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

Attached files

file	filename
EX-99.3 - EX-99.3 - REGIONS FINANCIAL CORP	d381058dex993.htm
EX-99.1 - EX-99.1 - REGIONS FINANCIAL CORP	d381058dex991.htm
8-K - 8-K - REGIONS FINANCIAL CORP	d381058d8k.htm

Exhibit 99.2

LOGO

Regions Financial Corporation and Subsidiaries

Financial Supplement

Second Quarter 2012

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2012 Earnings Release

Table of Contents


	Page

Consolidated Balance Sheets		1

Consolidated Statements of Operations		2

Selected Ratios and Other Information from Continuing Operations		3

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

Loans		6

Deposits		7

Pre-Tax Pre-Provision Income (“PPI”) and Adjusted PPI from Continuing Operations		8

Non-Interest Income and Expense from Continuing Operations		9

Credit Quality
Allowance for Credit Losses, Net Charge-Offs and Related Ratios		10
Troubled Debt Restructurings and Credit Costs		11
NPL, Foreclosed Property and Held for Sale Migration		12
Early and late stage delinquencies		13
Non-Accrual Loans (excludes loans held for sale) and IRE portfolio analysis		14
Residential lending net charge-off analysis		15

Reconciliation to GAAP Financial Measures
Net Income and EPS		16
Fee Income Ratios, Efficiency Ratios and Adjusted Non-Interest Income / Expense		17
Return Ratios, Tangible Common Ratios and Capital		18
Tier 1 Capital Adjusted to exclude Series A Preferred Stock		19

Statement of Discontinued Operations		20

Forward-Looking Statements		21

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2012 Earnings Release

Page 1

Consolidated Balance Sheets (unaudited)


	Quarter Ended
($ amounts in millions)	6/30/12			3/31/12			12/31/11			9/30/11			6/30/11
Assets:
Cash and due from banks	$	2,000		$	2,036		$	2,132		$	2,000		$	2,271
Interest-bearing deposits in other banks		1,766			5,270			4,913			6,009			5,452
Federal funds sold and securities purchased under agreements to resell		—			167			200			254			251
Trading account assets		110			1,127			1,266			1,462			1,223
Securities available for sale		27,232			27,177			24,471			24,635			23,828
Securities held to maturity		13			15			16			18			21
Loans held for sale		1,187			1,054			1,193			1,012			1,141
Loans, net of unearned income		76,202			76,720			77,594			79,447			81,176
Allowance for loan losses		(2,291	)		(2,530	)		(2,745	)		(2,964	)		(3,120	)

Net loans		73,911			74,190			74,849			76,483			78,056
Other interest-earning assets		901			1,054			1,085			1,081			1,207
Premises and equipment, net		2,300			2,350			2,375			2,399			2,481
Interest receivable		341			397			361			422			354
Goodwill		4,816			4,816			4,816			5,561			5,561
Mortgage servicing rights (MSRs)		179			199			182			182			268
Other identifiable intangible assets		391			420			449			478			420
Other assets		7,198			8,010			8,742			7,766			8,374

Total assets	$	122,345		$	128,282		$	127,050		$	129,762		$	130,908


Liabilities and stockholders’ equity:
Deposits:
Non-interest-bearing	$	29,694		$	29,707		$	28,266		$	28,296		$	28,148
Interest-bearing		65,404			67,431			67,361			67,642			68,183

Total deposits		95,098			97,138			95,627			95,938			96,331
Borrowed funds:
Short-term borrowings:
Federal funds purchased and securities sold under agreements to repurchase		2,746			2,287			2,333			1,969			1,740
Other short-term borrowings		560			621			734			974			982

Total short-term borrowings		3,306			2,908			3,067			2,943			2,722
Long-term borrowings		6,230			7,196			8,110			10,140			11,646

Total borrowed funds		9,536			10,104			11,177			13,083			14,368
Other liabilities		3,256			3,506			3,747			3,478			3,321

Total liabilities		107,890			110,748			110,551			112,499			114,020

Stockholders’ equity:
Preferred stock, Series A		—			3,429			3,419			3,409			3,399
Common stock		15			15			13			13			13
Additional paid-in capital		19,898			19,939			19,060			19,059			19,052
Retained earnings (deficit)		(4,136	)		(4,395	)		(4,527	)		(3,913	)		(4,000	)
Treasury stock, at cost		(1,376	)		(1,394	)		(1,397	)		(1,397	)		(1,399	)
Accumulated other comprehensive income (loss), net		54			(60	)		(69	)		92			(177	)

Total stockholders’ equity		14,455			17,534			16,499			17,263			16,888

Total liabilities and stockholders’ equity	$	122,345		$	128,282		$	127,050		$	129,762		$	130,908

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2012 Earnings Release

Page 2

Consolidated Statements of Operations (unaudited)


	Quarter Ended
($ amounts in millions, except per share data)	6/30/12		3/31/12			12/31/11			9/30/11			6/30/11
Interest income on:
Loans, including fees	$	806	$	812		$	854		$	867		$	856
Securities:
Taxable		179		174			166			177			208
Tax-exempt		—		—			—			—			—

Total securities		179		174			166			177			208
Loans held for sale		7		7			7			7			9
Trading account assets		—		1			1			—			—
Other interest-earning assets		2		3			3			4			3

Total interest income		994		997			1,031			1,055			1,076

Interest expense on:
Deposits		76		88			95			112			126
Short-term borrowings		—		—			(2	)		—			—
Long-term borrowings		80		82			89			93			94

Total interest expense		156		170			182			205			220

Net interest income		838		827			849			850			856
Provision for loan losses		26		117			295			355			398

Net interest income after provision for loan losses		812		710			554			495			458

Non-interest income:
Service charges on deposit accounts		233		254			263			310			308
Capital markets and investment income (loss)		17		28			19			(5	)		19
Mortgage income		90		77			57			68			50
Trust department income		50		49			49			49			51
Securities gains (losses), net		12		12			7			(1	)		24
Other		105		104			112			92			91

Total non-interest income		507		524			507			513			543

Non-interest expense:
Salaries and employee benefits		434		442			392			383			401
Net occupancy expense		92		94			95			95			98
Furniture and equipment expense		67		64			63			70			72
Goodwill impairment		—		—			253			—			—
Other		249		313			321			302			385

Total non-interest expense		842		913			1,124			850			956

Income (loss) before income taxes		477		321			(63	)		158			45
Income tax expense (benefit)		126		82			18			17			(34	)

Income (loss) from continuing operations		351		239			(81	)		141			79

Discontinued operations:
Income (loss) from discontinued operations before income taxes		4		(65	)		(472	)		24			4
Income tax expense (benefit)		—		(25	)		(5	)		10			(26	)

Income (loss) from discontinued operations, net of tax		4		(40	)		(467	)		14			30

Net income (loss)	$	355	$	199		$	(548	)	$	155		$	109

Income (loss) from continuing operations available to common shareholders ⁽¹⁾	$	280	$	185		$	(135	)	$	87		$	25

Net income (loss) available to common shareholders ⁽¹⁾	$	284	$	145		$	(602	)	$	101		$	55

Weighted-average shares outstanding–during quarter:
Basic		1,414		1,282			1,259			1,259			1,258
Diluted		1,418		1,283			1,259			1,261			1,260
Actual shares outstanding–end of quarter		1,413		1,412			1,259			1,259			1,259
Earnings (loss) per common share from continuing operations ⁽¹⁾:
Basic	$	0.20	$	0.14		$	(0.11	)	$	0.07		$	0.02
Diluted	$	0.20	$	0.14		$	(0.11	)	$	0.07		$	0.02

Earnings (loss) per common share ⁽¹⁾:
Basic	$	0.20	$	0.11		$	(0.48	)	$	0.08		$	0.04
Diluted	$	0.20	$	0.11		$	(0.48	)	$	0.08		$	0.04
Cash dividends declared per common share	$	0.01	$	0.01		$	0.01		$	0.01		$	0.01
Taxable-equivalent net interest income from continuing operations	$	850	$	839		$	858		$	859		$	864

(1)	Includes preferred stock dividends and accretion

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2012 Earnings Release

Page 3

Selected Ratios and Other Information from Continuing Operations


	As of and for Quarter Ended
	6/30/12			3/31/12			12/31/11			9/30/11			6/30/11
Return on average assets from continuing operations		0.92	%		0.59	%		(0.43	%)		0.26	%		0.08	%
Return on average assets from continuing operations, excluding goodwill impairment and regulatory charge related tax benefit (non-GAAP) * ⁽¹⁾		0.92	%		0.59	%		0.37	%		0.26	%		0.03	%
Return on average tangible common stockholders’ equity (non-GAAP) * ⁽¹⁾		12.40	%		7.08	%		(30.12	%)		5.05	%		2.88	%
Return on average tangible common stockholders’ equity, excluding goodwill impairment and regulatory charge related tax benefit (non-GAAP) * ⁽¹⁾		12.40	%		7.08	%		6.45	%		5.05	%		0.57	%
Efficiency ratio from continuing operations (non-GAAP) ⁽¹⁾		62.8	%		67.9	%		64.6	%		61.8	%		63.6	%
Common equity per share	$	10.23		$	9.99		$	10.39		$	11.00		$	10.71
Tangible common book value per share (non-GAAP) ⁽¹⁾	$	6.69		$	6.42		$	6.37		$	6.38		$	6.15
Tangible common stockholders’ equity to tangible assets (non-GAAP) ⁽¹⁾		8.04	%		7.35	%		6.57	%		6.48	%		6.18	%
Tier 1 Common risk-based ratio (non-GAAP) ⁽¹⁾⁽²⁾		10.0	%		9.6	%		8.5	%		8.2	%		7.9	%
Tier 1 Capital ⁽²⁾		11.0	%		14.3	%		13.3	%		12.8	%		12.6	%
Tier 1 Capital adjusted for retirement of Series A preferred stock ⁽¹⁾⁽²⁾		11.0	%		10.5	%		9.4	%		9.0	%		8.8	%
Total Risk-Based Capital ⁽²⁾		14.5	%		18.0	%		16.9	%		16.5	%		16.2	%
Leverage ⁽²⁾		8.7	%		11.0	%		9.9	%		9.7	%		9.5	%
Allowance for loan losses as a percentage of loans, net of unearned income		3.01	%		3.30	%		3.54	%		3.73	%		3.84	%
Allowance for loan losses to non-performing loans, excluding loans held for sale		1.20	x		1.18	x		1.16	x		1.09	x		1.12	x
Net interest margin (FTE) from continuing operations		3.16	%		3.09	%		3.08	%		3.04	%		3.07	%
Loans, net of unearned income, to total deposits		80.1	%		79.0	%		81.1	%		82.8	%		84.3	%
Net charge-offs as a percentage of average loans *		1.39	%		1.73	%		2.16	%		2.52	%		2.71	%
Non-accrual loans, excluding loans held for sale as a percentage of loans		2.51	%		2.80	%		3.06	%		3.41	%		3.43	%
Non-performing assets (excluding loans 90 days past due) as a percentage of loans, foreclosed properties and non-performing loans held for sale		3.04	%		3.42	%		3.83	%		4.23	%		4.39	%
Non-performing assets (including loans 90 days past due) as a percentage of loans, foreclosed properties and non-performing loans held for sale		3.57	%		3.97	%		4.40	%		4.75	%		4.98	%
Associate headcount ³		23,422			23,619			23,707			23,713			23,966
Total branch outlets		1,719			1,722			1,726			1,767			1,769
ATMs		2,063			2,070			2,083			2,130			2,132

