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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 September 30, 2017
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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, any repricing of assets, 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, adverse consequences related to tax reform, 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 and leases, including operating leases.
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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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•
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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, malware, “denial of service” attacks, “hacking” and identity theft, a failure of which could disrupt our business and result in the disclosure of and/or misuse or misappropriation of confidential or proprietary information; disruption or damage to our systems; increased costs; losses; or adverse effects to our reputation.
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•
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Our ability to realize our adjusted 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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September 30, 2017
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December 31, 2016
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||||
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(In millions, except share data)
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||||||
Assets
|
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|
||||
Cash and due from banks
|
$
|
1,829
|
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|
$
|
1,853
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Interest-bearing deposits in other banks
|
1,932
|
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|
3,583
|
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||
Federal funds sold and securities purchased under agreements to resell
|
—
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|
|
15
|
|
||
Trading account securities
|
193
|
|
|
124
|
|
||
Securities held to maturity (estimated fair value of $1,720 and $1,369, respectively)
|
1,703
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|
1,362
|
|
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Securities available for sale
|
23,659
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|
23,781
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|
||
Loans held for sale (includes $307 and $447 measured at fair value, respectively)
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388
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|
718
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Loans, net of unearned income
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79,356
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|
80,095
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Allowance for loan losses
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(1,041
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)
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|
(1,091
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)
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Net loans
|
78,315
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|
|
79,004
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Other earning assets
|
1,421
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|
|
1,644
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Premises and equipment, net
|
2,057
|
|
|
2,096
|
|
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Interest receivable
|
319
|
|
|
319
|
|
||
Goodwill
|
4,904
|
|
|
4,904
|
|
||
Residential mortgage servicing rights at fair value
|
335
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|
|
324
|
|
||
Other identifiable intangible assets
|
187
|
|
|
221
|
|
||
Other assets
|
6,029
|
|
|
6,020
|
|
||
Total assets
|
$
|
123,271
|
|
|
$
|
125,968
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
||||
Deposits:
|
|
|
|
||||
Non-interest-bearing
|
$
|
37,293
|
|
|
$
|
36,046
|
|
Interest-bearing
|
60,298
|
|
|
62,989
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|
||
Total deposits
|
97,591
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|
|
99,035
|
|
||
Borrowed funds:
|
|
|
|
||||
Short-term borrowings:
|
|
|
|
||||
Other short-term borrowings
|
600
|
|
|
—
|
|
||
Total short-term borrowings
|
600
|
|
|
—
|
|
||
Long-term borrowings
|
6,102
|
|
|
7,763
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|
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Total borrowed funds
|
6,702
|
|
|
7,763
|
|
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Other liabilities
|
2,354
|
|
|
2,506
|
|
||
Total liabilities
|
106,647
|
|
|
109,304
|
|
||
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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|
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Common stock, authorized 3 billion shares, par value $.01 per share:
|
|
|
|
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Issued including treasury stock—1,206,139,664 and 1,255,839,866 shares, respectively
|
12
|
|
|
13
|
|
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Additional paid-in capital
|
16,344
|
|
|
17,092
|
|
||
Retained earnings
|
1,279
|
|
|
666
|
|
||
Treasury stock, at cost—41,259,320 and 41,259,319 shares, respectively
|
(1,377
|
)
|
|
(1,377
|
)
|
||
Accumulated other comprehensive income (loss), net
|
(454
|
)
|
|
(550
|
)
|
||
Total stockholders’ equity
|
16,624
|
|
|
16,664
|
|
||
Total liabilities and stockholders’ equity
|
$
|
123,271
|
|
|
$
|
125,968
|
|
|
Three Months Ended
September 30 |
|
Nine Months Ended
September 30 |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(In millions, except per share data)
|
||||||||||||||
Interest income, including other financing income on:
|
|
|
|
|
|
|
|
||||||||
Loans, including fees
|
$
|
827
|
|
|
$
|
763
|
|
|
$
|
2,401
|
|
|
$
|
2,293
|
|
Securities - taxable
|
149
|
|
|
135
|
|
|
448
|
|
|
427
|
|
||||
Loans held for sale
|
3
|
|
|
4
|
|
|
11
|
|
|
11
|
|
||||
Trading account securities
|
1
|
|
|
—
|
|
|
3
|
|
|
4
|
|
||||
Other earning assets
|
12
|
|
|
9
|
|
|
33
|
|
|
27
|
|
||||
Operating lease assets
|
21
|
|
|
31
|
|
|
72
|
|
|
95
|
|
||||
Total interest income, including other financing income
|
1,013
|
|
|
942
|
|
|
2,968
|
|
|
2,857
|
|
||||
Interest expense on:
|
|
|
|
|
|
|
|
||||||||
Deposits
|
42
|
|
|
31
|
|
|
114
|
|
|
86
|
|
||||
Short-term borrowings
|
2
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||
Long-term borrowings
|
53
|
|
|
51
|
|
|
153
|
|
|
148
|
|
||||
Total interest expense
|
97
|
|
|
82
|
|
|
271
|
|
|
234
|
|
||||
Depreciation expense on operating lease assets
|
18
|
|
|
25
|
|
|
58
|
|
|
78
|
|
||||
Total interest expense and depreciation expense on operating lease assets
|
115
|
|
|
107
|
|
|
329
|
|
|
312
|
|
||||
Net interest income and other financing income
|
898
|
|
|
835
|
|
|
2,639
|
|
|
2,545
|
|
||||
Provision for loan losses
|
76
|
|
|
29
|
|
|
194
|
|
|
214
|
|
||||
Net interest income and other financing income after provision for loan losses
|
822
|
|
|
806
|
|
|
2,445
|
|
|
2,331
|
|
||||
Non-interest income:
|
|
|
|
|
|
|
|
||||||||
Service charges on deposit accounts
|
175
|
|
|
166
|
|
|
512
|
|
|
491
|
|
||||
Card and ATM fees
|
103
|
|
|
105
|
|
|
311
|
|
|
299
|
|
||||
Investment management and trust fee income
|
58
|
|
|
54
|
|
|
171
|
|
|
156
|
|
||||
Mortgage income
|
32
|
|
|
46
|
|
|
113
|
|
|
130
|
|
||||
Securities gains (losses), net
|
8
|
|
|
—
|
|
|
9
|
|
|
1
|
|
||||
Other
|
139
|
|
|
228
|
|
|
434
|
|
|
554
|
|
||||
Total non-interest income
|
515
|
|
|
599
|
|
|
1,550
|
|
|
1,631
|
|
||||
Non-interest expense:
|
|
|
|
|
|
|
|
||||||||
Salaries and employee benefits
|
483
|
|
|
486
|
|
|
1,458
|
|
|
1,441
|
|
||||
Net occupancy expense
|
91
|
|
|
87
|
|
|
262
|
|
|
259
|
|
||||
Furniture and equipment expense
|
84
|
|
|
80
|
|
|
249
|
|
|
237
|
|
||||
Other
|
228
|
|
|
281
|
|
|
703
|
|
|
781
|
|
||||
Total non-interest expense
|
886
|
|
|
934
|
|
|
2,672
|
|
|
2,718
|
|
||||
Income from continuing operations before income taxes
|
451
|
|
|
471
|
|
|
1,323
|
|
|
1,244
|
|
||||
Income tax expense
|
139
|
|
|
152
|
|
|
400
|
|
|
380
|
|
||||
Income from continuing operations
|
312
|
|
|
319
|
|
|
923
|
|
|
864
|
|
||||
Discontinued operations:
|
|
|
|
|
|
|
|
||||||||
Income (loss) from discontinued operations before income taxes
|
(1
|
)
|
|
2
|
|
|
9
|
|
|
7
|
|
||||
Income tax expense (benefit)
|
—
|
|
|
1
|
|
|
4
|
|
|
3
|
|
||||
Income (loss) from discontinued operations, net of tax
|
(1
|
)
|
|
1
|
|
|
5
|
|
|
4
|
|
||||
Net income
|
$
|
311
|
|
|
$
|
320
|
|
|
$
|
928
|
|
|
$
|
868
|
|
Net income from continuing operations available to common shareholders
|
$
|
296
|
|
|
$
|
303
|
|
|
$
|
875
|
|
|
$
|
816
|
|
Net income available to common shareholders
|
$
|
295
|
|
|
$
|
304
|
|
|
$
|
880
|
|
|
$
|
820
|
|
Weighted-average number of shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
1,182
|
|
|
1,246
|
|
|
1,197
|
|
|
1,266
|
|
||||
Diluted
|
1,193
|
|
|
1,252
|
|
|
1,209
|
|
|
1,270
|
|
||||
Earnings per common share from continuing operations:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.25
|
|
|
$
|
0.24
|
|
|
$
|
0.73
|
|
|
$
|
0.64
|
|
Diluted
|
0.25
|
|
|
0.24
|
|
|
0.72
|
|
|
0.64
|
|
||||
Earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.25
|
|
|
$
|
0.24
|
|
|
$
|
0.74
|
|
|
$
|
0.65
|
|
Diluted
|
0.25
|
|
|
0.24
|
|
|
0.73
|
|
|
0.65
|
|
||||
Cash dividends declared per common share
|
0.09
|
|
|
0.065
|
|
|
0.225
|
|
|
0.19
|
|
|
Three Months Ended September 30
|
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Net income
|
$
|
311
|
|
|
$
|
320
|
|
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 ($1) and ($4) tax effect, respectively)
|
(1
|
)
|
|
(5
|
)
|
||
Net change in unrealized losses on securities transferred to held to maturity, net of tax
|
1
|
|
|
5
|
|
||
Unrealized gains (losses) on securities available for sale:
|
|
|
|
||||
Unrealized holding gains (losses) arising during the period (net of $16 and ($7) tax effect, respectively)
|
23
|
|
|
(13
|
)
|
||
Less: reclassification adjustments for securities gains (losses) realized in net income (net of $2 and zero tax effect, respectively)
|
2
|
|
|
—
|
|
||
Net change in unrealized gains (losses) on securities available for sale, net of tax
|
21
|
|
|
(13
|
)
|
||
Unrealized gains (losses) on derivative instruments designated as cash flow hedges:
|
|
|
|
||||
Unrealized holding gains (losses) on derivatives arising during the period (net of $4 and ($12) tax effect, respectively)
|
6
|
|
|
(18
|
)
|
||
Less: reclassification adjustments for gains (losses) on derivative instruments realized in net income (net of $7 and $13 tax effect, respectively)
|
10
|
|
|
22
|
|
||
Net change in unrealized gains (losses) on derivative instruments, net of tax
|
(4
|
)
|
|
(40
|
)
|
||
Defined benefit pension plans and other post employment benefits:
|
|
|
|
||||
Net actuarial gains (losses) arising during the period (net of zero and zero tax effect, respectively)
|
—
|
|
|
(1
|
)
|
||
Less: reclassification adjustments for amortization of actuarial loss and settlements realized in net income (net of ($4) and ($3) tax effect, respectively)
|
(7
|
)
|
|
(6
|
)
|
||
Net change from defined benefit pension plans and other post employment benefits, net of tax
|
7
|
|
|
5
|
|
||
Other comprehensive income (loss), net of tax
|
25
|
|
|
(43
|
)
|
||
Comprehensive income
|
$
|
336
|
|
|
$
|
277
|
|
|
|
|
|
||||
|
Nine Months Ended September 30
|
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Net income
|
$
|
928
|
|
|
$
|
868
|
|
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 ($8) tax effect, respectively)
|
(4
|
)
|
|
(12
|
)
|
||
Net change in unrealized losses on securities transferred to held to maturity, net of tax
|
4
|
|
|
12
|
|
||
Unrealized gains (losses) on securities available for sale:
|
|
|
|
||||
Unrealized holding gains (losses) arising during the period (net of $47 and $180 tax effect, respectively)
|
75
|
|
|
295
|
|
||
Less: reclassification adjustments for securities gains (losses) realized in net income (net of $2 and zero tax effect, respectively)
|
3
|
|
|
1
|
|
||
Net change in unrealized gains (losses) on securities available for sale, net of tax
|
72
|
|
|
294
|
|
||
Unrealized gains (losses) on derivative instruments designated as cash flow hedges:
|
|
|
|
||||
Unrealized holding gains (losses) on derivatives arising during the period (net of $24 and $141 tax effect, respectively)
|
39
|
|
|
231
|
|
||
Less: reclassification adjustments for gains (losses) on derivative instruments realized in net income (net of $27 and $41 tax effect, respectively)
|
43
|
|
|
68
|
|
||
Net change in unrealized gains (losses) on derivative instruments, net of tax
|
(4
|
)
|
|
163
|
|
||
Defined benefit pension plans and other post employment benefits:
|
|
|
|
||||
Net actuarial gains (losses) arising during the period (net of zero and $1 tax effect, respectively)
|
(1
|
)
|
|
(1
|
)
|
||
Less: reclassification adjustments for amortization of actuarial loss and settlements realized in net income (net of ($14) and ($9) tax effect, respectively)
|
(25
|
)
|
|
(17
|
)
|
||
Net change from defined benefit pension plans and other post employment benefits, net of tax
|
24
|
|
|
16
|
|
||
Other comprehensive income (loss), net of tax
|
96
|
|
|
485
|
|
||
Comprehensive income
|
$
|
1,024
|
|
|
$
|
1,353
|
|
|
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, 2016
|
1
|
|
|
$
|
820
|
|
|
1,297
|
|
|
$
|
13
|
|
|
$
|
17,883
|
|
|
$
|
(115
|
)
|
|
$
|
(1,377
|
)
|
|
$
|
(380
|
)
|
|
$
|
16,844
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
868
|
|
|
—
|
|
|
—
|
|
|
868
|
|
|||||||
Amortization of unrealized losses on securities transferred to held to maturity, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
12
|
|
|||||||
Net change in unrealized gains and losses on securities available for sale, net of tax and reclassification adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
294
|
|
|
294
|
|
|||||||
Net change in unrealized gains and losses on derivative instruments, net of tax and reclassification adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
163
|
|
|
163
|
|
|||||||
Net change from employee benefit plans, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
16
|
|
|||||||
Cash dividends declared—$0.19 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(240
|
)
|
|
—
|
|
|
—
|
|
|
(240
|
)
|
|||||||
Preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(48
|
)
|
|
—
|
|
|
—
|
|
|
(48
|
)
|
|||||||
Common stock transactions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Impact of share repurchases
|
—
|
|
|
—
|
|
|
(65
|
)
|
|
—
|
|
|
(569
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(569
|
)
|
|||||||
Impact of stock transactions under compensation plans, net and other
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
25
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|||||||
BALANCE AT SEPTEMBER 30, 2016
|
1
|
|
|
$
|
820
|
|
|
1,236
|
|
|
$
|
13
|
|
|
$
|
17,339
|
|
|
$
|
465
|
|
|
$
|
(1,377
|
)
|
|
$
|
105
|
|
|
$
|
17,365
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
BALANCE AT JANUARY 1, 2017
|
1
|
|
|
$
|
820
|
|
|
1,214
|
|
|
$
|
13
|
|
|
$
|
17,092
|
|
|
$
|
666
|
|
|
$
|
(1,377
|
)
|
|
$
|
(550
|
)
|
|
$
|
16,664
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
928
|
|
|
—
|
|
|
—
|
|
|
928
|
|
|||||||
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
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
72
|
|
|
72
|
|
|||||||
Net change in unrealized gains and losses on derivative instruments, net of tax and reclassification adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(4
|
)
|
|||||||
Net change from employee benefit plans, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|
24
|
|
|||||||
Cash dividends declared—$0.225 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(267
|
)
|
|
—
|
|
|
—
|
|
|
(267
|
)
|
|||||||
Preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(48
|
)
|
|
—
|
|
|
—
|
|
|
(48
|
)
|
|||||||
Common stock transactions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Impact of share repurchases
|
—
|
|
|
—
|
|
|
(54
|
)
|
|
(1
|
)
|
|
(774
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(775
|
)
|
|||||||
Impact of stock transactions under compensation plans, net and other
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
26
