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Form 10-Q
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ý
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Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the quarterly period ended June 30, 2016
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¨
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Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the transition period from
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to
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Regions Financial Corporation
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(Exact name of registrant as specified in its charter)
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Delaware
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63-0589368
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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1900 Fifth Avenue North
Birmingham, Alabama
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35203
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(Address of principal executive offices)
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(Zip Code)
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Page
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Part I. Financial Information
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Item 1.
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Financial Statements (Unaudited)
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Item 2.
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Item 3.
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Item 4.
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Part II. Other Information
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Item 1.
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Item 2.
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Item 6.
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•
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Current and future economic and market conditions in the United States generally or in the communities we serve, including the effects of declines in property values, unemployment rates and potential reductions of economic growth, which may adversely affect our lending and other businesses and our financial results and conditions.
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•
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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.
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•
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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.
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•
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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.
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•
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Any impairment of our goodwill or other intangibles, or any adjustment of valuation allowances on our deferred tax assets due to adverse changes in the economic environment, declining operations of the reporting unit, or other factors.
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•
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Possible changes in the creditworthiness of customers and the possible impairment of the collectability of loans.
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•
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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.
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•
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Possible acceleration of prepayments on mortgage-backed securities due to low interest rates, and the related acceleration of premium amortization on those securities.
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•
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Our ability to effectively compete with other financial services companies, some of whom possess greater financial resources than we do and are subject to different regulatory standards than we are.
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•
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Loss of customer checking and savings account deposits as customers pursue other, higher-yield investments, which could increase our funding costs.
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•
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Our inability to develop and gain acceptance from current and prospective customers for new products and services in a timely manner could have a negative impact on our revenue.
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•
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The effects of any developments, changes or actions relating to any litigation or regulatory proceedings brought against us or any of our subsidiaries.
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•
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Changes in laws and regulations affecting our businesses, such as the Dodd-Frank Act and other legislation and regulations relating to bank products and services, as well as changes in the enforcement and interpretation of such laws and regulations by applicable governmental and self-regulatory agencies, which could require us to change certain business practices, increase compliance risk, reduce our revenue, impose additional costs on us, or otherwise negatively affect our businesses.
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•
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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.
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•
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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.
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•
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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.
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•
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The Basel III framework calls for additional risk-based capital surcharges for globally systemically important banks. Although we are not subject to such surcharges, it is possible that in the future we may become subject to similar surcharges.
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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.
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•
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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.
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•
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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.
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•
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The success of our marketing efforts in attracting and retaining customers.
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•
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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.
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•
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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.
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•
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Fraud or misconduct by our customers, employees or business partners.
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•
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Any inaccurate or incomplete information provided to us by our customers or counterparties.
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•
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The risks and uncertainties related to our acquisition and integration of other companies.
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•
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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.
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•
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The inability of our internal disclosure controls and procedures to prevent, detect or mitigate any material errors or fraudulent acts.
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•
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The effects of geopolitical instability, including wars, conflicts and terrorist attacks and the potential impact, directly or indirectly, on our businesses.
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•
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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.
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•
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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.
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•
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Our inability to keep pace with technological changes could result in losing business to competitors.
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•
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Our ability to identify and address cyber-security risks such as data security breaches, “denial of service” attacks, “hacking” and identity theft, a failure of which could disrupt our business and result in the disclosure of and/or misuse or misappropriation of confidential or proprietary information; increased costs; losses; or adverse effects to our reputation.
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•
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Our ability to realize our efficiency ratio target as part of our expense management initiatives.
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•
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Significant disruption of, or loss of public confidence in, the Internet and services and devices used to access the Internet could affect the ability of our customers to access their accounts and conduct banking transactions.
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•
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Possible downgrades in our credit ratings or outlook could increase the costs of funding from capital markets.
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•
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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.
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•
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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.
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•
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Our ability to receive dividends from our subsidiaries could affect our liquidity and ability to pay dividends to stockholders.
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•
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Changes in accounting policies or procedures as may be required by the FASB or other regulatory agencies could materially affect how we report our financial results.
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•
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Other risks identified from time to time in reports that we file with the SEC.
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•
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The effects of any damage to our reputation resulting from developments related to any of the items identified above.
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June 30, 2016
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December 31, 2015
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(In millions, except share data)
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Assets
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Cash and due from banks
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$
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1,867
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$
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1,382
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Interest-bearing deposits in other banks
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2,370
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3,932
|
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Trading account securities
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117
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143
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Securities held to maturity (estimated fair value of $1,707 and $1,969, respectively)
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1,646
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1,946
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Securities available for sale
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23,494
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22,710
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Loans held for sale (includes $475 and $353 measured at fair value, respectively)
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551
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448
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Loans, net of unearned income
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81,702
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81,162
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Allowance for loan losses
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(1,151
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)
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(1,106
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)
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Net loans
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80,551
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80,056
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Other earning assets
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1,516
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|
1,652
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Premises and equipment, net
|
2,091
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|
2,152
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Interest receivable
|
312
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|
|
319
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Goodwill
|
4,882
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|
4,878
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Residential mortgage servicing rights at fair value
|
216
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|
|
252
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Other identifiable intangible assets
|
240
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|
|
259
|
|
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Other assets
|
6,359
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|
5,921
|
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Total assets
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$
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126,212
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|
$
|
126,050
|
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Liabilities and Stockholders’ Equity
|
|
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|
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Deposits:
|
|
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|
||||
Non-interest-bearing
|
$
|
34,982
|
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|
$
|
34,862
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Interest-bearing
|
62,263
|
|
|
63,568
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|
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Total deposits
|
97,245
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|
98,430
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|
||
Borrowed funds:
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|
|
||||
Short-term borrowings:
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|
|
|
||||
Other short-term borrowings
|
2
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|
|
10
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|
||
Total short-term borrowings
|
2
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|
|
10
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|
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Long-term borrowings
|
8,968
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|
8,349
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Total borrowed funds
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8,970
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|
|
8,359
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Other liabilities
|
2,612
|
|
|
2,417
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Total liabilities
|
108,827
|
|
|
109,206
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|
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Stockholders’ equity:
|
|
|
|
||||
Preferred stock, authorized 10 million shares, par value $1.00 per share
|
|
|
|
||||
Non-cumulative perpetual, liquidation preference $1,000.00 per share, including related surplus, net of issuance costs; issued—1,000,000 shares
|
820
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|
|
820
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Common stock, authorized 3 billion shares, par value $.01 per share:
|
|
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|
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Issued including treasury stock—1,300,275,747 and 1,338,591,703 shares, respectively
|
13
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|
|
13
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|
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Additional paid-in capital
|
17,539
|
|
|
17,883
|
|
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Retained earnings (deficit)
|
242
|
|
|
(115
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)
|
||
Treasury stock, at cost—41,261,041 and 41,261,018 shares, respectively
|
(1,377
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)
|
|
(1,377
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)
|
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Accumulated other comprehensive income (loss), net
|
148
|
|
|
(380
|
)
|
||
Total stockholders’ equity
|
17,385
|
|
|
16,844
|
|
||
Total liabilities and stockholders’ equity
|
$
|
126,212
|
|
|
$
|
126,050
|
|
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In millions, except per share data)
|
||||||||||||||
Interest income, including other financing income on:
|
|
|
|
|
|
|
|
||||||||
Loans, including fees
|
$
|
762
|
|
|
$
|
728
|
|
|
$
|
1,530
|
|
|
$
|
1,453
|
|
Securities - taxable
|
145
|
|
|
141
|
|
|
292
|
|
|
286
|
|
||||
Loans held for sale
|
4
|
|
|
4
|
|
|
7
|
|
|
7
|
|
||||
Trading account securities
|
1
|
|
|
1
|
|
|
4
|
|
|
4
|
|
||||
Other earning assets
|
8
|
|
|
9
|
|
|
18
|
|
|
19
|
|
||||
Operating lease assets
|
32
|
|
|
—
|
|
|
64
|
|
|
—
|
|
||||
Total interest income, including other financing income
|
952
|
|
|
883
|
|
|
1,915
|
|
|
1,769
|
|
||||
Interest expense on:
|
|
|
|
|
|
|
|
||||||||
Deposits
|
28
|
|
|
27
|
|
|
55
|
|
|
55
|
|
||||
Short-term borrowings
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Long-term borrowings
|
50
|
|
|
35
|
|
|
97
|
|
|
78
|
|
||||
Total interest expense
|
78
|
|
|
63
|
|
|
152
|
|
|
134
|
|
||||
Depreciation expense on operating lease assets
|
26
|
|
|
—
|
|
|
53
|
|
|
—
|
|
||||
Total interest expense and depreciation expense on operating lease assets
|
104
|
|
|
63
|
|
|
205
|
|
|
134
|
|
||||
Net interest income and other financing income
|
848
|
|
|
820
|
|
|
1,710
|
|
|
1,635
|
|
||||
Provision for loan losses
|
72
|
|
|
63
|
|
|
185
|
|
|
112
|
|
||||
Net interest income and other financing income after provision for loan losses
|
776
|
|
|
757
|
|
|
1,525
|
|
|
1,523
|
|
||||
Non-interest income:
|
|
|
|
|
|
|
|
||||||||
Service charges on deposit accounts
|
166
|
|
|
168
|
|
|
325
|
|
|
329
|
|
||||
Card and ATM fees
|
99
|
|
|
90
|
|
|
194
|
|
|
175
|
|
||||
Mortgage income
|
46
|
|
|
46
|
|
|
84
|
|
|
86
|
|
||||
Securities gains, net
|
6
|
|
|
6
|
|
|
1
|
|
|
11
|
|
||||
Other
|
209
|
|
|
280
|
|
|
428
|
|
|
459
|
|
||||
Total non-interest income
|
526
|
|
|
590
|
|
|
1,032
|
|
|
1,060
|
|
||||
Non-interest expense:
|
|
|
|
|
|
|
|
||||||||
Salaries and employee benefits
|
480
|
|
|
477
|
|
|
955
|
|
|
935
|
|
||||
Net occupancy expense
|
86
|
|
|
89
|
|
|
172
|
|
|
180
|
|
||||
Furniture and equipment expense
|
79
|
|
|
76
|
|
|
157
|
|
|
147
|
|
||||
Other
|
270
|
|
|
292
|
|
|
500
|
|
|
577
|
|
||||
Total non-interest expense
|
915
|
|
|
934
|
|
|
1,784
|
|
|
1,839
|
|
||||
Income from continuing operations before income taxes
|
387
|
|
|
413
|
|
|
773
|
|
|
744
|
|
||||
Income tax expense
|
115
|
|
|
124
|
|
|
228
|
|
|
219
|
|
||||
Income from continuing operations
|
272
|
|
|
289
|
|
|
545
|
|
|
525
|
|
||||
Discontinued operations:
|
|
|
|
|
|
|
|
||||||||
Income (loss) from discontinued operations before income taxes
|
5
|
|
|
(6
|
)
|
|
5
|
|
|
(10
|
)
|
||||
Income tax expense (benefit)
|
2
|
|
|
(2
|
)
|
|
2
|
|
|
(4
|
)
|
||||
Income (loss) from discontinued operations, net of tax
|
3
|
|
|
(4
|
)
|
|
3
|
|
|
(6
|
)
|
||||
Net income
|
$
|
275
|
|
|
$
|
285
|
|
|
$
|
548
|
|
|
$
|
519
|
|
Net income from continuing operations available to common shareholders
|
$
|
256
|
|
|
$
|
273
|
|
|
$
|
513
|
|
|
$
|
493
|
|
Net income available to common shareholders
|
$
|
259
|
|
|
$
|
269
|
|
|
$
|
516
|
|
|
$
|
487
|
|
Weighted-average number of shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
1,265
|
|
|
1,335
|
|
|
1,275
|
|
|
1,340
|
|
||||
Diluted
|
1,268
|
|
|
1,346
|
|
|
1,279
|
|
|
1,352
|
|
||||
Earnings per common share from continuing operations:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.20
|
|
|
$
|
0.20
|
|
|
$
|
0.40
|
|
|
$
|
0.37
|
|
Diluted
|
0.20
|
|
|
0.20
|
|
|
0.40
|
|
|
0.36
|
|
||||
Earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.20
|
|
|
$
|
0.20
|
|
|
$
|
0.40
|
|
|
$
|
0.36
|
|
Diluted
|
0.20
|
|
|
0.20
|
|
|
0.40
|
|
|
0.36
|
|
||||
Cash dividends declared per common share
|
0.065
|
|
|
0.06
|
|
|
0.125
|
|
|
0.11
|
|
|
Three Months Ended June 30
|
||||||
|
2016
|
|
2015
|
||||
|
(In millions)
|
||||||
Net income
|
$
|
275
|
|
|
$
|
285
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
||||
Unrealized losses on securities transferred to held to maturity:
|
|
|
|
||||
Unrealized losses on securities transferred to held to maturity during the period (net of zero and zero tax effect, respectively)
|
—
|
|
|
—
|
|
||
Less: reclassification adjustments for amortization of unrealized losses on securities transferred to held to maturity (net of ($3) and ($2) tax effect, respectively)
|
(5
|
)
|
|
(2
|
)
|
||
Net change in unrealized losses on securities transferred to held to maturity, net of tax
|
5
|
|
|
2
|
|
||
Unrealized gains (losses) on securities available for sale:
|
|
|
|
||||
Unrealized holding gains (losses) arising during the period (net of $62 and ($94) tax effect, respectively)
|
103
|
|
|
(152
|
)
|
||
Less: reclassification adjustments for securities gains (losses) realized in net income (net of $2 and $2 tax effect, respectively)
|
4
|
|
|
4
|
|
||
Net change in unrealized gains (losses) on securities available for sale, net of tax
|
99
|
|
|
(156
|
)
|
||
Unrealized gains (losses) on derivative instruments designated as cash flow hedges:
|
|
|
|
||||
Unrealized holding gains (losses) on derivatives arising during the period (net of $51 and ($3) tax effect, respectively)
|
84
|
|
|
(4
|
)
|
||
Less: reclassification adjustments for gains (losses) on derivative instruments realized in net income (net of $13 and $13 tax effect, respectively)
|
22
|
|
|
21
|
|
||
Net change in unrealized gains (losses) on derivative instruments, net of tax
|
62
|
|
|
(25
|
)
|
||
Defined benefit pension plans and other post employment benefits:
|
|
|
|
||||
Net actuarial gains (losses) arising during the period (net of $1 and zero tax effect, respectively)
|
—
|
|
|
—
|
|
||
Less: reclassification adjustments for amortization of actuarial loss and prior service cost realized in net income (net of ($3) and ($5) tax effect, respectively)
|
(5
|
)
|
|
(7
|
)
|
||
Net change from defined benefit pension plans and other post employment benefits, net of tax
|
5
|
|
|
7
|
|
||
Other comprehensive income (loss), net of tax
|
171
|
|
|
(172
|
)
|
||
Comprehensive income
|
$
|
446
|
|
|
$
|
113
|
|
|
|
|
|
||||
|
Six Months Ended June 30
|
||||||
|
2016
|
|
2015
|
||||
|
(In millions)
|
||||||
Net income
|
$
|
548
|
|
|
$
|
519
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