*	Annualized

(1)	See reconciliation of GAAP to non-GAAP Financial Measures on pages 16-19

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

(3)	Excludes Morgan Keegan Associates

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2012 Earnings Release

Page 4

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


	Quarter Ended
	6/30/12								3/31/12
($ amounts in millions; yields on taxable-equivalent basis)	Average Balance			Income/ Expense		Yield/ Rate			Average Balance			Income/ Expense		Yield/ Rate
Assets
Interest-earning assets:
Federal funds sold and securities purchased under agreements to resell	$	—		$	—		—	%	$	—		$	—		—	%
Trading account assets		116			—		—			182			2		4.42
Securities:
Taxable		26,846			179		2.68			25,659			173		2.71
Tax-exempt		16			—		—			33			—		—
Loans held for sale		1,107			8		2.91			1,047			7		2.69
Loans, net of unearned income:
Commercial and industrial		25,650			266		4.17			24,748			258		4.19
Commercial real estate mortgage - owner-occupied		10,805			128		4.76			11,077			130		4.72
Commercial real estate construction - owner-occupied		271			4		5.94			311			4		5.17
Commercial investor real estate mortgage		8,925			81		3.65			9,492			85		3.60
Commercial investor real estate construction		923			8		3.49			994			8		3.24
Residential first mortgage		13,484			144		4.30			13,651			149		4.39
Home equity lending		12,479			111		3.58			12,845			113		3.54
Indirect		2,022			25		4.97			1,908			25		5.27
Consumer credit card		925			28		12.17			952			30		12.67
Other consumer		1,186			22		7.46			1,190			22		7.44

Total loans, net of unearned income		76,670			817		4.29			77,168			824		4.29
Other interest-earning assets		3,311			2		0.24			5,140			3		0.23

Total interest-earning assets		108,066			1,006		3.74			109,229			1,009		3.72
Allowance for loan losses		(2,506	)							(2,745	)
Cash and due from banks		1,814								1,987
Other non-earning assets		15,052								15,285

	$	122,426							$	123,756

Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Savings accounts	$	5,655			1		0.07		$	5,362			1		0.08
Interest-bearing transaction accounts		19,447			6		0.12			19,657			6		0.12
Money market accounts		24,456			11		0.18			23,488			12		0.21
Time deposits		17,175			58		1.36			19,053			69		1.46

Total interest-bearing deposits ⁽¹⁾		66,733			76		0.46			67,560			88		0.52
Federal funds purchased and securities sold under agreements to repurchase		1,856			—		—			1,572			—		—
Other short-term borrowings		468			—		—			63			—		—
Long-term borrowings		6,862			80		4.69			7,585			82		4.35

Total interest-bearing liabilities ⁽²⁾		75,919			156		0.83			76,780			170		0.89

Net interest spread							2.91								2.83

Non-interest-bearing deposits ⁽¹⁾⁽²⁾		29,130								28,501
Other liabilities		2,996								2,745
Stockholders’ equity		14,381								15,730

	$	122,426							$	123,756

Net interest income/margin FTE basis				$	850		3.16	%				$	839		3.09	%

(1)

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 0.32% and 0.37% for the quarters ended June 30, 2012 and March 31, 2012, respectively.

(2)

Total funding costs from continuing operations may be calculated by dividing total interest expense on interest-bearing liabilities by the sum of interest-bearing liabilities and non-interest bearing deposits. The rates for total funding costs from continuing operations equal 0.60% and 0.65% for the quarters ended June 30, 2012 and March 31 2012, respectively.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2012 Earnings Release

Page 5

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


	Quarter Ended
	12/31/11									9/30/11								6/30/11
($ amounts in millions; yields on taxable-equivalent basis)	Average Balance			Income/ Expense			Yield/ Rate			Average Balance			Income/ Expense		Yield/ Rate			Average Balance			Income/ Expense		Yield/ Rate
Assets
Interest-earning assets:
Federal funds sold and securities purchased under agreements to resell	$	—		$	—			—	%	$	—		$	—		—	%	$	—		$	—		—	%
Trading account assets		175			1			2.27			182			1		2.18			164			1		2.45
Securities:
Taxable		24,731			166			2.66			24,098			177		2.91			24,765			208		3.37
Tax-exempt		32			—			—			31			—		—			33			—		—
Loans held for sale		1,057			7			2.63			847			7		3.28			1,141			9		3.16
Loans, net of unearned income
Commercial and industrial		24,310			263			4.29			23,953			249		4.12			23,506			249		4.25
Commercial real estate mortgage - owner-occupied		11,404			140			4.87			11,661			163		5.55			11,826			161		5.46
Commercial real estate construction - owner-occupied		346			5			5.73			376			4		4.22			404			4		3.97
Commercial investor real estate mortgage		10,357			91			3.49			11,395			100		3.48			12,607			108		3.44
Commercial investor real estate construction		1,152			9			3.10			1,411			9		2.53			1,805			12		2.67
Residential first mortgage		13,925			153			4.36			14,207			160		4.47			14,329			164		4.59
Home equity lending		13,172			118			3.55			13,454			119		3.51			13,745			119		3.47
Indirect		1,825			25			5.43			1,755			25		5.65			1,681			24		5.73
Consumer credit card		1,002			37			14.65			1,095			24		8.70			12			—		—
Other consumer		1,209			22			7.22			1,206			22		7.24			1,191			22		7.41

Total loans, net of unearned income		78,702			863			4.35			80,513			875		4.31			81,106			863		4.27
Other interest-earning assets		5,690			4			0.28			6,544			4		0.24			5,662			3		0.21

Total interest-earning assets		110,387			1,041			3.74			112,215			1,064		3.76			112,871			1,084		3.85
Allowance for loan losses		(2,901	)								(3,150	)							(3,200	)
Cash and due from banks		1,974									1,972								2,027
Other non-earning assets		15,440									15,549								15,740

	$	124,900								$	126,586							$	127,438

Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Savings accounts	$	5,153			1			0.08		$	5,148			1		0.08		$	5,107			1		0.08
Interest-bearing transaction accounts		18,602			7			0.15			16,651			7		0.17			13,898			7		0.20
Money market accounts		23,308			13			0.22			24,571			18		0.29			26,805			20		0.30
Time deposits		19,774			74			1.48			21,369			86		1.60			22,507			98		1.75

Total interest-bearing deposits ⁽¹⁾		66,837			95			0.56			67,739			112		0.66			68,317			126		0.74
Federal funds purchased and securities sold under agreements to repurchase		1,912			(2	)		(0.41	)		1,604			—		—			1,752			1		0.23
Other short-term borrowings		77			—			—			148			—		—			122			—		—
Long-term borrowings		9,630			90			3.71			10,786			93		3.42			11,726			93		3.18

Total interest-bearing liabilities ⁽²⁾		78,456			183			0.93			80,277			205		1.01			81,917			220		1.08

Net interest spread								2.81								2.75								2.77

Non-interest-bearing deposits ^(1) (2)		28,318									28,408								27,806
Other liabilities		2,569									2,496								2,455
Stockholders’ equity		15,557									15,405								15,260

	$	124,900								$	126,586							$	127,438

Net interest income/margin FTE basis				$	858			3.08	%				$	859		3.04	%				$	864		3.07	%

(1)

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 0.40%, 0.46%, and 0.53% for the quarters ended December 31, 2011, September 30, 2011 and June 30, 2011, respectively.

(2)

Total funding costs from continuing operations may be calculated by dividing total interest expense on interest-bearing liabilities by the sum of interest-bearing liabilities and non-interest bearing deposits. The rates for total funding costs from continuing operations equal 0.68%, 0.75% and 0.80% for the quarters ended December 31, 2011, September 30, 2011 and June 30, 2011, respectively.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2012 Earnings Release

Page 6

Loans


	Quarter Ended
($ amounts in millions)	6/30/12		3/31/12		12/31/11		9/30/11		6/30/11		6/30/12 vs. 3/31/12					6/30/12 vs. 6/30/11
Commercial and industrial	$	25,990	$	25,098	$	24,522	$	24,273	$	23,644	$	892		3.6	%	$	2,346		9.9	%
Commercial real estate mortgage - owner-occupied		10,626		10,931		11,166		11,537		11,797		(305	)	-2.8	%		(1,171	)	-9.9	%
Commercial real estate construction - owner-occupied		261		281		337		356		377		(20	)	-7.1	%		(116	)	-30.8	%