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26
|
|
|||||||
BALANCE AT SEPTEMBER 30, 2017
|
1
|
|
|
$
|
820
|
|
|
1,165
|
|
|
$
|
12
|
|
|
$
|
16,344
|
|
|
$
|
1,279
|
|
|
$
|
(1,377
|
)
|
|
$
|
(454
|
)
|
|
$
|
16,624
|
|
|
Nine Months Ended September 30
|
||||||
|
2017
|
|
2016
|
||||
|
(In millions)
|
||||||
Operating activities:
|
|
|
|
||||
Net income
|
$
|
928
|
|
|
$
|
868
|
|
Adjustments to reconcile net income to net cash from operating activities:
|
|
|
|
||||
Provision for loan losses
|
194
|
|
|
214
|
|
||
Depreciation, amortization and accretion, net
|
410
|
|
|
425
|
|
||
Securities (gains) losses, net
|
(9
|
)
|
|
(1
|
)
|
||
Deferred income tax expense
|
63
|
|
|
18
|
|
||
Originations and purchases of loans held for sale
|
(2,667
|
)
|
|
(2,767
|
)
|
||
Proceeds from sales of loans held for sale
|
3,074
|
|
|
2,711
|
|
||
(Gain) loss on sale of loans, net
|
(78
|
)
|
|
(95
|
)
|
||
Net change in operating assets and liabilities:
|
|
|
|
||||
Trading account securities
|
(55
|
)
|
|
23
|
|
||
Other earning assets
|
165
|
|
|
69
|
|
||
Interest receivable and other assets
|
(85
|
)
|
|
28
|
|
||
Other liabilities
|
(9
|
)
|
|
157
|
|
||
Other
|
36
|
|
|
104
|
|
||
Net cash from operating activities
|
1,967
|
|
|
1,754
|
|
||
Investing activities:
|
|
|
|
||||
Proceeds from maturities of securities held to maturity
|
152
|
|
|
522
|
|
||
Proceeds from sales of securities available for sale
|
722
|
|
|
1,873
|
|
||
Proceeds from maturities of securities available for sale
|
2,747
|
|
|
3,325
|
|
||
Proceeds from sales of trading account securities
|
37
|
|
|
—
|
|
||
Purchases of securities available for sale
|
(3,395
|
)
|
|
(6,108
|
)
|
||
Purchases of securities held to maturity
|
(494
|
)
|
|
—
|
|
||
Proceeds from sales of loans
|
45
|
|
|
86
|
|
||
Purchases of loans
|
(153
|
)
|
|
(779
|
)
|
||
Purchases of mortgage servicing rights
|
(40
|
)
|
|
(35
|
)
|
||
Net change in loans
|
498
|
|
|
720
|
|
||
Net purchases of other assets
|
(81
|
)
|
|
(107
|
)
|
||
Net cash from investing activities
|
38
|
|
|
(503
|
)
|
||
Financing activities:
|
|
|
|
||||
Net change in deposits
|
(1,444
|
)
|
|
859
|
|
||
Net change in short-term borrowings
|
600
|
|
|
(10
|
)
|
||
Proceeds from long-term borrowings
|
2,844
|
|
|
1,607
|
|
||
Payments on long-term borrowings
|
(4,504
|
)
|
|
(3,910
|
)
|
||
Cash dividends on common stock
|
(346
|
)
|
|
(236
|
)
|
||
Cash dividends on preferred stock
|
(48
|
)
|
|
(48
|
)
|
||
Repurchases of common stock
|
(775
|
)
|
|
(569
|
)
|
||
Taxes paid related to net share settlement of equity awards
|
(22
|
)
|
|
(14
|
)
|
||
Other
|
—
|
|
|
(6
|
)
|
||
Net cash from financing activities
|
(3,695
|
)
|
|
(2,327
|
)
|
||
Net change in cash and cash equivalents
|
(1,690
|
)
|
|
(1,076
|
)
|
||
Cash and cash equivalents at beginning of year
|
5,451
|
|
|
5,314
|
|
||
Cash and cash equivalents at end of period
|
$
|
3,761
|
|
|
$
|
4,238
|
|
|
Three Months Ended
September 30 |
|
Nine Months Ended
September 30 |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(In millions, except per share data)
|
||||||||||||||
Non-interest expense:
|
|
|
|
|
|
|
|
||||||||
Professional and legal expenses/(recoveries)
|
$
|
1
|
|
|
$
|
(2
|
)
|
|
$
|
(10
|
)
|
|
$
|
(8
|
)
|
Other
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Total non-interest expense
|
1
|
|
|
(2
|
)
|
|
(9
|
)
|
|
(7
|
)
|
||||
Income (loss) from discontinued operations before income taxes
|
(1
|
)
|
|
2
|
|
|
9
|
|
|
7
|
|
||||
Income tax expense (benefit)
|
—
|
|
|
1
|
|
|
4
|
|
|
3
|
|
||||
Income (loss) from discontinued operations, net of tax
|
$
|
(1
|
)
|
|
$
|
1
|
|
|
$
|
5
|
|
|
$
|
4
|
|
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
|
|
|
September 30, 2017
|
||||||||||||||||||||||||||
|
|
|
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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Residential agency
|
$
|
1,096
|
|
|
$
|
—
|
|
|
$
|
(42
|
)
|
|
$
|
1,054
|
|
|
$
|
16
|
|
|
$
|
(3
|
)
|
|
$
|
1,067
|
|
Commercial agency
|
653
|
|
|
—
|
|
|
(4
|
)
|
|
649
|
|
|
6
|
|
|
(2
|
)
|
|
653
|
|
|||||||
|
$
|
1,749
|
|
|
$
|
—
|
|
|
$
|
(46
|
)
|
|
$
|
1,703
|
|
|
$
|
22
|
|
|
$
|
(5
|
)
|
|
$
|
1,720
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
U.S. Treasury securities
|
$
|
307
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
308
|
|
|
|
|
|
|
$
|
308
|
|
||||
Federal agency securities
|
24
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|
|
|
|
|
24
|
|
|||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Residential agency
|
17,573
|
|
|
89
|
|
|
(178
|
)
|
|
17,484
|
|
|
|
|
|
|
17,484
|
|
|||||||||
Residential non-agency
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
|
|
|
|
3
|
|
|||||||||
Commercial agency
|
3,630
|
|
|
14
|
|
|
(18
|
)
|
|
3,626
|
|
|
|
|
|
|
3,626
|
|
|||||||||
Commercial non-agency
|
803
|
|
|
7
|
|
|
(1
|
)
|
|
809
|
|
|
|
|
|
|
809
|
|
|||||||||
Corporate and other debt securities
|
1,179
|
|
|
28
|
|
|
(5
|
)
|
|
1,202
|
|
|
|
|
|
|
1,202
|
|
|||||||||
Equity securities
|
193
|
|
|
10
|
|
|
—
|
|
|
203
|
|
|
|
|
|
|
203
|
|
|||||||||
|
$
|
23,712
|
|
|
$
|
149
|
|
|
$
|
(202
|
)
|
|
$
|
23,659
|
|
|
|
|
|
|
$
|
23,659
|
|
|
December 31, 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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Residential agency
|
$
|
1,249
|
|
|
$
|
—
|
|
|
$
|
(49
|
)
|
|
$
|
1,200
|
|
|
$
|
12
|
|
|
$
|
(3
|
)
|
|
$
|
1,209
|
|
Commercial agency
|
167
|
|
|
—
|
|
|
(5
|
)
|
|
162
|
|
|
—
|
|
|
(2
|
)
|
|
160
|
|
|||||||
|
$
|
1,416
|
|
|
$
|
—
|
|
|
$
|
(54
|
)
|
|
$
|
1,362
|
|
|
$
|
12
|
|
|
$
|
(5
|
)
|
|
$
|
1,369
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
U.S. Treasury securities
|
$
|
303
|
|
|
$
|
1
|
|
|
$
|
(1
|
)
|
|
$
|
303
|
|
|
|
|
|
|
$
|
303
|
|
||||
Federal agency securities
|
35
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|
|
|
|
|
35
|
|
|||||||||
Obligations of states and political subdivisions
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
|
|
|
|
1
|
|
|||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Residential agency
|
17,531
|
|
|
95
|
|
|
(255
|
)
|
|
17,371
|
|
|
|
|
|
|
17,371
|
|
|||||||||
Residential non-agency
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
|
|
|
|
4
|
|
|||||||||
Commercial agency
|
3,486
|
|
|
9
|
|
|
(32
|
)
|
|
3,463
|
|
|
|
|
|
|
3,463
|
|
|||||||||
Commercial non-agency
|
1,124
|
|
|
8
|
|
|
(3
|
)
|
|
1,129
|
|
|
|
|
|
|
1,129
|
|
|||||||||
Corporate and other debt securities
|
1,272
|
|
|
19
|
|
|
(17
|
)
|
|
1,274
|
|
|
|
|
|
|
1,274
|
|
|||||||||
Equity securities
|
194
|
|
|
7
|
|
|
—
|
|
|
201
|
|
|
|
|
|
|
201
|
|
|||||||||
|
$
|
23,950
|
|
|
$
|
139
|
|
|
$
|
(308
|
)
|
|
$
|
23,781
|
|
|
|
|
|
|
$
|
23,781
|
|
|
Amortized
Cost
|
|
Estimated
Fair Value
|
||||
|
(In millions)
|
||||||
Securities held to maturity:
|
|
|
|
||||
Mortgage-backed securities:
|
|
|
|
||||
Residential agency
|
$
|
1,096
|
|
|
$
|
1,067
|
|
Commercial agency
|
653
|
|
|
653
|
|
||
|
$
|
1,749
|
|
|
$
|
1,720
|
|
Securities available for sale:
|
|
|
|
||||
Due in one year or less
|
$
|
37
|
|
|
$
|
37
|
|
Due after one year through five years
|
761
|
|
|
771
|
|
||
Due after five years through ten years
|
570
|
|
|
581
|
|
||
Due after ten years
|
142
|
|
|
145
|
|
||
Mortgage-backed securities:
|
|
|
|
||||
Residential agency
|
17,573
|
|
|
17,484
|
|
||
Residential non-agency
|
3
|
|
|
3
|
|
||
Commercial agency
|
3,630
|
|
|
3,626
|
|
||
Commercial non-agency
|
803
|
|
|
809
|
|
||
Equity securities
|
193
|
|
|
203
|
|
||
|
$
|
23,712
|
|
|
$
|
23,659
|
|
|
September 30, 2017
|
||||||||||||||||||||||
|
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
|
$
|
752
|
|
|
$
|
(18
|
)
|
|
$
|
315
|
|
|
$
|
(11
|
)
|
|
$
|
1,067
|
|
|
$
|
(29
|
)
|
Commercial agency
|
—
|
|
|
—
|
|
|
153
|
|
|
(6
|
)
|
|
153
|
|
|
(6
|
)
|
||||||
|
$
|
752
|
|
|
$
|
(18
|
)
|
|
$
|
468
|
|
|
$
|
(17
|
)
|
|
$
|
1,220
|
|
|
$
|
(35
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury securities
|
$
|
80
|
|
|
$
|
—
|
|
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
98
|
|
|
$
|
—
|
|
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential agency
|
10,060
|
|
|
(139
|
)
|
|
1,519
|
|
|
(39
|
)
|
|
11,579
|
|
|
(178
|
)
|
||||||
Commercial agency
|
1,490
|
|
|
(15
|
)
|
|
164
|
|
|
(3
|
)
|
|
1,654
|
|
|
(18
|
)
|
||||||
Commercial non-agency
|
175
|
|
|
(1
|
)
|
|
30
|
|
|
—
|
|
|
205
|
|
|
(1
|
)
|
||||||
All other securities
|
164
|
|
|
(1
|
)
|
|
104
|
|
|
(4
|
)
|
|
268
|
|
|
(5
|
)
|
||||||
|
$
|
11,969
|
|
|
$
|
(156
|
)
|
|
$
|
1,835
|
|
|
$
|
(46
|
)
|
|
$
|
13,804
|
|
|
$
|
(202
|
)
|
|
December 31, 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
|
$
|
850
|
|
|
$
|
(26
|
)
|
|
$
|
359
|
|
|
$
|
(14
|
)
|
|
$
|
1,209
|
|
|
$
|
(40
|
)
|
Commercial agency
|
—
|
|
|
—
|
|
|
160
|
|
|
(7
|
)
|
|
160
|
|
|
(7
|
)
|
||||||
|
$
|
850
|
|
|
$
|
(26
|
)
|
|
$
|
519
|
|
|
$
|
(21
|
)
|
|
$
|
1,369
|
|
|
$
|
(47
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury securities
|
$
|
112
|
|
|
$
|
(1
|
)
|
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
130
|
|
|
$
|
(1
|
)
|
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential agency
|
12,071
|
|
|
(245
|
)
|
|
570
|
|
|
(10
|
)
|
|
12,641
|
|
|
(255
|
)
|
||||||
Commercial agency
|
2,199
|
|
|
(31
|
)
|
|
45
|
|
|
(1
|
)
|
|
2,244
|
|
|
(32
|
)
|
||||||
Commercial non-agency
|
402
|
|
|
(2
|
)
|
|
176
|
|
|
(1
|
)
|
|
578
|
|
|
(3
|
)
|
||||||
All other securities
|
382
|
|
|
(6
|
)
|
|
218
|
|
|
(11
|
)
|
|
600
|
|
|
(17
|
)
|
||||||
|
$
|
15,166
|
|
|
$
|
(285
|
)
|
|
$
|
1,027
|
|
|
$
|
(23
|
)
|
|
$
|
16,193
|
|
|
$
|
(308
|
)
|
|
Three Months Ended September 30
|
|
Nine Months Ended September 30
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(In millions)
|
||||||||||||||
Gross realized gains
|
$
|
5
|
|
|
$
|
1
|
|
|
$
|
9
|
|
|
$
|
30
|
|
Gross realized losses
|
—
|
|
|
(1
|
)
|
|
(3
|
)
|
|
(28
|
)
|
||||
OTTI
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||
Securities available for sale gains (losses), net
(1)
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
1
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
|
(In millions, net of unearned income)
|
||||||
Commercial and industrial
|
$
|
35,443
|
|
|
$
|
35,012
|
|
Commercial real estate mortgage—owner-occupied
|
6,284
|
|
|
6,867
|
|
||
Commercial real estate construction—owner-occupied
|
335
|
|
|
334
|
|
||
Total commercial
|
42,062
|
|
|
42,213
|
|
||
Commercial investor real estate mortgage
|
3,999
|
|
|
4,087
|
|
||
Commercial investor real estate construction
|
1,936
|
|
|
2,387
|
|
||
Total investor real estate
|
5,935
|
|
|
6,474
|
|
||
Residential first mortgage
|
13,903
|
|
|
13,440
|
|
||
Home equity
|
10,276
|
|
|
10,687
|
|
||
Indirect—vehicles
|
3,489
|
|
|
4,040
|
|
||
Indirect—other consumer
|
1,318
|
|
|
920
|
|
||
Consumer credit card
|
1,214
|
|
|
1,196
|
|
||
Other consumer
|
1,159
|
|
|
1,125
|
|
||
Total consumer
|
31,359
|
|
|
31,408
|
|
||
|
$
|
79,356
|
|
|
$
|
80,095
|
|
|
Three Months Ended September 30, 2017
|
||||||||||||||
|
Commercial
|
|
Investor Real
Estate
|
|
Consumer
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
Allowance for loan losses, July 1, 2017
|
$
|
707
|
|
|
$
|
82
|
|
|
$
|
252
|
|
|
$
|
1,041
|
|
Provision (credit) for loan losses
|
8
|
|
|
(8
|
)
|
|
76
|
|
|
76
|
|
||||
Loan losses:
|
|
|
|
|
|
|
|
||||||||
Charge-offs
|
(43
|
)
|
|
—
|
|
|
(63
|
)
|
|
(106
|
)
|
||||
Recoveries
|
11
|
|
|
3
|
|
|
16
|
|
|
30
|
|
||||
Net loan losses
|
(32
|
)
|
|
3
|
|
|
(47
|
)
|
|
(76
|
)
|
||||
Allowance for loan losses, September 30, 2017
|
683
|
|
|
77
|
|
|
281
|
|
|
1,041
|
|
||||
Reserve for unfunded credit commitments, July 1, 2017
|
63
|
|
|
4
|
|
|
—
|
|
|
67
|
|
||||
Provision (credit) for unfunded credit losses
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
||||
Reserve for unfunded credit commitments, September 30, 2017
|
55
|
|
|
4
|
|
|
—
|
|
|
59
|
|
||||
Allowance for credit losses, September 30, 2017
|
$
|
738
|
|
|
$
|
81
|
|
|
$
|
281
|
|
|
$
|
1,100
|
|
|
Three Months Ended September 30, 2016
|
||||||||||||||
|
Commercial
|
|
Investor Real
Estate
|
|
Consumer
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
Allowance for loan losses, July 1, 2016
|
$
|
825
|
|
|
$
|
87
|
|
|
$
|
239
|
|
|
$
|
1,151
|
|
Provision (credit) for loan losses
|
(15
|
)
|
|
(7
|
)
|
|
51
|
|
|
29
|
|
||||
Loan losses:
|
|
|
|
|
|
|
|
||||||||
Charge-offs
|
(31
|
)
|
|
(1
|
)
|
|
(62
|
)
|
|
(94
|
)
|
||||
Recoveries
|
19
|
|
|
5
|
|
|
16
|
|
|
40
|
|
||||
Net loan losses
|
(12
|
)
|
|
4
|
|
|
(46
|
)
|
|
(54
|
)
|
||||
Allowance for loan losses, September 30, 2016
|
798
|
|
|
84
|
|
|
244
|
|
|
1,126
|
|
||||
Reserve for unfunded credit commitments, July 1, 2016
|
59
|
|
|
5
|
|
|
—
|
|
|
64
|
|
||||
Provision (credit) for unfunded credit losses
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
||||
Reserve for unfunded credit commitments, September 30, 2016
|
67
|
|
|
5
|
|
|
—
|
|
|
72
|
|
||||
Allowance for credit losses, September 30, 2016
|
$
|
865
|
|
|
$
|
89
|
|
|
$
|
244
|
|
|
$
|
1,198
|
|
|
Nine Months Ended September 30, 2017
|
||||||||||||||
|
Commercial
|
|
Investor Real
Estate
|
|
Consumer
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
Allowance for loan losses, January 1, 2017
|
$
|
753
|
|
|
$
|
85
|
|
|
$
|
253
|
|
|
$
|
1,091
|
|
Provision (credit) for loan losses
|
41
|
|
|
(16
|
)
|
|
169
|
|
|
194
|
|
||||
Loan losses:
|
|
|
|
|
|
|
|
||||||||
Charge-offs
|
(139
|
)
|
|
(2
|
)
|
|
(188
|
)
|
|
(329
|
)
|
||||
Recoveries
|
28
|
|
|
10
|
|
|
47
|
|
|
85
|
|
||||
Net loan losses
|
(111
|
)
|
|
8
|
|
|
(141
|
)
|
|
(244
|
)
|
||||
Allowance for loan losses, September 30, 2017
|
683
|
|
|
77
|
|
|
281
|
|
|
1,041
|
|
||||
Reserve for unfunded credit commitments, January 1, 2017
|
64
|
|
|
5
|
|
|
—
|
|
|
69
|
|
||||
Provision (credit) for unfunded credit losses
|
(9
|
)
|
|
(1
|
)
|
|
—
|
|
|
(10
|
)
|
||||
Reserve for unfunded credit commitments, September 30, 2017
|
55
|
|
|
4
|
|
|
—
|
|
|
59
|
|
||||
Allowance for credit losses, September 30, 2017
|
$
|
738
|
|
|
$
|
81
|
|
|
$
|
281
|
|
|
$
|
1,100
|
|
Portion of ending allowance for loan losses:
|
|
|
|
|
|
|
|
||||||||
Individually evaluated for impairment
|
$
|
202
|
|
|
$
|
19
|
|
|
$
|
52
|
|
|
$
|
273
|
|
Collectively evaluated for impairment
|
481
|
|
|
58
|
|
|
229
|
|
|
768
|
|
||||
Total allowance for loan losses
|
$
|
683
|
|
|
$
|
77
|
|
|
$
|
281
|
|
|
$
|
1,041
|
|
Portion of loan portfolio ending balance:
|
|
|
|
|
|
|
|
||||||||
Individually evaluated for impairment
|
$
|
898
|
|
|
$
|
108
|
|
|
$
|
727
|
|
|
$
|
1,733
|
|
Collectively evaluated for impairment
|
41,164
|
|
|
5,827
|
|
|
30,632
|
|
|
77,623
|
|
||||
Total loans evaluated for impairment
|
$
|
42,062
|
|
|
$
|
5,935
|
|
|
$
|
31,359
|
|
|
$
|
79,356
|
|
|
Nine Months Ended September 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
|
108
|
|
|
(21
|
)
|
|
127
|
|
|
214
|
|
||||
Loan losses:
|
|
|
|
|
|
|
|
||||||||
Charge-offs
|
(102
|
)
|
|
(2
|
)
|
|
(184
|
)
|
|
(288
|
)
|
||||
Recoveries
|
34
|
|
|
10
|
|
|
50
|
|
|
94
|
|
||||
Net loan losses
|
(68
|
)
|
|
8
|
|
|
(134
|
)
|
|
(194
|
)
|
||||
Allowance for loan losses, September 30, 2016
|
798
|
|
|
84
|
|
|
244
|
|
|
1,126
|
|
||||
Reserve for unfunded credit commitments, January 1, 2016
|
47
|
|
|
5
|
|
|
—
|
|
|
52
|
|
||||
Provision (credit) for unfunded credit losses
|
20
|
|
|
—
|
|
|
—
|
|
|
20
|
|
||||
Reserve for unfunded credit commitments, September 30, 2016
|
67
|
|
|
5
|
|
|
—
|
|
|
72
|
|
||||
Allowance for credit losses, September 30, 2016
|
$
|
865
|
|
|
$
|
89
|
|
|
$
|
244
|
|
|
$
|
1,198
|
|
Portion of ending allowance for loan losses:
|
|
|
|
|
|
|
|
||||||||
Individually evaluated for impairment
|
$
|
252
|
|
|
$
|
19
|
|
|
$
|
62
|
|
|
$
|
333
|
|
Collectively evaluated for impairment
|
546
|
|
|
65
|
|
|
182
|
|
|
793
|
|
||||
Total allowance for loan losses
|
$
|
798
|
|
|
$
|
84
|
|
|
$
|
244
|
|
|
$
|
1,126
|
|
Portion of loan portfolio ending balance:
|
|
|
|
|
|
|
|
||||||||
Individually evaluated for impairment
|
$
|
1,119
|
|
|
$
|
140
|
|
|
$
|
785
|
|
|
$
|
2,044
|
|
Collectively evaluated for impairment
|
41,625
|
|
|
6,624
|
|
|
30,590
|
|
|
78,839
|
|
||||
Total loans evaluated for impairment
|
$
|
42,744
|
|
|
$
|
6,764
|
|
|
$
|
31,375
|
|
|
$
|
80,883
|
|
•
|
Pass—includes obligations where the probability of default is considered low;
|
•
|
Special Mention—includes obligations that have potential weakness that 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 that 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.
