Regions Financial (RF) 10-Q 5 May 10 2010 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information
	3 Months Ended Mar. 31, 2010	Apr. 30, 2010
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2010-03-31
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	Q1
Trading Symbol	RF
Entity Registrant Name	REGIONS FINANCIAL CORP
Entity Central Index Key	0001281761
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		1,192,471,000

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS (USD $)
In Millions	Mar. 31, 2010	Dec. 31, 2009	Mar. 31, 2009
Assets
Cash and due from banks	$2,252	$2,052	$2,429
Interest-bearing deposits in other banks	4,295	5,580	2,288
Federal funds sold and securities purchased under agreements to resell	324	379	418
Trading account assets	1,238	3,039	1,348
Securities available for sale	24,219	24,069	20,970
Securities held to maturity	30	31	45
Loans held for sale (includes $549, $780 and $1,365 measured at fair value at March 31, 2010, December 31, 2009 and March 31, 2009, respectively)	1,048	1,511	1,956
Loans, net of unearned income	88,174	90,674	95,686
Allowance for loan losses	(3,184)	(3,114)	(1,861)
Net loans	84,990	87,560	93,825
Other interest-earning assets	819	734	849
Premises and equipment, net	2,637	2,668	2,808
Interest receivable	503	468	426
Goodwill	5,559	5,557	5,551
Mortgage servicing rights	270	247	161
Other identifiable intangible assets	472	503	603
Other assets	8,574	7,920	8,303
Total assets	137,230	142,318	141,980
Deposits:
Non-interest-bearing	23,391	23,204	19,988
Interest-bearing	74,941	75,476	73,548
Total deposits	98,332	98,680	93,536
Short-term borrowings:
Federal funds purchased and securities sold under agreements to repurchase	1,687	1,893	2,828
Other short-term borrowings	997	1,775	6,525
Total short-term borrowings	2,684	3,668	9,353
Long-term borrowings	15,683	18,464	18,762
Total borrowed funds	18,367	22,132	28,115
Other liabilities	2,893	3,625	3,512
Total liabilities	119,592	124,437	125,163
Preferred stock, authorized 10 million shares
Series A, cumulative perpetual participating, par value $1.00 (liquidation preference $1,000.00) per share, net of discount; Issued-3,500,000 shares	3,351	3,343	3,316
Series B, mandatorily convertible, cumulative perpetual participating, par value $1,000.00 (liquidation preference $1,000.00) per share; Issued-267,665 shares	259	259
Common stock, par value $.01 per share: Authorized 1.5 billion shares Issued including treasury stock-1,235,340,936, 1,235,850,589 and 738,570,609 shares, respectively	12	12	7
Additional paid-in capital	18,781	18,781	16,828
Retained earnings (deficit)	(3,502)	(3,235)	(1,913)
Treasury stock, at cost-43,166,437, 43,241,020 and 43,676,701 shares, respectively	(1,407)	(1,409)	(1,415)
Accumulated other comprehensive income (loss), net	144	130	(6)
Total stockholders' equity	17,638	17,881	16,817
Total liabilities and stockholders' equity	$137,230	$142,318	$141,980

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
In Millions, except Share data	Mar. 31, 2010	Dec. 31, 2009	Mar. 31, 2009
Loans held for sale, at fair value	$549	$780	$1,365
Preferred stock, authorized	10,000,000	10,000,000	10,000,000
Common stock, par value	0.01	0.01	0.01
Common stock, Authorized	1,500,000,000	1,500,000,000	1,500,000,000
Common stock, Issued including treasury stock	1,235,340,936	1,235,850,589	738,570,609
Treasury stock, shares	43,166,437	43,241,020	43,676,701
Series A cumulative perpetual participating Preferred stock
Preferred Stock, par value	$1	$1	$1
Preferred Stock, Liquidation preference	$10	$10	$10
Preferred Stock, Issued	3,500,000	3,500,000	3,500,000
Series B, mandatorily convertible, cumulative perpetual participating Preferred Stock
Preferred Stock, par value	$10	$10
Preferred Stock, Liquidation preference	$10	$10
Preferred Stock, Issued	267,665	267,665