Total commercial		36,877		36,310		36,025		36,166		35,818		567		1.6	%		1,059		3.0	%
Commercial investor real estate mortgage		8,598		9,156		9,702		10,696		11,836		(558	)	-6.1	%		(3,238	)	-27.4	%
Commercial investor real estate construction		849		955		1,025		1,188		1,595		(106	)	-11.1	%		(746	)	-46.8	%
Total investor real estate		9,447		10,111		10,727		11,884		13,431		(664	)	-6.6	%		(3,984	)	-29.7	%
Residential first mortgage		13,394		13,611		13,784		14,083		14,306		(217	)	-1.6	%		(912	)	-6.4	%
Home equity - first lien		5,663		5,760		5,884		5,954		6,011		(97	)	-1.7	%		(348	)	-5.8	%
Home equity - second lien		6,658		6,882		7,137		7,362		7,582		(224	)	-3.3	%		(924	)	-12.2	%
Indirect		2,060		1,938		1,848		1,774		1,704		122		6.3	%		356		20.9	%
Consumer credit card		922		939		987		1,024		1,134		(17	)	-1.8	%		(212	)	-18.7	%
Other consumer		1,181		1,169		1,202		1,200		1,190		12		1.0	%		(9	)	-0.8	%

Total Loans	$	76,202	$	76,720	$	77,594	$	79,447	$	81,176	$	(518	)	-0.7	%	$	(4,974	)	-6.1	%


	Average Balances
($ amounts in millions)	2Q12		1Q12		4Q11		3Q11		2Q11		2Q12 vs. 1Q12					2Q12 vs. 2Q11
Commercial and industrial	$	25,650	$	24,748	$	24,310	$	23,953	$	23,506	$	902		3.6	%	$	2,144		9.1	%
Commercial real estate mortgage - owner-occupied		10,805		11,077		11,404		11,661		11,826		(272	)	-2.5	%		(1,021	)	-8.6	%
Commercial real estate construction - owner-occupied		271		311		346		375		404		(40	)	-12.9	%		(133	)	-32.9	%

Total commercial		36,726		36,136		36,060		35,989		35,736		590		1.6	%		990		2.8	%
Commercial investor real estate mortgage		8,925		9,492		10,357		11,395		12,607		(567	)	-6.0	%		(3,682	)	-29.2	%
Commercial investor real estate construction		923		994		1,152		1,411		1,805		(71	)	-7.1	%		(882	)	-48.9	%

Total investor real estate		9,848		10,486		11,509		12,806		14,412		(638	)	-6.1	%		(4,564	)	-31.7	%
Residential first mortgage		13,484		13,651		13,925		14,207		14,329		(167	)	-1.2	%		(845	)	-5.9	%
Home equity - first lien		5,723		5,835		5,927		6,003		6,066		(112	)	-1.9	%		(343	)	-5.7	%
Home equity - second lien		6,756		7,010		7,245		7,451		7,678		(254	)	-3.6	%		(922	)	-12.0	%
Indirect		2,022		1,908		1,825		1,755		1,681		114		6.0	%		341		20.3	%
Consumer credit card		925		952		1,002		1,095		13		(27	)	-2.8	%		912		NM
Other consumer		1,186		1,190		1,209		1,207		1,191		(4	)	-0.3	%		(5	)	-0.4	%

Total Loans	$	76,670	$	77,168	$	78,702	$	80,513	$	81,106	$	(498	)	-0.6	%	$	(4,436	)	-5.5	%

Loan Portfolio Balances by Percentage


	Quarter Ended
	6/30/2012			3/31/12			12/31/11			9/30/11			6/30/11
Commercial and industrial		34.1	%		32.7	%		31.6	%		30.6	%		29.1	%
Commercial real estate mortgage - owner-occupied		13.9	%		14.2	%		14.4	%		14.5	%		14.5	%
Commercial real estate construction - owner-occupied		0.4	%		0.4	%		0.4	%		0.4	%		0.5	%

Total commercial		48.4	%		47.3	%		46.4	%		45.5	%		44.1	%
Commercial investor real estate mortgage		11.3	%		11.9	%		12.5	%		13.5	%		14.6	%
Commercial investor real estate construction		1.1	%		1.3	%		1.3	%		1.5	%		2.0	%

Total investor real estate		12.4	%		13.2	%		13.8	%		15.0	%		16.6	%
Residential first mortgage		17.6	%		17.8	%		17.8	%		17.7	%		17.6	%
Home equity - first lien		7.4	%		7.5	%		7.6	%		7.5	%		7.4	%
Home equity - second lien		8.7	%		9.0	%		9.2	%		9.3	%		9.3	%
Indirect		2.7	%		2.5	%		2.4	%		2.2	%		2.1	%
Consumer credit card		1.2	%		1.2	%		1.3	%		1.3	%		1.4	%
Other consumer		1.5	%		1.5	%		1.5	%		1.5	%		1.5	%

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

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2012 Earnings Release

Page 7

Deposits


	Quarter Ended
($ amounts in millions)	6/30/12		3/31/12		12/31/11		9/30/11		6/30/11		6/30/12 vs. 3/31/12					6/30/12 vs. 6/30/11
Customer Deposits
Interest-free deposits	$	29,694	$	29,707	$	28,266	$	28,296	$	28,148	$	(13	)	0.0	%	$	1,546		5.5	%
Interest-bearing checking		19,311		19,805		19,388		18,317		15,982		(494	)	-2.5	%		3,329		20.8	%
Savings		5,661		5,632		5,159		5,155		5,118		29		0.5	%		543		10.6	%
Money market - domestic		23,999		23,513		23,053		23,284		24,650		486		2.1	%		(651	)	-2.6	%
Money market - foreign		228		271		378		423		476		(43	)	-15.9	%		(248	)	-52.1	%

Low-cost deposits		78,893		78,928		76,244		75,475		74,374		(35	)	0.0	%		4,519		6.1	%
Time deposits		16,202		18,207		19,378		20,455		21,947		(2,005	)	-11.0	%		(5,745	)	-26.2	%

Total customer deposits		95,095		97,135		95,622		95,930		96,321		(2,040	)	-2.1	%		(1,226	)	-1.3	%

Corporate Treasury Deposits
Time deposits		3		3		5		8		10		—		0.0	%		(7	)	-70.0	%

Total Deposits	$	95,098	$	97,138	$	95,627	$	95,938	$	96,331	$	(2,040	)	-2.1	%	$	(1,233	)	-1.3	%


	Average Balances
($ amounts in millions)	2Q12		1Q12		4Q11		3Q11		2Q11		2Q12 vs. 4Q11					2Q12 vs. 2Q11
Customer Deposits
Interest-free deposits	$	29,130	$	28,501	$	28,318	$	28,408	$	27,806	$	629		2.2	%	$	1,324		4.8	%
Interest-bearing checking		19,447		19,657		18,602		16,651		13,898		(210	)	-1.1	%		5,549		39.9	%
Savings		5,655		5,362		5,153		5,148		5,107		293		5.5	%		548		10.7	%
Money market - domestic		24,197		23,166		22,951		24,098		26,302		1,031		4.5	%		(2,105	)	-8.0	%
Money market - foreign		259		322		357		473		503		(63	)	-19.6	%		(244	)	-48.5	%

Low-cost deposits		78,688		77,008		75,381		74,778		73,616		1,680		2.2	%		5,072		6.9	%
Time deposits		17,172		19,049		19,767		21,359		22,496		(1,877	)	-9.9	%		(5,324	)	-23.7	%

Total customer deposits		95,860		96,057		95,148		96,137		96,112		(197	)	-0.2	%		(252	)	-0.3	%

Corporate Treasury Deposits
Time deposits		3		4		7		10		10		(1	)	-25.0	%		(7	)	-70.0	%

Total Deposits	$	95,863	$	96,061	$	95,155	$	96,147	$	96,122	$	(198	)	-0.2	%	$	(259	)	-0.3	%

Deposits by Percentage


	Quarter Ended
	6/30/12			3/31/12			12/31/11			9/30/11			6/30/11
Customer Deposits
Interest-free deposits		31.2	%		30.6	%		29.5	%		29.5	%		29.2	%
Interest-bearing checking		20.3	%		20.4	%		20.3	%		19.1	%		16.6	%
Savings		6.0	%		5.8	%		5.4	%		5.4	%		5.3	%
Money market - domestic		25.2	%		24.2	%		24.1	%		24.3	%		25.6	%
Money market - foreign		0.3	%		0.3	%		0.4	%		0.4	%		0.5	%

Low-cost deposits		83.0	%		81.3	%		79.7	%		78.7	%		77.2	%
Time deposits		17.0	%		18.7	%		20.3	%		21.3	%		22.8	%

Total customer deposits		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

Corporate Treasury Deposits
Time deposits		—			—			—			—			—

Total Deposits		100.0	%		100.00	%		100.0	%		100.0	%		100.0	%

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2012 Earnings Release

Page 8

Pre-Tax Pre-Provision Income from Continuing Operations (non-GAAP)


	Quarter Ended
($ amounts in millions)	6/30/12			3/31/12			12/31/11			9/30/11		6/30/11			2Q12 vs. 1Q12					2Q12 vs. 2Q11
Income (loss) from continuing operations available to common shareholders (GAAP)	$	280		$	185		$	(135	)	$	87	$	25		$	95		51.4	%	$	255		NM
Preferred dividends (GAAP)		71			54			54			54		54			17		31.5	%		17		31.5	%
Income tax expense (benefit) (GAAP)		126			82			18			17		(34	)		44		53.7	%		160		NM

Income (loss) from continuing operations before income taxes (GAAP)		477			321			(63	)		158		45			156		48.6	%		432		NM
Provision for loan losses (GAAP)		26			117			295			355		398			(91	)	-77.8	%		(372	)	-93.5	%

Pre-tax pre-provision income from continuing operations (non-GAAP)		503			438			232			513		443			65		14.8	%		60		13.5	%
Goodwill impairment		—			—			253			—		—			—		—			—		—

Pre-tax pre-provision income from continuing operations, excluding goodwill impairment (non-GAAP)		503			438			485			513		443			65		14.8	%		60		13.5	%

Other Adjustments:
Securities (gains) losses, net		(12	)		(12	)		(7	)		1		(24	)		—		—			12		50.0	%
Leveraged lease termination (gains) losses, net ⁽¹⁾		(7	)		(7	)		(10	)		2		—			—		—			(7	)	NM
Securities impairment, net		2			—			2			—		—			2		NM			2		NM
Branch consolidation and equipment costs		—			—			(2	)		—		77			—		—			(77	)	NM

Total other adjustments		(17	)		(19	)		(17	)		3		53			2		-10.5	%		(70	)	132.1	%

Adjusted pre-tax pre-provision income from continuing operations (non-GAAP)	$	486		$	419		$	468		$	516	$	496		$	67		16.0	%	$	(10	)	-2.0	%