|
|
September 30, 2017
|
||||||||||||||||||
|
Pass
|
|
Special Mention
|
|
Substandard
Accrual
|
|
Non-accrual
|
|
Total
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Commercial and industrial
|
$
|
33,323
|
|
|
$
|
627
|
|
|
$
|
1,000
|
|
|
$
|
493
|
|
|
$
|
35,443
|
|
Commercial real estate mortgage—owner-occupied
|
5,780
|
|
|
178
|
|
|
186
|
|
|
140
|
|
|
6,284
|
|
|||||
Commercial real estate construction—owner-occupied
|
315
|
|
|
6
|
|
|
8
|
|
|
6
|
|
|
335
|
|
|||||
Total commercial
|
$
|
39,418
|
|
|
$
|
811
|
|
|
$
|
1,194
|
|
|
$
|
639
|
|
|
$
|
42,062
|
|
Commercial investor real estate mortgage
|
$
|
3,729
|
|
|
$
|
128
|
|
|
$
|
137
|
|
|
$
|
5
|
|
|
$
|
3,999
|
|
Commercial investor real estate construction
|
1,888
|
|
|
2
|
|
|
46
|
|
|
—
|
|
|
1,936
|
|
|||||
Total investor real estate
|
$
|
5,617
|
|
|
$
|
130
|
|
|
$
|
183
|
|
|
$
|
5
|
|
|
$
|
5,935
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
Accrual
|
|
Non-accrual
|
|
Total
|
||||||||||
|
|
|
|
|
(In millions)
|
||||||||||||||
Residential first mortgage
|
|
|
|
|
$
|
13,858
|
|
|
$
|
45
|
|
|
$
|
13,903
|
|
||||
Home equity
|
|
|
|
|
10,206
|
|
|
70
|
|
|
10,276
|
|
|||||||
Indirect—vehicles
|
|
|
|
|
3,488
|
|
|
1
|
|
|
3,489
|
|
|||||||
Indirect—other consumer
|
|
|
|
|
1,318
|
|
|
—
|
|
|
1,318
|
|
|||||||
Consumer credit card
|
|
|
|
|
1,214
|
|
|
—
|
|
|
1,214
|
|
|||||||
Other consumer
|
|
|
|
|
1,159
|
|
|
—
|
|
|
1,159
|
|
|||||||
Total consumer
|
|
|
|
|
$
|
31,243
|
|
|
$
|
116
|
|
|
$
|
31,359
|
|
||||
|
|
|
|
|
|
|
|
|
$
|
79,356
|
|
|
December 31, 2016
|
||||||||||||||||||
|
Pass
|
|
Special
Mention
|
|
Substandard
Accrual
|
|
Non-accrual
|
|
Total
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Commercial and industrial
|
$
|
32,619
|
|
|
$
|
658
|
|
|
$
|
1,112
|
|
|
$
|
623
|
|
|
$
|
35,012
|
|
Commercial real estate mortgage—owner-occupied
|
6,190
|
|
|
221
|
|
|
246
|
|
|
210
|
|
|
6,867
|
|
|||||
Commercial real estate construction—owner-occupied
|
308
|
|
|
8
|
|
|
15
|
|
|
3
|
|
|
334
|
|
|||||
Total commercial
|
$
|
39,117
|
|
|
$
|
887
|
|
|
$
|
1,373
|
|
|
$
|
836
|
|
|
$
|
42,213
|
|
Commercial investor real estate mortgage
|
$
|
3,766
|
|
|
$
|
190
|
|
|
$
|
114
|
|
|
$
|
17
|
|
|
$
|
4,087
|
|
Commercial investor real estate construction
|
2,192
|
|
|
129
|
|
|
66
|
|
|
—
|
|
|
2,387
|
|
|||||
Total investor real estate
|
$
|
5,958
|
|
|
$
|
319
|
|
|
$
|
180
|
|
|
$
|
17
|
|
|
$
|
6,474
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
Accrual
|
|
Non-accrual
|
|
Total
|
||||||||||
|
|
|
|
|
(In millions)
|
||||||||||||||
Residential first mortgage
|
|
|
|
|
$
|
13,390
|
|
|
$
|
50
|
|
|
$
|
13,440
|
|
||||
Home equity
|
|
|
|
|
10,595
|
|
|
92
|
|
|
10,687
|
|
|||||||
Indirect—vehicles
|
|
|
|
|
4,040
|
|
|
—
|
|
|
4,040
|
|
|||||||
Indirect—other consumer
|
|
|
|
|
920
|
|
|
—
|
|
|
920
|
|
|||||||
Consumer credit card
|
|
|
|
|
1,196
|
|
|
—
|
|
|
1,196
|
|
|||||||
Other consumer
|
|
|
|
|
1,125
|
|
|
—
|
|
|
1,125
|
|
|||||||
Total consumer
|
|
|
|
|
$
|
31,266
|
|
|
$
|
142
|
|
|
$
|
31,408
|
|
||||
|
|
|
|
|
|
|
|
|
$
|
80,095
|
|
|
September 30, 2017
|
||||||||||||||||||||||||||
|
Accrual Loans
|
|
|
|
|
|
|
||||||||||||||||||||
|
30-59 DPD
|
|
60-89 DPD
|
|
90+ DPD
|
|
Total
30+ DPD
|
|
Total
Accrual
|
|
Non-accrual
|
|
Total
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Commercial and industrial
|
$
|
26
|
|
|
$
|
20
|
|
|
$
|
5
|
|
|
$
|
51
|
|
|
$
|
34,950
|
|
|
$
|
493
|
|
|
$
|
35,443
|
|
Commercial real estate mortgage—owner-occupied
|
16
|
|
|
4
|
|
|
4
|
|
|
24
|
|
|
6,144
|
|
|
140
|
|
|
6,284
|
|
|||||||
Commercial real estate construction—owner-occupied
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
329
|
|
|
6
|
|
|
335
|
|
|||||||
Total commercial
|
42
|
|
|
24
|
|
|
9
|
|
|
75
|
|
|
41,423
|
|
|
639
|
|
|
42,062
|
|
|||||||
Commercial investor real estate mortgage
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
3,994
|
|
|
5
|
|
|
3,999
|
|
|||||||
Commercial investor real estate construction
|
29
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|
1,936
|
|
|
—
|
|
|
1,936
|
|
|||||||
Total investor real estate
|
36
|
|
|
—
|
|
|
—
|
|
|
36
|
|
|
5,930
|
|
|
5
|
|
|
5,935
|
|
|||||||
Residential first mortgage
|
90
|
|
|
59
|
|
|
174
|
|
|
323
|
|
|
13,858
|
|
|
45
|
|
|
13,903
|
|
|||||||
Home equity
|
59
|
|
|
30
|
|
|
33
|
|
|
122
|
|
|
10,206
|
|
|
70
|
|
|
10,276
|
|
|||||||
Indirect—vehicles
|
45
|
|
|
13
|
|
|
9
|
|
|
67
|
|
|
3,488
|
|
|
1
|
|
|
3,489
|
|
|||||||
Indirect—other consumer
|
8
|
|
|
5
|
|
|
—
|
|
|
13
|
|
|
1,318
|
|
|
—
|
|
|
1,318
|
|
|||||||
Consumer credit card
|
11
|
|
|
7
|
|
|
16
|
|
|
34
|
|
|
1,214
|
|
|
—
|
|
|
1,214
|
|
|||||||
Other consumer
|
12
|
|
|
4
|
|
|
4
|
|
|
20
|
|
|
1,159
|
|
|
—
|
|
|
1,159
|
|
|||||||
Total consumer
|
225
|
|
|
118
|
|
|
236
|
|
|
579
|
|
|
31,243
|
|
|
116
|
|
|
31,359
|
|
|||||||
|
$
|
303
|
|
|
$
|
142
|
|
|
$
|
245
|
|
|
$
|
690
|
|
|
$
|
78,596
|
|
|
$
|
760
|
|
|
$
|
79,356
|
|
|
December 31, 2016
|
||||||||||||||||||||||||||
|
Accrual Loans
|
|
|
|
|
|
|
||||||||||||||||||||
|
30-59 DPD
|
|
60-89 DPD
|
|
90+ DPD
|
|
Total
30+ DPD
|
|
Total
Accrual
|
|
Non-accrual
|
|
Total
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Commercial and industrial
|
$
|
59
|
|
|
$
|
11
|
|
|
$
|
6
|
|
|
$
|
76
|
|
|
$
|
34,389
|
|
|
$
|
623
|
|
|
$
|
35,012
|
|
Commercial real estate mortgage—owner-occupied
|
29
|
|
|
7
|
|
|
2
|
|
|
38
|
|
|
6,657
|
|
|
210
|
|
|
6,867
|
|
|||||||
Commercial real estate construction—owner-occupied
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
331
|
|
|
3
|
|
|
334
|
|
|||||||
Total commercial
|
89
|
|
|
18
|
|
|
8
|
|
|
115
|
|
|
41,377
|
|
|
836
|
|
|
42,213
|
|
|||||||
Commercial investor real estate mortgage
|
6
|
|
|
8
|
|
|
—
|
|
|
14
|
|
|
4,070
|
|
|
17
|
|
|
4,087
|
|
|||||||
Commercial investor real estate construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,387
|
|
|
—
|
|
|
2,387
|
|
|||||||
Total investor real estate
|
6
|
|
|
8
|
|
|
—
|
|
|
14
|
|
|
6,457
|
|
|
17
|
|
|
6,474
|
|
|||||||
Residential first mortgage
|
99
|
|
|
63
|
|
|
212
|
|
|
374
|
|
|
13,390
|
|
|
50
|
|
|
13,440
|
|
|||||||
Home equity
|
60
|
|
|
22
|
|
|
33
|
|
|
115
|
|
|
10,595
|
|
|
92
|
|
|
10,687
|
|
|||||||
Indirect—vehicles
|
56
|
|
|
14
|
|
|
10
|
|
|
80
|
|
|
4,040
|
|
|
—
|
|
|
4,040
|
|
|||||||
Indirect—other consumer
|
5
|
|
|
3
|
|
|
—
|
|
|
8
|
|
|
920
|
|
|
—
|
|
|
920
|
|
|||||||
Consumer credit card
|
9
|
|
|
7
|
|
|
15
|
|
|
31
|
|
|
1,196
|
|
|
—
|
|
|
1,196
|
|
|||||||
Other consumer
|
13
|
|
|
5
|
|
|
5
|
|
|
23
|
|
|
1,125
|
|
|
—
|
|
|
1,125
|
|
|||||||
Total consumer
|
242
|
|
|
114
|
|
|
275
|
|
|
631
|
|
|
31,266
|
|
|
142
|
|
|
31,408
|
|
|||||||
|
$
|
337
|
|
|
$
|
140
|
|
|
$
|
283
|
|
|
$
|
760
|
|
|
$
|
79,100
|
|
|
$
|
995
|
|
|
$
|
80,095
|
|
|
Non-accrual Impaired Loans As of September 30, 2017
|
|||||||||||||||||||||||||
|
|
|
|
|
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
|
$
|
599
|
|
|
$
|
110
|
|
|
$
|
489
|
|
|
$
|
60
|
|
|
$
|
429
|
|
|
$
|
124
|
|
|
39.1
|
%
|
Commercial real estate mortgage—owner-occupied
|
156
|
|
|
16
|
|
|
140
|
|
|
12
|
|
|
128
|
|
|
38
|
|
|
34.6
|
|
||||||
Commercial real estate construction—owner-occupied
|
6
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
|
2
|
|
|
33.3
|
|
||||||
Total commercial
|
761
|
|
|
126
|
|
|
635
|
|
|
72
|
|
|
563
|
|
|
164
|
|
|
38.1
|
|
||||||
Commercial investor real estate mortgage
|
6
|
|
|
1
|
|
|
5
|
|
|
1
|
|
|
4
|
|
|
2
|
|
|
50.0
|
|
||||||
Total investor real estate
|
6
|
|
|
1
|
|
|
5
|
|
|
1
|
|
|
4
|
|
|
2
|
|
|
50.0
|
|
||||||
Residential first mortgage
|
28
|
|
|
1
|
|
|
27
|
|
|
—
|
|
|
27
|
|
|
3
|
|
|
14.3
|
|
||||||
Home equity
|
11
|
|
|
1
|
|
|
10
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
9.1
|
|
||||||
Total consumer
|
39
|
|
|
2
|
|
|
37
|
|
|
—
|
|
|
37
|
|
|
3
|
|
|
12.8
|
|
||||||
|
$
|
806
|
|
|
$
|
129
|
|
|
$
|
677
|
|
|
$
|
73
|
|
|
$
|
604
|
|
|
$
|
169
|
|
|
37.0
|
%
|
|
Accruing Impaired Loans As of September 30, 2017
|
|||||||||||||||||
|
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
|
$
|
207
|
|
|
$
|
6
|
|
|
$
|
201
|
|
|
$
|
32
|
|
|
18.4
|
%
|
Commercial real estate mortgage—owner-occupied
|
64
|
|
|
3
|
|
|
61
|
|
|
6
|
|
|
14.1
|
|
||||
Commercial real estate construction—owner-occupied
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Total commercial
|
272
|
|
|
9
|
|
|
263
|
|
|
38
|
|
|
17.3
|
|
||||
Commercial investor real estate mortgage
|
77
|
|
|
2
|
|
|
75
|
|
|
12
|
|
|
18.2
|
|
||||
Commercial investor real estate construction
|
29
|
|
|
1
|
|
|
28
|
|
|
5
|
|
|
20.7
|
|
||||
Total investor real estate
|
106
|
|
|
3
|
|
|
103
|
|
|
17
|
|
|
18.9
|
|
||||
Residential first mortgage
|
418
|
|
|
—
|
|
|
418
|
|
|
45
|
|
|
10.8
|
|
||||
Home equity
|
263
|
|
|
1
|
|
|
262
|
|
|
4
|
|
|
1.9
|
|
||||
Indirect—vehicles
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Consumer credit card
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Other consumer
|
9
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
||||
Total consumer
|
691
|
|
|
1
|
|
|
690
|
|
|
49
|
|
|
7.2
|
|
||||
|
$
|
1,069
|
|
|
$
|
13
|
|
|
$
|
1,056
|
|
|
$
|
104
|
|
|
10.9
|
%
|
|
Total Impaired Loans As of September 30, 2017
|
|||||||||||||||||||||||||
|
|
|
|
|
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
|
$
|
806
|
|
|
$
|
116
|
|
|
$
|
690
|
|
|
$
|
60
|
|
|
$
|
630
|
|
|
$
|
156
|
|
|
33.7
|
%
|
Commercial real estate mortgage—owner-occupied
|
220
|
|
|
19
|
|
|
201
|
|
|
12
|
|
|
189
|
|
|
44
|
|
|
28.6
|
|
||||||
Commercial real estate construction—owner-occupied
|
7
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
|
2
|
|
|
28.6
|
|
||||||
Total commercial
|
1,033
|
|
|
135
|
|
|
898
|
|
|
72
|
|
|
826
|
|
|
202
|
|
|
32.6
|
|
||||||
Commercial investor real estate mortgage
|
83
|
|
|
3
|
|
|
80
|
|
|
1
|
|
|
79
|
|
|
14
|
|
|
20.5
|
|
||||||
Commercial investor real estate construction
|
29
|
|
|
1
|
|
|
28
|
|
|
—
|
|
|
28
|
|
|
5
|
|
|
20.7
|
|
||||||
Total investor real estate
|
112
|
|
|
4
|
|
|
108
|
|
|
1
|
|
|
107
|
|
|
19
|
|
|
20.5
|
|
||||||
Residential first mortgage
|
446
|
|
|
1
|
|
|
445
|
|
|
—
|
|
|
445
|
|
|
48
|
|
|
11.0
|
|
||||||
Home equity
|
274
|
|
|
2
|
|
|
272
|
|
|
—
|
|
|
272
|
|
|
4
|
|
|
2.2
|
|
||||||
Indirect—vehicles
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Consumer credit card
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||||
Other consumer
|
9
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
||||||
Total consumer
|
730
|
|
|
3
|
|
|
727
|
|
|
—
|
|
|
727
|
|
|
52
|
|
|
7.5
|
|
||||||
|
$
|
1,875
|
|
|
$
|
142
|
|
|
$
|
1,733
|
|
|
$
|
73
|
|
|
$
|
1,660
|
|
|
$
|
273
|
|
|
22.1
|
%
|
|
Non-accrual Impaired Loans As of December 31, 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
|
$
|
685
|
|
|
$
|
72
|
|
|
$
|
613
|
|
|
$
|
126
|
|
|
$
|
487
|
|
|
$
|
138
|
|
|
30.7
|
%
|
Commercial real estate mortgage—owner-occupied
|
231
|
|
|
21
|
|
|
210
|
|
|
39
|
|
|
171
|
|
|
53
|
|
|
32.0
|
|
||||||
Commercial real estate construction—owner-occupied
|
4
|
|
|
1
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|
2
|
|
|
75.0
|
|
||||||
Total commercial
|
920
|
|
|
94
|
|
|
826
|
|
|
165
|
|
|
661
|
|
|
193
|
|
|
31.2
|
|
||||||
Commercial investor real estate mortgage
|
18
|
|
|
1
|
|
|
17
|
|
|
5
|
|
|
12
|
|
|
5
|
|
|
33.3
|
|
||||||
Total investor real estate
|
18
|
|
|
1
|
|
|
17
|
|
|
5
|
|
|
12
|
|
|
5
|
|
|
33.3
|
|
||||||
Residential first mortgage
|
41
|
|
|
12
|
|
|
29
|
|
|
—
|
|
|
29
|
|
|
4
|
|
|
39.0
|
|
||||||
Home equity
|
12
|
|
|
1
|
|
|
11
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
8.3
|
|
||||||
Total consumer
|
53
|
|
|
13
|
|
|
40
|
|
|
—
|
|
|
40
|
|
|
4
|
|
|
32.1
|
|
||||||
|
$
|
991
|
|
|
$
|
108
|
|
|
$
|
883
|
|
|
$
|
170
|
|
|
$
|
713
|
|
|
$
|
202
|
|
|
31.3
|
%
|
|
Accruing Impaired Loans As of December 31, 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
|
$
|
187
|
|
|
$
|
1
|
|
|
$
|
186
|
|
|
$
|
33
|
|
|
18.2
|
%
|
Commercial real estate mortgage—owner-occupied
|
60
|
|
|
4
|
|
|
56
|
|
|
5
|
|
|
15.0
|
|
||||
Commercial real estate construction—owner-occupied
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Total commercial
|
248
|
|
|
5
|
|
|
243
|
|
|
38
|
|
|
17.3
|
|
||||
Commercial investor real estate mortgage
|
82
|
|
|
8
|
|
|
74
|
|
|
7
|
|
|
18.3
|
|
||||
Commercial investor real estate construction
|
16
|
|
|
—
|
|
|
16
|
|
|
1
|
|
|
6.3
|
|
||||
Total investor real estate
|
98
|
|
|
8
|
|
|
90
|
|
|
8
|
|
|
16.3
|
|
||||
Residential first mortgage
|
435
|
|
|
10
|
|
|
425
|
|
|
51
|
|
|
14.0
|
|
||||
Home equity
|
292
|
|
|
—
|
|
|
292
|
|
|
5
|
|
|
1.7
|
|
||||
Indirect—vehicles
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Consumer credit card
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
Other consumer
|
10
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
—
|
|
||||
Total consumer
|
740
|
|
|
10
|
|
|
730
|
|
|
56
|
|
|
8.9
|
|
||||
|
$
|
1,086
|
|
|
$
|
23
|
|
|
$
|
1,063
|
|
|
$
|
102
|
|
|
11.5
|
%
|
|
Total Impaired Loans As of December 31, 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
|
$
|
872
|
|
|
$
|
73
|
|
|
$
|
799
|
|
|
$
|
126
|
|
|
$
|
673
|
|
|
$
|
171
|
|
|
28.0
|
%
|
Commercial real estate mortgage—owner-occupied
|
291
|
|
|
25
|
|
|
266
|
|
|
39
|
|
|
227
|
|
|
58
|
|
|
28.5
|
|
||||||
Commercial real estate construction—owner-occupied
|
5
|
|
|
1
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|
2
|
|
|
60.0
|
|
||||||
Total commercial
|
1,168
|
|
|
99
|
|
|
1,069
|
|
|
165
|
|
|
904
|
|
|
231
|
|
|
28.3
|
|
||||||
Commercial investor real estate mortgage
|
100
|
|
|
9
|
|
|
91
|
|
|
5
|
|
|
86
|
|
|
12
|
|
|
21.0
|
|
||||||
Commercial investor real estate construction
|
16
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
16
|
|
|
1
|
|
|
6.3
|
|
||||||
Total investor real estate
|
116
|
|
|
9
|
|
|
107
|
|
|
5
|
|
|
102
|
|
|
13
|
|
|
19.0
|
|
||||||
Residential first mortgage
|
476
|
|
|
22
|
|
|
454
|
|
|
—
|
|
|
454
|
|
|
55
|
|
|
16.2
|
|
||||||
Home equity
|
