Regions Financial 8K Results of Operations and Financial Condition | RF 19 Jul 19

Exhibit 99.2

Regions Financial Corporation and Subsidiaries

Financial Supplement

Second Quarter 2019

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2019 Earnings Release

Table of Contents




		Page

Financial Highlights		1

Selected Ratios and Other Information		2

Consolidated Statements of Income		3

Consolidated Average Daily Balances and Yield / Rate Analysis		5

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

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

Non-Interest Expense		10

Reconciliation to GAAP Financial Measures
Adjusted Efficiency Ratios, Adjusted Fee Income Ratios, Adjusted Non-Interest Income / Expense, Adjusted Operating Leverage Ratios, and Return Ratios		11

Credit Quality
Allowance for Credit Losses, Net Charge-Offs and Related Ratios		14
Non-Accrual Loans (excludes loans held for sale), Criticized and Classified Loans - Business Services, and Home Equity Lines of Credit - Future Principal Payment Resets		16
Early and Late Stage Delinquencies		17
Troubled Debt Restructurings		18

Consolidated Balance Sheets		19

Loans		20

Deposits		23

Reconciliation to GAAP Financial Measures
Tangible Common Ratios and Capital		25

Forward-Looking Statements		26

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2019 Earnings Release

Financial Highlights



	Quarter Ended
($ amounts in millions, except per share data)	6/30/2019			3/31/2019			12/31/2018			9/30/2018			6/30/2018
Earnings Summary
Interest income and other financing income - taxable equivalent	$	1,202		$	1,196		$	1,171		$	1,125		$	1,088
Interest expense - taxable equivalent	235			223			188			156			136
Depreciation expense on operating lease assets	11			12			12			14			14
Net interest income and other financing income - taxable equivalent - continuing operations	956			961			971			955			938
Less: Taxable-equivalent adjustment	14			13			13			13			12
Net interest income and other financing income	942			948			958			942			926
Provision for loan losses	92			91			95			84			60
Net interest income and other financing income after provision for loan losses	850			857			863			858			866
Non-interest income	494			502			481			519			512
Non-interest expense	861			860			853			922			911
Income from continuing operations before income taxes	483			499			491			455			467
Income tax expense	93			105			85			85			89
Income from continuing operations	390			394			406			370			378
Income (loss) from discontinued operations before income taxes	—			—			—			274			(3		)
Income tax expense (benefit)	—			—			—			80			—
Income (loss) from discontinued operations, net of tax	—			—			—			194			(3		)
Net income	$	390		$	394		$	406		$	564		$	375
Income from continuing operations available to common shareholders	$	374		$	378		$	390		$	354		$	362
Net income available to common shareholders	$	374		$	378		$	390		$	548		$	359

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

Balance Sheet Summary
At quarter-end—Consolidated
Loans, net of unearned income	$	83,553		$	84,430		$	83,152		$	81,821		$	80,478
Allowance for loan losses	(853		)	(853		)	(840		)	(840		)	(838		)
Assets	127,518			128,802			125,688			124,578			124,557
Deposits	94,971			95,720			94,491			93,255			95,283
Long-term borrowings - Federal Home Loan Bank advances	3,102			6,902			6,902			5,703			5,153
Long-term borrowings - Other	6,111			6,055			5,522			5,475			4,737
Stockholders' equity	16,608			15,512			15,090			14,770			15,777
Average balances—Consolidated
Loans, net of unearned income	$	83,905		$	83,725		$	81,873		$	81,022		$	79,957
Assets	126,115			125,543			123,538			123,526			122,960
Deposits	94,918			94,170			93,159			93,942			95,253
Long-term borrowings - Federal Home Loan Bank advances	4,787			5,876			5,704			5,286			3,711
Long-term borrowings - Other	6,068			5,877			5,478			5,143			5,031
Stockholders' equity	15,927			15,192			14,605			15,401			15,682

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2019 Earnings Release

Selected Ratios and Other Information



	As of and for Quarter Ended
	6/30/2019			3/31/2019			12/31/2018			9/30/2018			6/30/2018
Return on average assets* ⁽¹⁾	1.24		%	1.27		%	1.30		%	1.19		%	1.23		%
Return on average common stockholders' equity*	10.16		%	10.66		%	11.22		%	14.91		%	9.68		%
Return on average common stockholders' equity from continuing operations*	10.15		%	10.66		%	11.23		%	9.62		%	9.77		%
Return on average tangible common stockholders’ equity (non-GAAP)* ⁽²⁾	15.11		%	16.09		%	17.32		%	22.36		%	14.54		%
Return on average tangible common stockholders’ equity from continuing operations (non-GAAP)* ⁽²⁾	15.10		%	16.09		%	17.33		%	14.42		%	14.67		%
Efficiency ratio from continuing operations	59.4		%	58.8		%	58.7		%	62.6		%	62.7		%
Adjusted efficiency ratio from continuing operations (non-GAAP) ⁽²⁾	58.3		%	58.3		%	58.1		%	58.1		%	60.4		%
Common book value per share	$	15.24		$	14.50		$	13.92		$	13.22		$	13.42
Tangible common book value per share (non-GAAP) ⁽²⁾	$	10.42		$	9.72		$	9.19		$	8.62		$	8.97
Tangible common stockholders’ equity to tangible assets (non-GAAP) ⁽²⁾	8.53		%	7.95		%	7.80		%	7.60		%	8.36		%
Basel III common equity ⁽³⁾	$	10,484		$	10,443		$	10,371		$	10,481		$	11,234
Basel III common equity Tier 1 ratio ⁽³⁾	9.9		%	9.8		%	9.9		%	10.2		%	11.0		%
Tier 1 capital ratio ⁽³⁾	11.1		%	10.6		%	10.7		%	11.0		%	11.8		%
Total risk-based capital ratio ⁽³⁾	12.9		%	12.4		%	12.5		%	12.8		%	13.6		%
Leverage ratio ⁽³⁾	9.7		%	9.3		%	9.3		%	9.4		%	10.1		%
Effective tax rate	19.4		%	21.0		%	17.4		%	18.7		%	19.2		%
Allowance for loan losses as a percentage of loans, net of unearned income	1.02		%	1.01		%	1.01		%	1.03		%	1.04		%
Allowance for loan losses to non-performing loans, excluding loans held for sale	160		%	163		%	169		%	156		%	141		%
Net interest margin (FTE)*	3.45		%	3.53		%	3.55		%	3.50		%	3.49		%
Loans, net of unearned income, to total deposits	88.0		%	88.2		%	88.0		%	87.8		%	84.5		%
Net charge-offs as a percentage of average loans*	0.44		%	0.38		%	0.46		%	0.40		%	0.32		%
Non-accrual loans, excluding loans held for sale, as a percentage of loans	0.64		%	0.62		%	0.60		%	0.66		%	0.74		%
Non-performing assets (excluding loans 90 days past due) as a percentage of loans, foreclosed properties, non-marketable investments and non-performing loans held for sale	0.72		%	0.71		%	0.68		%	0.76		%	0.83		%
Non-performing assets (including loans 90 days past due) as a percentage of loans, foreclosed properties, non-marketable investments and non-performing loans held for sale ⁽⁴⁾	0.89		%	0.88		%	0.85		%	0.93		%	0.99		%
Associate headcount—full-time equivalent from continuing operations	19,765			20,056			19,969			19,869			20,326
ATMs	2,021			1,985			1,952			1,938			1,956
Branch Statistics
Full service	1,402			1,399			1,396			1,394			1,414
Drive-through/transaction service only	58			57			58			61			62
Total branch outlets	1,460			1,456			1,454			1,455			1,476

*Annualized


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


(2)	See reconciliation of GAAP to non-GAAP Financial Measures on pages 7, 11, 12, 13, 21, 22 and 25.


(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)	Excludes guaranteed residential first mortgages that are 90+ days past due and still accruing. Refer to the footnotes on page 17 for amounts related to these loans.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2019 Earnings Release

Consolidated Statements of Income (unaudited)



	Quarter Ended
($ amounts in millions, except per share data)	6/30/2019			3/31/2019			12/31/2018		9/30/2018		6/30/2018
Interest income, including other financing income on:
Loans, including fees	$	992		$	981		$	962	$	919	$	881
Debt securities—taxable	163			165			160		155		156
Loans held for sale	4			3			4		4		4
Other earning assets	15			19			17		17		17
Operating lease assets	14			15			15		17		18
Total interest income, including other financing income	1,188			1,183			1,158		1,112		1,076
Interest expense on:
Deposits	125			108			80		64		57
Short-term borrowings	14			13			15		8		6
Long-term borrowings	96			102			93		84		73
Total interest expense	235			223			188		156		136
Depreciation expense on operating lease assets	11			12			12		14		14
Total interest expense and depreciation expense on operating lease assets	246			235			200		170		150
Net interest income and other financing income	942			948			958		942		926
Provision for loan losses	92			91			95		84		60
Net interest income and other financing income after provision for loan losses	850			857			863		858		866
Non-interest income:
Service charges on deposit accounts	181			175			185		179		175
Card and ATM fees	120			109			111		111		112
Wealth management income	79			76			77		77		77
Capital markets income	39			42			50		45		57
Mortgage income	31			27			30		32		37
Securities gains (losses), net	(19		)	(7		)	—		—		1
Other	63			80			28		75		53
Total non-interest income	494			502			481		519		512
Non-interest expense:
Salaries and employee benefits	469			478			468		473		511
Net occupancy expense	80			82			86		82		84
Furniture and equipment expense	84			76			82		81		81
Other	228			224			217		286		235
Total non-interest expense	861			860			853		922		911
Income from continuing operations before income taxes	483			499			491		455		467
Income tax expense	93			105			85		85		89
Income from continuing operations	390			394			406		370		378
Discontinued operations ⁽¹⁾:
Income (loss) from discontinued operations before income taxes	—			—			—		274		(3		)
Income tax expense (benefit)	—			—			—		80		—
Income (loss) from discontinued operations, net of tax	—			—			—		194		(3		)
Net income	$	390		$	394		$	406	$	564	$	375
Net income from continuing operations available to common shareholders	$	374		$	378		$	390	$	354	$	362
Net income available to common shareholders	$	374		$	378		$	390	$	548	$	359
Weighted-average shares outstanding—during quarter:
Basic	1,010			1,019			1,035		1,086		1,119
Diluted	1,012			1,028			1,043		1,095		1,128
Actual shares outstanding—end of quarter	1,004			1,013			1,025		1,055		1,114
Earnings per common share from continuing operations:
Basic	$	0.37		$	0.37		$	0.38	$	0.33	$	0.32
Diluted	$	0.37		$	0.37		$	0.37	$	0.32	$	0.32
Earnings (loss) per common share from discontinued operations ⁽¹⁾⁽²⁾:
Basic	$	0.00		$	0.00		$	0.00	$	0.18	$	(0.00	)
Diluted	$	0.00		$	0.00		$	0.00	$	0.18	$	(0.00	)
Earnings per common share:
Basic	$	0.37		$	0.37		$	0.38	$	0.50	$	0.32
Diluted	$	0.37		$	0.37		$	0.37	$	0.50	$	0.32
Taxable-equivalent net interest income and other financing income	$	956		$	961		$	971	$	956	$	938

________

(1)

On April 4, 2018, Regions entered into a stock purchase agreement to sell Regions Insurance Group, Inc to BB&T Insurance Holdings. The transaction closed on July 2, 2018. The transaction generated an after-tax gain of $196 million. On January 11, 2012, Regions entered into a stock purchase agreement to sell Morgan Keegan and Company and related affiliates to Raymond James Financial Inc. The sale closed on April 2, 2012.