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
In Millions, except Per Share data	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Interest income on:
Loans, including fees	$945	$1,099
Securities:
Taxable	242	239
Tax-exempt	1	7
Total securities	243	246
Loans held for sale	8	15
Federal funds sold and securities purchased under agreements to resell		1
Trading account assets	12	12
Other interest-earning assets	7	6
Total interest income	1,215	1,379
Interest expense on:
Deposits	242	366
Short-term borrowings	3	20
Long-term borrowings	139	184
Total interest expense	384	570
Net interest income	831	809
Provision for loan losses	770	425
Net interest income after provision for loan losses	61	384
Non-interest income:
Service charges on deposit accounts	288	269
Brokerage, investment banking and capital markets	236	217
Mortgage income	67	73
Trust department income	48	46
Securities gains, net	59	53
Leveraged lease termination gains	19	323
Other	95	85
Total non-interest income	812	1,066
Non-interest expense:
Salaries and employee benefits	575	539
Net occupancy expense	120	107
Furniture and equipment expense	74	76
Other	461	336
Total non-interest expense	1,230	1,058
Income (loss) before income taxes	(357)	392
Income taxes	(161)	315
Net income (loss)	(196)	77
Net income (loss) available to common shareholders	($255)	$26
Weighted-average number of shares outstanding:
Basic	1,194	693
Diluted	1,194	694
Earnings (loss) per common share:
Basic	-0.21	0.04
Diluted	-0.21	0.04
Cash dividends declared per common share	0.01	0.1

CONSOLIDATED STATEMENTS OF CHAN

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (USD $)
In Millions	Preferred Stock	Common Stock	Additional Paid-In Capital	Retained Earnings (Deficit)	Treasury Stock, At Cost	Accumulated Other Comprehensive Income (Loss)		Total
BEGINNING BALANCE at Dec. 31, 2008	$3,307	$7	$16,815	($1,869)	($1,425)	($22)		$16,813
BEGINNING BALANCE (in shares) at Dec. 31, 2008	4	691
Comprehensive income (loss):
Net income (loss)				77				77
Net change in unrealized gains and losses on securities available for sale, net of tax and reclassification adjustment						52	[1]	52	[1]
Net change in unrealized gains and losses on derivative instruments, net of tax and reclassification adjustment						(35)	[1]	(35)	[1]
Net change from defined benefit pension plans, net of tax						(1)	[1]	(1)	[1]
Comprehensive income (loss)								93
Cash dividends declared - $0.01 in 2010 and $0.10 in 2009 per share				(70)				(70)
Preferred dividends				(42)				(42)
Preferred stock transactions:
Discount accretion	9			(9)
Common stock transactions:
Stock transactions under compensation plans, net (in shares)		4
Stock transactions under compensation plans, net			5		10			15
Amortization of unearned restricted stock and related adjustments			8					8
ENDING BALANCE (in shares) at Mar. 31, 2009	4	695
ENDING BALANCE at Mar. 31, 2009	3,316	7	16,828	(1,913)	(1,415)	(6)		16,817
BEGINNING BALANCE at Dec. 31, 2009	3,602	12	18,781	(3,235)	(1,409)	130		17,881
BEGINNING BALANCE (in shares) at Dec. 31, 2009	4	1,193
Comprehensive income (loss):
Net income (loss)				(196)				(196)
Net change in unrealized gains and losses on securities available for sale, net of tax and reclassification adjustment						29	[1]	29	[1]
Net change in unrealized gains and losses on derivative instruments, net of tax and reclassification adjustment						(18)	[1]	(18)	[1]
Net change from defined benefit pension plans, net of tax						3	[1]	3	[1]
Comprehensive income (loss)								(182)
Cash dividends declared - $0.01 in 2010 and $0.10 in 2009 per share				(12)				(12)
Preferred dividends				(51)				(51)
Preferred stock transactions:
Discount accretion	8			(8)
Common stock transactions:
Stock transactions under compensation plans, net			2		2			4
Amortization of unearned restricted stock and related adjustments (in shares)		(1)
Amortization of unearned restricted stock and related adjustments			(2)					(2)
ENDING BALANCE (in shares) at Mar. 31, 2010	4	1,192
ENDING BALANCE at Mar. 31, 2010	$3,610	$12	$18,781	($3,502)	($1,407)	$144		$17,638
[1]See disclosure of reclassification adjustment amount and tax effect, as applicable, in Note 3 to the consolidated financial statements.

1_CONSOLIDATED STATEMENTS OF CH

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) (USD $)
	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Cash dividends declared, per share	0.01	0.1