304
|
|
|
1
|
|
|
303
|
|
|
—
|
|
|
303
|
|
|
5
|
|
|
2.0
|
|
||||||
Indirect—vehicles
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||||
Consumer credit card
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||||
Other consumer
|
10
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
—
|
|
||||||
Total consumer
|
793
|
|
|
23
|
|
|
770
|
|
|
—
|
|
|
770
|
|
|
60
|
|
|
10.5
|
|
||||||
|
$
|
2,077
|
|
|
$
|
131
|
|
|
$
|
1,946
|
|
|
$
|
170
|
|
|
$
|
1,776
|
|
|
$
|
304
|
|
|
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 September 30
|
|
Nine Months Ended September 30
|
||||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||||||||||||||
|
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
|
$
|
748
|
|
|
$
|
3
|
|
|
$
|
816
|
|
|
$
|
1
|
|
|
$
|
804
|
|
|
$
|
9
|
|
|
$
|
670
|
|
|
$
|
4
|
|
Commercial real estate mortgage—owner-occupied
|
209
|
|
|
2
|
|
|
296
|
|
|
1
|
|
|
234
|
|
|
4
|
|
|
313
|
|
|
3
|
|
||||||||
Commercial real estate construction—owner-occupied
|
5
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||||||
Total commercial
|
962
|
|
|
5
|
|
|
1,116
|
|
|
2
|
|
|
1,043
|
|
|
13
|
|
|
986
|
|
|
7
|
|
||||||||
Commercial investor real estate mortgage
|
93
|
|
|
1
|
|
|
117
|
|
|
1
|
|
|
87
|
|
|
3
|
|
|
128
|
|
|
4
|
|
||||||||
Commercial investor real estate construction
|
40
|
|
|
1
|
|
|
36
|
|
|
1
|
|
|
42
|
|
|
2
|
|
|
31
|
|
|
1
|
|
||||||||
Total investor real estate
|
133
|
|
|
2
|
|
|
153
|
|
|
2
|
|
|
129
|
|
|
5
|
|
|
159
|
|
|
5
|
|
||||||||
Residential first mortgage
|
448
|
|
|
4
|
|
|
464
|
|
|
4
|
|
|
454
|
|
|
12
|
|
|
473
|
|
|
12
|
|
||||||||
Home equity
|
275
|
|
|
4
|
|
|
317
|
|
|
3
|
|
|
285
|
|
|
11
|
|
|
328
|
|
|
12
|
|
||||||||
Consumer credit card
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||||||
Other consumer
|
9
|
|
|
—
|
|
|
11
|
|
|
1
|
|
|
10
|
|
|
—
|
|
|
12
|
|
|
1
|
|
||||||||
Total consumer
|
734
|
|
|
8
|
|
|
794
|
|
|
8
|
|
|
751
|
|
|
23
|
|
|
815
|
|
|
25
|
|
||||||||
Total impaired loans
|
$
|
1,829
|
|
|
$
|
15
|
|
|
$
|
2,063
|
|
|
$
|
12
|
|
|
$
|
1,923
|
|
|
$
|
41
|
|
|
$
|
1,960
|
|
|
$
|
37
|
|
|
Three Months Ended September 30, 2017
|
|||||||||
|
|
|
|
|
Financial Impact
of Modifications
Considered TDRs
|
|||||
|
Number of
Obligors
|
|
Recorded
Investment
|
|
Increase in
Allowance at
Modification
|
|||||
|
(Dollars in millions)
|
|||||||||
Commercial and industrial
|
37
|
|
|
$
|
157
|
|
|
$
|
2
|
|
Commercial real estate mortgage—owner-occupied
|
33
|
|
|
32
|
|
|
1
|
|
||
Total commercial
|
70
|
|
|
189
|
|
|
3
|
|
||
Commercial investor real estate mortgage
|
8
|
|
|
45
|
|
|
2
|
|
||
Total investor real estate
|
8
|
|
|
45
|
|
|
2
|
|
||
Residential first mortgage
|
67
|
|
|
9
|
|
|
1
|
|
||
Home equity
|
10
|
|
|
1
|
|
|
—
|
|
||
Consumer credit card
|
11
|
|
|
—
|
|
|
—
|
|
||
Indirect—vehicles and other consumer
|
38
|
|
|
1
|
|
|
—
|
|
||
Total consumer
|
126
|
|
|
11
|
|
|
1
|
|
||
|
204
|
|
|
$
|
245
|
|
|
$
|
6
|
|
|
Three Months Ended September 30, 2016
|
|||||||||
|
|
|
|
|
Financial Impact
of Modifications
Considered TDRs
|
|||||
|
Number of
Obligors
|
|
Recorded
Investment
|
|
Increase in
Allowance at
Modification
|
|||||
|
(Dollars in millions)
|
|||||||||
Commercial and industrial
|
47
|
|
|
$
|
117
|
|
|
$
|
2
|
|
Commercial real estate mortgage—owner-occupied
|
22
|
|
|
26
|
|
|
1
|
|
||
Total commercial
|
69
|
|
|
143
|
|
|
3
|
|
||
Commercial investor real estate mortgage
|
19
|
|
|
27
|
|
|
—
|
|
||
Commercial investor real estate construction
|
3
|
|
|
25
|
|
|
1
|
|
||
Total investor real estate
|
22
|
|
|
52
|
|
|
1
|
|
||
Residential first mortgage
|
51
|
|
|
9
|
|
|
1
|
|
||
Home equity
|
57
|
|
|
2
|
|
|
—
|
|
||
Consumer credit card
|
14
|
|
|
1
|
|
|
—
|
|
||
Indirect—vehicles and other consumer
|
47
|
|
|
1
|
|
|
—
|
|
||
Total consumer
|
169
|
|
|
13
|
|
|
1
|
|
||
|
260
|
|
|
$
|
208
|
|
|
$
|
5
|
|
|
Nine Months Ended September 30, 2017
|
|||||||||
|
|
|
|
|
Financial Impact
of Modifications Considered TDRs |
|||||
|
Number of
Obligors |
|
Recorded
Investment |
|
Increase in
Allowance at Modification |
|||||
|
(Dollars in millions)
|
|||||||||
Commercial and industrial
|
106
|
|
|
$
|
449
|
|
|
$
|
9
|
|
Commercial real estate mortgage—owner-occupied
|
94
|
|
|
97
|
|
|
3
|
|
||
Commercial real estate construction—owner-occupied
|
3
|
|
|
2
|
|
|
—
|
|
||
Total commercial
|
203
|
|
|
548
|
|
|
12
|
|
||
Commercial investor real estate mortgage
|
33
|
|
|
93
|
|
|
3
|
|
||
Commercial investor real estate construction
|
5
|
|
|
70
|
|
|
2
|
|
||
Total investor real estate
|
38
|
|
|
163
|
|
|
5
|
|
||
Residential first mortgage
|
168
|
|
|
34
|
|
|
4
|
|
||
Home equity
|
101
|
|
|
8
|
|
|
—
|
|
||
Consumer credit card
|
54
|
|
|
—
|
|
|
—
|
|
||
Indirect—vehicles and other consumer
|
125
|
|
|
2
|
|
|
—
|
|
||
Total consumer
|
448
|
|
|
44
|
|
|
4
|
|
||
|
689
|
|
|
$
|
755
|
|
|
$
|
21
|
|
|
Nine Months Ended September 30, 2016
|
|||||||||
|
|
|
|
|
Financial Impact
of Modifications Considered TDRs |
|||||
|
Number of
Obligors |
|
Recorded
Investment |
|
Increase in
Allowance at Modification |
|||||
|
(Dollars in millions)
|
|||||||||
Commercial and industrial
|
142
|
|
|
$
|
298
|
|
|
$
|
8
|
|
Commercial real estate mortgage—owner-occupied
|
98
|
|
|
60
|
|
|
2
|
|
||
Total commercial
|
240
|
|
|
358
|
|
|
10
|
|
||
Commercial investor real estate mortgage
|
68
|
|
|
87
|
|
|
1
|
|
||
Commercial investor real estate construction
|
8
|
|
|
36
|
|
|
1
|
|
||
Total investor real estate
|
76
|
|
|
123
|
|
|
2
|
|
||
Residential first mortgage
|
189
|
|
|
38
|
|
|
5
|
|
||
Home equity
|
263
|
|
|
13
|
|
|
—
|
|
||
Consumer credit card
|
65
|
|
|
1
|
|
|
—
|
|
||
Indirect—vehicles and other consumer
|
148
|
|
|
2
|
|
|
—
|
|
||
Total consumer
|
665
|
|
|
54
|
|
|
5
|
|
||
|
981
|
|
|
$
|
535
|
|
|
$
|
17
|
|
|
Three Months Ended September 30
|
|
Nine Months Ended September 30
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(In millions)
|
||||||||||||||
Defaulted During the Period, Where Modified in a TDR Twelve Months Prior to Default
|
|
|
|
|
|
|
|
||||||||
Commercial and industrial
|
$
|
1
|
|
|
$
|
16
|
|
|
$
|
9
|
|
|
$
|
28
|
|
Commercial real estate mortgage—owner-occupied
|
1
|
|
|
1
|
|
|
1
|
|
|
2
|
|
||||
Total commercial
|
2
|
|
|
17
|
|
|
10
|
|
|
30
|
|
||||
Commercial investor real estate mortgage
|
—
|
|
|
1
|
|
|
—
|
|
|
2
|
|
||||
Commercial investor real estate construction
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Total investor real estate
|
—
|
|
|
2
|
|
|
—
|
|
|
3
|
|
||||
Residential first mortgage
|
1
|
|
|
7
|
|
|
6
|
|
|
18
|
|
||||
Home equity
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Total consumer
|
1
|
|
|
7
|
|
|
7
|
|
|
19
|
|
||||
|
$
|
3
|
|
|
$
|
26
|
|
|
$
|
17
|
|
|
$
|
52
|
|
|
Three Months Ended September 30
|
|
Nine Months Ended September 30
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(In millions)
|
||||||||||||||
Carrying value, beginning of period
|
$
|
346
|
|
|
$
|
216
|
|
|
$
|
324
|
|
|
$
|
252
|
|
Additions
|
10
|
|
|
34
|
|
|
56
|
|
|
73
|
|
||||
Increase (decrease) in fair value
(1)
:
|
|
|
|
|
|
|
|
||||||||
Due to change in valuation inputs or assumptions
|
(9
|
)
|
|
(2
|
)
|
|
(12
|
)
|
|
(60
|
)
|
||||
Economic amortization associated with borrower repayments
|
(12
|
)
|
|
(10
|
)
|
|
(33
|
)
|
|
(27
|
)
|
||||
Carrying value, end of period
|
$
|
335
|
|
|
$
|
238
|
|
|
$
|
335
|
|
|
$
|
238
|
|
|
September 30
|
||||||
|
2017
|
|
2016
|
||||
|
(Dollars in millions)
|
||||||
Unpaid principal balance
|
$
|
32,586
|
|
|
$
|
29,657
|
|
Weighted-average prepayment speed (CPR; percentage)
|
10.0
|
%
|
|
12.3
|
%
|
||
Estimated impact on fair value of a 10% increase
|
$
|
(22
|
)
|
|
$
|
(13
|
)
|
Estimated impact on fair value of a 20% increase
|
$
|
(40
|
)
|
|
$
|
(24
|
)
|
Option-adjusted spread (basis points)
|
860
|
|
|
1,060
|
|
||
Estimated impact on fair value of a 10% increase
|
$
|
(11
|
)
|
|
$
|
(9
|
)
|
Estimated impact on fair value of a 20% increase
|
$
|
(23
|
)
|
|
$
|
(18
|
)
|
Weighted-average coupon interest rate
|
4.1
|
%
|
|
4.2
|
%
|
||
Weighted-average remaining maturity (months)
|
282
|
|
|
280
|
|
||
Weighted-average servicing fee (basis points)
|
27.4
|
|
|
27.6
|
|
|
Three Months Ended September 30
|
|
Nine Months Ended September 30
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(In millions)
|
||||||||||||||
Servicing related fees and other ancillary income
|
$
|
24
|
|
|
$
|
21
|
|
|
$
|
71
|
|
|
$
|
63
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
|
(In millions)
|
||||||
Corporate Bank
|
$
|
2,474
|
|
|
$
|
2,474
|
|
Consumer Bank
|
1,978
|
|
|
1,978
|
|
||
Wealth Management
|
452
|
|
|
452
|
|
||
|
$
|
4,904
|
|
|
$
|
4,904
|
|
•
|
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.
|
|
|
|
|
|
|
|
|
|
|
September 30, 2017
|
|
December 31, 2016
|
|||||||
|
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 September 30, 2017
|
||||||||||||||||||
|
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
|
$
|
(30
|
)
|
|
$
|
(55
|
)
|
|
$
|
11
|
|
|
$
|
(405
|
)
|
|
$
|
(479
|
)
|
Net change
|
1
|
|
|
21
|
|
|
(4
|
)
|
|
7
|
|
|
25
|
|
|||||
End of period
|
$
|
(29
|
)
|
|
$
|
(34
|
)
|
|
$
|
7
|
|
|
$
|
(398
|
)
|
|
$
|
(454
|
)
|
|
Three Months Ended September 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
|
$
|
(40
|
)
|
|
$
|
297
|
|
|
$
|
278
|
|
|
$
|
(387
|
)
|
|
$
|
148
|
|
Net change
|
5
|
|
|
(13
|
)
|
|
(40
|
)
|
|
5
|
|
|
(43
|
)
|
|||||
End of period
|
$
|
(35
|
)
|
|
$
|
284
|
|
|
$
|
238
|
|
|
$
|
(382
|
)
|
|
$
|
105
|
|
|
Nine Months Ended September 30, 2017
|
||||||||||||||||||
|
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
|
$
|
(33
|
)
|
|
$
|
(106
|
)
|
|
$
|
11
|
|
|
$
|
(422
|
)
|
|
$
|
(550
|
)
|
Net change
|
4
|
|
|
72
|
|
|
(4
|
)
|
|
24
|
|
|
96
|
|
|||||
End of period
|
$
|
(29
|
)
|
|
$
|
(34
|
)
|
|
$
|
7
|
|
|
$
|
(398
|
)
|
|
$
|
(454
|
)
|
|
Nine Months Ended September 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
|
12
|
|
|
294
|
|
|
163
|
|
|
16
|
|
|
485
|
|
|||||
End of period
|
$
|
(35
|
)
|
|
$
|
284
|
|
|
$
|
238
|
|
|
$
|
(382
|
)
|
|
$
|
105
|
|
|
Three Months Ended September 30, 2017
|
|
Three Months Ended September 30, 2016
|
|
|
||||
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:
|
|
|
|
|
|
||||
|
$
|
(2
|
)
|
|
$
|
(9
|
)
|
|
Net interest income and other financing income
|
|
1
|
|
|
4
|
|
|
Tax (expense) or benefit
|
||
|
$
|
(1
|
)
|
|
$
|
(5
|
)
|
|
Net of tax
|
Unrealized gains and (losses) on available for sale securities:
|
|
|
|
|
|
||||
|
$
|
4
|
|
|
$
|
—
|
|
|
Securities gains (losses), net
|
|
(2
|
)
|
|
—
|
|
|
Tax (expense) or benefit
|
||
|
$
|
2
|
|
|
$
|
—
|
|
|
Net of tax
|
|
|
|
|
|
|
||||
Gains and (losses) on cash flow hedges:
|
|
|
|
|
|
||||
Interest rate contracts
|
$
|
17
|
|
|
$
|
35
|
|
|
Net interest income and other financing income
|
|
(7
|
)
|
|
(13
|
)
|
|
Tax (expense) or benefit
|
||
|
$
|
10
|
|
|
$
|
22
|
|
|
Net of tax
|
|
|
|
|
|
|
||||
Amortization of defined benefit pension plans and other post employment benefits:
|
|
|
|
|
|
||||
Actuarial gains (losses) and settlements
|
$
|
(11
|
)
|
|
$
|
(9
|
)
|
|
(2)
|
|
(11
|
)
|
|
(9
|
)
|
|
Total before tax
|
||
|
4
|
|
|
3
|
|
|
Tax (expense) or benefit
|
||
|
$
|
(7
|
)
|
|
$
|
(6
|
)
|
|
Net of tax
|
|
|
|
|
|
|
||||
Total reclassifications for the period
|
$
|
4
|
|
|
$
|
11
|
|
|
Net of tax
|
|
Nine Months Ended
September 30, 2017
|
|
Nine Months Ended
September 30, 2016
|
|
|
||||
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:
|
|
|
|
|
|
||||
|
$
|
(7
|
)
|
|
$
|
(20
|
)
|
|
Net interest income and other financing income
|
|
3
|
|
|
8
|
|
|
Tax (expense) or benefit
|
||
|
$
|
(4
|
)
|
|
$
|
(12
|
)
|
|
Net of tax
|
Unrealized gains and (losses) on available for sale securities:
|
|
|
|
|
|
||||
|
$
|
5
|
|
|
$
|
1
|
|
|
Securities gains (losses), net
|
|
(2
|
)
|
|
—
|
|
|
Tax (expense) or benefit
|
||
|
$
|
3
|
|
|
$
|
1
|
|
|
Net of tax
|
|
|
|
|
|
|
||||
Gains and (losses) on cash flow hedges:
|
|
|
|
|
|
||||
Interest rate contracts
|
$
|
70
|
|
|
$
|
109
|
|
|
Net interest income and other financing income
|
|
(27
|
)
|
|
(41
|
)
|
|
Tax (expense) or benefit
|
||
|
$
|
43
|
|
|
$
|
68
|
|
|
Net of tax
|
|
|
|
|
|
|
||||
Amortization of defined benefit pension plans and other post employment benefits:
|
|
|
|
|
|
||||
Actuarial gains (losses) and settlements
|
$
|
(39
|
)
|
|
$
|
(26
|
)
|
|
(2)
|
|
(39
|
)
|
|
(26
|
)
|
|
Total before tax
|
||
|
14
|
|
|
9
|
|
|
Tax (expense) or benefit
|
||
|
$
|
(25
|
)
|
|
$
|
(17
|
)
|
|
Net of tax
|
|
|
|
|
|
|
||||
Total reclassifications for the period
|
$
|
17
|
|
|
$
|
40
|
|
|
Net of tax
|
|
Three Months Ended September 30
|
|
Nine Months Ended September 30
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(In millions, except per share amounts)
|
||||||||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
312
|
|
|
$
|
319
|
|
|
$
|
923
|
|
|
$
|
864
|
|
Preferred stock dividends
|
(16
|
)
|
|
(16
|
)
|
|
(48
|
)
|
|
(48
|
)
|
||||
Income from continuing operations available to common shareholders
|
296
|
|
|
303
|
|
|
875
|
|
|
816
|
|
||||
Income (loss) from discontinued operations, net of tax
|
(1
|
)
|
|
1
|
|
|
5
|
|
|
4
|
|
||||
Net income available to common shareholders
|
$
|
295
|
|
|
$
|
304
|
|
|
$
|
880
|
|
|
$
|
820
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding—basic
|
1,182
|
|
|
1,246
|
|
|
1,197
|
|
|
1,266
|
|
||||
Potential common shares
|
11
|
|
|
6
|
|
|
12
|
|
|
4
|
|
||||
Weighted-average common shares outstanding—diluted
|
1,193
|
|
|
1,252
|
|
|
1,209
|
|
|
1,270
|
|
||||
Earnings per common share from continuing operations available to common shareholders
(1)
:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.25
|
|
|
$
|
0.24
|
|
|
$
|
0.73
|
|
|
$
|
0.64
|
|
Diluted
|
0.25
|
|
|
0.24
|
|
|
0.72
|
|
|
0.64
|
|
||||
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
|
$
|
0.25
|
|
|
$
|
0.24
|
|
|
$
|
0.74
|
|
|
$
|
0.65
|
|
Diluted
|
0.25
|
|
|
0.24
|
|
|
0.73
|
|
|
0.65
|
|
(1)
|
Certain per share amounts may not appear to reconcile due to rounding.