(2)	In a period where there is a loss from discontinued operations, basic weighted-average common shares outstanding are used to determine both basic and diluted earnings per share.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2019 Earnings Release

Consolidated Statements of Income (continued) (unaudited)



	Six Months Ended June 30
($ amounts in millions, except per share data)	2019			2018
Interest income, including other financing income on:
Loans, including fees	$	1,973		$	1,732
Debt securities—taxable	328			310
Loans held for sale	7			7
Other earning assets	34			36
Operating lease assets	29			38
Total interest income, including other financing income	2,371			2,123
Interest expense on:
Deposits	233			106
Short-term borrowings	27			7
Long-term borrowings	198			145
Total interest expense	458			258
Depreciation expense on operating lease assets	23			30
Total interest expense and depreciation expense on operating lease assets	481			288
Net interest income and other financing income	1,890			1,835
Provision for loan losses	183			50
Net interest income and other financing income after provision for loan losses	1,707			1,785
Non-interest income:
Service charges on deposit accounts	356			346
Card and ATM fees	229			216
Wealth management income	155			152
Capital markets income	81			107
Mortgage income	58			75
Securities gains (losses), net	(26		)	1
Other	143			122
Total non-interest income	996			1,019
Non-interest expense:
Salaries and employee benefits	947			1,006
Net occupancy expense	162			167
Furniture and equipment expense	160			162
Other	452			460
Total non-interest expense	1,721			1,795
Income from continuing operations before income taxes	982			1,009
Income tax expense	198			217
Income from continuing operations	784			792
Discontinued operations:
Income (loss) from discontinued operations before income taxes	—			(3		)
Income tax expense (benefit)	—			—
Income (loss) from discontinued operations, net of tax	—			(3		)
Net income	$	784		$	789
Net income from continuing operations available to common shareholders	$	752		$	760
Net income available to common shareholders	$	752		$	757
Weighted-average shares outstanding—during year:
Basic	1,015			1,123
Diluted	1,020			1,135
Actual shares outstanding—end of period	1,004			1,114
Earnings per common share from continuing operations:
Basic	$	0.74		$	0.68
Diluted	$	0.74		$	0.67
Earnings (loss) per common share from discontinued operations ⁽¹⁾⁽²⁾:
Basic	$	0.00		$	(0.00	)
Diluted	$	0.00		$	(0.00	)
Earnings per common share:
Basic	$	0.74		$	0.67
Diluted	$	0.74		$	0.67
Taxable-equivalent net interest income and other financing income	$	1,917		$	1,860

________

(1)


(2)	In a period where there is a loss from discontinued operations, basic weighted-average common shares outstanding are used to determine both basic and diluted earnings per share.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2019 Earnings Release

Consolidated Average Daily Balances and Yield/Rate Analysis



	Quarter Ended
	6/30/2019							3/31/2019
($ amounts in millions; yields on taxable-equivalent basis)	Average Balance			Income/ Expense		Yield/ Rate		Average Balance			Income/ Expense		Yield/ Rate
Assets
Earning assets:
Debt securities—taxable	$	24,539		$	163	2.67	%	$	24,251		$	165	2.72	%
Loans held for sale	398			4		4.14		302			3		3.63
Loans, net of unearned income:
Commercial and industrial	40,707			457		4.49		39,999			445		4.49
Commercial real estate mortgage—owner-occupied	5,448			64		4.65		5,560			65		4.65
Commercial real estate construction—owner-occupied	447			5		4.81		409			5		4.72
Commercial investor real estate mortgage	4,699			54		4.53		4,729			54		4.58
Commercial investor real estate construction	1,797			25		5.44		1,821			25		5.60
Residential first mortgage	14,150			142		4.01		14,203			144		4.04
Home equity	8,910			109		4.89		9,135			111		4.89
Indirect—vehicles	2,578			23		3.58		2,924			24		3.38
Indirect—other consumer	2,662			60		9.04		2,429			54		8.85
Consumer credit card	1,286			42		13.09		1,304			43		13.41
Other consumer	1,221			25		8.02		1,212			24		8.12
Total loans, net of unearned income	83,905			1,006		4.79		83,725			994		4.78
Investment in operating leases, net	340			3		3.45		364			3		3.41
Other earning assets	1,959			15		3.00		1,849			19		4.29
Total earning assets	111,141			1,191		4.28		110,491			1,184		4.31
Allowance for loan losses	(857		)					(843		)
Cash and due from banks	1,857							1,893
Other non-earning assets	13,974							14,002
	$	126,115						$	125,543
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Savings	$	8,806		3		0.16		$	8,852		4		0.17
Interest-bearing checking	18,869			33		0.71		19,309			33		0.69
Money market	24,350			49		0.79		23,989			40		0.68
Time deposits	9,010			40		1.78		8,124			31		1.56
Total interest-bearing deposits ⁽¹⁾	61,035			125		0.82		60,274			108		0.73
Federal funds purchased and securities sold under agreements to repurchase	244			1		2.41		343			2		2.41
Other short-term borrowings	1,965			13		2.54		1,735			11		2.55
Long-term borrowings	10,855			96		3.52		11,753			102		3.47
Total interest-bearing liabilities	74,099			235		1.27		74,105			223		1.22
Non-interest-bearing deposits ⁽¹⁾	33,883			—		—		33,896			—		—
Total funding sources	107,982			235		0.87		108,001			223		0.83
Net interest spread						3.01							3.09
Other liabilities	2,195							2,350
Stockholders’ equity	15,927							15,192
Noncontrolling interest	11							—
	$	126,115						$	125,543
Net interest income and other financing income/margin FTE basis				$	956	3.45	%				$	961	3.53	%

_______


(1)	Total deposit costs may be calculated by dividing total interest expense on deposits by the sum of interest-bearing deposits and non-interest bearing deposits. The rates for total deposit costs equal 0.53% and 0.46% for the quarters ended June 30, 2019 and March 31, 2019.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2019 Earnings Release

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



	Quarter Ended
	12/31/2018							9/30/2018							6/30/2018
($ amounts in millions; yields on taxable-equivalent basis)	Average Balance			Income/ Expense		Yield/ Rate		Average Balance			Income/ Expense		Yield/ Rate		Average Balance			Income/ Expense		Yield/ Rate
Assets
Earning assets:
Debt securities—taxable	$	23,891		$	160	2.68	%	$	24,198		$	156	2.56	%	$	24,386		$	156	2.56	%
Loans held for sale	413			4		4.25		386			4		4.14		388			4		4.21
Loans, net of unearned income:
Commercial and industrial	38,111			430		4.46		37,410			402		4.26		36,874			385		4.17
Commercial real estate mortgage—owner-occupied	5,847			69		4.64		6,000			71		4.61		6,017			71		4.67
Commercial real estate construction—owner-occupied	349			4		4.73		311			4		4.84		298			3		4.79
Commercial investor real estate mortgage	4,275			48		4.39		4,083			44		4.25		3,724			39		4.12
Commercial investor real estate construction	1,815			25		5.31		1,809			24		5.06		1,867			22		4.83
Residential first mortgage	14,230			142		4.01		14,162			141		3.96		13,980			137		3.93
Home equity	9,335			111		4.75		9,543			110		4.61		9,792			109		4.46
Indirect—vehicles	3,109			27		3.40		3,190			27		3.33		3,260			26		3.23
Indirect—other consumer	2,287			51		8.77		2,042			44		8.61		1,743			38		8.68
Consumer credit card	1,298			43		13.06		1,271			41		12.85		1,245			39		12.50
Other consumer	1,217			25		8.12		1,201			24		8.12		1,157			24		8.09
Total loans, net of unearned income	81,873			975		4.72		81,022			932		4.56		79,957			893		4.46
Investment in operating leases, net	383			3		3.36		410			3		3.33		439			4		3.59
Other earning assets	2,015			17		3.26		2,440			17		2.87		2,558			17		2.60
Total earning assets	108,575			1,159		4.24		108,456			1,112		4.07		107,728			1,074		3.98
Allowance for loan losses	(839		)					(834		)					(848		)
Cash and due from banks	1,957							2,036							1,953
Other non-earning assets	13,845							13,868							14,127
	$	123,538						$	123,526						$	122,960
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Savings	8,827			3		0.15		$	8,928		4		0.15		$	8,981		3		0.15
Interest-bearing checking	18,295			24		0.52		18,924			21		0.44		19,534			18		0.38
Money market	23,850			31		0.51		24,046			22		0.37		24,235			19		0.30
Time deposits	7,018			22		1.24		6,630			17		1.06		6,692			17		0.98
Total interest-bearing deposits ⁽¹⁾	57,990			80		0.54		58,528			64		0.44		59,442			57		0.38
Federal funds purchased and securities sold under agreements to repurchase	241			2		2.27		154			—		—		41			1		1.83
Other short-term borrowings	2,227			13		2.38		1,480			8		2.07		1,161			5		1.90
Long-term borrowings	11,182			93		3.28		10,429			84		3.14		8,742			73		3.35
Total interest-bearing liabilities	71,640			188		1.04		70,591			156		0.88		69,386			136		0.79
Non-interest-bearing deposits ⁽¹⁾	35,169			—		—		35,414			—		—		35,811			—		—
Total funding sources	106,809			188		0.69		106,005			156		0.58		105,197			136		0.52
Net interest spread						3.20							3.19							3.19
Other liabilities	2,124							2,120							2,081
Stockholders’ equity	14,605							15,401							15,682
	$	123,538						$	123,526						$	122,960
Net interest income and other financing income/margin FTE basis				$	971	3.55	%				$	956	3.50	%				$	938	3.49	%

_______


(1)	Total deposit costs may be calculated by dividing total interest expense on deposits by the sum of interest-bearing deposits and non-interest bearing deposits. The rates for total deposit costs equal 0.34% for the quarter ended December 31, 2018, 0.27% for the quarter ended September 30, 2018 and 0.24% for the quarter ended June 30, 2018.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2019 Earnings Release

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

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



	Quarter Ended
($ amounts in millions)	6/30/2019		3/31/2019			12/31/2018		9/30/2018			6/30/2018			2Q19 vs. 1Q19					2Q19 vs. 2Q18
Net income from continuing operations available to common shareholders (GAAP)	$	374	$	378		$	390	$	354		$	362		$	(4	)	(1.1	)%	$	12		3.3	%
Preferred dividends (GAAP)	16		16			16		16			16			—			—	%	—			—	%
Income tax expense (GAAP)	93		105			85		85			89			(12		)	(11.4	)%	4			4.5	%
Income from continuing operations before income taxes (GAAP)	483		499			491		455			467			(16		)	(3.2	)%	16			3.4	%
Provision for loan losses (GAAP)	92		91			95		84			60			1			1.1	%	32			53.3	%
Pre-tax pre-provision income from continuing operations (non-GAAP)	575		590			586		539			527			(15		)	(2.5	)%	48			9.1	%
Other adjustments:
Gain on sale of affordable housing residential mortgage loans ⁽¹⁾	—		(8		)	—		—			—			8			(100.0	)%	—			NM
Securities (gains) losses, net	19		7			—		—			(1		)	12			171.4	%	20			NM
Leveraged lease termination gains	—		—			—		(4		)	—			—			NM		—			NM
Salaries and employee benefits—severance charges	2		2			7		5			34			—			—	%	(32		)	(94.1	)%
Branch consolidation, property and equipment charges	2		6			3		4			1			(4		)	(66.7	)%	1			100.0	%
Contribution to the Regions Financial Corporation foundation	—		—			—		60			—			—			NM		—			NM
Total other adjustments	23		7			10		65			34			16			228.6	%	(11		)	(32.4	)%
Adjusted pre-tax pre-provision income from continuing operations (non-GAAP)	$	598	$	597		$	596	$	604		$	561		$	1		0.2	%	$	37		6.6	%