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Millions	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Operating activities:
Net income (loss)	($196)	$77
Adjustments to reconcile net cash provided by operating activities:
Provision for loan losses	770	425
Depreciation and amortization of premises and equipment	73	68
Provision for losses on other real estate, net	32	19
Net amortization (accretion) of securities	40	(5)
Net amortization of loans and other assets	51	64
Net accretion of deposits and borrowings		(4)
Net securities gains	(59)	(53)
Loss on early extinguishment of debt	53
Other-than-temporary impairments, net	1	3
Deferred income tax benefit	(113)	(139)
Excess tax benefits from share-based payments	(1)
Originations and purchases of loans held for sale	(1,101)	(2,477)
Proceeds from sales of loans held for sale	1,656	1,900
Gain on sale of loans, net	(24)	(37)
Decrease (increase) in trading account assets	1,801	(298)
(Increase) decrease in other interest-earning assets	(85)	48
(Increase) decrease in interest receivable	(35)	32
Increase in other assets	(445)	(285)
(Decrease) increase in other liabilities	(726)	32
Other	33	9
Net cash from operating activities	1,725	(621)
Investing activities:
Proceeds from sales of securities available for sale	1,443	795
Proceeds from maturites of:
Securities available for sale	1,853	1,089
Securities held to maturity	1	2
Purchases of:
Securities available for sale	(3,381)	(3,865)
Proceeds from sales of loans	299	88
Net decrease in loans	1,225	1,167
Net purchases of premises and equipment	(43)	(90)
Net cash received from deposits assumed		279
Net cash from investing activities	1,397	(535)
Financing activities:
Net (decrease) increase in deposits	(348)	2,354
Net decrease in short-term borrowings	(984)	(6,469)
Proceeds from long-term borrowings		100
Payments on long-term borrowings	(2,870)	(560)
Cash dividends on common stock	(12)	(70)
Cash dividends on preferred stock	(51)	(42)
Proceeds from stock transactions under compensation plans	2	5
Excess tax benefits from share-based payments	1
Net cash from financing activities	(4,262)	(4,682)
Decrease in cash and cash equivalents	(1,140)	(5,838)
Cash and cash equivalents at beginning of year	8,011	10,973
Cash and cash equivalents at end of period	$6,871	$5,135

Basis of Presentation

Basis of Presentation
	3 Months Ended Mar. 31, 2010
Basis of Presentation	NOTE 1Basis of Presentation Regions Financial Corporation (Regions or the Company) provides a full range of banking and bank-related services to individual and corporate customers through its subsidiaries and branch offices located primarily in Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Mississippi, Missouri, North Carolina, South Carolina, Tennessee, Texas and Virginia. The Company is subject to competition from other financial institutions, is subject to the regulations of certain government agencies and undergoes periodic examinations by those regulatory authorities. The accounting and reporting policies of Regions and the methods of applying those policies that materially affect the consolidated financial statements conform with accounting principles generally accepted in the United States (GAAP) and with general financial services industry practices. The accompanying interim financial statements have been prepared in accordance with the instructions for Form 10-Q and, therefore, do not include all information and notes to the consolidated financial statements necessary for a complete presentation of financial position, results of operations and cash flows in conformity with GAAP. In the opinion of management, all adjustments, consisting of only normal and recurring items, necessary for the fair presentation of the consolidated financial statements have been included. These interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto in Regions Form 10-K for the year ended December31, 2009. Regions has evaluated all subsequent events for potential recognition and disclosure through the filing date of this Form 10-Q. Certain amounts in prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications are immaterial and have no effect on net income, total assets or stockholders equity.

Earnings

Earnings (Loss) per Common Share
	3 Months Ended Mar. 31, 2010
Earnings (Loss) per Common Share	NOTE 2Earnings (Loss) per Common Share The following table sets forth the computation of basic earnings (loss) per common share and diluted earnings (loss) per common share: Three Months Ended March 31 2010 2009 (In millions, except per share amounts) Numerator: Net income (loss) $ (196 ) $ 77 Preferred stock dividends and accretion (59 ) (51 ) Net income (loss) available to common shareholders $ (255 ) $ 26 Denominator: Weighted-average common shares outstanding - basic 1,194 693 Common stock equivalents 1 Weighted-average common shares outstanding - diluted 1,194 694 Earnings (loss) per common share: Basic $ (0.21 ) $ 0.04 Diluted (0.21 ) 0.04 The effect from the assumed issuance of 61million common shares upon conversion of mandatorily convertible preferred stock issued in May 2009 for the three months ended March31, 2010 was not included in the above computations of diluted earnings (loss) per common share because such amounts would have had an antidilutive effect on earnings (loss) per common share (see Note 3 for further discussion). The effect from the assumed exercise of 50million and 53million stock options for the three months ended March31, 2010 and 2009, respectively, was not included in the above computations of diluted earnings (loss) per common share because such amounts would have had an antidilutive effect on earnings (loss) per common share.