|
|
Nine Months Ended September 30
|
||||||||||||
|
2017
|
|
2016
|
||||||||||
|
Number of
Options
|
|
Weighted-Average
Exercise Price
|
|
Number of
Options
|
|
Weighted-Average
Exercise Price
|
||||||
Outstanding at beginning of period
|
13,455,047
|
|
|
$
|
19.37
|
|
|
19,350,157
|
|
|
$
|
21.06
|
|
Exercised
|
(1,114,766
|
)
|
|
6.66
|
|
|
(568,882
|
)
|
|
5.86
|
|
||
Forfeited or expired
|
(2,727,357
|
)
|
|
34.51
|
|
|
(3,840,704
|
)
|
|
34.68
|
|
||
Outstanding at end of period
|
9,612,924
|
|
|
$
|
16.55
|
|
|
14,940,571
|
|
|
$
|
18.14
|
|
Exercisable at end of period
|
9,612,924
|
|
|
$
|
16.55
|
|
|
14,940,571
|
|
|
$
|
18.14
|
|
|
Nine Months Ended September 30
|
||||||||||||
|
2017
|
|
2016
|
||||||||||
|
Number of
Shares
|
|
Weighted-Average
Grant Date Fair Value
|
|
Number of
Shares
|
|
Weighted-Average
Grant Date Fair Value |
||||||
Non-vested at beginning of period
|
16,558,942
|
|
|
$
|
9.31
|
|
|
16,374,242
|
|
|
$
|
9.51
|
|
Granted
|
3,976,193
|
|
|
14.57
|
|
|
6,840,385
|
|
|
7.92
|
|
||
Vested
|
(4,623,917
|
)
|
|
11.08
|
|
|
(5,735,271
|
)
|
|
8.25
|
|
||
Forfeited
|
(522,258
|
)
|
|
10.00
|
|
|
(686,347
|
)
|
|
9.18
|
|
||
Non-vested at end of period
|
15,388,960
|
|
|
$
|
10.12
|
|
|
16,793,009
|
|
|
$
|
9.31
|
|
|
Qualified Plans
|
|
Non-qualified Plans
|
|
Total
|
|||||||||||||||||||
|
Three Months Ended September 30
|
|||||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||||||
|
(In millions)
|
|||||||||||||||||||||||
Service cost
|
$
|
8
|
|
|
$
|
9
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
9
|
|
|
$
|
10
|
|
|
Interest cost
|
18
|
|
|
19
|
|
|
1
|
|
|
1
|
|
|
19
|
|
|
20
|
|
|||||||
Expected return on plan assets
|
(35
|
)
|
|
(36
|
)
|
|
—
|
|
|
—
|
|
|
(35
|
)
|
|
(36
|
)
|
|||||||
Amortization of actuarial loss
|
8
|
|
|
8
|
|
|
1
|
|
|
1
|
|
|
9
|
|
|
9
|
|
|||||||
Settlement charge
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|||||||
Net periodic pension cost (credit)
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
3
|
|
|
$
|
4
|
|
|
$
|
3
|
|
|
Qualified Plans
|
|
Non-qualified Plans
|
|
Total
|
|||||||||||||||||||
|
Nine Months Ended September 30
|
|||||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||||||
|
(In millions)
|
|||||||||||||||||||||||
Service cost
|
$
|
25
|
|
|
$
|
26
|
|
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
28
|
|
|
$
|
29
|
|
|
Interest cost
|
54
|
|
|
55
|
|
|
3
|
|
|
4
|
|
|
57
|
|
|
59
|
|
|||||||
Expected return on plan assets
|
(106
|
)
|
|
(108
|
)
|
|
—
|
|
|
—
|
|
|
(106
|
)
|
|
(108
|
)
|
|||||||
Amortization of actuarial loss
|
24
|
|
|
24
|
|
|
3
|
|
|
2
|
|
|
27
|
|
|
26
|
|
|||||||
Settlement charge
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|||||||
Net periodic pension cost (credit)
|
$
|
(3
|
)
|
|
$
|
(3
|
)
|
|
$
|
21
|
|
|
$
|
9
|
|
|
$
|
18
|
|
|
$
|
6
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
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
|
$
|
3,130
|
|
|
$
|
1
|
|
|
$
|
37
|
|
|
$
|
2,257
|
|
|
$
|
7
|
|
|
$
|
40
|
|
Derivatives in cash flow hedging relationships:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps
|
7,150
|
|
|
21
|
|
|
153
|
|
|
9,000
|
|
|
19
|
|
|
269
|
|
||||||
Total derivatives designated as hedging instruments
|
$
|
10,280
|
|
|
$
|
22
|
|
|
$
|
190
|
|
|
$
|
11,257
|
|
|
$
|
26
|
|
|
$
|
309
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps
|
$
|
40,124
|
|
|
$
|
315
|
|
|
$
|
352
|
|
|
$
|
41,851
|
|
|
$
|
412
|
|
|
$
|
467
|
|
Interest rate options
|
3,787
|
|
|
20
|
|
|
10
|
|
|
3,877
|
|
|
24
|
|
|
12
|
|
||||||
Interest rate futures and forward commitments
|
27,944
|
|
|
4
|
|
|
7
|
|
|
18,605
|
|
|
11
|
|
|
6
|
|
||||||
Other contracts
|
5,551
|
|
|
53
|
|
|
46
|
|
|
5,813
|
|
|
106
|
|
|
93
|
|
||||||
Total derivatives not designated as hedging instruments
|
$
|
77,406
|
|
|
$
|
392
|
|
|
$
|
415
|
|
|
$
|
70,146
|
|
|
$
|
553
|
|
|
$
|
578
|
|
Total derivatives
|
$
|
87,686
|
|
|
$
|
414
|
|
|
$
|
605
|
|
|
$
|
81,403
|
|
|
$
|
579
|
|
|
$
|
887
|
|
(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 September 30
|
|
|
|
Three Months Ended
September 30 |
||||||||||||
|
2017
|
|
2016
|
|
|
|
2017
|
|
2016
|
||||||||
|
(In millions)
|
|
|
|
(In millions)
|
||||||||||||
Fair Value Hedges:
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps on:
|
|
|
|
|
|
|
|
|
|
||||||||
Debt/CDs
|
$
|
1
|
|
|
$
|
2
|
|
|
Interest expense
|
|
$
|
—
|
|
|
$
|
—
|
|
Debt/CDs
|
(6
|
)
|
|
(23
|
)
|
|
Other non-interest expense
|
|
6
|
|
|
24
|
|
||||
Securities available for sale
|
(1
|
)
|
|
(2
|
)
|
|
Interest income
|
|
—
|
|
|
—
|
|
||||
Securities available for sale
|
—
|
|
|
2
|
|
|
Other non-interest expense
|
|
—
|
|
|
(5
|
)
|
||||
Total
|
$
|
(6
|
)
|
|
$
|
(21
|
)
|
|
|
|
$
|
6
|
|
|
$
|
19
|
|
|
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 September 30
|
|
|
|
Three Months Ended September 30
|
||||||||||||
|
2017
|
|
2016
|
|
|
|
2017
|
|
2016
|
||||||||
|
(In millions)
|
|
|
|
(In millions)
|
||||||||||||
Cash Flow Hedges:
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
$
|
(4
|
)
|
|
$
|
(40
|
)
|
|
Interest income on loans
|
|
$
|
17
|
|
|
$
|
35
|
|
Total
|
$
|
(4
|
)
|
|
$
|
(40
|
)
|
|
|
|
$
|
17
|
|
|
$
|
35
|
|
|
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
|
||||||||||||
|
Nine Months Ended
September 30 |
|
|
|
Nine Months Ended
September 30 |
||||||||||||
|
2017
|
|
2016
|
|
|
|
2017
|
|
2016
|
||||||||
|
(In millions)
|
|
|
|
(In millions)
|
||||||||||||
Fair Value Hedges:
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps on:
|
|
|
|
|
|
|
|
|
|
||||||||
Debt/CDs
|
$
|
2
|
|
|
$
|
10
|
|
|
Interest expense
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
Debt/CDs
|
(1
|
)
|
|
4
|
|
|
Other non-interest expense
|
|
2
|
|
|
(3
|
)
|
||||
Securities available for sale
|
(3
|
)
|
|
(7
|
)
|
|
Interest income
|
|
—
|
|
|
—
|
|
||||
Securities available for sale
|
(2
|
)
|
|
(36
|
)
|
|
Other non-interest expense
|
|
1
|
|
|
32
|
|
||||
Total
|
$
|
(4
|
)
|
|
$
|
(29
|
)
|
|
|
|
$
|
3
|
|
|
$
|
27
|
|
|
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)
|
||||||||||||
|
Nine Months Ended September 30
|
|
|
|
Nine Months Ended September 30
|
||||||||||||
|
2017
|
|
2016
|
|
|
|
2017
|
|
2016
|
||||||||
|
(In millions)
|
|
|
|
(In millions)
|
||||||||||||
Cash Flow Hedges:
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
$
|
(4
|
)
|
|
$
|
163
|
|
|
Interest income on loans
|
|
$
|
70
|
|
|
$
|
109
|
|
Total
|
$
|
(4
|
)
|
|
$
|
163
|
|
|
|
|
$
|
70
|
|
|
$
|
109
|
|
|
Three Months Ended September 30
|
|
Nine Months Ended September 30
|
||||||||||||
Derivatives Not Designated as Hedging Instruments
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(In millions)
|
||||||||||||||
Capital markets fee income and other
(1)
:
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
$
|
3
|
|
|
$
|
4
|
|
|
$
|
9
|
|
|
$
|
7
|
|
Interest rate options
|
9
|
|
|
2
|
|
|
19
|
|
|
16
|
|
||||
Interest rate futures and forward commitments
|
1
|
|
|
1
|
|
|
6
|
|
|
4
|
|
||||
Other contracts
|
9
|
|
|
(11
|
)
|
|
(6
|
)
|
|
(9
|
)
|
||||
Total capital markets fee income and other
|
22
|
|
|
(4
|
)
|
|
28
|
|
|
18
|
|
||||
Mortgage income:
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
1
|
|
|
(3
|
)
|
|
7
|
|
|
45
|
|
||||
Interest rate options
|
(2
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
7
|
|
||||
Interest rate futures and forward commitments
|
2
|
|
|
8
|
|
|
(5
|
)
|
|
9
|
|
||||
Total mortgage income
|
1
|
|
|
4
|
|
|
(1
|
)
|
|
61
|
|
||||
|
$
|
23
|
|
|
$
|
—
|
|
|
$
|
27
|
|
|
$
|
79
|
|
|
Offsetting Derivative Assets
|
|
Offsetting Derivative Liabilities
|
||||||||||||
|
September 30, 2017
|
|
December 31, 2016
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||
|
(In millions)
|
||||||||||||||
Gross amounts subject to offsetting
|
$
|
259
|
|
|
$
|
414
|
|
|
$
|
347
|
|
|
$
|
583
|
|
Gross amounts not subject to offsetting
|
155
|
|
|
165
|
|
|
258
|
|
|
304
|
|
||||
Gross amounts recognized
|
414
|
|
|
579
|
|
|
605
|
|
|
887
|
|
||||
Gross amounts offset in the consolidated balance sheets
(1)
|
158
|
|
|
241
|
|
|
265
|
|
|
541
|
|
||||
Net amounts presented in the consolidated balance sheets
|
256
|
|
|
338
|
|
|
340
|
|
|
346
|
|
||||
Gross amounts not offset in the consolidated balance sheets:
|
|
|
|
|
|
|
|
||||||||
Financial instruments
|
3
|
|
|
4
|
|
|
50
|
|
|
50
|
|
||||
Cash collateral received/posted
|
—
|
|
|
—
|
|
|
250
|
|
|
227
|
|
||||
Net amounts
|
$
|
253
|
|
|
$
|
334
|
|
|
$
|
40
|
|
|
$
|
69
|
|
(1)
|
At
September 30, 2017
, gross amounts of derivative assets and liabilities offset in the consolidated balance sheets presented above include cash collateral received of
$40 million
and cash collateral posted of
$148 million
. At
December 31, 2016
, gross amounts of derivative assets and liabilities offset in the consolidated balance sheets presented above include cash collateral received of
$48 million
and cash collateral posted of
$349 million
.
|
|
September 30, 2017
|
|
|
December 31, 2016
|
||||||||||||||||||||||||||||
|
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
|
$
|
193
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
193
|
|
|
|
$
|
124
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
124
|
|
Securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. Treasury securities
|
$
|
308
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
308
|
|
|
|
$
|
303
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
303
|
|
Federal agency securities
|
—
|
|
|
24
|
|
|
—
|
|
|
24
|
|
|
|
—
|
|
|
35
|
|
|
—
|
|
|
35
|
|
||||||||
Obligations of states and political subdivisions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||||
Mortgage-backed securities (MBS):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Residential agency
|
—
|
|
|
17,484
|
|
|
—
|
|
|
17,484
|
|
|
|
—
|
|
|
17,371
|
|
|
—
|
|
|
17,371
|
|
||||||||
Residential non-agency
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
||||||||
Commercial agency
|
—
|
|
|
3,626
|
|
|
—
|
|
|
3,626
|
|
|
|
—
|
|
|
3,463
|
|
|
—
|
|
|
3,463
|
|
||||||||
Commercial non-agency
|
—
|
|
|
809
|
|
|
—
|
|
|
809
|
|
|
|
—
|
|
|
1,129
|
|
|
—
|
|
|
1,129
|
|
||||||||
Corporate and other debt securities
|
—
|
|
|
1,198
|
|
|
4
|
|
|
1,202
|
|
|
|
—
|
|
|
1,271
|
|
|
3
|
|
|
1,274
|
|
||||||||
Equity securities
|
203
|
|
|
—
|
|
|
—
|
|
|
203
|
|
|
|
201
|
|
|
—
|
|
|
—
|
|
|
201
|
|
||||||||
Total securities available for sale
|
$
|
511
|
|
|
$
|
23,141
|
|
|
$
|
7
|
|
|
$
|
23,659
|
|
|
|
$
|
504
|
|
|
$
|
23,270
|
|
|
$
|
7
|
|
|
$
|
23,781
|
|
Loans held for sale
|
$
|
—
|
|
|
$
|
307
|
|
|
$
|
—
|
|
|
$
|
307
|
|
|
|
$
|
—
|
|
|
$
|
414
|
|
|
$
|
33
|
|
|
$
|
447
|
|
Residential mortgage servicing rights
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
335
|
|
|
$
|
335
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
324
|
|
|
$
|
324
|
|
Derivative assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate swaps
|
$
|
—
|
|
|
$
|
337
|
|
|
$
|
—
|
|
|
$
|
337
|
|
|
|
$
|
—
|
|
|
$
|
438
|
|
|
$
|
—
|
|
|
$
|
438
|
|
Interest rate options
|
—
|
|
|
10
|
|
|
10
|
|
|
20
|
|
|
|
—
|
|
|
13
|
|
|
11
|
|
|
24
|
|
||||||||
Interest rate futures and forward commitments
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
11
|
|
||||||||
Other contracts
|
2
|
|
|
51
|
|
|
—
|
|
|
53
|
|
|
|
2
|
|
|
104
|
|
|
—
|
|
|
106
|
|
||||||||
Total derivative assets
|
$
|
2
|
|
|
$
|
402
|
|
|
$
|
10
|
|
|
$
|
414
|
|
|
|
$
|
2
|
|
|
$
|
566
|
|
|
$
|
11
|
|
|
$
|
579
|
|
Derivative liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate swaps
|
$
|
—
|
|
|
$
|
542
|
|
|
$
|
—
|
|
|
$
|
542
|
|
|
|
$
|
—
|
|
|
$
|
776
|
|
|
$
|
—
|
|
|
$
|
776
|
|
Interest rate options
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
||||||||
Interest rate futures and forward commitments
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
||||||||
Other contracts
|
2
|
|
|
44
|
|
|
—
|
|
|
46
|
|
|
|
1
|
|
|
92
|
|
|
—
|
|
|
93
|
|
||||||||
Total derivative liabilities
|
$
|
2
|
|
|
$
|
603
|
|
|
$
|
—
|
|
|
$
|
605
|
|
|
|
$
|
1
|
|
|
$
|
886
|
|
|
$
|
—
|
|
|
$
|
887
|
|
Non-recurring fair value measurements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Loans held for sale
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
7
|
|
Foreclosed property and other real estate
|
—
|
|
|
32
|
|
|
6
|
|
|
38
|
|
|
|
—
|
|
|
29
|
|
|
6
|
|
|
35
|
|
|
Three Months Ended September 30, 2017
|
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Opening
Balance July 1, 2017 |
|
Total Realized /
Unrealized
Gains or Losses
|
|
Purchases
|
|
Sales
|
|
Issuances
|
|
Settlements
|
|
Transfers
into Level 3 |
|
Transfers
out of Level 3 |
|
Closing
Balance September 30, 2017 |
||||||||||||||
|
|
Included
in
Earnings
|
|
Included
in Other
Compre-
hensive
Income
(Loss)
|
|
||||||||||||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Level 3 Instruments Only
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential non-agency MBS
|
$
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
3
|
|
Corporate and other debt securities
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||
Total securities available for sale
|
$
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
7
|
|
Commercial mortgage loans held for sale
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Residential mortgage servicing rights
|
$
|
346
|
|
|
(21
|
)
|
(1)
|
—
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
335
|
|
Total derivatives, net
|
$
|
13
|
|
|
31
|
|
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(34
|
)
|
|
—
|
|
|
—
|
|
|
$
|
10
|
|
|
Three Months Ended September 30, 2016
|
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Opening
Balance July 1, 2016 |
|
Total Realized /
Unrealized Gains or Losses |
|
Purchases
|
|
Sales
|
|
Issuances
|
|
Settlements
|
|
Transfers
into Level 3 |
|
Transfers
out of Level 3 |
|
Closing
Balance September 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
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
60
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
90
|
|
Residential mortgage servicing rights
|
$
|
216
|
|
|
(12
|
)
|
(1)
|
—
|
|
|
34
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
238
|
|
Total derivatives, net
|
$
|
17
|
|
|
32
|
|
(4)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(33
|
)
|
|
—
|
|
|
—
|
|
|
$
|
16
|
|
|
Nine Months Ended September 30, 2017
|
||||||||||||||||||||||||||||||
|
Opening
Balance January 1, 2017 |
|
Total Realized /
Unrealized
Gains or Losses
|
|
Purchases
|
|
Sales
|
|
Issuances
|
|
Settlements
|
|
Transfers
into Level 3 |
|
Transfers
out of Level 3 |
|
Closing
Balance September 30, 2017 |
||||||||||||||
|
|
Included
in
Earnings
|
|
Included
in Other
Compre-
hensive
Income
(Loss)
|
|
||||||||||||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Level 3 Instruments Only
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential non-agency MBS
|
$
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
$
|
3
|
|
Corporate and other debt securities
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
4
|
|
||
Total securities available for sale
|
$
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
1
|
|
|
—
|
|
|
$
|
7
