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	rf20161231exh993.htm
EX-99.1 - EXHIBIT 99.1 - REGIONS FINANCIAL CORP	rf-20161231xexhibit991.htm
8-K - 8-K - REGIONS FINANCIAL CORP	rf-20161231x8k.htm

Exhibit 99.2

Regions Financial Corporation and Subsidiaries

Financial Supplement

Fourth Quarter 2016

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2016 Earnings Release

Table of Contents




		Page

Financial Highlights		1

Selected Ratios and Other Information		2

Consolidated Statements of Income		3

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

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

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

Non-Interest Expense		11

Reconciliation to GAAP Financial Measures
Adjusted Efficiency Ratios, Adjusted Fee Income Ratios, Adjusted Non-Interest Income / Expense, Adjusted Operating Leverage Ratios, and Return Ratios		12

Statements of Discontinued Operations		14

Credit Quality
Allowance for Credit Losses, Net Charge-Offs and Related Ratios		15
Allowance for Credit Losses (Continued), Non-Accrual Loans (excludes loans held for sale), Adjusted Non-Accrual Loans and Select Ratios, Criticized and Classified Loans - Business Services, and Home Equity Lines of Credit - Future Principal Payment Resets		16
Early and Late Stage Delinquencies		18
Troubled Debt Restructurings		19

Consolidated Balance Sheets		20

Loans and Leases		21

Deposits		22

Reconciliation to GAAP Financial Measures
Tangible Common Ratios and Capital		24

Forward-Looking Statements		25

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2016 Earnings Release

Financial Highlights



	Quarter Ended
($ amounts in millions, except per share data)	12/31/2016			9/30/2016			6/30/2016			3/31/2016			12/31/2015
Earnings Summary
Interest income and other financing income - taxable equivalent	$	978		$	963		$	973		$	984		$	953
Interest expense - taxable equivalent	79			82			78			74			69
Depreciation expense on operating lease assets	25			25			26			27			28
Net interest income and other financing income - taxable equivalent	874			856			869			883			856
Less: Taxable-equivalent adjustment	21			21			21			21			20
Net interest income and other financing income	853			835			848			862			836
Provision for loan losses	48			29			72			113			69
Net interest income and other financing income after provision for loan losses	805			806			776			749			767
Non-interest income	522			599			526			506			514
Non-interest expense	899			934			915			869			873
Income from continuing operations before income taxes	428			471			387			386			408
Income tax expense	134			152			115			113			120
Income from continuing operations	294			319			272			273			288
Income (loss) from discontinued operations before income taxes	1			2			5			—			(6		)
Income tax expense (benefit)	—			1			2			—			(3		)
Income (loss) from discontinued operations, net of tax	1			1			3			—			(3		)
Net income	$	295		$	320		$	275		$	273		$	285
Income from continuing operations available to common shareholders	$	278		$	303		$	256		$	257		$	272
Net income available to common shareholders	$	279		$	304		$	259		$	257		$	269

Earnings per common share from continuing operations - basic	$	0.23		$	0.24		$	0.20		$	0.20		$	0.21
Earnings per common share from continuing operations - diluted	0.23			0.24			0.20			0.20			0.21
Earnings per common share - basic	0.23			0.24			0.20			0.20			0.21
Earnings per common share - diluted	0.23			0.24			0.20			0.20			0.21

Balance Sheet Summary
At quarter-end—Consolidated
Loans, net of unearned income	$	80,095		$	80,883		$	81,702		$	81,606		$	81,162
Allowance for loan losses	(1,091		)	(1,126		)	(1,151		)	(1,151		)	(1,106		)
Assets	125,968			125,177			126,212			125,539			126,050
Deposits	99,035			99,289			97,245			98,154			98,430
Long-term debt	7,763			6,054			8,968			7,851			8,349
Stockholders' equity	16,664			17,365			17,385			17,211			16,844
Average balances—Continuing Operations
Loans, net of unearned income	$	80,589		$	81,283		$	81,960		$	81,510		$	80,760
Assets	124,827			125,829			125,412			125,960			124,645
Deposits	98,497			97,936			97,497			97,750			97,488
Long-term debt	7,084			8,235			8,523			8,806			7,740
Stockholders' equity	16,951			17,307			17,151			17,086			16,901

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2016 Earnings Release

Selected Ratios and Other Information



	As of and for Quarter Ended
	12/31/2016			9/30/2016			6/30/2016			3/31/2016			12/31/2015
Return on average assets from continuing operations*	0.89		%	0.96		%	0.82		%	0.82		%	0.87		%
Return on average common stockholders' equity*	6.90		%	7.33		%	6.37		%	6.36		%	6.64		%
Return on average tangible common stockholders’ equity (non-GAAP)* (1)	9.96		%	10.48		%	9.15		%	9.16		%	9.61		%
Efficiency ratio from continuing operations	64.4		%	64.2		%	65.6		%	62.5		%	63.7		%
Adjusted efficiency ratio from continuing operations (non-GAAP) ⁽¹⁾⁽²⁾	63.2		%	65.3		%	64.0		%	60.6		%	63.4		%
Common book value per share	$	13.04		$	13.38		$	13.16		$	12.86		$	12.35
Tangible common book value per share (non-GAAP) ⁽¹⁾	$	8.95		$	9.38		$	9.22		$	8.97		$	8.52
Tangible common stockholders’ equity to tangible assets (non-GAAP) (1)	8.99		%	9.64		%	9.57		%	9.48		%	9.13		%
Basel III common equity ⁽³⁾	$	11,477		$	11,543		$	11,507		$	11,496		$	11,543
Basel III common equity Tier 1 ratio ⁽³⁾	11.1		%	11.2		%	11.0		%	10.9		%	10.9		%
Basel III common equity Tier 1 ratio—Fully Phased-In Pro-Forma (non-GAAP) ⁽¹⁾⁽³⁾	11.0		%	11.0		%	10.8		%	10.7		%	10.7		%
Tier 1 capital ratio ⁽³⁾	11.9		%	11.9		%	11.7		%	11.6		%	11.7		%
Total risk-based capital ratio ⁽³⁾	14.1		%	14.1		%	13.9		%	13.9		%	13.9		%
Leverage ratio ⁽³⁾	10.1		%	10.2		%	10.2		%	10.1		%	10.3		%
Effective tax rate ⁽⁴⁾	31.2		%	32.3		%	29.7		%	29.3		%	29.3		%
Allowance for loan losses as a percentage of loans, net of unearned income	1.36		%	1.39		%	1.41		%	1.41		%	1.36		%
Allowance for loan losses to non-performing loans, excluding loans held for sale	1.10x			1.04x			1.12x			1.16x			1.41x
Adjusted allowance for loan losses to non-performing loans, excluding loans held for sale (non-GAAP) ⁽¹⁾⁽⁷⁾	1.38x			1.23x			1.24x			1.32x			1.37x
Net interest margin (FTE) from continuing operations* ⁽⁵⁾	3.16		%	3.06		%	3.15		%	3.19		%	3.08		%
Loans, net of unearned income, to total deposits	80.9		%	81.5		%	84.0		%	83.1		%	82.5		%
Net charge-offs as a percentage of average loans*	0.41		%	0.26		%	0.35		%	0.34		%	0.38		%
Non-accrual loans, excluding loans held for sale, as a percentage of loans	1.24		%	1.33		%	1.25		%	1.22		%	0.96		%
Non-performing assets (excluding loans 90 days past due) as a percentage of loans, foreclosed properties and non-performing loans held for sale	1.37		%	1.47		%	1.40		%	1.36		%	1.13		%
Non-performing assets (including loans 90 days past due) as a percentage of loans, foreclosed properties and non-performing loans held for sale ⁽⁶⁾	1.58		%	1.69		%	1.61		%	1.61		%	1.39		%
Associate headcount—full-time equivalent	22,166			22,215			22,447			22,855			23,393
ATMs	1,906			1,969			1,957			1,950			1,962

Branch Statistics
Full service	1,460			1,522			1,520			1,525			1,548
Drive-through/transaction service only	67			75			79			80			79
Total branch outlets	1,527			1,597			1,599			1,605			1,627

*Annualized


(1)	See reconciliation of GAAP to non-GAAP Financial Measures on pages 12, 13, 16 and 24.

(2)

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


(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 effective tax rate for the second quarter of 2016 was favorably impacted by increased benefits from affordable housing investments and tax-exempt income. The first quarter of 2016 includes an income tax benefit related to the conclusion of a state tax examination. The fourth quarter of 2015 reflects the impact of higher than expected income tax benefits related to affordable housing investments.


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


(6)	Excludes guaranteed residential first mortgages that are 90+ days past due and still accruing. Refer to the footnotes on page 18 for amounts related to these loans.


(7)	Adjusted to exclude the allowance for loan losses and non-accrual loans related to the Direct Energy portfolio.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2016 Earnings Release

Consolidated Statements of Income (unaudited)



	Quarter Ended
($ amounts in millions, except per share data)	12/31/2016		9/30/2016		6/30/2016		3/31/2016			12/31/2015
Interest income, including other financing income on:
Loans, including fees	$	773	$	763	$	762	$	768		$	741
Securities—taxable	139		135		145		147			140
Loans held for sale	5		4		4		3			4
Trading account securities	1		—		1		3			1
Other earning assets	9		9		8		10			14
Operating lease assets	30		31		32		32			33
Total interest income, including other financing income	957		942		952		963			933
Interest expense on:
Deposits	31		31		28		27			27
Long-term borrowings	48		51		50		47			42
Total interest expense	79		82		78		74			69
Depreciation expense on operating lease assets	25		25		26		27			28
Total interest expense and depreciation expense on operating lease assets	104		107		104		101			97
Net interest income and other financing income	853		835		848		862			836
Provision for loan losses	48		29		72		113			69
Net interest income and other financing income after provision for loan losses	805		806		776		749			767
Non-interest income:
Service charges on deposit accounts	173		166		166		159			166
Card and ATM fees	103		105		99		95			96
Investment management and trust fee income	57		54		52		50			51
Mortgage income	43		46		46		38			37
Securities gains (losses), net	5		—		6		(5		)	11
Other	141		228		157		169			153
Total non-interest income	522		599		526		506			514
Non-interest expense:
Salaries and employee benefits	472		486		480		475			478
Net occupancy expense	89		87		86		86			91
Furniture and equipment expense	80		80		79		78			79
Other	258		281		270		230			225
Total non-interest expense	899		934		915		869			873
Income from continuing operations before income taxes	428		471		387		386			408
Income tax expense	134		152		115		113			120
Income from continuing operations	294		319		272		273			288
Discontinued operations:
Income (loss) from discontinued operations before income taxes	1		2		5		—			(6		)
Income tax expense (benefit)	—		1		2		—			(3		)
Income (loss) from discontinued operations, net of tax	1		1		3		—			(3		)
Net income	$	295	$	320	$	275	$	273		$	285
Net income from continuing operations available to common shareholders	$	278	$	303	$	256	$	257		$	272
Net income available to common shareholders	$	279	$	304	$	259	$	257		$	269
Weighted-average shares outstanding—during quarter:
Basic	1,224		1,246		1,265		1,286			1,301
Diluted	1,234		1,252		1,268		1,291			1,308
Actual shares outstanding—end of quarter	1,215		1,236		1,259		1,275			1,297
Earnings per common share from continuing operations:
Basic	$	0.23	$	0.24	$	0.20	$	0.20		$	0.21
Diluted	$	0.23	$	0.24	$	0.20	$	0.20		$	0.21
Earnings per common share:
Basic	$	0.23	$	0.24	$	0.20	$	0.20		$	0.21
Diluted	$	0.23	$	0.24	$	0.20	$	0.20		$	0.21
Cash dividends declared per common share	$	0.065	$	0.065	$	0.065	$	0.06		$	0.06
Taxable-equivalent net interest income and other financing income from continuing operations	$	874	$	856	$	869	$	883		$	856