Stockholders' Equity and Compre

Stockholders' Equity and Comprehensive Income (Loss)
	3 Months Ended Mar. 31, 2010
Stockholders' Equity and Comprehensive Income (Loss)	NOTE 3Stockholders Equity and Comprehensive Income (Loss) On November14, 2008, Regions completed the sale of 3.5million shares of its Fixed Rate Cumulative Perpetual Preferred Stock, Series A, par value $1.00 and liquidation preference $1,000.00 per share (and $3.5 billion liquidation preference in the aggregate) to the U.S. Treasury as part of the Capital Purchase Program (CPP). Regions will pay the U.S. Treasury on a quarterly basis a 5% dividend, or $175 million annually, for each of the first five years of the investment, and 9% thereafter unless Regions redeems the shares. Regions performed a discounted cash flow analysis to value the preferred stock at the date of issuance. For purposes of this analysis, Regions assumed that the preferred stock would most likely be redeemed five years from the valuation date based on optimal financial budgeting considerations. Regions used the Bloomberg USD US Bank BBB index to derive the market yield curve as of the valuation date to discount future expected cash flows to the valuation date. The discount rate used to value the preferred stock was 7.46%, based on this yield curve at a 5-year maturity. Dividends were assumed to be accrued until redemption. While the discounting was required based on a 5-year redemption, Regions did not have a 5-year security or similarly termed security available. As a result, it was necessary to use a benchmark yield curve to calculate the 5-year value. To determine the appropriate yield curve that was applicable to Regions, the yield to maturity on the outstanding debt instrument with the longest dated maturity (8.875% junior subordinated notes due June 2048) was compared to the longest point on the USD US Bank BBB index as of November14, 2008. Regions concluded that the yield to maturity as of the valuation date of the debt, which was 11.03%, was consistent with the indicative yield of the curve noted above. The longest available point on this curve was 10.55% at 30 years. As part of its purchase of the preferred securities, the U.S. Treasury also received a warrant to purchase 48.3million shares of Regions common stock at an exercise price of $10.88 per share, subject to anti-dilution and other adjustments. The warrant expires ten years from the issuance date. Regions used the Cox-Ross-Rubinstein Binomial Option Pricing Model (CRR Model) to value the warrant at the date of issuance. The CRR Model is a standard option pricing model which incorporates optimal early exercise in order to receive the benefit of future dividend payments. Based on the transferability of the warrant, the CRR Model approach that was applied assumes that the warrant holder will not sub-optimally exercise its warrant. The following assumptions were used in the CRR Model: Stock price (a) $ 9.67 Exercise price (b) $ 10.88 Expected volatility (c) 45.22 % Risk-free rate (d) 4.25 % Dividend yield (e) 3.88 % Warrant term (in years) (b) 10 (a) Closing stock price of Regions as of the valuation date (November 14, 2008). (b) As outlined in the Warrant to Purchase Agreement, dated November 14, 2008. (c) Expe

Pension and Other Postretiremen

Pension and Other Postretirement Benefits
	3 Months Ended Mar. 31, 2010
Pension and Other Postretirement Benefits	NOTE 4Pension and Other Postretirement Benefits Net periodic pension and other postretirement benefits cost included the following components: For The Three Months Ended March 31 Pension OtherPostretirement Benefits 2010 2009 2010 2009 (In millions) Service cost $ 9 $ 1 $ $ Interest cost 23 22 1 Expected return on plan assets (25 ) (22 ) Amortization of actuarial loss 11 11 $ 18 $ 12 $ 1 $ During 2009, participant accruals of service in the Regions Financial Corporation Retirement Plan and the Companys current active non-qualified supplemental retirement plan (the SERP) were temporarily suspended resulting in a reduction in service cost. Effective January1, 2010, the benefit accruals were reinstated for pension plan and SERP participants. Matching contributions in the 401(K) plan were temporarily suspended beginning in the second quarter of 2009. Effective January1, 2010, Regions restored matching contributions to the 401(K) plan to pre-existing levels.

Securities

Securities
	3 Months Ended Mar. 31, 2010
Securities	NOTE 5Securities The amortized cost, gross unrealized gains and losses, and estimated fair value of securities available for sale and securities held to maturity are as follows: March 31, 2010 Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (In millions) Securities available for sale: U.S. Treasury securities $ 55 $ 4 $ $ 59 Federal agency securities 44 1 45 Obligations of states and political subdivisions 46 46 Mortgage-backed securities: Residential agency 22,396 486 (24 ) 22,858 Residential non-agency 23 3 26 Commercial agency 19 2 21 Other debt securities 26 (3 ) 23 Equity securities 1,128 13 1,141 $ 23,737 $ 509 $ (27 ) $ 24,219 Securities held to maturity: U.S. Treasury securities $ 7 $ $ $ 7 Federal agency securities 6 1 7 Mortgage-backed securities: Residential agency 15 15 Other debt securities 2 2 $ 30 $ 1 $ $ 31 December31, 2009 Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (In millions) Securities available for sale: U.S. Treasury securities $ 46 $ 4 $ $ 50 Federal agency securities 44 1 45 Obligations of states and political subdivisions 70 70 Mortgage-backed securities: Residential agency 22,271 474 (61 ) 22,684 Residential non-agency 33 3 36 Commercial agency 20 1 21 Other debt securities 22 (3 ) 19 Equity securities 1,132 12 1,144 $ 23,638 $ 495 $ (64 ) $ 24,069 Securities held to maturity: U.S. Treasury securities $ 7 $ $ $ 7 Federal agency securities 6 6 Mortgage-backed securities: Residential agency 16 16 Other debt securities 2 2 $ 31 $ $ $ 31 Regions evaluates securities in a loss position for other-than-temporary impairment, considering such factors as the length of time and the extent to which the market value has been below cost, the credit standing of the issuer, Regions intent to hold the security and the likelihood that the Company will hold the security until its market value recovers. Activity related to the credit loss component of other-than-temporary impairment is recognized in earnings. For debt securities, the portion of other-than-temporary impairment related to all other factors is recognized in other

