	%	0.4	%
Total commercial	54.4	%	54.2	%	54.0	%	54.1	%	53.3	%
Commercial investor real estate mortgage	5.6	%	5.1	%	4.8	%	4.7	%	5.1	%
Commercial investor real estate construction	2.1	%	2.2	%	2.3	%	2.3	%	2.2	%
Total investor real estate	7.7	%	7.3	%	7.1	%	7.0	%	7.3	%
Total business	62.1	%	61.5	%	61.1	%	61.1	%	60.6	%
Residential first mortgage	17.2	%	17.4	%	17.5	%	17.4	%	17.6	%
Home equity—lines of credit	7.1	%	7.3	%	7.7	%	8.0	%	8.2	%
Home equity—closed-end	4.1	%	4.2	%	4.4	%	4.5	%	4.5	%
Indirect—vehicles	2.9	%	3.0	%	3.0	%	2.9	%	2.7	%
Indirect—vehicles third-party	0.7	%	0.9	%	1.0	%	1.2	%	1.4	%
Indirect—other consumer	2.8	%	2.6	%	2.3	%	2.0	%	1.9	%
Consumer credit card	1.6	%	1.6	%	1.6	%	1.5	%	1.6	%
Other consumer	1.5	%	1.5	%	1.4	%	1.4	%	1.5	%
Total consumer	37.9	%	38.5	%	38.9	%	38.9	%	39.4	%
Total Loans	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2018 Earnings Release

Average Balances of Loans



	Average Balances
($ amounts in millions)	4Q18		3Q18		2Q18		1Q18		4Q17		4Q18 vs. 3Q18					4Q18 vs. 4Q17
Commercial and industrial	$	38,111	$	37,410	$	36,874	$	36,464	$	35,689	$	701		1.9	%	$	2,422		6.8	%
Commercial real estate mortgage—owner-occupied	5,847		6,000		6,017		6,117		6,208		(153		)	(2.6	)%	(361		)	(5.8	)%
Commercial real estate construction—owner-occupied	349		311		298		318		335		38			12.2	%	14			4.2	%
Total commercial	44,307		43,721		43,189		42,899		42,232		586			1.3	%	2,075			4.9	%
Commercial investor real estate mortgage	4,275		4,083		3,724		3,883		3,986		192			4.7	%	289			7.3	%
Commercial investor real estate construction	1,815		1,809		1,867		1,837		1,938		6			0.3	%	(123		)	(6.3	)%
Total investor real estate	6,090		5,892		5,591		5,720		5,924		198			3.4	%	166			2.8	%
Total business	50,397		49,613		48,780		48,619		48,156		784			1.6	%	2,241			4.7	%
Residential first mortgage	14,230		14,162		13,980		13,977		13,954		68			0.5	%	276			2.0	%
Home equity—lines of credit	5,924		6,068		6,259		6,465		6,625		(144		)	(2.4	)%	(701		)	(10.6	)%
Home equity—closed-end	3,411		3,475		3,533		3,576		3,581		(64		)	(1.8	)%	(170		)	(4.7	)%
Indirect—vehicles	2,451		2,414		2,351		2,248		2,177		37			1.5	%	274			12.6	%
Indirect—vehicles third-party	658		776		909		1,061		1,223		(118		)	(15.2	)%	(565		)	(46.2	)%
Indirect—other consumer	2,287		2,042		1,743		1,531		1,400		245			12.0	%	887			63.4	%
Consumer credit card	1,298		1,271		1,245		1,257		1,238		27			2.1	%	60			4.8	%
Other consumer	1,217		1,201		1,157		1,157		1,169		16			1.3	%	48			4.1	%
Total consumer	31,476		31,409		31,177		31,272		31,367		67			0.2	%	109			0.3	%
Total loans	$	81,873	$	81,022	$	79,957	$	79,891	$	79,523	$	851		1.1	%	$	2,350		3.0	%