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2016 Earnings Release

Consolidated Statements of Income (continued) (unaudited)



	Year Ended December 31
($ amounts in millions, except per share data)	2016		2015
Interest income, including other financing income on:
Loans, including fees	$	3,066	$	2,942
Securities—taxable	566		564
Loans held for sale	16		16
Trading account securities	5		5
Other earning assets	36		43
Operating lease assets	125		33
Total interest income, including other financing income	3,814		3,603
Interest expense on:
Deposits	117		109
Short-term borrowings	—		1
Long-term borrowings	196		158
Total interest expense	313		268
Depreciation expense on operating lease assets	103		28
Total interest expense and depreciation expense on operating lease assets	416		296
Net interest income and other financing income	3,398		3,307
Provision for loan losses	262		241
Net interest income and other financing income after provision for loan losses	3,136		3,066
Non-interest income:
Service charges on deposit accounts	664		662
Card and ATM fees	402		364
Investment management and trust fee income	213		202
Mortgage income	173		162
Securities gains, net	6		29
Other	695		652
Total non-interest income	2,153		2,071
Non-interest expense:
Salaries and employee benefits	1,913		1,883
Net occupancy expense	348		361
Furniture and equipment expense	317		303
Other	1,039		1,060
Total non-interest expense	3,617		3,607
Income from continuing operations before income taxes	1,672		1,530
Income tax expense	514		455
Income from continuing operations	1,158		1,075
Discontinued operations:
Income (loss) from discontinued operations before income taxes	8		(22		)
Income tax expense (benefit)	3		(9		)
Income (loss) from discontinued operations, net of tax	5		(13		)
Net income	$	1,163	$	1,062
Net income from continuing operations available to common shareholders	$	1,094	$	1,011
Net income available to common shareholders	$	1,099	$	998
Weighted-average shares outstanding—during year:
Basic	1,255		1,325
Diluted	1,261		1,334
Actual shares outstanding—end of period	1,215		1,297
Earnings per common share from continuing operations:
Basic	$	0.87	$	0.76
Diluted	$	0.87	$	0.76
Earnings per common share:
Basic	$	0.87	$	0.75
Diluted	$	0.87	$	0.75
Cash dividends declared per common share	$	0.255	$	0.23
Taxable-equivalent net interest income and other financing income from continuing operations	$	3,482	$	3,382

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2016 Earnings Release

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



	Quarter Ended
	12/31/2016							9/30/2016
($ 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		$	—	—	%	$	—		$	—	—	%
Trading account securities	120			1		1.72		117			—		—
Securities:
Taxable	25,086			139		2.22		24,929			135		2.15
Tax-exempt	1			—		—		1			—		—
Loans held for sale	563			5		3.22		531			4		3.38
Loans, net of unearned income:
Commercial and industrial	35,149			326		3.67		35,733			315		3.50
Commercial real estate mortgage—owner-occupied	6,963			78		4.33		7,106			81		4.49
Commercial real estate construction—owner-occupied	356			3		4.34		345			4		4.29
Commercial investor real estate mortgage	4,231			36		3.31		4,444			35		3.06
Commercial investor real estate construction	2,441			22		3.27		2,535			20		3.15
Residential first mortgage	13,485			128		3.83		13,249			128		3.85
Home equity	10,711			99		3.69		10,775			99		3.68
Indirect—vehicles	4,096			29		2.82		4,113			32		3.09
Indirect—other consumer	889			17		7.82		779			14		7.31
Consumer credit card	1,146			33		11.42		1,110			33		11.64
Other consumer	1,122			23		8.33		1,094			23		8.29
Total loans, net of unearned income	80,589			794		3.91		81,283			784		3.82
Investment in operating leases, net	721			5		3.05		761			6		2.85
Other earning assets	3,108			9		1.24		3,751			9		0.93
Total earning assets	110,189			953		3.44		111,373			938		3.34
Allowance for loan losses	(1,132		)					(1,156		)
Cash and due from banks	1,915							1,879
Other non-earning assets	13,855							13,733
	$	124,827						$	125,829
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Savings	$	7,811		3		0.13		$	7,779		3		0.14
Interest-bearing checking	19,769			5		0.11		20,267			5		0.10
Money market	27,254			8		0.12		26,974			9		0.12
Time deposits	7,505			15		0.79		7,447			14		0.79
Total interest-bearing deposits ⁽¹⁾	62,339			31		0.20		62,467			31		0.19
Other short-term borrowings	—			—		—		1			—		—
Long-term borrowings	7,084			48		2.70		8,235			51		2.43
Total interest-bearing liabilities	69,423			79		0.45		70,703			82		0.46
Non-interest-bearing deposits ⁽¹⁾	36,158			—		—		35,469			—		—
Total funding sources	105,581			79		0.30		106,172			82		0.30
Net interest spread						2.99							2.88
Other liabilities	2,295							2,350
Stockholders’ equity	16,951							17,307
	$	124,827						$	125,829
Net interest income and other financing income/margin FTE basis				$	874	3.16	%				$	856	3.06	%

_______


(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 0.13% and 0.12% for the quarters ended December 31, 2016 and September 30, 2016.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2016 Earnings Release

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



	Quarter Ended
	6/30/2016							3/31/2016							12/31/2015
($ 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	$	3		$	—	—	%	$	11		$	—	—	%	$	10		$	—	—	%
Trading account securities	114			1		0.99		132			3		10.20		138			1		3.71
Securities:
Taxable	24,682			145		2.36		24,618			147		2.39		24,325			140		2.28
Tax-exempt	1			—		—		1			—		—		1			—		—
Loans held for sale	458			4		3.45		362			3		3.30		404			4		4.18
Loans, net of unearned income:
Commercial and industrial ⁽¹⁾	36,493			316		3.47		36,103			321		3.56		35,511			290		3.24
Commercial real estate mortgage—owner-occupied	7,311			87		4.74		7,512			91		4.79		7,675			97		5.04
Commercial real estate construction—owner-occupied	348			4		4.46		359			4		4.17		415			5		4.48
Commercial investor real estate mortgage	4,399			33		3.00		4,430			34		3.07		4,332			35		3.20
Commercial investor real estate construction	2,591			20		3.12		2,591			20		3.11		2,576			19		2.97
Residential first mortgage	12,990			126		3.87		12,828			125		3.89		12,753			127		3.93
Home equity	10,869			99		3.65		10,956			99		3.63		10,948			96		3.48
Indirect—vehicles	4,149			33		3.15		4,056			32		3.18		3,969			32		3.22
Indirect—other consumer	686			12		6.86		599			10		6.41		523			8		5.71
Consumer credit card	1,066			31		11.72		1,050			31		12.01		1,031			30		11.52
Other consumer	1,058			22		8.31		1,026			22		8.47		1,027			22		8.50
Total loans, net of unearned income ⁽¹⁾	81,960			783		3.82		81,510			789		3.87		80,760			761		3.74
Investment in operating leases, net ⁽¹⁾	792			6		2.81		825			5		2.71		852			5		2.60
Other earning assets	2,970			8		1.10		4,046			10		0.98		3,709			14		1.39
Total earning assets	110,980			947		3.41		111,505			957		3.43		110,199			925		3.33
Allowance for loan losses	(1,158		)					(1,108		)					(1,120		)
Cash and due from banks	1,792							1,710							1,642
Other non-earning assets	13,798							13,853							13,924
	$	125,412						$	125,960						$	124,645
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Savings	$	7,794		2		0.14		$	7,491		3		0.16		$	7,245		2		0.12
Interest-bearing checking	20,760			5		0.09		21,244			5		0.10		21,052			5		0.08
Money market	26,585			7		0.11		26,821			7		0.10		26,627			7		0.10
Time deposits	7,338			14		0.73		7,368			12		0.67		7,818			13		0.67
Total interest-bearing deposits ⁽²⁾	62,477			28		0.18		62,924			27		0.18		62,742			27		0.17
Federal funds purchased and securities sold under agreements to repurchase	—			—		—		—			—		—		10			—		—
Other short-term borrowings	—			—		—		8			—		—		3			—		—
Long-term borrowings	8,523			50		2.33		8,806			47		2.13		7,740			42		2.19
Total interest-bearing liabilities	71,000			78		0.44		71,738			74		0.42		70,495			69		0.39
Non-interest-bearing deposits ⁽²⁾	35,020			—		—		34,826			—		—		34,746			—		—
Total funding sources	106,020			78		0.29		106,564			74		0.28		105,241			69		0.26
Net interest spread						2.97							3.01							2.94
Other liabilities	2,241							2,310							2,503
Stockholders’ equity	17,151							17,086							16,901
	$	125,412						$	125,960						$	124,645
Net interest income and other financing income/margin FTE basis ⁽¹⁾				$	869	3.15	%				$	883	3.19	%				$	856	3.08	%

_______

(1)

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


(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 0.12% for quarter ended June 30, 2016 and 0.11% for both of the quarters ended March 31, 2016 and December 31, 2015.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2016 Earnings Release