||||
Unrealized losses on securities transferred to held to maturity:
|
|
|
|
||||
Unrealized losses on securities transferred to held to maturity during the period (net of zero and zero tax effect, respectively)
|
—
|
|
|
—
|
|
||
Less: reclassification adjustments for amortization of unrealized losses on securities transferred to held to maturity (net of ($4) and ($3) tax effect, respectively)
|
(7
|
)
|
|
(4
|
)
|
||
Net change in unrealized losses on securities transferred to held to maturity, net of tax
|
7
|
|
|
4
|
|
||
Unrealized gains (losses) on securities available for sale:
|
|
|
|
||||
Unrealized holding gains (losses) arising during the period (net of $187 and ($45) tax effect, respectively)
|
308
|
|
|
(72
|
)
|
||
Less: reclassification adjustments for securities gains (losses) realized in net income (net of zero and $4 tax effect, respectively)
|
1
|
|
|
7
|
|
||
Net change in unrealized gains (losses) on securities available for sale, net of tax
|
307
|
|
|
(79
|
)
|
||
Unrealized gains (losses) on derivative instruments designated as cash flow hedges:
|
|
|
|
||||
Unrealized holding gains (losses) on derivatives arising during the period (net of $153 and $32 tax effect, respectively)
|
249
|
|
|
54
|
|
||
Less: reclassification adjustments for gains (losses) on derivative instruments realized in net income (net of $28 and $25 tax effect, respectively)
|
46
|
|
|
42
|
|
||
Net change in unrealized gains (losses) on derivative instruments, net of tax
|
203
|
|
|
12
|
|
||
Defined benefit pension plans and other post employment benefits:
|
|
|
|
||||
Net actuarial gains (losses) arising during the period (net of $1 and zero tax effect, respectively)
|
—
|
|
|
(1
|
)
|
||
Less: reclassification adjustments for amortization of actuarial loss and prior service cost realized in net income (net of ($6) and ($9) tax effect, respectively)
|
(11
|
)
|
|
(15
|
)
|
||
Net change from defined benefit pension plans and other post employment benefits, net of tax
|
11
|
|
|
14
|
|
||
Other comprehensive income (loss), net of tax
|
528
|
|
|
(49
|
)
|
||
Comprehensive income
|
$
|
1,076
|
|
|
$
|
470
|
|
|
Preferred Stock
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
(Deficit)
|
|
Treasury
Stock,
At Cost
|
|
Accumulated
Other
Comprehensive
Income (Loss), Net
|
|
Total
|
||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
|
|||||||||||||||||||||
|
(In millions, except per share data)
|
||||||||||||||||||||||||||||||||
BALANCE AT JANUARY 1, 2015
|
1
|
|
|
$
|
884
|
|
|
1,354
|
|
|
$
|
14
|
|
|
$
|
18,767
|
|
|
$
|
(1,177
|
)
|
|
$
|
(1,377
|
)
|
|
$
|
(238
|
)
|
|
$
|
16,873
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
519
|
|
|
—
|
|
|
—
|
|
|
519
|
|
|||||||
Amortization of unrealized losses on securities transferred to held to maturity, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
|||||||
Net change in unrealized gains and losses on securities available for sale, net of tax and reclassification adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(79
|
)
|
|
(79
|
)
|
|||||||
Net change in unrealized gains and losses on derivative instruments, net of tax and reclassification adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
12
|
|
|||||||
Net change from employee benefit plans, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
14
|
|
|||||||
Cash dividends declared—$0.11 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(147
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(147
|
)
|
|||||||
Preferred stock dividends
|
—
|
|
|
(32
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(32
|
)
|
|||||||
Common stock transactions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Impact of share repurchase
|
—
|
|
|
—
|
|
|
(28
|
)
|
|
—
|
|
|
(274
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(274
|
)
|
|||||||
Impact of stock transactions under compensation plans, net and other
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|||||||
BALANCE AT JUNE 30, 2015
|
1
|
|
|
$
|
852
|
|
|
1,331
|
|
|
$
|
14
|
|
|
$
|
18,355
|
|
|
$
|
(658
|
)
|
|
$
|
(1,377
|
)
|
|
$
|
(287
|
)
|
|
$
|
16,899
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
BALANCE AT JANUARY 1, 2016
|
1
|
|
|
$
|
820
|
|
|
1,297
|
|
|
$
|
13
|
|
|
$
|
17,883
|
|
|
$
|
(115
|
)
|
|
$
|
(1,377
|
)
|
|
$
|
(380
|
)
|
|
$
|
16,844
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
548
|
|
|
—
|
|
|
—
|
|
|
548
|
|
|||||||
Amortization of unrealized losses on securities transferred to held to maturity, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
7
|
|
|||||||
Net change in unrealized gains and losses on securities available for sale, net of tax and reclassification adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
307
|
|
|
307
|
|
|||||||
Net change in unrealized gains and losses on derivative instruments, net of tax and reclassification adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
203
|
|
|
203
|
|
|||||||
Net change from employee benefit plans, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
11
|
|
|||||||
Cash dividends declared—$0.125 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(159
|
)
|
|
—
|
|
|
—
|
|
|
(159
|
)
|
|||||||
Preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(32
|
)
|
|
—
|
|
|
—
|
|
|
(32
|
)
|
|||||||
Common stock transactions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Impact of share repurchase
|
—
|
|
|
—
|
|
|
(42
|
)
|
|
—
|
|
|
(354
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(354
|
)
|
|||||||
Impact of stock transactions under compensation plans, net and other
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|||||||
BALANCE AT JUNE 30, 2016
|
1
|
|
|
$
|
820
|
|
|
1,259
|
|
|
$
|
13
|
|
|
$
|
17,539
|
|
|
$
|
242
|
|
|
$
|
(1,377
|
)
|
|
$
|
148
|
|
|
$
|
17,385
|
|
|
Six Months Ended June 30
|
||||||
|
2016
|
|
2015
|
||||
|
(In millions)
|
||||||
Operating activities:
|
|
|
|
||||
Net income
|
$
|
548
|
|
|
$
|
519
|
|
Adjustments to reconcile net income to net cash from operating activities:
|
|
|
|
||||
Provision for loan losses
|
185
|
|
|
112
|
|
||
Depreciation, amortization and accretion, net
|
267
|
|
|
252
|
|
||
Securities (gains) losses, net
|
(1
|
)
|
|
(11
|
)
|
||
Deferred income tax expense
|
10
|
|
|
40
|
|
||
Originations and purchases of loans held for sale
|
(1,837
|
)
|
|
(1,224
|
)
|
||
Proceeds from sales of loans held for sale
|
1,823
|
|
|
1,295
|
|
||
(Gain) loss on sale of loans, net
|
(59
|
)
|
|
(48
|
)
|
||
(Gain) loss on early extinguishment of debt
|
—
|
|
|
43
|
|
||
Net change in operating assets and liabilities:
|
|
|
|
||||
Trading account securities
|
26
|
|
|
(4
|
)
|
||
Other earning assets
|
83
|
|
|
(81
|
)
|
||
Interest receivable and other assets
|
(126
|
)
|
|
91
|
|
||
Other liabilities
|
197
|
|
|
(347
|
)
|
||
Other
|
14
|
|
|
30
|
|
||
Net cash from operating activities
|
1,130
|
|
|
667
|
|
||
Investing activities:
|
|
|
|
||||
Proceeds from maturities of securities held to maturity
|
305
|
|
|
109
|
|
||
Proceeds from sales of securities available for sale
|
1,527
|
|
|
801
|
|
||
Proceeds from maturities of securities available for sale
|
1,983
|
|
|
1,911
|
|
||
Purchases of securities available for sale
|
(4,092
|
)
|
|
(2,733
|
)
|
||
Proceeds from sales of loans
|
47
|
|
|
49
|
|
||
Purchases of loans
|
(579
|
)
|
|
(547
|
)
|
||
Purchases of mortgage servicing rights
|
(24
|
)
|
|
—
|
|
||
Net change in loans
|
(202
|
)
|
|
(2,565
|
)
|
||
Net purchases of other assets
|
(41
|
)
|
|
(74
|
)
|
||
Net cash from investing activities
|
(1,076
|
)
|
|
(3,049
|
)
|
||
Financing activities:
|
|
|
|
||||
Net change in deposits
|
(1,185
|
)
|
|
2,875
|
|
||
Net change in short-term borrowings
|
(8
|
)
|
|
(407
|
)
|
||
Proceeds from long-term borrowings
|
1,607
|
|
|
1,248
|
|
||
Payments on long-term borrowings
|
(1,000
|
)
|
|
(1,142
|
)
|
||
Cash dividends on common stock
|
(154
|
)
|
|
(147
|
)
|
||
Cash dividends on preferred stock
|
(32
|
)
|
|
(32
|
)
|
||
Repurchase of common stock
|
(354
|
)
|
|
(274
|
)
|
||
Other
|
(5
|
)
|
|
12
|
|
||
Net cash from financing activities
|
(1,131
|
)
|
|
2,133
|
|
||
Net change in cash and cash equivalents
|
(1,077
|
)
|
|
(249
|
)
|
||
Cash and cash equivalents at beginning of year
|
5,314
|
|
|
4,004
|
|
||
Cash and cash equivalents at end of period
|
$
|
4,237
|
|
|
$
|
3,755
|
|
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In millions, except per share data)
|
||||||||||||||
Non-interest expense:
|
|
|
|
|
|
|
|
||||||||
Professional and legal expenses/(recoveries)
|
$
|
(5
|
)
|
|
$
|
5
|
|
|
$
|
(5
|
)
|
|
$
|
9
|
|
Other
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Total non-interest expense
|
(5
|
)
|
|
6
|
|
|
(5
|
)
|
|
10
|
|
||||
Income (loss) from discontinued operations before income taxes
|
5
|
|
|
(6
|
)
|
|
5
|
|
|
(10
|
)
|
||||
Income tax expense (benefit)
|
2
|
|
|
(2
|
)
|
|
2
|
|
|
(4
|
)
|
||||
Income (loss) from discontinued operations, net of tax
|
$
|
3
|
|
|
$
|
(4
|
)
|
|
$
|
3
|
|
|
$
|
(6
|
)
|
Earnings (loss) per common share from discontinued operations:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.00
|
|
|
$
|
(0.00
|
)
|
|
$
|
0.00
|
|
|
$
|
(0.00
|
)
|
Diluted
|
$
|
0.00
|
|
|
$
|
(0.00
|
)
|
|
$
|
0.00
|
|
|
$
|
(0.00
|
)
|
|
June 30, 2016
|
||||||||||||||||||||||||||
|
|
|
Recognized in OCI
(1)
|
|
|
|
Not Recognized in OCI
|
|
|
||||||||||||||||||
|
Amortized
Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Carrying Value
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Securities held to maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
U.S. Treasury securities
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Federal agency securities
|
150
|
|
|
—
|
|
|
(4
|
)
|
|
146
|
|
|
4
|
|
|
—
|
|
|
150
|
|
|||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Residential agency
|
1,384
|
|
|
—
|
|
|
(57
|
)
|
|
1,327
|
|
|
55
|
|
|
—
|
|
|
1,382
|
|
|||||||
Commercial agency
|
176
|
|
|
—
|
|
|
(4
|
)
|
|
172
|
|
|
2
|
|
|
—
|
|
|
174
|
|
|||||||
|
$
|
1,711
|
|
|
$
|
—
|
|
|
$
|
(65
|
)
|
|
$
|
1,646
|
|
|
$
|
61
|
|
|
$
|
—
|
|
|
$
|
1,707
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
U.S. Treasury securities
|
$
|
235
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
240
|
|
|
|
|
|
|
$
|
240
|
|
||||
Federal agency securities
|
213
|
|
|
3
|
|
|
—
|
|
|
216
|
|
|
|
|
|
|
216
|
|
|||||||||
Obligations of states and political subdivisions
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
|
|
|
|
1
|
|
|||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Residential agency
|
16,602
|
|
|
342
|
|
|
(11
|
)
|
|
16,933
|
|
|
|
|
|
|
16,933
|
|
|||||||||
Residential non-agency
|
4
|
|
|
1
|
|
|
—
|
|
|
5
|
|
|
|
|
|
|
5
|
|
|||||||||
Commercial agency
|
3,150
|
|
|
93
|
|
|
—
|
|
|
3,243
|
|
|
|
|
|
|
3,243
|
|
|||||||||
Commercial non-agency
|
1,167
|
|
|
20
|
|
|
(4
|
)
|
|
1,183
|
|
|
|
|
|
|
1,183
|
|
|||||||||
Corporate and other debt securities
|
1,393
|
|
|
44
|
|
|
(22
|
)
|
|
1,415
|
|
|
|
|
|
|
1,415
|
|
|||||||||
Equity securities
|
249
|
|
|
10
|
|
|
(1
|
)
|
|
258
|
|
|
|
|
|
|
258
|
|
|||||||||
|
$
|
23,014
|
|
|
$
|
518
|
|
|
$
|
(38
|
)
|
|
$
|
23,494
|
|
|
|
|
|
|
$
|
23,494
|
|
|
December 31, 2015
|
||||||||||||||||||||||||||
|
|
|
Recognized in OCI
(1)
|
|
|
|
Not Recognized in OCI
|
|
|
||||||||||||||||||
|
Amortized
Cost |
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Carrying Value
|
|
Gross
Unrealized Gains |
|
Gross
Unrealized Losses |
|
Estimated
Fair Value |
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Securities held to maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
U.S. Treasury securities
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Federal agency securities
|
350
|
|
|
—
|
|
|
(10
|
)
|
|
340
|
|
|
9
|
|
|
—
|
|
|
349
|
|
|||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Residential agency
|
1,490
|
|
|
—
|
|
|
(61
|
)
|
|
1,429
|
|
|
18
|
|
|
(2
|
)
|
|
1,445
|
|
|||||||
Commercial agency
|
181
|
|
|
—
|
|
|
(5
|
)
|
|
176
|
|
|
—
|
|
|
(2
|
)
|
|
174
|
|
|||||||
|
$
|
2,022
|
|
|
$
|
—
|
|
|
$
|
(76
|
)
|
|
$
|
1,946
|
|
|
$
|
27
|
|
|
$
|
(4
|
)
|
|
$
|
1,969
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
U.S. Treasury securities
|
$
|
228
|
|
|
$
|
1
|
|
|
$
|
(1
|
)
|
|
$
|
228
|
|
|
|
|
|
|
$
|
228
|
|
||||
Federal agency securities
|
219
|
|
|
—
|
|
|
(1
|
)
|
|
218
|
|
|
|
|
|
|
218
|
|
|||||||||
Obligations of states and political subdivisions
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
|
|
|
|
1
|
|
|||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Residential agency
|
16,003
|
|
|
149
|
|
|
(90
|
)
|
|
16,062
|
|
|
|
|
|
|
16,062
|
|
|||||||||
Residential non-agency
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
|
|
|
|
5
|
|
|||||||||
Commercial agency
|
3,033
|
|
|
10
|
|
|
(25
|
)
|
|
3,018
|
|
|
|
|
|
|
3,018
|
|
|||||||||
Commercial non-agency
|
1,245
|
|
|
3
|
|
|
(17
|
)
|
|
1,231
|
|
|
|
|
|
|
1,231
|
|
|||||||||
Corporate and other debt securities
|
1,718
|
|
|
12
|
|
|
(63
|
)
|
|
1,667
|
|
|
|
|
|
|
1,667
|
|
|||||||||
Equity securities
|
272
|
|
|
10
|
|
|
(2
|
)
|
|
280
|
|
|
|
|
|
|
280
|
|
|||||||||
|
$
|
22,724
|
|
|
$
|
185
|
|
|
$
|
(199
|
)
|
|
$
|
22,710
|
|
|
|
|
|
|
$
|
22,710
|
|
|
Amortized
Cost
|
|
Estimated
Fair Value
|
||||
|
(In millions)
|
||||||
Securities held to maturity:
|
|
|
|
||||
Due in one year or less
|
$
|
1
|
|
|
$
|
1
|
|
Due after one year through five years
|
150
|
|
|
150
|
|
||
Mortgage-backed securities:
|
|
|
|
||||
Residential agency
|
1,384
|
|
|
1,382
|
|
||
Commercial agency
|
176
|
|
|
174
|
|
||
|
$
|
1,711
|
|
|
$
|
1,707
|
|
Securities available for sale:
|
|
|
|
||||
Due in one year or less
|
$
|
50
|
|
|
$
|
50
|
|
Due after one year through five years
|
646
|
|
|
660
|
|
||
Due after five years through ten years
|
883
|
|
|
907
|
|
||
Due after ten years
|
263
|
|
|
255
|
|
||
Mortgage-backed securities:
|
|
|
|
||||
Residential agency
|
16,602
|
|
|
16,933
|
|
||
Residential non-agency
|
4
|
|
|
5
|
|
||
Commercial agency
|
3,150
|
|
|
3,243
|
|
||
Commercial non-agency
|
1,167
|
|
|
1,183
|
|
||
Equity securities
|
249
|
|
|
258
|
|
||
|
$
|
23,014
|
|
|
$
|
23,494
|
|
|
June 30, 2016
|
||||||||||||||||||||||
|
Less Than Twelve Months
|
|
Twelve Months or More
|
|
Total
|
||||||||||||||||||
|
Estimated
Fair
Value
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
|
Gross
Unrealized
Losses
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Securities held to maturity:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential agency
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
944
|
|
|
$
|
(5
|
)
|
|
$
|
944
|
|
|
$
|
(5
|
)
|
Commercial agency
|
—
|
|
|
—
|
|
|
174
|
|
|
(3
|
)
|
|
174
|
|
|
(3
|
)
|
||||||
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,118
|
|
|
$
|
(8
|
)
|
|
$
|
1,118
|
|
|
$
|
(8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury securities
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
8
|
|
|
$
|
—
|
|
Federal agency securities
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential agency
|
480
|
|
|
(3
|
)
|
|
805
|
|
|
(8
|
)
|
|
1,285
|
|
|
(11
|
)
|
||||||
Residential non-agency
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||||
Commercial agency
|
44
|
|
|
—
|
|
|
45
|
|
|
—
|
|
|
89
|
|
|
—
|
|
||||||
Commercial non-agency
|
77
|
|
|
(1
|
)
|
|
264
|
|
|
(3
|
)
|
|
341
|
|
|
(4
|
)
|
||||||
All other securities
|
41
|
|
|
(1
|
)
|
|
291
|
|
|
(22
|
)
|
|
332
|
|
|
(23
|
)
|
||||||
|
$
|
654
|
|
|
$
|
(5
|
)
|
|
$
|
1,406
|
|
|
$
|
(33
|
)
|
|
$
|
2,060
|
|
|
$
|
(38
|
)
|
|
December 31, 2015
|
||||||||||||||||||||||
|
Less Than Twelve Months
|
|
Twelve Months or More
|
|
Total
|
||||||||||||||||||
|
Estimated
Fair Value |
|
Gross
Unrealized Losses |
|
Estimated
Fair Value |
|
Gross
Unrealized Losses |
|
Estimated
Fair Value |
|
Gross
Unrealized Losses |
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Securities held to maturity:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Federal agency securities
|
$
|
198
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
198
|
|
|
$
|
(1
|
)
|
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential agency
|
322
|
|
|
(7
|
)
|
|
1,121
|
|
|
(38
|
)
|
|
1,443
|
|
|
(45
|
)
|
||||||
Commercial agency
|
—
|
|
|
—
|
|
|
174
|
|
|
(7
|
)
|
|
174
|
|
|
(7
|
)
|
||||||
|
$
|
520
|
|
|
$
|
(8
|
)
|
|
$
|
1,295
|
|
|
$
|
(45
|
)
|
|
$
|
1,815
|
|
|
$
|
(53
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury securities
|
$
|
59
|
|
|
$
|
(1
|
)
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
67
|
|
|
$
|
(1
|
)
|
Federal agency securities
|
74
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
81
|
|
|
—
|
|
||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential agency
|
8,037
|
|
|
(73
|
)
|
|
791
|
|
|
(17
|
)
|
|
8,828
|
|
|
(90
|
)
|
||||||
Residential non-agency
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||||
Commercial agency
|
1,695
|
|
|
(20
|
)
|
|
273
|
|
|
(5
|
)
|
|
1,968
|
|
|
(25
|
)
|
||||||
Commercial non-agency
|
684
|
|
|
(12
|
)
|
|
264
|
|
|
(6
|
)
|
|
948
|
|
|
(18
|
)
|
||||||
All other securities
|
805
|
|
|
(36
|
)
|
|
307
|
|
|
(29
|
)
|
|
1,112
|
|
|
(65
|
)
|
||||||
|
$
|
11,357
|
|
|
$
|
(142
|
)
|
|
$
|
1,650
|
|
|
$
|
(57
|
)
|
|
$
|
13,007
|
|
|
$
|
(199
|
)
|
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In millions)
|
||||||||||||||
Gross realized gains
|
$
|
13
|
|
|
$
|
9
|
|
|
$
|
29
|
|
|
$
|
14
|
|
Gross realized losses
|
(7
|
)
|
|
(3
|
)
|
|
(27
|
)
|
|
(3
|
)
|
||||
OTTI
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||
Securities gains (losses), net
|
$
|
6
|
|
|
$
|
6
|
|
|
$
|
1
|
|
|
$
|
11
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
|
(In millions, net of unearned income)
|
||||||
Commercial and industrial
|
$
|
36,124
|
|
|
$
|
35,821
|
|
Commercial real estate mortgage—owner-occupied
|
7,193
|
|
|
7,538
|
|
||
Commercial real estate construction—owner-occupied
|
344
|
|
|
423
|
|
||
Total commercial
|
43,661
|
|
|
43,782
|
|
||
Commercial investor real estate mortgage
|
4,302
|
|
|
4,255
|
|
||
Commercial investor real estate construction
|
2,660
|
|
|
2,692
|
|
||
Total investor real estate
|
6,962
|
|
|
6,947
|
|
||
Residential first mortgage
|
13,164
|
|
|
12,811
|
|
||
Home equity
|
10,832
|
|
|
10,978
|
|
||
Indirect—vehicles
|
4,159
|
|
|
3,984
|
|
||
Indirect—other consumer
|
722
|
|
|
545
|
|
||
Consumer credit card
|
1,113
|
|
|
1,075
|
|
||
Other consumer
|
1,089
|
|
|
1,040
|
|
||
Total consumer
|
31,079
|
|
|
30,433
|
|
||
|
$
|
81,702
|
|
|
$
|
81,162
|
|
|
Three Months Ended June 30, 2016
|
||||||||||||||
|
Commercial
|
|
Investor Real
Estate
|
|
Consumer
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
Allowance for loan losses, April 1, 2016
|
$
|
821
|
|
|
$
|
91
|
|
|
$
|
239
|
|
|
$
|
1,151
|
|
Provision (credit) for loan losses
|
38
|
|
|
(4
|
)
|
|
38
|
|
|
72
|
|
||||
Loan losses:
|
|
|
|
|
|
|
|
||||||||
Charge-offs
|
(42
|
)
|
|
(1
|
)
|
|
(55
|
)
|
|
(98
|
)
|
||||
Recoveries
|
8
|
|
|
1
|
|
|
17
|
|
|
26
|
|
||||
Net loan losses
|
(34
|
)
|
|
—
|
|
|
(38
|
)
|
|
(72
|
)
|
||||
Allowance for loan losses, June 30, 2016
|
825
|
|
|
87
|
|
|
239
|
|
|
1,151
|
|
||||
Reserve for unfunded credit commitments, April 1, 2016
|
48
|
|
|
5
|
|
|
—
|
|
|
53
|
|
||||
Provision (credit) for unfunded credit losses
|
11
|
|
|
—
|
|
|
—
|
|
|
11
|
|
||||
Reserve for unfunded credit commitments, June 30, 2016
|
59
|
|
|
5
|
|
|
—
|
|
|
64
|
|
||||
Allowance for credit losses, June 30, 2016
|
$
|
884
|
|
|
$
|
92
|
|
|
$
|
239
|
|
|
$
|
1,215
|
|
|
Three Months Ended June 30, 2015
|
||||||||||||||
|
Commercial
|
|
Investor Real
Estate
|
|
Consumer
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
Allowance for loan losses, April 1, 2015
|
$
|
696
|
|
|
$
|
125
|
|
|
$
|
277
|
|
|
$
|
1,098
|
|
Provision (credit) for loan losses
|
51
|
|
|
(3
|
)
|
|
15
|
|
|
63
|
|
||||
Loan losses:
|
|
|
|
|
|
|
|
||||||||
Charge-offs
|
(25
|
)
|
|
(4
|
)
|
|
(57
|
)
|
|
(86
|
)
|
||||
Recoveries
|
18
|
|
|
5
|
|
|
17
|
|
|
40
|
|
||||
Net loan losses
|
(7
|
)
|
|
1
|
|
|
(40
|
)
|
|
(46
|
)
|
||||
Allowance for loan losses, June 30, 2015
|
740
|
|
|
123
|
|
|
252
|
|
|
1,115
|
|
||||
Reserve for unfunded credit commitments, April 1, 2015
|
58
|
|
|
8
|
|
|
—
|
|
|
66
|
|
||||
Provision (credit) for unfunded credit losses
|
1
|
|
|
(3
|
)
|
|
—
|
|
|
(2
|
)
|
||||
Reserve for unfunded credit commitments, June 30, 2015
|
59
|
|
|
5
|
|
|
—
|
|
|
64
|
|
||||
Allowance for credit losses, June 30, 2015
|
$
|
799
|
|
|
$
|
128
|
|
|
$
|
252
|
|
|
$
|
1,179
|
|
|
Six Months Ended June 30, 2016
|
||||||||||||||
|
Commercial
|
|
Investor Real
Estate
|
|
Consumer
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
Allowance for loan losses, January 1, 2016
|
$
|
758
|
|
|
$
|
97
|
|
|
$
|
251
|
|
|
$
|
1,106
|
|
Provision (credit) for loan losses
|
123
|
|
|
(14
|
)
|
|
76
|
|
|
185
|
|
||||
Loan losses:
|
|
|
|
|
|
|
|
||||||||
Charge-offs
|
(71
|
)
|
|
(1
|
)
|
|
(122
|
)
|
|
(194
|
)
|
||||
Recoveries
|
15
|
|
|
5
|
|
|
34
|
|
|
54
|
|
||||
Net loan losses
|
(56
|
)
|
|
4
|
|
|
(88
|
)
|
|
(140
|
)
|
||||
Allowance for loan losses, June 30, 2016
|
825
|
|
|
87
|
|
|
239
|
|
|
1,151
|
|
||||
Reserve for unfunded credit commitments, January 1, 2016
|
47
|
|
|
5
|
|
|
—
|
|
|
52
|
|
||||
Provision (credit) for unfunded credit losses
|
12
|
|
|
—
|
|
|
—
|
|
|
12
|
|
||||
Reserve for unfunded credit commitments, June 30, 2016
|
59
|
|
|
5
|
|
|
—
|
|
|
64
|
|
||||
Allowance for credit losses, June 30, 2016
|
$
|
884
|
|
|
$
|
92
|
|
|
$
|
239
|
|
|
$
|
1,215
|
|
Portion of ending allowance for loan losses:
|
|
|
|
|
|
|
|
||||||||
Individually evaluated for impairment
|
$
|
264
|
|
|
$
|
20
|
|
|
$
|
65
|
|
|
$
|
349
|
|
Collectively evaluated for impairment
|
561
|
|
|
67
|
|
|
174
|
|
|
802
|
|
||||
Total allowance for loan losses
|
$
|
825
|
|
|
$
|
87
|
|
|
$
|
239
|
|
|
$
|
1,151
|
|
Portion of loan portfolio ending balance:
|
|
|
|
|
|
|
|
||||||||
Individually evaluated for impairment
|
$
|
1,046
|
|
|
$
|
156
|
|
|
$
|
815
|
|
|
$
|
2,017
|
|
Collectively evaluated for impairment
|
42,615
|
|
|
6,806
|
|
|
30,264
|
|
|
79,685
|
|
||||
Total loans evaluated for impairment
|
$
|
43,661
|
|
|
$
|
6,962
|
|
|
$
|
31,079
|
|
|
$
|
81,702
|
|
|
Six Months Ended June 30, 2015
|
||||||||||||||
|
Commercial
|
|
Investor Real
Estate
|
|
Consumer
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
Allowance for loan losses, January 1, 2015
|
$
|
654
|
|
|
$
|
150
|
|
|
$
|
299
|
|
|
$
|
1,103
|
|
Provision (credit) for loan losses
|
110
|
|
|
(28
|
)
|
|
30
|
|
|
112
|
|
||||
Loan losses:
|
|
|
|
|
|
|
|
||||||||
Charge-offs
|
(59
|
)
|
|
(12
|
)
|
|
(116
|
)
|
|
(187
|
)
|
||||
Recoveries
|
35
|
|
|
13
|
|
|
39
|
|
|
87
|
|
||||
Net loan losses
|
(24
|
)
|
|
1
|
|
|
(77
|
)
|
|
(100
|
)
|
||||
Allowance for loan losses, June 30, 2015
|
740
|
|
|
123
|
|
|
252
|
|
|
1,115
|
|
||||
Reserve for unfunded credit commitments, January 1, 2015
|
57
|
|
|
8
|
|
|
—
|
|
|
65
|
|
||||
Provision (credit) for unfunded credit losses
|
2
|
|
|
(3
|
)
|
|
—
|
|
|
(1
|
)
|
||||
Reserve for unfunded credit commitments, June 30, 2015
|
59
|
|
|
5
|
|
|
—
|
|
|
64
|
|
||||
Allowance for credit losses, June 30, 2015
|
$
|
799
|
|
|
$
|
128
|
|
|
$
|
252
|
|
|
$
|
1,179
|
|
Portion of ending allowance for loan losses:
|
|
|
|
|
|
|
|
||||||||
Individually evaluated for impairment
|
$
|
189
|
|
|
$
|
42
|
|
|
$
|
69
|
|
|
$
|
300
|
|
Collectively evaluated for impairment
|
551
|
|
|
81
|
|
|
183
|
|
|
815
|
|
||||
Total allowance for loan losses
|
$
|
740
|
|
|
$
|
123
|
|
|
$
|
252
|
|
|
$
|
1,115
|
|
Portion of loan portfolio ending balance:
|
|
|
|
|
|
|
|
||||||||
Individually evaluated for impairment
|
$
|
722
|
|
|
$
|
264
|
|
|
$
|
845
|
|
|
$
|
1,831
|
|
Collectively evaluated for impairment
|
42,870
|
|
|
6,664
|
|
|
28,784
|
|
|
78,318
|
|
||||
Total loans evaluated for impairment
|
$
|
43,592
|
|
|
$
|
6,928
|
|
|
$
|
29,629
|
|
|
$
|
80,149
|
|
•
|
Pass—includes obligations where the probability of default is considered low;
|
•
|
Special Mention—includes obligations that have potential weakness which may, if not reversed or corrected, weaken the credit or inadequately protect the Company’s position at some future date. Obligations in this category may also be subject to economic or market conditions which may, in the future, have an adverse effect on debt service ability;
|
•
|
Substandard Accrual—includes obligations that exhibit a well-defined weakness that presently jeopardizes debt repayment, even though they are currently performing. These obligations are characterized by the distinct possibility that the Company may incur a loss in the future if these weaknesses are not corrected;
|
•
|
Non-accrual—includes obligations where management has determined that full payment of principal and interest is in doubt.