______

NM - Not Meaningful

(1) The gain on sale of affordable housing residential mortgage loans in the first quarter of 2019 was the result of the sale of approximately $167 million of loans.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2019 Earnings Release

Non-Interest Income from Continuing Operations



	Quarter Ended
($ amounts in millions)	6/30/2019			3/31/2019			12/31/2018			9/30/2018		6/30/2018			2Q19 vs. 1Q19					2Q19 vs. 2Q18
Service charges on deposit accounts	$	181		$	175		$	185		$	179	$	175		$	6		3.4	%	$	6		3.4	%
Card and ATM fees	120			109			111			111		112			11			10.1	%	8			7.1	%
Wealth management income	79			76			77			77		77			3			3.9	%	2			2.6	%
Capital markets income ⁽¹⁾	39			42			50			45		57			(3		)	(7.1	)%	(18		)	(31.6	)%
Mortgage income	31			27			30			32		37			4			14.8	%	(6		)	(16.2	)%
Commercial credit fee income	18			18			19			18		17			—			—	%	1			5.9	%
Bank-owned life insurance	19			23			12			18		18			(4		)	(17.4	)%	1			5.6	%
Securities gains (losses), net	(19		)	(7		)	—			—		1			(12		)	171.4	%	(20		)	NM
Market value adjustments on employee benefit assets - defined benefit ⁽²⁾	—			5			(7		)	3		(1		)	(5		)	(100.0	)%	1			(100.0	)%
Market value adjustments on employee benefit assets - other ⁽³⁾	(2		)	(1		)	(8		)	4		(1		)	(1		)	100.0	%	(1		)	100.0	%
Other	28			35			12			32		20			(7		)	(20.0	)%	8			40.0	%
Total non-interest income from continuing operations	$	494		$	502		$	481		$	519	$	512		$	(8	)	(1.6	)%	$	(18	)	(3.5	)%

Mortgage Income



	Quarter Ended
($ amounts in millions)	6/30/2019			3/31/2019			12/31/2018			9/30/2018			6/30/2018			2Q19 vs. 1Q19					2Q19 vs. 2Q18
Production and sales	$	26		$	19		$	15		$	24		$	23		$	7		36.8	%	$	3		13.0	%
Loan servicing	26			26			26			23			23			—			—	%	3			13.0	%
MSR and related hedge impact:
MSRs fair value increase (decrease) due to change in valuation inputs or assumptions	(43		)	(28		)	(20		)	6			10			(15		)	53.6	%	(53		)	NM
MSRs hedge gain (loss)	36			21			21			(9		)	(6		)	15			71.4	%	42			NM
MSRs change due to payment decay	(14		)	(11		)	(12		)	(12		)	(13		)	(3		)	27.3	%	(1		)	7.7	%
MSR and related hedge impact	(21		)	(18		)	(11		)	(15		)	(9		)	(3		)	16.7	%	(12		)	133.3	%
Total mortgage income	$	31		$	27		$	30		$	32		$	37		$	4		14.8	%	$	(6	)	(16.2	)%

Mortgage production - purchased	$	1,149		$	712		$	813		$	1,012		$	1,179		$	437		61.4	%	$	(30	)	(2.5	)%
Mortgage production - refinanced	312			209			216			237			249			103			49.3	%	63			25.3	%
Total mortgage production ⁽⁴⁾	$	1,461		$	921		$	1,029		$	1,249		$	1,428		$	540		58.6	%	$	33		2.3	%

Wealth Management Income



	Quarter Ended
($ amounts in millions)	6/30/2019		3/31/2019		12/31/2018		9/30/2018		6/30/2018		2Q19 vs. 1Q19				2Q19 vs. 2Q18
Investment management and trust fee income	$	59	$	57	$	60	$	59	$	58	$	2	3.5	%	$	1	1.7	%
Investment services fee income	20		19		17		18		19		1		5.3	%	1		5.3	%
Total wealth management income ⁽⁵⁾	$	79	$	76	$	77	$	77	$	77	$	3	3.9	%	$	2	2.6	%

Capital Markets Income



	Quarter Ended
($ amounts in millions)	6/30/2019			3/31/2019			12/31/2018			9/30/2018		6/30/2018			2Q19 vs. 1Q19					2Q19 vs. 2Q18
Capital markets income	$	39		$	42		$	50		$	45	$	57		$	(3	)	(7.1	)%	$	(18	)	(31.6	)%
Less: Valuation adjustments on customer derivatives ⁽⁶⁾	(7		)	(2		)	(7		)	1		(1		)	(5		)	250.0	%	(6		)	NM
Capital markets income excluding valuation adjustments	$	46		$	44		$	57		$	44	$	58		$	2		4.5	%	$	(12	)	(20.7	)%

_________

NM - Not Meaningful


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


(2)	During the second quarter of 2019, the Company reallocated these employee benefit assets from primarily equity securities to fixed income investments. Market valuation adjustments for fixed income investments are recorded in other comprehensive income, and as such these adjustments did not impact non-interest income in the second quarter of 2019.


(3)	These market value adjustments relate to assets held for employee benefits that are offset within salaries and employee benefits expense.


(4)	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.


(5)	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.


(6)	For the purposes of determining the fair value of customer derivatives, the Company considers the risk of nonperformance by counterparties, as well as the Company's own risk of nonperformance. The valuation adjustments above are reflective of the values associated with these considerations.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2019 Earnings Release

Non-Interest Income from Continuing Operations



	Six Months Ended						Year-to-Date Change 6/30/2019 vs. 6/30/2018
($ amounts in millions)	6/30/2019			6/30/2018			Amount			Percent
Service charges on deposit accounts	$	356		$	346		$	10		2.9	%
Card and ATM fees	229			216			13			6.0	%
Wealth management income	155			152			3			2.0	%
Capital markets income ⁽¹⁾	81			107			(26		)	(24.3	)%
Mortgage income	58			75			(17		)	(22.7	)%
Commercial credit fee income	36			34			2			5.9	%
Bank-owned life insurance	42			35			7			20.0	%
Securities gains (losses), net	(26		)	1			(27		)	NM
Market value adjustments on employee benefit assets - defined benefit	5			(2		)	7			(350.0	)%
Market value adjustments on employee benefit assets - other ⁽²⁾	(3		)	(1		)	(2		)	200.0	%
Other	63			56			7			12.5	%
Total non-interest income from continuing operations	$	996		$	1,019		$	(23	)	(2.3	)%

Mortgage Income



	Six Months Ended						Year-to-Date Change 6/30/2019 vs. 6/30/2018
($ amounts in millions)	6/30/2019			6/30/2018			Amount			Percent
Production and sales	$	45		$	46		$	(1	)	(2.2	)%
Loan servicing	52			46			6			13.0	%
MSR and related hedge impact:
MSRs fair value increase (decrease) due to change in valuation inputs or assumptions	(71		)	32			(103		)	(321.9	)%
MSRs hedge gain (loss)	57			(26		)	83			(319.2	)%
MSRs change due to payment decay	(25		)	(23		)	(2		)	8.7	%
MSR and related hedge impact	(39		)	(17		)	(22		)	129.4	%
Total mortgage income	$	58		$	75		$	(17	)	(22.7	)%

Mortgage production - purchased	$	1,861		$	1,996		$	(135	)	(6.8	)%
Mortgage production - refinanced	521			528			(7		)	(1.3	)%
Total mortgage production ⁽³⁾	$	2,382		$	2,524		$	(142	)	(5.6	)%

Wealth Management Income



	Six Months Ended				Year-to-Date Change 6/30/2019 vs. 6/30/2018
($ amounts in millions)	6/30/2019		6/30/2018		Amount		Percent
Investment management and trust fee income	$	116	$	116	$	—	—	%
Investment services fee income	39		36		3		8.3	%
Total wealth management income ⁽⁴⁾	$	155	$	152	$	3	2.0	%

Capital Markets Income



	Six Months Ended					Year-to-Date Change 6/30/2019 vs. 6/30/2018
($ amounts in millions)	6/30/2019			6/30/2018		Amount			Percent
Capital markets income	$	81		$	107	$	(26	)	(24.3	)%
Less: Valuation adjustments on customer derivatives ⁽⁵⁾	(9		)	4		(13		)	(325.0	)%
Capital markets income excluding valuation adjustments	$	90		$	103	$	(13	)	(12.6	)%

_________

NM - Not Meaningful


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


(2)	These market value adjustments relate to assets held for certain employee benefits and are offset within salaries and employee benefits expense.


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


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


(5)	For the purposes of determining the fair value of customer derivatives, the Company considers the risk of nonperformance by counterparties, as well as the Company's own risk of nonperformance. The valuation adjustments above are reflective of the values associated with these considerations.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2019 Earnings Release

Non-Interest Expense from Continuing Operations



	Quarter Ended
($ amounts in millions)	6/30/2019		3/31/2019			12/31/2018			9/30/2018		6/30/2018			2Q19 vs. 1Q19					2Q19 vs. 2Q18
Salaries and employee benefits ⁽¹⁾	$	469	$	478		$	468		$	473	$	511		$	(9	)	(1.9	)%	$	(42	)	(8.2	)%
Net occupancy expense	80		82			86			82		84			(2		)	(2.4	)%	(4		)	(4.8	)%
Furniture and equipment expense	84		76			82			81		81			8			10.5	%	3			3.7	%
Outside services	52		45			46			46		48			7			15.6	%	4			8.3	%
Professional, legal and regulatory expenses	26		20			27			32		33			6			30.0	%	(7		)	(21.2	)%
Marketing	23		23			21			20		25			—			—	%	(2		)	(8.0	)%
FDIC insurance assessments	12		13			14			22		25			(1		)	(7.7	)%	(13		)	(52.0	)%
Credit/checkcard expenses	18		16			13			18		13			2			12.5	%	5			38.5	%
Branch consolidation, property and equipment charges	2		6			3			4		1			(4		)	(66.7	)%	1			100.0	%
Visa class B shares expense	3		4			(2		)	—		10			(1		)	(25.0	)%	(7		)	(70.0	)%
Provision (credit) for unfunded credit losses	—		(1		)	1			2		(1		)	1			(100.0	)%	1			(100.0	)%
Other	92		98			94			142		81			(6		)	(6.1	)%	11			13.6	%
Total non-interest expense from continuing operations	$	861	$	860		$	853		$	922	$	911		$	1		0.1	%	$	(50	)	(5.5	)%