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



	Year Ended December 31
	2016							2015
($ amounts in millions; yields on taxable-equivalent basis)	Average Balance			Income/ Expense		Yield/ Rate		Average Balance			Income/ Expense		Yield/ Rate
Assets
Earning assets:
Federal funds sold and securities purchased under agreements to resell	$	4		$	—	—	%	$	9		$	—	—	%
Trading account securities	121			5		3.73		117			5		4.49
Securities:
Taxable	24,830			566		2.28		24,130			564		2.34
Tax-exempt	1			—		—		1			—		—
Loans held for sale	479			16		3.33		442			16		3.65
Loans, net of unearned income:
Commercial and industrial	35,867			1,278		3.55		34,772			1,170		3.37
Commercial real estate mortgage—owner-occupied	7,222			337		4.59		7,875			391		4.97
Commercial real estate construction—owner-occupied	352			15		4.31		428			19		4.32
Commercial investor real estate mortgage	4,376			138		3.11		4,487			142		3.16
Commercial investor real estate construction	2,539			82		3.16		2,421			72		2.99
Residential first mortgage	13,140			507		3.86		12,552			492		3.92
Home equity	10,827			396		3.66		10,901			385		3.54
Indirect—vehicles	4,103			126		3.06		3,828			125		3.28
Indirect—other consumer	738			53		7.17		383			20		5.18
Consumer credit card	1,093			128		11.69		997			115		11.51
Other consumer	1,076			90		8.35		990			86		8.63
Total loans, net of unearned income	81,333			3,150		3.86		79,634			3,017		3.79
Investment in operating leases, net	775			22		2.85		214			5		2.60
Other earning assets	3,469			36		1.05		3,324			43		1.28
Total earning assets	111,012			3,795		3.41		107,871			3,650		3.38
Allowance for loan losses	(1,139		)					(1,106		)
Cash and due from banks	1,824							1,702
Other non-earning assets	13,809							13,798
	$	125,506						$	122,265
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Savings	$	7,719		11		0.14		$	7,119		9		0.13
Interest-bearing checking	20,507			20		0.10		21,324			18		0.08
Money market	26,909			31		0.11		26,573			28		0.10
Time deposits	7,415			55		0.75		8,167			54		0.66
Total interest-bearing deposits ⁽¹⁾	62,550			117		0.19		63,183			109		0.17
Federal funds purchased and securities sold under agreements to repurchase	—			—		—		588			—		—
Other short-term borrowings	3			—		—		338			1		0.20
Long-term borrowings	8,159			196		2.38		5,046			158		3.14
Total interest-bearing liabilities	70,712			313		0.44		69,155			268		0.39
Non-interest-bearing deposits ⁽¹⁾	35,371			—		—		33,707			—		—
Total funding sources	106,083			313		0.29		102,862			268		0.26
Net interest spread						2.97							2.99
Other liabilities	2,299							2,481
Stockholders’ equity	17,124							16,922
	$	125,506						$	122,265
Net interest income and other financing income/margin FTE basis				$	3,482	3.14	%				$	3,382	3.13	%

_______

(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 0.12% and 0.11% for the years ended December 31, 2016 and 2015, respectively.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2016 Earnings Release

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

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



	Quarter Ended
($ amounts in millions)	12/31/2016			9/30/2016			6/30/2016			3/31/2016			12/31/2015			4Q16 vs. 3Q16					4Q16 vs. 4Q15
Net income from continuing operations available to common shareholders (GAAP)	$	278		$	303		$	256		$	257		$	272		$	(25	)	(8.3	)%	$	6		2.2	%
Preferred dividends (GAAP)	16			16			16			16			16			—			—	%	—			—	%
Income tax expense (GAAP)	134			152			115			113			120			(18		)	(11.8	)%	14			11.7	%
Income from continuing operations before income taxes (GAAP)	428			471			387			386			408			(43		)	(9.1	)%	20			4.9	%
Provision for loan losses (GAAP)	48			29			72			113			69			19			65.5	%	(21		)	(30.4	)%
Pre-tax pre-provision income from continuing operations (non-GAAP)	476			500			459			499			477			(24		)	(4.8	)%	(1		)	(0.2	)%
Other adjustments:
Gain on sale of affordable housing residential mortgage loans ⁽¹⁾	(5		)	—			—			—			—			(5		)	NM		(5		)	NM
Securities (gains) losses, net	(5		)	—			(6		)	5			(11		)	(5		)	NM		6			(54.5	)%
Insurance proceeds ⁽²⁾	—			(47		)	—			(3		)	(1		)	47			(100.0	)%	1			(100.0	)%
Leveraged lease termination gains, net ⁽³⁾	—			(8		)	—			—			—			8			(100.0	)%	—			NM
Salaries and employee benefits—severance charges	5			3			1			12			6			2			66.7	%	(1		)	(16.7	)%
Professional, legal and regulatory expenses ⁽⁴⁾	—			—			3			—			—			—			NM		—			NM
Branch consolidation, property and equipment charges	17			5			22			14			6			12			240.0	%	11			183.3	%
Loss on early extinguishment of debt	—			14			—			—			—			(14		)	(100.0	)%	—			NM
Total other adjustments	12			(33		)	20			28			—			45			(136.4	)%	12			NM
Adjusted pre-tax pre-provision income from continuing operations (non-GAAP)	$	488		$	467		$	479		$	527		$	477		$	21		4.5	%	$	11		2.3	%

NM - Not Meaningful

(1) Gain on sale of affordable housing residential mortgage loans in the fourth quarter of 2016 was due to the decision to sell approximately $171 million of loans to Freddie Mac. Approximately $91 million were sold with recourse, resulting in a deferred gain of $5 million, which will be evaluated when the recourse expires during the second quarter of 2017.

(2) Insurance proceeds recognized in the third quarter of 2016 are related to the previously disclosed settlement with the Department of Housing and Urban Development. Insurance

proceeds recognized in the other periods presented are related to the settlement of the previously disclosed 2010 class-action lawsuit.

(3) The impact of the leveraged lease termination gains, net in the third quarter of 2016 was fully offset by increased tax expense.

(4) Regions recorded $3 million of contingent legal and regulatory accruals during the second quarter of 2016.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2016 Earnings Release

Non-Interest Income



	Quarter Ended
($ amounts in millions)	12/31/2016		9/30/2016		6/30/2016		3/31/2016			12/31/2015		4Q16 vs. 3Q16					4Q16 vs. 4Q15
Service charges on deposit accounts	$	173	$	166	$	166	$	159		$	166	$	7		4.2	%	$	7		4.2	%
Card and ATM fees	103		105		99		95			96		(2		)	(1.9	)%	7			7.3	%
Investment management and trust fee income	57		54		52		50			51		3			5.6	%	6			11.8	%
Mortgage income	43		46		46		38			37		(3		)	(6.5	)%	6			16.2	%
Capital markets fee income and other ⁽¹⁾	31		42		38		41			28		(11		)	(26.2	)%	3			10.7	%
Insurance commissions and fees	34		38		36		40			34		(4		)	(10.5	)%	—			NM
Bank-owned life insurance	20		22		20		33			19		(2		)	(9.1	)%	1			5.3	%
Commercial credit fee income	19		17		18		19			19		2			11.8	%	—			NM
Investment services fee income	12		15		15		16			15		(3		)	(20.0	)%	(3		)	(20.0	)%
Insurance proceeds	—		47		—		3			1		(47		)	(100.0	)%	(1		)	(100.0	)%
Net revenue from affordable housing	1		2		3		11			14		(1		)	(50.0	)%	(13		)	(92.9	)%
Securities gains (losses), net	5		—		6		(5		)	11		5			NM		(6		)	(54.5	)%
Market value adjustments on employee benefit assets	3		4		8		(12		)	2		(1		)	(25.0	)%	1			50.0	%
Other	21		41		19		18			21		(20		)	(48.8	)%	—			NM
Total non-interest income from continuing operations	$	522	$	599	$	526	$	506		$	514	$	(77	)	(12.9	)%	$	8		1.6	%

Mortgage Income



	Quarter Ended
($ amounts in millions)	12/31/2016			9/30/2016			6/30/2016			3/31/2016			12/31/2015			4Q16 vs. 3Q16					4Q16 vs. 4Q15
Production and sales	$	27		$	37		$	32		$	27		$	23		$	(10	)	(27.0	)%	$	4		17.4	%
Loan servicing	23			21			22			20			20			2			9.5	%	3			15.0	%
MSR and related hedge impact:
MSRs fair value increase (decrease) due to change in valuation inputs or assumptions	64			(2		)	(22		)	(36		)	12			66			NM		52			433.3	%
MSRs hedge gain (loss)	(59		)	—			24			35			(9		)	(59		)	NM		(50		)	NM
MSRs change due to payment decay	(12		)	(10		)	(10		)	(8		)	(9		)	(2		)	20.0	%	(3		)	33.3	%
MSR and related hedge impact	(7		)	(12		)	(8		)	(9		)	(6		)	5			(41.7	)%	(1		)	16.7	%
Total mortgage income	$	43		$	46		$	46		$	38		$	37		$	(3	)	(6.5	)%	$	6		16.2	%

Mortgage production - purchased	$	911		$	1,112		$	1,235		$	756		$	852		$	(201	)	(18.1	)%	$	59		6.9	%
Mortgage production - refinanced	627			550			421			355			338			77			14.0	%	289			85.5	%
Total mortgage production ⁽²⁾	$	1,538		$	1,662		$	1,656		$	1,111		$	1,190		$	(124	)	(7.5	)%	$	348		29.2	%

Wealth Management Income



	Quarter Ended
($ amounts in millions)	12/31/2016		9/30/2016		6/30/2016		3/31/2016		12/31/2015		4Q16 vs. 3Q16					4Q16 vs. 4Q15
Investment management and trust fee income	$	57	$	54	$	52	$	50	$	51	$	3		5.6	%	$	6		11.8	%
Insurance commissions and fees	34		38		36		40		34		(4		)	(10.5	)%	—			NM
Investment services fee income	12		15		15		16		15		(3		)	(20.0	)%	(3		)	(20.0	)%
Total wealth management income ⁽³⁾	$	103	$	107	$	103	$	106	$	100	$	(4	)	(3.7	)%	$	3		3.0	%

_________

NM - Not Meaningful

(1)

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


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


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

Selected Non-Interest Income Variance Analysis


•	Capital markets fee income and other decreased in the fourth quarter of 2016 compared to the third quarter 2016 due to lower mergers and acquisition advisory services activity.


•	During the third quarter of 2016, the company received $47 million of insurance proceeds related to the previously disclosed settlement with the Department of Housing and Urban Development regarding Federal Housing Administration insured mortgage loans. Expenses related to the settlement were accrued in prior periods.