|
|
June 30, 2016
|
||||||||||||||||||
|
Pass
|
|
Special Mention
|
|
Substandard
Accrual
|
|
Non-accrual
|
|
Total
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Commercial and industrial
|
$
|
33,584
|
|
|
$
|
690
|
|
|
$
|
1,254
|
|
|
$
|
596
|
|
|
$
|
36,124
|
|
Commercial real estate mortgage—owner-occupied
|
6,492
|
|
|
270
|
|
|
191
|
|
|
240
|
|
|
7,193
|
|
|||||
Commercial real estate construction—owner-occupied
|
323
|
|
|
10
|
|
|
8
|
|
|
3
|
|
|
344
|
|
|||||
Total commercial
|
$
|
40,399
|
|
|
$
|
970
|
|
|
$
|
1,453
|
|
|
$
|
839
|
|
|
$
|
43,661
|
|
Commercial investor real estate mortgage
|
$
|
4,041
|
|
|
$
|
112
|
|
|
$
|
116
|
|
|
$
|
33
|
|
|
$
|
4,302
|
|
Commercial investor real estate construction
|
2,519
|
|
|
114
|
|
|
27
|
|
|
—
|
|
|
2,660
|
|
|||||
Total investor real estate
|
$
|
6,560
|
|
|
$
|
226
|
|
|
$
|
143
|
|
|
$
|
33
|
|
|
$
|
6,962
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
Accrual
|
|
Non-accrual
|
|
Total
|
||||||||||
|
|
|
|
|
(In millions)
|
||||||||||||||
Residential first mortgage
|
|
|
|
|
$
|
13,112
|
|
|
$
|
52
|
|
|
$
|
13,164
|
|
||||
Home equity
|
|
|
|
|
10,731
|
|
|
101
|
|
|
10,832
|
|
|||||||
Indirect—vehicles
|
|
|
|
|
4,159
|
|
|
—
|
|
|
4,159
|
|
|||||||
Indirect—other consumer
|
|
|
|
|
722
|
|
|
—
|
|
|
722
|
|
|||||||
Consumer credit card
|
|
|
|
|
1,113
|
|
|
—
|
|
|
1,113
|
|
|||||||
Other consumer
|
|
|
|
|
1,089
|
|
|
—
|
|
|
1,089
|
|
|||||||
Total consumer
|
|
|
|
|
$
|
30,926
|
|
|
$
|
153
|
|
|
$
|
31,079
|
|
||||
|
|
|
|
|
|
|
|
|
$
|
81,702
|
|
|
December 31, 2015
|
||||||||||||||||||
|
Pass
|
|
Special
Mention
|
|
Substandard
Accrual
|
|
Non-accrual
|
|
Total
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Commercial and industrial
|
$
|
33,639
|
|
|
$
|
963
|
|
|
$
|
894
|
|
|
$
|
325
|
|
|
$
|
35,821
|
|
Commercial real estate mortgage—owner-occupied
|
6,750
|
|
|
306
|
|
|
214
|
|
|
268
|
|
|
7,538
|
|
|||||
Commercial real estate construction—owner-occupied
|
385
|
|
|
21
|
|
|
15
|
|
|
2
|
|
|
423
|
|
|||||
Total commercial
|
$
|
40,774
|
|
|
$
|
1,290
|
|
|
$
|
1,123
|
|
|
$
|
595
|
|
|
$
|
43,782
|
|
Commercial investor real estate mortgage
|
$
|
3,926
|
|
|
$
|
140
|
|
|
$
|
158
|
|
|
$
|
31
|
|
|
$
|
4,255
|
|
Commercial investor real estate construction
|
2,658
|
|
|
4
|
|
|
30
|
|
|
—
|
|
|
2,692
|
|
|||||
Total investor real estate
|
$
|
6,584
|
|
|
$
|
144
|
|
|
$
|
188
|
|
|
$
|
31
|
|
|
$
|
6,947
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
Accrual
|
|
Non-accrual
|
|
Total
|
||||||||||
|
|
|
|
|
(In millions)
|
||||||||||||||
Residential first mortgage
|
|
|
|
|
$
|
12,748
|
|
|
$
|
63
|
|
|
$
|
12,811
|
|
||||
Home equity
|
|
|
|
|
10,885
|
|
|
93
|
|
|
10,978
|
|
|||||||
Indirect—vehicles
|
|
|
|
|
3,984
|
|
|
—
|
|
|
3,984
|
|
|||||||
Indirect—other consumer
|
|
|
|
|
545
|
|
|
—
|
|
|
545
|
|
|||||||
Consumer credit card
|
|
|
|
|
1,075
|
|
|
—
|
|
|
1,075
|
|
|||||||
Other consumer
|
|
|
|
|
1,040
|
|
|
—
|
|
|
1,040
|
|
|||||||
Total consumer
|
|
|
|
|
$
|
30,277
|
|
|
$
|
156
|
|
|
$
|
30,433
|
|
||||
|
|
|
|
|
|
|
|
|
$
|
81,162
|
|
|
June 30, 2016
|
||||||||||||||||||||||||||
|
Accrual Loans
|
|
|
|
|
|
|
||||||||||||||||||||
|
30-59 DPD
|
|
60-89 DPD
|
|
90+ DPD
|
|
Total
30+ DPD
|
|
Total
Accrual
|
|
Non-accrual
|
|
Total
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Commercial and industrial
|
$
|
24
|
|
|
$
|
14
|
|
|
$
|
6
|
|
|
$
|
44
|
|
|
$
|
35,528
|
|
|
$
|
596
|
|
|
$
|
36,124
|
|
Commercial real estate
mortgage—owner-occupied
|
20
|
|
|
7
|
|
|
3
|
|
|
30
|
|
|
6,953
|
|
|
240
|
|
|
7,193
|
|
|||||||
Commercial real estate construction—owner-occupied
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
341
|
|
|
3
|
|
|
344
|
|
|||||||
Total commercial
|
45
|
|
|
21
|
|
|
9
|
|
|
75
|
|
|
42,822
|
|
|
839
|
|
|
43,661
|
|
|||||||
Commercial investor real estate mortgage
|
19
|
|
|
8
|
|
|
3
|
|
|
30
|
|
|
4,269
|
|
|
33
|
|
|
4,302
|
|
|||||||
Commercial investor real estate construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,660
|
|
|
—
|
|
|
2,660
|
|
|||||||
Total investor real estate
|
19
|
|
|
8
|
|
|
3
|
|
|
30
|
|
|
6,929
|
|
|
33
|
|
|
6,962
|
|
|||||||
Residential first mortgage
|
90
|
|
|
58
|
|
|
199
|
|
|
347
|
|
|
13,112
|
|
|
52
|
|
|
13,164
|
|
|||||||
Home equity
|
51
|
|
|
23
|
|
|
34
|
|
|
108
|
|
|
10,731
|
|
|
101
|
|
|
10,832
|
|
|||||||
Indirect—vehicles
|
43
|
|
|
12
|
|
|
8
|
|
|
63
|
|
|
4,159
|
|
|
—
|
|
|
4,159
|
|
|||||||
Indirect—other consumer
|
3
|
|
|
2
|
|
|
—
|
|
|
5
|
|
|
722
|
|
|
—
|
|
|
722
|
|
|||||||
Consumer credit card
|
8
|
|
|
4
|
|
|
13
|
|
|
25
|
|
|
1,113
|
|
|
—
|
|
|
1,113
|
|
|||||||
Other consumer
|
14
|
|
|
3
|
|
|
3
|
|
|
20
|
|
|
1,089
|
|
|
—
|
|
|
1,089
|
|
|||||||
Total consumer
|
209
|
|
|
102
|
|
|
257
|
|
|
568
|
|
|
30,926
|
|
|
153
|
|
|
31,079
|
|
|||||||
|
$
|
273
|
|
|
$
|
131
|
|
|
$
|
269
|
|
|
$
|
673
|
|
|
$
|
80,677
|
|
|
$
|
1,025
|
|
|
$
|
81,702
|
|
|
December 31, 2015
|
||||||||||||||||||||||||||
|
Accrual Loans
|
|
|
|
|
|
|
||||||||||||||||||||
|
30-59 DPD
|
|
60-89 DPD
|
|
90+ DPD
|
|
Total
30+ DPD
|
|
Total
Accrual
|
|
Non-accrual
|
|
Total
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Commercial and industrial
|
$
|
11
|
|
|
$
|
6
|
|
|
$
|
9
|
|
|
$
|
26
|
|
|
$
|
35,496
|
|
|
$
|
325
|
|
|
$
|
35,821
|
|
Commercial real estate
mortgage—owner-occupied
|
24
|
|
|
7
|
|
|
3
|
|
|
34
|
|
|
7,270
|
|
|
268
|
|
|
7,538
|
|
|||||||
Commercial real estate construction—owner-occupied
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
421
|
|
|
2
|
|
|
423
|
|
|||||||
Total commercial
|
35
|
|
|
14
|
|
|
12
|
|
|
61
|
|
|
43,187
|
|
|
595
|
|
|
43,782
|
|
|||||||
Commercial investor real estate mortgage
|
14
|
|
|
13
|
|
|
4
|
|
|
31
|
|
|
4,224
|
|
|
31
|
|
|
4,255
|
|
|||||||
Commercial investor real estate construction
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2,692
|
|
|
—
|
|
|
2,692
|
|
|||||||
Total investor real estate
|
16
|
|
|
13
|
|
|
4
|
|
|
33
|
|
|
6,916
|
|
|
31
|
|
|
6,947
|
|
|||||||
Residential first mortgage
|
88
|
|
|
60
|
|
|
220
|
|
|
368
|
|
|
12,748
|
|
|
63
|
|
|
12,811
|
|
|||||||
Home equity
|
58
|
|
|
26
|
|
|
59
|
|
|
143
|
|
|
10,885
|
|
|
93
|
|
|
10,978
|
|
|||||||
Indirect—vehicles
|
49
|
|
|
14
|
|
|
9
|
|
|
72
|
|
|
3,984
|
|
|
—
|
|
|
3,984
|
|
|||||||
Indirect—other consumer
|
2
|
|
|
1
|
|
|
—
|
|
|
3
|
|
|
545
|
|
|
—
|
|
|
545
|
|
|||||||
Consumer credit card
|
7
|
|
|
5
|
|
|
12
|
|
|
24
|
|
|
1,075
|
|
|
—
|
|
|
1,075
|
|
|||||||
Other consumer
|
11
|
|
|
4
|
|
|
4
|
|
|
19
|
|
|
1,040
|
|
|
—
|
|
|
1,040
|
|
|||||||
Total consumer
|
215
|
|
|
110
|
|
|
304
|
|
|
629
|
|
|
30,277
|
|
|
156
|
|
|
30,433
|
|
|||||||
|
$
|
266
|
|
|
$
|
137
|
|
|
$
|
320
|
|
|
$
|
723
|
|
|
$
|
80,380
|
|
|
$
|
782
|
|
|
$
|
81,162
|
|
|
Non-accrual Impaired Loans As of June 30, 2016
|
|||||||||||||||||||||||||
|
|
|
|
|
Book Value
(3)
|
|
|
|
|
|||||||||||||||||
|
Unpaid
Principal
Balance
(1)
|
|
Charge-offs
and Payments
Applied
(2)
|
|
Total
Impaired
Loans on
Non-accrual
Status
|
|
Impaired
Loans on
Non-accrual
Status with
No Related
Allowance
|
|
Impaired
Loans on
Non-accrual
Status with
Related
Allowance
|
|
Related
Allowance
for Loan
Losses
|
|
Coverage %
(4)
|
|||||||||||||
|
(Dollars in millions)
|
|||||||||||||||||||||||||
Commercial and industrial
|
$
|
644
|
|
|
$
|
57
|
|
|
$
|
587
|
|
|
$
|
121
|
|
|
$
|
466
|
|
|
$
|
162
|
|
|
34.0
|
%
|
Commercial real estate mortgage—owner-occupied
|
261
|
|
|
21
|
|
|
240
|
|
|
31
|
|
|
209
|
|
|
65
|
|
|
33.0
|
|
||||||
Commercial real estate construction—owner-occupied
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|
2
|
|
|
66.7
|
|
||||||
Total commercial
|
908
|
|
|
78
|
|
|
830
|
|
|
152
|
|
|
678
|
|
|
229
|
|
|
33.8
|
|
||||||
Commercial investor real estate mortgage
|
38
|
|
|
5
|
|
|
33
|
|
|
11
|
|
|
22
|
|
|
8
|
|
|
34.2
|
|
||||||
Total investor real estate
|
38
|
|
|
5
|
|
|
33
|
|
|
11
|
|
|
22
|
|
|
8
|
|
|
34.2
|
|
||||||
Residential first mortgage
|
47
|
|
|
14
|
|
|
33
|
|
|
—
|
|
|
33
|
|
|
4
|
|
|
38.3
|
|
||||||
Home equity
|
13
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
—
|
|
||||||
Total consumer
|
60
|
|
|
14
|
|
|
46
|
|
|
—
|
|
|
46
|
|
|
4
|
|
|
30.0
|
|
||||||
|
$
|
1,006
|
|
|
$
|
97
|
|
|
$
|
909
|
|
|
$
|
163
|
|
|
$
|
746
|
|
|
$
|
241
|
|
|
33.6
|
%
|
|
Accruing Impaired Loans As of June 30, 2016
|
|||||||||||||||||
|
Unpaid
Principal
Balance
(1)
|
|
Charge-offs
and Payments
Applied
(2)
|
|
Book Value
(3)
|
|
Related
Allowance for
Loan Losses
|
|
Coverage %
(4)
|
|||||||||
|
(Dollars in millions)
|
|||||||||||||||||
Commercial and industrial
|
$
|
154
|
|
|
$
|
1
|
|
|
$
|
153
|
|
|
$
|
30
|
|
|
20.1
|
%
|
Commercial real estate mortgage—owner-occupied
|
65
|
|
|
3
|
|
|
62
|
|
|
5
|
|
|
12.3
|
|
||||
Commercial real estate construction—owner-occupied
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Total commercial
|
220
|
|
|
4
|
|
|
216
|
|
|
35
|
|
|
17.7
|
|
||||
Commercial investor real estate mortgage
|
101
|
|
|
6
|
|
|
95
|
|
|
9
|
|
|
14.9
|
|
||||
Commercial investor real estate construction
|
29
|
|
|
1
|
|
|
28
|
|
|
3
|
|
|
13.8
|
|
||||
Total investor real estate
|
130
|
|
|
7
|
|
|
123
|
|
|
12
|
|
|
14.6
|
|
||||
Residential first mortgage
|
456
|
|
|
12
|
|
|
444
|
|
|
55
|
|
|
14.7
|
|
||||
Home equity
|
312
|
|
|
1
|
|
|
311
|
|
|
6
|
|
|
2.2
|
|
||||
Consumer credit card
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
Other consumer
|
12
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
—
|
|
||||
Total consumer
|
782
|
|
|
13
|
|
|
769
|
|
|
61
|
|
|
9.5
|
|
||||
|
$
|
1,132
|
|
|
$
|
24
|
|
|
$
|
1,108
|
|
|
$
|
108
|
|
|
11.7
|
%
|
|
Total Impaired Loans As of June 30, 2016
|
|||||||||||||||||||||||||
|
|
|
|
|
Book Value
(3)
|
|
|
|
|
|||||||||||||||||
|
Unpaid
Principal
Balance
(1)
|
|
Charge-offs
and Payments
Applied
(2)
|
|
Total
Impaired
Loans
|
|
Impaired
Loans with No
Related
Allowance
|
|
Impaired
Loans with
Related
Allowance
|
|
Related
Allowance
for Loan
Losses
|
|
Coverage %
(4)
|
|||||||||||||
|
(Dollars in millions)
|
|||||||||||||||||||||||||
Commercial and industrial
|
$
|
798
|
|
|
$
|
58
|
|
|
$
|
740
|
|
|
$
|
121
|
|
|
$
|
619
|
|
|
$
|
192
|
|
|
31.3
|
%
|
Commercial real estate mortgage—owner-occupied
|
326
|
|
|
24
|
|
|
302
|
|
|
31
|
|
|
271
|
|
|
70
|
|
|
28.8
|
|
||||||
Commercial real estate construction—owner-occupied
|
4
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|
2
|
|
|
50.0
|
|
||||||
Total commercial
|
1,128
|
|
|
82
|
|
|
1,046
|
|
|
152
|
|
|
894
|
|
|
264
|
|
|
30.7
|
|
||||||
Commercial investor real estate mortgage
|
139
|
|
|
11
|
|
|
128
|
|
|
11
|
|
|
117
|
|
|
17
|
|
|
20.1
|
|
||||||
Commercial investor real estate construction
|
29
|
|
|
1
|
|
|
28
|
|
|
—
|
|
|
28
|
|
|
3
|
|
|
13.8
|
|
||||||
Total investor real estate
|
168
|
|
|
12
|
|
|
156
|
|
|
11
|
|
|
145
|
|
|
20
|
|
|
19.0
|
|
||||||
Residential first mortgage
|
503
|
|
|
26
|
|
|
477
|
|
|
—
|
|
|
477
|
|
|
59
|
|
|
16.9
|
|
||||||
Home equity
|
325
|
|
|
1
|
|
|
324
|
|
|
—
|
|
|
324
|
|
|
6
|
|
|
2.2
|
|
||||||
Consumer credit card
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||||
Other consumer
|
12
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
—
|
|
||||||
Total consumer
|
842
|
|
|
27
|
|
|
815
|
|
|
—
|
|
|
815
|
|
|
65
|
|
|
10.9
|
|
||||||
|
$
|
2,138
|
|
|
$
|
121
|
|
|
$
|
2,017
|
|
|
$
|
163
|
|
|
$
|
1,854
|
|
|
$
|
349
|
|
|
22.0
|
%
|
|
Non-accrual Impaired Loans As of December 31, 2015
|
|||||||||||||||||||||||||
|
|
|
|
|
Book Value
(3)
|
|
|
|
|
|||||||||||||||||
|
Unpaid
Principal
Balance
(1)
|
|
Charge-offs
and Payments
Applied
(2)
|
|
Total
Impaired
Loans on
Non-accrual
Status
|
|
Impaired
Loans on
Non-accrual
Status with
No Related
Allowance
|
|
Impaired
Loans on
Non-accrual
Status with
Related
Allowance
|
|
Related
Allowance
for Loan
Losses
|
|
Coverage %
(4)
|
|||||||||||||
|
(Dollars in millions)
|
|||||||||||||||||||||||||
Commercial and industrial
|
$
|
363
|
|
|
$
|
41
|
|
|
$
|
322
|
|
|
$
|
26
|
|
|
$
|
296
|
|
|
$
|
98
|
|
|
38.3
|
%
|
Commercial real estate mortgage—owner-occupied
|
286
|
|
|
18
|
|
|
268
|
|
|
36
|
|
|
232
|
|
|
69
|
|
|
30.4
|
|
||||||
Commercial real estate construction—owner-occupied
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|
1
|
|
|
50.0
|
|
||||||
Total commercial
|
651
|
|
|
59
|
|
|
592
|
|
|
62
|
|
|
530
|
|
|
168
|
|
|
34.9
|
|
||||||
Commercial investor real estate mortgage
|
36
|
|
|
5
|
|
|
31
|
|
|
13
|
|
|
18
|
|
|
8
|
|
|
36.1
|
|
||||||
Total investor real estate
|
36
|
|
|
5
|
|
|
31
|
|
|
13
|
|
|
18
|
|
|
8
|
|
|
36.1
|
|
||||||
Residential first mortgage
|
51
|
|
|
16
|
|
|
35
|
|
|
—
|
|
|
35
|
|
|
4
|
|
|
39.2
|
|
||||||
Home equity
|
14
|
|
|
1
|
|
|
13
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
7.1
|
|
||||||
Total consumer
|
65
|
|
|
17
|
|
|
48
|
|
|
—
|
|
|
48
|
|
|
4
|
|
|
32.3
|
|
||||||
|
$
|
752
|
|
|
$
|
81
|
|
|
$
|
671
|
|
|
$
|
75
|
|
|
$
|
596
|
|
|
$
|
180
|
|
|
34.7
|
%
|
|
Accruing Impaired Loans As of December 31, 2015
|
|||||||||||||||||
|
Unpaid
Principal
Balance
(1)
|
|
Charge-offs
and Payments
Applied
(2)
|
|
Book Value
(3)
|
|
Related
Allowance for
Loan Losses
|
|
Coverage %
(4)
|
|||||||||
|
(Dollars in millions)
|
|||||||||||||||||
Commercial and industrial
|
$
|
68
|
|
|
$
|
1
|
|
|
$
|
67
|
|
|
$
|
13
|
|
|
20.6
|
%
|
Commercial real estate mortgage—owner-occupied
|
89
|
|
|
6
|
|
|
83
|
|
|
8
|
|
|
15.7
|
|
||||
Commercial real estate construction—owner-occupied
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Total commercial
|
158
|
|
|
7
|
|
|
151
|
|
|
21
|
|
|
17.7
|
|
||||
Commercial investor real estate mortgage
|
141
|
|
|
8
|
|
|
133
|
|
|
13
|
|
|
14.9
|
|
||||
Commercial investor real estate construction
|
27
|
|
|
—
|
|
|
27
|
|
|
5
|
|
|
18.5
|
|
||||
Total investor real estate
|
168
|
|
|
8
|
|
|
160
|
|
|
18
|
|
|
15.5
|
|
||||
Residential first mortgage
|
457
|
|
|
13
|
|
|
444
|
|
|
57
|
|
|
15.3
|
|
||||
Home equity
|
328
|
|
|
—
|
|
|
328
|
|
|
7
|
|
|
2.1
|
|
||||
Indirect—vehicles
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Consumer credit card
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
Other consumer
|
12
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
—
|
|
||||
Total consumer
|
800
|
|
|
13
|
|
|
787
|
|
|
64
|
|
|
9.6
|
|
||||
|
$
|
1,126
|
|
|
$
|
28
|
|
|
$
|
1,098
|
|
|
$
|
103
|
|
|
11.6
|
%
|
|
Total Impaired Loans As of December 31, 2015
|
|||||||||||||||||||||||||
|
|
|
|
|
Book Value
(3)
|
|
|
|
|
|||||||||||||||||
|
Unpaid
Principal
Balance
(1)
|
|
Charge-offs
and Payments
Applied
(2)
|
|
Total
Impaired
Loans
|
|
Impaired
Loans with No
Related
Allowance
|
|
Impaired
Loans with
Related
Allowance
|
|
Related
Allowance for
Loan Losses
|
|
Coverage %
(4)
|
|||||||||||||
|
(Dollars in millions)
|
|||||||||||||||||||||||||
Commercial and industrial
|
$
|
431
|
|
|
$
|
42
|
|
|
$
|
389
|
|
|
$
|
26
|
|
|
$
|
363
|
|
|
$
|
111
|
|
|
35.5
|
%
|
Commercial real estate mortgage—owner-occupied
|
375
|
|
|
24
|
|
|
351
|
|
|
36
|
|
|
315
|
|
|
77
|
|
|
26.9
|
|
||||||
Commercial real estate construction—owner-occupied
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|
1
|
|
|
33.3
|
|
||||||
Total commercial
|
809
|
|
|
66
|
|
|
743
|
|
|
62
|
|
|
681
|
|
|
189
|
|
|
31.5
|
|
||||||
Commercial investor real estate mortgage
|
177
|
|
|
13
|
|
|
164
|
|
|
13
|
|
|
151
|
|
|
21
|
|
|
19.2
|
|
||||||
Commercial investor real estate construction
|
27
|
|
|
—
|
|
|
27
|
|
|
—
|
|
|
27
|
|
|
5
|
|
|
18.5
|
|
||||||
Total investor real estate
|
204
|
|
|
13
|
|
|
191
|
|
|
13
|
|
|
178
|
|
|
26
|
|
|
19.1
|
|
||||||
Residential first mortgage
|
508
|
|
|
29
|
|
|
479
|
|
|
—
|
|
|
479
|
|
|
61
|
|
|
17.7
|
|
||||||
Home equity
|
342
|
|
|
1
|
|
|
341
|
|
|
—
|
|
|
341
|
|
|
7
|
|
|
2.3
|
|
||||||
Indirect—vehicles
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||||
Consumer credit card
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||||
Other consumer
|
12
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
—
|
|
||||||
Total consumer
|
865
|
|
|
30
|
|
|
835
|
|
|
—
|
|
|
835
|
|
|
68
|
|
|
11.3
|
|
||||||
|
$
|
1,878
|
|
|
$
|
109
|
|
|
$
|
1,769
|
|
|
$
|
75
|
|
|
$
|
1,694
|
|
|
$
|
283
|
|
|
20.9
|
%
|
(1)
|
Unpaid principal balance represents the contractual obligation due from the customer and includes the net book value plus charge-offs and payments applied.
|
(2)
|
Charge-offs and payments applied represents cumulative partial charge-offs taken, as well as interest payments received that have been applied against the outstanding principal balance.
|
(3)
|
Book value represents the unpaid principal balance less charge-offs and payments applied; it is shown before any allowance for loan losses.
|
(4)
|
Coverage % represents charge-offs and payments applied plus the related allowance as a percent of the unpaid principal balance.
|
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
||||||||||||||||||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||||||||||||||
|
Average
Balance
|
|
Interest
Income
Recognized
|
|
Average
Balance
|
|
Interest
Income
Recognized
|
|
Average
Balance
|
|
Interest
Income
Recognized
|
|
Average
Balance
|
|
Interest
Income
Recognized
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Commercial and industrial
|
$
|
719
|
|
|
$
|
2
|
|
|
$
|
398
|
|
|
$
|
2
|
|
|
$
|
597
|
|
|
$
|
3
|
|
|
$
|
378
|
|
|
$
|
3
|
|
Commercial real estate mortgage—owner-occupied
|
314
|
|
|
1
|
|
|
348
|
|
|
2
|
|
|
321
|
|
|
2
|
|
|
364
|
|
|
5
|
|
||||||||
Commercial real estate construction—owner-occupied
|
3
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||||||
Total commercial
|
1,036
|
|
|
3
|
|
|
750
|
|
|
4
|
|
|
921
|
|
|
5
|
|
|
746
|
|
|
8
|
|
||||||||
Commercial investor real estate mortgage
|
126
|
|
|
1
|
|
|
257
|
|
|
3
|
|
|
134
|
|
|
3
|
|
|
294
|
|
|
6
|
|
||||||||
Commercial investor real estate construction
|
28
|
|
|
—
|
|
|
32
|
|
|
—
|
|
|
28
|
|
|
—
|
|
|
32
|
|
|
1
|
|
||||||||
Total investor real estate
|
154
|
|
|
1
|
|
|
289
|
|
|
3
|
|
|
162
|
|
|
3
|
|
|
326
|
|
|
7
|
|
||||||||
Residential first mortgage
|
479
|
|
|
4
|
|
|
474
|
|
|
4
|
|
|
478
|
|
|
8
|
|
|
475
|
|
|
8
|
|
||||||||
Home equity
|
328
|
|
|
4
|
|
|
358
|
|
|
4
|
|
|
332
|
|
|
9
|
|
|
360
|
|
|
9
|
|
||||||||
Indirect—vehicles
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||||||
Consumer credit card
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||||||
Other consumer
|
12
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
15
|
|
|
—
|
|
||||||||
Total consumer
|
821
|
|
|
8
|
|
|
850
|
|
|
8
|
|
|
825
|
|
|
17
|
|
|
853
|
|
|
17
|
|
||||||||
Total impaired loans
|
$
|
2,011
|
|
|
$
|
12
|
|
|
$
|
1,889
|
|
|
$
|
15
|
|
|
$
|
1,908
|
|
|
$
|
25
|
|
|
$
|
1,925
|
|
|
$
|
32
|
|
|
Three Months Ended June 30, 2016
|
|||||||||
|
|
|
|
|
Financial Impact
of Modifications
Considered TDRs
|
|||||
|
Number of
Obligors
|
|
Recorded
Investment
|
|
Increase in
Allowance at
Modification
|
|||||
|
(Dollars in millions)
|
|||||||||
Commercial and industrial
|
57
|
|
|
$
|
122
|
|
|
$
|
4
|
|
Commercial real estate mortgage—owner-occupied
|
46
|
|
|
21
|
|
|
1
|
|
||
Total commercial
|
103
|
|
|
143
|
|
|
5
|
|
||
Commercial investor real estate mortgage
|
24
|
|
|
17
|
|
|
—
|
|
||
Commercial investor real estate construction
|
3
|
|
|
10
|
|
|
—
|
|
||
Total investor real estate
|
27
|
|
|
27
|
|
|
—
|
|
||
Residential first mortgage
|
75
|
|
|
15
|
|
|
2
|
|
||
Home equity
|
89
|
|
|
5
|
|
|
—
|
|
||
Consumer credit card
|
27
|
|
|
—
|
|
|
—
|
|
||
Indirect—vehicles and other consumer
|
47
|
|
|
—
|
|
|
—
|
|
||
Total consumer
|
238
|
|
|
20
|
|
|
2
|
|
||
|
368
|
|
|
$
|
190
|
|
|
$
|
7
|
|
|
Three Months Ended June 30, 2015
|
|||||||||
|
|
|
|
|
Financial Impact
of Modifications
Considered TDRs
|
|||||
|
Number of
Obligors
|
|
Recorded
Investment
|
|
Increase in
Allowance at
Modification
|
|||||
|
(Dollars in millions)
|
|||||||||
Commercial and industrial
|
62
|
|
|
$
|
45
|
|
|
$
|
1
|
|
Commercial real estate mortgage—owner-occupied
|
61
|
|
|
37
|
|
|
1
|
|
||
Total commercial
|
123
|
|
|
82
|
|
|
2
|
|
||
Commercial investor real estate mortgage
|
31
|
|
|
15
|
|
|
—
|
|
||
Commercial investor real estate construction
|
12
|
|
|
6
|
|
|
—
|
|
||
Total investor real estate
|
43
|
|
|
21
|
|
|
—
|
|
||
Residential first mortgage
|
96
|
|
|
20
|
|
|
3
|
|
||
Home equity
|
187
|
|
|
9
|
|
|
—
|
|
||
Consumer credit card
|
41
|
|
|
1
|
|
|
—
|
|
||
Indirect—vehicles and other consumer
|
109
|
|
|
1
|
|
|
—
|
|
||
Total consumer
|
433
|
|
|
31
|
|
|
3
|
|
||
|
599
|
|
|
$
|
134
|
|
|
$
|
5
|
|
|
Six Months Ended June 30, 2016
|
|||||||||
|
|
|
|
|
Financial Impact
of Modifications Considered TDRs |
|||||
|
Number of
Obligors |
|
Recorded
Investment |
|
Increase in
Allowance at Modification |
|||||
|
(Dollars in millions)
|
|||||||||
Commercial and industrial
|
95
|
|
|
$
|
181
|
|
|
$
|
6
|
|
Commercial real estate mortgage—owner-occupied
|
76
|
|
|
34
|
|
|
1
|
|
||
Total commercial
|
171
|
|
|
215
|
|
|
7
|
|
||
Commercial investor real estate mortgage
|
49
|
|
|
60
|
|
|
1
|
|
||
Commercial investor real estate construction
|
5
|
|
|
11
|
|
|
—
|
|
||
Total investor real estate
|
54
|
|
|
71
|
|
|
1
|
|
||
Residential first mortgage
|
138
|
|
|
29
|
|
|
4
|
|
||
Home equity
|
206
|
|
|
11
|
|
|
—
|
|
||
Consumer credit card
|
51
|
|
|
—
|
|
|
—
|
|
||
Indirect—vehicles and other consumer
|
101
|
|
|
1
|
|
|
—
|
|
||
Total consumer
|
496
|
|
|
41
|
|
|
4
|
|
||
|
721
|
|
|
$
|
327
|
|
|
$
|
12
|
|
|
Six Months Ended June 30, 2015
|
|||||||||
|
|
|
|
|
Financial Impact
of Modifications Considered TDRs |
|||||
|
Number of
Obligors |
|
Recorded
Investment |
|
Increase in
Allowance at Modification |
|||||
|
(Dollars in millions)