	Six Months Ended						Year-to-Date Change 6/30/19 vs. 6/30/18
($ amounts in millions)	6/30/2019			6/30/2018			Amount			Percent
Salaries and employee benefits ⁽¹⁾	$	947		$	1,006		$	(59	)	(5.9	)%
Net occupancy expense	162			167			(5		)	(3.0	)%
Furniture and equipment expense	160			162			(2		)	(1.2	)%
Outside services	97			95			2			2.1	%
Professional, legal and regulatory expenses	46			60			(14		)	(23.3	)%
Marketing	46			51			(5		)	(9.8	)%
FDIC insurance assessments	25			49			(24		)	(49.0	)%
Credit/checkcard expenses	34			26			8			30.8	%
Branch consolidation, property and equipment charges	8			4			4			100.0	%
Visa class B shares expense	7			12			(5		)	(41.7	)%
Provision (credit) for unfunded credit losses	(1		)	(5		)	4			(80.0	)%
Other	190			168			22			13.1	%
Total non-interest expense from continuing operations	$	1,721		$	1,795		$	(74	)	(4.1	)%

_________


(1)	Salaries and employee benefits expense includes severance charges for each of the quarters. See the amounts for the respective quarters on page 7.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2019 Earnings Release

Reconciliation to GAAP Financial Measures

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

The table below and on the following page present computations of the efficiency ratio, which is a measure of productivity, generally calculated as non-interest expense divided by total revenue; and the fee income ratio, generally calculated as non-interest income divided by total revenue. Management uses these ratios to monitor performance and believes these measures provide meaningful information to investors. Non-interest expense (GAAP) is presented excluding certain adjustments to arrive at adjusted non-interest expense (non-GAAP), which is the numerator for the efficiency ratio. Non-interest income (GAAP) is presented excluding certain adjustments to arrive at adjusted non-interest income (non-GAAP), which is the numerator for the fee income ratio. Net interest income and other financing income and non-interest income are added together to arrive at total revenue. Adjustments are made to arrive at adjusted total revenue (non-GAAP). 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 also presents a computation of the operating leverage ratio (non-GAAP) which is the period to period percentage change in adjusted total revenue on a taxable-equivalent basis (non-GAAP) less the percentage change in adjusted non-interest expense (non-GAAP). Regions believes that presentation of these non-GAAP financial measures will permit investors to assess the performance of the Company on the same basis as that applied by management.



		Quarter Ended
($ amounts in millions)		6/30/2019			3/31/2019			12/31/2018			9/30/2018			6/30/2018			2Q19 vs. 1Q19					2Q19 vs. 2Q18
Non-interest expense (GAAP)	A	$	861		$	860		$	853		$	922		$	911		$	1		0.1	%	$	(50	)	(5.5	)%
Adjustments:
Contribution to the Regions Financial Corporation foundation		—			—			—			(60		)	—			—			NM		—			NM
Branch consolidation, property and equipment charges		(2		)	(6		)	(3		)	(4		)	(1		)	4			(66.7	)%	(1		)	100.0	%
Salary and employee benefits—severance charges		(2		)	(2		)	(7		)	(5		)	(34		)	—			—	%	32			(94.1	)%
Adjusted non-interest expense (non-GAAP)	B	$	857		$	852		$	843		$	853		$	876		$	5		0.6	%	$	(19	)	(2.2	)%
Net interest income and other financing income (GAAP)	C	$	942		$	948		$	958		$	942		$	926		$	(6	)	(0.6	)%	$	16		1.7	%
Taxable-equivalent adjustment		14			13			13			13			12			1			7.7	%	2			16.7	%
Net interest income and other financing income, taxable-equivalent basis - continuing operations	D	$	956		$	961		$	971		$	955		$	938		$	(5	)	(0.5	)%	$	18		1.9	%
Non-interest income (GAAP)	E	$	494		$	502		$	481		$	519		$	512		$	(8	)	(1.6	)%	$	(18	)	(3.5	)%
Adjustments:
Securities (gains) losses, net		19			7			—			—			(1		)	12			171.4	%	20			NM
Leveraged lease termination gains		—			—			—			(4		)	—			—			NM		—			NM
Gain on sale of affordable housing residential mortgage loans ⁽¹⁾		—			(8		)	—			—			—			8			(100.0	)%	—			NM
Adjusted non-interest income (non-GAAP)	F	$	513		$	501		$	481		$	515		$	511		$	12		2.4	%	$	2		0.4	%
Total revenue	C+E=G	$	1,436		$	1,450		$	1,439		$	1,461		$	1,438		$	(14	)	(1.0	)%	$	(2	)	(0.1	)%
Adjusted total revenue (non-GAAP)	C+F=H	$	1,455		$	1,449		$	1,439		$	1,457		$	1,437		$	6		0.4	%	$	18		1.3	%
Total revenue, taxable-equivalent basis	D+E=I	$	1,450		$	1,463		$	1,452		$	1,474		$	1,450		$	(13	)	(0.9	)%	$	—		—	%
Adjusted total revenue, taxable-equivalent basis (non-GAAP)	D+F=J	$	1,469		$	1,462		$	1,452		$	1,470		$	1,449		$	7		0.5	%	$	20		1.4	%
Efficiency ratio (GAAP)	A/I	59.4		%	58.8		%	58.7		%	62.6		%	62.7		%
Adjusted efficiency ratio (non-GAAP)	B/J	58.3		%	58.3		%	58.1		%	58.1		%	60.4		%
Fee income ratio (GAAP)	E/I	34.1		%	34.3		%	33.1		%	35.2		%	35.3		%
Adjusted fee income ratio (non-GAAP)	F/J	35.0		%	34.3		%	33.1		%	35.0		%	35.2		%

________

NM - Not Meaningful

(1) See page 7 for more information regarding this adjustment.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2019 Earnings Release

Reconciliation to GAAP Financial Measures

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



		Six Months Ended June 30
($ amounts in millions)		2019			2018			2019 vs. 2018
Non-interest expense (GAAP)	K	$	1,721		$	1,795		$	(74	)	(4.1	)%
Adjustments:
Branch consolidation, property and equipment charges		(8		)	(4		)	(4		)	100.0	%
Expenses associated with residential mortgage loan sale		—			(4		)	4			(100.0	)%
Salary and employee benefits—severance charges		(4		)	(49		)	45			(91.8	)%
Adjusted non-interest expense (non-GAAP)	L	$	1,709		$	1,738		$	(29	)	(1.7	)%
Net interest income and other financing income (GAAP)	M	$	1,890		$	1,835		$	55		3.0	%
Taxable-equivalent adjustment		27			25			2			8.0	%
Net interest income and other financing income, taxable-equivalent basis - continuing operations	N	$	1,917		$	1,860		$	57		3.1	%
Non-interest income (GAAP)	O	$	996		$	1,019		$	(23	)	(2.3	)%
Adjustments:
Securities (gains) losses, net		26			(1		)	27			NM
Leveraged lease termination gains		—			(4		)	4			(100.0	)%
Gain on sale of affordable housing residential mortgage loans ⁽¹⁾		(8		)	—			(8		)	NM
Adjusted non-interest income (non-GAAP)	P	$	1,014		$	1,014		$	—		—	%
Total revenue	M+O=Q	$	2,886		$	2,854		$	32		1.1	%
Adjusted total revenue (non-GAAP)	M+P=R	$	2,904		$	2,849		$	55		1.9	%
Total revenue, taxable-equivalent basis	N+O=S	$	2,913		$	2,879		$	34		1.2	%
Adjusted total revenue, taxable-equivalent basis (non-GAAP)	N+P=T	$	2,931		$	2,874		$	57		2.0	%
Operating leverage ratio (GAAP)	S-K										5.3	%
Adjusted operating leverage ratio (non-GAAP)	T-L										3.7	%
Efficiency ratio (GAAP)	K/S	59.1		%	62.3		%
Adjusted efficiency ratio (non-GAAP)	L/T	58.3		%	60.5		%
Fee income ratio (GAAP)	O/S	34.2		%	35.4		%
Adjusted fee income ratio (non-GAAP)	P/T	34.6		%	35.3		%

______

NM - Not Meaningful

(1) See page 7 for more information regarding this adjustment.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2019 Earnings Release

Reconciliation to GAAP Financial Measures

Return Ratios

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



		Quarter Ended
($ amounts in millions)		6/30/2019			3/31/2019			12/31/2018			9/30/2018			6/30/2018
RETURN ON AVERAGE TANGIBLE COMMON STOCKHOLDERS' EQUITY- CONSOLIDATED
Net income available to common shareholders (GAAP)	A	$	374		$	378		$	390		$	548		$	359
Average stockholders' equity (GAAP)		$	15,927		$	15,192		$	14,605		$	15,401		$	15,682
Less:
Average intangible assets (GAAP)		4,933			4,940			4,947			4,955			5,066
Average deferred tax liability related to intangibles (GAAP)		(94		)	(94		)	(95		)	(97		)	(98		)
Average preferred stock (GAAP)		1,154			820			820			820			820
Average tangible common stockholders' equity (non-GAAP)	B	$	9,934		$	9,526		$	8,933		$	9,723		$	9,894
Return on average tangible common stockholders' equity (non-GAAP)*	A/B	15.11		%	16.09		%	17.32		%	22.36		%	14.54		%



		Quarter Ended
($ amounts in millions)		6/30/2019			3/31/2019			12/31/2018			9/30/2018			6/30/2018
RETURN ON AVERAGE TANGIBLE COMMON STOCKHOLDERS' EQUITY- CONTINUING OPERATIONS
Net income from continuing operations available to common shareholders (GAAP)	C	$	374		$	378		$	390		$	354		$	362
Average stockholders' equity (GAAP)⁽¹⁾		$	15,927		$	15,192		$	14,605		$	15,401		$	15,682
Less:
Average intangible assets (GAAP)⁽¹⁾		4,933			4,940			4,947			4,955			5,066
Average deferred tax liability related to intangibles (GAAP)⁽¹⁾		(94		)	(94		)	(95		)	(97		)	(98		)
Average preferred stock (GAAP)⁽¹⁾		1,154			820			820			820			820
Average tangible common stockholders' equity (non-GAAP)	D	$	9,934		$	9,526		$	8,933		$	9,723		$	9,894
Return on average tangible common stockholders' equity (non-GAAP)*	C/D	15.10		%	16.09		%	17.33		%	14.42		%	14.67		%

______

*Annualized

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

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2019 Earnings Release

Credit Quality



	As of and for Quarter Ended
($ amounts in millions)	6/30/2019			3/31/2019			12/31/2018			9/30/2018			6/30/2018
Components:
Allowance for loan losses (ALL)	$	853		$	853		$	840		$	840		$	838
Reserve for unfunded credit commitments	50			50			51			50			48
Allowance for credit losses (ACL)	$	903		$	903		$	891		$	890		$	886

Provision for loan losses	$	92		$	91		$	95		$	84		$	60
Provision (credit) for unfunded credit losses	—			(1		)	1			2			(1		)

Loans charged-off:
Commercial and industrial	$	42		$	27		$	39		$	37		$	29
Commercial real estate mortgage—owner-occupied	2			3			4			4			5
Total commercial	44			30			43			41			34
Commercial investor real estate mortgage	—			—			—			1			—
Commercial investor real estate construction	—			—			—			—			—
Total investor real estate	—			—			—			1			—
Residential first mortgage	2			1			2			3			1
Home equity—lines of credit	3			5			8			6			6
Home equity—closed-end	2			1			2			1			2
Indirect—vehicles	6			9			9			8			9
Indirect—other consumer	18			17			15			11			10
Consumer credit card	17			17			16			14			15
Other consumer	21			22			24			22			18
Total consumer	69			72			76			65			61
Total	113			102			119			107			95