•	Other non-interest income decreased in the fourth quarter of 2016 compared to the third quarter of 2016 primarily due to a recovery of approximately $10 million related to the Gulf of Mexico oil spill and $8 million related to gains on leveraged lease terminations which occurred in the third quarter and did not repeat in the fourth quarter 2016.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2016 Earnings Release

Non-Interest Income



	Year Ended					Year-to-Date Change 12/31/16 vs. 12/31/15
($ amounts in millions)	12/31/2016		12/31/2015			Amount			Percent
Service charges on deposit accounts	$	664	$	662		$	2		0.3	%
Card and ATM fees	402		364			38			10.4	%
Investment management and trust fee income	213		202			11			5.4	%
Mortgage income	173		162			11			6.8	%
Capital markets fee income and other ⁽¹⁾	152		104			48			46.2	%
Insurance commissions and fees	148		140			8			5.7	%
Bank-owned life insurance	95		74			21			28.4	%
Commercial credit fee income	73		76			(3		)	(3.9	)%
Investment services fee income	58		55			3			5.5	%
Insurance proceeds	50		91			(41		)	(45.1	)%
Net revenue from affordable housing	17		24			(7		)	(29.2	)%
Securities gains, net	6		29			(23		)	(79.3	)%
Market value adjustments on employee benefit assets	3		(3		)	6			(200.0	)%
Other	99		91			8			8.8	%
Total non-interest income from continuing operations	$	2,153	$	2,071		$	82		4.0	%

Mortgage Income



	Year Ended						Year-to-Date Change 12/31/16 vs. 12/31/15
($ amounts in millions)	12/31/2016			12/31/2015			Amount			Percent
Production and sales	$	123		$	111		$	12		10.8	%
Loan servicing	86			81			5			6.2	%
MSR and related hedge impact:
MSRs fair value increase (decrease) due to change in valuation inputs or assumptions	4			(2		)	6			(300.0	)%
MSRs hedge gain (loss)	—			11			(11		)	(100.0	)%
MSRs change due to payment decay	(40		)	(39		)	(1		)	2.6	%
MSR and related hedge impact	(36		)	(30		)	(6		)	20.0	%
Total mortgage income	$	173		$	162		$	11		6.8	%

Mortgage production - purchased	$	4,014		$	3,749		$	265		7.1	%
Mortgage production - refinanced	1,953			1,734			219			12.6	%
Total mortgage production ⁽²⁾	$	5,967		$	5,483		$	484		8.8	%

Wealth Management Income



	Year Ended				Year-to-Date Change 12/31/16 vs. 12/31/15
($ amounts in millions)	12/31/2016		12/31/2015		Amount		Percent
Investment management and trust fee income	$	213	$	202	$	11	5.4	%
Insurance commissions and fees	148		140		8		5.7	%
Investment services fee income	58		55		3		5.5	%
Total wealth management income ⁽³⁾	$	419	$	397	$	22	5.5	%

_________

NM - Not Meaningful

(1)


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


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

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2016 Earnings Release

Non-Interest Expense



	Quarter Ended
($ amounts in millions)	12/31/2016			9/30/2016		6/30/2016		3/31/2016		12/31/2015			4Q16 vs. 3Q16					4Q16 vs. 4Q15
Salaries and employee benefits	$	472		$	486	$	480	$	475	$	478		$	(14	)	(2.9	)%	$	(6	)	(1.3	)%
Net occupancy expense	89			87		86		86		91			2			2.3	%	(2		)	(2.2	)%
Furniture and equipment expense	80			80		79		78		79			—			NM		1			1.3	%
Outside services	41			38		39		36		40			3			7.9	%	1			2.5	%
Marketing	23			25		28		25		23			(2		)	(8.0	)%	—			NM
FDIC insurance assessments	28			29		17		25		22			(1		)	(3.4	)%	6			27.3	%
Professional, legal and regulatory expenses	26			29		21		13		22			(3		)	(10.3	)%	4			18.2	%
Branch consolidation, property and equipment charges	17			5		22		14		6			12			240.0	%	11			183.3	%
Credit/checkcard expenses	14			14		14		13		13			—			NM		1			7.7	%
Provision (credit) for unfunded credit losses	(3		)	8		11		1		(12		)	(11		)	(137.5	)%	9			(75.0	)%
Visa class B shares expense	—			11		2		2		3			(11		)	(100.0	)%	(3		)	(100.0	)%
Loss on early extinguishment of debt	—			14		—		—		—			(14		)	(100.0	)%	—			NM
Other	112			108		116		101		108			4			3.7	%	4			3.7	%
Total non-interest expense from continuing operations	$	899		$	934	$	915	$	869	$	873		$	(35	)	(3.7	)%	$	26		3.0	%



	Year Ended					Year-to-Date Change 12/31/16 vs. 12/31/15
($ amounts in millions)	12/31/2016		12/31/2015			Amount			Percent
Salaries and employee benefits	$	1,913	$	1,883		$	30		1.6	%
Net occupancy expense	348		361			(13		)	(3.6	)%
Furniture and equipment expense	317		303			14			4.6	%
Outside services	154		149			5			3.4	%
Marketing	101		98			3			3.1	%
FDIC insurance assessments	99		105			(6		)	(5.7	)%
Professional, legal and regulatory expenses	89		137			(48		)	(35.0	)%
Branch consolidation, property and equipment charges	58		56			2			3.6	%
Credit/checkcard expenses	55		54			1			1.9	%
Provision (credit) for unfunded credit losses	17		(13		)	30			(230.8	)%
Visa class B shares expense	15		9			6			66.7	%
Loss on early extinguishment of debt	14		43			(29		)	(67.4	)%
Other	437		422			15			3.6	%
Total non-interest expense from continuing operations	$	3,617	$	3,607		$	10		0.3	%

_________

NM - Not Meaningful

Selected Non-Interest Expense Variance Analysis


•	Salaries and employee benefits decreased in the fourth quarter of 2016 compared to the third quarter of 2016, primarily due to a decline in base salaries associated with one less weekday as well as a decrease in production-based incentives related to lower capital markets and commercial banking production.


•	During the fourth quarter of 2016 the company incurred $17 million of expenses related to the previously announced consolidation of 70 branches.


•	Visa class B share expense is associated with shares sold in a prior year. The Visa class B shares have restrictions tied to finalization of certain covered litigation. Changes in the status of that litigation drove the increased expense for the third quarter of 2016.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2016 Earnings Release

Reconciliation to GAAP Financial Measures

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

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

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



		Quarter Ended
($ amounts in millions)		12/31/2016			9/30/2016			6/30/2016			3/31/2016			12/31/2015			4Q16 vs. 3Q16					4Q16 vs. 4Q15
ADJUSTED EFFICIENCY AND FEE INCOME RATIOS, ADJUSTED NON-INTEREST INCOME/EXPENSE- CONTINUING OPERATIONS
Non-interest expense (GAAP)	A	$	899		$	934		$	915		$	869		$	873		$	(35	)	(3.7	)%	$	26		3.0	%
Adjustments:
Professional, legal and regulatory expenses ⁽¹⁾		—			—			(3		)	—			—			—			NM		—			NM
Branch consolidation, property and equipment charges		(17		)	(5		)	(22		)	(14		)	(6		)	(12		)	240.0	%	(11		)	183.3	%
Loss on early extinguishment of debt		—			(14		)	—			—			—			14			(100.0	)%	—			NM
Salary and employee benefits—severance charges		(5		)	(3		)	(1		)	(12		)	(6		)	(2		)	66.7	%	1			(16.7	)%
Adjusted non-interest expense (non-GAAP)	B	$	877		$	912		$	889		$	843		$	861		$	(35	)	(3.8	)%	$	16		1.9	%
Net interest income and other financing income (GAAP)		$	853		$	835		$	848		$	862		$	836		$	18		2.2	%	$	17		2.0	%
Taxable-equivalent adjustment		21			21			21			21			20			—			—	%	1			5.0	%
Net interest income and other financing income, taxable-equivalent basis	C	$	874		$	856		$	869		$	883		$	856		$	18		2.1	%	$	18		2.1	%
Non-interest income (GAAP)	D	$	522		$	599		$	526		$	506		$	514		$	(77	)	(12.9	)%	$	8		1.6	%
Adjustments:
Securities (gains) losses, net		(5		)	—			(6		)	5			(11		)	(5		)	NM		6			(54.5	)%
Insurance proceeds ⁽¹⁾		—			(47		)	—			(3		)	(1		)	47			(100.0	)%	1			(100.0	)%
Leveraged lease termination gains, net ⁽¹⁾		—			(8		)	—			—			—			8			(100.0	)%	—			NM
Gain on sale of affordable housing residential mortgage loans ⁽¹⁾		(5		)	—			—			—			—			(5		)	NM		(5		)	NM
Adjusted non-interest income (non-GAAP)	E	$	512		$	544		$	520		$	508		$	502		$	(32	)	(5.9	)%	$	10		2.0	%
Total revenue, taxable-equivalent basis	C+D=F	$	1,396		$	1,455		$	1,395		$	1,389		$	1,370		$	(59	)	(4.1	)%	$	26		1.9	%
Adjusted total revenue, taxable-equivalent basis (non-GAAP)	C+E=G	$	1,386		$	1,400		$	1,389		$	1,391		$	1,358		$	(14	)	(1.0	)%	$	28		2.1	%
Efficiency ratio (GAAP)	A/F	64.4		%	64.2		%	65.6		%	62.5		%	63.7		%
Adjusted efficiency ratio (non-GAAP) ⁽²⁾	B/G	63.2		%	65.3		%	64.0		%	60.6		%	63.4		%
Fee income ratio (GAAP)	D/F	37.4		%	41.2		%	37.7		%	36.4		%	37.5		%
Adjusted fee income ratio (non-GAAP)	E/G	36.9		%	38.8		%	37.5		%	36.5		%	37.0		%

________

*Annualized

NM - Not Meaningful


(1)	See page 8 for additional information regarding these adjustments.