|
|||||||||
Commercial and industrial
|
103
|
|
|
$
|
102
|
|
|
$
|
2
|
|
Commercial real estate mortgage—owner-occupied
|
103
|
|
|
62
|
|
|
2
|
|
||
Total commercial
|
206
|
|
|
164
|
|
|
4
|
|
||
Commercial investor real estate mortgage
|
60
|
|
|
39
|
|
|
1
|
|
||
Commercial investor real estate construction
|
13
|
|
|
7
|
|
|
—
|
|
||
Total investor real estate
|
73
|
|
|
46
|
|
|
1
|
|
||
Residential first mortgage
|
229
|
|
|
52
|
|
|
7
|
|
||
Home equity
|
312
|
|
|
15
|
|
|
—
|
|
||
Consumer credit card
|
73
|
|
|
1
|
|
|
—
|
|
||
Indirect—vehicles and other consumer
|
196
|
|
|
2
|
|
|
—
|
|
||
Total consumer
|
810
|
|
|
70
|
|
|
7
|
|
||
|
1,089
|
|
|
$
|
280
|
|
|
$
|
12
|
|
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In millions)
|
||||||||||||||
Defaulted During the Period, Where Modified in a TDR Twelve Months Prior to Default
|
|
|
|
|
|
|
|
||||||||
Commercial and industrial
|
$
|
6
|
|
|
$
|
3
|
|
|
$
|
12
|
|
|
$
|
4
|
|
Commercial real estate mortgage—owner-occupied
|
—
|
|
|
2
|
|
|
1
|
|
|
3
|
|
||||
Total commercial
|
6
|
|
|
5
|
|
|
13
|
|
|
7
|
|
||||
Commercial investor real estate mortgage
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Total investor real estate
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Residential first mortgage
|
8
|
|
|
5
|
|
|
11
|
|
|
8
|
|
||||
Home equity
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||
Total consumer
|
9
|
|
|
6
|
|
|
12
|
|
|
9
|
|
||||
|
$
|
15
|
|
|
$
|
11
|
|
|
$
|
26
|
|
|
$
|
17
|
|
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In millions)
|
||||||||||||||
Carrying value, beginning of period
|
$
|
239
|
|
|
$
|
239
|
|
|
$
|
252
|
|
|
$
|
257
|
|
Additions
|
8
|
|
|
12
|
|
|
39
|
|
|
19
|
|
||||
Increase (decrease) in fair value
(1)
:
|
|
|
|
|
|
|
|
||||||||
Due to change in valuation inputs or assumptions
|
(22
|
)
|
|
28
|
|
|
(58
|
)
|
|
11
|
|
||||
Economic amortization associated with borrower repayments
|
(9
|
)
|
|
(11
|
)
|
|
(17
|
)
|
|
(19
|
)
|
||||
Carrying value, end of period
|
$
|
216
|
|
|
$
|
268
|
|
|
$
|
216
|
|
|
$
|
268
|
|
|
June 30
|
||||||
|
2016
|
|
2015
|
||||
|
(Dollars in millions)
|
||||||
Unpaid principal balance
|
$
|
27,360
|
|
|
$
|
26,637
|
|
Weighted-average prepayment speed (CPR; percentage)
|
16.5
|
%
|
|
10.0
|
%
|
||
Estimated impact on fair value of a 10% increase
|
$
|
(12
|
)
|
|
$
|
(15
|
)
|
Estimated impact on fair value of a 20% increase
|
$
|
(24
|
)
|
|
$
|
(27
|
)
|
Option-adjusted spread (basis points)
|
999
|
|
|
998
|
|
||
Estimated impact on fair value of a 10% increase
|
$
|
(8
|
)
|
|
$
|
(11
|
)
|
Estimated impact on fair value of a 20% increase
|
$
|
(15
|
)
|
|
$
|
(21
|
)
|
Weighted-average coupon interest rate
|
4.3
|
%
|
|
4.4
|
%
|
||
Weighted-average remaining maturity (months)
|
279
|
|
|
279
|
|
||
Weighted-average servicing fee (basis points)
|
27.8
|
|
|
27.8
|
|
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In millions)
|
||||||||||||||
Servicing related fees and other ancillary income
|
$
|
22
|
|
|
$
|
20
|
|
|
$
|
42
|
|
|
$
|
41
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
|
(In millions)
|
||||||
Corporate Bank
|
$
|
2,452
|
|
|
$
|
2,305
|
|
Consumer Bank
|
1,978
|
|
|
2,095
|
|
||
Wealth Management
|
452
|
|
|
478
|
|
||
|
$
|
4,882
|
|
|
$
|
4,878
|
|
•
|
Recent operating performance,
|
•
|
Changes in market capitalization,
|
•
|
Regulatory actions and assessments,
|
•
|
Changes in the business climate (including legislation, legal factors, and competition),
|
•
|
Company-specific factors (including changes in key personnel, asset impairments, and business dispositions), and
|
•
|
Trends in the banking industry.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2016
|
|
December 31, 2015
|
|||||||
|
Issuance Date
|
|
Earliest Redemption Date
|
|
Dividend Rate
|
|
Liquidation Amount
|
|
Carrying Amount
|
|
Carrying Amount
|
||||||||
|
(Dollars in millions)
|
||||||||||||||||||
Series A
|
11/1/2012
|
|
12/15/2017
|
|
6.375
|
%
|
|
|
$
|
500
|
|
|
$
|
387
|
|
|
$
|
387
|
|
Series B
|
4/29/2014
|
|
9/15/2024
|
|
6.375
|
%
|
(1)
|
|
500
|
|
|
433
|
|
|
433
|
|
|||
|
|
|
|
|
|
|
|
$
|
1,000
|
|
|
$
|
820
|
|
|
$
|
820
|
|
|
Three Months Ended June 30, 2016
|
||||||||||||||||||
|
Unrealized losses on securities transferred to held to maturity
|
|
Unrealized gains (losses) on securities available for sale
|
|
Unrealized gains (losses) on derivative instruments designated as cash flow hedges
|
|
Defined benefit
pension plans and other post
employment
benefits
|
|
Accumulated
other
comprehensive
income (loss),
net of tax
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Beginning of period
|
$
|
(45
|
)
|
|
$
|
198
|
|
|
$
|
216
|
|
|
$
|
(392
|
)
|
|
$
|
(23
|
)
|
Net change
|
5
|
|
|
99
|
|
|
62
|
|
|
5
|
|
|
171
|
|
|||||
End of period
|
$
|
(40
|
)
|
|
$
|
297
|
|
|
$
|
278
|
|
|
$
|
(387
|
)
|
|
$
|
148
|
|
|
Three Months Ended June 30, 2015
|
||||||||||||||||||
|
Unrealized losses on securities transferred to held to maturity
|
|
Unrealized gains (losses) on securities available for sale
|
|
Unrealized gains (losses) on derivative instruments designated as cash flow hedges
|
|
Defined benefit pension plans and other post employment benefits
|
|
Accumulated other comprehensive
income (loss), net of tax
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Beginning of period
|
$
|
(53
|
)
|
|
$
|
252
|
|
|
$
|
70
|
|
|
$
|
(384
|
)
|
|
$
|
(115
|
)
|
Net change
|
2
|
|
|
(156
|
)
|
|
(25
|
)
|
|
7
|
|
|
(172
|
)
|
|||||
End of period
|
$
|
(51
|
)
|
|
$
|
96
|
|
|
$
|
45
|
|
|
$
|
(377
|
)
|
|
$
|
(287
|
)
|
|
Six Months Ended June 30, 2016
|
||||||||||||||||||
|
Unrealized losses on securities transferred to held to maturity
|
|
Unrealized gains (losses) on securities available for sale
|
|
Unrealized gains (losses) on derivative instruments designated as cash flow hedges
|
|
Defined benefit pension plans and other post employment benefits
|
|
Accumulated other comprehensive
income (loss), net of tax |
||||||||||
|
(In millions)
|
||||||||||||||||||
Beginning of period
|
$
|
(47
|
)
|
|
$
|
(10
|
)
|
|
$
|
75
|
|
|
$
|
(398
|
)
|
|
$
|
(380
|
)
|
Net change
|
7
|
|
|
307
|
|
|
203
|
|
|
11
|
|
|
528
|
|
|||||
End of period
|
$
|
(40
|
)
|
|
$
|
297
|
|
|
$
|
278
|
|
|
$
|
(387
|
)
|
|
$
|
148
|
|
|
Six Months Ended June 30, 2015
|
||||||||||||||||||
|
Unrealized losses on securities transferred to held to maturity
|
|
Unrealized gains (losses) on securities available for sale
|
|
Unrealized gains (losses) on derivative instruments designated as cash flow hedges
|
|
Defined benefit pension plans and other post employment benefits
|
|
Accumulated other comprehensive
income (loss), net of tax |
||||||||||
|
(In millions)
|
||||||||||||||||||
Beginning of period
|
$
|
(55
|
)
|
|
$
|
175
|
|
|
$
|
33
|
|
|
$
|
(391
|
)
|
|
$
|
(238
|
)
|
Net change
|
4
|
|
|
(79
|
)
|
|
12
|
|
|
14
|
|
|
(49
|
)
|
|||||
End of period
|
$
|
(51
|
)
|
|
$
|
96
|
|
|
$
|
45
|
|
|
$
|
(377
|
)
|
|
$
|
(287
|
)
|
|
Three Months Ended June 30, 2016
|
|
Three Months Ended June 30, 2015
|
|
|
||||
Details about Accumulated Other Comprehensive Income (Loss) Components
|
Amount Reclassified from Accumulated Other Comprehensive Income (Loss)
(1)
|
|
Amount Reclassified from Accumulated Other Comprehensive Income (Loss)
(1)
|
|
Affected Line Item in the Consolidated Statements of Income
|
||||
|
(In millions)
|
|
|
||||||
Unrealized losses on securities transferred to held to maturity:
|
|
|
|
|
|
||||
|
$
|
(8
|
)
|
|
$
|
(4
|
)
|
|
Net interest income and other financing income
|
|
3
|
|
|
2
|
|
|
Tax (expense) or benefit
|
||
|
$
|
(5
|
)
|
|
$
|
(2
|
)
|
|
Net of tax
|
Unrealized gains and (losses) on available for sale securities:
|
|
|
|
|
|
||||
|
$
|
6
|
|
|
$
|
6
|
|
|
Securities gains (losses), net
|
|
(2
|
)
|
|
(2
|
)
|
|
Tax (expense) or benefit
|
||
|
$
|
4
|
|
|
$
|
4
|
|
|
Net of tax
|
|
|
|
|
|
|
||||
Gains and (losses) on cash flow hedges:
|
|
|
|
|
|
||||
Interest rate contracts
|
$
|
35
|
|
|
$
|
34
|
|
|
Net interest income and other financing income
|
|
(13
|
)
|
|
(13
|
)
|
|
Tax (expense) or benefit
|
||
|
$
|
22
|
|
|
$
|
21
|
|
|
Net of tax
|
|
|
|
|
|
|
||||
Amortization of defined benefit pension plans and other post employment benefits:
|
|
|
|
|
|
||||
Prior-service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
(2)
|
Actuarial gains (losses)
|
(8
|
)
|
|
(12
|
)
|
|
(2)
|
||
|
(8
|
)
|
|
(12
|
)
|
|
Total before tax
|
||
|
3
|
|
|
5
|
|
|
Tax (expense) or benefit
|
||
|
$
|
(5
|
)
|
|
$
|
(7
|
)
|
|
Net of tax
|
|
|
|
|
|
|
||||
Total reclassifications for the period
|
$
|
16
|
|
|
$
|
16
|
|
|
Net of tax
|
|
Six Months Ended June 30, 2016
|
|
Six Months Ended June 30, 2015
|
|
|
||||
Details about Accumulated Other Comprehensive Income (Loss) Components
|
Amount Reclassified from Accumulated Other Comprehensive Income (Loss)
(1)
|
|
Amount Reclassified from Accumulated Other Comprehensive Income (Loss)
(1)
|
|
Affected Line Item in the Consolidated Statements of Income
|
||||
|
(In millions)
|
|
|
||||||
Unrealized losses on securities transferred to held to maturity:
|
|
|
|
|
|
||||
|
$
|
(11
|
)
|
|
$
|
(7
|
)
|
|
Net interest income and other financing income
|
|
4
|
|
|
3
|
|
|
Tax (expense) or benefit
|
||
|
$
|
(7
|
)
|
|
$
|
(4
|
)
|
|
Net of tax
|
Unrealized gains and (losses) on available for sale securities:
|
|
|
|
|
|
||||
|
$
|
1
|
|
|
$
|
11
|
|
|
Securities gains (losses), net
|
|
—
|
|
|
(4
|
)
|
|
Tax (expense) or benefit
|
||
|
$
|
1
|
|
|
$
|
7
|
|
|
Net of tax
|
|
|
|
|
|
|
||||
Gains and (losses) on cash flow hedges:
|
|
|
|
|
|
||||
Interest rate contracts
|
$
|
74
|
|
|
$
|
67
|
|
|
Net interest income and other financing income
|
|
(28
|
)
|
|
(25
|
)
|
|
Tax (expense) or benefit
|
||
|
$
|
46
|
|
|
$
|
42
|
|
|
Net of tax
|
|
|
|
|
|
|
||||
Amortization of defined benefit pension plans and other post employment benefits:
|
|
|
|
|
|
||||
Prior-service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
(2)
|
Actuarial gains (losses)
|
(17
|
)
|
|
(24
|
)
|
|
(2)
|
||
|
(17
|
)
|
|
(24
|
)
|
|
Total before tax
|
||
|
6
|
|
|
9
|
|
|
Tax (expense) or benefit
|
||
|
$
|
(11
|
)
|
|
$
|
(15
|
)
|
|
Net of tax
|
|
|
|
|
|
|
||||
Total reclassifications for the period
|
$
|
29
|
|
|
$
|
30
|
|
|
Net of tax
|
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In millions, except per share amounts)
|
||||||||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
272
|
|
|
$
|
289
|
|
|
$
|
545
|
|
|
$
|
525
|
|
Preferred stock dividends
|
(16
|
)
|
|
(16
|
)
|
|
(32
|
)
|
|
(32
|
)
|
||||
Income from continuing operations available to common shareholders
|
256
|
|
|
273
|
|
|
513
|
|
|
493
|
|
||||
Income (loss) from discontinued operations, net of tax
|
3
|
|
|
(4
|
)
|
|
3
|
|
|
(6
|
)
|
||||
Net income available to common shareholders
|
$
|
259
|
|
|
$
|
269
|
|
|
$
|
516
|
|
|
$
|
487
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding—basic
|
1,265
|
|
|
1,335
|
|
|
1,275
|
|
|
1,340
|
|
||||
Potential common shares
|
3
|
|
|
11
|
|
|
4
|
|
|
12
|
|
||||
Weighted-average common shares outstanding—diluted
|
1,268
|
|
|
1,346
|
|
|
1,279
|
|
|
1,352
|
|
||||
Earnings per common share from continuing operations available to common shareholders
(1)
:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.20
|
|
|
$
|
0.20
|
|
|
$
|
0.40
|
|
|
$
|
0.37
|
|
Diluted
|
0.20
|
|
|
0.20
|
|
|
0.40
|
|
|
0.36
|
|
||||
Earnings (loss) per common share from discontinued operations
(1)
:
|
|
|
|
|
|
|
|
||||||||
Basic
|
0.00
|
|
|
(0.00
|
)
|
|
0.00
|
|
|
(0.00
|
)
|
||||
Diluted
|
0.00
|
|
|
(0.00
|
)
|
|
0.00
|
|
|
(0.00
|
)
|
||||
Earnings per common share
(1)
:
|
|
|
|
|
|
|
|
||||||||
Basic
|
0.20
|
|
|
0.20
|
|
|
0.40
|
|
|
0.36
|
|
||||
Diluted
|
0.20
|
|
|
0.20
|
|
|
0.40
|
|
|
0.36
|
|
(1)
|
Certain per share amounts may not appear to reconcile due to rounding.
|
|
Six Months Ended June 30
|
||||||||||||
|
2016
|
|
2015
|
||||||||||
|
Number of
Options
|
|
Weighted-Average
Exercise Price
|
|
Number of
Options
|
|
Weighted-Average
Exercise Price
|
||||||
Outstanding at beginning of period
|
19,350,157
|
|
|
$
|
21.06
|
|
|
25,316,676
|
|
|
$
|
23.07
|
|
Exercised
|
(227,492
|
)
|
|
6.91
|
|
|
(291,460
|
)
|
|
6.96
|
|
||
Forfeited or expired
|
(3,819,783
|
)
|
|
34.72
|
|
|
(5,301,942
|
)
|
|
31.95
|
|
||
Outstanding at end of period
|
15,302,882
|
|
|
$
|
17.86
|
|
|
19,723,274
|
|
|
$
|
20.92
|
|
Exercisable at end of period
|
15,302,882
|
|
|
$
|
17.86
|
|
|
19,723,274
|
|
|
$
|
20.92
|
|
|
Six Months Ended June 30
|
||||||||||||
|
2016
|
|
2015
|
||||||||||
|
Number of
Shares
|
|
Weighted-Average
Grant Date Fair Value
|
|
Number of
Shares
|
|
Weighted-Average
Grant Date Fair Value |
||||||
Non-vested at beginning of period
|
16,374,242
|
|
|
$
|
9.51
|
|
|
18,427,409
|
|
|
$
|
8.07
|
|
Granted
|
6,820,768
|
|
|
7.92
|
|
|
6,603,342
|
|
|
9.90
|
|
||
Vested
|
(5,600,419
|
)
|
|
8.21
|
|
|
(7,968,049
|
)
|
|
6.01
|
|
||
Forfeited
|
(690,623
|
)
|
|
9.19
|
|
|
(371,998
|
)
|
|
8.18
|
|
||
Non-vested at end of period
|
16,903,968
|
|
|
$
|
9.31
|
|
|
16,690,704
|
|
|
$
|
9.50
|
|
|
Qualified Plan
|
|
Non-qualified Plans
|
|
Total
|
|||||||||||||||||||
|
Three Months Ended June 30
|
|||||||||||||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||||||||||
|
(In millions)
|
|||||||||||||||||||||||
Service cost
|
$
|
8
|
|
|
$
|
10
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
9
|
|
|
$
|
12
|
|
|
Interest cost
|
18
|
|
|
21
|
|
|
2
|
|
|
2
|
|
|
20
|
|
|
23
|
|
|||||||
Expected return on plan assets
|
(36
|
)
|
|
(38
|
)
|
|
—
|
|
|
—
|
|
|
(36
|
)
|
|
(38
|
)
|
|||||||
Amortization of actuarial loss
|
8
|
|
|
11
|
|
|
—
|
|
|
1
|
|
|
8
|
|
|
12
|
|
|||||||
Amortization of prior service cost
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Net periodic pension cost (credit)
|
$
|
(2
|
)
|
|
$
|
4
|
|
|
$
|
3
|
|
|
$
|
5
|
|
|
$
|
1
|
|
|
$
|
9
|
|
|
Qualified Plan
|
|
Non-qualified Plans
|
|
Total
|
|||||||||||||||||||
|
Six Months Ended June 30
|
|||||||||||||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||||||||||
|
(In millions)
|
|||||||||||||||||||||||
Service cost
|
$
|
17
|
|
|
$
|
20
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
19
|
|
|
$
|
23
|
|
|
Interest cost
|
36
|
|
|
42
|
|
|
3
|
|
|
3
|
|
|
39
|
|
|
45
|
|
|||||||
Expected return on plan assets
|
(72
|
)
|
|
(74
|
)
|
|
—
|
|
|
—
|
|
|
(72
|
)
|
|
(74
|
)
|
|||||||
Amortization of actuarial loss
|
16
|
|
|
22
|
|
|
1
|
|
|
2
|
|
|
17
|
|
|
24
|
|
|||||||
Amortization of prior service cost
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Net periodic pension cost (credit)
|
$
|
(3
|
)
|
|
$
|
10
|
|
|
$
|
6
|
|
|
$
|
8
|
|
|
$
|
3
|
|
|
$
|
18
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
|
Notional
Amount
|
|
Estimated Fair Value
|
|
Notional
Amount
|
|
Estimated Fair Value
|
||||||||||||||||
|
Gain
(1)
|
|
Loss
(1)
|
|
Gain
(1)
|
|
Loss
(1)
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Derivatives in fair value hedging relationships:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps
|
$
|
3,021
|
|
|
$
|
34
|
|
|
$
|
60
|
|
|
$
|
2,450
|
|
|
$
|
5
|
|
|
$
|
27
|
|
Derivatives in cash flow hedging relationships:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps
|
9,800
|
|
|
331
|
|
|
—
|
|
|
9,800
|
|
|
109
|
|
|
9
|
|
||||||
Total derivatives designated as hedging instruments
|
$
|
12,821
|
|
|
$
|
365
|
|
|
$
|
60
|
|
|
$
|
12,250
|
|
|
$
|
114
|
|
|
$
|
36
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps
|
$
|
40,920
|
|
|
$
|
753
|
|
|
$
|
764
|
|
|
$
|
40,612
|
|
|
$
|
496
|
|
|
$
|
528
|
|
Interest rate options
|
3,975
|
|
|
20
|
|
|
1
|
|
|
3,441
|
|
|
11
|
|
|
1
|
|
||||||
Interest rate futures and forward commitments
|
21,846
|
|
|
11
|
|
|
17
|
|
|
17,288
|
|
|
5
|
|
|
6
|
|
||||||
Other contracts
|
5,085
|
|
|
121
|
|
|
103
|
|
|
4,367
|
|
|
200
|
|
|
187
|
|
||||||
Total derivatives not designated as hedging instruments
|
$
|
71,826
|
|
|
$
|
905
|
|
|
$
|
885
|
|
|
$
|
65,708
|
|
|
$
|
712
|
|
|
$
|
722
|
|
Total derivatives
|
$
|
84,647
|
|
|
$
|
1,270
|
|
|
$
|
945
|
|
|
$
|
77,958
|
|
|
$
|
826
|
|
|
$
|
758
|
|
(1)
|
Derivatives in a gain position are recorded as other assets and derivatives in a loss position are recorded as other liabilities on the consolidated balance sheets.
|
|
Gain or (Loss) Recognized in Income on Derivatives
|
|
Location of Amounts Recognized in Income on Derivatives and Related Hedged Item
|
|
Gain or (Loss) Recognized in Income on Related Hedged Item
|
||||||||||||
|
Three Months Ended June 30
|
|
|
|
Three Months Ended June 30
|
||||||||||||
|
2016
|
|
2015
|
|
|
|
2016
|
|
2015
|
||||||||
|
(In millions)
|
|
|
|
(In millions)
|
||||||||||||
Fair Value Hedges:
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps on:
|
|
|
|
|
|
|
|
|
|
||||||||
Debt/CDs
|
$
|
4
|
|
|
$
|
4
|
|
|
Interest expense
|
|
$
|
(1
|
)
|
|
$
|
2
|
|
Debt/CDs
|
12
|
|
|
(3
|
)
|
|
Other non-interest expense
|
|
(12
|
)
|
|
3
|
|
||||
Securities available for sale
|
(2
|
)
|
|
(4
|
)
|
|
Interest income
|
|
—
|
|
|
—
|
|
||||
Securities available for sale
|
(12
|
)
|
|
25
|
|
|
Other non-interest expense
|
|
12
|
|
|
(25
|
)
|
||||
Total
|
$
|
2
|
|
|
$
|
22
|
|
|
|
|
$
|
(1
|
)
|
|
$
|
(20
|
)
|
|
Effective Portion
(3)
|
||||||||||||||||
|
Gain or (Loss) Recognized in AOCI
(1)
|
|
Location of Amounts Reclassified from AOCI into Income
|
|
Gain or (Loss) Reclassified from AOCI into Income
(2)
|
||||||||||||
|
Three Months Ended June 30
|
|
|
|
Three Months Ended June 30
|
||||||||||||
|
2016
|
|
2015
|
|
|
|
2016
|
|
2015
|
||||||||
|
(In millions)
|
|
|
|
(In millions)
|
||||||||||||
Cash Flow Hedges:
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
$
|
62
|
|
|
$
|
(25
|
)
|
|
Interest income on loans
|
|
$
|
35
|
|
|
$
|
34
|
|
Total
|
$
|
62
|
|
|
$
|
(25
|
)
|
|
|
|
$
|
35
|
|
|
$
|
34
|
|
|
Gain or (Loss) Recognized in Income on Derivatives
|
|
Location of Amounts Recognized in Income on Derivatives and Related Hedged Item
|
|
Gain or (Loss) Recognized in Income on Related Hedged Item
|
||||||||||||
|
Six Months Ended June 30
|
|
|
|
Six Months Ended June 30
|
||||||||||||
|
2016
|
|
2015
|
|
|
|
2016
|
|
2015
|
||||||||
|
(In millions)
|
|
|
|
(In millions)
|
||||||||||||
Fair Value Hedges:
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps on:
|
|
|
|
|
|
|
|
|
|
||||||||
Debt/CDs
|
$
|
8
|
|
|
$
|
8
|
|
|
Interest expense
|
|
$
|
(2
|
)
|
|
$
|
6
|
|
Debt/CDs
|
27
|
|
|
4
|
|
|
Other non-interest expense
|
|
(27
|
)
|
|
(4
|
)
|
||||
Securities available for sale
|
(5
|
)
|
|
(8
|
)
|
|
Interest income
|
|
—
|
|
|
—
|
|
||||
Securities available for sale
|
(38
|
)
|
|
5
|
|
|
Other non-interest expense
|
|
37
|
|
|
(6
|
)
|
||||
Total
|
$
|
(8
|
)
|
|
$
|
9
|
|
|
|
|
$
|
8
|
|
|
$
|
(4
|
)
|
|
Effective Portion
(3)
|
||||||||||||||||
|
Gain or (Loss) Recognized in AOCI
(1)
|
|
Location of Amounts Reclassified from AOCI into Income
|
|
Gain or (Loss) Reclassified from AOCI into Income
(2)
|
||||||||||||
|
Six Months Ended June 30
|
|
|
|
Six Months Ended June 30
|
||||||||||||
|
2016
|
|
2015
|
|
|
|
2016
|
|
2015
|
||||||||
|
(In millions)
|
|
|
|
(In millions)
|
||||||||||||
Cash Flow Hedges:
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
$
|
203
|
|
|
$
|
12
|
|
|
Interest income on loans
|
|
$
|
74
|
|
|
$
|
67
|
|
Total
|
$
|
203
|
|
|
$
|
12
|
|
|
|
|
$
|
74
|
|
|
$
|
67
|
|
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
||||||||||||
Derivatives Not Designated as Hedging Instruments
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In millions)
|
||||||||||||||
Capital markets fee income and other
(1)
:
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
$
|
(1
|
)
|
|
$
|
4
|
|
|
$
|
3
|
|
|
$
|
8
|
|
Interest rate options
|
4
|
|
|
4
|
|
|
14
|
|
|
4
|
|
||||
Interest rate futures and forward commitments
|
2
|
|
|
—
|
|
|
3
|
|
|
(1
|
)
|
||||
Other contracts
|
14
|
|
|
(11
|
)
|
|
2
|
|
|
(7
|
)
|
||||
Total capital markets fee income and other
|
19
|
|
|
(3
|
)
|
|
22
|
|
|
4
|
|
||||
Mortgage income:
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
19
|
|
|
(16
|
)
|
|
48
|
|
|
(3
|
)
|
||||
Interest rate options
|
3
|
|
|
(3
|
)
|
|
8
|
|
|
4
|
|
||||
Interest rate futures and forward commitments
|
(1
|
)
|
|
3
|
|
|
1
|
|
|
7
|
|
||||
Total mortgage income
|
21
|
|
|
(16
|
)
|
|
57
|
|
|
8
|
|
||||
|
$
|
40
|
|
|
$
|
(19
|
)
|
|
$
|
79
|
|
|
$
|
12
|
|
|
Offsetting Derivative Assets
|
|
Offsetting Derivative Liabilities
|
||||||||||||
|
June 30, 2016
|
|
December 31, 2015
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||
|
(In millions)
|
||||||||||||||
Gross amounts subject to offsetting
|
$
|
955
|
|
|
$
|
718
|
|
|
$
|
727
|
|
|
$
|
677
|
|
Gross amounts not subject to offsetting
|
315
|
|
|
108
|
|
|
218
|
|
|
81
|
|
||||
Gross amounts recognized
|
1,270
|
|
|
826
|
|
|
945
|
|
|
758
|
|
||||
Gross amounts offset in the consolidated balance sheets
(1)
|
536
|
|
|
409
|
|
|
658
|
|
|
558
|
|
||||
Net amounts presented in the consolidated balance sheets
|
734
|
|
|
417
|
|
|
287
|
|
|
200
|
|
||||
Gross amounts not offset in the consolidated balance sheets:
|
|
|
|
|
|
|
|
||||||||
Financial instruments
|
4
|
|
|
5
|
|
|
51
|
|
|
50
|
|
||||
Cash collateral received/posted
|
2
|
|
|
6
|
|
|
7
|
|
|
52
|
|
||||
Net amounts
|
$
|
728
|
|
|
$
|
406
|
|
|
$
|
229
|
|
|
$
|
98
|
|
(1)
|
At
June 30, 2016
, gross amounts of derivative assets and liabilities offset in the consolidated balance sheets presented above include cash collateral received of
$149 million
and cash collateral posted of
$270 million
. At
December 31, 2015
, gross amounts of derivative assets and liabilities offset in the consolidated balance sheets presented above include cash collateral received of
$108 million
and cash collateral posted of
$256 million
.