Recoveries of loans previously charged-off:
Commercial and industrial	6			6			9			8			12
Commercial real estate mortgage—owner-occupied	—			3			2			2			2
Total commercial	6			9			11			10			14
Commercial investor real estate mortgage	—			1			1			1			1
Commercial investor real estate construction	1			—			1			1			1
Total investor real estate	1			1			2			2			2
Residential first mortgage	1			1			1			1			3
Home equity—lines of credit	3			3			3			3			4
Home equity—closed-end	1			1			1			1			1
Indirect—vehicles	3			4			3			3			4
Indirect—other consumer	—			—			—			—			—
Consumer credit card	2			2			1			2			2
Other consumer	4			3			2			3			3
Total consumer	14			14			11			13			17
Total	21			24			24			25			33

Net loans charged-off:
Commercial and industrial	36			21			30			29			17
Commercial real estate mortgage—owner-occupied	2			—			2			2			3
Total commercial	38			21			32			31			20
Commercial investor real estate mortgage	—			(1		)	(1		)	—			(1		)
Commercial investor real estate construction	(1		)	—			(1		)	(1		)	(1		)
Total investor real estate	(1		)	(1		)	(2		)	(1		)	(2		)
Residential first mortgage	1			—			1			2			(2		)
Home equity—lines of credit	—			2			5			3			2
Home equity—closed-end	1			—			1			—			1
Indirect—vehicles	3			5			6			5			5
Indirect—other consumer	18			17			15			11			10
Consumer credit card	15			15			15			12			13
Other consumer	17			19			22			19			15
Total consumer	55			58			65			52			44
Total	$	92		$	78		$	95		$	82		$	62

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2019 Earnings Release



Credit Quality (continued)

	As of and for Quarter Ended
($ amounts in millions)	6/30/2019			3/31/2019			12/31/2018			9/30/2018			6/30/2018
Net loan charge-offs as a % of average loans, annualized:
Commercial and industrial	0.36		%	0.21		%	0.32		%	0.31		%	0.18		%
Commercial real estate mortgage—owner-occupied	0.11		%	0.05		%	0.16		%	0.16		%	0.17		%
Total commercial	0.33		%	0.18		%	0.29		%	0.28		%	0.18		%
Commercial investor real estate mortgage	(0.03		)%	(0.07		)%	(0.06		)%	(0.04		)%	(0.10		)%
Commercial investor real estate construction	(0.15		)%	—		%	(0.12		)%	(0.23		)%	(0.25		)%
Total investor real estate	(0.06		)%	(0.05		)%	(0.07		)%	(0.10		)%	(0.15		)%
Residential first mortgage	—		%	0.02		%	0.04		%	0.04		%	(0.05		)%
Home equity—lines of credit	0.04		%	0.12		%	0.35		%	0.17		%	0.15		%
Home equity—closed-end	0.04		%	0.09		%	0.10		%	(0.03		)%	0.11		%
Indirect—vehicles	0.53		%	0.69		%	0.71		%	0.62		%	0.66		%
Indirect—other consumer	2.66		%	2.79		%	2.58		%	2.23		%	2.46		%
Consumer credit card	4.62		%	4.66		%	4.16		%	3.97		%	4.22		%
Other consumer	5.90		%	6.13		%	7.23		%	6.26		%	5.08		%
Total consumer	0.71		%	0.75		%	0.80		%	0.65		%	0.58		%
Total	0.44		%	0.38		%	0.46		%	0.40		%	0.32		%
Non-accrual loans, excluding loans held for sale	$	533		$	523		$	496		$	539		$	595
Non-performing loans held for sale	11			13			10			15			10
Non-accrual loans, including loans held for sale	544			536			506			554			605
Foreclosed properties	55			53			52			58			61
Non-marketable investments received in foreclosure	5			8			8			12			—
Non-performing assets (NPAs)	$	604		$	597		$	566		$	624		$	666
Loans past due > 90 days ⁽¹⁾	$	144		$	147		$	143		$	137		$	129
Accruing restructured loans not included in categories above ⁽²⁾	$	469		$	479		$	488		$	600		$	590
Credit Ratios:
ACL/Loans, net	1.08		%	1.07		%	1.07		%	1.09		%	1.10		%
ALL/Loans, net	1.02		%	1.01		%	1.01		%	1.03		%	1.04		%
Allowance for loan losses to non-performing loans, excluding loans held for sale	160		%	163		%	169		%	156		%	141		%
Non-accrual loans, excluding loans held for sale/Loans, net	0.64		%	0.62		%	0.60		%	0.66		%	0.74		%
NPAs (ex. 90+ past due)/Loans, foreclosed properties, non-marketable investments and non-performing loans held for sale	0.72		%	0.71		%	0.68		%	0.76		%	0.83		%
NPAs (inc. 90+ past due)/Loans, foreclosed properties, non-marketable investments and non-performing loans held for sale ⁽¹⁾	0.89		%	0.88		%	0.85		%	0.93		%	0.99		%


(1)	Excludes guaranteed residential first mortgages that are 90+ days past due and still accruing. Refer to the footnotes on page 17 for amounts related to these loans.


(2)	See page 18 for detail of restructured loans.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2019 Earnings Release

Non-Accrual Loans (excludes loans held for sale)



	As of
($ amounts in millions)	6/30/2019				3/31/2019				12/31/2018				9/30/2018				6/30/2018
Commercial and industrial	$	347	0.86	%	$	336	0.82	%	$	307	0.78	%	$	341	0.90	%	$	384	1.04	%
Commercial real estate mortgage—owner-occupied	68		1.26	%	67		1.22	%	67		1.21	%	80		1.36	%	98		1.63	%
Commercial real estate construction—owner-occupied	15		3.62	%	14		3.26	%	8		2.16	%	8		2.41	%	5		1.66	%
Total commercial	430		0.93	%	417		0.89	%	382		0.85	%	429		0.97	%	487		1.12	%
Commercial investor real estate mortgage	8		0.15	%	8		0.16	%	11		0.22	%	2		0.04	%	4		0.10	%
Total investor real estate	8		0.12	%	8		0.12	%	11		0.16	%	2		0.04	%	4		0.06	%
Residential first mortgage	34		0.24	%	34		0.24	%	40		0.28	%	42		0.29	%	38		0.27	%
Home equity—lines of credit	52		0.93	%	53		0.93	%	53		0.90	%	56		0.94	%	55		0.88	%
Home equity—closed-end	9		0.28	%	11		0.32	%	10		0.30	%	10		0.29	%	11		0.32	%
Total consumer	95		0.31	%	98		0.32	%	103		0.33	%	108		0.34	%	104		0.33	%
Total non-accrual loans	$	533	0.64	%	$	523	0.62	%	$	496	0.60	%	$	539	0.66	%	$	595	0.74	%

Criticized and Classified Loans—Business Services ⁽¹⁾



	As of
											06/30/2019					06/30/2019
($ amounts in millions)	6/30/2019		3/31/2019		12/31/2018		9/30/2018		6/30/2018		vs. 3/31/2019					vs. 06/30/2018
Accruing classified	$	528	$	631	$	590	$	550	$	560	$	(103	)	(16.3	)%	$	(32	)	(5.7	)%
Non-accruing classified	438		425		393		431		491		13			3.1	%	(53		)	(10.8	)%
Total classified	966		1,056		983		981		1,051		(90		)	(8.5	)%	(85		)	(8.1	)%

Special mention	1,158		1,063		939		1,048		857		95			8.9	%	301			35.1	%
Total criticized	$	2,124	$	2,119	$	1,922	$	2,029	$	1,908	$	5		0.2	%	$	216		11.3	%


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

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



	As of 6/30/2019
($ amounts in millions)	First Lien		% of Total		Second Lien		% of Total		Total
2019	$	38	0.68	%	$	33	0.59	%	$	71
2020	93		1.68	%	69		1.24	%	162
2021	114		2.06	%	101		1.82	%	215
2022	123		2.22	%	120		2.15	%	243
2023	158		2.84	%	142		2.56	%	300
2024-2028	2,220		39.92	%	2,093		37.63	%	4,313
2029-2033	143		2.56	%	111		2.00	%	254
Thereafter	1		0.02	%	2		0.03	%	3
Total	$	2,890	51.98	%	$	2,671	48.02	%	$	5,561

(2)

The balance of Regions' home equity portfolio was $8,802 million at June 30, 2019 consisting of $5,561 million of home equity lines of credit and $3,241 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 Second Quarter 2019 Earnings Release

Early and Late Stage Delinquencies



Accruing 30-89 Days Past Due Loans	As of
($ amounts in millions)	6/30/2019				3/31/2019				12/31/2018				9/30/2018				6/30/2018
Commercial and industrial	$	74	0.18	%	$	35	0.08	%	$	102	0.26	%	$	45	0.12	%	$	18	0.05	%
Commercial real estate mortgage—owner-occupied	33		0.61	%	12		0.22	%	19		0.34	%	18		0.31	%	16		0.28	%
Commercial real estate construction—owner-occupied	2		0.52	%	—		—	%	—		—	%	—		—	%	3		0.84	%
Total commercial	109		0.24	%	47		0.10	%	121		0.27	%	63		0.14	%	37		0.08	%
Commercial investor real estate mortgage	1		0.01	%	1		0.01	%	6		0.12	%	6		0.13	%	6		0.14	%
Commercial investor real estate construction	—		—	%	1		0.03	%	—		—	%	—		—	%	—		0.01	%
Total investor real estate	1		0.01	%	2		0.02	%	6		0.09	%	6		0.09	%	6		0.10	%
Residential first mortgage—non-guaranteed ⁽¹⁾	88		0.63	%	88		0.64	%	101		0.73	%	89		0.65	%	82		0.60	%
Home equity—lines of credit	53		0.95	%	50		0.89	%	53		0.90	%	53		0.87	%	55		0.89	%
Home equity—closed-end	18		0.56	%	18		0.55	%	20		0.58	%	24		0.70	%	22		0.62	%
Indirect—vehicles	42		1.74	%	43		1.55	%	51		1.69	%	51		1.64	%	49		1.51	%
Indirect—other consumer	20		0.72	%	20		0.80	%	20		0.85	%	16		0.76	%	11		0.59	%
Consumer credit card	17		1.32	%	19		1.48	%	21		1.58	%	19		1.50	%	16		1.32	%
Other consumer	21		1.71	%	20		1.67	%	20		1.60	%	20		1.62	%	16		1.40	%
Total consumer ⁽¹⁾	259		0.85	%	258		0.85	%	286		0.92	%	272		0.88	%	251		0.82	%
Total accruing 30-89 days past due loans ⁽¹⁾	$	369	0.44	%	$	307	0.37	%	$	413	0.50	%	$	341	0.42	%	$	294	0.37	%

Accruing 90+ Days Past Due Loans	As of
($ amounts in millions)	6/30/2019				3/31/2019				12/31/2018				9/30/2018				6/30/2018
Commercial and industrial	$	11	0.03	%	$	11	0.03	%	$	8	0.02	%	$	4	0.01	%	$	4	0.01	%
Commercial real estate mortgage—owner-occupied	—		—	%	1		0.01	%	—		—	%	2		0.02	%	1		0.01	%
Total commercial	11		0.02	%	12		0.02	%	8		0.02	%	6		0.01	%	5		0.01	%
Residential first mortgage—non-guaranteed ⁽²⁾	61		0.44	%	66		0.48	%	66		0.47	%	61		0.44	%	63		0.46	%
Home equity—lines of credit	31		0.55	%	27		0.46	%	24		0.41	%	30		0.50	%	23		0.37	%
Home equity—closed-end	9		0.28	%	10		0.31	%	10		0.29	%	9		0.28	%	8		0.25	%
Indirect—vehicles	6		0.26	%	7		0.26	%	9		0.28	%	9		0.28	%	8		0.24	%
Indirect—other consumer	2		0.07	%	1		0.03	%	1		0.06	%	1		0.03	%	—		—	%
Consumer credit card	20		1.47	%	20		1.59	%	20		1.48	%	17		1.36	%	17		1.31	%
Other consumer	4		0.35	%	4		0.36	%	5		0.42	%	4		0.32	%	5		0.36	%
Total consumer ⁽²⁾	133		0.44	%	135		0.44	%	135		0.43	%	131		0.42	%	124		0.40	%
Total accruing 90+ days past due loans ⁽²⁾	$	144	0.17	%	$	147	0.18	%	$	143	0.17	%	$	137	0.17	%	$	129	0.16	%

Total delinquencies ^{(1) (2)}	$	513	0.62	%	$	454	0.54	%	$	556	0.67	%	$	478	0.59	%	$	423	0.53	%


(1)	Excludes loans that are 100% guaranteed by FHA. Total 30-89 days past due guaranteed loans excluded were $35 million at 6/30/2019, $32 million at 3/31/2019, $37 million at 12/31/2018, $36 million at 9/30/2018, and $28 million at 6/30/2018.