(2)

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

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2016 Earnings Release

Reconciliation to GAAP Financial Measures

Adjusted Efficiency Ratios, Adjusted Fee Income Ratios, Adjusted Non-Interest Income/Expense, Adjusted Operating Leverage Ratios, and Return Ratios (continued)



		Year Ended December 31
($ amounts in millions)		2016			2015			2016 vs. 2015
ADJUSTED EFFICIENCY, FEE INCOME AND OPERATING LEVERAGE RATIOS, ADJUSTED NON-INTEREST INCOME/EXPENSE- CONTINUING OPERATIONS
Non-interest expense (GAAP)	H	$	3,617		$	3,607		$	10		0.3	%
Adjustments:
Professional, legal and regulatory expenses ⁽¹⁾		(3		)	(48		)	45			(93.8	)%
Branch consolidation, property and equipment charges		(58		)	(56		)	(2		)	3.6	%
Loss on early extinguishment of debt		(14		)	(43		)	29			(67.4	)%
Salary and employee benefits—severance charges		(21		)	(6		)	(15		)	250.0	%
Adjusted non-interest expense (non-GAAP)	I	$	3,521		$	3,454		$	67		1.9	%
Net interest income and other financing income (GAAP)		$	3,398		$	3,307		$	91		2.8	%
Taxable-equivalent adjustment		84			75			9			12.0	%
Net interest income and other financing income, taxable-equivalent basis	J	$	3,482		$	3,382		$	100		3.0	%
Non-interest income (GAAP)	K	$	2,153		$	2,071		$	82		4.0	%
Adjustments:
Securities gains, net		(6		)	(29		)	23			(79.3	)%
Insurance proceeds ⁽¹⁾		(50		)	(91		)	41			(45.1	)%
Leveraged lease termination gains, net ⁽¹⁾		(8		)	(8		)	—			NM
Gain on sale of affordable housing residential mortgage loans ⁽¹⁾		(5		)	—			(5		)	NM
Adjusted non-interest income (non-GAAP)	L	$	2,084		$	1,943		$	141		7.3	%
Total revenue, taxable-equivalent basis	J+K=M	$	5,635		$	5,453		$	182		3.3	%
Adjusted total revenue, taxable-equivalent basis (non-GAAP)	J+L=N	$	5,566		$	5,325		$	241		4.5	%
Operating leverage ratio (GAAP)	M-H										3.0	%
Adjusted operating leverage ratio (non-GAAP)	N-I										2.6	%
Efficiency ratio (GAAP)	H/M	64.2		%	66.2		%
Adjusted efficiency ratio (non-GAAP)	I/N	63.3		%	64.9		%
Fee income ratio (GAAP)	K/M	38.2		%	38.0		%
Adjusted fee income ratio (non-GAAP)	L/N	37.5		%	36.5		%



		Quarter Ended
($ amounts in millions)		12/31/2016			9/30/2016			6/30/2016			3/31/2016			12/31/2015
RETURN ON AVERAGE TANGIBLE COMMON STOCKHOLDERS' EQUITY- CONSOLIDATED
Net income available to common shareholders (GAAP)	O	$	279		$	304		$	259		$	257		$	269
Average stockholders' equity (GAAP)		$	16,955		$	17,311		$	17,151		$	17,086		$	16,889
Less:
Average intangible assets (GAAP)		5,127			5,116			5,124			5,131			5,132
Average deferred tax liability related to intangibles (GAAP)		(158		)	(161		)	(163		)	(165		)	(167		)
Average preferred stock (GAAP)		820			820			820			820			822
Average tangible common stockholders' equity (non-GAAP)	P	$	11,166		$	11,536		$	11,370		$	11,300		$	11,102
Return on average tangible common stockholders' equity (non-GAAP)*	O/P	9.96		%	10.48		%	9.15		%	9.16		%	9.61		%



		Year Ended
($ amounts in millions)		12/31/2016			12/31/2015
RETURN ON AVERAGE TANGIBLE COMMON STOCKHOLDERS' EQUITY- CONSOLIDATED
Net income available to common shareholders (GAAP)	Q	$	1,099		$	998
Average stockholders' equity (GAAP)		$	17,126		$	16,916
Less:
Average intangible assets (GAAP)		5,125			5,099
Average deferred tax liability related to intangibles (GAAP)		(162		)	(170		)
Average preferred stock (GAAP)		820			848
Average tangible common stockholders' equity (non-GAAP)	R	$	11,343		$	11,139
Return on average tangible common stockholders' equity (non-GAAP)	Q/R	9.69		%	8.96		%

________

*Annualized

NM - Not Meaningful


(1)	See page 8 for additional information regarding these adjustments.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2016 Earnings Release

Statements of Discontinued Operations (unaudited)

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



	Quarter Ended
($ amounts in millions, except per share data)	12/31/2016			9/30/2016			6/30/2016			3/31/2016		12/31/2015
Non-interest expense:
Professional and legal expenses	$	(1	)	$	(2	)	$	(5	)	$	—	$	5
Other	—			—			—			—		1
Total non-interest expense	(1		)	(2		)	(5		)	—		6
Income (loss) from discontinued operations before income tax	1			2			5			—		(6		)
Income tax expense (benefit)	—			1			2			—		(3		)
Income (loss) from discontinued operations, net of tax	$	1		$	1		$	3		$	—	$	(3	)
Weighted-average shares outstanding—during quarter ⁽¹⁾:
Basic	1,224			1,246			1,265			1,286		1,301
Diluted	1,234			1,252			1,268			1,291		1,301
Earnings (loss) per common share from discontinued operations:
Basic	$	0.00		$	0.00		$	0.00		$	0.00	$	(0.00	)
Diluted	$	0.00		$	0.00		$	0.00		$	0.00	$	(0.00	)




	Year Ended December 31
($ amounts in millions, except per share data)	2016			2015
Non-interest expense:
Professional and legal expenses	$	(9	)	$	21
Other	1			1
Total non-interest expense	(8		)	22
Income (loss) from discontinued operations before income tax	8			(22		)
Income tax expense (benefit)	3			(9		)
Income (loss) from discontinued operations, net of tax	$	5		$	(13	)
Weighted-average shares outstanding—during year ⁽¹⁾:
Basic	1,255			1,325
Diluted	1,261			1,325
Earnings (loss) per common share from discontinued operations:
Basic	$	0.00		$	(0.01	)
Diluted	$	0.00		$	(0.01	)

_________


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

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2016 Earnings Release

Credit Quality



	As of and for Quarter Ended
($ amounts in millions)	12/31/2016			9/30/2016			6/30/2016			3/31/2016			12/31/2015
Components:
Allowance for loan losses (ALL)	$	1,091		$	1,126		$	1,151		$	1,151		$	1,106
Reserve for unfunded credit commitments	69			72			64			53			52
Allowance for credit losses (ACL)	$	1,160		$	1,198		$	1,215		$	1,204		$	1,158

Provision for loan losses	$	48		$	29		$	72		$	113		$	69
Provision (credit) for unfunded credit losses	(3		)	8			11			1			(12		)

Net loans charged-off:
Commercial and industrial	31			10			29			18			43
Commercial real estate mortgage—owner-occupied	1			2			5			3			1
Commercial real estate construction—owner-occupied	—			—			—			1			—
Total commercial	32			12			34			22			44
Commercial investor real estate mortgage	(2		)	(3		)	—			(3		)	(2		)
Commercial investor real estate construction	(1		)	(1		)	—			(1		)	(7		)
Total investor real estate	(3		)	(4		)	—			(4		)	(9		)
Residential first mortgage	3			4			2			3			5
Home equity—first lien	3			1			2			5			2
Home equity—second lien	3			2			5			9			5
Indirect—vehicles	11			8			6			8			9
Indirect—other consumer	4			4			3			3			—
Consumer credit card	10			10			7			9			8
Other consumer	20			17			13			13			14
Total consumer	54			46			38			50			43
Total	$	83		$	54		$	72		$	68		$	78
Net loan charge-offs as a % of average loans, annualized:
Commercial and industrial	0.34		%	0.11		%	0.32		%	0.20		%	0.48		%
Commercial real estate mortgage—owner-occupied	0.10		%	0.14		%	0.22		%	0.19		%	0.08		%
Commercial real estate construction—owner-occupied	(0.03		)%	(0.19		)%	0.19		%	0.73		%	(0.13		)%
Total commercial	0.30		%	0.11		%	0.31		%	0.20		%	0.40		%
Commercial investor real estate mortgage	(0.16		)%	(0.33		)%	(0.02		)%	(0.23		)%	(0.22		)%
Commercial investor real estate construction	(0.12		)%	(0.12		)%	(0.07		)%	(0.15		)%	(1.00		)%
Total investor real estate	(0.15		)%	(0.25		)%	(0.04		)%	(0.20		)%	(0.51		)%
Residential first mortgage	0.10		%	0.11		%	0.04		%	0.11		%	0.16		%
Home equity—first lien	0.15		%	0.04		%	0.14		%	0.29		%	0.11		%
Home equity—second lien	0.34		%	0.24		%	0.45		%	0.86		%	0.47		%
Indirect—vehicles	0.94		%	0.86		%	0.59		%	0.79		%	0.83		%
Indirect—other consumer	2.16		%	1.97		%	1.86		%	1.79		%	—		%
Consumer credit card	3.61		%	3.23		%	3.00		%	3.31		%	3.14		%
Other consumer	6.90		%	6.52		%	4.99		%	5.02		%	5.25		%
Total consumer	0.68		%	0.59		%	0.51		%	0.65		%	0.55		%
Total	0.41		%	0.26		%	0.35		%	0.34		%	0.38		%
Non-accrual loans, excluding loans held for sale	$	995		$	1,078		$	1,025		$	993		$	782
Non-performing loans held for sale	13			15			31			22			38
Non-accrual loans, including loans held for sale	1,008			1,093			1,056			1,015			820
Foreclosed properties	90			95			89			97			100
Non-performing assets (NPAs)	$	1,098		$	1,188		$	1,145		$	1,112		$	920
Loans past due > 90 days ⁽¹⁾	$	170		$	178		$	174		$	201		$	213
Accruing restructured loans not included in categories above ⁽²⁾	$	1,010		$	1,023		$	1,051		$	993		$	1,039
Credit Ratios:
ACL/Loans, net	1.45		%	1.48		%	1.49		%	1.48		%	1.43		%
ALL/Loans, net	1.36		%	1.39		%	1.41		%	1.41		%	1.36		%
Allowance for loan losses to non-performing loans, excluding loans held for sale	1.10x			1.04x			1.12x			1.16x			1.41x
Non-accrual loans, excluding loans held for sale/Loans, net	1.24		%	1.33		%	1.25		%	1.22		%	0.96		%
NPAs (ex. 90+ past due)/Loans, foreclosed properties and non-performing loans held for sale	1.37		%	1.47		%	1.40		%	1.36		%	1.13		%
NPAs (inc. 90+ past due)/Loans, foreclosed properties and non-performing loans held for sale ⁽¹⁾	1.58		%	1.69		%	1.61		%	1.61		%	1.39		%


(1)	Excludes guaranteed residential first mortgages that are 90+ days past due and still accruing. Refer to the footnotes on page 18 for amounts related to these loans.