|
|
June 30, 2016
|
|
|
December 31, 2015
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
Estimated Fair Value
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
Estimated Fair Value
|
||||||||||||||||
|
(In millions)
|
|||||||||||||||||||||||||||||||
Recurring fair value measurements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Trading account securities
|
$
|
117
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
117
|
|
|
|
$
|
110
|
|
|
$
|
—
|
|
|
$
|
33
|
|
|
$
|
143
|
|
Securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. Treasury securities
|
$
|
240
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
240
|
|
|
|
$
|
228
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
228
|
|
Federal agency securities
|
—
|
|
|
216
|
|
|
—
|
|
|
216
|
|
|
|
—
|
|
|
218
|
|
|
—
|
|
|
218
|
|
||||||||
Obligations of states and political subdivisions
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||||
Mortgage-backed securities (MBS):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Residential agency
|
—
|
|
|
16,933
|
|
|
—
|
|
|
16,933
|
|
|
|
—
|
|
|
16,062
|
|
|
—
|
|
|
16,062
|
|
||||||||
Residential non-agency
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
||||||||
Commercial agency
|
—
|
|
|
3,243
|
|
|
—
|
|
|
3,243
|
|
|
|
—
|
|
|
3,018
|
|
|
—
|
|
|
3,018
|
|
||||||||
Commercial non-agency
|
—
|
|
|
1,183
|
|
|
—
|
|
|
1,183
|
|
|
|
—
|
|
|
1,231
|
|
|
—
|
|
|
1,231
|
|
||||||||
Corporate and other debt securities
|
—
|
|
|
1,412
|
|
|
3
|
|
|
1,415
|
|
|
|
—
|
|
|
1,664
|
|
|
3
|
|
|
1,667
|
|
||||||||
Equity securities
|
258
|
|
|
—
|
|
|
—
|
|
|
258
|
|
|
|
280
|
|
|
—
|
|
|
—
|
|
|
280
|
|
||||||||
Total securities available for sale
|
$
|
498
|
|
|
$
|
22,988
|
|
|
$
|
8
|
|
|
$
|
23,494
|
|
|
|
$
|
508
|
|
|
$
|
22,194
|
|
|
$
|
8
|
|
|
$
|
22,710
|
|
Mortgage loans held for sale
|
$
|
—
|
|
|
$
|
445
|
|
|
$
|
30
|
|
|
$
|
475
|
|
|
|
$
|
—
|
|
|
$
|
353
|
|
|
$
|
—
|
|
|
$
|
353
|
|
Residential mortgage servicing rights
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
216
|
|
|
$
|
216
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
252
|
|
|
$
|
252
|
|
Derivative assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate swaps
|
$
|
—
|
|
|
$
|
1,118
|
|
|
$
|
—
|
|
|
$
|
1,118
|
|
|
|
$
|
—
|
|
|
$
|
610
|
|
|
$
|
—
|
|
|
$
|
610
|
|
Interest rate options
|
—
|
|
|
3
|
|
|
17
|
|
|
20
|
|
|
|
—
|
|
|
1
|
|
|
10
|
|
|
11
|
|
||||||||
Interest rate futures and forward commitments
|
—
|
|
|
11
|
|
|
—
|
|
|
11
|
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
||||||||
Other contracts
|
2
|
|
|
119
|
|
|
—
|
|
|
121
|
|
|
|
—
|
|
|
200
|
|
|
—
|
|
|
200
|
|
||||||||
Total derivative assets
|
$
|
2
|
|
|
$
|
1,251
|
|
|
$
|
17
|
|
|
$
|
1,270
|
|
|
|
$
|
—
|
|
|
$
|
816
|
|
|
$
|
10
|
|
|
$
|
826
|
|
Derivative liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate swaps
|
$
|
—
|
|
|
$
|
824
|
|
|
$
|
—
|
|
|
$
|
824
|
|
|
|
$
|
—
|
|
|
$
|
564
|
|
|
$
|
—
|
|
|
$
|
564
|
|
Interest rate options
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||||
Interest rate futures and forward commitments
|
—
|
|
|
17
|
|
|
—
|
|
|
17
|
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
||||||||
Other contracts
|
—
|
|
|
103
|
|
|
—
|
|
|
103
|
|
|
|
—
|
|
|
187
|
|
|
—
|
|
|
187
|
|
||||||||
Total derivative liabilities
|
$
|
—
|
|
|
$
|
945
|
|
|
$
|
—
|
|
|
$
|
945
|
|
|
|
$
|
—
|
|
|
$
|
758
|
|
|
$
|
—
|
|
|
$
|
758
|
|
Non-recurring fair value measurements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Loans held for sale
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
38
|
|
|
$
|
38
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
36
|
|
|
$
|
36
|
|
Foreclosed property and other real estate
|
—
|
|
|
28
|
|
|
23
|
|
|
51
|
|
|
|
—
|
|
|
30
|
|
|
8
|
|
|
38
|
|
|
Three Months Ended June 30, 2016
|
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Opening
Balance April 1, 2016 |
|
Total Realized /
Unrealized
Gains or Losses
|
|
Purchases
|
|
Sales
|
|
Issuances
|
|
Settlements
|
|
Transfers
into Level 3 |
|
Transfers
out of Level 3 |
|
Closing
Balance June 30, 2016 |
||||||||||||||
|
|
Included
in
Earnings
|
|
Included
in Other
Compre-
hensive
Income
(Loss)
|
|
||||||||||||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Level 3 Instruments Only
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential non-agency MBS
|
$
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
5
|
|
Corporate and other debt securities
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||
Total securities available for sale
|
$
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
8
|
|
Commercial mortgage loans held for sale
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
30
|
|
Residential mortgage servicing rights
|
$
|
239
|
|
|
(31
|
)
|
(1)
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
216
|
|
Total derivatives, net
|
$
|
21
|
|
|
35
|
|
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(39
|
)
|
|
—
|
|
|
—
|
|
|
$
|
17
|
|
|
Three Months Ended June 30, 2015
|
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Opening
Balance April 1, 2015 |
|
Total Realized /
Unrealized Gains or Losses |
|
Purchases
|
|
Sales
|
|
Issuances
|
|
Settlements
|
|
Transfers
into Level 3 |
|
Transfers
out of Level 3 |
|
Closing
Balance June 30, 2015 |
||||||||||||||
|
Included
in Earnings |
|
Included
in Other Compre- hensive Income (Loss) |
|
|||||||||||||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Level 3 Instruments Only
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential non-agency MBS
|
$
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
$
|
6
|
|
Corporate and other debt securities
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||
Total securities available for sale
|
$
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
$
|
9
|
|
Residential mortgage servicing rights
|
$
|
239
|
|
|
17
|
|
(1)
|
—
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
268
|
|
Total derivatives, net
|
$
|
14
|
|
|
25
|
|
(3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(26
|
)
|
|
—
|
|
|
—
|
|
|
$
|
13
|
|
|
Six Months Ended June 30, 2016
|
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Opening
Balance January 1, 2016 |
|
Total Realized /
Unrealized
Gains or Losses
|
|
Purchases
|
|
Sales
|
|
Issuances
|
|
Settlements
|
|
Transfers
into Level 3 |
|
Transfers
out of Level 3 |
|
Closing
Balance June 30, 2016 |
||||||||||||||
|
|
Included
in
Earnings
|
|
Included
in Other
Compre-
hensive
Income
(Loss)
|
|
||||||||||||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Level 3 Instruments Only
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trading account securities
|
$
|
33
|
|
|
(2
|
)
|
(4)
|
—
|
|
|
—
|
|
|
(31
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential non-agency MBS
|
$
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
5
|
|
Corporate and other debt securities
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||
Total securities available for sale
|
$
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
8
|
|
Commercial mortgage loans held for sale
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
30
|
|
Residential mortgage servicing rights
|
$
|
252
|
|
|
(75
|
)
|
(1)
|
—
|
|
|
39
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
216
|
|
Total derivatives, net
|
$
|
10
|
|
|
73
|
|
(5)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(66
|
)
|
|
—
|
|
|
—
|
|
|
$
|
17
|
|
|
Six Months Ended June 30, 2015
|
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Opening
Balance January 1, 2015 |
|
Total Realized /
Unrealized
Gains or Losses
|
|
Purchases
|
|
Sales
|
|
Issuances
|
|
Settlements
|
|
Transfers
into
Level 3
|
|
Transfers
out of
Level 3
|
|
Closing
Balance June 30, 2015 |
||||||||||||||
|
Included
in Earnings
|
|
Included
in Other
Compre-
hensive
Income
(Loss)
|
|
|||||||||||||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Level 3 Instruments Only
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential non-agency MBS
|
$
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
$
|
6
|
|
Corporate and other debt securities
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||
Total securities available for sale
|
$
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
$
|
9
|
|
Residential mortgage servicing rights
|
$
|
257
|
|
|
(8
|
)
|
(1)
|
—
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
268
|
|
Total derivatives, net
|
$
|
8
|
|
|
53
|
|
(6)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(48
|
)
|
|
—
|
|
|
—
|
|
|
$
|
13
|
|
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In millions)
|
||||||||||||||
Loans held for sale
|
$
|
(18
|
)
|
|
$
|
(4
|
)
|
|
$
|
(22
|
)
|
|
$
|
(11
|
)
|
Foreclosed property and other real estate
|
(20
|
)
|
|
(40
|
)
|
|
(27
|
)
|
|
(47
|
)
|
|
June 30, 2016
|
||||||
|
Level 3
Estimated Fair Value at June 30, 2016 |
|
Valuation
Technique
|
|
Unobservable
Input(s)
|
|
Quantitative Range of
Unobservable Inputs and
(Weighted-Average)
|
|
(Dollars in millions)
|
||||||
Recurring fair value measurements:
|
|
|
|
|
|
|
|
Securities available for sale:
|
|
|
|
|
|
|
|
Residential non-agency MBS
|
$5
|
|
Discounted cash flow
|
|
Spread to LIBOR
|
|
5.5% - 70.0% (23.0%)
|
|
|
|
|
|
Weighted-average prepayment speed (CPR; percentage)
|
|
4.3% - 28.5% (11.8%)
|
|
|
|
|
|
Probability of default
|
|
3.9%
|
|
|
|
|
|
Loss severity
|
|
60.6%
|
Corporate and other debt securities
|
$3
|
|
Market comparable
|
|
Evaluated quote on same issuer/comparable bond
|
|
100.3%
|
Commercial mortgage loans held for sale
|
$30
|
|
Market comparable
|
|
Credit spreads for bonds in the commercial MBS
|
|
0.5% - 6.85% (2.02%)
|
Residential mortgage servicing rights
(1)
|
$216
|
|
Discounted cash flow
|
|
Weighted-average prepayment speed (CPR; percentage)
|
|
13.1% - 23.5% (16.5%)
|
|
|
|
|
|
OAS (percentage)
|
|
8.7% - 13.5% (10.0%)
|
Derivative assets:
|
|
|
|
|
|
|
|
Interest rate options
|
$16
|
|
Interest rate lock commitments on the residential mortgage loans are valued using discounted cash flows
|
|
Weighted-average prepayment speed (CPR; percentage)
|
|
13.1% - 23.5% (16.5%)
|
|
|
|
|
|
OAS (percentage)
|
|
8.7% - 13.5% (10.0%)
|
|
|
|
|
|
Pull-through
|
|
31.7% - 99.1% (79.6%)
|
|
$1
|
|
Interest rate lock commitments on the commercial mortgage loans are valued using discounted cash flows
|
|
Internal rate of return
|
|
7.0% - 17.0% (12.0%)
|
Nonrecurring fair value measurements:
|
|
|
|
|
|
|
|
Loans held for sale
|
$38
|
|
Commercial loans held for sale are valued based on multiple data points, including discount to appraised value of collateral based on recent market activity for sales of similar loans
|
|
Appraisal comparability adjustment (discount)
|
|
5.0% - 95.4% (67.8%)
|
Foreclosed property and other real estate
|
$6
|
|
Property in foreclosure is valued by discount to appraised value of property based on recent market activity for sales of similar properties
|
|
Appraisal comparability adjustment (discount)
|
|
25.0% - 82.2% (52.2%)
|
|
$17
|
|
Bank owned property valuations are based on comparable sales and local broker network estimates provided by a third-party real estate services provider
|
|
Estimated third-party valuations utilizing available sales data for similar transactions (discount)
|
|
2.1% - 78.7% (45.6%)
|
|
December 31, 2015
|
||||||
|
Level 3
Estimated Fair Value at December 31, 2015 |
|
Valuation
Technique
|
|
Unobservable
Input(s)
|
|
Quantitative Range of
Unobservable Inputs and
(Weighted-Average)
|
|
(Dollars in millions)
|
||||||
Recurring fair value measurements:
|
|
|
|
|
|
|
|
Trading account securities
|
$33
|
|
Market comparable
|
|
Spread from US High Yield B Effective Yield Index
|
|
4.7%
|
Securities available for sale:
|
|
|
|
|
|
|
|
Residential non-agency MBS
|
$5
|
|
Discounted cash flow
|
|
Spread to LIBOR
|
|
5.5% - 70.1% (23.0%)
|
|
|
|
|
|
Weighted-average prepayment speed (CPR; percentage)
|
|
5.6% - 11.9% (9.9%)
|
|
|
|
|
|
Probability of default
|
|
2.2%
|
|
|
|
|
|
Loss severity
|
|
74.3%
|
Corporate and other debt securities
|
$3
|
|
Market comparable
|
|
Evaluated quote on same issuer/comparable bond
|
|
100.2%
|
Residential mortgage servicing rights
(1)
|
$252
|
|
Discounted cash flow
|
|
Weighted-average prepayment speed (CPR; percentage)
|
|
10.5% - 11.5% (10.9%)
|
|
|
|
|
|
OAS (percentage)
|
|
8.7% - 13.3% (10.0%)
|
Derivative assets:
|
|
|
|
|
|
|
|
Interest rate options
|
$9
|
|
Interest rate lock commitments on the residential loans are valued using discounted cash flows
|
|
Weighted-average prepayment speed (CPR; percentage)
|
|
10.5% - 11.5% (10.9%)
|
|
|
|
|
|
OAS (percentage)
|
|
8.7% - 13.3% (10.0%)
|
|
|
|
|
|
Pull-through
|
|
18.9% - 99.4% (80.7%)
|
|
$1
|
|
Interest rate lock commitments on the commercial mortgage loans are valued using discounted cash flows
|
|
Internal rate of return
|
|
12.0%
|
Nonrecurring fair value measurements:
|
|
|
|
|
|
|
|
Loans held for sale
|
$36
|
|
Commercial loans held for sale are valued based on multiple data points, including discount to appraised value of collateral based on recent market activity for sales of similar loans
|
|
Appraisal comparability adjustment (discount)
|
|
11.1% - 85.7% (69.0%)
|
Foreclosed property and other real estate
|
$5
|
|
Property in foreclosure is valued by discount to appraised value of property based on recent market activity for sales of similar properties
|
|
Appraisal comparability adjustment (discount)
|
|
25.0% - 44.0% (30.3%)
|
|
$3
|
|
Bank owned property valuations are based on comparable sales and local broker network estimates provided by a third-party real estate services provider
|
|
Estimated third-party valuations utilizing available sales data for similar transactions (discount)
|
|
3.0% - 58.8% (39.2%)
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
|
Aggregate
Fair Value
|
|
Aggregate
Unpaid
Principal
|
|
Aggregate Fair
Value Less
Aggregate
Unpaid
Principal
|
|
Aggregate
Fair Value
|
|
Aggregate
Unpaid
Principal
|
|
Aggregate Fair
Value Less
Aggregate
Unpaid
Principal
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Mortgage loans held for sale, at fair value
|
$
|
475
|
|
|
$
|
454
|
|
|
$
|
21
|
|
|
$
|
353
|
|
|
$
|
341
|
|
|
$
|
12
|
|
|
Mortgage loans held for sale, at fair value
|
||||||||||||||
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In millions)
|
||||||||||||||
Net gains (losses) resulting from changes in fair value
|
$
|
7
|
|
|
$
|
(4
|
)
|
|
$
|
9
|
|
|
$
|
(8
|
)
|
|
June 30, 2016
|
||||||||||||||||||
|
Carrying
Amount
|
|
Estimated
Fair
Value
(1)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
4,237
|
|
|
$
|
4,237
|
|
|
$
|
4,237
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Trading account securities
|
117
|
|
|
117
|
|
|
117
|
|
|
—
|
|
|
—
|
|
|||||
Securities held to maturity
|
1,646
|
|
|
1,707
|
|
|
1
|
|
|
1,706
|
|
|
—
|
|
|||||
Securities available for sale
|
23,494
|
|
|
23,494
|
|
|
498
|
|
|
22,988
|
|
|
8
|
|
|||||
Loans held for sale
|
551
|
|
|
551
|
|
|
—
|
|
|
445
|
|
|
106
|
|
|||||
Loans (excluding leases), net of unearned income and allowance for loan losses
(2)(3)
|
79,608
|
|
|
75,322
|
|
|
—
|
|
|
—
|
|
|
75,322
|
|
|||||
Other earning assets
(4)
|
744
|
|
|
744
|
|
|
—
|
|
|
744
|
|
|
—
|
|
|||||
Derivative assets
|
1,270
|
|
|
1,270
|
|
|
2
|
|
|
1,251
|
|
|
17
|
|
|||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative liabilities
|
945
|
|
|
945
|
|
|
—
|
|
|
945
|
|
|
—
|
|
|||||
Deposits
|
97,245
|
|
|
97,335
|
|
|
—
|
|
|
97,335
|
|
|
—
|
|
|||||
Short-term borrowings
|
2
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|||||
Long-term borrowings
|
8,968
|
|
|
9,258
|
|
|
—
|
|
|
5,828
|
|
|
3,430
|
|
|||||
Loan commitments and letters of credit
|
98
|
|
|
515
|
|
|
—
|
|
|
—
|
|
|
515
|
|
|||||
Indemnification obligation
|
61
|
|
|
54
|
|
|
—
|
|
|
—
|
|
|
54
|
|
(1)
|
Estimated fair values are consistent with an exit price concept. The assumptions used to estimate the fair values are intended to approximate those that a market participant would use in a hypothetical orderly transaction. In estimating fair value, the Company makes adjustments for interest rates, market liquidity and credit spreads as appropriate.
|
(2)
|
The estimated fair value of portfolio loans assumes sale of the loans to a third-party financial investor. Accordingly, the value to the Company if the loans were held to maturity is not reflected in the fair value estimate. In the current whole loan market, financial investors are generally requiring a higher rate of return than the return inherent in loans if held to maturity. The fair value discount at
June 30, 2016
was
$4.3 billion
or
5.4
percent.
|
(3)
|
Excluded from this table is the capital lease carrying amount of
$943 million
at
June 30, 2016
.
|
(4)
|
Excluded from this table is the operating lease carrying amount of $
772 million
at
June 30, 2016
.
|
|
December 31, 2015
|
||||||||||||||||||
|
Carrying
Amount
|
|
Estimated
Fair
Value
(1)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
5,314
|
|
|
$
|
5,314
|
|
|
$
|
5,314
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Trading account securities
|
143
|
|
|
143
|
|
|
110
|
|
|
—
|
|
|
33
|
|
|||||
Securities held to maturity
|
1,946
|
|
|
1,969
|
|
|
1
|
|
|
1,968
|
|
|
—
|
|
|||||
Securities available for sale
|
22,710
|
|
|
22,710
|
|
|
508
|
|
|
22,194
|
|
|
8
|
|
|||||
Loans held for sale
|
448
|
|
|
448
|
|
|
—
|
|
|
353
|
|
|
95
|
|
|||||
Loans (excluding leases), net of unearned income and allowance for loan losses
(2)(3)
|
79,140
|
|
|
75,399
|
|
|
—
|
|
|
—
|
|
|
75,399
|
|
|||||
Other earning assets
(4)
|
818
|
|
|
818
|
|
|
—
|
|
|
818
|
|
|
—
|
|
|||||
Derivative assets
|
826
|
|
|
826
|
|
|
—
|
|
|
816
|
|
|
10
|
|
|||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative liabilities
|
758
|
|
|
758
|
|
|
—
|
|
|
758
|
|
|
—
|
|
|||||
Deposits
|
98,430
|
|
|
98,464
|
|
|
—
|
|
|
98,464
|
|
|
—
|
|
|||||
Short-term borrowings
|
10
|
|
|
10
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|||||
Long-term borrowings
|
8,349
|
|
|
8,615
|
|
|
—
|
|
|
5,775
|
|
|
2,840
|
|
|||||
Loan commitments and letters of credit
|
85
|
|
|
495
|
|
|
—
|
|
|
—
|
|
|
495
|
|
|||||
Indemnification obligation
|
77
|
|
|
67
|
|
|
—
|
|
|
—
|
|
|
67
|
|
(1)
|
Estimated fair values are consistent with an exit price concept. The assumptions used to estimate the fair values are intended to approximate those that a market participant would use in a hypothetical orderly transaction. In estimating fair value, the Company makes adjustments for interest rates, market liquidity and credit spreads as appropriate.
|
(2)
|
The estimated fair value of portfolio loans assumes sale of the loans to a third-party financial investor. Accordingly, the value to the Company if the loans were held to maturity is not reflected in the fair value estimate. In the current whole loan market, financial investors are generally requiring a higher rate of return than the return inherent in loans if held to maturity. The fair value discount at
December 31, 2015
was
$3.7 billion
or
4.7
percent.
|
(3)
|
Excluded from this table is the capital lease carrying amount of
$916 million
at
December 31, 2015
.
|
(4)
|
Excluded from this table is the operating lease carrying amount of
$834 million
at
December 31, 2015
.