(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 $66 million at 6/30/2019, $76 million at 3/31/2019, $84 million at 12/31/2018, $83 million at 9/30/2018, and $105 million at 6/30/2018.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2019 Earnings Release

Troubled Debt Restructurings



	As of
($ amounts in millions)	6/30/2019		3/31/2019		12/31/2018		9/30/2018		6/30/2018
Current:
Commercial	$	97	$	103	$	103	$	169	$	157
Investor real estate	15		14		13		44		35
Residential first mortgage	153		147		139		143		134
Home equity—lines of credit	43		45		46		47		49
Home equity—closed-end	117		125		133		141		157
Consumer credit card	1		1		1		1		1
Other consumer	4		5		5		6		6
Total current	430		440		440		551		539
Accruing 30-89 DPD:
Commercial	4		3		5		1		1
Investor real estate	—		—		1		5		5
Residential first mortgage	26		26		31		28		31
Home equity—lines of credit	1		1		1		2		2
Home equity—closed-end	7		9		9		13		11
Other consumer	1		—		1		—		1
Total accruing 30-89 DPD	39		39		48		49		51
Total accruing and <90 DPD	469		479		488		600		590
Non-accrual or 90+ DPD:
Commercial	182		220		183		195		178
Investor real estate	5		5		5		—		1
Residential first mortgage	33		37		38		42		44
Home equity—lines of credit	4		4		4		4		5
Home equity—closed-end	10		11		11		11		9
Total non-accrual or 90+DPD	234		277		241		252		237
Total TDRs - Loans	$	703	$	756	$	729	$	852	$	827
TDRs - Held For Sale	7		8		5		6		11
Total TDRs	$	710	$	764	$	734	$	858	$	838


Total TDRs - Loans by Portfolio
	As of
($ amounts in millions)	6/30/2019		3/31/2019		12/31/2018		9/30/2018		6/30/2018
Total commercial TDRs	$	283	$	326	$	291	$	365	$	336
Total investor real estate TDRs	20		19		19		49		41
Total consumer TDRs	400		411		419		438		450
Total TDRs - Loans	$	703	$	756	$	729	$	852	$	827

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2019 Earnings Release

Consolidated Balance Sheets (unaudited)



	As of
($ amounts in millions)	6/30/2019			3/31/2019			12/31/2018			9/30/2018			6/30/2018
Assets:
Cash and due from banks	$	2,026		$	1,666		$	2,018		$	1,911		$	1,844
Interest-bearing deposits in other banks	2,462			2,141			1,520			1,584			2,442
Debt securities held to maturity	1,415			1,451			1,482			1,524			1,568
Debt securities available for sale	22,699			23,786			22,729			22,671			22,935
Loans held for sale	508			318			304			331			490
Loans, net of unearned income	83,553			84,430			83,152			81,821			80,478
Allowance for loan losses	(853		)	(853		)	(840		)	(840		)	(838		)
Net loans	82,700			83,577			82,312			80,981			79,640
Other earning assets	1,646			1,617			1,719			1,801			1,672
Premises and equipment, net	1,950			2,026			2,045			2,051			2,050
Interest receivable	389			388			375			360			347
Goodwill	4,829			4,829			4,829			4,829			4,904
Residential mortgage servicing rights at fair value (MSRs)	337			386			418			406			362
Other identifiable intangible assets, net	101			108			115			122			156
Other assets	6,456			6,509			5,822			6,007			6,147
Total assets	$	127,518		$	128,802		$	125,688		$	124,578		$	124,557
Liabilities and Equity:
Deposits:
Non-interest-bearing	$	34,678		$	34,775		$	35,053		$	35,354		$	36,055
Interest-bearing	60,293			60,945			59,438			57,901			59,228
Total deposits	94,971			95,720			94,491			93,255			95,283
Borrowed funds:
Short-term borrowings:
Other short-term borrowings	4,250			1,600			1,600			3,250			1,400
Total short-term borrowings	4,250			1,600			1,600			3,250			1,400
Long-term borrowings	9,213			12,957			12,424			11,178			9,890
Total borrowed funds	13,463			14,557			14,024			14,428			11,290
Other liabilities	2,476			3,002			2,083			2,125			2,207
Total liabilities	110,910			113,279			110,598			109,808			108,780
Equity:
Preferred stock, non-cumulative perpetual	1,310			820			820			820			820
Common stock	11			11			11			11			12
Additional paid-in capital	13,380			13,584			13,766			14,122			15,389
Retained earnings	3,299			3,066			2,828			2,582			2,182
Treasury stock, at cost	(1,371		)	(1,371		)	(1,371		)	(1,371		)	(1,371		)
Accumulated other comprehensive income (loss), net	(21		)	(598		)	(964		)	(1,394		)	(1,255		)
Total stockholders’ equity	16,608			15,512			15,090			14,770			15,777
Noncontrolling interest	—			11			—			—			—
Total equity	16,608			15,523			15,090			14,770			15,777
Total liabilities and equity	$	127,518		$	128,802		$	125,688		$	124,578		$	124,557

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2019 Earnings Release

End of Period Loans



	As of
											6/30/2019					6/30/2019
($ amounts in millions)	6/30/2019		3/31/2019		12/31/2018		9/30/2018		6/30/2018		vs. 3/31/2019					vs. 6/30/2018
Commercial and industrial ⁽¹⁾	$	40,438	$	40,985	$	39,282	$	38,036	$	37,079	$	(547	)	(1.3	)%	$	3,359		9.1	%
Commercial real estate mortgage—owner-occupied ⁽²⁾	5,455		5,522		5,549		5,943		6,006		(67		)	(1.2	)%	(551		)	(9.2	)%
Commercial real estate construction—owner-occupied	415		434		384		326		304		(19		)	(4.4	)%	111			36.5	%
Total commercial	46,308		46,941		45,215		44,305		43,389		(633		)	(1.3	)%	2,919			6.7	%
Commercial investor real estate mortgage ⁽²⁾	4,795		4,715		4,650		4,205		3,882		80			1.7	%	913			23.5	%
Commercial investor real estate construction	1,658		1,871		1,786		1,838		1,879		(213		)	(11.4	)%	(221		)	(11.8	)%
Total investor real estate	6,453		6,586		6,436		6,043		5,761		(133		)	(2.0	)%	692			12.0	%
Total business	52,761		53,527		51,651		50,348		49,150		(766		)	(1.4	)%	3,611			7.3	%
Residential first mortgage ⁽³⁾	14,253		14,113		14,276		14,220		14,111		140			1.0	%	142			1.0	%
Home equity—lines of credit ⁽⁴⁾	5,561		5,705		5,871		5,993		6,165		(144		)	(2.5	)%	(604		)	(9.8	)%
Home equity—closed-end ⁽⁵⁾	3,241		3,309		3,386		3,442		3,514		(68		)	(2.1	)%	(273		)	(7.8	)%
Indirect—vehicles	2,415		2,759		3,053		3,146		3,219		(344		)	(12.5	)%	(804		)	(25.0	)%
Indirect—other consumer	2,796		2,547		2,349		2,179		1,889		249			9.8	%	907			48.0	%
Consumer credit card	1,303		1,274		1,345		1,273		1,264		29			2.3	%	39			3.1	%
Other consumer	1,223		1,196		1,221		1,220		1,166		27			2.3	%	57			4.9	%
Total consumer	30,792		30,903		31,501		31,473		31,328		(111		)	(0.4	)%	(536		)	(1.7	)%
Total Loans	$	83,553	$	84,430	$	83,152	$	81,821	$	80,478	$	(877	)	(1.0	)%	$	3,075		3.8	%

_______


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


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


(3)	Regions sold $167 million of affordable housing residential mortgage loans during the first quarter of 2019.


(4)	The balance of Regions' home equity lines of credit consists of $2,890 million of first lien and $2,671 million of second lien at 6/30//2019.


(5)	The balance of Regions' closed-end home equity loans consists of $2,934 million of first lien and $307 million of second lien at 6/30/2019.



	As of
End of Period Loans by Percentage	6/30/2019		3/31/2019		12/31/2018		9/30/2018		6/30/2018
Commercial and industrial	48.4	%	48.6	%	47.2	%	46.5	%	46.1	%
Commercial real estate mortgage—owner-occupied	6.5	%	6.5	%	6.7	%	7.3	%	7.5	%
Commercial real estate construction—owner-occupied	0.5	%	0.5	%	0.5	%	0.4	%	0.4	%
Total commercial	55.4	%	55.6	%	54.4	%	54.2	%	54.0	%
Commercial investor real estate mortgage	5.7	%	5.6	%	5.6	%	5.1	%	4.8	%
Commercial investor real estate construction	2.0	%	2.2	%	2.1	%	2.2	%	2.3	%
Total investor real estate	7.7	%	7.8	%	7.7	%	7.3	%	7.1	%
Total business	63.1	%	63.4	%	62.1	%	61.5	%	61.1	%
Residential first mortgage	17.0	%	16.7	%	17.2	%	17.4	%	17.5	%
Home equity—lines of credit	6.7	%	6.8	%	7.1	%	7.3	%	7.7	%
Home equity—closed-end	3.9	%	3.9	%	4.1	%	4.2	%	4.4	%
Indirect—vehicles	2.9	%	3.3	%	3.6	%	3.9	%	4.0	%
Indirect—other consumer	3.3	%	3.0	%	2.8	%	2.6	%	2.3	%
Consumer credit card	1.6	%	1.5	%	1.6	%	1.6	%	1.6	%
Other consumer	1.5	%	1.4	%	1.5	%	1.5	%	1.4	%
Total consumer	36.9	%	36.6	%	37.9	%	38.5	%	38.9	%
Total Loans	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2019 Earnings Release