(2)	See page 19 for detail of restructured loans.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2016 Earnings Release

Allowance for Credit Losses



	Year Ended December 31
($ amounts in millions)	2016			2015
Balance at beginning of year	$	1,158		$	1,168
Net loans charged off	(277		)	(238		)
Provision for loan losses	262			241
Provision (credit) for unfunded credit losses	17			(13		)
Balance at end of year	$	1,160		$	1,158

Non-Accrual Loans (excludes loans held for sale)



	As of
($ amounts in millions)	12/31/2016				9/30/2016				6/30/2016				3/31/2016				12/31/2015
Commercial and industrial	$	623	1.78	%	$	693	1.96	%	$	596	1.65	%	$	556	1.53	%	$	325	0.91	%
Commercial real estate mortgage—owner-occupied	210		3.06	%	221		3.15	%	240		3.34	%	254		3.44	%	268		3.55	%
Commercial real estate construction—owner-occupied	3		0.92	%	3		0.90	%	3		0.91	%	2		0.68	%	2		0.50	%
Total commercial	836		1.98	%	917		2.14	%	839		1.92	%	812		1.85	%	595		1.36	%
Commercial investor real estate mortgage	17		0.42	%	18		0.43	%	33		0.77	%	28		0.62	%	31		0.73	%
Commercial investor real estate construction	—		—	%	1		0.04	%	—		—	%	—		—	%	—		—	%
Total investor real estate	17		0.27	%	19		0.28	%	33		0.48	%	28		0.39	%	31		0.45	%
Residential first mortgage	50		0.38	%	50		0.38	%	52		0.40	%	54		0.42	%	63		0.49	%
Home equity	92		0.86	%	92		0.85	%	101		0.93	%	99		0.90	%	93		0.84	%
Total consumer	142		0.45	%	142		0.45	%	153		0.49	%	153		0.50	%	156		0.51	%
Total non-accrual loans	$	995	1.24	%	$	1,078	1.33	%	$	1,025	1.25	%	$	993	1.22	%	$	782	0.96	%

Adjusted Non-Accrual Loans and Select Ratios (non-GAAP)

The table below presents computations of the adjusted allowance for loan losses to non-performing loans, excluding loans held for sale ratio (non-GAAP), generally calculated as adjusted allowance for loan losses divided by adjusted total non-accrual loans, excluding loans held for sale. The allowance for loan losses (GAAP) is presented excluding the portion of the allowance related to direct energy loans to arrive at the adjusted allowance for loan losses (non-GAAP). Total non-accrual loans (GAAP) is presented excluding direct energy non-accrual loans to arrive at adjusted total non-accrual loans, excluding loans held for sale (non-GAAP), which is the denominator for the allowance for loan losses to non-accrual loans ratio. Management believes that excluding the portion of the allowance for loan losses related to direct energy loans and the direct energy non-accrual loans will assist investors in analyzing the Company's credit quality performance absent the volatility that has been experienced by energy businesses. Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, are not audited, and should not be considered in isolation, or as a substitute for analyses of results as reported under GAAP.



		As of
($ amounts in millions)		12/31/2016		9/30/2016		6/30/2016		3/31/2016		12/31/2015
Allowance for loan losses (GAAP)	A	$	1,091	$	1,126	$	1,151	$	1,151	$	1,106
Less: Direct energy portion		147		176		226		218		151
Adjusted allowance for loan losses (non-GAAP)	B	$	944	$	950	$	925	$	933	$	955

Total non-accrual loans (GAAP)	C	$	995	$	1,078	$	1,025	$	993	$	782
Less: Direct energy non-accrual loans		311		305		280		287		83
Adjusted total non-accrual loans (non-GAAP)	D	$	684	$	773	$	745	$	706	$	699
Allowance for loan losses to non-performing loans, excluding loans held for sale (GAAP)	A/C	1.10x		1.04x		1.12x		1.16x		1.41x
Adjusted allowance for loan losses to non-performing loans, excluding loans held for sale (non-GAAP)	B/D	1.38x		1.23x		1.24x		1.32x		1.37x

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2016 Earnings Release

Criticized and Classified Loans—Business Services ⁽¹⁾⁽²⁾



	As of
											12/31/2016					12/31/2016
($ amounts in millions)	12/31/2016		9/30/2016		6/30/2016		3/31/2016		12/31/2015		vs. 9/30/2016					vs. 12/31/2015
Accruing classified	$	1,553	$	1,477	$	1,596	$	1,800	$	1,311	$	76		5.1	%	$	242		18.5	%
Non-accruing classified	853		936		872		840		626		(83		)	(8.9	)%	227			36.3	%
Total classified	2,406		2,413		2,468		2,640		1,937		(7		)	(0.3	)%	469			24.2	%

Special mention	1,206		1,329		1,196		985		1,434		(123		)	(9.3	)%	(228		)	(15.9	)%
Total criticized	$	3,612	$	3,742	$	3,664	$	3,625	$	3,371	$	(130	)	(3.5	)%	$	241		7.1	%


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


(2)	In the second half of 2015, low oil prices began to drive the migration of a number of large energy credits into criticized (primarily in the exploration and production and oil field services sectors). Continued low oil prices prompted further migration of some of those credits into accruing classified and non-accruing classified during the first quarter of 2016.

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



	As of 12/31/2016
($ amounts in millions)	First Lien		% of Total		Second Lien		% of Total		Total
2017	$	10	0.14	%	$	20	0.27	%	$	30
2018	12		0.17	%	17		0.24	%	29
2019	77		1.07	%	69		0.96	%	146
2020	159		2.19	%	124		1.72	%	283
2021	187		2.58	%	161		2.22	%	348
2022-2026	1,679		23.22	%	1,760		24.33	%	3,439
2027-2031	1,551		21.44	%	1,406		19.44	%	2,957
Thereafter	—		—	%	1		0.01	%	1
Total	$	3,675	50.81	%	$	3,558	49.19	%	$	7,233

(3)

The balance of Regions' home equity portfolio was $10,687 million at December 31, 2016 consisting of $7,233 million of home equity lines of credit and $3,454 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 2016 Earnings Release

Early and Late Stage Delinquencies



Accruing 30-89 Days Past Due Loans	As of
($ amounts in millions)	12/31/2016				9/30/2016				6/30/2016				3/31/2016				12/31/2015
Commercial and industrial	$	70	0.20	%	$	21	0.06	%	$	38	0.11	%	$	24	0.07	%	$	17	0.05	%
Commercial real estate mortgage—owner-occupied	36		0.52	%	59		0.84	%	27		0.38	%	34		0.46	%	31		0.42	%
Commercial real estate construction—owner-occupied	1		0.39	%	2		0.61	%	1		0.09	%	1		0.18	%	1		0.29	%
Total commercial	107		0.25	%	82		0.19	%	66		0.15	%	59		0.13	%	49		0.11	%
Commercial investor real estate mortgage	14		0.33	%	6		0.14	%	27		0.63	%	21		0.47	%	27		0.63	%
Commercial investor real estate construction	—		—	%	—		—	%	—		0.01	%	3		0.12	%	2		0.06	%
Total investor real estate	14		0.21	%	6		0.09	%	27		0.39	%	24		0.34	%	29		0.41	%
Residential first mortgage—non-guaranteed ⁽¹⁾	128		0.98	%	116		0.89	%	120		0.94	%	108		0.86	%	122		0.98	%
Home equity	82		0.77	%	79		0.74	%	74		0.69	%	75		0.68	%	84		0.76	%
Indirect—vehicles	70		1.73	%	57		1.41	%	55		1.33	%	49		1.20	%	63		1.59	%
Indirect—other consumer	8		0.87	%	5		0.62	%	5		0.60	%	3		0.50	%	3		0.57	%
Consumer credit card	16		1.29	%	15		1.28	%	12		1.06	%	11		1.08	%	12		1.08	%
Other consumer	18		1.64	%	19		1.56	%	17		1.53	%	12		1.20	%	15		1.44	%
Total consumer ⁽¹⁾	322		1.04	%	291		0.94	%	283		0.92	%	258		0.85	%	299		0.99	%
Total accruing 30-89 days past due loans ⁽¹⁾	$	443	0.56	%	$	379	0.47	%	$	376	0.46	%	$	341	0.42	%	$	377	0.47	%

Accruing 90+ Days Past Due Loans	As of
($ amounts in millions)	12/31/2016				9/30/2016				6/30/2016				3/31/2016				12/31/2015
Commercial and industrial	$	6	0.02	%	$	5	0.01	%	$	6	0.02	%	$	3	0.01	%	$	9	0.02	%
Commercial real estate mortgage—owner-occupied	2		0.04	%	3		0.04	%	3		0.05	%	3		0.04	%	3		0.03	%
Total commercial	8		0.02	%	8		0.02	%	9		0.02	%	6		0.02	%	12		0.03	%
Commercial investor real estate mortgage	—		0.01	%	—		0.01	%	3		0.08	%	2		0.04	%	4		0.10	%
Commercial investor real estate construction	—		—	%	—		—	%	—		—	%	8		0.30	%	—		—	%
Total investor real estate	—		0.01	%	—		—	%	3		0.05	%	10		0.14	%	4		0.06	%
Residential first mortgage—non-guaranteed ⁽²⁾	99		0.76	%	106		0.81	%	104		0.82	%	115		0.92	%	113		0.91	%
Home equity	33		0.31	%	39		0.36	%	34		0.31	%	45		0.42	%	59		0.54	%
Indirect—vehicles	10		0.25	%	9		0.22	%	8		0.20	%	8		0.20	%	9		0.22	%
Consumer credit card	15		1.24	%	13		1.18	%	13		1.13	%	12		1.10	%	12		1.12	%
Other consumer	5		0.41	%	3		0.32	%	3		0.31	%	5		0.42	%	4		0.37	%
Total consumer ⁽²⁾	162		0.52	%	170		0.55	%	162		0.53	%	185		0.61	%	197		0.66	%
Total accruing 90+ days past due loans ⁽²⁾	$	170	0.21	%	$	178	0.22	%	$	174	0.21	%	$	201	0.25	%	$	213	0.26	%

Total delinquencies ^{(1) (2)}	$	613	0.77	%	$	557	0.69	%	$	550	0.68	%	$	542	0.67	%	$	590	0.73	%


(1)	Excludes loans that are 100% guaranteed by FHA. Total 30-89 days past due guaranteed loans excluded were $34 million at 12/31/2016, $29 million at 9/30/2016, $28 million at 6/30/2016, $19 million at 3/31/2016 and $26 million at 12/31/2015.