|
|
Three Months Ended June 30, 2016
|
||||||||||||||||||||||||||
|
Corporate Bank
|
|
Consumer
Bank
|
|
Wealth
Management
|
|
Other
|
|
Continuing
Operations
|
|
Discontinued
Operations
|
|
Consolidated
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Net interest income and other financing income (loss)
|
$
|
360
|
|
|
$
|
510
|
|
|
$
|
43
|
|
|
$
|
(65
|
)
|
|
$
|
848
|
|
|
$
|
—
|
|
|
$
|
848
|
|
Provision (credit) for loan losses
|
72
|
|
|
70
|
|
|
5
|
|
|
(75
|
)
|
|
72
|
|
|
—
|
|
|
72
|
|
|||||||
Non-interest income
|
118
|
|
|
282
|
|
|
105
|
|
|
21
|
|
|
526
|
|
|
—
|
|
|
526
|
|
|||||||
Non-interest expense
|
213
|
|
|
511
|
|
|
119
|
|
|
72
|
|
|
915
|
|
|
(5
|
)
|
|
910
|
|
|||||||
Income (loss) before income taxes
|
193
|
|
|
211
|
|
|
24
|
|
|
(41
|
)
|
|
387
|
|
|
5
|
|
|
392
|
|
|||||||
Income tax expense (benefit)
|
73
|
|
|
80
|
|
|
10
|
|
|
(48
|
)
|
|
115
|
|
|
2
|
|
|
117
|
|
|||||||
Net income (loss)
|
$
|
120
|
|
|
$
|
131
|
|
|
$
|
14
|
|
|
$
|
7
|
|
|
$
|
272
|
|
|
$
|
3
|
|
|
$
|
275
|
|
Average assets
|
$
|
54,747
|
|
|
$
|
34,331
|
|
|
$
|
3,241
|
|
|
$
|
33,093
|
|
|
$
|
125,412
|
|
|
$
|
—
|
|
|
$
|
125,412
|
|
|
Three Months Ended June 30, 2015
|
||||||||||||||||||||||||||
|
Corporate Bank
|
|
Consumer Bank
|
|
Wealth
Management
|
|
Other
|
|
Continuing
Operations
|
|
Discontinued
Operations
|
|
Consolidated
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Net interest income and other financing income (loss)
|
$
|
381
|
|
|
$
|
498
|
|
|
$
|
41
|
|
|
$
|
(100
|
)
|
|
$
|
820
|
|
|
$
|
—
|
|
|
$
|
820
|
|
Provision (credit) for loan losses
|
75
|
|
|
68
|
|
|
5
|
|
|
(85
|
)
|
|
63
|
|
|
—
|
|
|
63
|
|
|||||||
Non-interest income
|
108
|
|
|
278
|
|
|
99
|
|
|
105
|
|
|
590
|
|
|
—
|
|
|
590
|
|
|||||||
Non-interest expense
|
211
|
|
|
521
|
|
|
110
|
|
|
92
|
|
|
934
|
|
|
6
|
|
|
940
|
|
|||||||
Income (loss) before income taxes
|
203
|
|
|
187
|
|
|
25
|
|
|
(2
|
)
|
|
413
|
|
|
(6
|
)
|
|
407
|
|
|||||||
Income tax expense (benefit)
|
77
|
|
|
72
|
|
|
9
|
|
|
(34
|
)
|
|
124
|
|
|
(2
|
)
|
|
122
|
|
|||||||
Net income (loss)
|
$
|
126
|
|
|
$
|
115
|
|
|
$
|
16
|
|
|
$
|
32
|
|
|
$
|
289
|
|
|
$
|
(4
|
)
|
|
$
|
285
|
|
Average assets
|
$
|
52,971
|
|
|
$
|
33,201
|
|
|
$
|
3,134
|
|
|
$
|
31,569
|
|
|
$
|
120,875
|
|
|
$
|
—
|
|
|
$
|
120,875
|
|
|
Six Months Ended June 30, 2016
|
||||||||||||||||||||||||||
|
Corporate Bank
|
|
Consumer Bank
|
|
Wealth
Management
|
|
Other
|
|
Continuing
Operations
|
|
Discontinued
Operations
|
|
Consolidated
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Net interest income and other financing income (loss)
|
$
|
734
|
|
|
$
|
1,015
|
|
|
$
|
88
|
|
|
$
|
(127
|
)
|
|
$
|
1,710
|
|
|
$
|
—
|
|
|
$
|
1,710
|
|
Provision (credit) for loan losses
|
144
|
|
|
141
|
|
|
11
|
|
|
(111
|
)
|
|
185
|
|
|
—
|
|
|
185
|
|
|||||||
Non-interest income
|
249
|
|
|
540
|
|
|
213
|
|
|
30
|
|
|
1,032
|
|
|
—
|
|
|
1,032
|
|
|||||||
Non-interest expense
|
423
|
|
|
1,022
|
|
|
230
|
|
|
109
|
|
|
1,784
|
|
|
(5
|
)
|
|
1,779
|
|
|||||||
Income (loss) before income taxes
|
416
|
|
|
392
|
|
|
60
|
|
|
(95
|
)
|
|
773
|
|
|
5
|
|
|
778
|
|
|||||||
Income tax expense (benefit)
|
158
|
|
|
149
|
|
|
23
|
|
|
(102
|
)
|
|
228
|
|
|
2
|
|
|
230
|
|
|||||||
Net income (loss)
|
$
|
258
|
|
|
$
|
243
|
|
|
$
|
37
|
|
|
$
|
7
|
|
|
$
|
545
|
|
|
$
|
3
|
|
|
$
|
548
|
|
Average assets
|
$
|
54,733
|
|
|
$
|
34,136
|
|
|
$
|
3,237
|
|
|
$
|
33,580
|
|
|
$
|
125,686
|
|
|
$
|
—
|
|
|
$
|
125,686
|
|
|
Six Months Ended June 30, 2015
|
||||||||||||||||||||||||||
|
Corporate Bank
|
|
Consumer Bank
|
|
Wealth
Management
|
|
Other
|
|
Continuing
Operations
|
|
Discontinued
Operations
|
|
Consolidated
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Net interest income and other financing income (loss)
|
$
|
756
|
|
|
$
|
1,003
|
|
|
$
|
84
|
|
|
$
|
(208
|
)
|
|
$
|
1,635
|
|
|
$
|
—
|
|
|
$
|
1,635
|
|
Provision (credit) for loan losses
|
148
|
|
|
136
|
|
|
11
|
|
|
(183
|
)
|
|
112
|
|
|
—
|
|
|
112
|
|
|||||||
Non-interest income
|
207
|
|
|
534
|
|
|
199
|
|
|
120
|
|
|
1,060
|
|
|
—
|
|
|
1,060
|
|
|||||||
Non-interest expense
|
423
|
|
|
1,029
|
|
|
219
|
|
|
168
|
|
|
1,839
|
|
|
10
|
|
|
1,849
|
|
|||||||
Income (loss) before income taxes
|
392
|
|
|
372
|
|
|
53
|
|
|
(73
|
)
|
|
744
|
|
|
(10
|
)
|
|
734
|
|
|||||||
Income tax expense (benefit)
|
149
|
|
|
142
|
|
|
20
|
|
|
(92
|
)
|
|
219
|
|
|
(4
|
)
|
|
215
|
|
|||||||
Net income (loss)
|
$
|
243
|
|
|
$
|
230
|
|
|
$
|
33
|
|
|
$
|
19
|
|
|
$
|
525
|
|
|
$
|
(6
|
)
|
|
$
|
519
|
|
Average assets
|
$
|
52,695
|
|
|
$
|
33,073
|
|
|
$
|
3,144
|
|
|
$
|
31,810
|
|
|
$
|
120,722
|
|
|
$
|
—
|
|
|
$
|
120,722
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
|
(In millions)
|
||||||
Unused commitments to extend credit
|
$
|
44,906
|
|
|
$
|
45,516
|
|
Standby letters of credit
|
1,429
|
|
|
1,477
|
|
||
Commercial letters of credit
|
44
|
|
|
63
|
|
||
Liabilities associated with standby letters of credit
|
33
|
|
|
32
|
|
||
Assets associated with standby letters of credit
|
33
|
|
|
33
|
|
||
Reserve for unfunded credit commitments
|
64
|
|
|
52
|
|
•
|
Average loan growth of 3 to 5 percent compared to fourth quarter of 2015 average balances, expect to track toward the lower end of the range
|
•
|
Average deposits relatively stable compared to fourth quarter of 2015 average balances; change from previous guidance for growth of 2 to 4 percent resulting from acceleration of planned reductions of certain deposits within the Wealth Management and Corporate Bank segments
|
•
|
Net interest income and other financing income up 2 to 4 percent; assuming no rate increases, expect to be at the mid-point of the range
|
•
|
Adjusted non-interest income (non-GAAP) up 4 to 6 percent on a full year basis, expect to be at the high end of the range
|
•
|
Plan to eliminate $300 million of existing non-interest expenses between 2016 and 2018 in order to self-fund new initiatives; expect to achieve 35 to 45 percent of that reduction in 2016
|
•
|
Adjusted non-interest expenses (non-GAAP) flat to up modestly on a full year basis
|
•
|
Full year adjusted efficiency ratio (non-GAAP) less than 63 percent
|
•
|
Adjusted operating leverage (non-GAAP) of 2 to 4 percent on a full year basis
|
•
|
Full year net charge-offs of 25 to 35 basis points; expect to be at the top end of the range
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
|
(In millions)
|
||||||
U.S. Treasury securities
|
$
|
241
|
|
|
$
|
229
|
|
Federal agency securities
|
362
|
|
|
558
|
|
||
Obligations of states and political subdivisions
|
1
|
|
|
1
|
|
||
Mortgage-backed securities:
|
|
|
|
||||
Residential agency
|
18,260
|
|
|
17,491
|
|
||
Residential non-agency
|
5
|
|
|
5
|
|
||
Commercial agency
|
3,415
|
|
|
3,194
|
|
||
Commercial non-agency
|
1,183
|
|
|
1,231
|
|
||
Corporate and other debt securities
|
1,415
|
|
|
1,667
|
|
||
Equity securities
|
258
|
|
|
280
|
|
||
|
$
|
25,140
|
|
|
$
|
24,656
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
|
(In millions, net of unearned income)
|
||||||
Commercial and industrial
|
$
|
36,124
|
|
|
$
|
35,821
|
|
Commercial real estate mortgage—owner-occupied
|
7,193
|
|
|
7,538
|
|
||
Commercial real estate construction—owner-occupied
|
344
|
|
|
423
|
|
||
Total commercial
|
43,661
|
|
|
43,782
|
|
||
Commercial investor real estate mortgage
|
4,302
|
|
|
4,255
|
|
||
Commercial investor real estate construction
|
2,660
|
|
|
2,692
|
|
||
Total investor real estate
|
6,962
|
|
|
6,947
|
|
||
Residential first mortgage
|
13,164
|
|
|
12,811
|
|
||
Home equity
|
10,832
|
|
|
10,978
|
|
||
Indirect—vehicles
|
4,159
|
|
|
3,984
|
|
||
Indirect—other consumer
|
722
|
|
|
545
|
|
||
Consumer credit card
|
1,113
|
|
|
1,075
|
|
||
Other consumer
|
1,089
|
|
|
1,040
|
|
||
Total consumer
|
31,079
|
|
|
30,433
|
|
||
|
$
|
81,702
|
|
|
$
|
81,162
|
|
|
June 30, 2016
|
||||||||||
|
Loans
|
|
Unfunded Commitments
|
|
Total Exposure
|
||||||
|
(In millions)
|
||||||||||
Administrative, support, waste and repair
|
$
|
843
|
|
|
$
|
502
|
|
|
$
|
1,345
|
|
Agriculture
|
698
|
|
|
274
|
|
|
972
|
|
|||
Educational services
|
1,906
|
|
|
264
|
|
|
2,170
|
|
|||
Energy
|
2,392
|
|
|
2,088
|
|
|
4,480
|
|
|||
Financial services
|
3,786
|
|
|
3,174
|
|
|
6,960
|
|
|||
Government and public sector
|
2,446
|
|
|
101
|
|
|
2,547
|
|
|||
Healthcare
|
4,068
|
|
|
1,589
|
|
|
5,657
|
|
|||
Information
|
1,161
|
|
|
741
|
|
|
1,902
|
|
|||
Manufacturing
(1)
|
4,298
|
|
|
3,750
|
|
|
8,048
|
|
|||
Professional, scientific and technical services
(1)
|
1,686
|
|
|
1,137
|
|
|
2,823
|
|
|||
Real estate
|
6,529
|
|
|
5,189
|
|
|
11,718
|
|
|||
Religious, leisure, personal and non-profit services
|
2,038
|
|
|
584
|
|
|
2,622
|
|
|||
Restaurant, accommodation and lodging
|
2,540
|
|
|
711
|
|
|
3,251
|
|
|||
Retail trade
|
2,772
|
|
|
2,325
|
|
|
5,097
|
|
|||
Transportation and warehousing
(1)
|
2,201
|
|
|
960
|
|
|
3,161
|
|
|||
Utilities
|
1,113
|
|
|
1,752
|
|
|
2,865
|
|
|||
Wholesale goods
(1)
|
3,012
|
|
|
2,524
|
|
|
5,536
|
|
|||
Other
|
172
|
|
|
1,662
|
|
|
1,834
|
|
|||
Total commercial
|
$
|
43,661
|
|
|
$
|
29,327
|
|
|
$
|
72,988
|
|
|
December 31, 2015
(2)
|
||||||||||
|
Loans
|
|
Unfunded Commitments
|
|
Total Exposure
|
||||||
|
(In millions)
|
||||||||||
Administrative, support, waste and repair
|
$
|
901
|
|
|
$
|
575
|
|
|
$
|
1,476
|
|
Agriculture
|
747
|
|
|
295
|
|
|
1,042
|
|
|||
Educational services
|
1,846
|
|
|
312
|
|
|
2,158
|
|
|||
Energy
|
2,533
|
|
|
2,461
|
|
|
4,994
|
|
|||
Financial services
(3)
|
3,556
|
|
|
2,984
|
|
|
6,540
|
|
|||
Government and public sector
|
2,408
|
|
|
238
|
|
|
2,646
|
|
|||
Healthcare
|
4,322
|
|
|
1,407
|
|
|
5,729
|
|
|||
Information
|
1,281
|
|
|
744
|
|
|
2,025
|
|
|||
Manufacturing
(3)
|
4,407
|
|
|
3,938
|
|
|
8,345
|
|
|||
Professional, scientific and technical services
(3)
|
1,730
|
|
|
1,114
|
|
|
2,844
|
|
|||
Real estate
|
6,427
|
|
|
5,046
|
|
|
11,473
|
|
|||
Religious, leisure, personal and non-profit services
|
2,165
|
|
|
600
|
|
|
2,765
|
|
|||
Restaurant, accommodation and lodging
|
2,489
|
|
|
633
|
|
|
3,122
|
|
|||
Retail trade
|
2,492
|
|
|
2,507
|
|
|
4,999
|
|
|||
Transportation and warehousing
(3)
|
2,228
|
|
|
1,084
|
|
|
3,312
|
|
|||
Utilities
|
1,047
|
|
|
1,674
|
|
|
2,721
|
|
|||
Wholesale goods
(3)
|
2,981
|
|
|
2,588
|
|
|
5,569
|
|
|||
Other
|
222
|
|
|
1,600
|
|
|
1,822
|
|
|||
Total commercial
|
$
|
43,782
|
|
|
$
|
29,800
|
|
|
$
|
73,582
|
|
(1)
|
Regions' definition of indirect energy-related lending includes certain balances within each of these selected industry categories. As of June 30, 2016, total indirect energy-related loans were approximately $531 million, with approximately $500 million included in commercial loans and $31 million in investor real estate loans. Total unfunded commitments for indirect energy-related lending were $465 million as of June 30, 2016.
|
(2)
|
As customers' businesses evolve (e.g. up or down the vertical manufacturing chain), Regions may need to change the assigned business industry code used to define the customer relationship. When these changes occur, Regions does not recast the customer history for prior periods into the new classification because the business industry code used in the prior period was deemed appropriate. As a result, year over year changes may be impacted.
|
(3)
|
Regions' definition of indirect energy-related lending includes certain balances within each of these selected industry categories. As of December 31, 2015, total indirect energy-related loans were approximately $519 million, with approximately $497 million included in commercial loans and $22 million in investor real estate loans. Total unfunded commitments for indirect energy-related lending were $446 million as of December 31, 2015.
|
|
First Lien
|
|
% of Total
|
|
Second Lien
|
|
% of Total
|
|
Total
|
||||||||
|
(Dollars in millions)
|
||||||||||||||||
2016
|
$
|
14
|
|
|
0.19
|
%
|
|
$
|
26
|
|
|
0.34
|
%
|
|
$
|
40
|
|
2017
|
4
|
|
|
0.05
|
|
|
9
|
|
|
0.12
|
|
|
13
|
|
|||
2018
|
13
|
|
|
0.17
|
|
|
19
|
|
|
0.25
|
|
|
32
|
|
|||
2019
|
84
|
|
|
1.11
|
|
|
76
|
|
|
1.00
|
|
|
160
|
|
|||
2020
|
174
|
|
|
2.30
|
|
|
133
|
|
|
1.76
|
|
|
307
|
|
|||
2021-2025
|
1,489
|
|
|
19.69
|
|
|
1,472
|
|
|
19.46
|
|
|
2,961
|
|
|||
2026-2030
|
2,036
|
|
|
26.92
|
|
|
2,013
|
|
|
26.62
|
|
|
4,049
|
|
|||
Thereafter
|
—
|
|
|
—
|
|
|
1
|
|
|
0.02
|
|
|
1
|
|
|||
Total
|
$
|
3,814
|
|
|
50.43
|
%
|
|
$
|
3,749
|
|
|
49.57
|
%
|
|
$
|
7,563
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
|
Residential
First Mortgage
|
|
Home Equity
|
|
Residential
First Mortgage
|
|
Home Equity
|
||||||||||||||||
|
|
1st Lien
|
|
2nd Lien
|
|
|
1st Lien
|
|
2nd Lien
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Estimated current loan to value:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Above 100%
|
$
|
208
|
|
|
$
|
110
|
|
|
$
|
339
|
|
|
$
|
267
|
|
|
$
|
127
|
|
|
$
|
417
|
|
80% - 100%
|
1,772
|
|
|
434
|
|
|
792
|
|
|
1,703
|
|
|
497
|
|
|
886
|
|
||||||
Below 80%
|
10,632
|
|
|
6,082
|
|
|
2,796
|
|
|
10,288
|
|
|
5,965
|
|
|
2,785
|
|
||||||
Data not available
|
552
|
|
|
101
|
|
|
178
|
|
|
553
|
|
|
107
|
|
|
194
|
|
||||||
|
$
|
13,164
|
|
|
$
|
6,727
|
|
|
$
|
4,105
|
|
|
$
|
12,811
|
|
|
$
|
6,696
|
|
|
$
|
4,282
|
|
|
June 30, 2016
|
||||||||||||||||||||||
|
Residential
First Mortgage
|
|
Home Equity
|
|
Indirect
(1)
|
|
Consumer
Credit Card
|
|
Other
Consumer
|
||||||||||||||
|
|
1st Lien
|
|
2nd Lien
|
|
|
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Below 620
|
$
|
797
|
|
|
$
|
307
|
|
|
$
|
233
|
|
|
$
|
442
|
|
|
$
|
56
|
|
|
$
|
78
|
|
620-680
|
991
|
|
|
539
|
|
|
379
|
|
|
619
|
|
|
177
|
|
|
147
|
|
||||||
681-720
|
1,447
|
|
|
843
|
|
|
538
|
|
|
716
|
|
|
257
|
|
|
197
|
|
||||||
Above 720
|
9,038
|
|
|
4,902
|
|
|
2,893
|
|
|
2,841
|
|
|
622
|
|
|
539
|
|
||||||
Data not available
|
891
|
|
|
136
|
|
|
62
|
|
|
263
|
|
|
1
|
|
|
128
|
|
||||||
|
$
|
13,164
|
|
|
$
|
6,727
|
|
|
$
|
4,105
|
|
|
$
|
4,881
|
|
|
$
|
1,113
|
|
|
$
|
1,089
|
|
|
December 31, 2015
|
||||||||||||||||||||||
|
Residential
First Mortgage
|
|
Home Equity
|
|
Indirect
(1)
|
|
Consumer
Credit Card
|
|
Other
Consumer
|
||||||||||||||
|
|
1st Lien
|
|
2nd Lien
|
|
|
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Below 620
|
$
|
768
|
|
|
$
|
311
|
|
|
$
|
249
|
|
|
$
|
421
|
|
|
$
|
55
|
|
|
$
|
86
|
|
620-680
|
1,013
|
|
|
531
|
|
|
415
|
|
|
549
|
|
|
158
|
|
|
150
|
|
||||||
681-720
|
1,489
|
|
|
789
|
|
|
530
|
|
|
611
|
|
|
247
|
|
|
191
|
|
||||||
Above 720
|
8,487
|
|
|
4,808
|
|
|
2,938
|
|
|
2,409
|
|
|
614
|
|
|
526
|
|
||||||
Data not available
|
1,054
|
|
|
257
|
|
|
150
|
|
|
539
|
|
|
1
|
|
|
87
|
|
||||||
|
$
|
12,811
|
|
|
$
|
6,696
|
|
|
$
|
4,282
|
|
|
$
|
4,529
|
|
|
$
|
1,075
|
|
|
$
|
1,040
|
|
(1)
|
Amount represents both indirect-vehicles and indirect-other consumer portfolio classes.
|
|
Six Months Ended June 30
|
||||||
|
2016
|
|
2015
|
||||
|
(Dollars in millions)
|
||||||
Allowance for loan losses at beginning of year
|
$
|
1,106
|
|
|
$
|
1,103
|
|
Loans charged-off:
|
|
|
|
||||
Commercial and industrial
|
57
|
|
|
45
|
|
||
Commercial real estate mortgage—owner-occupied
|
13
|
|
|
14
|
|
||
Commercial real estate construction—owner-occupied
|
1
|
|
|
—
|
|
||
Commercial investor real estate mortgage
|
1
|
|
|
12
|
|
||
Commercial investor real estate construction
|
—
|
|
|
—
|
|
||
Residential first mortgage
|
7
|
|
|
13
|
|
||
Home equity
|
35
|
|
|
36
|
|
||
Indirect
—
vehicles
|
23
|
|
|
19
|
|
||
Indirect
—
other consumer
|
6
|
|
|
—
|
|
||
Consumer credit card
|
19
|
|
|
19
|
|
||
Other consumer
|
32
|
|
|
29
|
|
||
|
194
|
|
|
187
|
|
||
Recoveries of loans previously charged-off:
|
|
|
|
||||
Commercial and industrial
|
10
|
|
|
25
|
|
||
Commercial real estate mortgage—owner-occupied
|
5
|
|
|
10
|
|
||
Commercial real estate construction—owner-occupied
|
—
|
|
|
—
|
|
||
Commercial investor real estate mortgage
|
4
|
|
|
9
|
|
||
Commercial investor real estate construction
|
1
|
|
|
4
|
|
||
Residential first mortgage
|
2
|
|
|
6
|
|
||
Home equity
|
14
|
|
|
14
|
|
||
Indirect
—
vehicles
|
9
|
|
|
8
|
|
||
Indirect
—
other consumer
|
—
|
|
|
—
|
|
||
Consumer credit card
|
3
|
|
|
3
|
|
||
Other consumer
|
6
|
|
|
8
|
|
||
|
54
|
|
|
87
|
|
||
Net charge-offs:
|
|
|
|
||||
Commercial and industrial
|
47
|
|
|
20
|
|
||
Commercial real estate mortgage—owner-occupied
|
8
|
|
|
4
|
|
||
Commercial real estate construction—owner-occupied
|
1
|
|
|
—
|
|
||
Commercial investor real estate mortgage
|
(3
|
)
|
|
3
|
|
||
Commercial investor real estate construction
|
(1
|
)
|
|
(4
|
)
|
||
Residential first mortgage
|
5
|
|
|
7
|
|
||
Home equity
|
21
|
|
|
22
|
|
||
Indirect
—
vehicles
|
14
|
|
|
11
|
|
||
Indirect
—
other consumer
|
6
|
|
|
—
|
|
||
Consumer credit card
|
16
|
|
|
16
|
|
||
Other consumer
|
26
|
|
|
21
|
|
||
|
140
|
|
|
100
|
|
||
Provision for loan losses
|
185
|
|
|
112
|
|
||
Allowance for loan losses at June 30
|
$
|
1,151
|
|
|
$
|
1,115
|
|
Reserve for unfunded credit commitments at beginning of year
|
$
|
52
|
|
|
$
|
65
|
|
Provision (credit) for unfunded credit losses
|
12
|
|
|
(1
|
)
|
||
Reserve for unfunded credit commitments at June 30
|
$
|
64
|
|
|
$
|
64
|
|
Allowance for credit losses at June 30
|
$
|
1,215
|
|
|
$
|
1,179
|
|
Loans, net of unearned income, outstanding at end of period
|
$
|
81,702
|
|
|
$
|
80,149
|
|
Average loans, net of unearned income, outstanding for the period
|
$
|
81,735
|
|
|
$
|
78,562
|
|
Ratios:
|
|
|
|
||||
Allowance for loan losses at end of period to loans, net of unearned income
|
1.41
|
%
|
|
1.39
|
%
|
||
Allowance for loan losses at end of period to non-performing loans, excluding loans held for sale
|
1.12x
|
|
|
1.49x
|
|
||
Net charge-offs as percentage of average loans, net of unearned income (annualized)
|
0.34
|
%
|
|
0.26
|
%
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||
|
Loan
Balance
|
|
Allowance for
Loan Losses
|
|
Loan
Balance
|
|
Allowance for
Loan Losses
|
||||||||
|
(In millions)
|
||||||||||||||
Accruing:
|
|
|
|
|
|
|
|
||||||||
Commercial
|
$
|
214
|
|
|
$
|
35
|
|
|
$
|
146
|
|
|
$
|
20
|
|
Investor real estate
|
122
|
|
|
12
|
|
|
157
|
|
|
17
|
|
||||
Residential first mortgage
|
395
|
|
|
49
|
|
|
398
|
|
|
52
|
|
||||
Home equity
|
306
|
|
|
5
|
|
|
323
|
|
|
7
|
|
||||
Indirect—vehicles
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Consumer credit card
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
Other consumer
|
11
|
|
|
—
|
|
|
12
|
|
|
—
|
|
||||
|
1,051
|
|
|
101
|
|
|
1,039
|
|
|
96
|
|
||||
Non-accrual status or 90 days past due and still accruing:
|
|
|
|
|
|
|
|
||||||||
Commercial
|
147
|
|
|
33
|
|
|
135
|
|
|
37
|
|
||||
Investor real estate
|
19
|
|
|
3
|
|
|
22
|
|
|
3
|
|
||||
Residential first mortgage
|
82
|
|
|
10
|
|
|
81
|
|
|
10
|
|
||||
Home equity
|
18
|
|
|
—
|
|
|
18
|
|
|
—
|
|
||||
|
266
|
|
|
46
|
|
|
256
|
|
|
50
|
|
||||
Total TDRs - Loans
|
$
|
1,317
|
|
|
$
|
147
|
|
|
$
|
1,295
|
|
|
$
|
146
|
|
|
|
|
|
|
|
|
|
||||||||
TDRs - Held For Sale
|
8
|
|
|
—
|
|
|
8
|
|
|
—
|
|
||||
Total TDRs
|
$
|
1,325
|
|
|
$
|
147
|
|
|
$
|
1,303
|
|
|
$
|
146
|
|
|
Six Months Ended June 30, 2016
|
||||||
|
Commercial
|
|
Investor
Real Estate |
||||
|
(In millions)
|
||||||
Balance, beginning of period
|
$
|
281
|
|
|
$
|
179
|
|
Inflows
|
177
|
|
|
11
|
|
||
Outflows
|
|
|
|
||||
Charge-offs
|
(12
|
)
|
|
—
|
|
||
Payments, sales and other
(1)
|
(85
|
)
|
|
(49
|
)
|
||
Balance, end of period
|
$
|
361
|
|
|
$
|
141
|
|
|
Six Months Ended June 30, 2015
|
||||||
|
Commercial
|
|
Investor
Real Estate |
||||
|
(In millions)
|
||||||
Balance, beginning of period
|
$
|
344
|
|
|
$
|
357
|
|
Inflows
|
93
|
|
|
27
|
|
||
Outflows
|
|
|
|
||||
Charge-offs
|
(8
|
)
|
|
(7
|
)
|
||
Foreclosure
|
—
|
|
|
(32
|
)
|
||
Payments, sales and other
(1)
|
(118
|
)
|
|
(115
|
)
|
||
Balance, end of period
|
$
|
311
|
|
|
$
|
230
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
|
(Dollars in millions)
|
||||||
Non-performing loans:
|
|
|
|
||||
Commercial and industrial
|
$
|
596
|
|
|
$
|
325
|
|
Commercial real estate mortgage—owner-occupied
|
240
|
|
|
268
|
|
||
Commercial real estate construction—owner-occupied
|
3
|
|
|
2
|
|
||
Total commercial
|
839
|
|
|
595
|
|
||
Commercial investor real estate mortgage
|
33
|
|
|
31
|
|
||
Total investor real estate
|
33
|
|
|
31
|
|
||
Residential first mortgage
|
52
|
|
|
63
|
|
||
Home equity
|
101
|
|
|
93
|
|
||
Total consumer
|
153
|
|
|
156
|
|
||
Total non-performing loans, excluding loans held for sale
|
1,025
|
|
|
782
|
|
||
Non-performing loans held for sale
|
31
|
|
|
38
|
|
||
Total non-performing loans
(1)
|
1,056
|
|
|
820
|
|
||
Foreclosed properties
|
89
|
|
|
100
|
|
||
Total non-performing assets
(1)
|
$
|
1,145
|
|
|
$
|
920
|
|
Accruing loans 90 days past due:
|
|
|
|
||||
Commercial and industrial
|
$
|
6
|
|
|
$
|
9
|
|
Commercial real estate mortgage—owner-occupied
|
3
|
|
|
3
|
|
||
Total commercial
|
9
|
|
|
12
|
|
||
Commercial investor real estate mortgage
|
3
|
|
|
4
|
|
||
Total investor real estate
|
3
|
|
|
4
|
|
||
Residential first mortgage
(2)
|
104
|
|
|
113
|
|
||
Home equity
|
34
|
|
|
59
|
|
||
Indirect—vehicles
|
8
|
|
|
9
|
|
||
Consumer credit card
|
13
|
|
|
12
|
|
||
Other consumer
|
3
|
|
|
4
|
|
||
Total consumer
|
162
|
|
|
197
|
|
||
|
$
|
174
|
|
|
$
|
213
|
|
Restructured loans not included in the categories above
|
$
|
1,051
|
|
|
$
|
1,039
|
|
Non-performing loans
(1)
to loans and non-performing loans held for sale
|
1.29
|
%
|
|
1.01
|
%
|
||
Non-performing assets
(1)
to loans, foreclosed properties and non-performing loans held for sale
|
1.40
|
%
|
|
1.13
|
%
|
(1)
|
Excludes accruing loans 90 days past due.