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)	4Q18		3Q18		2Q18		1Q18		4Q17		4Q18 vs. 3Q18					4Q18 vs. 4Q17
Total consumer loans	$	31,476	$	31,409	$	31,177	$	31,272	$	31,367	$	67		0.2	%	$	109		0.3	%
Less: Balances of residential first mortgage loans sold⁽¹⁾	—		—		—		164		254		—			NM		(254		)	(100.0	)%
Less: Indirect—vehicles third-party	658		776		909		1,061		1,223		(118		)	(15.2	)%	(565		)	(46.2	)%
Adjusted total consumer loans (non-GAAP)	$	30,818	$	30,633	$	30,268	$	30,047	$	29,890	$	185		0.6	%	$	928		3.1	%
Total loans	$	81,873	$	81,022	$	79,957	$	79,891	$	79,523	851			1.1	%	2,350			3.0	%
Less: Balances of residential first mortgage loans sold⁽¹⁾	—		—		—		164		254		—			NM		(254		)	(100.0	)%
Less: Indirect—vehicles third-party	658		776		909		1,061		1,223		(118		)	(15.2	)%	(565		)	(46.2	)%
Adjusted total loans (non-GAAP)	$	81,215	$	80,246	$	79,048	$	78,666	$	78,046	$	969		1.2	%	$	3,169		4.1	%

________

(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 Fourth Quarter 2018 Earnings Release

Average Balances of Loans (continued)



	Average Balances
	Year Ended December 31
($ amounts in millions)	2018		2017		2018 vs. 2017
Commercial and industrial	$	37,220	$	35,514	$	1,706		4.8	%
Commercial real estate mortgage—owner-occupied	5,995		6,492		(497		)	(7.7	)%
Commercial real estate construction—owner-occupied	319		345		(26		)	(7.5	)%
Total commercial	43,534		42,351		1,183			2.8	%
Commercial investor real estate mortgage	3,992		4,128		(136		)	(3.3	)%
Commercial investor real estate construction	1,832		2,099		(267		)	(12.7	)%
Total investor real estate	5,824		6,227		(403		)	(6.5	)%
Total business	49,358		48,578		780			1.6	%
Residential first mortgage	14,088		13,719		369			2.7	%
Home equity—lines of credit	6,177		6,861		(684		)	(10.0	)%
Home equity—closed-end	3,498		3,544		(46		)	(1.3	)%
Indirect—vehicles	2,367		2,143		224			10.5	%
Indirect—vehicles third-party	850		1,517		(667		)	(44.0	)%
Indirect—other consumer	1,903		1,150		753			65.5	%
Consumer credit card	1,268		1,192		76			6.4	%
Other consumer	1,183		1,142		41			3.6	%
Total consumer	31,334		31,268		66			0.2	%
Total Loans	$	80,692	$	79,846	$	846		1.1	%

Adjusted Average Balances of Loans (non-GAAP)



	Average Balances
	Year Ended December 31
($ amounts in millions)	2018		2017		2018 vs. 2017
Total consumer loans	$	31,334	$	31,268	$	66		0.2	%
Less: Balances of residential first mortgage loans sold⁽¹⁾	40		254		(214		)	(84.3	)%
Less: Indirect—vehicles third-party	850		1,517		(667		)	(44.0	)%
Adjusted total consumer loans (non-GAAP)	$	30,444	$	29,497	$	947		3.2	%
Total Loans	$	80,692	$	79,846	$	846		1.1	%
Less: Balances of residential first mortgage loans sold⁽¹⁾	40		254		(214		)	(84.3	)%
Less: Indirect—vehicles third-party	850		1,517		(667		)	(44.0	)%
Adjusted total loans (non-GAAP)	$	79,802	$	78,075	$	1,727		2.2	%

________

(1) Adjustments to average loan balances assume a simple day-weighted average impact for the year ended December 31, 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 Fourth Quarter 2018 Earnings Release