|
|
Commercial mortgage loans held for sale
|
$
|
33
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
(40
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Residential mortgage servicing rights
|
$
|
324
|
|
|
(45
|
)
|
(1)
|
—
|
|
|
56
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
335
|
|
Total derivatives, net
|
$
|
11
|
|
|
87
|
|
(5)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(88
|
)
|
|
—
|
|
|
—
|
|
|
$
|
10
|
|
|
Nine Months Ended September 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 September 30, 2016 |
||||||||||||||
|
Included
in Earnings
|
|
Included
in Other
Compre-
hensive
Income
(Loss)
|
|
|||||||||||||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Level 3 Instruments Only
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trading account securities
|
$
|
33
|
|
|
(2
|
)
|
(3)
|
—
|
|
|
—
|
|
|
(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
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
90
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
90
|
|
Residential mortgage servicing rights
|
$
|
252
|
|
|
(87
|
)
|
(1)
|
—
|
|
|
73
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
238
|
|
Total derivatives, net
|
$
|
10
|
|
|
105
|
|
(6)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(99
|
)
|
|
—
|
|
|
—
|
|
|
$
|
16
|
|
|
Three Months Ended September 30
|
|
Nine Months Ended September 30
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(In millions)
|
||||||||||||||
Loans held for sale
|
$
|
(1
|
)
|
|
$
|
(3
|
)
|
|
$
|
(8
|
)
|
|
$
|
(25
|
)
|
Foreclosed property and other real estate
|
(6
|
)
|
|
(8
|
)
|
|
(21
|
)
|
|
(35
|
)
|
|
September 30, 2017
|
||||||
|
Level 3
Estimated Fair Value at September 30, 2017 |
|
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
|
$3
|
|
Discounted cash flow
|
|
Spread to LIBOR
|
|
5.4% - 69.9% (22.9%)
|
|
|
|
|
|
Weighted-average CPR (%)
|
|
3.8% - 29.3% (11.4%)
|
|
|
|
|
|
Probability of default
|
|
1.3%
|
|
|
|
|
|
Loss severity
|
|
88.0%
|
Corporate and other debt securities
|
$4
|
|
Market comparable
|
|
Evaluated quote on same issuer/comparable bond
|
|
99.7%
|
Residential mortgage servicing rights
(1)
|
$335
|
|
Discounted cash flow
|
|
Weighted-average CPR (%)
|
|
8.1% - 26.5% (10.0%)
|
|
|
|
|
|
OAS (%)
|
|
8.1% - 15.0% (8.6%)
|
Derivative assets:
|
|
|
|
|
|
|
|
Interest rate options
|
$8
|
|
Interest rate lock commitments on the residential mortgage loans are valued using discounted cash flows
|
|
Weighted-average CPR (%)
|
|
8.1% - 26.5% (10.0%)
|
|
|
|
|
|
OAS (%)
|
|
8.1% - 15.0% (8.6%)
|
|
|
|
|
|
Pull-through
|
|
8.6% - 99.0% (79.9%)
|
|
$2
|
|
Interest rate lock commitments on the commercial mortgage loans are valued using discounted cash flows
|
|
Internal rate of return
|
|
12.0% - 17.0% (12.0%)
|
Nonrecurring fair value measurements:
|
|
|
|
|
|
|
|
Loans held for sale
|
$5
|
|
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)
|
|
28.3% - 72.7% (54.7%)
|
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% - 35.0% (26.0%)
|
|
$1
|
|
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)
|
|
3.4%
|
|
December 31, 2016
|
||||||
|
Level 3
Estimated Fair Value at December 31, 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
|
$4
|
|
Discounted cash flow
|
|
Spread to LIBOR
|
|
5.5% - 70.0% (23.0%)
|
|
|
|
|
|
Weighted-average CPR (%)
|
|
3.5% - 29.5% (12.2%)
|
|
|
|
|
|
Probability of default
|
|
3.1%
|
|
|
|
|
|
Loss severity
|
|
63.6%
|
Corporate and other debt securities
|
$3
|
|
Market comparable
|
|
Evaluated quote on same issuer/comparable bond
|
|
100.3%
|
Commercial mortgage loans held for sale
|
$33
|
|
Market comparable
|
|
Credit spreads for bonds in the commercial MBS
|
|
0.4% - 5.8% (1.3%)
|
Residential mortgage servicing rights
(1)
|
$324
|
|
Discounted cash flow
|
|
Weighted-average CPR (%)
|
|
5.7% - 24.3% (7.6%)
|
|
|
|
|
|
OAS (%)
|
|
8.2% - 13.6% (10.5%)
|
Derivative assets:
|
|
|
|
|
|
|
|
Interest rate options
|
$8
|
|
Interest rate lock commitments on the residential mortgage loans are valued using discounted cash flows
|
|
Weighted-average CPR (%)
|
|
5.7% - 24.3% (7.6%)
|
|
|
|
|
|
OAS (%)
|
|
8.2% - 13.6% (10.5%)
|
|
|
|
|
|
Pull-through
|
|
14.9% - 99.4% (78.3%)
|
|
$3
|
|
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
|
$7
|
|
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)
|
|
26.2% - 69.4% (48.1%)
|
Foreclosed property and other real estate
|
$1
|
|
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% - 60.3% (37.0%)
|
|
$5
|
|
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)
|
|
5.9% - 29.6% (15.8%)
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
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
|
$
|
307
|
|
|
$
|
296
|
|
|
$
|
11
|
|
|
$
|
447
|
|
|
$
|
443
|
|
|
$
|
4
|
|
|
Net gains (losses) resulting from changes in fair value
|
||||||||||||||
|
Three Months Ended September 30
|
|
Nine Months Ended September 30
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(In millions)
|
||||||||||||||
Mortgage loans held for sale, at fair value
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
9
|
|
|
September 30, 2017
|
||||||||||||||||||
|
Carrying
Amount
|
|
Estimated
Fair
Value
(1)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
3,761
|
|
|
$
|
3,761
|
|
|
$
|
3,761
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Trading account securities
|
193
|
|
|
193
|
|
|
193
|
|
|
—
|
|
|
—
|
|
|||||
Securities held to maturity
|
1,703
|
|
|
1,720
|
|
|
—
|
|
|
1,720
|
|
|
—
|
|
|||||
Securities available for sale
|
23,659
|
|
|
23,659
|
|
|
511
|
|
|
23,141
|
|
|
7
|
|
|||||
Loans held for sale
|
388
|
|
|
388
|
|
|
—
|
|
|
388
|
|
|
—
|
|
|||||
Loans (excluding leases), net of unearned income and allowance for loan losses
(2)(3)
|
77,351
|
|
|
74,002
|
|
|
—
|
|
|
—
|
|
|
74,002
|
|
|||||
Other earning assets
(4)
|
891
|
|
|
891
|
|
|
—
|
|
|
891
|
|
|
—
|
|
|||||
Derivative assets
|
414
|
|
|
414
|
|
|
2
|
|
|
402
|
|
|
10
|
|
|||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative liabilities
|
605
|
|
|
605
|
|
|
2
|
|
|
603
|
|
|
—
|
|
|||||
Deposits
|
97,591
|
|
|
97,630
|
|
|
—
|
|
|
97,630
|
|
|
—
|
|
|||||
Short-term borrowings
|
600
|
|
|
600
|
|
|
—
|
|
|
600
|
|
|
—
|
|
|||||
Long-term borrowings
|
6,102
|
|
|
6,447
|
|
|
—
|
|
|
4,878
|
|
|
1,569
|
|
|||||
Loan commitments and letters of credit
|
85
|
|
|
420
|
|
|
—
|
|
|
—
|
|
|
420
|
|
|||||
Indemnification obligation
|
23
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
22
|
|
(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 maintains a corporate governance program to make adjustments for estimated changes in interest rates, market liquidity and credit spreads in the periods they are deemed to have occurred. Historically, the Company has utilized the results of a third-party vendor model to support its primary valuation approach for loans. The Company is currently finalizing the development of an internally-supported loan valuation model which management expects to implement by March 31, 2018.
|
(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
September 30, 2017
was
$3.3 billion
or
4.3
percent.
|
(3)
|
Excluded from this table is the capital lease carrying amount of
$964 million
at
September 30, 2017
.
|
(4)
|
Excluded from this table is the operating lease carrying amount of $
530 million
at
September 30, 2017
.
|
|
December 31, 2016
|
||||||||||||||||||
|
Carrying
Amount
|
|
Estimated
Fair
Value
(1)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
5,451
|
|
|
$
|
5,451
|
|
|
$
|
5,451
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Trading account securities
|
124
|
|
|
124
|
|
|
124
|
|
|
—
|
|
|
—
|
|
|||||
Securities held to maturity
|
1,362
|
|
|
1,369
|
|
|
—
|
|
|
1,369
|
|
|
—
|
|
|||||
Securities available for sale
|
23,781
|
|
|
23,781
|
|
|
504
|
|
|
23,270
|
|
|
7
|
|
|||||
Loans held for sale
|
718
|
|
|
722
|
|
|
—
|
|
|
689
|
|
|
33
|
|
|||||
Loans (excluding leases), net of unearned income and allowance for loan losses
(2)(3)
|
78,128
|
|
|
74,063
|
|
|
—
|
|
|
—
|
|
|
74,063
|
|
|||||
Other earning assets
(4)
|
956
|
|
|
956
|
|
|
—
|
|
|
956
|
|
|
—
|
|
|||||
Derivative assets
|
579
|
|
|
579
|
|
|
2
|
|
|
566
|
|
|
11
|
|
|||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative liabilities
|
887
|
|
|
887
|
|
|
1
|
|
|
886
|
|
|
—
|
|
|||||
Deposits
|
99,035
|
|
|
99,081
|
|
|
—
|
|
|
99,081
|
|
|
—
|
|
|||||
Long-term borrowings
|
7,763
|
|
|
8,008
|
|
|
—
|
|
|
5,408
|
|
|
2,600
|
|
|||||
Loan commitments and letters of credit
|
102
|
|
|
484
|
|
|
—
|
|
|
—
|
|
|
484
|
|
|||||
Indemnification obligation
|
28
|
|
|
26
|
|
|
—
|
|
|
—
|
|
|
26
|
|
(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 maintains a corporate governance program to make adjustments for estimated changes in interest rates, market liquidity and credit spreads in the periods they are deemed to have occurred. Historically, the Company has utilized the results of a third-party vendor model to support its primary valuation approach for loans. The Company is currently finalizing the development of an internally-supported loan valuation model which management expects to implement by March 31, 2018.
|
(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, 2016
was
$4.1 billion
or
5.2
percent.
|
(3)
|
Excluded from this table is the capital lease carrying amount of
$876 million
at
December 31, 2016
.
|
(4)
|
Excluded from this table is the operating lease carrying amount of
$688 million
at
December 31, 2016
.
|
|
Three Months Ended September 30, 2017
|
||||||||||||||||||||||||||
|
Corporate Bank
|
|
Consumer
Bank
|
|
Wealth
Management
|
|
Other
|
|
Continuing
Operations
|
|
Discontinued
Operations
|
|
Consolidated
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Net interest income and other financing income (loss)
|
$
|
362
|
|
|
$
|
542
|
|
|
$
|
50
|
|
|
$
|
(56
|
)
|
|
$
|
898
|
|
|
$
|
—
|
|
|
$
|
898
|
|
Provision (credit) for loan losses
|
66
|
|
|
75
|
|
|
5
|
|
|
(70
|
)
|
|
76
|
|
|
—
|
|
|
76
|
|
|||||||
Non-interest income
|
112
|
|
|
275
|
|
|
110
|
|
|
18
|
|
|
515
|
|
|
—
|
|
|
515
|
|
|||||||
Non-interest expense
|
214
|
|
|
511
|
|
|
117
|
|
|
44
|
|
|
886
|
|
|
1
|
|
|
887
|
|
|||||||
Income (loss) before income taxes
|
194
|
|
|
231
|
|
|
38
|
|
|
(12
|
)
|
|
451
|
|
|
(1
|
)
|
|
450
|
|
|||||||
Income tax expense (benefit)
|
74
|
|
|
88
|
|
|
15
|
|
|
(38
|
)
|
|
139
|
|
|
—
|
|
|
139
|
|
|||||||
Net income (loss)
|
$
|
120
|
|
|
$
|
143
|
|
|
$
|
23
|
|
|
$
|
26
|
|
|
$
|
312
|
|
|
$
|
(1
|
)
|
|
$
|
311
|
|
Average assets
|
$
|
51,304
|
|
|
$
|
34,988
|
|
|
$
|
3,093
|
|
|
$
|
34,048
|
|
|
$
|
123,433
|
|
|
$
|
—
|
|
|
$
|
123,433
|
|
|
Three Months Ended September 30, 2016
|
||||||||||||||||||||||||||
|
Corporate Bank
|
|
Consumer Bank
|
|
Wealth
Management
|
|
Other
|
|
Continuing
Operations
|
|
Discontinued
Operations
|
|
Consolidated
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Net interest income and other financing income (loss)
|
$
|
352
|
|
|
$
|
516
|
|
|
$
|
43
|
|
|
$
|
(76
|
)
|
|
$
|
835
|
|
|
$
|
—
|
|
|
$
|
835
|
|
Provision (credit) for loan losses
|
72
|
|
|
74
|
|
|
5
|
|
|
(122
|
)
|
|
29
|
|
|
—
|
|
|
29
|
|
|||||||
Non-interest income
|
130
|
|
|
291
|
|
|
107
|
|
|
71
|
|
|
599
|
|
|
—
|
|
|
599
|
|
|||||||
Non-interest expense
|
225
|
|
|
530
|
|
|
120
|
|
|
59
|
|
|
934
|
|
|
(2
|
)
|
|
932
|
|
|||||||
Income (loss) before income taxes
|
185
|
|
|
203
|
|
|
25
|
|
|
58
|
|
|
471
|
|
|
2
|
|
|
473
|
|
|||||||
Income tax expense (benefit)
|
70
|
|
|
77
|
|
|
10
|
|
|
(5
|
)
|
|
152
|
|
|
1
|
|
|
153
|
|
|||||||
Net income (loss)
|
$
|
115
|
|
|
$
|
126
|
|
|
$
|
15
|
|
|
$
|
63
|
|
|
$
|
319
|
|
|
$
|
1
|
|
|
$
|
320
|
|
Average assets
|
$
|
53,798
|
|
|
$
|
34,843
|
|
|
$
|
3,233
|
|
|
$
|
33,955
|
|
|
$
|
125,829
|
|
|
$
|
—
|
|
|
$
|
125,829
|
|
|
Nine Months Ended September 30, 2017
|
||||||||||||||||||||||||||
|
Corporate Bank
|
|
Consumer Bank
|
|
Wealth
Management
|
|
Other
|
|
Continuing
Operations
|
|
Discontinued
Operations
|
|
Consolidated
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Net interest income and other financing income (loss)
|
$
|
1,062
|
|
|
$
|
1,593
|
|
|
$
|
143
|
|
|
$
|
(159
|
)
|
|
$
|
2,639
|
|
|
$
|
—
|
|
|
$
|
2,639
|
|
Provision (credit) for loan losses
|
199
|
|
|
220
|
|
|
16
|
|
|
(241
|
)
|
|
194
|
|
|
—
|
|
|
194
|
|
|||||||
Non-interest income
|
343
|
|
|
836
|
|
|
331
|
|
|
40
|
|
|
1,550
|
|
|
—
|
|
|
1,550
|
|
|||||||
Non-interest expense
|
649
|
|
|
1,541
|
|
|
358
|
|
|
124
|
|
|
2,672
|
|
|
(9
|
)
|
|
2,663
|
|
|||||||
Income (loss) before income taxes
|
557
|
|
|
668
|
|
|
100
|
|
|
(2
|
)
|
|
1,323
|
|
|
9
|
|
|
1,332
|
|
|||||||
Income tax expense (benefit)
|
212
|
|
|
254
|
|
|
38
|
|
|
(104
|
)
|
|
400
|
|
|
4
|
|
|
404
|
|
|||||||
Net income (loss)
|
$
|
345
|
|
|
$
|
414
|
|
|
$
|
62
|
|
|
$
|
102
|
|
|
$
|
923
|
|
|
$
|
5
|
|
|
$
|
928
|
|
Average assets
|
$
|
51,896
|
|
|
$
|
34,982
|
|
|
$
|
3,130
|
|
|
$
|
34,016
|
|
|
$
|
124,024
|
|
|
$
|
—
|
|
|
$
|
124,024
|
|
|
Nine Months Ended September 30, 2016
|
||||||||||||||||||||||||||
|
Corporate Bank
|
|
Consumer Bank
|
|
Wealth
Management
|
|
Other
|
|
Continuing
Operations
|
|
Discontinued
Operations
|
|
Consolidated
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Net interest income and other financing income (loss)
|
$
|
1,088
|
|
|
$
|
1,531
|
|
|
$
|
131
|
|
|
$
|
(205
|
)
|
|
$
|
2,545
|
|
|
$
|
—
|
|
|
$
|
2,545
|
|
Provision (credit) for loan losses
|
216
|
|
|
215
|
|
|
17
|
|
|
(234
|
)
|
|
214
|
|
|
—
|
|
|
214
|
|
|||||||
Non-interest income
|
380
|
|
|
831
|
|
|
321
|
|
|
99
|
|
|
1,631
|
|
|
—
|
|
|
1,631
|
|
|||||||
Non-interest expense
|
662
|
|
|
1,544
|
|
|
351
|
|
|
161
|
|
|
2,718
|
|
|
(7
|
)
|
|
2,711
|
|
|||||||
Income (loss) before income taxes
|
590
|
|
|
603
|
|
|
84
|
|
|
(33
|
)
|
|
1,244
|
|
|
7
|
|
|
1,251
|
|
|||||||
Income tax expense (benefit)
|
224
|
|
|
229
|
|
|
32
|
|
|
(105
|
)
|
|
380
|
|
|
3
|
|
|
383
|
|
|||||||
Net income (loss)
|
$
|
366
|
|
|
$
|
374
|
|
|
$
|
52
|
|
|
$
|
72
|
|
|
$
|
864
|
|
|
$
|
4
|
|
|
$
|
868
|
|
Average assets
|
$
|
54,420
|
|
|
$
|
34,373
|
|
|
$
|
3,235
|
|
|
$
|
33,706
|
|
|
$
|
125,734
|
|
|
$
|
—
|
|
|
$
|
125,734
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
|
(In millions)
|
||||||
Unused commitments to extend credit
|
$
|
45,378
|
|
|
$
|
44,408
|
|
Standby letters of credit
|
1,356
|
|
|
1,425
|
|
||
Commercial letters of credit
|
63
|
|
|
46
|
|
||
Liabilities associated with standby letters of credit
|
25
|
|
|
34
|
|
||
Assets associated with standby letters of credit
|
26
|
|
|
34
|
|
||
Reserve for unfunded credit commitments
|
59
|
|
|
69
|
|
Standard
|
Description
|
Required Date of Adoption
|
Effect on Regions' financial statements or other significant matters
|
Standards Adopted (or partially adopted) in 2017
|
|||
ASU 2016-05, Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships
|
The ASU amends Topic 815,
Derivatives and Hedging
, and addresses how a change in the counterparty to a derivative contract affects a hedging relationship. The ASU may be adopted either prospectively or on a modified retrospective basis.
|
January 1, 2017
|
Adopted on a prospective basis January 1, 2017.