Average Balances of Loans



	Average Balances
($ amounts in millions)	2Q19		1Q19		4Q18		3Q18		2Q18		2Q19 vs. 1Q19					2Q19 vs. 2Q18
Commercial and industrial	$	40,707	$	39,999	$	38,111	$	37,410	$	36,874	$	708		1.8	%	$	3,833		10.4	%
Commercial real estate mortgage—owner-occupied	5,448		5,560		5,847		6,000		6,017		(112		)	(2.0	)%	(569		)	(9.5	)%
Commercial real estate construction—owner-occupied	447		409		349		311		298		38			9.3	%	149			50.0	%
Total commercial	46,602		45,968		44,307		43,721		43,189		634			1.4	%	3,413			7.9	%
Commercial investor real estate mortgage	4,699		4,729		4,275		4,083		3,724		(30		)	(0.6	)%	975			26.2	%
Commercial investor real estate construction	1,797		1,821		1,815		1,809		1,867		(24		)	(1.3	)%	(70		)	(3.7	)%
Total investor real estate	6,496		6,550		6,090		5,892		5,591		(54		)	(0.8	)%	905			16.2	%
Total business	53,098		52,518		50,397		49,613		48,780		580			1.1	%	4,318			8.9	%
Residential first mortgage	14,150		14,203		14,230		14,162		13,980		(53		)	(0.4	)%	170			1.2	%
Home equity—lines of credit	5,637		5,792		5,924		6,068		6,259		(155		)	(2.7	)%	(622		)	(9.9	)%
Home equity—closed-end	3,273		3,343		3,411		3,475		3,533		(70		)	(2.1	)%	(260		)	(7.4	)%
Indirect—vehicles	2,578		2,924		3,109		3,190		3,260		(346		)	(11.8	)%	(682		)	(20.9	)%
Indirect—other consumer	2,662		2,429		2,287		2,042		1,743		233			9.6	%	919			52.7	%
Consumer credit card	1,286		1,304		1,298		1,271		1,245		(18		)	(1.4	)%	41			3.3	%
Other consumer	1,221		1,212		1,217		1,201		1,157		9			0.7	%	64			5.5	%
Total consumer	30,807		31,207		31,476		31,409		31,177		(400		)	(1.3	)%	(370		)	(1.2	)%
Total loans	$	83,905	$	83,725	$	81,873	$	81,022	$	79,957	$	180		0.2	%	$	3,948		4.9	%

Adjusted Average Balances of Loans (non-GAAP)

Regions believes adjusting total average loans for the impact of the purchasing card reclassification from other assets and the indirect vehicles exit portfolio, provides a meaningful calculation of loan growth rates and presents them on the same basis as that applied by management.



	Average Balances
($ amounts in millions)	2Q19		1Q19		4Q18		3Q18		2Q18		2Q19 vs. 1Q19					2Q19 vs. 2Q18
Commercial and industrial	$	40,707	$	39,999	$	38,111	$	37,410	$	36,874	$	708		1.8	%	$	3,833		10.4	%
Add: Purchasing card balances ⁽¹⁾	—		—		252		239		228		—			NM		(228		)	(100.0	)%
Adjusted commercial and industrial loans (non-GAAP)	$	40,707	$	39,999	$	38,363	$	37,649	$	37,102	$	708		1.8	%	$	3,605		9.7	%
Total commercial loans	$	46,602	$	45,968	$	44,307	$	43,721	$	43,189	$	634		1.4	%	$	3,413		7.9	%
Add: Purchasing card balances ⁽¹⁾	—		—		252		239		228		—			NM		(228		)	(100.0	)%
Adjusted total commercial loans (non-GAAP)	$	46,602	$	45,968	$	44,559	$	43,960	$	43,417	$	634		1.4	%	$	3,185		7.3	%
Total business loans	$	53,098	$	52,518	$	50,397	$	49,613	$	48,780	$	580		1.1	%	$	4,318		8.9	%
Add: Purchasing card balances ⁽¹⁾	—		—		252		239		228		—			NM		(228		)	(100.0	)%
Adjusted total business loans (non-GAAP)	$	53,098	$	52,518	$	50,649	$	49,852	$	49,008	$	580		1.1	%	$	4,090		8.3	%
Total consumer loans	$	30,807	$	31,207	$	31,476	$	31,409	$	31,177	$	(400	)	(1.3	)%	$	(370	)	(1.2	)%
Less: Indirect—vehicles	2,578		2,924		3,109		3,190		3,260		(346		)	(11.8	)%	(682		)	(20.9	)%
Adjusted total consumer loans (non-GAAP)	$	28,229	$	28,283	$	28,367	$	28,219	$	27,917	$	(54	)	(0.2	)%	$	312		1.1	%
Total loans	$	83,905	$	83,725	$	81,873	$	81,022	$	79,957	$	180		0.2	%	$	3,948		4.9	%
Add: Purchasing card balances ⁽¹⁾	—		—		252		239		228		—			NM		(228		)	(100.0	)%
Less: Indirect—vehicles	2,578		2,924		3,109		3,190		3,260		(346		)	(11.8	)%	(682		)	(20.9	)%
Adjusted total loans (non-GAAP)	$	81,327	$	80,801	$	79,016	$	78,071	$	76,925	$	526		0.7	%	$	4,402		5.7	%

________


(1)	On December 31, 2018, purchasing cards were reclassified to commercial and industrial loans from other assets.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2019 Earnings Release

Average Balances of Loans (continued)



	Average Balances
	Six Months Ended June 30
($ amounts in millions)	2019		2018		2019 vs. 2018
Commercial and industrial	$	40,355	$	36,670	$	3,685		10.0	%
Commercial real estate mortgage—owner-occupied	5,504		6,067		(563		)	(9.3	)%
Commercial real estate construction—owner-occupied	428		308		120			39.0	%
Total commercial	46,287		43,045		3,242			7.5	%
Commercial investor real estate mortgage	4,714		3,803		911			24.0	%
Commercial investor real estate construction	1,809		1,852		(43		)	(2.3	)%
Total investor real estate	6,523		5,655		868			15.3	%
Total business	52,810		48,700		4,110			8.4	%
Residential first mortgage	14,176		13,978		198			1.4	%
Home equity—lines of credit	5,714		6,362		(648		)	(10.2	)%
Home equity—closed-end	3,308		3,554		(246		)	(6.9	)%
Indirect—vehicles	2,750		3,284		(534		)	(16.3	)%
Indirect—other consumer	2,546		1,638		908			55.4	%
Consumer credit card	1,295		1,251		44			3.5	%
Other consumer	1,217		1,157		60			5.2	%
Total consumer	31,006		31,224		(218		)	(0.7	)%
Total Loans	$	83,816	$	79,924	$	3,892		4.9	%

Adjusted Average Balances of Loans (non-GAAP)

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



	Average Balances
	Six Months Ended June 30
($ amounts in millions)	2019		2018		2019 vs. 2018
Commercial and industrial	$	40,355	$	36,670	$	3,685		10.0	%
Add: Purchasing card balances⁽¹⁾	—		218		(218		)	(100.0	)%
Adjusted commercial and industrial loans (non-GAAP)	$	40,355	$	36,888	$	3,467		9.4	%
Total commercial loans	$	46,287	$	43,045	$	3,242		7.5	%
Add: Purchasing card balances⁽¹⁾	—		218		(218		)	(100.0	)%
Adjusted total commercial loans (non-GAAP)	$	46,287	$	43,263	$	3,024		7.0	%
Total business loans	$	52,810	$	48,700	$	4,110		8.4	%
Add: Purchasing card balances⁽¹⁾	—		218		(218		)	(100.0	)%
Adjusted total business loans (non-GAAP)	$	52,810	$	48,918	$	3,892		8.0	%
Total consumer loans	$	31,006	$	31,225	$	(219	)	(0.7	)%
Less: Balances of residential first mortgage loans sold⁽²⁾	—		81		(81		)	(100.0	)%
Less: Indirect—vehicles	2,750		3,284		(534		)	(16.3	)%
Adjusted total consumer loans (non-GAAP)	$	28,256	$	27,860	$	396		1.4	%
Total Loans	$	83,816	$	79,925	$	3,891		4.9	%
Add: Purchasing card balances⁽¹⁾	—		218		(218		)	(100.0	)%
Less: Balances of residential first mortgage loans sold⁽²⁾	—		81		(81		)	(100.0	)%
Less: Indirect—vehicles	2,750		3,284		(534		)	(16.3	)%
Adjusted total loans (non-GAAP)	$	81,066	$	76,778	$	4,288		5.6	%

________

(1) On December 31, 2018, purchasing cards were reclassified to commercial and industrial loans from other assets.

(2) Adjustments to average loan balances assume a simple day-weighted average impact for the year ended December 31, 2018, and are equal to the ending balance of the residential first mortgage loans sold for the prior periods.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2019 Earnings Release

End of Period Deposits



	As of
												6/30/2019					6/30/2019
($ amounts in millions)	6/30/2019		3/31/2019		12/31/2018		9/30/2018		6/30/2018			vs. 3/31/2019					vs. 6/30/2018
Interest-free deposits	$	34,678	$	34,775	$	35,053	$	35,354	$	36,055		$	(97	)	(0.3	)%	$	(1,377	)	(3.8	)%
Interest-bearing checking	18,625		19,724		19,175		18,586		19,403			(1,099		)	(5.6	)%	(778		)	(4.0	)%
Savings	8,659		9,031		8,788		8,900		8,971			(372		)	(4.1	)%	(312		)	(3.5	)%
Money market—domestic	24,729		23,806		24,111		23,896		24,255			923			3.9	%	474			2.0	%
Low-cost deposits	86,691		87,336		87,127		86,736		88,684			(645		)	(0.7	)%	(1,993		)	(2.2	)%
Time deposits	7,731		7,704		7,122		6,499		6,576			27			0.4	%	1,155			17.6	%
Total Customer Deposits	94,422		95,040		94,249		93,235		95,260			(618		)	(0.7	)%	(838		)	(0.9	)%
Corporate treasury time deposits	549		680		242		20		23			(131		)	(19.3	)%	526			NM
Total Deposits	$	94,971	$	95,720	$	94,491	$	93,255	$	95,283		$	(749	)	(0.8	)%	$	(312	)	(0.3	)%

	As of
												6/30/2019					6/30/2019
($ amounts in millions)	6/30/2019		3/31/2019		12/31/2018		9/30/2018		6/30/2018			vs. 3/31/2019					vs. 6/30/2018
Consumer Bank Segment	$	59,775	$	59,880	$	57,575	$	57,939	$	58,713		$	(105	)	(0.2	)%	$	1,062		1.8	%
Corporate Bank Segment	26,386		26,741		27,748		26,002		26,873			(355		)	(1.3	)%	(487		)	(1.8	)%
Wealth Management Segment	7,919		7,994		8,072		8,018		8,334			(75		)	(0.9	)%	(415		)	(5.0	)%
Other ⁽¹⁾	891		1,105		1,096		1,296		1,363			(214		)	(19.4	)%	(472		)	(34.6	)%
Total Deposits	$	94,971	$	95,720	$	94,491	$	93,255	$	95,283		$	(749	)	(0.8	)%	$	(312	)	(0.3	)%