End of Period Deposits



	As of
												12/31/2018					12/31/2018
($ amounts in millions)	12/31/2018		9/30/2018		6/30/2018		3/31/2018		12/31/2017			vs. 9/30/2018					vs. 12/31/2017
Customer Deposits
Interest-free deposits	$	35,053	$	35,354	$	36,055	$	36,935	$	36,127		$	(301	)	(0.9	)%	$	(1,074	)	(3.0	)%
Interest-bearing checking	19,175		18,586		19,403		19,916		20,161			589			3.2	%	(986		)	(4.9	)%
Savings	8,788		8,900		8,971		8,983		8,413			(112		)	(1.3	)%	375			4.5	%
Money market—domestic	24,111		23,896		24,255		24,478		25,306			215			0.9	%	(1,195		)	(4.7	)%
Money market—foreign	—		—		—		18		23			—			—	%	(23		)	(100.0	)%
Low-cost deposits	87,127		86,736		88,684		90,330		90,030			391			0.5	%	(2,903		)	(3.2	)%
Time deposits	7,364		6,519		6,599		6,660		6,859			845			13.0	%	505			7.4	%
Total Deposits	$	94,491	$	93,255	$	95,283	$	96,990	$	96,889		$	1,236		1.3	%	$	(2,398	)	(2.5	)%

	As of
												12/31/2018					12/31/2018
($ amounts in millions)	12/31/2018		9/30/2018		6/30/2018		3/31/2018		12/31/2017			vs. 9/30/2018					vs. 12/31/2017
Consumer Bank Segment	$	57,575	$	57,939	$	58,713	$	59,266	$	57,475		$	(364	)	(0.6	)%	$	100		0.2	%
Corporate Bank Segment	27,748		26,002		26,873		27,569		28,023			1,746			6.7	%	(275		)	(1.0	)%
Wealth Management Segment	8,072		8,018		8,334		8,702		9,162			54			0.7	%	(1,090		)	(11.9	)%
Other ⁽¹⁾	1,096		1,296		1,363		1,453		2,229			(200		)	(15.4	)%	(1,133		)	(50.8	)%
Total Deposits	$	94,491	$	93,255	$	95,283	$	96,990	$	96,889		$	1,236		1.3	%	$	(2,398	)	(2.5	)%

	As of
												12/31/2018					12/31/2018
($ amounts in millions)	12/31/2018		9/30/2018		6/30/2018		3/31/2018		12/31/2017			vs. 9/30/2018					vs. 12/31/2017
Wealth Management - Private Wealth	$	7,204	$	7,035	$	7,248	$	7,581	$	7,953		$	169		2.4	%	$	(749	)	(9.4	)%
Wealth Management - Institutional Services	868		983		1,086		1,121		1,209			(115		)	(11.7	)%	(341		)	(28.2	)%
Total Wealth Management Segment Deposits	$	8,072	$	8,018	$	8,334	$	8,702	$	9,162		$	54		0.7	%	$	(1,090	)	(11.9	)%

									As of
End of Period Deposits by Percentage									12/31/2018			9/30/2018			6/30/2018		3/31/2018			12/31/2017
Customer Deposits
Interest-free deposits									37.1		%	37.9		%	37.8	%	38.1		%	37.3	%
Interest-bearing checking									20.3		%	19.9		%	20.4	%	20.5		%	20.8	%
Savings									9.3		%	9.6		%	9.4	%	9.3		%	8.7	%
Money market—domestic									25.5		%	25.6		%	25.5	%	25.2		%	26.1	%
Money market—foreign									—		%	—		%	—	%	—		%	—	%
Low-cost deposits									92.2		%	93.0		%	93.1	%	93.1		%	92.9	%
Time deposits									7.8		%	7.0		%	6.9	%	6.9		%	7.1	%
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 Fourth Quarter 2018 Earnings Release