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

(1)	After tax amounts for leveraged lease terminations gains are $0.6 million for 6/30/2012, $3.1 million for 3/31/2012, $2.8 million for 12/31/11 and $5.4 million for 9/30/11.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2012 Earnings Release

Page 9

Non-Interest Income and Expense from Continuing Operations


Non-Interest Income from Continuing Operations	Quarter Ended
($ amounts in millions)	6/30/12			3/31/12			12/31/11			9/30/11			6/30/11			2Q12 vs. 1Q12					2Q12 vs. 2Q11
Service charges on deposit accounts	$	233		$	254		$	263		$	310		$	308		$	(21	)	-8.3	%	$	(75	)	-24.4	%
Capital markets and investment income		17			28			19			(5	)		19			(11	)	-39.3	%		(2	)	-10.5	%
Mortgage income		90			77			57			68			50			13		16.9	%		40		80.0	%
Trust department income		50			49			49			49			51			1		2.0	%		(1	)	-2.0	%
Commercial credit fee income		16			19			20			20			20			(3	)	-15.8	%		(4	)	-20.0	%
Securities gains (losses), net		12			12			7			(1	)		24			—		—			(12	)	-50.0	%
Insurance commissions and fees		26			28			26			27			25			(2	)	-7.1	%		1		4.0	%
Leveraged lease termination gains (losses), net		7			7			10			(2	)		—			—		—			7		NM
Bank owned life insurance		21			21			24			18			20			—		—			1		5.0	%
Net revenue (loss) from affordable housing		(13	)		(14	)		(20	)		(18	)		(17	)		1		-7.1	%		4		-23.5	%
Creditcard/bankcard income		23			23			24			24			10			—		—			13		NM
Other		25			20			28			23			33			5		25.0	%		(8	)	-24.2	%

Total non-interest income from continuing operations	$	507		$	524		$	507		$	513		$	543		$	(17	)	-3.2	%	$	(36	)	-6.6	%


Non-Interest Expense from Continuing Operations	Quarter Ended
($ amounts in millions)	6/30/12			3/31/12			12/31/11			9/30/11			6/30/11			2Q12 vs. 1Q12					2Q12 vs. 2Q11
Salaries and employee benefits	$	434		$	442		$	392		$	383		$	401		$	(8	)	-1.8	%	$	33		8.2	%
Net occupancy expense		92			94			95			95			98			(2	)	-2.1	%		(6	)	-6.1	%
Furniture and equipment expense		67			64			63			70			72			3		4.7	%		(5	)	-6.9	%
Professional and legal expenses		36			27			40			42			38			9		33.3	%		(2	)	-5.3	%
Amortization of core deposit intangible		21			22			23			23			24			(1	)	-4.5	%		(3	)	-12.5	%
Other real estate owned expense		10			23			38			48			37			(13	)	-56.5	%		(27	)	-73.0	%
Credit/checkcard expenses		19			20			18			18			7			(1	)	-5.0	%		12		NM
FDIC premiums		44			47			46			47			72			(3	)	-6.4	%		(28	)	-38.9	%
Marketing		20			17			18			14			17			3		17.6	%		3		17.6	%
Branch consolidation and property and equipment charges		—			—			(2	)		—			77			—		—			(77	)	NM
(Gain)/loss on loans held for sale		(26	)		(8	)		(5	)		—			4			(18	)	225.0	%		(30	)	NM
Other		125			165			145			110			109			(40	)	-24.2	%		16		14.7	%

Total non-interest expense from continuing operations before goodwill impairment (non-GAAP)		842			913			871			850			956		$	(71	)	-7.8	%	$	(114	)	-11.9	%
Goodwill impairment		—			—			253			—			—			—		—			—		—

Total non-interest expense from continuing operations	$	842		$	913		$	1,124		$	850		$	956		$	(71	)	-7.8	%	$	(114	)	-11.9	%

•

Non-interest income decreased $17 million linked quarter to $507 million. Included in the 2Q12 amount were $12 million in securities gains and $7 million in leveraged lease termination gains. The leveraged lease termination gain was offset by $6 million in increased tax expense, resulting in a nominal impact to net income.

•

Account service fees and charges were down $21 million linked quarter due to the establishment of a reserve for certain customer fee refunds resulting from a change in the company’s non-sufficient funds policy. Excluding this item, total service charges would have been consistent with the first quarter.

•

Capital markets and investment income decreased $11 million to $17 million reflecting decreased capital markets revenue and deferred compensation adjustments which are offset by decreases in salaries and benefits.

•

Mortgage income increased $13 million linked quarter, aided by the government’s HARP II program, which is increasing refinance volume. Mortgage origination volume in the second quarter totaled $2.1 billion compared to $1.6 billion in the first quarter.

•

Non-interest expenses decreased $71 million or 8 percent linked quarter. Credit related expenses experienced significant declines. Other real estate owned expense decreased $13 million linked quarter, reflecting a decline in valuation adjustments. In addition, held for sale related expenses benefited from $26 million in gains related to sales of properties. Salaries and benefits declined $8 million linked quarter primarily related to a decrease in benefit expenses somewhat offset by higher incentive compensation and annual merit increases.

•

Other expenses declined $40 million linked quarter driven primarily by minority interest expense incurred in the first quarter as well as declines in unfunded commitment costs and liability hedge costs.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2012 Earnings Release

Page 10

Credit Quality


	As of and for Quarter Ended
($ amounts in millions)	6/30/12			3/31/12			12/31/11			9/30/11			6/30/11
Allowance for credit losses (ACL)	$	2,382		$	2,621		$	2,823		$	3,050		$	3,204
Allowance allocated to purchased loans ⁽¹⁾		—			—			—			84			84
Provision for loan losses		26			117			295			355			398
Provision (credit) for unfunded credit losses		—			13			(8	)		2			6
Net loans charged-off:
Commercial and industrial		33			61			65			72			49
Commercial real estate mortgage - owner-occupied		45			46			63			62			43
Commercial real estate construction - owner-occupied		4			2			1			2			1

Total commercial		82			109			129			136			93
Commercial investor real estate mortgage		41			64			112			167			247
Commercial investor real estate construction		11			19			39			52			56

Total investor real estate		52			83			151			219			303
Residential first mortgage		42			39			47			59			55
Home equity - first lien		17			18			16			19			17
Home equity - second lien		47			57			56			60			66
Indirect		2			4			4			2			3
Consumer credit card		11			12			12			1			—
Other consumer		12			10			15			15			11

Total	$	265		$	332		$	430		$	511		$	548

Net loan charge-offs as a % of average loans, annualized:
Commercial and industrial		0.51	%		0.99	%		1.06	%		1.19	%		0.85	%
Commercial real estate mortgage - owner-occupied		1.68	%		1.67	%		2.18	%		2.13	%		1.45	%
Commercial real estate construction - owner-occupied		5.59	%		2.02	%		0.82	%		2.01	%		1.08	%

Total commercial		0.89	%		1.21	%		1.41	%		1.50	%		1.05	%
Commercial investor real estate mortgage		1.86	%		2.70	%		4.28	%		5.81	%		7.85	%
Commercial investor real estate construction		4.56	%		7.64	%		13.61	%		14.45	%		12.56	%

Total investor real estate		2.11	%		3.17	%		5.21	%		6.76	%		8.44	%
Residential first mortgage		1.27	%		1.16	%		1.34	%		1.64	%		1.54	%
Home equity - first lien		1.18	%		1.25	%		1.11	%		1.26	%		1.11	%
Home equity - second lien		2.79	%		3.28	%		3.06	%		3.21	%		3.46	%
Indirect		0.52	%		0.76	%		0.78	%		0.64	%		0.57	%
Consumer credit card		4.95	%		4.95	%		4.62	%		0.42	%		—
Other consumer		4.07	%		3.38	%		4.92	%		4.93	%		3.70	%

Total		1.39	%		1.73	%		2.16	%		2.52	%		2.71	%

Non-accrual loans, excluding loans held for sale	$	1,915		$	2,151		$	2,372		$	2,710		$	2,784
Non-performing loans held for sale		202			249			328			344			381

Non-accrual loans, including loans held for sale	$	2,117		$	2,400		$	2,700		$	3,054		$	3,165
Foreclosed properties		214			241			296			337			437

Non-performing assets (NPAs)	$	2,331		$	2,641		$	2,996		$	3,391		$	3,602

Loans past due > 90 days	$	403		$	427		$	447		$	412		$	483
Restructured loans not included in categories above ⁽²⁾	$	2,966		$	2,944		$	2,850		$	2,817		$	1,664

Credit Ratios:
ACL/Loans, net		3.13	%		3.42	%		3.64	%		3.84	%		3.95	%
ALL/Loans, net		3.01	%		3.30	%		3.54	%		3.73	%		3.84	%
Allowance for loan losses to non-performing loans, excluding loans held for sale		1.20x			1.18x			1.16x			1.09x			1.12x
Non-accrual loans, excluding loans held for sale/Loans, net		2.51	%		2.80	%		3.06	%		3.41	%		3.43	%
NPAs (ex. 90+ past due)/Loans, foreclosed properties and non-performing loans held for sale		3.04	%		3.42	%		3.83	%		4.23	%		4.39	%
NPAs (inc. 90+ past due)/Loans, foreclosed properties and non-performing loans held for sale		3.57	%		3.97	%		4.40	%		4.75	%		4.98	%

Allowance for Credit Losses

	Quarter Ended
($ amounts in millions)	6/30/12			3/31/12			12/31/11			9/30/11			6/30/11
Components:
Allowance for loan losses	$	2,291		$	2,530		$	2,745		$	2,964		$	3,120
Reserve for unfunded credit commitments		91			91			78			86			84

Allowance for credit losses	$	2,382		$	2,621		$	2,823		$	3,050		$	3,204

(1)

During the second quarter of 2011, Regions purchased a credit card portfolio for approximately $1.1 billion and recorded an allowance for loan losses and related premium of approximately $84 million. Upon finalization of the purchase price in the fourth quarter of 2011, Regions reclassified the $84 million allowance and premium. The impact of these reclassification entries was not material to the financial results in any of the quarters of 2011.