No material impact. |
ASU 2016-06, Contingent Put and Call Options in Debt Instruments
|
The ASU amends Topic 815,
Derivatives and Hedging
, and clarifies that entities should solely use the four-step decision sequence described in current derivatives accounting guidance. This sequence should be used when assessing whether contingent exercise provisions associated with a put or call option are clearly and closely related to their debt hosts. The ASU should be adopted on a modified retrospective basis.
|
January 1, 2017
|
Adopted January 1, 2017.
No material impact. |
ASU 2016-07, Simplifying the Transition to the Equity Method of Accounting
|
The ASU amends Topic 323,
Investments-Equity Method and Joint Ventures
, and eliminates the requirement for an investor to retrospectively apply the equity method to investments when its ownership interest (or degree of influence in an investee) increases to a level that triggers the equity method of accounting. This ASU should be adopted prospectively.
|
January 1, 2017
|
Adopted on a prospective basis January 1, 2017.
No material impact. |
ASU 2016-09, Improvements to Employee Share-Based Payment Accounting
|
This ASU amends Topic 718,
Stock Compensation
, and intends to improve and simplify accounting for employee share-based payments. The amendments update the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The transition method of accounting application (i.e. prospective, retrospective or modified retrospective application) differs by amendment and is defined in the guidance.
|
January 1, 2017
|
Adopted on January 1, 2017.
There was no material impact at adoption related to the reclassification of excess tax benefits previously recognized in additional paid-in capital to income tax expense (prospective basis), cash flow statement reclassification related to excess tax benefits (prospective basis) or cash flow statement reclassification related to taxes paid for employee withholdings on share-based awards (retrospective basis).
Additionally, the Company has no previously unrecognized excess tax benefits; therefore, there was no impact.
The Company elected to retain its existing accounting policy election to estimate award forfeitures.
|
ASU 2016-17, Interest Held through Related Parties That Are Under Common Control
|
This ASU amends Topic 810,
Consolidation
, and prescribes that when determining whether a single decision maker is the primary beneficiary of a variable interest entity (VIE), a single decision maker will no longer be required to consider indirect interests held through related parties that are under common control with the single decision maker to be the equivalent of direct interests in their entirety.
|
January 1, 2017
|
Adopted on January 1, 2017.
No material impact.
|
Standard
|
Description
|
Required Date of Adoption
|
Effect on Regions' financial statements or other significant matters
|
Standards Not Yet Adopted
|
|||
ASU 2014-09, Revenue from Contracts with Customers
ASU 2015-14, Deferral of the Effective Date ASU 2016-08, Principal versus Agent Considerations ASU 2016-10, Identifying Performance Obligations and Licensing ASU 2016-12, Narrow-Scope Improvements and Practical Expedience ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers |
This ASU supersedes the revenue recognition requirements in ASC Topic 605,
Revenue Recognition
, and most industry-specific guidance throughout the Industry topics of the Codification. The core principle of the ASU is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU may be adopted either retrospectively or on a modified retrospective basis.
|
January 1, 2018
|
Regions has established a revenue recognition standard implementation team, led by the Corporate Controller’s group with assistance from the various lines of business and finance management to evaluate the potential impact of adopting this guidance. The implementation team has completed the scoping and determined that approximately $1.7 billion of 2016 non-interest income would be within the scope of the new revenue recognition standard, when adopted. Non-interest income streams that are out of scope of the new standard include mortgage income, securities gains (losses), bank-owned life insurance and certain other components within non-interest income. The implementation team has also completed its reviews of contracts related to in-scope non-interest income. Based on the completed contract reviews, any potential changes in revenue recognition for those contracts are not expected to result in a material impact to Regions upon adoption. The implementation team is in the process of developing additional quantitative and qualitative disclosures that will be required upon the adoption of the new revenue recognition standard.
|
ASU 2017-01, Clarifying the Definition of a Business
|
This ASU amends Topic 805,
Business Combinations
, and provides additional accounting guidance to better determine when a set of assets and activities is a business. The ASU should be adopted prospectively.
|
January 1, 2018
Early adoption is permitted for certain transactions as described in the guidance.
|
Regions is evaluating the impact upon adoption; however, the impact is not expected to be material.
|
ASU 2017-04, Simplifying the Test for Goodwill Impairment
|
This ASU amends Topic 350,
Intangibles-Goodwill and Other
, and eliminates Step 2 from the goodwill impairment test.
|
January 1, 2020
Early adoption is permitted. |
Regions believes the adoption of this guidance will not have a material impact. Regions does not plan to early adopt.
|
2017-05, Other Income- Gains and Losses from the Derecognition of Nonfinancial Assets
|
This ASU amends Subtopic 610-20,
Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets
, to clarify the scope and to add guidance for partial sales of nonfinancial assets. The new standard adds a definition for in-substance nonfinancial assets and clarifies that nonfinancial assets within a legal entity are within the scope of ASC 606. This ASU should be adopted in conjunction with ASU 2014-09 using a retrospective or modified retrospective approach.
|
January 1, 2018
|
Regions is evaluating the impact upon adoption; however, the impact is not expected to be material.
|
2017-07, Compensation- Retirement Benefits
|
This ASU amends Topic 715,
Retirement Benefits
, and provides more prescriptive guidance around the presentation of net period pension and postretirement benefit cost in the income statement. The amendment requires that the service cost component be disaggregated from other components of net periodic benefit cost in the income statement.
|
January 1, 2018
Early adoption is permitted.
|
Regions is evaluating the impact upon adoption; however, the impact is not expected to be material. Regions does not plan to early adopt.
|
2017-08, Receivables- Nonrefundable Fees and Other Costs
|
This ASU amends Subtopic 310-20,
Receivables-Nonrefundable Fees and Other Costs
, to shorten the amortization period for certain purchased callable debt securities held at a premium to the earliest call date. Current guidance generally requires entities to amortize a premium as a yield adjustment over the contractual life of the instrument. Shortening the amortization period is generally expected to more closely align the recognition of interest income with expectations incorporated into the pricing of the underlying securities. The amendments do not affect the accounting treatment of discounts. This ASU should be adopted on a modified retrospective basis.
|
January 1, 2019
Early adoption permitted, including in an interim period. |
Regions is evaluating the impact upon adoption; however, the impact is not expected to be material.
|
ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments
|
This ASU amends Topic 230,
Statement of Cash Flows
, and provides clarification with respect to classification within the statement on cash flows where current guidance is unclear or silent. The ASU should be adopted retrospectively.
|
January 1, 2018
Early adoption is permitted.
|
Regions is evaluating the impact upon adoption; however, the impact is not expected to be material. Regions does not plan to early adopt.
|
Standard
|
Description
|
Required Date of Adoption
|
Effect on Regions' financial statements or other significant matters
|
Standards Not Yet Adopted (continued)
|
|||
ASU 2016-02, Leases
|
This ASU creates ASU Topic 842,
Leases
, and supersedes Topic 840,
Leases
. The new guidance requires lessees to record a right-of-use asset and a corresponding liability equal to the present value of future rental payments on their balance sheets for all leases with a term greater than one year. There are not significant changes to lessor accounting; however, there were certain improvements made to align lessor accounting with the lessee accounting model and Topic 606,
Revenue from Contracts with Customers
. This guidance expands both quantitative and qualitative required disclosures. This ASU should be adopted on a modified retrospective basis.
|
January 1, 2019
Early adoption is permitted.
|
This ASU supersedes the lease accounting requirements in Topic 840,
Leases
. Regions has established a leasing standard implementation team comprised of the Corporate Controller’s group, Corporate Real Estate and other business and finance management to plan and execute the adoption of the new leasing standard. The implementation team has substantially completed the identification of Regions’ leases that will need to be measured and reported as a right-of-use asset and corresponding liability for future rental payments. The implementation team is currently working with a lease administration vendor to set up and test the accounting for the lease contracts on the lease administration system. Based on the December 31, 2016 lease portfolio, Regions has approximately $761 million of future lease obligations that would be measured and recognized when the new guidance is adopted (refer to Note 24 to the 2016 consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2016). While this amount represents a large majority of the leases that are within the scope of the new leasing standard, the implementation team will continue reviewing service contracts up through the effective date and may identify additional leases embedded in those arrangements that will be within the scope of the new standard. Between now and January 1, 2019, Regions will likely have changes to the lease portfolio as the Company continues to evaluate and execute branch and occupancy optimization initiatives. In addition to final determination of the lease portfolio at the effective date, the initial measurement of the right-of-use asset and the corresponding liability will be affected by certain key assumptions such as expectations of renewals or extensions and the interest rate to be used to discount the future lease obligations. Up through the date of adoption, the evaluation of the impact of the standard will be adjusted based on new leases that are executed, leases that are terminated prior to the effective date, and any leases with changes to key assumptions or expectations such as renewals and extensions, and discount rates. While there will be some changes to income statement classification, the implementation team does not expect the adoption of the standard to have a material impact to pre-tax income. Regions does not anticipate early adoption of the new standard.
|
ASU 2016-13, Measurement of Credit Losses on Financial Instruments
|
This ASU amends Topic 326,
Financial Instruments- Credit Losses
to replace the current incurred loss accounting model with a current expected credit loss approach (CECL) for financial instruments measured at amortized cost and other commitments to extend credit. The amendments require entities to consider all available relevant information when estimating current expected credit losses, including details about past events, current conditions, and reasonable and supportable forecasts. The resulting allowance for credit losses is to reflect the portion of the amortized cost basis that the entity does not expect to collect. The amendments also eliminate the current accounting model for purchased credit impaired loans and debt securities. Additional quantitative and qualitative disclosures are required upon adoption.
While the CECL model does not apply to AFS debt securities, the ASU does require entities to record an allowance when recognizing credit losses for AFS securities, rather than reduce the amortized cost of the securities by direct write-offs. The ASU should be adopted on a modified retrospective basis. Entities that have loans accounted for under ASC 310-30 at the time of adoption should prospectively apply the guidance in this amendment for purchase credit deteriorated assets. |
January 1, 2020
Early adoption permitted beginning January 1, 2019.
|
Regions has formed a cross-functional implementation team co-led by Finance and Risk Management. The implementation team has developed a project plan and is keeping current with the broader industry’s perspective and insights, delivering educational and awareness sessions across the Company, identifying and researching key decision points, and evaluating the financial and operational implications of adoption.
Regions expects the guidance will result in an increase in the allowance for credit losses given the change from accounting for losses inherent in the loan portfolio to accounting for losses over the remaining expected life of the portfolio. The guidance will also result in the establishment of an allowance for credit loss on held to maturity debt securities. The amount of the increase in these allowances will be impacted by the portfolio composition and quality at the adoption date as well as economic conditions and forecasts at that time. |
ASU 2017-09, Stock Compensation: Scope of Modification Accounting
|
This ASU amends Topic 718,
Compensation- Stock Compensation
, and clarifies when modification accounting should be applied to changes in terms or conditions of share-based payment awards. The amendments narrow the scope of modification accounting by clarifying that modification accounting should be applied to awards if the change affects the fair value, vesting conditions, or classification of the award. The amendments do not impact current disclosure requirements for modifications, regardless of whether modification accounting is required under the new guidance.
|
January 1, 2018
|
Regions is evaluating the impact upon adoption; however, the impact is not expected to be material.
|
Standard
|
Description
|
Required Date of Adoption
|
Effect on Regions' financial statements or other significant matters
|
Standards Not Yet Adopted (continued)
|
|||
ASU 2016-01, Recognition and Measurement of Financial Assets and Liabilities
|
This ASU amends ASC Topic 825,
Financial Instruments-Overall
, and addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The main provisions require investments in equity securities to be measured at fair value with changes in the fair value recognized through net income (except for those accounted for under the equity method of accounting or those that result in consolidation of the investee) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes and requires an entity to present separately in other comprehensive income, the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value. Except for disclosure requirements that will be adopted prospectively, the ASU must be adopted on a modified retrospective basis.
|
January 1, 2018
Early adoption is permitted for certain provisions as described in the guidance.
|
Regions is evaluating the impact upon adoption; however, the impact is not expected to be material. Regions does not plan to early adopt.
|
ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities
|
This ASU amends ASC 815,
Derivatives and Hedging
to (1) improve the transparency and understandability of information conveyed to financial statement users about an entity’s risk management activities by better aligning the entity’s financial reporting for hedging relationships with those risk management activities and (2) reduce the complexity of and simplify the application of hedge accounting by preparers.
|
January 1, 2019.
Early adoption is permitted.
|
Regions is evaluating the impact upon adoption; however, the impact is not expected to be material. Regions is considering early adoption.
|
•
|
Excluding the impact of a terminated third-party arrangement within the indirect-vehicle loan portfolio, full year average loans are expected to be down slightly compared to the prior year
|
•
|
Full-year average deposits are expected to be relatively stable compared to the prior year
|
•
|
Net interest income and other financing income up 3 to 5 percent
|
•
|
Adjusted non-interest income (non-GAAP) is expected to be relatively stable compared to the prior year
|
•
|
Adjusted non-interest expenses (non-GAAP) flat to up 1 percent
|
•
|
Full-year adjusted efficiency ratio (non-GAAP) of approximately 62 percent
|
•
|
Positive adjusted operating leverage (non-GAAP) of approximately 2 percent
|
•
|
Full-year effective income tax rate expected in the 30 percent to 31 percent range
|
•
|
Full-year net charge-offs of
35
to
50
basis points
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
|
(In millions)
|
||||||
U.S. Treasury securities
|
$
|
308
|
|
|
$
|
303
|
|
Federal agency securities
|
24
|
|
|
35
|
|
||
Obligations of states and political subdivisions
|
—
|
|
|
1
|
|
||
Mortgage-backed securities:
|
|
|
|
||||
Residential agency
|
18,538
|
|
|
18,571
|
|
||
Residential non-agency
|
3
|
|
|
4
|
|
||
Commercial agency
|
4,275
|
|
|
3,625
|
|
||
Commercial non-agency
|
809
|
|
|
1,129
|
|
||
Corporate and other debt securities
|
1,202
|
|
|
1,274
|
|
||
Equity securities
|
203
|
|
|
201
|
|
||
|
$
|
25,362
|
|
|
$
|
25,143
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
|
(In millions, net of unearned income)
|
||||||
Commercial and industrial
|
$
|
35,443
|
|
|
$
|
35,012
|
|
Commercial real estate mortgage—owner-occupied
|
6,284
|
|
|
6,867
|
|
||
Commercial real estate construction—owner-occupied
|
335
|
|
|
334
|
|
||
Total commercial
|
42,062
|
|
|
42,213
|
|
||
Commercial investor real estate mortgage
|
3,999
|
|
|
4,087
|
|
||
Commercial investor real estate construction
|
1,936
|
|
|
2,387
|
|
||
Total investor real estate
|
5,935
|
|
|
6,474
|
|
||
Residential first mortgage
|
13,903
|
|
|
13,440
|
|
||
Home equity
|
10,276
|
|
|
10,687
|
|
||
Indirect—vehicles
|
3,489
|
|
|
4,040
|
|
||
Indirect—other consumer
|
1,318
|
|
|
920
|
|
||
Consumer credit card
|
1,214
|
|
|
1,196
|
|
||
Other consumer
|
1,159
|
|
|
1,125
|
|
||
Total consumer
|
31,359
|
|
|
31,408
|
|
||
|
$
|
79,356
|
|
|
$
|
80,095
|
|
|
September 30, 2017
|
||||||||||
|
Loans
|
|
Unfunded Commitments
|
|
Total Exposure
|
||||||
|
(In millions)
|
||||||||||
Administrative, support, waste and repair
|
$
|
940
|
|
|
$
|
535
|
|
|
$
|
1,475
|
|
Agriculture
|
606
|
|
|
227
|
|
|
833
|
|
|||
Educational services
|
2,259
|
|
|
346
|
|
|
2,605
|
|
|||
Energy
|
1,902
|
|
|
1,922
|
|
|
3,824
|
|
|||
Financial services
|
3,537
|
|
|
3,223
|
|
|
6,760
|
|
|||
Government and public sector
|
2,735
|
|
|
357
|
|
|
3,092
|
|
|||
Healthcare
|
4,073
|
|
|
1,584
|
|
|
5,657
|
|
|||
Information
|
1,046
|
|
|
883
|
|
|
1,929
|
|
|||
Manufacturing
(1)
|
4,188
|
|
|
3,715
|
|
|
7,903
|
|
|||
Professional, scientific and technical services
(1)
|
1,696
|
|
|
1,236
|
|
|
2,932
|
|
|||
Real estate
(1)
|
6,224
|
|
|
5,531
|
|
|
11,755
|
|
|||
Religious, leisure, personal and non-profit services
|
1,908
|
|
|
627
|
|
|
2,535
|
|
|||
Restaurant, accommodation and lodging
|
2,221
|
|
|
540
|
|
|
2,761
|
|
|||
Retail trade
|
2,555
|
|
|
2,202
|
|
|
4,757
|
|
|||
Transportation and warehousing
(1)
|
1,829
|
|
|
787
|
|
|
2,616
|
|
|||
Utilities
|
1,214
|
|
|
2,135
|
|
|
3,349
|
|
|||
Wholesale goods
(1)
|
3,076
|
|
|
2,271
|
|
|
5,347
|
|
|||
Other
(2)
|
53
|
|
|
2,263
|
|
|
2,316
|
|
|||
Total commercial
|
$
|
42,062
|
|
|
$
|
30,384
|
|
|
$
|
72,446
|
|
|
December 31, 2016
(3)
|
||||||||||
|
Loans
|
|
Unfunded Commitments
|
|
Total Exposure
|
||||||
|
(In millions)
|
||||||||||
Administrative, support, waste and repair
|
$
|
899
|
|
|
$
|
481
|
|
|
$
|
1,380
|
|
Agriculture
|
612
|
|
|
241
|
|
|
853
|
|
|||
Educational services
|
1,929
|
|
|
307
|
|
|
2,236
|
|
|||
Energy
|
2,097
|
|
|
1,968
|
|
|
4,065
|
|
|||
Financial services
(4)
|
3,473
|
|
|
3,228
|
|
|
6,701
|
|
|||
Government and public sector
|
2,485
|
|
|
246
|
|
|
2,731
|
|
|||
Healthcare
|
4,178
|
|
|
1,483
|
|
|
5,661
|
|
|||
Information
|
1,111
|
|
|
817
|
|
|
1,928
|
|
|||
Manufacturing
(4)
|
4,101
|
|
|
4,024
|
|
|
8,125
|
|
|||
Professional, scientific and technical services
(4)
|
1,701
|
|
|
1,052
|
|
|
2,753
|
|
|||
Real estate
(4)
|
6,513
|
|
|
5,445
|
|
|
11,958
|
|
|||
Religious, leisure, personal and non-profit services
|
1,934
|
|
|
495
|
|
|
2,429
|
|
|||
Restaurant, accommodation and lodging
|
2,436
|
|
|
650
|
|
|
3,086
|
|
|||
Retail trade
|
2,570
|
|
|
2,339
|
|
|
4,909
|
|
|||
Transportation and warehousing
(4)
|
2,196
|
|
|
1,005
|
|
|
3,201
|
|
|||
Utilities
|
1,147
|
|
|
2,008
|
|
|
3,155
|
|
|||
Wholesale goods
(4)
|
2,795
|
|
|
2,396
|
|
|
5,191
|
|
|||
Other
(2)
|
36
|
|
|
1,162
|
|
|
1,198
|
|
|||
Total commercial
|
$
|
42,213
|
|
|
$
|
29,347
|
|
|
$
|
71,560
|
|
(1)
|
Regions' definition of indirect energy-related lending includes certain balances within each of these selected industry categories. As of September 30, 2017, total indirect energy-related loans were approximately $572 million, with approximately $544 million included in commercial loans and $28 million in investor real estate loans. Total unfunded commitments for indirect energy-related lending were $363 million as of September 30, 2017.
|
(2)
|
"Other" contains balances related to non-classifiable and invalid business industry codes offset by payments in process and fee accounts that are not available at the loan level.