(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 $113 million at 12/31/2016, $99 million at 9/30/2016, $95 million at 6/30/2016, $105 million at 3/31/2016 and $107 million at 12/31/2015.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2016 Earnings Release

Troubled Debt Restructurings



	As of
($ amounts in millions)	12/31/2016		9/30/2016		6/30/2016		3/31/2016		12/31/2015
Current:
Commercial	$	230	$	205	$	206	$	136	$	135
Investor real estate	86		118		100		103		149
Residential first mortgage	325		329		343		345		341
Home equity	272		280		291		301		306
Consumer credit card	2		2		2		2		2
Other consumer	10		10		11		12		12
Total current	925		944		953		899		945
Accruing 30-89 DPD:
Commercial	11		6		8		10		11
Investor real estate	4		2		22		16		8
Residential first mortgage	55		54		52		52		57
Home equity	14		16		15		15		17
Other consumer	1		1		1		1		1
Total accruing 30-89 DPD	85		79		98		94		94
Total accruing and <90 DPD	1,010		1,023		1,051		993		1,039
Non-accrual or 90+ DPD:
Commercial	279		194		147		149		135
Investor real estate	5		9		19		27		22
Residential first mortgage	74		76		82		80		81
Home equity	17		17		18		19		18
Total non-accrual or 90+DPD	375		296		266		275		256
Total TDRs - Loans	$	1,385	$	1,319	$	1,317	$	1,268	$	1,295
TDRs - Held For Sale	3		6		8		8		8
Total TDRs	$	1,388	$	1,325	$	1,325	$	1,276	$	1,303


Total TDRs - Loans by Portfolio
	As of
($ amounts in millions)	12/31/2016		9/30/2016		6/30/2016		3/31/2016		12/31/2015
Total commercial TDRs	$	520	$	405	$	361	$	295	$	281
Total investor real estate TDRs	95		129		141		146		179
Total consumer TDRs	770		785		815		827		835
Total TDRs - Loans	$	1,385	$	1,319	$	1,317	$	1,268	$	1,295

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2016 Earnings Release

Consolidated Balance Sheets (unaudited)



	As of
($ amounts in millions)	12/31/2016			9/30/2016			6/30/2016			3/31/2016			12/31/2015
Assets:
Cash and due from banks	$	1,853		$	1,928		$	1,867		$	1,708		$	1,382
Interest-bearing deposits in other banks	3,583			2,310			2,370			2,682			3,932
Federal funds sold and securities purchased under agreements to resell	15			—			—			—			—
Trading account securities	124			120			117			110			143
Securities held to maturity	1,362			1,431			1,646			1,901			1,946
Securities available for sale	23,781			23,859			23,494			23,095			22,710
Loans held for sale	718			571			551			351			448
Loans, net of unearned income	80,095			80,883			81,702			81,606			81,162
Allowance for loan losses	(1,091		)	(1,126		)	(1,151		)	(1,151		)	(1,106		)
Net loans	79,004			79,757			80,551			80,455			80,056
Other earning assets	1,644			1,505			1,516			1,574			1,652
Premises and equipment, net	2,096			2,075			2,091			2,134			2,152
Interest receivable	319			305			312			314			319
Goodwill	4,904			4,882			4,882			4,878			4,878
Residential mortgage servicing rights at fair value (MSRs)	324			238			216			239			252
Other identifiable intangible assets	221			228			240			246			259
Other assets	6,020			5,968			6,359			5,852			5,921
Total assets	$	125,968		$	125,177		$	126,212		$	125,539		$	126,050
Liabilities and stockholders’ equity:
Deposits:
Non-interest-bearing	$	36,046		$	36,321		$	34,982		$	35,153		$	34,862
Interest-bearing	62,989			62,968			62,263			63,001			63,568
Total deposits	99,035			99,289			97,245			98,154			98,430
Borrowed funds:
Short-term borrowings:
Other short-term borrowings	—			—			2			—			10
Total short-term borrowings	—			—			2			—			10
Long-term borrowings	7,763			6,054			8,968			7,851			8,349
Total borrowed funds	7,763			6,054			8,970			7,851			8,359
Other liabilities	2,506			2,469			2,612			2,323			2,417
Total liabilities	109,304			107,812			108,827			108,328			109,206
Stockholders’ equity:
Preferred stock, non-cumulative perpetual	820			820			820			820			820
Common stock	13			13			13			13			13
Additional paid-in capital	17,092			17,339			17,539			17,716			17,883
Retained earnings (deficit)	666			465			242			62			(115		)
Treasury stock, at cost	(1,377		)	(1,377		)	(1,377		)	(1,377		)	(1,377		)
Accumulated other comprehensive income (loss), net	(550		)	105			148			(23		)	(380		)
Total stockholders’ equity	16,664			17,365			17,385			17,211			16,844
Total liabilities and stockholders’ equity	$	125,968		$	125,177		$	126,212		$	125,539		$	126,050

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2016 Earnings Release

Loans and Leases



	As of
												12/31/2016					12/31/2016
($ amounts in millions)	12/31/2016		9/30/2016		6/30/2016		3/31/2016		12/31/2015			vs. 9/30/2016					vs. 12/31/2015
Commercial and industrial	$	35,012	$	35,388	$	36,124	$	36,200	$	35,821		$	(376	)	(1.1	)%	$	(809	)	(2.3	)%
Commercial real estate mortgage—owner-occupied	6,867		7,007		7,193		7,385		7,538			(140		)	(2.0	)%	(671		)	(8.9	)%
Commercial real estate construction—owner-occupied	334		349		344		346		423			(15		)	(4.3	)%	(89		)	(21.0	)%
Total commercial	42,213		42,744		43,661		43,931		43,782			(531		)	(1.2	)%	(1,569		)	(3.6	)%
Commercial investor real estate mortgage	4,087		4,306		4,302		4,516		4,255			(219		)	(5.1	)%	(168		)	(3.9	)%
Commercial investor real estate construction	2,387		2,458		2,660		2,554		2,692			(71		)	(2.9	)%	(305		)	(11.3	)%
Total investor real estate	6,474		6,764		6,962		7,070		6,947			(290		)	(4.3	)%	(473		)	(6.8	)%
Total business	48,687		49,508		50,623		51,001		50,729			(821		)	(1.7	)%	(2,042		)	(4.0	)%
Residential first mortgage	13,440		13,402		13,164		12,895		12,811			38			0.3	%	629			4.9	%
Home equity—first lien	6,800		6,762		6,727		6,723		6,696			38			0.6	%	104			1.6	%
Home equity—second lien	3,887		3,987		4,105		4,191		4,282			(100		)	(2.5	)%	(395		)	(9.2	)%
Indirect—vehicles	4,040		4,076		4,159		4,072		3,984			(36		)	(0.9	)%	56			1.4	%
Indirect—other consumer	920		838		722		652		545			82			9.8	%	375			68.8	%
Consumer credit card	1,196		1,123		1,113		1,045		1,075			73			6.5	%	121			11.3	%
Other consumer	1,125		1,187		1,089		1,027		1,040			(62		)	(5.2	)%	85			8.2	%
Total consumer	31,408		31,375		31,079		30,605		30,433			33			0.1	%	975			3.2	%
Total Loans	$	80,095	$	80,883	$	81,702	$	81,606	$	81,162		$	(788	)	(1.0	)%	$	(1,067	)	(1.3	)%

	Average Balances
($ amounts in millions)	4Q16		3Q16		2Q16		1Q16		4Q15			4Q16 vs. 3Q16					4Q16 vs. 4Q15
Commercial and industrial	$	35,149	$	35,733	$	36,493	$	36,103	$	35,511		$	(584	)	(1.6	)%	$	(362	)	(1.0	)%
Commercial real estate mortgage—owner-occupied	6,963		7,106		7,311		7,512		7,675			(143		)	(2.0	)%	(712		)	(9.3	)%
Commercial real estate construction—owner-occupied	356		345		348		359		415			11			3.2	%	(59		)	(14.2	)%
Total commercial	42,468		43,184		44,152		43,974		43,601			(716		)	(1.7	)%	(1,133		)	(2.6	)%
Commercial investor real estate mortgage	4,231		4,444		4,399		4,430		4,332			(213		)	(4.8	)%	(101		)	(2.3	)%
Commercial investor real estate construction	2,441		2,535		2,591		2,591		2,576			(94		)	(3.7	)%	(135		)	(5.2	)%
Total investor real estate	6,672		6,979		6,990		7,021		6,908			(307		)	(4.4	)%	(236		)	(3.4	)%
Total business	49,140		50,163		51,142		50,995		50,509			(1,023		)	(2.0	)%	(1,369		)	(2.7	)%
Residential first mortgage	13,485		13,249		12,990		12,828		12,753			236			1.8	%	732			5.7	%
Home equity—first lien	6,790		6,751		6,727		6,725		6,643			39			0.6	%	147			2.2	%
Home equity—second lien	3,921		4,024		4,142		4,231		4,305			(103		)	(2.6	)%	(384		)	(8.9	)%
Indirect—vehicles	4,096		4,113		4,149		4,056		3,969			(17		)	(0.4	)%	127			3.2	%
Indirect—other consumer	889		779		686		599		523			110			14.1	%	366			70.0	%
Consumer credit card	1,146		1,110		1,066		1,050		1,031			36			3.2	%	115			11.2	%
Other consumer	1,122		1,094		1,058		1,026		1,027			28			2.6	%	95			9.3	%
Total consumer	31,449		31,120		30,818		30,515		30,251			329			1.1	%	1,198			4.0	%
Total Loans	$	80,589	$	81,283	$	81,960	$	81,510	$	80,760		$	(694	)	(0.9	)%	$	(171	)	(0.2	)%