Business Segment Information

Business Segment Information
	3 Months Ended Mar. 31, 2010
Business Segment Information	NOTE 6Business Segment Information Regions segment information is presented based on Regions key segments of business. Each segment is a strategic business unit that serves specific needs of Regions customers. The Companys primary segment is Banking/Treasury, which represents the Companys branch network, including consumer and commercial banking functions, and has separate management that is responsible for the operation of that business unit. This segment also includes the Companys Treasury function, including the Companys securities portfolio and other wholesale funding activities. In addition to Banking/Treasury, Regions has designated as distinct reportable segments the activity of its Investment Banking/Brokerage/Trust and Insurance divisions. Investment Banking/Brokerage/Trust includes trust activities and all brokerage and investment activities associated with Morgan Keegan. Insurance includes all business associated with commercial insurance and credit life products sold to consumer customers. The following tables present financial information for each reportable segment for the period indicated. Banking/ Treasury Investment Banking/ Brokerage/ Trust Insurance Total Company Three months ended March 31, 2010 (In millions) Net interest income $ 816 $ 14 $ 1 $ 831 Provision for loan losses 770 770 Non-interest income 488 297 27 812 Non-interest expense 936 272 22 1,230 Income taxes (177 ) 14 2 (161 ) Net income (loss) $ (225 ) $ 25 $ 4 $ (196 ) Average assets $ 134,003 $ 5,055 $ 507 $ 139,565 Banking/ Treasury Investment Banking/ Brokerage/ Trust Insurance Total Company Three months ended March 31, 2009 (In millions) Net interest income $ 792 $ 16 $ 1 $ 809 Provision for loan losses 425 425 Non-interest income 784 253 29 1,066 Non-interest expense 787 248 23 1,058 Income taxes 305 8 2 315 Net income $ 59 $ 13 $ 5 $ 77 Average assets $ 139,534 $ 3,549 $ 480 $ 143,563

Goodwill

Goodwill
	3 Months Ended Mar. 31, 2010
Goodwill	NOTE 7Goodwill Goodwill allocated to each reportable segment as of March31, 2010,December, 31, 2009, and March31, 2009 is presented as follows: March31 2010 December31 2009 March31 2009 (In millions) Banking/Treasury $ 4,691 $ 4,691 $ 4,691 Investment Banking/Brokerage/Trust 745 745 740 Insurance 123 121 120 Total goodwill $ 5,559 $ 5,557 $ 5,551 The Companys goodwill is tested for impairment on an annual basis, or more often if events or circumstances indicate that there may be impairment. Adverse changes in the economic environment, declining operations, or other factors could result in a decline in the implied fair value of goodwill. A goodwill impairment test includes two steps. Step One, used to identify potential impairment, compares the estimated fair value of a reporting unit with its carrying amount, including goodwill. If the estimated fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not to be impaired. If the carrying amount of a reporting unit exceeds its estimated fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. Step Two of the goodwill impairment test compares the implied estimated fair value of reporting unit goodwill with the carrying amount of that goodwill. If the carrying amount of goodwill for that reporting unit exceeds the implied fair value of that units goodwill, an impairment loss is recognized in an amount equal to that excess. During the first quarter of 2010, Regions assessed the indicators of goodwill impairment as of February28, 2010, and through the date of the filing of our Quarterly Report on Form 10-Q for the quarter ended March31, 2010. The indicators assessed included: Recent operating performance, Changes in market capitalization, Regulatory actions and assessments, Changes in the business climate (including legal factors and competition), Company-specific factors (including changes in key personnel, asset impairments, and business dispositions), and Trends in the banking industry. Based on the assessment of the indicators above, quantitative testing of goodwill was required for the Banking/Treasury, Investment Banking/ Brokerage/Trust, and Insurance reporting units for the March31, 2010 interim period. For purposes of performing Step One of the goodwill impairment test, Regions uses both the income and market approaches to value its reporting units. The income approach, which is the primary valuation approach, consists of discounting projected long-term future cash flows, which are derived from internal forecasts and economic expectations for the respective reporting units. The projected future cash flows are discounted using cost of capital metrics for Regions peer group or a build-up approach (such as the capital asset pricing model) applicable to each reporting unit. The significant inputs to the income approach include expected future cash flows, the long-term targ