(2)	See page 11 for detail of restructured loans.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2012 Earnings Release

Page 11

Troubled Debt Restructurings


	Quarter Ended
(in millions)	6/30/12			3/31/12			12/31/11			9/30/11			6/30/11
Current:
Commercial	$	450		$	445		$	452		$	437		$	62
Investor Real Estate		991			1,016			967			923			257
Residential First Mortgage		845			815			767			774			760
Home Equity		381			383			377			373			352
Other Consumer		45			49			50			54			58

Total Current	$	2,712		$	2,708		$	2,613		$	2,561		$	1,489

Accruing 30-89 DPD:
Commercial	$	71		$	44		$	40		$	39		$	7
Investor Real Estate		34			40			28			67			16
Residential First Mortgage		113			118			133			114			116
Home Equity		32			30			30			30			31
Other Consumer		4			4			6			6			5

Total Accruing 30-89 DPD	$	254		$	236		$	237		$	256		$	175

Non-accrual or 90+DPD:
Commercial	$	315		$	344		$	353		$	373		$	164
Investor Real Estate		474			507			473			475			200
Residential First Mortgage		198			205			210			214			207
Home Equity		30			31			33			30			29
Other Consumer		1			—			—			1			—

Total Non-accrual or 90+DPD	$	1,018		$	1,087		$	1,069		$	1,093		$	600

Total TDRs	$	3,984		$	4,031		$	3,919		$	3,910		$	2,264


Credit Costs
	Quarter Ended
(in millions)	6/30/12			3/31/12			12/31/11			9/30/11			6/30/11
Net Charge-offs
Investor Real Estate (IRE)	$	22		$	47		$	54		$	60		$	99
Commercial		65			89			87			100			91
Consumer Real Estate		103			115			117			134			138
Other Consumer		26			26			31			19			13

Net Charge-offs excluding charge-offs from Sales / Transfers to HFS	$	216		$	277		$	289		$	313		$	341

Sales/Transfer to HFS		49			55			141			198			207

Total Net Charge-offs	$	265		$	332		$	430		$	511		$	548

Net Loss / (Gain) - HFS Sales	$	(33	)	$	(10	)	$	(12	)	$	(2	)	$	(1	)
HFS Write-downs ⁽¹⁾		7			2			7			2			5
OREO expense		11			23			39			48			37

Total Credit Costs before Reserve Reduction	$	250		$	347		$	464		$	559		$	589

Loan Loss Reserve Increase / (Reduction)		(239	)		(215	)		(134	)		(156	)		(150	)

Total Credit Costs after Reserve Reduction	$	11		$	132		$	330		$	403		$	439

⁽¹⁾	Reflects write-downs subsequent to initial move to held for sale and write-downs upon transfer to OREO

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2012 Earnings Release

Page 12

Gross and Net NPL Migration


	Quarter Ended
($ in millions)	6/30/12			3/31/12			12/31/11			9/30/11			6/30/11
Beginning Non-Performing Loans ⁽¹⁾	$	2,151		$	2,372		$	2,710		$	2,784		$	3,087

Additions ^(2):
Land/Single Family/Condo Investor Real Estate	$	45		$	57		$	58		$	189		$	73
Income Producing IRE		69			105			199			273			134

Total Investor Real Estate		114			162			257			462			207
Commercial		83			76			140			161			207
Business and Community		134			150			165			144			158
Consumer		(16	)		(7	)		(1	)		(12	)		(17	)

Total Gross NPL Additions	$	315		$	381		$	561		$	755		$	555

Resolutions ⁽³⁾		(265	)		(267	)		(340	)		(253	)		(216	)
Charge-Offs ⁽⁴⁾		(164	)		(212	)		(305	)		(354	)		(329	)
Home Equity Reclassification ⁽⁵⁾		—			—			—			56			—

Net Additions (Reductions)	$	(114	)	$	(98	)	$	(84	)	$	204		$	10

Non-Accrual Loan Sales		(24	)		(5	)		(8	)		(37	)		(61	)
Transfer to HFS		(77	)		(93	)		(196	)		(206	)		(176	)
Transfer to OREO		(21	)		(25	)		(50	)		(35	)		(76	)

Ending Non-Performing Loans ⁽¹⁾	$	1,915		$	2,151		$	2,372		$	2,710		$	2,784

⁽¹⁾	Does not include Loans Held for Sale

⁽²⁾

All net activity within the consumer portfolio other than sales and transfers to held for sale is included as a single net number within the additions line, due to the relative immateriality of consumer non-accrual loans.

⁽³⁾	Includes payments and returned to accruals

⁽⁴⁾	Includes charge-offs on loans on non-accrual status and charge-offs taken upon sale and transfer of non-accrual loans to held for sale

⁽⁵⁾

Beginning in 3Q11, credit policy on home equity lines and loans in second lien position changed such that they are placed on non-accrual by the end of the month in which the loan becomes 120 days past due. Prior policy required all real estate secured loans to be placed on non-accrual by the end of the month in which the loan becomes 180 days past due unless the loan is fully secured and in process of collection. The effect of the reclassification was to increase non-accrual loans and to decrease 90 days past due loans.

Foreclosed Properties


	Quarter Ended
($ in millions)	6/30/12			03/31/12			12/31/11			9/30/11			6/30/11
Beginning Foreclosed Properties	$	241		$	296		$	337		$	437		$	465

Transfers in	$	80		$	94		$	119		$	94		$	152
Sales		(87	)		(129	)		(121	)		(146	)		(138	)
Writedowns / Other Activity		(20	)		(20	)		(39	)		(48	)		(42	)

Ending Foreclosed Properties	$	214		$	241		$	296		$	337		$	437

Non-Performing Loans Held for Sale



	Quarter Ended
($ in millions)	6/30/12			3/31/12			12/31/11			9/30/11			6/30/11
Beginning Non-Performing Loans Held for Sale	$	249		$	328		$	344		$	381		$	381

Transfers in ⁽¹⁾	$	77		$	93		$	196		$	218		$	176
Sales		(103	)		(145	)		(175	)		(244	)		(151	)
Writedowns		(6	)		(2	)		(7	)		(2	)		(5	)
Loan moved from HFS / Other Activity		(4	)		(8	)		(21	)		(6	)		(7	)
Transfers to OREO		(11	)		(17	)		(9	)		(3	)		(13	)

Ending Non-Performing Loans Held for Sale	$	202		$	249		$	328		$	344		$	381

⁽¹⁾	During the Quarter-ended 9/30/11, there were approximately $12 million in transfers from Accruing Loans Held for Sale to Non-Performing Loans Held for Sale.

Composition of Non-Performing Loans Held for Sale


Quarter Transferred to HFS	Percent
2Q12		38.1	%
1Q12		11.9	%
2011		43.9	%
Pre-2011		6.1	%

Total		100.0	%

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2012 Earnings Release

Page 13

Early and Late Stage Delinquencies

30-89 Days Past Due Loans


	Quarter Ended
($ millions)	6/30/12				3/31/12				12/31/11				9/30/11				6/30/11
Commercial and Industrial	$	64	0.25	%	$	43	0.17	%	$	61	0.25	%	$	87	0.36	%	$	118	0.50	%
Commercial Real Estate Mortgage - OO		90	0.85	%		68	0.62	%		70	0.63	%		87	0.76	%		71	0.60	%
Commercial Real Estate Construction - OO		2	0.47	%		1	0.28	%		4	1.12	%		1	0.20	%		2	0.56	%

Total Commercial	$	156	0.42	%	$	112	0.31	%	$	135	0.37	%	$	175	0.48	%	$	191	0.53	%

Commercial Investor Real Estate Mortgage	$	103	1.20	%	$	122	1.33	%	$	76	0.78	%	$	126	1.18	%	$	146	1.23	%
Commercial Investor Real Estate Construction		3	0.36	%		3	0.37	%		28	2.76	%		17	1.42	%		25	1.57	%

Total Investor Real Estate	$	106	1.12	%	$	125	1.24	%	$	104	0.97	%	$	143	1.21	%	$	171	1.27	%

Residential First Mortgage	$	221	1.65	%	$	258	1.89	%	$	287	2.08	%	$	269	1.91	%	$	265	1.85	%
Home Equity		153	1.25	%		158	1.24	%		198	1.52	%		180	1.36	%		168	1.23	%
Direct		11	1.31	%		9	1.12	%		13	1.56	%		12	1.44	%		12	1.39	%
Indirect		27	1.33	%		25	1.30	%		33	1.80	%		30	1.66	%		25	1.44	%
Consumer Credit Card		12	1.28	%		12	1.28	%		14	1.39	%		14	1.40	%		11	1.00	%
Other Consumer		12	3.47	%		9	2.74	%		12	3.45	%		12	3.46	%		10	3.10	%

Total Consumer	$	436	1.46	%	$	471	1.55	%	$	557	1.81	%	$	517	1.65	%	$	491	1.54	%

Total 30-89 Days Past Due Loans	$	698	0.92	%	$	708	0.92	%	$	796	1.03	%	$	835	1.05	%	$	853	1.05	%


90+ Days Past Due Loans

	Quarter Ended
($ millions)	6/30/12				3/31/12				12/31/11				9/30/11				6/30/11
Commercial & Industrial	$	5	0.02	%	$	9	0.03	%	$	28	0.11	%	$	10	0.04	%	$	7	0.03	%
Commercial Real Estate Mortgage - OO		9	0.08	%		9	0.08	%		9	0.08	%		6	0.05	%		11	0.09	%
Commercial Real Estate Construction - OO		—	0.16	%		—	0.00	%		—	0.00	%		—	0.00	%		—	0.05	%

Total Commercial	$	14	0.04	%	$	18	0.05	%	$	37	0.10	%	$	16	0.04	%	$	18	0.05	%

Commercial Investor Real Estate Mortgage	$	16	0.19	%	$	2	0.02	%	$	13	0.13	%	$	9	0.08	%	$	5	0.04	%
Commercial Investor Real Estate Construction		—	0.00	%		—	0.00	%		—	0.01	%		—	0.01	%		—	0.02	%

Total Investor Real Estate	$	16	0.17	%	$	2	0.02	%	$	13	0.12	%	$	9	0.07	%	$	5	0.04	%