	As of
												6/30/2019					6/30/2019
($ amounts in millions)	6/30/2019		3/31/2019		12/31/2018		9/30/2018		6/30/2018			vs. 3/31/2019					vs. 6/30/2018
Wealth Management - Private Wealth	$	6,965	$	7,089	$	7,204	$	7,035	$	7,248		$	(124	)	(1.7	)%	$	(283	)	(3.9	)%
Wealth Management - Institutional Services	954		905		868		983		1,086			49			5.4	%	(132		)	(12.2	)%
Total Wealth Management Segment Deposits	$	7,919	$	7,994	$	8,072	$	8,018	$	8,334		$	(75	)	(0.9	)%	$	(415	)	(5.0	)%

									As of
End of Period Deposits by Percentage									6/30/2019			3/31/2019			12/31/2018		9/30/2018			6/30/2018
Customer Deposits
Interest-free deposits									36.5		%	36.3		%	37.1	%	37.9		%	37.8	%
Interest-bearing checking									19.6		%	20.6		%	20.3	%	19.9		%	20.4	%
Savings									9.1		%	9.4		%	9.3	%	9.6		%	9.4	%
Money market—domestic									26.0		%	24.9		%	25.5	%	25.6		%	25.5	%
Low-cost deposits									91.2		%	91.2		%	92.2	%	93.0		%	93.1	%
Time deposits									8.2		%	8.1		%	7.5	%	7.0		%	6.9	%
Total Customer Deposits									99.4		%	99.3		%	99.7	%	100.0		%	100.0	%
Corporate treasury time deposits									0.6		%	0.7		%	0.3	%	—		%	—	%
Total Deposits									100.0		%	100.0		%	100.0	%	100.0		%	100.0	%


(1)	Consists primarily of brokered deposits.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2019 Earnings Release

Average Balances of Deposits



	Average Balances
($ amounts in millions)	2Q19		1Q19		4Q18		3Q18		2Q18		2Q19 vs. 1Q19					2Q19 vs. 2Q18
Interest-free deposits	$	33,883	$	33,896	$	35,169	$	35,414	$	35,811	$	(13	)	—	%	$	(1,928	)	(5.4	)%
Interest-bearing checking	18,869		19,309		18,295		18,924		19,534		(440		)	(2.3	)%	(665		)	(3.4	)%
Savings	8,806		8,852		8,827		8,928		8,981		(46		)	(0.5	)%	(175		)	(1.9	)%
Money market—domestic	24,350		23,989		23,850		24,046		24,225		361			1.5	%	125			0.5	%
Money market—foreign	—		—		—		—		10		—			—	%	(10		)	(100.0	)%
Low-cost deposits	85,908		86,046		86,141		87,312		88,561		(138		)	(0.2	)%	(2,653		)	(3.0	)%
Time deposits	7,800		7,471		6,792		6,501		6,610		329			4.4	%	1,190			18.0	%
Total Customer Deposits	93,708		93,517		92,933		93,813		95,171		191			0.2	%	(1,463		)	(1.5	)%
Corporate treasury time deposits	657		496		87		21		23		161			32.5	%	634			NM
Corporate treasury other deposits	553		157		139		108		59		396			252.2	%	494			NM
Total Deposits	$	94,918	$	94,170	$	93,159	$	93,942	$	95,253	$	748		0.8	%	$	(335	)	(0.4	)%



	Average Balances
($ amounts in millions)	2Q19		1Q19		4Q18		3Q18		2Q18		2Q19 vs. 1Q19					2Q19 vs. 2Q18
Consumer Bank Segment	$	59,277	$	57,952	$	57,366	$	57,684	$	58,152	$	1,325		2.3	%	$	1,125		1.9	%
Corporate Bank Segment	26,154		26,904		26,323		26,563		27,160		(750		)	(2.8	)%	(1,006		)	(3.7	)%
Wealth Management Segment	7,924		7,948		8,027		8,235		8,528		(24		)	(0.3	)%	(604		)	(7.1	)%
Other ⁽¹⁾	1,563		1,366		1,443		1,460		1,413		197			14.4	%	150			10.6	%
Total Deposits	$	94,918	$	94,170	$	93,159	$	93,942	$	95,253	$	748		0.8	%	$	(335	)	(0.4	)%



	Average Balances
($ amounts in millions)	2Q19		1Q19		4Q18		3Q18		2Q18		2Q19 vs. 1Q19					2Q19 vs. 2Q18
Wealth Management - Private Wealth	$	7,033	$	7,111	$	7,084	$	7,250	$	7,430	$	(78	)	(1.1	)%	$	(397	)	(5.3	)%
Wealth Management - Institutional Services	891		837		943		985		1,098		54			6.5	%	(207		)	(18.9	)%
Total Wealth Management Segment Deposits	$	7,924	$	7,948	$	8,027	$	8,235	$	8,528	$	(24	)	(0.3	)%	$	(604	)	(7.1	)%




	Average Balances
	Six Months Ended June 30
($ amounts in millions)	2019		2018		2019 vs. 2018
Customer Deposits
Interest-free deposits	$	33,889	$	35,638	$	(1,749	)	(4.9	)%
Interest-bearing checking	19,087		19,734		(647		)	(3.3	)%
Savings	8,829		8,799		30			0.3	%
Money market—domestic	24,171		24,401		(230		)	(0.9	)%
Money market—foreign	—		16		(16		)	(100.0	)%
Low-cost deposits	85,976		88,588		(2,612		)	(2.9	)%
Time deposits	7,637		6,685		952			14.2	%
Total Customer Deposits	93,613		95,273		(1,660		)	(1.7	)%
Corporate treasury time deposits	577		24		553			NM
Corporate treasury other deposits	356		43		313			NM
Total Deposits	$	94,546	$	95,340	$	(794	)	(0.8	)%




	Average Balances
	Six Months Ended June 30
($ amounts in millions)	2019		2018		2019 vs. 2018
Consumer Bank Segment	$	58,618	$	57,652	$	966		1.7	%
Corporate Bank Segment	26,527		27,415		(888		)	(3.2	)%
Wealth Management Segment	7,936		8,734		(798		)	(9.1	)%
Other ⁽¹⁾	1,465		1,539		(74		)	(4.8	)%
Total Deposits	$	94,546	$	95,340	$	(794	)	(0.8	)%




	Average Balances
	Six Months Ended June 30
($ amounts in millions)	2019		2018		2019 vs. 2018
Wealth Management - Private Wealth	$	7,072	$	7,597	$	(525	)	(6.9	)%
Wealth Management - Institutional Services	864		1,137		(273		)	(24.0	)%
Total Wealth Management Segment Deposits	$	7,936	$	8,734	$	(798	)	(9.1	)%


(1)	Consists primarily of brokered deposits.

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2019 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 extending to 2019. The Basel III rules are now fully phased in, other than with respect to deductions and adjustments whose transitional treatment has been extended until the federal banking agencies' September 2017 proposal to revise and simplify the capital treatment of selected categories of assets is finalized. 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)		6/30/2019			3/31/2019			12/31/2018			9/30/2018			6/30/2018
Tangible Common Ratios—Consolidated
Stockholders’ equity (GAAP)		$	16,608		$	15,512		$	15,090		$	14,770		$	15,777
Less:
Preferred stock (GAAP)		1,310			820			820			820			820
Intangible assets (GAAP)		4,930			4,937			4,944			4,951			5,060
Deferred tax liability related to intangibles (GAAP)		(94		)	(94		)	(94		)	(95		)	(97		)
Tangible common stockholders’ equity (non-GAAP)	A	$	10,462		$	9,849		$	9,420		$	9,094		$	9,994
Total assets (GAAP)		$	127,518		$	128,802		$	125,688		$	124,578		$	124,557
Less:
Intangible assets (GAAP)		4,930			4,937			4,944			4,951			5,060
Deferred tax liability related to intangibles (GAAP)		(94		)	(94		)	(94		)	(95		)	(97		)
Tangible assets (non-GAAP)	B	$	122,682		$	123,959		$	120,838		$	119,722		$	119,594
Shares outstanding—end of quarter	C	1,004			1,013			1,025			1,055			1,114
Tangible common stockholders’ equity to tangible assets (non-GAAP)	A/B	8.53		%	7.95		%	7.80		%	7.60		%	8.36		%
Tangible common book value per share (non-GAAP)	A/C	$	10.42		$	9.72		$	9.19		$	8.62		$	8.97



		As of and for Quarter Ended
($ amounts in millions)		6/30/2019			3/31/2019			12/31/2018			9/30/2018			6/30/2018
Basel III Common Equity Tier 1 Ratio—Fully Phased-In Pro-Forma ⁽¹⁾
Stockholder's equity (GAAP)		$	16,608		$	15,512		$	15,090		$	14,770		$	15,777
Non-qualifying goodwill and intangibles		(4,827		)	(4,833		)	(4,839		)	(4,845		)	(4,953		)
Adjustments, including all components of accumulated other comprehensive income, disallowed deferred tax assets, threshold deductions and other adjustments		13			584			940			1,376			1,230
Preferred stock (GAAP)		(1,310		)	(820		)	(820		)	(820		)	(820		)
Basel III common equity Tier 1—Fully Phased-In Pro-Forma (non-GAAP)	D	$	10,484		$	10,443		$	10,371		$	10,481		$	11,234
Basel III risk-weighted assets—Fully Phased-In Pro-Forma (non-GAAP) ⁽²⁾	E	$	106,458		$	107,128		$	105,475		$	103,721		$	102,819
Basel III common equity Tier 1 ratio—Fully Phased-In Pro-Forma (non-GAAP)	D/E	9.8		%	9.8		%	9.8		%	10.1		%	10.9		%


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


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

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2019 Earnings Release

Forward-Looking Statements

This release may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not based on historical information, but rather are related to future operations, strategies, financial results or other developments. Forward-looking statements are based on management’s current expectations as well as certain assumptions and estimates made by, and information available to, management at the time the statements are made. Those statements are based on general assumptions and are subject to various risks, and because they also relate to the future they are likewise subject to inherent uncertainties and other factors that may cause actual results to differ materially from the views, beliefs and projections expressed in such statements. Therefore, we caution you against relying on any of these forward-looking statements. These risks, uncertainties and other factors include, but are not limited to, those described below:


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


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


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


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


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


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


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


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


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


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


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


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


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

•

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

•

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


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


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


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


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


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


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


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


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


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


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


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

Regions Financial Corporation and Subsidiaries

Financial Supplement to Second Quarter 2019 Earnings Release


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


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


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


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

•

The effects of man-made and natural disasters, including fires, floods, droughts, tornadoes, hurricanes, and environmental damage, which may negatively affect our operations and/or our loan portfolios and increase our cost of conducting business. The severity and impact of future earthquakes, fires, hurricanes, tornadoes, droughts, floods and other weather-related events are difficult to predict and may be exacerbated by global climate change.

•

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

•

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


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


•	Possible cessation or market replacement of LIBOR and the related effect on our LIBOR-based financial products and contracts, including, but not limited to, hedging products, debt obligations, investments, and loans.


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


•	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.


•	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 shareholders.


•	Changes in accounting policies or procedures as may be required by the FASB or other regulatory agencies could materially affect our financial statements and how we report those results, and expectations and preliminary analyses relating to how such changes will affect our financial results could prove incorrect.


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


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


•	The effects of any damage to our reputation resulting from developments related to any of the items identified above.

The foregoing list of factors is not exhaustive. For discussion of these and other factors that may cause actual results to differ from expectations, look under the captions “Forward-Looking Statements” and “Risk Factors” of Regions’ Annual Report on Form 10-K for the year ended December 31, 2018 as filed with the SEC.

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

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

Regions Financial (RF) 8-KResults of Operations and Financial Condition