Average Balances of Deposits



	Average Balances
($ amounts in millions)	4Q18		3Q18		2Q18		1Q18		4Q17		4Q18 vs. 3Q18					4Q18 vs. 4Q17
Customer Deposits
Interest-free deposits	$	35,169	$	35,414	$	35,811	$	35,464	$	36,742	$	(245	)	(0.7	)%	$	(1,573	)	(4.3	)%
Interest-bearing checking	18,295		18,924		19,534		19,935		19,261		(629		)	(3.3	)%	(966		)	(5.0	)%
Savings	8,827		8,928		8,981		8,615		8,378		(101		)	(1.1	)%	449			5.4	%
Money market—domestic	23,850		24,046		24,225		24,580		25,716		(196		)	(0.8	)%	(1,866		)	(7.3	)%
Money market—foreign	—		—		10		21		28		—			—	%	(28		)	(100.0	)%
Low-cost deposits	86,141		87,312		88,561		88,615		90,125		(1,171		)	(1.3	)%	(3,984		)	(4.4	)%
Time deposits	6,879		6,522		6,632		6,787		6,935		357			5.5	%	(56		)	(0.8	)%
Total Customer Deposits	93,020		93,834		95,193		95,402		97,060		(814		)	(0.9	)%	(4,040		)	(4.2	)%
Corporate treasury deposits	139		108		60		26		—		31			28.7	%	139			NM
Total Deposits	$	93,159	$	93,942	$	95,253	$	95,428	$	97,060	$	(783	)	(0.8	)%	$	(3,901	)	(4.0	)%



	Average Balances
($ amounts in millions)	4Q18		3Q18		2Q18		1Q18		4Q17		4Q18 vs. 3Q18					4Q18 vs. 4Q17
Consumer Bank Segment	$	57,366	$	57,684	$	58,152	$	57,146	$	56,921	$	(318	)	(0.6	)%	$	445		0.8	%
Corporate Bank Segment	26,323		26,563		27,160		27,672		28,362		(240		)	(0.9	)%	(2,039		)	(7.2	)%
Wealth Management Segment	8,027		8,235		8,528		8,942		9,163		(208		)	(2.5	)%	(1,136		)	(12.4	)%
Other ⁽¹⁾	1,443		1,460		1,413		1,668		2,614		(17		)	(1.2	)%	(1,171		)	(44.8	)%
Total Deposits	$	93,159	$	93,942	$	95,253	$	95,428	$	97,060	$	(783	)	(0.8	)%	$	(3,901	)	(4.0	)%



	Average Balances
($ amounts in millions)	4Q18		3Q18		2Q18		1Q18		4Q17		4Q18 vs. 3Q18					4Q18 vs. 4Q17
Wealth Management - Private Wealth	$	7,084	$	7,250	$	7,430	$	7,765	$	7,798	$	(166	)	(2.3	)%	$	(714	)	(9.2	)%
Wealth Management - Institutional Services	943		985		1,098		1,177		1,365		(42		)	(4.3	)%	(422		)	(30.9	)%
Total Wealth Management Segment Deposits	$	8,027	$	8,235	$	8,528	$	8,942	$	9,163	$	(208	)	(2.5	)%	$	(1,136	)	(12.4	)%



	Average Balances
	Year Ended December 31
($ amounts in millions)	2018		2017		2018 vs. 2017
Customer Deposits
Interest-free deposits	$	35,464	$	36,262	$	(798	)	(2.2	)%
Interest-bearing checking	19,167		19,294		(127		)	(0.7	)%
Savings	8,838		8,284		554			6.7	%
Money market—domestic	24,173		26,420		(2,247		)	(8.5	)%
Money market—foreign	8		78		(70		)	(89.7	)%
Low-cost deposits	87,650		90,338		(2,688		)	(3.0	)%
Time deposits	6,705		6,991		(286		)	(4.1	)%
Total Customer Deposits	94,355		97,329		(2,974		)	(3.1	)%
Corporate treasury deposits	83		12		71			NM
Total Deposits	$	94,438	$	97,341	$	(2,903	)	(3.0	)%