Residential First Mortgage	$	281	2.10	%	$	300	2.21	%	$	284	2.06	%	$	291	2.06	%	$	296	2.07	%
Home Equity ⁽¹⁾		74	0.60	%		87	0.69	%		93	0.71	%		81	0.61	%		158	1.16	%
Direct		1	0.14	%		1	0.13	%		2	0.23	%		2	0.19	%		1	0.16	%
Indirect		2	0.11	%		2	0.09	%		2	0.13	%		1	0.08	%		2	0.10	%
Consumer Credit Card		13	1.38	%		14	1.50	%		13	1.38	%		10	1.03	%		—	0.00	%
Other Consumer		2	0.62	%		3	0.90	%		3	0.75	%		2	0.50	%		3	0.79	%

Total Consumer	$	373	1.25	%	$	407	1.34	%	$	397	1.29	%	$	387	1.23	%	$	460	1.44	%

Total 90+ Days Past Due Loans	$	403	0.53	%	$	427	0.56	%	$	447	0.58	%	$	412	0.52	%	$	483	0.60	%

OO = Owner Occupied

(1)	Refer to page 12 for the home equity reclassification which increased non-accrual loans and decreased 90 days past due loans in 3Q11.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2012 Earnings Release

Page 14

Non-Accrual Loans (excludes loans held for sale)


	Quarter Ended
($ millions)	6/30/12				3/31/12				12/31/11				9/30/11				6/30/11
Commercial and Industrial	$	366	1.41	%	$	439	1.75	%	$	457	1.86	%	$	498	2.05	%	$	525	2.22	%
Commercial Real Estate Mortgage - OO		504	4.75	%		545	4.99	%		590	5.29	%		668	5.79	%		687	5.82	%
Commercial Real Estate Construction - OO		20	7.61	%		23	8.32	%		25	7.36	%		27	7.68	%		28	7.57	%
Total Commercial	$	890	2.41	%	$	1,007	2.77	%	$	1,072	2.98	%	$	1,193	3.30	%	$	1,240	3.46	%

Commercial Investor Real Estate Mortgage	$	599	6.97	%	$	640	6.99	%	$	734	7.56	%	$	829	7.75	%	$	820	6.93	%
Commercial Investor Real Estate Construction		74	8.73	%		127	13.22	%		180	17.61	%		296	24.93	%		371	23.25	%
Total Investor Real Estate	$	673	7.12	%	$	767	7.58	%	$	914	8.52	%	$	1,125	9.46	%	$	1,191	8.87	%

Residential First Mortgage		229	1.71	%		241	1.77	%		250	1.81	%		261	1.85	%		288	2.01	%
Home Equity ⁽¹⁾		123	1.00	%		136	1.08	%		136	1.04	%		131	0.98	%		65	0.48	%
Direct		—	0.00	%		—	0.00	%		—	0.00	%		—	0.00	%		—	0.00	%
Indirect		—	0.00	%		—	0.00	%		—	0.00	%		—	0.00	%		—	0.00	%
Consumer Credit Card		—	0.00	%		—	0.00	%		—	0.00	%		—	0.00	%		—	0.00	%
Other Consumer		—	0.00	%		—	0.00	%		—	0.00	%		—	0.00	%		—	0.00	%

Total Consumer	$	352	1.18	%	$	377	1.25	%	$	386	1.25	%	$	392	1.25	%	$	353	1.11	%

Total Non-Accrual Loans	$	1,915	2.51	%	$	2,151	2.80	%	$	2,372	3.06	%	$	2,710	3.41	%	$	2,784	3.43	%

OO = Owner Occupied

(1)	Refer to page 12 for the home equity reclassification which increased non-accrual loans and decreased 90 days past due loans in 3Q11.

Business Services Credit Quality - Criticized Loans


	Quarter Ended
($ millions)	6/30/12				3/31/12				12/31/11				9/30/11				6/30/11
Special Mention	$	1,548	3.34	%	$	1,652	3.56	%	$	1,637	3.50	%	$	1,897	3.95	%	$	2,075	4.21	%
Classified Loans	$	3,888	8.39	%	$	4,327	9.32	%	$	4,733	10.12	%	$	5,408	11.25	%	$	5,824	11.83	%

Total Business Services	$	5,436	11.73	%	$	5,979	12.88	%	$	6,370	13.62	%	$	7,305	15.20	%	$	7,899	16.04	%

Investor Real Estate Analysis

Represents percent of loan balances in the portfolio


	Core State ⁽¹⁾																								% of Total IRE
	AL			AR			FL			GA			LA			MS			TN			Other			% of Total IRE
MULTI-FAMILY		1.9	%		0.5	%		4.1	%		1.5	%		1.1	%		0.4	%		2.0	%		10.8	%		22.3	%
RETAIL		2.3	%		0.7	%		5.0	%		1.9	%		0.5	%		0.2	%		1.7	%		8.6	%		20.9	%
OFFICE		1.9	%		0.3	%		3.7	%		2.4	%		1.3	%		0.3	%		1.3	%		8.3	%		19.5	%
INDUSTRIAL		1.0	%		0.1	%		1.7	%		1.4	%		0.3	%		0.2	%		0.8	%		3.4	%		8.9	%
LAND		1.0	%		0.2	%		3.2	%		0.6	%		0.2	%		0.1	%		0.8	%		1.5	%		7.6	%
SINGLE FAMILY		1.6	%		0.5	%		1.1	%		0.8	%		0.3	%		0.1	%		1.0	%		2.0	%		7.4	%
HOTEL		0.6	%		0.5	%		2.2	%		0.1	%		0.8	%		0.3	%		0.4	%		1.6	%		6.5	%
OTHER		0.8	%		0.2	%		1.6	%		0.5	%		0.4	%		0.2	%		0.6	%		1.4	%		5.7	%
CONDO		0.1	%		0.0	%		0.8	%		0.1	%		0.0	%		0.0	%		0.0	%		0.2	%		1.2	%

Grand Total		11.2	%		3.0	%		23.4	%		9.3	%		4.9	%		1.8	%		8.6	%		37.8	%		100.0	%

(1)	Core State of Regions Bank’s Footprint in which the underlying collateral is located.


	Construction			Mortgage			Non- Performing Loans as a % of Total IRE			90+ days past due as a % of Total IRE			30-89 days past due as a % of Total IRE
MULTI-FAMILY		2.0	%		20.2	%		0.6	%		0.0	%		0.3	%
RETAIL		0.5	%		20.4	%		1.8	%		0.0	%		0.1	%
OFFICE		0.5	%		18.7	%		0.4	%		0.2	%		0.2	%
INDUSTRIAL		0.2	%		8.7	%		0.4	%		0.0	%		0.1	%
LAND		1.7	%		6.1	%		1.8	%		0.0	%		0.1	%
SINGLE FAMILY		3.8	%		3.7	%		1.0	%		0.0	%		0.1	%
HOTEL		0.1	%		6.4	%		0.3	%		0.0	%		0.1	%
OTHER		0.0	%		5.6	%		0.6	%		0.0	%		0.1	%
CONDO		0.2	%		1.2	%		0.2	%		0.0	%		0.0	%

Grand Total		9.0	%		91.0	%		7.1	%		0.2	%		1.1	%

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2012 Earnings Release

Page 15

Residential Lending Net Charge-off Analysis


		Quarter Ended
		6/30/2012															3/31/2012
		First Liens									Junior Liens			Total			First Liens									Junior Liens			Total
($ in millions)		Residential Mortgage			Home Equity			Total			Home Equity						Residential Mortgage			Home Equity			Total			Home Equity
Florida	Net Charge-off %*		2.06	%		2.16	%		2.09	%		4.72	%		2.80	%		1.89	%		2.03	%		1.93	%		5.74	%		2.98	%
	$ Losses	$	26.2		$	10.4		$	36.6		$	30.9		$	67.5		$	24.4		$	9.9		$	34.3		$	39.0		$	73.3
	Balance	$	5,089.6		$	1,906.8		$	6,996.4		$	2,596.1		$	9,592.5		$	5,200.2		$	1,934.2		$	7,134.4		$	2,681.8		$	9,816.2
	Original LTV		72.9	%		65.5	%					75.8	%					72.5	%		65.5	%					75.9	%

All Other States	Net Charge-off %*		0.79	%		0.68	%		0.76	%		1.55	%		0.96	%		0.72	%		0.86	%		0.76	%		1.70	%		1.00	%
	$ Losses	$	16.4		$	6.4		$	22.8		$	15.9		$	38.7		$	15.1		$	8.3		$	23.4		$	18.1		$	41.5
	Balance	$	8,304.2		$	3,756.6		$	12,060.8		$	4,061.6		$	16,122.4		$	8,410.8		$	3,825.6		$	12,236.4		$	4,199.8		$	16,436.2
	Original LTV		74.3	%		66.5	%					79.2	%					74.2	%		66.6	%					79.3	%

Totals	Net Charge-off %*		1.27	%		1.18	%		1.24	%		2.79	%		1.65	%		1.16	%		1.25	%		1.19	%		3.28	%		1.74	%
	$ Losses	$	42.6		$	16.8		$	59.4		$	46.9		$	106.3		$	39.5		$	18.2		$	57.7		$	57.1		$	114.8
	Balance	$	13,393.8		$	5,663.4		$	19,057.1		$	6,657.8		$	25,714.9		$	13,611.0		$	5,759.8		$	19,370.8		$	6,881.6		$	26,252.4
	Original LTV		73.8	%		66.2	%					77.9	%					73.6	%		66.3	%					77.9	%

•

21% Florida junior lien concentration driving results

•

Junior lien, Florida net charge-offs represent 49% of 2Q12 Home Equity net charge-offs but just 21% of Home Equity outstanding balances.