End of Period Loan Portfolio Balances by Percentage									As of
End of Period Loan Portfolio Balances by Percentage									12/31/2016			9/30/2016			6/30/2016		3/31/2016			12/31/2015
Commercial and industrial									43.7		%	43.8		%	44.2	%	44.4		%	44.1	%
Commercial real estate mortgage—owner-occupied									8.6		%	8.7		%	8.8	%	9.0		%	9.3	%
Commercial real estate construction—owner-occupied									0.4		%	0.4		%	0.4	%	0.4		%	0.5	%
Total commercial									52.7		%	52.9		%	53.4	%	53.8		%	53.9	%
Commercial investor real estate mortgage									5.1		%	5.3		%	5.3	%	5.6		%	5.3	%
Commercial investor real estate construction									3.0		%	3.0		%	3.3	%	3.1		%	3.3	%
Total investor real estate									8.1		%	8.3		%	8.6	%	8.7		%	8.6	%
Total business									60.8		%	61.2		%	62.0	%	62.5		%	62.5	%
Residential first mortgage									16.8		%	16.6		%	16.1	%	15.8		%	15.8	%
Home equity—first lien									8.5		%	8.4		%	8.2	%	8.2		%	8.2	%
Home equity—second lien									4.8		%	4.9		%	5.0	%	5.1		%	5.3	%
Indirect—vehicles									5.0		%	5.0		%	5.1	%	5.0		%	4.9	%
Indirect—other consumer									1.2		%	1.0		%	0.9	%	0.8		%	0.7	%
Consumer credit card									1.5		%	1.4		%	1.4	%	1.3		%	1.3	%
Other consumer									1.4		%	1.5		%	1.3	%	1.3		%	1.3	%
Total consumer									39.2		%	38.8		%	38.0	%	37.5		%	37.5	%
Total Loans									100.0		%	100.0		%	100.0	%	100.0		%	100.0	%

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2016 Earnings Release

Deposits



	As of
											12/31/2016					12/31/2016
($ amounts in millions)	12/31/2016		9/30/2016		6/30/2016		3/31/2016		12/31/2015		vs. 9/30/2016					vs. 12/31/2015
Customer Deposits
Interest-free deposits	$	36,046	$	36,321	$	34,982	$	35,153	$	34,862	$	(275	)	(0.8	)%	$	1,184		3.4	%
Interest-bearing checking	20,259		20,016		20,571		21,172		21,902		243			1.2	%	(1,643		)	(7.5	)%
Savings	7,840		7,786		7,786		7,768		7,287		54			0.7	%	553			7.6	%
Money market—domestic	27,293		27,534		26,138		26,607		26,468		(241		)	(0.9	)%	825			3.1	%
Money market—foreign	186		237		258		270		243		(51		)	(21.5	)%	(57		)	(23.5	)%
Low-cost deposits	91,624		91,894		89,735		90,970		90,762		(270		)	(0.3	)%	862			0.9	%
Time deposits	7,183		7,366		7,286		7,161		7,468		(183		)	(2.5	)%	(285		)	(3.8	)%
Total Customer Deposits	98,807		99,260		97,021		98,131		98,230		(453		)	(0.5	)%	577			0.6	%
Corporate Treasury Deposits
Time deposits	228		29		224		23		200		199			NM		28			14.0	%
Total Deposits	$	99,035	$	99,289	$	97,245	$	98,154	$	98,430	$	(254	)	(0.3	)%	$	605		0.6	%

	As of
											12/31/2016					12/31/2016
($ amounts in millions)	12/31/2016		9/30/2016		6/30/2016		3/31/2016		12/31/2015		vs. 9/30/2016					vs. 12/31/2015
Consumer Bank Segment	$	56,267	$	56,184	$	54,773	$	54,482	$	53,825	$	83		0.1	%	$	2,442		4.5	%
Corporate Bank Segment	28,280		28,356		27,743		27,527		27,287		(76		)	(0.3	)%	993			3.6	%
Wealth Management Segment	10,438		10,622		10,863		12,092		12,863		(184		)	(1.7	)%	(2,425		)	(18.9	)%
Other	4,050		4,127		3,866		4,053		4,455		(77		)	(1.9	)%	(405		)	(9.1	)%
Total Deposits	$	99,035	$	99,289	$	97,245	$	98,154	$	98,430	$	(254	)	(0.3	)%	$	605		0.6	%

	Average Balances
($ amounts in millions)	4Q16		3Q16		2Q16		1Q16		4Q15		4Q16 vs. 3Q16					4Q16 vs. 4Q15
Customer Deposits
Interest-free deposits	$	36,158	$	35,469	$	35,020	$	34,826	$	34,746	$	689		1.9	%	$	1,412		4.1	%
Interest-bearing checking	19,769		20,267		20,760		21,244		21,052		(498		)	(2.5	)%	(1,283		)	(6.1	)%
Savings	7,811		7,779		7,794		7,491		7,245		32			0.4	%	566			7.8	%
Money market—domestic	27,039		26,701		26,331		26,575		26,371		338			1.3	%	668			2.5	%
Money market—foreign	215		273		254		246		256		(58		)	(21.2	)%	(41		)	(16.0	)%
Low-cost deposits	90,992		90,489		90,159		90,382		89,670		503			0.6	%	1,322			1.5	%
Time deposits	7,300		7,346		7,169		7,277		7,618		(46		)	(0.6	)%	(318		)	(4.2	)%
Total Customer Deposits	98,292		97,835		97,328		97,659		97,288		457			0.5	%	1,004			1.0	%
Corporate Treasury Deposits
Time deposits	205		101		169		91		200		104			103.0	%	5			2.5	%
Total Deposits	$	98,497	$	97,936	$	97,497	$	97,750	$	97,488	$	561		0.6	%	$	1,009		1.0	%

	Average Balances
($ amounts in millions)	4Q16		3Q16		2Q16		1Q16		4Q15		4Q16 vs. 3Q16					4Q16 vs. 4Q15
Consumer Bank Segment	$	55,638	$	55,186	$	54,703	$	53,492	$	52,952	$	452		0.8	%	$	2,686		5.1	%
Corporate Bank Segment	28,730		28,293		27,618		27,608		27,580		437			1.5	%	1,150			4.2	%
Wealth Management Segment	10,245		10,643		11,280		12,311		12,497		(398		)	(3.7	)%	(2,252		)	(18.0	)%
Other	3,884		3,814		3,896		4,339		4,459		70			1.8	%	(575		)	(12.9	)%
Total Deposits	$	98,497	$	97,936	$	97,497	$	97,750	$	97,488	$	561		0.6	%	$	1,009		1.0	%

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2016 Earnings Release



Deposits (Continued)
	As of
End of Period Deposits by Percentage	12/31/2016		9/30/2016		6/30/2016		3/31/2016		12/31/2015
Customer Deposits
Interest-free deposits	36.4	%	36.6	%	36.0	%	35.8	%	35.4	%
Interest-bearing checking	20.5	%	20.2	%	21.1	%	21.6	%	22.3	%
Savings	7.9	%	7.9	%	8.0	%	7.9	%	7.4	%
Money market—domestic	27.5	%	27.7	%	26.9	%	27.1	%	26.9	%
Money market—foreign	0.2	%	0.2	%	0.3	%	0.3	%	0.2	%
Low-cost deposits	92.5	%	92.6	%	92.3	%	92.7	%	92.2	%
Time deposits	7.3	%	7.4	%	7.5	%	7.3	%	7.6	%
Total Customer Deposits	99.8	%	100.0	%	99.8	%	100.0	%	99.8	%
Corporate Treasury Deposits
Time deposits	0.2	%	—	%	0.2	%	—	%	0.2	%
Total Deposits	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2016 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)		12/31/2016			9/30/2016			6/30/2016			3/31/2016			12/31/2015
Tangible Common Ratios—Consolidated
Stockholders’ equity (GAAP)		$	16,664		$	17,365		$	17,385		$	17,211		$	16,844
Less:
Preferred stock (GAAP)		820			820			820			820			820
Intangible assets (GAAP)		5,125			5,110			5,122			5,124			5,137
Deferred tax liability related to intangibles (GAAP)		(155		)	(160		)	(163		)	(164		)	(165		)
Tangible common stockholders’ equity (non-GAAP)	A	$	10,874		$	11,595		$	11,606		$	11,431		$	11,052
Total assets (GAAP)		$	125,968		$	125,177		$	126,212		$	125,539		$	126,050
Less:
Intangible assets (GAAP)		5,125			5,110			5,122			5,124			5,137
Deferred tax liability related to intangibles (GAAP)		(155		)	(160		)	(163		)	(164		)	(165		)
Tangible assets (non-GAAP)	B	$	120,998		$	120,227		$	121,253		$	120,579		$	121,078
Shares outstanding—end of quarter	C	1,215			1,236			1,259			1,275			1,297
Tangible common stockholders’ equity to tangible assets (non-GAAP)	A/B	8.99		%	9.64		%	9.57		%	9.48		%	9.13		%
Tangible common book value per share (non-GAAP)	A/C	$	8.95		$	9.38		$	9.22		$	8.97		$	8.52



($ amounts in millions)		12/31/2016			9/30/2016			6/30/2016			3/31/2016			12/31/2015
Basel III Common Equity Tier 1 Ratio—Fully Phased-In Pro-Forma ⁽¹⁾
Stockholder's equity (GAAP)		$	16,664		$	17,365		$	17,385		$	17,211		$	16,844
Non-qualifying goodwill and intangibles		(4,955		)	(4,936		)	(4,946		)	(4,947		)	(4,958		)
Adjustments, including all components of accumulated other comprehensive income, disallowed deferred tax assets, threshold deductions and other adjustments		482			(173		)	(227		)	(64		)	286
Preferred stock (GAAP)		(820		)	(820		)	(820		)	(820		)	(820		)
Basel III common equity Tier 1—Fully Phased-In Pro-Forma (non-GAAP)	D	$	11,371		$	11,436		$	11,392		$	11,380		$	11,352
Basel III risk-weighted assets—Fully Phased-In Pro-Forma (non-GAAP) ⁽²⁾	E	$	103,529		$	103,749		$	105,199		$	106,227		$	106,188
Basel III common equity Tier 1 ratio—Fully Phased-In Pro-Forma (non-GAAP)	D/E	11.0		%	11.0		%	10.8		%	10.7		%	10.7		%


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


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

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2016 Earnings Release

Forward-Looking Statements

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


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


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


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


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


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


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


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


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


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


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


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


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

•

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

•

Our ability to obtain 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 Basel III framework calls for additional risk-based capital surcharges for globally systemically important banks. Although we are not subject to such surcharges, it is possible that in the future we may become subject to similar surcharges.


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


•	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 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.


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

Regions Financial Corporation and Subsidiaries

Financial Supplement to Fourth Quarter 2016 Earnings Release


•	The risks and uncertainties related to our acquisition and integration of other companies.


•	Inability of our framework to manage risks associated with our business such as credit risk and operational risk, including third-party vendors and other service providers, which could, among other things, result in a breach of operating or security systems as a result of a cyber attack or similar act.


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


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


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

•

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

•

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


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


•	Significant disruption of, or loss of public confidence in, the Internet and services and devices used to access the Internet could affect the ability of our customers to access their accounts and conduct banking transactions.


•	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.


•	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, 2015, as filed with the SEC.

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

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

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