Loan Servicing

Loan Servicing
	3 Months Ended Mar. 31, 2010
Loan Servicing	NOTE 8Loan Servicing The fair value of mortgage servicing rights is calculated using various assumptions including future cash flows, market discount rates, expected prepayment rates, servicing costs and other factors. A significant change in prepayments of mortgages in the servicing portfolio could result in significant changes in the valuation adjustments, thus creating potential volatility in the carrying amount of mortgage servicing rights. Regions uses various derivative instruments and trading securities to mitigate the effect of changes in the fair value of its mortgage servicing rights in the statement of operations. During the three months ended March31, 2010, Regions recognized a $23 million net gain associated with changes in mortgage servicing rights and related derivatives which is included in several line items in the statement of operations: $3 million is included in interest income, $4 million is included in brokerage, investment banking and capital markets income, and $16 million is included in mortgage income. During the three months ended March31, 2009, Regions recognized a net $1 million loss associated with changes in mortgage servicing rights and related derivatives, which is included in mortgage income. Beginning in the third quarter of 2009, Regions began using an option-adjusted spread (OAS) valuation approach. The OAS represents the additional spread over the swap rate that is required in order for the assets discounted cash flows to equal its market price. An analysis of the OAS and its sensitivity to rate fluctuations is presented below. The table below presents an analysis of mortgage servicing rights for the three months ended March31, 2010 and 2009, under the fair value measurement method: ThreeMonthsEndedMarch31 2010 2009 (In millions) Carrying value, beginning of period $ 247 $ 161 Additions 17 19 Increase (decrease) in fair value: Due to change in valuation inputs or assumptions 11 (9 ) Other changes(1) (5 ) (10 ) Carrying value, end of period $ 270 $ 161 (1) Represents economic amortization associated with borrower repayments. Data and assumptions used in the fair value calculation related to residential mortgage servicing rights (excluding related derivative instruments) as of March31, 2010 and 2009 are as follows (dollars in millions): March31 2010 2009 Unpaid principal balance $ 23,469 $ 22,341 Weighted-average prepayment speed (CPR; percentage) 12.2 % 37.3 % Estimated impact on fair value of a 10% increase $ (12 ) $ (9 ) Estimated impact on fair value of a 20% increase $ (23 ) $ (18 ) Option-adjusted spread (basis points) 576 (NA ) Estimated impact on fair value of a 10% increase $ (6 ) (NA ) Estimated impact on fair value of a 20% increase $ (11 ) (NA ) Weighted-average coupon interest rate 5.74 % 6.06 % Weighted-average remaining maturity (months) 288 278 Weighted-average ser

Derivative Financial Instrument

Derivative Financial Instruments and Hedging Activities
	3 Months Ended Mar. 31, 2010
Derivative Financial Instruments and Hedging Activities	NOTE 9Derivative Financial Instruments and Hedging Activities Regions enters into derivative financial instruments to manage interest rate risk, facilitate asset/liability management strategies and manage other exposures. These derivative instruments primarily include interest rate swaps, options on interest rate swaps, interest rate caps and floors, Eurodollar futures, forward rate contracts and forward sale commitments. All derivative financial instruments are recognized on the consolidated balance sheets as other assets or other liabilities at fair value. Regions enters into master netting agreements with counterparties and/or requires collateral based on counterparty credit ratings to cover exposures. Interest rate swaps are agreements to exchange interest payments based upon notional amounts. Interest rate swaps subject Regions to market risk associated with changes in interest rates, as well as the credit risk that the counterparty will fail to perform. Option contracts involve rights to buy or sell financial instruments on a specified date or over a period at a specified price. These rights do not have to be exercised. Some option contracts, such as interest rate floors, involve the exchange of cash based on changes in specified indices. Interest rate floors are contracts to hedge interest rate declines based on a notional amount. Interest rate floors subject Regions to market risk associated with changes in interest rates, as well as the credit risk that the counterparty will fail to perform. Forward rate contracts are commitments to buy or sell financial instruments at a future date at a specified price or yield. Regions primarily enters into forward rate contracts on market instruments, which expose Regions to market risk associated with changes in the value of the underlying financial instrument, as well as the credit risk that the counterparty will fail to perform. Eurodollar futures are futures contracts on Eurodollar deposits. Eurodollar futures subject Regions to market risk associated with changes in interest rates. Because futures contracts are cash settled daily, there is minimal credit risk associated with Eurodollar futures. The following tables present the fair value of derivative instruments on a gross basis as of March31, 2010 and December31, 2009, respectively: March 31, 2010 Asset Derivatives Liability Derivatives BalanceSheetLocation Fair Value BalanceSheetLocation Fair Value (In millions) Derivatives designated as hedging instruments Interest rate swaps Otherassets $ 367 Other liabilities $ 2 Interest rate options Other assets 43 Other liabilities Eurodollar futures (1) Other assets Other liabilities Total derivatives designated as hedging instruments $ 410 $ 2 Derivatives not designated as hedging instruments Interest rate swaps Other assets $ 1,488 Other liabilities $ 1,497 Interest rate options Other assets 45 Other liabilities 24 Interest rate futur