|
(2)
|
Excludes residential first mortgage loans that are 100% guaranteed by the FHA and all guaranteed loans sold to the GNMA where Regions has the right but not the obligation to repurchase. Total 90 days or more past due guaranteed loans excluded were $95 million at
June 30, 2016
and $107 million at
December 31, 2015
.
|
|
Non-Accrual Loans, Excluding Loans Held for Sale
Six Months Ended June 30, 2016 |
||||||||||||||
|
Commercial
|
|
Investor
Real Estate
|
|
Consumer
(1)
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
Balance at beginning of period
|
$
|
595
|
|
|
$
|
31
|
|
|
$
|
156
|
|
|
$
|
782
|
|
Additions
|
522
|
|
|
11
|
|
|
(2
|
)
|
|
531
|
|
||||
Net payments/other activity
|
(152
|
)
|
|
(5
|
)
|
|
—
|
|
|
(157
|
)
|
||||
Return to accrual
|
(21
|
)
|
|
(2
|
)
|
|
—
|
|
|
(23
|
)
|
||||
Charge-offs on non-accrual loans
(2)
|
(68
|
)
|
|
(1
|
)
|
|
—
|
|
|
(69
|
)
|
||||
Transfers to held for sale
(3)
|
(30
|
)
|
|
—
|
|
|
(1
|
)
|
|
(31
|
)
|
||||
Transfers to foreclosed properties
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||
Sales
|
(5
|
)
|
|
(1
|
)
|
|
—
|
|
|
(6
|
)
|
||||
Balance at end of period
|
$
|
839
|
|
|
$
|
33
|
|
|
$
|
153
|
|
|
$
|
1,025
|
|
|
Non-Accrual Loans, Excluding Loans Held for Sale
Six Months Ended June 30, 2015 |
||||||||||||||
|
Commercial
|
|
Investor
Real Estate
|
|
Consumer
(1)
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
Balance at beginning of period
|
$
|
493
|
|
|
$
|
125
|
|
|
$
|
211
|
|
|
$
|
829
|
|
Additions
|
305
|
|
|
23
|
|
|
(29
|
)
|
|
299
|
|
||||
Net payments/other activity
|
(122
|
)
|
|
(26
|
)
|
|
—
|
|
|
(148
|
)
|
||||
Return to accrual
|
(92
|
)
|
|
(11
|
)
|
|
—
|
|
|
(103
|
)
|
||||
Charge-offs on non-accrual loans
(2)
|
(56
|
)
|
|
(12
|
)
|
|
—
|
|
|
(68
|
)
|
||||
Transfers to held for sale
(3)
|
(17
|
)
|
|
(3
|
)
|
|
—
|
|
|
(20
|
)
|
||||
Transfers to foreclosed properties
|
(5
|
)
|
|
(31
|
)
|
|
—
|
|
|
(36
|
)
|
||||
Sales
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||
Balance at end of period
|
$
|
504
|
|
|
$
|
65
|
|
|
$
|
182
|
|
|
$
|
751
|
|
(1)
|
All net activity within the consumer portfolio segment other than sales and transfers to held for sale (including related charge-offs) is included as a single net number within the additions line.
|
(2)
|
Includes charge-offs on loans on non-accrual status and charge-offs taken upon sale and transfer of non-accrual loans to held for sale.
|
(3)
|
Transfers to held for sale are shown net of charge-offs of $16 million and $11 million recorded upon transfer for the
six months ended June 30, 2016
and
2015
, respectively.
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
|
(In millions)
|
||||||
Non-interest-bearing demand
|
$
|
34,982
|
|
|
$
|
34,862
|
|
Savings
|
7,786
|
|
|
7,287
|
|
||
Interest-bearing transaction
|
20,571
|
|
|
21,902
|
|
||
Money market—domestic
|
26,138
|
|
|
26,468
|
|
||
Money market—foreign
|
258
|
|
|
243
|
|
||
Low-cost deposits
|
89,735
|
|
|
90,762
|
|
||
Time deposits
|
7,286
|
|
|
7,468
|
|
||
Customer deposits
|
97,021
|
|
|
98,230
|
|
||
Corporate treasury time deposits
|
224
|
|
|
200
|
|
||
|
$
|
97,245
|
|
|
$
|
98,430
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
|
(In millions)
|
||||||
Customer-related borrowings:
|
|
|
|
||||
Customer collateral
|
$
|
2
|
|
|
$
|
10
|
|
|
$
|
2
|
|
|
$
|
10
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
|
(In millions)
|
||||||
Regions Financial Corporation (Parent):
|
|
|
|
||||
2.00% senior notes due May 2018
|
$
|
747
|
|
|
$
|
749
|
|
3.20% senior notes due February 2021
|
1,102
|
|
|
—
|
|
||
7.75% subordinated notes due September 2024
|
100
|
|
|
100
|
|
||
6.75% subordinated debentures due November 2025
|
159
|
|
|
159
|
|
||
7.375% subordinated notes due December 2037
|
297
|
|
|
300
|
|
||
Valuation adjustments on hedged long-term debt
|
12
|
|
|
(7
|
)
|
||
|
2,417
|
|
|
1,301
|
|
||
Regions Bank:
|
|
|
|
||||
Federal Home Loan Bank advances
|
4,755
|
|
|
5,255
|
|
||
2.25% senior notes due September 2018
|
747
|
|
|
749
|
|
||
7.50% subordinated notes due May 2018
|
499
|
|
|
500
|
|
||
6.45% subordinated notes due June 2037
|
495
|
|
|
497
|
|
||
3.80% affiliate subordinated notes due February 2025
|
150
|
|
|
150
|
|
||
Other long-term debt
|
47
|
|
|
48
|
|
||
Valuation adjustments on hedged long-term debt
|
8
|
|
|
(1
|
)
|
||
|
6,701
|
|
|
7,198
|
|
||
Elimination of 3.80% affiliate subordinated notes due February 2025
|
(150
|
)
|
|
(150
|
)
|
||
Total consolidated
|
$
|
8,968
|
|
|
$
|
8,349
|
|
•
|
4.5% CET1 to risk-weighted assets.
|
•
|
6.0% Tier 1 capital to risk-weighted assets.
|
•
|
8.0% Total capital to risk-weighted assets.
|
•
|
Applying a 150% risk weight for certain high volatility commercial real estate acquisition, development and construction exposures (previously set at 100%).
|
•
|
Assigning a 150% risk weight to exposures (other than residential mortgage exposures) that are on non-accrual status or 90 days or more past due (previously set at 100%).
|
•
|
Providing for a 20% credit conversion factor for the unused portion of a loan commitment with an original maturity of less than one year that is not unconditionally cancellable (previously set at 0%).
|
•
|
Eliminating the previous 50% cap on the risk weight for derivative exposures.
|
•
|
Replacing the previous Ratings Based Approach for certain asset-backed securities with a SSFA which results in risk weights ranging from 20% to 1,250% (previously ranged from 100% to 1,250%).
|
•
|
Effective January 1, 2018, applying a 250% risk weight to the portion of MSRs and deferred tax assets that are includible in capital (previously set at 100%).
|
Transitional Basis Basel III Regulatory Capital Rules
(1)
|
June 30, 2016
Ratio
(2)
|
|
December 31, 2015
Ratio
|
|
To Be Well
Capitalized
|
|||
Basel III common equity Tier 1 capital:
|
|
|
|
|
|
|||
Regions Financial Corporation
|
10.98
|
%
|
|
10.93
|
%
|
|
N/A
|
|
Regions Bank
|
11.80
|
|
|
11.68
|
|
|
6.50
|
%
|
Tier 1 capital:
|
|
|
|
|
|
|||
Regions Financial Corporation
|
11.74
|
%
|
|
11.65
|
%
|
|
6.00
|
%
|
Regions Bank
|
11.80
|
|
|
11.68
|
|
|
8.00
|
|
Total capital:
|
|
|
|
|
|
|||
Regions Financial Corporation
|
13.92
|
%
|
|
13.88
|
%
|
|
10.00
|
%
|
Regions Bank
|
13.68
|
|
|
13.59
|
|
|
10.00
|
|
Leverage capital:
|
|
|
|
|
|
|||
Regions Financial Corporation
|
10.19
|
%
|
|
10.25
|
%
|
|
N/A
|
|
Regions Bank
|
10.27
|
|
|
10.28
|
|
|
5.00
|
%
|
(1)
|
The 2016 and 2015 capital ratios were calculated at different points of the phase-in period under the Basel III Rules and therefore are not directly comparable.
|
(2)
|
The current quarter Basel III CET1 capital, Tier 1 capital, Total capital, and Leverage capital ratios are estimated.
|
|
|
|
|
|
As of June 30, 2016 and December 31, 2015
|
|||
|
S&P
|
Moody’s
|
Fitch
|
DBRS
|
Regions Financial Corporation
|
|
|
|
|
Senior unsecured debt
|
BBB
|
Baa3
|
BBB
|
BBB
|
Subordinated debt
|
BBB-
|
Baa3
|
BBB-
|
BBBL
|
Regions Bank
|
|
|
|
|
Short-term
|
A-2
|
P-2
|
F2
|
R-1L
|
Long-term bank deposits
|
N/A
|
A3
|
BBB+
|
BBBH
|
Long-term rating
|
BBB+
|
A3
|
BBB
|
N/A
|
Senior unsecured debt
|
BBB+
|
Baa3
|
BBB
|
BBBH
|
Subordinated debt
|
BBB
|
Baa3
|
BBB-
|
BBB
|
Outlook
|
Stable
|
Stable
|
Stable
|
Positive
|
•
|
Preparation of Regions’ operating budgets
|
•
|
Monthly financial performance reporting
|
•
|
Monthly close-out reporting of consolidated results (management only)
|
•
|
Presentations to investors of Company performance
|
|
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
(Dollars in millions, except per share data)
|
||||||||||||||
INCOME
|
|
|
|
|
|
|
|
|
||||||||
Net income (GAAP)
|
|
$
|
275
|
|
|
$
|
285
|
|
|
$
|
548
|
|
|
$
|
519
|
|
Preferred dividends (GAAP)
|
|
(16
|
)
|
|
(16
|
)
|
|
(32
|
)
|
|
(32
|
)
|
||||
Net income available to common shareholders (GAAP)
|
A
|
$
|
259
|
|
|
$
|
269
|
|
|
$
|
516
|
|
|
$
|
487
|
|
ADJUSTED FEE INCOME AND EFFICIENCY RATIOS
|
|
|
|
|
|
|
|
|
||||||||
Non-interest expense from continuing operations (GAAP)
|
B
|
$
|
915
|
|
|
$
|
934
|
|
|
$
|
1,784
|
|
|
$
|
1,839
|
|
Significant items:
|
|
|
|
|
|
|
|
|
||||||||
Professional, legal and regulatory expenses
(1)
|
|
(3
|
)
|
|
(48
|
)
|
|
(3
|
)
|
|
(48
|
)
|
||||
Branch consolidation, property and equipment charges
|
|
(22
|
)
|
|
(27
|
)
|
|
(36
|
)
|
|
(49
|
)
|
||||
Loss on early extinguishment of debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(43
|
)
|
||||
Salary and employee benefits
—
severance charges
|
|
(1
|
)
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
||||
Adjusted non-interest expense (non-GAAP)
|
C
|
$
|
889
|
|
|
$
|
859
|
|
|
$
|
1,732
|
|
|
$
|
1,699
|
|
Net interest income and other financing income (GAAP)
|
|
$
|
848
|
|
|
$
|
820
|
|
|
$
|
1,710
|
|
|
$
|
1,635
|
|
Taxable-equivalent adjustment
|
|
21
|
|
|
19
|
|
|
42
|
|
|
36
|
|
||||
Net interest income and other financing income from continuing operations, taxable-equivalent basis
|
D
|
869
|
|
|
839
|
|
|
1,752
|
|
|
1,671
|
|
||||
Non-interest income from continuing operations (GAAP)
|
E
|
526
|
|
|
590
|
|
|
1,032
|
|
|
1,060
|
|
||||
Significant items:
|
|
|
|
|
|
|
|
|
||||||||
Securities gains, net
|
|
(6
|
)
|
|
(6
|
)
|
|
(1
|
)
|
|
(11
|
)
|
||||
Insurance proceeds
(2)
|
|
—
|
|
|
(90
|
)
|
|
(3
|
)
|
|
(90
|
)
|
||||
Leveraged lease termination gains, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||
Adjusted non-interest income (non-GAAP)
|
F
|
$
|
520
|
|
|
$
|
494
|
|
|
$
|
1,028
|
|
|
$
|
957
|
|
Total revenue, taxable-equivalent basis
|
D+E=G
|
$
|
1,395
|
|
|
$
|
1,429
|
|
|
$
|
2,784
|
|
|
$
|
2,731
|
|
Adjusted total revenue, taxable-equivalent basis (non-GAAP)
|
D+F=H
|
$
|
1,389
|
|
|
$
|
1,333
|
|
|
$
|
2,780
|
|
|
$
|
2,628
|
|
Efficiency ratio (GAAP)
|
B/G
|
65.62
|
%
|
|
65.41
|
%
|
|
64.08
|
%
|
|
67.35
|
%
|
||||
Adjusted efficiency ratio (non-GAAP)
|
C/H
|
63.98
|
%
|
|
64.45
|
%
|
|
62.30
|
%
|
|
64.68
|
%
|
||||
Fee income ratio (GAAP)
|
E/G
|
37.70
|
%
|
|
41.24
|
%
|
|
37.07
|
%
|
|
38.80
|
%
|
||||
Adjusted fee income ratio (non-GAAP)
|
F/H
|
37.46
|
%
|
|
37.04
|
%
|
|
37.00
|
%
|
|
36.40
|
%
|
||||
RETURN ON AVERAGE TANGIBLE COMMON STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
||||||||
Average stockholders’ equity (GAAP)
|
|
$
|
17,151
|
|
|
$
|
16,946
|
|
|
$
|
17,119
|
|
|
$
|
16,954
|
|
Less: Average intangible assets (GAAP)
|
|
5,124
|
|
|
5,083
|
|
|
5,127
|
|
|
5,086
|
|
||||
Average deferred tax liability related to intangibles (GAAP)
|
|
(163
|
)
|
|
(171
|
)
|
|
(164
|
)
|
|
(172
|
)
|
||||
Average preferred stock (GAAP)
|
|
820
|
|
|
856
|
|
|
820
|
|
|
867
|
|
||||
Average tangible common stockholders’ equity (non-GAAP)
|
I
|
$
|
11,370
|
|
|
$
|
11,178
|
|
|
$
|
11,336
|
|
|
$
|
11,173
|
|
Return on average tangible common stockholders’ equity (non-GAAP)
(3)
|
A/I
|
9.15
|
%
|
|
9.66
|
%
|
|
9.15
|
%
|
|
8.79
|
%
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
|
|
(Dollars in millions, except per share data)
|
||||||
TANGIBLE COMMON RATIOS
|
|
|
|
|
||||
Ending stockholders’ equity (GAAP)
|
|
$
|
17,385
|
|
|
$
|
16,844
|
|
Less: Ending intangible assets (GAAP)
|
|
5,122
|
|
|
5,137
|
|
||
Ending deferred tax liability related to intangibles (GAAP)
|
|
(163
|
)
|
|
(165
|
)
|
||
Ending preferred stock (GAAP)
|
|
820
|
|
|
820
|
|
||
Ending tangible common stockholders’ equity (non-GAAP)
|
J
|
$
|
11,606
|
|
|
$
|
11,052
|
|
Ending total assets (GAAP)
|
|
$
|
126,212
|
|
|
$
|
126,050
|
|
Less: Ending intangible assets (GAAP)
|
|
5,122
|
|
|
5,137
|
|
||
Ending deferred tax liability related to intangibles (GAAP)
|
|
(163
|
)
|
|
(165
|
)
|
||
Ending tangible assets (non-GAAP)
|
K
|
$
|
121,253
|
|
|
$
|
121,078
|
|
End of period shares outstanding
|
L
|
1,259
|
|
|
1,297
|
|
||
Tangible common stockholders’ equity to tangible assets (non-GAAP)
|
J/K
|
9.57
|
%
|
|
9.13
|
%
|
||
Tangible common book value per share (non-GAAP)
|
J/L
|
$
|
9.22
|
|
|
$
|
8.52
|
|
BASEL III COMMON EQUITY TIER 1 RATIO—FULLY PHASED-IN PRO-FORMA
(4)
|
|
|
|
|
||||
Stockholders’ equity (GAAP)
|
|
$
|
17,385
|
|
|
$
|
16,844
|
|
Non-qualifying goodwill and intangibles
|
|
(4,946
|
)
|
|
(4,958
|
)
|
||
Adjustments, including all components of accumulated other comprehensive income, disallowed deferred tax assets, threshold deductions and other adjustments
|
|
(227
|
)
|
|
286
|
|
||
Preferred stock (GAAP)
|
|
(820
|
)
|
|
(820
|
)
|
||
Basel III common equity Tier 1
—
Fully Phased-In Pro-Forma (non-GAAP)
|
M
|
$
|
11,392
|
|
|
$
|
11,352
|
|
Basel III risk-weighted assets
—
Fully Phased-In Pro-Forma (non-GAAP)
(5)
|
N
|
$
|
105,199
|
|
|
$
|
106,188
|
|
Basel III common equity Tier 1 ratio
—
Fully Phased-In Pro-Forma (non-GAAP)
|
M/N
|
10.83
|
%
|
|
10.69
|
%
|
(1)
|
Regions recorded $3 million, $50 million and $100 million of contingent legal and regulatory accruals during the second quarter of 2016, the second quarter of 2015, and the fourth quarter of 2014, respectively, related to previously disclosed matters. The fourth quarter of 2014 accruals were settled in the second quarter of 2015 for $2 million less than originally estimated and a corresponding recovery was recognized.
|
(2)
|
Insurance proceeds recognized in all periods are related to the settlement of the previously disclosed 2010 class-action lawsuit.
|
(3)
|
Income statement amounts have been annualized in calculation.
|
(4)
|
Current quarter amounts and the resulting ratio are estimated.
|
(5)
|
Regions continues to develop systems and internal controls to precisely calculate risk-weighted assets as required by Basel III on a fully phased-in basis. The amounts included above are a reasonable approximation, based on current understanding of the requirements.
|
|
Three Months Ended June 30
|
||||||||||||||||||||
|
2016
|
|
2015
|
||||||||||||||||||
|
Average
Balance
|
|
Income/
Expense
|
|
Yield/
Rate
|
|
Average
Balance
|
|
Income/
Expense
|
|
Yield/
Rate
|
||||||||||
|
(Dollars in millions; yields on taxable-equivalent basis)
|
||||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earning assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Federal funds sold and securities purchased under agreements to resell
|
$
|
3
|
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
2
|
|
|
$
|
—
|
|
|
—
|
%
|
Trading account securities
|
114
|
|
|
1
|
|
|
0.99
|
|
|
112
|
|
|
1
|
|
|
1.06
|
|
||||
Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Taxable
(1)
|
24,682
|
|
|
145
|
|
|
2.36
|
|
|
24,114
|
|
|
141
|
|
|
2.35
|
|
||||
Tax-exempt
|
1
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
Loans held for sale
|
458
|
|
|
4
|
|
|
3.45
|
|
|
463
|
|
|
4
|
|
|
3.44
|
|
||||
Loans, net of unearned income
(2)(3)
|
81,960
|
|
|
783
|
|
|
3.82
|
|
|
79,175
|
|
|
747
|
|
|
3.78
|
|
||||
Investment in operating leases, net
|
792
|
|
|
6
|
|
|
2.81
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other earning assets
(1)
|
2,970
|
|
|
8
|
|
|
1.10
|
|
|
2,659
|
|
|
9
|
|
|
1.44
|
|
||||
Total earning assets
|
110,980
|
|
|
947
|
|
|
3.41
|
|
|
106,527
|
|
|
902
|
|
|
3.40
|
|
||||
Allowance for loan losses
|
(1,158
|
)
|
|
|
|
|
|
(1,097
|
)
|
|
|
|
|
||||||||
Cash and due from banks
|
1,792
|
|
|
|
|
|
|
1,706
|
|
|
|
|
|
||||||||
Other non-earning assets
|
13,798
|
|
|
|
|
|
|
13,739
|
|
|
|
|
|
||||||||
|
$
|
125,412
|
|
|
|
|
|
|
$
|
120,875
|
|
|
|
|
|
||||||
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Savings
|
$
|
7,794
|
|
|
2
|
|
|
0.14
|
|
|
$
|
7,165
|
|
|
3
|
|
|
0.12
|
|
||
Interest-bearing checking
|
20,760
|
|
|
5
|
|
|
0.09
|
|
|
21,494
|
|
|
4
|
|
|
0.08
|
|
||||
Money market
|
26,585
|
|
|
7
|
|
|
0.11
|
|
|
26,483
|
|
|
7
|
|
|
0.11
|
|
||||
Time deposits
|
7,338
|
|
|
14
|
|
|
0.73
|
|
|
8,250
|
|
|
13
|
|
|
0.67
|
|
||||
Total interest-bearing deposits
(4)
|
62,477
|
|
|
28
|
|
|
0.18
|
|
|
63,392
|
|
|
27
|
|
|
0.17
|
|
||||
Federal funds purchased and securities sold under agreements to repurchase
|
—
|
|
|
—
|
|
|
—
|
|
|
637
|
|
|
—
|
|
|
—
|
|
||||
Other short-term borrowings
|
—
|
|
|
—
|
|
|
—
|
|
|
942
|
|
|
1
|
|
|
0.21
|
|
||||
Long-term borrowings
|
8,523
|
|
|
50
|
|
|
2.33
|
|
|
2,903
|
|
|
35
|
|
|
4.83
|
|
||||
Total interest-bearing liabilities
|
71,000
|
|
|
78
|
|
|
0.44
|
|
|
67,874
|
|
|
63
|
|
|
0.37
|
|
||||
Non-interest-bearing deposits
(4)
|
35,020
|
|
|
—
|
|
|
—
|
|
|
33,708
|
|
|
—
|
|
|
—
|
|
||||
Total funding sources
|
106,020
|
|
|
78
|
|
|
0.29
|
|
|
101,582
|
|
|
63
|
|
|
0.25
|
|
||||
Net interest spread
|
|
|
|
|
2.97
|
|
|
|
|
|
|
3.03
|
|
||||||||
Other liabilities
|
2,241
|
|
|
|
|
|
|
2,343
|
|
|
|
|
|
||||||||
Stockholders’ equity
|
17,151
|
|
|
|
|
|
|
16,950
|
|
|
|
|
|
||||||||
|
$
|
125,412
|
|
|
|
|
|
|
$
|
120,875
|
|
|
|
|
|
||||||
Net interest income and other financing income/margin on a taxable-equivalent basis from continuing operations
(5)
|
|
|
$
|
869
|
|
|
3.15
|
%
|
|
|
|
$
|
839
|
|
|
3.16
|
%
|
(1)
|
Investments in FRB and FHLB stock were reclassified from securities available for sale to other earning assets during the fourth quarter of 2015. All periods presented have been revised to reflect this presentation.
|
(2)
|
Loans, net of unearned income include non-accrual loans for all periods presented.
|
(3)
|
Interest income includes net loan fees of
$8 million
and
$14 million
for the
three months ended June 30, 2016
and
2015
, respectively.
|
(4)
|
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
0.12%
and
0.11%
for the
three months ended June 30, 2016
and
2015
, respectively.
|
(5)
|
The computation of taxable-equivalent net interest income and other financing income is based on the statutory federal income tax rate of 35%, adjusted for applicable state income taxes net of the related federal tax benefit.