•

Net Home Equity charge-offs in Florida approximately 3 times non-Florida net charge-off rate

•

New Home Equity origination quality solid with an average FICO of 774 and an average LTV of 60%; Property value declines driving losses

LOGO


Notes:		* Recoveries are pro-rated based on charge-off balances.
		* Balances shown on an ending basis. Net loss rates calculated using average balances

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2012 Earnings Release

Page 16

Reconciliation to GAAP Financial Measures

Net Income (Loss) and Earnings (Loss) Per Share

The table below presents earnings (loss) per share from continuing operations, excluding preferred dividends and accretion (non-GAAP). The table also presents computations of earnings (loss) and certain other financial measures, excluding goodwill impairment and regulatory charge and related tax benefit (non-GAAP) all recorded in 2011. The preferred dividends and accretion, goodwill impairment charge, and the regulatory charge and related tax benefit are included in financial results presented in accordance with generally accepted accounting principles (GAAP). Regions believes that the exclusion of the preferred dividends and accretion, goodwill impairment and the regulatory charge and related tax benefit in expressing earnings (loss) and certain other financial measures, including “earnings (loss) per common share, excluding preferred dividends and accretion” and “earnings (loss) per common share, excluding goodwill impairment and regulatory charge and related tax benefit” provides a meaningful base for period-to-period comparisons, which management believes will assist investors in analyzing the operating results of the Company and predicting future performance. These non-GAAP financial measures are also used by management to assess the performance of Regions’ business because management does not consider the preferred dividends and accretion, goodwill impairment and regulatory charge and related tax benefit to be relevant to ongoing operating results. Management and the Board of Directors utilize these non-GAAP financial measures for the following purposes: preparation of Regions’ operating budgets; monthly financial performance reporting; monthly close-out reporting of consolidated results (management only); and presentations to investors of Company performance. Regions believes that presenting these non-GAAP financial measures will permit investors to assess the performance of the Company on the same basis as that applied by management and the Board of Directors. Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied and are not audited. Although these non-GAAP financial measures are frequently used by stakeholders in the evaluation of a company, they have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analyses of results as reported under GAAP. In particular, a measure of earnings that excludes the preferred dividends and accretion, goodwill impairment charge, and the regulatory charge and related tax benefit does not represent the amount that effectively accrues directly to stockholders (i.e. the preferred dividends and accretion, goodwill impairment charge, and the regulatory charge are reductions in earnings and stockholders’ equity).


		As of and for Quarter Ended
($ amounts in millions, except per share data)		06/30/12		03/31/12			12/31/11			9/30/11		6/30/11
Net income (loss) available to common shareholders (GAAP)		$	284	$	145		$	(602	)	$	101	$	55
Preferred dividends and accretion (GAAP)			71		54			54			54		54
Income (loss) from discontinued operations, net of tax (GAAP)			4		(40	)		(467	)		14		30

Income (loss) from continuing operations (GAAP)	A	$	351	$	239		$	(81	)	$	141	$	79

Net income (loss) available to common shareholders (GAAP)	B	$	284	$	145		$	(602	)	$	101	$	55
Goodwill impairment, net of tax			—		—			731			—		—
Regulatory charge and related tax benefit			—		—			—			—		(44	)

Income available to common shareholders, excluding goodwill impairment and regulatory charge and related tax benefit (non- GAAP)	C	$	284	$	145		$	129		$	101	$	11

Net income (loss) available to common shareholders (GAAP)	B	$	284	$	145		$	(602	)	$	101	$	55
Income (loss) from discontinued operations, net of tax (GAAP) ⁽¹⁾			4		(40	)		(467	)		14		30

Income (loss) from continuing operations available to common shareholders (GAAP)	D		280		185			(135	)		87		25

Goodwill impairment from continuing operations (non-deductible)			—		—			253			—		—
Regulatory charge and related tax benefit from continuing operations⁽²⁾			—		—			—			—		(17	)

Income from continuing operations available to common shareholders, excluding goodwill impairment and regulatory charge and related tax benefit (non-GAAP)	E	$	280	$	185		$	118		$	87	$	8

Weighted-average diluted shares	F		1,418		1,283			1,259			1,261		1,260
Earnings (loss) per common share from continuing operations, excluding preferred dividends and accretion - diluted (non-GAAP)	A/F	$	0.25	$	0.19		$	(0.06	)	$	0.11	$	0.06
Earnings (loss) per common share - diluted (GAAP)	B/F	$	0.20	$	0.11		$	(0.48	)	$	0.08	$	0.04
Earnings (loss) per common share from continuing operations - diluted (GAAP)	D/F	$	0.20	$	0.14		$	(0.11	)	$	0.07	$	0.02
Earnings per common share from continuing operations, excluding goodwill impairment and regulatory charge and related tax benefit - diluted (non-GAAP)	E/F	$	0.20	$	0.14		$	0.09		$	0.07	$	0.01

(1)	There are no preferred shares allocable to discontinued operations.

(2)

In the second quarter of 2010, Regions recorded a $200 million charge to account for a probable, reasonably estimable loss related to a pending settlement of regulatory matters. At that time, Regions assumed that the entire charge would be non-deductible for income tax purposes. $75 million of the regulatory charge relates to continuing operations. The settlement was finalized during the second quarter of 2011. At the time of settlement, Regions had better information related to tax implications. Approximately $125 million of the settlement charge will be deductible for federal income tax purposes. Accordingly, during the second quarter of 2011, Regions adjusted federal income taxes to account for the impact of the deduction. The adjustment reduced Regions’ provision for income taxes by approximately $44 million for the second quarter of 2011, of which approximately $17 million relates to continuing operations.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2012 Earnings Release

Page 17

Reconciliation to GAAP Financial Measures - Continuing Operations

Fee Income Ratios and Efficiency Ratios

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


		As of and for Quarter Ended
($ amounts in millions)		6/30/12			3/31/12			12/31/11			9/30/11			6/30/11
Continuing Operations
Non-interest expense (GAAP)		$	842		$	913		$	1,124		$	850		$	956
Adjustments:
Securities impairment, net			(2	)		—			(2	)		—			—
Branch consolidation and property and equipment charges			—			—			2			—			(77	)
Goodwill impairment			—			—			(253	)		—			—

Adjusted non-interest expense (non-GAAP)	G	$	840		$	913		$	871		$	850		$	879

Net interest income, taxable-equivalent basis (GAAP)		$	850		$	839		$	858		$	859		$	864

Non-interest income (GAAP)		$	507		$	524		$	507		$	513		$	543
Adjustments:
Securities (gains) losses, net			(12	)		(12	)		(7	)		1			(24	)
Leveraged lease termination (gains) losses, net			(7	)		(7	)		(10	)		2			—

Adjusted non-interest income (non-GAAP)	H		488			505			490			516			519

Adjusted total revenue (non-GAAP)	I	$	1,338		$	1,344		$	1,348		$	1,375		$	1,383

Fee income ratio (non-GAAP)	H/I		36.5	%		37.6	%		36.4	%		37.5	%		37.5	%
Efficiency ratio (non-GAAP)	G/I		62.8	%		67.9	%		64.6	%		61.8	%		63.6	%

Adjusted Non-Interest Income/Expense

The table below presents computations of adjusted non-interest income/expense for the second quarter of 2012 and the first quarter of 2012 (non-GAAP). Management uses these measures to monitor performance and believes these measures provide meaningful information to investors. Non-interest income/expense (GAAP) is presented excluding certain adjustments to arrive at adjusted non-interest income/expense (non-GAAP). Regions believes that the exclusion of these adjustments provides a meaningful base for period-to-period comparisons, which management believes will assist investors in analyzing the operating results of the Company and predicting future performance. These non-GAAP financial measures are also used by management to assess the performance of Regions’ business. It is possible that the activities related to the adjustments may recur; however, management does not consider the activities related to the adjustments to be indications of ongoing operations. Regions believes that presentation of these non-GAAP financial measures will permit investors to assess the performance of the Company on the same basis as that applied by management.


	Quarter Ended
	6/30/12			3/31/12			$ Change			% Change
Continuing Operations
Non-interest income (GAAP)	$	507		$	524		$	(17	)		-3.2	%
Adjustments:
Securities gains, net		(12	)		(12	)		—			—
Leveraged lease termination gains, net		(7	)		(7	)		—			—

Adjusted non-interest income (non-GAAP)	$	488		$	505		$	(17	)		-3.4	%


	Quarter Ended
	6/30/12			3/31/12			$ Change			% Change
Continuing Operations
Non-interest expense (GAAP)	$	842		$	913		$	(71	)		-7.8	%
Adjustments:
Securities impairment, net		(2	)		—			(2	)		NM

Adjusted non-interest expense (non-GAAP)	$	840		$	913		$	(73	)		-8.0	%

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2012 Earnings Release

Page 18

Reconciliation to GAAP Financial Measures

Return Ratios, Tangible Common Ratios, Capital

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

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


		As of and for Quarter Ended
($ amounts in millions, except per share data)		6/30/12			3/31/12			12/31/11			9/30/11			6/30/11
RETURN ON AVERAGE ASSETS FROM CONTINUING OPERATIONS
Average assets (GAAP) - continuing operations	J	$	122,426		$	123,756		$	124,900		$	126,586		$	127,438
Return on average assets from continuing operations (GAAP) ⁽¹⁾	D/J		0.92	%		0.59	%		(0.43	%)		0.26	%		0.08	%

Return on average assets from continuing operations, excluding goodwill impairment and regulatory charge related tax benefit (non-GAAP) ⁽¹⁾	E/J		0.92	%		0.59	%		0.37	%		0.26	%		0.03	%

RETURN ON AVERAGE TANGIBLE COMMON STOCKHOLDERS’ EQUITY
Average stockholders’ equity (GAAP)		$	14,347		$	16,715		$	17,151		$	17,069		$	16,796
Less: Average intangible assets (GAAP)			5,221			5,253			6,019			5,998			5,909
Average deferred tax liability related to intangibles (GAAP)			(198	)		(198	)		(210	)		(224	)		(230	)
Average preferred equity (GAAP)			113			3,423			3,413			3,402			3,392

Average tangible common stockholders’ equity (non-GAAP)	K	$	9,211		$	8,237		$	7,929		$	7,893		$	7,725

Return on average tangible common stockholders’ equity (GAAP) ⁽¹⁾	B/K		12.40	%		7.08	%		-30.12	%		5.05	%		2.88	%

Return on average tangible common stockholders’ equity, excluding goodwill impairment and regulatory charge related tax benefit (non-GAAP) ⁽¹⁾	C/K		12.40	%		7.08	%		6.45	%		5.05	%		0.57	%