Fair Value Measurements

Fair Value Measurements
	3 Months Ended Mar. 31, 2010
Fair Value Measurements	NOTE 10Fair Value Measurements Fair value guidance establishes a framework for using fair value to measure assets and liabilities and defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) as opposed to the price that would be paid to acquire the asset or received to assume the liability (an entry price). A fair value measure should reflect the assumptions that market participants would use in pricing the asset or liability, including the assumptions about the risk inherent in a particular valuation technique, the effect of a restriction on the sale or use of an asset and the risk of nonperformance. Required disclosures include stratification of balance sheet amounts measured at fair value based on inputs the Company uses to derive fair value measurements. These strata include: Level 1 valuations, where the valuation is based on quoted market prices for identical assets or liabilities traded in active markets (which include exchanges and over-the-counter markets with sufficient volume), Level 2 valuations, where the valuation is based on quoted market prices for similar instruments traded in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market, and Level 3 valuations, where the valuation is generated from model-based techniques that use significant assumptions not observable in the market, but observable based on Company-specific data. Theseunobservable assumptions reflect the Companys own estimates for assumptions that market participants would use in pricing the asset or liability. Valuation techniques typically include option pricing models, discounted cash flow models and similar techniques, but may also include the use of market prices of assets or liabilities that are not directly comparable to the subject asset or liability. ITEMS MEASURED AT FAIR VALUE ON A RECURRING BASIS Trading account assets (net of certain short-term borrowings), securities available for sale, mortgage loans held for sale, mortgage servicing rights and derivatives were recorded at fair value on a recurring basis during 2010 and 2009. Below is a description of valuation methodologies for these assets and liabilities: Trading account assets, net and securities available for sale primarily consist of U.S. Treasuries, obligations of states and political subdivisions, mortgage-backed securities (including agency securities), and equity securities. Trading account assets are presented net of short-sale liabilities which are valued based on the fair value of the underlying securities. U.S. Treasuries and mortgage-backed securities are valued primarily using data from third-party pricing services for similar securities as applicable. Pricing from these third party services is generally based on quoted market prices of similar instruments (including matrix pricing); these valuations are Level 2 measurements. Obligations of states and political subdivisions are generally based on data from third

Commitments and Contingencies

Commitments and Contingencies
	3 Months Ended Mar. 31, 2010
Commitments and Contingencies	NOTE 11Commitments and Contingencies COMMERCIAL COMMITMENTS Regions issues off-balance sheet financial instruments in connection with lending activities. The credit risk associated with these instruments is essentially the same as that involved in extending loans to customers and is subject to Regions normal credit approval policies and procedures. Regions measures inherent risk associated with these instruments by recording a reserve for unfunded commitments based on an assessment of the likelihood that the guarantee will be funded and the creditworthiness of the customer or counterparty. Collateral is obtained based on managements assessment of the creditworthiness of the customer. Credit risk associated with these instruments is represented by the contractual amounts indicated in the following table: March31 2010 December31 2009 March31 2009 (In millions) Unused commitments to extend credit $ 31,960 $ 31,008 $ 35,697 Standby letters of credit 4,901 4,610 7,518 Commercial letter of credit 35 30 15 Unused commitments to extend creditTo accommodate the financial needs of its customers, Regions makes commitments under various terms to lend funds to consumers, businesses and other entities. These commitments include (among others) revolving credit agreements, term loan commitments and short-term borrowing agreements. Many of these loan commitments have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of these commitments are expected to expire without being funded, the total commitment amounts do not necessarily represent future liquidity requirements. Standby letters of creditStandby letters of credit are also issued to customers, which commit Regions to make payments on behalf of customers if certain specified future events occur. Regions has recourse against the customer for any amount required to be paid to a third party under a standby letter of credit. Historically, a large percentage of standby letters of credit expired without being funded. The contractual amount of standby letters of credit represents the maximum potential amount of future payments Regions could be required to make and represents Regions maximum credit risk. At March31, 2010,December31, 2009 and March31, 2009, Regions had $109 million, $119 million and $116 million, respectively, of liabilities associated with standby letter of credit agreements, with related assets of $106 million, $114 million and $107 million, respectively. Commercial letters of creditCommercial letters of credit are issued to facilitate foreign or domestic trade transactions for customers. As a general rule, drafts will be drawn when the goods underlying the transaction are in transit. The reserve for all of these off-balance sheet financial instruments was $66 million, $74 million and $74 million at March31, 2010,December31, 2009 and March31, 2009, respectively. LEGAL Regions and its affiliates are subject to litigation and claims arising in the ordinary course of business. Punitive damages are routinely claimed in these cases. Regions continues to b