|
|
Six Months Ended June 30
|
||||||||||||||||||||
|
2016
|
|
2015
|
||||||||||||||||||
|
Average
Balance |
|
Income/
Expense |
|
Yield/
Rate |
|
Average
Balance |
|
Income/
Expense |
|
Yield/
Rate |
||||||||||
|
(Dollars in millions; yields on taxable-equivalent basis)
|
||||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earning assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Federal funds sold and securities purchased under agreements to resell
|
$
|
7
|
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
11
|
|
|
$
|
—
|
|
|
—
|
%
|
Trading account securities
|
123
|
|
|
4
|
|
|
5.93
|
|
|
109
|
|
|
4
|
|
|
6.74
|
|
||||
Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Taxable
(1)
|
24,650
|
|
|
292
|
|
|
2.38
|
|
|
24,142
|
|
|
286
|
|
|
2.39
|
|
||||
Tax-exempt
|
1
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
Loans held for sale
|
410
|
|
|
7
|
|
|
3.38
|
|
|
435
|
|
|
7
|
|
|
3.45
|
|
||||
Loans, net of unearned income
(2)(3)
|
81,735
|
|
|
1,572
|
|
|
3.84
|
|
|
78,562
|
|
|
1,489
|
|
|
3.82
|
|
||||
Investment in operating leases, net
|
809
|
|
|
11
|
|
|
2.76
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other earning assets
(1)
|
3,508
|
|
|
18
|
|
|
1.03
|
|
|
3,070
|
|
|
19
|
|
|
1.26
|
|
||||
Total earning assets
|
111,243
|
|
|
1,904
|
|
|
3.42
|
|
|
106,331
|
|
|
1,805
|
|
|
3.42
|
|
||||
Allowance for loan losses
|
(1,133
|
)
|
|
|
|
|
|
(1,098
|
)
|
|
|
|
|
||||||||
Cash and due from banks
|
1,751
|
|
|
|
|
|
|
1,740
|
|
|
|
|
|
||||||||
Other non-earning assets
|
13,825
|
|
|
|
|
|
|
13,749
|
|
|
|
|
|
||||||||
|
$
|
125,686
|
|
|
|
|
|
|
$
|
120,722
|
|
|
|
|
|
||||||
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Savings
|
$
|
7,642
|
|
|
5
|
|
|
0.15
|
|
|
$
|
7,023
|
|
|
5
|
|
|
0.13
|
|
||
Interest-bearing checking
|
21,002
|
|
|
10
|
|
|
0.09
|
|
|
21,631
|
|
|
9
|
|
|
0.09
|
|
||||
Money market
|
26,703
|
|
|
14
|
|
|
0.11
|
|
|
26,432
|
|
|
14
|
|
|
0.11
|
|
||||
Time deposits
|
7,353
|
|
|
26
|
|
|
0.70
|
|
|
8,374
|
|
|
27
|
|
|
0.66
|
|
||||
Total interest-bearing deposits
(4)
|
62,700
|
|
|
55
|
|
|
0.18
|
|
|
63,460
|
|
|
55
|
|
0.18
|
|
|||||
Federal funds purchased and securities sold under agreements to repurchase
|
—
|
|
|
—
|
|
|
—
|
|
|
1,158
|
|
|
—
|
|
|
—
|
|
||||
Other short-term borrowings
|
4
|
|
|
—
|
|
|
—
|
|
|
554
|
|
|
1
|
|
|
0.21
|
|
||||
Long-term borrowings
|
8,665
|
|
|
97
|
|
|
2.23
|
|
|
3,135
|
|
|
78
|
|
|
5.03
|
|
||||
Total interest-bearing liabilities
|
71,369
|
|
|
152
|
|
|
0.43
|
|
|
68,307
|
|
|
134
|
|
0.40
|
|
|||||
Non-interest-bearing deposits
(4)
|
34,923
|
|
|
—
|
|
|
—
|
|
|
32,985
|
|
|
—
|
|
|
—
|
|
||||
Total funding sources
|
106,292
|
|
|
152
|
|
|
0.29
|
|
|
101,292
|
|
|
134
|
|
0.27
|
|
|||||
Net interest spread
|
|
|
|
|
2.99
|
|
|
|
|
|
|
3.02
|
|
||||||||
Other liabilities
|
2,275
|
|
|
|
|
|
|
2,473
|
|
|
|
|
|
||||||||
Stockholders’ equity
|
17,119
|
|
|
|
|
|
|
16,957
|
|
|
|
|
|
||||||||
|
$
|
125,686
|
|
|
|
|
|
|
$
|
120,722
|
|
|
|
|
|
||||||
Net interest income and other financing income/margin on a taxable-equivalent basis from continuing operations
(5)
|
|
|
$
|
1,752
|
|
|
3.17
|
%
|
|
|
|
$
|
1,671
|
|
|
3.17
|
%
|
(1)
|
Investments in FRB and FHLB stock were reclassified from securities available for sale to other earning assets during the fourth quarter of 2015. All periods presented have been revised to reflect this presentation.
|
(2)
|
Loans, net of unearned income include non-accrual loans for all periods presented.
|
(3)
|
Interest income includes net loan fees of
$19 million
and
$31 million
for the
six months ended June 30, 2016
and
2015
, respectively.
|
(4)
|
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
0.11%
and
0.12%
for the
six months ended June 30, 2016
and
2015
, respectively.
|
(5)
|
The computation of taxable-equivalent net interest income and other financing income is based on the statutory federal income tax rate of 35%, adjusted for applicable state income taxes net of the related federal tax benefit.
|
|
Estimated Annual Change
in Net Interest Income
June 30, 2016
|
||
|
(In millions)
|
||
Gradual Change in Interest Rates
|
|
||
+ 200 basis points
|
|
$234
|
|
+ 100 basis points
|
130
|
|
|
- 50 basis points
|
(87
|
)
|
|
|
|
||
Instantaneous Change in Interest Rates
|
|
||
+ 200 basis points
|
|
$269
|
|
+ 100 basis points
|
165
|
|
|
- 50 basis points
|
(147
|
)
|
|
June 30, 2016
|
|||||||||||||||||||
|
|
|
Estimated Fair Value
|
|
Weighted-Average
|
|||||||||||||||
|
Notional
Amount |
|
Gain
|
|
Loss
|
|
Maturity (Years)
|
|
Receive Rate
|
|
Pay Rate
|
|||||||||
|
(Dollars in millions)
|
|||||||||||||||||||
Interest rate swaps:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Derivatives in fair value hedging relationships:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Receive fixed/pay variable
|
$
|
2,535
|
|
|
$
|
34
|
|
|
$
|
—
|
|
|
3.2
|
|
|
1.3
|
%
|
|
0.5
|
%
|
Receive variable/pay fixed
|
486
|
|
|
—
|
|
|
60
|
|
|
10.3
|
|
|
0.5
|
|
|
2.6
|
|
|||
Derivatives in cash flow hedging relationships:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Receive fixed/pay variable
|
9,800
|
|
|
331
|
|
|
—
|
|
|
5.1
|
|
|
1.5
|
|
|
0.5
|
|
|||
Total derivatives designated as hedging instruments
|
$
|
12,821
|
|
|
$
|
365
|
|
|
$
|
60
|
|
|
4.9
|
|
|
1.4
|
%
|
|
0.5
|
%
|
|
Three Months Ended June 30
|
|
Change June 30, 2016 vs. June 30, 2015
|
|||||||||||
|
2016
|
|
2015
|
|
Amount
|
|
Percent
|
|||||||
|
(Dollars in millions)
|
|||||||||||||
Service charges on deposit accounts
|
$
|
166
|
|
|
$
|
168
|
|
|
$
|
(2
|
)
|
|
(1.2
|
)%
|
Card and ATM fees
|
99
|
|
|
90
|
|
|
9
|
|
|
10.0
|
%
|
|||
Investment management and trust fee income
|
52
|
|
|
51
|
|
|
1
|
|
|
2.0
|
%
|
|||
Mortgage income
|
46
|
|
|
46
|
|
|
—
|
|
|
NM
|
|
|||
Insurance commissions and fees
|
36
|
|
|
33
|
|
|
3
|
|
|
9.1
|
%
|
|||
Capital markets fee income and other
|
38
|
|
|
27
|
|
|
11
|
|
|
40.7
|
%
|
|||
Insurance proceeds
|
—
|
|
|
90
|
|
|
(90
|
)
|
|
(100.0
|
)%
|
|||
Commercial credit fee income
|
18
|
|
|
21
|
|
|
(3
|
)
|
|
(14.3
|
)%
|
|||
Bank-owned life insurance
|
20
|
|
|
18
|
|
|
2
|
|
|
11.1
|
%
|
|||
Investment services fee income
|
15
|
|
|
13
|
|
|
2
|
|
|
15.4
|
%
|
|||
Securities gains, net
|
6
|
|
|
6
|
|
|
—
|
|
|
NM
|
|
|||
Net revenue from affordable housing
|
3
|
|
|
6
|
|
|
(3
|
)
|
|
(50.0
|
)%
|
|||
Market value adjustments on employee benefit assets
|
8
|
|
|
2
|
|
|
6
|
|
|
300.0
|
%
|
|||
Other miscellaneous income
|
19
|
|
|
19
|
|
|
—
|
|
|
NM
|
|
|||
|
$
|
526
|
|
|
$
|
590
|
|
|
$
|
(64
|
)
|
|
(10.8
|
)%
|
|
|
|
|
|
|
|
|
|||||||
|
Six Months Ended June 30
|
|
Change June 30, 2016 vs. June 30, 2015
|
|||||||||||
|
2016
|
|
2015
|
|
Amount
|
|
Percent
|
|||||||
|
(Dollars in millions)
|
|||||||||||||
Service charges on deposit accounts
|
$
|
325
|
|
|
$
|
329
|
|
|
$
|
(4
|
)
|
|
(1.2
|
)%
|
Card and ATM fees
|
194
|
|
|
175
|
|
|
19
|
|
|
10.9
|
%
|
|||
Investment management and trust fee income
|
102
|
|
|
102
|
|
|
—
|
|
|
NM
|
|
|||
Mortgage income
|
84
|
|
|
86
|
|
|
(2
|
)
|
|
(2.3
|
)%
|
|||
Insurance commissions and fees
|
76
|
|
|
68
|
|
|
8
|
|
|
11.8
|
%
|
|||
Capital markets fee income and other
|
79
|
|
|
47
|
|
|
32
|
|
|
68.1
|
%
|
|||
Insurance proceeds
|
3
|
|
|
90
|
|
|
(87
|
)
|
|
(96.7
|
)%
|
|||
Commercial credit fee income
|
37
|
|
|
37
|
|
|
—
|
|
|
NM
|
|
|||
Bank-owned life insurance
|
53
|
|
|
38
|
|
|
15
|
|
|
39.5
|
%
|
|||
Investment services fee income
|
31
|
|
|
25
|
|
|
6
|
|
|
24.0
|
%
|
|||
Securities gains, net
|
1
|
|
|
11
|
|
|
(10
|
)
|
|
(90.9
|
)%
|
|||
Net revenue from affordable housing
|
14
|
|
|
8
|
|
|
6
|
|
|
75.0
|
%
|
|||
Market value adjustments on employee benefit assets
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|
NM
|
|
|||
Other miscellaneous income
|
37
|
|
|
44
|
|
|
(7
|
)
|
|
(15.9
|
)%
|
|||
|
$
|
1,032
|
|
|
$
|
1,060
|
|
|
$
|
(28
|
)
|
|
(2.6
|
)%
|
|
Three Months Ended June 30
|
|
Change June 30, 2016 vs. June 30, 2015
|
|||||||||||
|
2016
|
|
2015
|
|
Amount
|
|
Percent
|
|||||||
|
(Dollars in millions)
|
|||||||||||||
Salaries and employee benefits
|
$
|
480
|
|
|
$
|
477
|
|
|
$
|
3
|
|
|
0.6
|
%
|
Net occupancy expense
|
86
|
|
|
89
|
|
|
(3
|
)
|
|
(3.4
|
)%
|
|||
Furniture and equipment expense
|
79
|
|
|
76
|
|
|
3
|
|
|
3.9
|
%
|
|||
Outside services
|
39
|
|
|
40
|
|
|
(1
|
)
|
|
(2.5
|
)%
|
|||
Professional, legal and regulatory expenses
|
21
|
|
|
71
|
|
|
(50
|
)
|
|
(70.4
|
)%
|
|||
FDIC insurance assessments
|
17
|
|
|
15
|
|
|
2
|
|
|
13.3
|
%
|
|||
Marketing
|
28
|
|
|
25
|
|
|
3
|
|
|
12.0
|
%
|
|||
Branch consolidation, property and equipment charges
|
22
|
|
|
27
|
|
|
(5
|
)
|
|
(18.5
|
)%
|
|||
Credit/checkcard expenses
|
14
|
|
|
13
|
|
|
1
|
|
|
7.7
|
%
|
|||
Other miscellaneous expenses
|
129
|
|
|
101
|
|
|
28
|
|
|
27.7
|
%
|
|||
|
$
|
915
|
|
|
$
|
934
|
|
|
$
|
(19
|
)
|
|
(2.0
|
)%
|
|
|
|
|
|
|
|
|
|||||||
|
Six Months Ended June 30
|
|
Change June 30, 2016 vs. June 30, 2015
|
|||||||||||
|
2016
|
|
2015
|
|
Amount
|
|
Percent
|
|||||||
|
(Dollars in millions)
|
|||||||||||||
Salaries and employee benefits
|
$
|
955
|
|
|
$
|
935
|
|
|
$
|
20
|
|
|
2.1
|
%
|
Net occupancy expense
|
172
|
|
|
180
|
|
|
(8
|
)
|
|
(4.4
|
)%
|
|||
Furniture and equipment expense
|
157
|
|
|
147
|
|
|
10
|
|
|
6.8
|
%
|
|||
Outside services
|
75
|
|
|
71
|
|
|
4
|
|
|
5.6
|
%
|
|||
Professional, legal and regulatory expenses
|
34
|
|
|
90
|
|
|
(56
|
)
|
|
(62.2
|
)%
|
|||
FDIC insurance assessments
|
42
|
|
|
37
|
|
|
5
|
|
|
13.5
|
%
|
|||
Marketing
|
53
|
|
|
51
|
|
|
2
|
|
|
3.9
|
%
|
|||
Branch consolidation, property and equipment charges
|
36
|
|
|
49
|
|
|
(13
|
)
|
|
(26.5
|
)%
|
|||
Credit/checkcard expenses
|
27
|
|
|
26
|
|
|
1
|
|
|
3.8
|
%
|
|||
Loss on early extinguishment of debt
|
—
|
|
|
43
|
|
|
(43
|
)
|
|
(100.0
|
)%
|
|||
Other miscellaneous expenses
|
233
|
|
|
210
|
|
|
23
|
|
|
11.0
|
%
|
|||
|
$
|
1,784
|
|
|
$
|
1,839
|
|
|
$
|
(55
|
)
|
|
(3.0
|
)%
|
Period
|
Total Number of
Shares Purchased
|
|
Average Price Paid
Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Approximate Dollar Value of Shares That May Yet Be Purchased Under Publicly Announced Plans or Programs
|
||||||
April 1-30, 2016
|
11,872,759
|
|
|
$
|
9.26
|
|
|
11,872,759
|
|
|
$
|
69,483,468
|
|
May 1-31, 2016
|
7,400,000
|
|
|
$
|
9.13
|
|
|
7,400,000
|
|
|
$
|
1,837,468
|
|
June 1-30, 2016
|
175,000
|
|
|
$
|
9.59
|
|
|
175,000
|
|
|
$
|
—
|
|
Total 2nd Quarter
|
19,447,759
|
|
|
$
|
9.21
|
|
|
19,447,759
|
|
|
$
|
—
|
|
3.1
|
|
Amended and Restated Certificate of Incorporation, incorporated by reference to Exhibit 3.1 to Form 10-Q Quarterly Report filed by registrant on August 6, 2012.
|
|
|
|
3.2
|
|
Certificate of Designations, incorporated by reference to Exhibit 3.3 to Form 8-A filed by registrant on November 1, 2012.
|
|
|
|
3.3
|
|
Certificate of Designations, incorporated by reference to Exhibit 3.3 to the Form 8-A filed by registrant on April 28, 2014.
|
|
|
|
3.4
|
|
By-laws as amended and restated, incorporated by reference to Exhibit 3.2 to Form 8-K Current Report filed by registrant on February 12, 2015.
|
|
|
|
10.1
|
|
Form of Notice and Form of 2016 Director Restricted Stock Award Agreement under Regions Financial Corporation 2015 Long Term Incentive Plan.
|
|
|
|
10.2
|
|
Form of Notice and Form of Restricted Stock Unit Award Agreement under Regions Financial Corporation 2015 Long Term Incentive Plan.
|
10.3
|
|
Form of Notice and Form of Performance Stock Unit Award Agreement under Regions Financial Corporation 2015 Long Term Incentive Plan.
|
|
|
|
10.4
|
|
Form of Notice and Form of Performance Unit Award Agreement under Regions Financial Corporation 2015 Long Term Incentive Plan.
|
|
|
|
12
|
|
Computation of Ratio of Earnings to Fixed Charges.
|
|
|
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32
|
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101
|
|
Interactive Data File
|
|
|
|
DATE: August 5, 2016
|
|
Regions Financial Corporation
|
|
|
|
|
|
/
S
/ H
ARDIE
B. K
IMBROUGH
, J
R
.
|
|
|
Hardie B. Kimbrough, Jr.
Executive Vice President and Controller
(Chief Accounting Officer and Authorized Officer)
|
(i)
|
Capital - Capital Action Decision Tree Status, as defined in the Capital Policy, must remain in either “Monitor Capital” or “Capital Deployment” status; and
|
(ii)
|
Liquidity - Risk for Primary Liquidity Level must remain at “Moderate” or better as established in the Market & Liquidity Risk Framework document.
|
•
|
Notwithstanding anything in the Plan to the contrary, in the event of a Change in Control, the portion of your Award that is subject to vesting based on achievement of the Capital and Liquidity Performance Thresholds for any Performance Threshold Measurement Period that ends after the closing of the Change in Control will convert to time-based vesting for the duration of the applicable Performance Threshold Measurement Period. If your employment is terminated by the Company without Cause or by you for Good Reason, in each case, within the twenty-four (24) month period following the Change in Control, this Award (
i.e.
, the portion of this Award not subject to vesting based on achievement of the Capital and Liquidity Performance Thresholds (_____%) and the portion of this Award subject to vesting based on achievement of the Capital and Liquidity Performance Thresholds but converted to time-based vesting in accordance with the preceding sentence (up to _____%)) will fully vest upon your termination of employment and shares of Stock equivalent to the Maximum Award will be issued to you.
|
•
|
If your employment terminates due to your death, then as soon as practicable following your death, your Award will fully vest (unless prohibited by applicable laws, rules or regulations), and shares of Stock equivalent to the Maximum Award will be issued to your estate.
|
•
|
If your employment terminates due to (a) your Disability or (b) your retirement (on or after age 65 or on or after you attain age 55 with 10 years of service) any time on or after November 30th of the year during which this Award is granted,
|
•
|
If your employment is terminated by the Company without Cause, then the Restricted Stock Units equivalent to the Maximum Award will be pro-rated for the portion of the Vesting Period between the Grant Date and the date your employment terminated and then (i) the pro rata portion of this Award that is not subject to vesting based on achievement of the Capital and Liquidity Performance Thresholds (_____%) will vest upon your termination of employment (unless prohibited by applicable laws, rules or regulations), and shares of Stock will be issued to you, and (ii) the pro rata portion of this Award that is subject to vesting based on achievement of the Capital and Liquidity Performance Thresholds (_____%) will continue to vest in accordance with its terms.
|
•
|
If your employment terminates during the Vesting Period for any reason other than those listed above, your Award will be forfeited as of your termination date.
|
(i)
|
the Company’s growth in diluted earnings per common share from continuing operations (“Diluted EPS Growth”); and
|
(ii)
|
the Company’s return on average tangible common stockholders’ equity, which is defined as net income from continuing operations available to common shareholders divided by average tangible common shareholders’ equity, with average tangible common shareholders’ equity equal to average stockholders’ equity less the sum of (a) average intangible assets, net of their related average deferred tax liability and (b) average preferred stock (“ROATCE”).
|
•
|
If your employment terminates due to your death, then as soon as practicable following your death, the Performance Period and any other trading restrictions imposed upon your Award will lapse (unless prohibited by applicable laws, rules or regulations), and shares of Stock equivalent to the Target Grant will be issued to your estate.
|
•
|
If your employment terminates due to your Disability, then the Award will continue to vest in accordance with its terms and you will be entitled to receive the number of shares of Stock, if any, at the end of the Performance Period that you otherwise would have received (
i.e.
, based on actual achievement of the Performance Goals) had your employment continued through the date of delivery of such Stock. In the event your employment terminates due to your Disability and your death occurs prior to the end of the Performance Period, then as soon as practicable following your death, the Performance Period and any other trading restrictions imposed upon your Award will lapse (unless prohibited by applicable laws, rules or regulations), and shares of Stock equivalent to the Target Grant under this Award will be issued to your estate.
|
•
|
If any time on or after November 30th of the year during which the Award is granted, you terminate your employment due to retirement (on or after age 65 or on or after you attain age 55 with 10 years of service), then the Award will continue to vest in accordance with its terms and you will be entitled to receive the number of shares of Stock, if any, at the end
|
•
|
If the Company terminates your employment without Cause, then the Award will continue to vest in accordance with its terms and you will be entitled to receive the number of shares of Stock, if any, at the end of the Performance Period that you otherwise would have received (
i.e
., based on actual achievement of the Performance Goals) had your employment continued through the payment date, which amount will be pro-rated for the portion of the Performance Period between the Grant Date and the date your employment terminated.
|
•
|
Notwithstanding anything in the Plan to the contrary, in the event of a Change in Control, the Award will convert to a Restricted Stock Unit over the number of shares of Stock underlying the Target Grant, which Restricted Stock Unit will vest and become payable in accordance with the service-based vesting conditions in the Notice of Grant, provided you are still employed by the Company as of such payment date. Notwithstanding the foregoing, if your employment is terminated by the Company without Cause or by you for Good Reason, in each case, within the twenty-four (24) month period following the Change in Control, such Restricted Stock Units will immediately vest and become payable.
|
•
|
If your employment terminates during the Performance Period for any reason other than those listed above, your Award will be forfeited as of your termination date.
|
(i)
|
the Company’s growth in diluted earnings per common share from continuing operations (“Diluted EPS Growth”); and
|
(ii)
|
the Company’s return on average tangible common stockholders’ equity, which is defined as net income from continuing operations available to common shareholders divided by average tangible common shareholders’ equity, with average tangible common shareholders’ equity equal to average stockholders’ equity less the sum of (a) average intangible assets, net of their related average deferred tax liability and (b) average preferred stock (“ROATCE”).
|
•
|
Your employment terminates due to your death, then as soon as practicable following your death, the Performance Period will lapse, unless otherwise specifically prohibited by applicable laws, rules or regulations, and the PUs will vest based on target achievement of the Performance Goals and cash equal to the Target Value (as defined in the Notice of Grant) will be paid to your estate.
|
•
|
Your employment terminates due to your Disability, then the Award will continue to vest in accordance with its terms and you will be entitled to receive the cash payment under the PUs, if any, at the end of the Performance Period that you otherwise would have received (
i.e.
, based on actual achievement of the Performance Goals) had your employment with Regions continued through the payment date. In the event your employment terminates due to your Disability and your death occurs prior to the end of the Performance Period, then as soon as practicable following your death, the Performance Period will lapse, unless otherwise specifically prohibited by applicable laws, rules or regulations and cash equal to the Target Value (as defined in the Notice of Grant) will be paid to your estate.
|
•
|
If, prior to payment of this Award and any time on or after November 30th of the year during which the Award is granted, you terminate your employment due to retirement (on or after age 65 or on or after you attain age 55 with 10 years of service), then the Award will continue to vest in accordance with its terms and you will be entitled to receive the cash payment under the PUs, if any, at the end of the Performance Period that you otherwise would have received (
i.e.
, based on actual achievement of the Performance Goals) had your employment with Regions continued through the payment date.
|
•
|
If, prior to payment of this Award the Company terminates your employment without Cause, then the Award will continue to vest in accordance with its terms and you will be entitled to receive the cash payment under the PUs, if any, at the end of the Performance Period that you otherwise would have received (
i.e.
, based on actual achievement of the Performance Goals) had your employment with Regions continued through the payment date, which amount shall be pro-rated for the portion of the Performance Period between the Grant Date and the date your employment terminated.
|
•
|
Notwithstanding anything in the Plan to the contrary, in the event a Change in Control occurs then, upon the Change in Control, the value of the PUs under the Award will be locked in at the Target Value and shall vest and become payable in accordance with the service-based vesting conditions set forth in the Notice of Grant, provided you are still employed by the Company as of such payment date. Notwithstanding the foregoing, if your employment is terminated by the Company without Cause or by you for Good Reason, in each case, within the twenty-four (24) month period following the Change in Control, such PUs shall immediately vest and become payable.
|
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(Dollars in millions)
|
||||||||||||||
Excluding Interest on Deposits
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations before income taxes
|
$
|
387
|
|
|
$
|
413
|
|
|
$
|
773
|
|
|
$
|
744
|
|
Fixed charges excluding preferred stock dividends
|
65
|
|
|
51
|
|
|
126
|
|
|
108
|
|
||||
Income for computation excluding interest on deposits
|
452
|
|
|
464
|
|
|
899
|
|
|
852
|
|
||||
Interest expense excluding interest on deposits
|
50
|
|
|
36
|
|
|
97
|
|
|
79
|
|
||||
One-third of rent expense
|
15
|
|
|
15
|
|
|
29
|
|
|
29
|
|
||||
Preferred stock dividends
|
16
|
|
|
16
|
|
|
32
|
|
|
32
|
|
||||
Fixed charges including preferred stock dividends
|
81
|
|
|
67
|
|
|
158
|
|
|
140
|
|
||||
Ratio of earnings to fixed charges, excluding interest on deposits
|
5.62x
|
|
|
7.03x
|
|
|
5.70x
|
|
|
6.11x
|
|
||||
Including Interest on Deposits
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations before income taxes
|
$
|
387
|
|
|
$
|
413
|
|
|
$
|
773
|
|
|
$
|
744
|
|
Fixed charges excluding preferred stock dividends
|
93
|
|
|
78
|
|
|
181
|
|
|
163
|
|
||||
Income for computation including interest on deposits
|
480
|
|
|
491
|
|
|
954
|
|
|
907
|
|
||||
Interest expense including interest on deposits
|
78
|
|
|
63
|
|
|
152
|
|
|
134
|
|
||||
One-third of rent expense
|
15
|
|
|
15
|
|
|
29
|
|
|
29
|
|
||||
Preferred stock dividends
|
16
|
|
|
16
|
|
|
32
|
|
|
32
|
|
||||
Fixed charges including preferred stock dividends
|
109
|
|
|
94
|
|
|
213
|
|
|
195
|
|
||||
Ratio of earnings to fixed charges, including interest on deposits
|
4.42x
|
|
|
5.26x
|
|
|
4.48x
|
|
|
4.65x
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Regions Financial Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/
S
/ O. B. G
RAYSON
H
ALL
, J
R
.
|
O. B. Grayson Hall, Jr.
Chairman, President and
Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Regions Financial Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/
S
/ D
AVID
J. T
URNER
, J
R
.
|
David J. Turner, Jr.
Senior Executive Vice President and
Chief Financial Officer
|
1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/
S
/ O. B. G
RAYSON
H
ALL
, J
R
.
|
|
/
S
/ D
AVID
J. T
URNER
, J
R
.
|
O. B. Grayson Hall, Jr.
Chief Executive Officer
|
|
David J. Turner, Jr.
Chief Financial Officer
|