	Average Balances
	Year Ended December 31
($ amounts in millions)	2018		2017		2018 vs. 2017
Consumer Bank Segment	$	57,588	$	56,822	$	766		1.3	%
Corporate Bank Segment	26,925		27,929		(1,004		)	(3.6	)%
Wealth Management Segment	8,430		9,501		(1,071		)	(11.3	)%
Other ⁽¹⁾	1,495		3,089		(1,594		)	(51.6	)%
Total Deposits	$	94,438	$	97,341	$	(2,903	)	(3.0	)%




	Average Balances
	Year Ended December 31
($ amounts in millions)	2018		2017		2018 vs. 2017
Wealth Management - Private Wealth	$	7,380	$	7,835	$	(455	)	(5.8	)%
Wealth Management - Institutional Services	1,050		1,666		(616		)	(37.0	)%
Total Wealth Management Segment Deposits	$	8,430	$	9,501	$	(1,071	)	(11.3	)%


(1)	Consists primarily of brokered deposits.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth 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)		12/31/2018			9/30/2018			6/30/2018			3/31/2018			12/31/2017
Tangible Common Ratios—Consolidated
Stockholders’ equity (GAAP)		$	15,090		$	14,770		$	15,777		$	15,866		$	16,192
Less:
Preferred stock (GAAP)		820			820			820			820			820
Intangible assets (GAAP)		4,944			4,951			5,060			5,071			5,081
Deferred tax liability related to intangibles (GAAP)		(94		)	(95		)	(97		)	(99		)	(99		)
Tangible common stockholders’ equity (non-GAAP)	A	$	9,420		$	9,094		$	9,994		$	10,074		$	10,390
Total assets (GAAP)		$	125,688		$	124,578		$	124,557		$	122,913		$	124,294
Less:
Intangible assets (GAAP)		4,944			4,951			5,060			5,071			5,081
Deferred tax liability related to intangibles (GAAP)		(94		)	(95		)	(97		)	(99		)	(99		)
Tangible assets (non-GAAP)	B	$	120,838		$	119,722		$	119,594		$	117,941		$	119,312
Shares outstanding—end of quarter	C	1,025			1,055			1,114			1,123			1,134
Tangible common stockholders’ equity to tangible assets (non-GAAP)	A/B	7.80		%	7.60		%	8.36		%	8.54		%	8.71		%
Tangible common book value per share (non-GAAP)	A/C	$	9.19		$	8.62		$	8.97		$	8.98		$	9.16



		As of and for Quarter Ended
($ amounts in millions)		12/31/2018			9/30/2018			6/30/2018			3/31/2018			12/31/2017
Basel III Common Equity Tier 1 Ratio—Fully Phased-In Pro-Forma ⁽¹⁾
Stockholder's equity (GAAP)		$	15,090		$	14,770		$	15,777		$	15,866		$	16,192
Non-qualifying goodwill and intangibles		(4,838		)	(4,845		)	(4,953		)	(4,961		)	(4,972		)
Adjustments, including all components of accumulated other comprehensive income, disallowed deferred tax assets, threshold deductions and other adjustments		946			1,376			1,230			1,121			712
Preferred stock (GAAP)		(820		)	(820		)	(820		)	(820		)	(820		)
Basel III common equity Tier 1—Fully Phased-In Pro-Forma (non-GAAP)	D	$	10,378		$	10,481		$	11,234		$	11,206		$	11,112
Basel III risk-weighted assets—Fully Phased-In Pro-Forma (non-GAAP) ⁽²⁾	E	$	105,741		$	103,721		$	102,819		$	101,482		$	101,498
Basel III common equity Tier 1 ratio—Fully Phased-In Pro-Forma (non-GAAP)	D/E	9.8		%	10.1		%	10.9		%	11.0		%	11.0		%


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


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

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 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 current 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, and because they also relate to the future they are likewise subject to inherent 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 U.S. 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 Fourth 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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