Recent Accounting Pronouncement

Recent Accounting Pronouncements
	3 Months Ended Mar. 31, 2010
Recent Accounting Pronouncements	NOTE 12Recent Accounting Pronouncements In April 2009, the FASB issued FASB Staff Position No.157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly, codified in the Fair Value Topic, to provide additional guidance for estimating fair value when the volume and level of activity for the asset or liability have significantly decreased. Additionally, it includes guidance on identifying circumstances that indicate a transaction is not orderly. The guidance emphasizes that even if there has been a significant decrease in the volume and level of activity for the asset or liability and regardless of the valuation technique(s) used, the objective of a fair value measurement remains the same. This guidance is effective for interim and annual reporting periods ending after June15, 2009, and is applied prospectively. Regions adopted these provisions during the second quarter of 2009, and the effect of the adoption on the consolidated financial statements was not material. In April 2009, the FASB issued FASB Staff Position No.107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments, codified in the Financial Instruments Topic of the ASC, to require disclosures about fair value of financial instruments for interim reporting periods as well as in annual financial statements. This guidance is effective for interim and annual reporting periods ending after June15, 2009, and is applied prospectively. Regions adopted these provisions during the second quarter of 2009. Refer to Note 10, Fair Value Measurements for additional information. In April 2009, the FASB issued FSP 115-2 and 124-2, Recognition and Presentation of Other-Than-Temporary Impairments, codified in the Investments Topic of the ASC, which modifies and expands other- than-temporary impairment guidance for debt securities. This guidance addresses the unique features of debt securities and clarifies the interaction of the factors that should be considered when determining whether a debt security is other-than-temporarily impaired. Additionally, it requires an entity to recognize the credit component of an other-than-temporary impairment of a debt security in earnings and the noncredit component in other comprehensive income when the entity does not intend to sell the security and it is more likely than not that the entity will not be required to sell the security prior to recovery. The guidance also expands and increases the frequency of existing disclosures about other-than-temporary impairments for debt and equity securities. This guidance is effective for interim and annual reporting periods ending after June15, 2009, and is applied prospectively. Regions adopted these provisions during the second quarter of 2009. Refer to Note 5, Securities for additional information. In May 2009, the FASB issued Statement of Financial Accounting Standards No.165, Subsequent Events, codified in the Subsequent Events Topic of the ASC, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but befo

Subsequent Events

Subsequent Events
	3 Months Ended Mar. 31, 2010
Subsequent Events	NOTE 13Subsequent Events In April 2010, Regions issued an aggregate principal amount of $750 million of senior unsecured notes. The issuance included $250 million of 4.875% senior notes which mature in 2013. The issuance also included $500 million of 5.75% senior notes which mature in 2015. The notes are obligations of the parent company. In April 2010, Regions announced that it was exercising its option to convert all 267,665 outstanding shares of its 10% Mandatorily Convertible Preferred Stock, Series B (Series B Preferred Stock), into shares of Regions common stock, par value $0.01 per share, in accordance with the terms of the Certificate of Designations with respect to the Series B Preferred Stock (the Certificate of Designations). The conversion rate for each of the outstanding shares of Series B Preferred Stock will be determined as set forth in the Certificate of Designations based on the average volume weighted average price per share of Regions common stock during the five trading days immediately preceding the effective date of the conversion. The conversion will be effective on or about June18, 2010 and Regions will issue the shares of common stock soon after that date. Regions expects an increase in its Tier 1 common ratio of approximately 25 basis points upon the increase in common shares outstanding. In connection with the conversion, as provided in the Certificate of Designations, Regions board of directors declared a dividend on all outstanding shares of Series B Preferred Stock in the amount of all dividends which would accrue between May15, 2010 and June18, 2010. The board declared that this dividend will be payable in shares of common stock at a price per share of 97% of the average volume weighted average price per share of Regions common stock during the five trading days immediately preceding the effective date of the conversion. The dividend will be paid on June18, 2010 or shortly thereafter to holders of record at the close of business on the effective date of the conversion.