TANGIBLE COMMON RATIOS - CONSOLIDATED
Stockholders’ equity (GAAP)		$	14,455		$	17,534		$	16,499		$	17,263		$	16,888
Less: Preferred equity (GAAP)			—			3,429			3,419			3,409			3,399
Intangible assets (GAAP)			5,207			5,236			5,265			6,039			5,981
Deferred tax liability related to intangibles (GAAP)			(201	)		(195	)		(200	)		(220	)		(227	)

Tangible common stockholders’ equity (non-GAAP)	L	$	9,449		$	9,064		$	8,015		$	8,035		$	7,735
Total assets (GAAP)		$	122,345		$	128,282		$	127,050		$	129,762		$	130,908
Less: Intangible assets (GAAP)			5,207			5,236			5,265			6,039			5,981
Deferred tax liability related to intangibles (GAAP)			(201	)		(195	)		(200	)		(220	)		(227	)

Tangible assets (non-GAAP)	M	$	117,339		$	123,241		$	121,985		$	123,943		$	125,154
Shares outstanding - end of quarter	N		1,413			1,412			1,259			1,259			1,259
Tangible common stockholders’ equity to tangible assets (non-GAAP)	L/M		8.04	%		7.35	%		6.57	%		6.48	%		6.18	%
Tangible common book value per share (non-GAAP)	L/N	$	6.69		$	6.42		$	6.37		$	6.38		$	6.15

TIER 1 COMMON RISK-BASED RATIO ⁽²⁾ - CONSOLIDATED
Stockholders’ equity (GAAP)		$	14,455		$	17,534		$	16,499		$	17,263		$	16,888
Accumulated other comprehensive (income) loss			(54	)		60			69			(92	)		177
Non-qualifying goodwill and intangibles			(4,852	)		(4,881	)		(4,900	)		(5,649	)		(5,668	)
Disallowed deferred tax assets			(336	)		(345	)		(432	)		(506	)		(498	)
Disallowed servicing assets			(33	)		(36	)		(35	)		(35	)		(35	)
Qualifying non-controlling interests			92			92			92			92			92
Qualifying trust preferred securities			846			846			846			846			846

Tier 1 capital (regulatory)		$	10,118		$	13,270		$	12,139		$	11,919		$	11,802
Qualifying non-controlling interests			(92	)		(92	)		(92	)		(92	)		(92	)
Qualifying trust preferred securities			(846	)		(846	)		(846	)		(846	)		(846	)
Preferred stock			—			(3,429	)		(3,419	)		(3,409	)		(3,399	)

Tier 1 common equity (non-GAAP)	O	$	9,180		$	8,903		$	7,782		$	7,572		$	7,465
Risk-weighted assets (regulatory)	P		91,769			92,546			91,449			92,786			93,865
Tier 1 common risk-based ratio (non-GAAP)	O/P		10.0	%		9.6	%		8.5	%		8.2	%		7.9	%

(1)	Annualized

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

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2012 Earnings Release

Page 19

Reconciliation to GAAP Financial Measures

Tier 1 Capital - With History Adjusted for Series A Retirement

Regions’ Series A preferred stock was repurchased on April 4, 2012 and the warrant to purchase 48.3 million shares of Regions common stock was retired on May 2, 2012. The following table presents the calculations of Tier 1 capital and the Tier 1 capital ratio, adjusted as if the repurchase of the shares and the retirement of the warrant occurred on the last day of the quarter for each prior period presented. The amount retired includes the Series A preferred stock plus the remaining balance of the related discount.


	Quarter Ended
($ amounts in millions)	6/30/12			3/31/12			12/31/11			9/30/11			6/30/11
TIER 1 RISK-BASED RATIO
Stockholders’ equity	$	14,455		$	17,534		$	16,499		$	17,263		$	16,888
Accumulated other comprehensive (income) loss		(54	)		60			69			(92	)		177
Non-qualifying goodwill and intangibles		(4,852	)		(4,881	)		(4,900	)		(5,649	)		(5,668	)
Disallowed deferred tax assets		(336	)		(345	)		(432	)		(506	)		(498	)
Disallowed servicing assets		(33	)		(36	)		(35	)		(35	)		(35	)
Qualifying non-controlling interests		92			92			92			92			92
Qualifying trust preferred securities		846			846			846			846			846

Tier 1 capital as reported	$	10,118		$	13,270		$	12,139		$	11,919		$	11,802

Series A Preferred Stock Retirement (Reduction to Stockholders’ equity)	$	—		$	(3,500	)	$	(3,500	)	$	(3,500	)	$	(3,500	)
Retirement of warrant to purchase 48.3 million shares of Regions common stock		—			(45	)		(45	)		(45	)		(45	)

Tier 1 capital as adjusted to exclude Series A Preferred Stock	$	10,118		$	9,725		$	8,594		$	8,374		$	8,257

Risk-weighted assets ¹		91,769			92,546			91,449			92,786			93,865
Tier 1 capital ratio ¹		11.0	%		14.3	%		13.3	%		12.8	%		12.6	%
Tier 1 capital ratio excluding Series A Preferred Stock and associated warrant ¹		11.0	%		10.5	%		9.4	%		9.0	%		8.8	%

(1)	Current quarter amount and the resulting ratios are estimated

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2012 Earnings Release

Page 20

Statements of Discontinued Operations (unaudited)

On January 11, 2012, Regions entered into a stock purchase agreement to sell Morgan Keegan and Company, Inc. and related affiliates to Raymond James Financial Inc. The sale was closed on April 2, 2012. Regions Investment Management, Inc. (formerly known as Morgan Asset Management, Inc.) and Regions Trust are not included in the sale. In connection with the closing, the Company and Raymond James agreed that in lieu of the $250 million pre-closing dividend from Morgan Keegan and Company, Inc. to the Company as contemplated in the original agreement, the parties would increase the purchase price by the same amount. The total purchase price received by the Company was approximately $1.2 billion. In connection with the agreement, the results of the entities being sold are reported as discontinued operations. The following tables represent the unaudited condensed results of operations for discontinued operations.


	Quarter Ended
($ amounts in millions)	6/30/12		3/31/12			12/31/11			9/30/11		6/30/11
Interest income	$	—	$	8		$	8		$	9	$	10
Interest expense		—		1			1			1		2

Net interest income		—		7			7			8		8
Non-interest income
Brokerage, investment banking and capital markets		—		233			251			222		229
Gain on sale		15		—			—			—		—
Other		—		7			11			10		9

Total non-interest income		15		240			262			232		238
Non-interest expense
Salaries and employee benefits		—		171			172			146		160
Net occupancy expense		—		9			9			9		9
Furniture and equipment expense		—		8			9			7		7
Goodwill impairment		—		—			492			—		—
Professional and legal fees		10		96			23			22		23
Other		1		28			36			32		43

Total non-interest expense		11		312			741			216		242
Income (loss) from discontinued operations before income tax		4		(65	)		(472	)		24		4
Income tax expense (benefit) ⁽¹⁾⁽²⁾		—		(25	)		(5	)		10		(26	)

Income (loss) from discontinued operations, net of tax	$	4	$	(40	)	$	(467	)	$	14		30

Weighted-average shares outstanding–during quarter:
Basic		1,414		1,282			1,259			1,259		1,258
Diluted		1,418		1,282			1,259			1,261		1,260

Earnings (loss) per common share from discontinued operations:
Basic	$	0.00	$	(0.03	)	$	(0.37	)	$	0.01	$	0.02
Diluted	$	0.00	$	(0.03	)	$	(0.37	)	$	0.01	$	0.02

(1)

In the second quarter of 2010, Regions recorded a $200 million charge to account for a probable, reasonably estimable loss related to a pending settlement of regulatory matters. At that time, Regions assumed that the entire charge would be non-deductible for income tax purposes. $125 million of the regulatory charge relates to discontinued operations. The regulatory settlement was finalized in the second quarter of 2011. At the time of the settlement, Regions had better information related to the tax implications. Approximately $125 million of the $200 million settlement charge will be deductible for federal income tax purposes. Accordingly, during the second quarter of 2011, Regions adjusted federal income taxes to account for the impact of the deduction. The adjustment reduced income tax expense by approximately $44 million for the second quarter of 2011, of which approximately $27 million relates to discontinued operations.

(2)	The income tax benefit for the fourth quarter of 2011 includes a $14 million benefit related to goodwill impairment.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2012 Earnings Release

Page 21

Forward-Looking Statements

This presentation may include forward-looking statements which reflect Regions’ current views with respect to future events and financial performance. The Private Securities Litigation Reform Act of 1995 (“the Act”) provides a “safe harbor” for forward-looking statements which are identified as such and are accompanied by the identification of important factors that could cause actual results to differ materially from the forward-looking statements. For these statements, we, together with our subsidiaries, claim the protection afforded by the safe harbor in the Act. Forward-looking statements are not based on historical information, but rather are related to future operations, strategies, financial results or other developments. Forward-looking statements are based on management’s expectations as well as certain assumptions and estimates made by, and information available to, management at the time the statements are made. Those statements are based on general assumptions and are subject to various risks, uncertainties and other factors that may cause actual results to differ materially from the views, beliefs and projections expressed in such statements. These risks, uncertainties and other factors include, but are not limited to, those described below:

•

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

•

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

•

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

•

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

•

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

•

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

•

Possible regulations issued by the Consumer Financial Protection Bureau or other regulators which might adversely impact Regions’ business model or products and services.

•

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

•

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

•

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

•

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

•

Regions’ ability to keep pace with technological changes.

•

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

•

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

•

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

•

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

•

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

•

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

•

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

•

Possible downgrades in ratings issued by rating agencies.

•

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

•

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

•

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

•

Regions’ ability to receive dividends from its subsidiaries.

•

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

•

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

•

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

•

The 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” in Regions’ Annual Report on Form 10-K for the year ended December 31, 2011 and the “Foward-Looking Statements” section of Regions’ Quarterly Report on Form 10-Q for the quarter ended March 31, 2012.

•

The words “believe,” “expect,” “anticipate,” “project,” and similar expressions often signify forward-looking statements. You should not place undue reliance on any forward-looking statements, which speak only as of the date made. We assume no obligation to update or revise any forward-looking statements that are made from time to time.

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

Attached files

Stock widget

Investing forum

REGIONS FINANCIAL CORP Reports