|
(3)
|
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.
|
(4)
|
Regions' definition of indirect energy-related lending includes certain balances within each of these selected industry categories. As of December 31, 2016, total indirect energy-related loans were approximately $536 million, with approximately $506 million included in commercial loans and $30 million in investor real estate loans. Total unfunded commitments for indirect energy-related lending were $446 million as of December 31, 2016.
|
|
First Lien
|
|
% of Total
|
|
Second Lien
|
|
% of Total
|
|
Total
|
||||||||
|
(Dollars in millions)
|
||||||||||||||||
2017
|
$
|
3
|
|
|
0.05
|
%
|
|
$
|
7
|
|
|
0.10
|
%
|
|
$
|
10
|
|
2018
|
9
|
|
|
0.13
|
|
|
15
|
|
|
0.22
|
|
|
24
|
|
|||
2019
|
66
|
|
|
0.99
|
|
|
57
|
|
|
0.86
|
|
|
123
|
|
|||
2020
|
138
|
|
|
2.06
|
|
|
106
|
|
|
1.58
|
|
|
244
|
|
|||
2021
|
161
|
|
|
2.41
|
|
|
141
|
|
|
2.11
|
|
|
302
|
|
|||
2022-2026
|
1,480
|
|
|
22.12
|
|
|
1,546
|
|
|
23.09
|
|
|
3,026
|
|
|||
2027-2031
|
1,583
|
|
|
23.64
|
|
|
1,380
|
|
|
20.63
|
|
|
2,963
|
|
|||
Thereafter
|
—
|
|
|
—
|
|
|
1
|
|
|
0.01
|
|
|
1
|
|
|||
Total
|
$
|
3,440
|
|
|
51.40
|
%
|
|
$
|
3,253
|
|
|
48.60
|
%
|
|
$
|
6,693
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
Residential
First Mortgage
|
|
Home Equity
|
|
Residential
First Mortgage
|
|
Home Equity
|
||||||||||||||||
|
|
1st Lien
|
|
2nd Lien
|
|
|
1st Lien
|
|
2nd Lien
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Estimated current LTV:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Above 100%
|
$
|
106
|
|
|
$
|
54
|
|
|
$
|
138
|
|
|
$
|
139
|
|
|
$
|
82
|
|
|
$
|
235
|
|
80% - 100%
|
1,632
|
|
|
280
|
|
|
526
|
|
|
1,675
|
|
|
371
|
|
|
677
|
|
||||||
Below 80%
|
11,584
|
|
|
6,277
|
|
|
2,778
|
|
|
11,090
|
|
|
6,248
|
|
|
2,814
|
|
||||||
Data not available
|
581
|
|
|
91
|
|
|
132
|
|
|
536
|
|
|
99
|
|
|
161
|
|
||||||
|
$
|
13,903
|
|
|
$
|
6,702
|
|
|
$
|
3,574
|
|
|
$
|
13,440
|
|
|
$
|
6,800
|
|
|
$
|
3,887
|
|
|
September 30, 2017
|
||||||||||||||||||||||||||
|
Residential
First Mortgage
|
|
Home Equity
|
|
Indirect—Vehicles
|
|
Indirect—Other Consumer
|
|
Consumer
Credit Card
|
|
Other
Consumer
|
||||||||||||||||
|
|
1st Lien
|
|
2nd Lien
|
|
|
|
|
|||||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Below 620
|
$
|
766
|
|
|
$
|
273
|
|
|
$
|
181
|
|
|
$
|
355
|
|
|
$
|
47
|
|
|
$
|
81
|
|
|
$
|
74
|
|
620-680
|
827
|
|
|
486
|
|
|
296
|
|
|
422
|
|
|
153
|
|
|
214
|
|
|
145
|
|
|||||||
681-720
|
1,361
|
|
|
815
|
|
|
445
|
|
|
442
|
|
|
236
|
|
|
277
|
|
|
228
|
|
|||||||
Above 720
|
10,201
|
|
|
4,988
|
|
|
2,595
|
|
|
2,173
|
|
|
721
|
|
|
633
|
|
|
650
|
|
|||||||
Data not available
|
748
|
|
|
140
|
|
|
57
|
|
|
97
|
|
|
161
|
|
|
9
|
|
|
62
|
|
|||||||
|
$
|
13,903
|
|
|
$
|
6,702
|
|
|
$
|
3,574
|
|
|
$
|
3,489
|
|
|
$
|
1,318
|
|
|
$
|
1,214
|
|
|
$
|
1,159
|
|
|
December 31, 2016
|
||||||||||||||||||||||||||
|
Residential
First Mortgage
|
|
Home Equity
|
|
Indirect—Vehicles
|
|
Indirect—Other Consumer
|
|
Consumer
Credit Card
|
|
Other
Consumer
|
||||||||||||||||
|
|
1st Lien
|
|
2nd Lien
|
|
|
|
|
|||||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Below 620
|
$
|
807
|
|
|
$
|
301
|
|
|
$
|
204
|
|
|
$
|
427
|
|
|
$
|
19
|
|
|
$
|
71
|
|
|
$
|
82
|
|
620-680
|
920
|
|
|
529
|
|
|
355
|
|
|
527
|
|
|
94
|
|
|
206
|
|
|
162
|
|
|||||||
681-720
|
1,400
|
|
|
834
|
|
|
489
|
|
|
559
|
|
|
141
|
|
|
271
|
|
|
222
|
|
|||||||
Above 720
|
9,578
|
|
|
4,988
|
|
|
2,775
|
|
|
2,402
|
|
|
382
|
|
|
647
|
|
|
597
|
|
|||||||
Data not available
|
735
|
|
|
148
|
|
|
64
|
|
|
125
|
|
|
284
|
|
|
1
|
|
|
62
|
|
|||||||
|
$
|
13,440
|
|
|
$
|
6,800
|
|
|
$
|
3,887
|
|
|
$
|
4,040
|
|
|
$
|
920
|
|
|
$
|
1,196
|
|
|
$
|
1,125
|
|
|
Nine Months Ended September 30
|
||||||
|
2017
|
|
2016
|
||||
|
(Dollars in millions)
|
||||||
Allowance for loan losses at beginning of year
|
$
|
1,091
|
|
|
$
|
1,106
|
|
Loans charged-off:
|
|
|
|
||||
Commercial and industrial
|
124
|
|
|
82
|
|
||
Commercial real estate mortgage—owner-occupied
|
15
|
|
|
19
|
|
||
Commercial real estate construction—owner-occupied
|
—
|
|
|
1
|
|
||
Commercial investor real estate mortgage
|
2
|
|
|
2
|
|
||
Commercial investor real estate construction
|
—
|
|
|
—
|
|
||
Residential first mortgage
|
9
|
|
|
11
|
|
||
Home equity
|
26
|
|
|
45
|
|
||
Indirect
—
vehicles
|
38
|
|
|
36
|
|
||
Indirect
—
other consumer
|
20
|
|
|
10
|
|
||
Consumer credit card
|
40
|
|
|
30
|
|
||
Other consumer
|
55
|
|
|
52
|
|
||
|
329
|
|
|
288
|
|
||
Recoveries of loans previously charged-off:
|
|
|
|
||||
Commercial and industrial
|
22
|
|
|
25
|
|
||
Commercial real estate mortgage—owner-occupied
|
6
|
|
|
9
|
|
||
Commercial real estate construction—owner-occupied
|
—
|
|
|
—
|
|
||
Commercial investor real estate mortgage
|
8
|
|
|
8
|
|
||
Commercial investor real estate construction
|
2
|
|
|
2
|
|
||
Residential first mortgage
|
3
|
|
|
2
|
|
||
Home equity
|
15
|
|
|
21
|
|
||
Indirect
—
vehicles
|
14
|
|
|
14
|
|
||
Indirect
—
other consumer
|
1
|
|
|
—
|
|
||
Consumer credit card
|
5
|
|
|
4
|
|
||
Other consumer
|
9
|
|
|
9
|
|
||
|
85
|
|
|
94
|
|
||
Net charge-offs:
|
|
|
|
||||
Commercial and industrial
|
102
|
|
|
57
|
|
||
Commercial real estate mortgage—owner-occupied
|
9
|
|
|
10
|
|
||
Commercial real estate construction—owner-occupied
|
—
|
|
|
1
|
|
||
Commercial investor real estate mortgage
|
(6
|
)
|
|
(6
|
)
|
||
Commercial investor real estate construction
|
(2
|
)
|
|
(2
|
)
|
||
Residential first mortgage
|
6
|
|
|
9
|
|
||
Home equity
|
11
|
|
|
24
|
|
||
Indirect
—
vehicles
|
24
|
|
|
22
|
|
||
Indirect
—
other consumer
|
19
|
|
|
10
|
|
||
Consumer credit card
|
35
|
|
|
26
|
|
||
Other consumer
|
46
|
|
|
43
|
|
||
|
244
|
|
|
194
|
|
||
Provision for loan losses
|
194
|
|
|
214
|
|
||
Allowance for loan losses at September 30
|
$
|
1,041
|
|
|
$
|
1,126
|
|
Reserve for unfunded credit commitments at beginning of year
|
$
|
69
|
|
|
$
|
52
|
|
Provision (credit) for unfunded credit losses
|
(10
|
)
|
|
20
|
|
||
Reserve for unfunded credit commitments at September 30
|
$
|
59
|
|
|
$
|
72
|
|
Allowance for credit losses at September 30
|
$
|
1,100
|
|
|
$
|
1,198
|
|
Loans, net of unearned income, outstanding at end of period
|
$
|
79,356
|
|
|
$
|
80,883
|
|
Average loans, net of unearned income, outstanding for the period
|
$
|
79,956
|
|
|
$
|
81,583
|
|
Ratios:
|
|
|
|
||||
Allowance for loan losses at end of period to loans, net of unearned income
|
1.31
|
%
|
|
1.39
|
%
|
||
Allowance for loan losses at end of period to non-performing loans, excluding loans held for sale
|
1.37x
|
|
|
1.04x
|
|
||
Net charge-offs as percentage of average loans, net of unearned income (annualized)
|
0.41
|
%
|
|
0.32
|
%
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||||
|
Loan
Balance
|
|
Allowance for
Loan Losses
|
|
Loan
Balance
|
|
Allowance for
Loan Losses
|
||||||||
|
(In millions)
|
||||||||||||||
Accruing:
|
|
|
|
|
|
|
|
||||||||
Commercial
|
$
|
262
|
|
|
$
|
38
|
|
|
$
|
241
|
|
|
$
|
38
|
|
Investor real estate
|
104
|
|
|
17
|
|
|
90
|
|
|
8
|
|
||||
Residential first mortgage
|
381
|
|
|
41
|
|
|
380
|
|
|
46
|
|
||||
Home equity
|
257
|
|
|
5
|
|
|
286
|
|
|
5
|
|
||||
Indirect—vehicles
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Consumer credit card
|
1
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
Other consumer
|
9
|
|
|
—
|
|
|
10
|
|
|
—
|
|
||||
|
1,014
|
|
|
101
|
|
|
1,010
|
|
|
97
|
|
||||
Non-accrual status or 90 days past due and still accruing:
|
|
|
|
|
|
|
|
||||||||
Commercial
|
238
|
|
|
50
|
|
|
279
|
|
|
65
|
|
||||
Investor real estate
|
1
|
|
|
1
|
|
|
5
|
|
|
2
|
|
||||
Residential first mortgage
|
64
|
|
|
7
|
|
|
74
|
|
|
9
|
|
||||
Home equity
|
15
|
|
|
—
|
|
|
17
|
|
|
—
|
|
||||
|
318
|
|
|
58
|
|
|
375
|
|
|
76
|
|
||||
Total TDRs - Loans
|
$
|
1,332
|
|
|
$
|
159
|
|
|
$
|
1,385
|
|
|
$
|
173
|
|
|
|
|
|
|
|
|
|
||||||||
TDRs - Held For Sale
|
1
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||
Total TDRs
|
$
|
1,333
|
|
|
$
|
159
|
|
|
$
|
1,388
|
|
|
$
|
173
|
|
|
Nine Months Ended
September 30, 2017 |
|
Nine Months Ended
September 30, 2016
|
||||||||||||
|
Commercial
|
|
Investor
Real Estate |
|
Commercial
|
|
Investor
Real Estate |
||||||||
|
(In millions)
|
||||||||||||||
Balance, beginning of period
|
$
|
520
|
|
|
$
|
95
|
|
|
$
|
281
|
|
|
$
|
179
|
|
Inflows
|
359
|
|
|
88
|
|
|
299
|
|
|
27
|
|
||||
Outflows
|
|
|
|
|
|
|
|
||||||||
Charge-offs
|
(11
|
)
|
|
(1
|
)
|
|
(15
|
)
|
|
—
|
|
||||
Foreclosure
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Payments, sales and other
(1)
|
(366
|
)
|
|
(77
|
)
|
|
(160
|
)
|
|
(77
|
)
|
||||
Balance, end of period
|
$
|
500
|
|
|
$
|
105
|
|
|
$
|
405
|
|
|
$
|
129
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
|
(Dollars in millions)
|
||||||
Non-performing loans:
|
|
|
|
||||
Commercial and industrial
|
$
|
493
|
|
|
$
|
623
|
|
Commercial real estate mortgage—owner-occupied
|
140
|
|
|
210
|
|
||
Commercial real estate construction—owner-occupied
|
6
|
|
|
3
|
|
||
Total commercial
|
639
|
|
|
836
|
|
||
Commercial investor real estate mortgage
|
5
|
|
|
17
|
|
||
Total investor real estate
|
5
|
|
|
17
|
|
||
Residential first mortgage
|
45
|
|
|
50
|
|
||
Home equity
|
70
|
|
|
92
|
|
||
Indirect - vehicles
|
1
|
|
|
—
|
|
||
Total consumer
|
116
|
|
|
142
|
|
||
Total non-performing loans, excluding loans held for sale
|
760
|
|
|
995
|
|
||
Non-performing loans held for sale
|
6
|
|
|
13
|
|
||
Total non-performing loans
(1)
|
766
|
|
|
1,008
|
|
||
Foreclosed properties
|
73
|
|
|
90
|
|
||
Total non-performing assets
(1)
|
$
|
839
|
|
|
$
|
1,098
|
|
Accruing loans 90 days past due:
|
|
|
|
||||
Commercial and industrial
|
$
|
5
|
|
|
$
|
6
|
|
Commercial real estate mortgage—owner-occupied
|
4
|
|
|
2
|
|
||
Total commercial
|
9
|
|
|
8
|
|
||
Residential first mortgage
(2)
|
80
|
|
|
99
|
|
||
Home equity
|
33
|
|
|
33
|
|
||
Indirect—vehicles
|
9
|
|
|
10
|
|
||
Consumer credit card
|
16
|
|
|
15
|
|
||
Other consumer
|
4
|
|
|
5
|
|
||
Total consumer
|
142
|
|
|
162
|
|
||
|
$
|
151
|
|
|
$
|
170
|
|
Restructured loans not included in the categories above
|
$
|
1,014
|
|
|
$
|
1,010
|
|
Non-performing loans
(1)
to loans and non-performing loans held for sale
|
0.97
|
%
|
|
1.26
|
%
|
||
Non-performing assets
(1)
to loans, foreclosed properties and non-performing loans held for sale
|
1.06
|
%
|
|
1.37
|
%
|
(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
$94 million
at
September 30, 2017
and $113 million at
December 31, 2016
.
|
|
Non-Accrual Loans, Excluding Loans Held for Sale
Nine Months Ended September 30, 2017 |
||||||||||||||
|
Commercial
|
|
Investor
Real Estate
|
|
Consumer
(1)
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
Balance at beginning of period
|
$
|
836
|
|
|
$
|
17
|
|
|
$
|
142
|
|
|
$
|
995
|
|
Additions
|
423
|
|
|
7
|
|
|
—
|
|
|
430
|
|
||||
Net payments/other activity
|
(389
|
)
|
|
(7
|
)
|
|
(26
|
)
|
|
(422
|
)
|
||||
Return to accrual
|
(80
|
)
|
|
(8
|
)
|
|
—
|
|
|
(88
|
)
|
||||
Charge-offs on non-accrual loans
(2)
|
(133
|
)
|
|
(1
|
)
|
|
—
|
|
|
(134
|
)
|
||||
Transfers to held for sale
(3)
|
(14
|
)
|
|
(2
|
)
|
|
—
|
|
|
(16
|
)
|
||||
Transfers to foreclosed properties
|
(3
|
)
|
|
(1
|
)
|
|
—
|
|
|
(4
|
)
|
||||
Sales
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
Balance at end of period
|
$
|
639
|
|
|
$
|
5
|
|
|
$
|
116
|
|
|
$
|
760
|
|
|
Non-Accrual Loans, Excluding Loans Held for Sale
Nine Months Ended September 30, 2016 |
||||||||||||||
|
Commercial
|
|
Investor
Real Estate
|
|
Consumer
(1)
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
Balance at beginning of period
|
$
|
595
|
|
|
$
|
31
|
|
|
$
|
156
|
|
|
$
|
782
|
|
Additions
|
724
|
|
|
16
|
|
|
—
|
|
|
740
|
|
||||
Net payments/other activity
|
(223
|
)
|
|
(12
|
)
|
|
(13
|
)
|
|
(248
|
)
|
||||
Return to accrual
|
(34
|
)
|
|
(12
|
)
|
|
—
|
|
|
(46
|
)
|
||||
Charge-offs on non-accrual loans
(2)
|
(97
|
)
|
|
(2
|
)
|
|
—
|
|
|
(99
|
)
|
||||
Transfers to held for sale
(3)
|
(40
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(42
|
)
|
||||
Transfers to foreclosed properties
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||
Sales
|
(5
|
)
|
|
(1
|
)
|
|
—
|
|
|
(6
|
)
|
||||
Balance at end of period
|
$
|
917
|
|
|
$
|
19
|
|
|
$
|
142
|
|
|
$
|
1,078
|
|
(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 net payments/other activity 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 $5 million and $19 million recorded upon transfer for the
nine months ended September 30, 2017
and
2016
, respectively.
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
|
(In millions)
|
||||||
Non-interest-bearing demand
|
$
|
37,293
|
|
|
$
|
36,046
|
|
Savings
|
8,364
|
|
|
7,840
|
|
||
Interest-bearing transaction
|
18,976
|
|
|
20,259
|
|
||
Money market—domestic
|
25,886
|
|
|
27,293
|
|
||
Money market—foreign
|
36
|
|
|
186
|
|
||
Low-cost deposits
|
90,555
|
|
|
91,624
|
|
||
Time deposits
|
7,036
|
|
|
7,183
|
|
||
Customer deposits
|
97,591
|
|
|
98,807
|
|
||
Corporate treasury time deposits
|
—
|
|
|
228
|
|
||
|
$
|
97,591
|
|
|
$
|
99,035
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
|
(In millions)
|
||||||
Regions Financial Corporation (Parent):
|
|
|
|
||||
2.00% senior notes due May 2018
|
$
|
101
|
|
|
$
|
100
|
|
3.20% senior notes due February 2021
|
1,101
|
|
|
1,102
|
|
||
2.75% senior notes due August 2022
|
995
|
|
|
—
|
|
||
7.75% subordinated notes due September 2024
|
100
|
|
|
100
|
|
||
6.75% subordinated debentures due November 2025
|
158
|
|
|
159
|
|
||
7.375% subordinated notes due December 2037
|
298
|
|
|
297
|
|
||
Valuation adjustments on hedged long-term debt
|
(32
|
)
|
|
(30
|
)
|
||
|
2,721
|
|
|
1,728
|
|
||
Regions Bank:
|
|
|
|
||||
Federal Home Loan Bank advances
|
1,603
|
|
|
4,254
|
|
||
2.25% senior notes due September 2018
|
748
|
|
|
748
|
|
||
7.50% subordinated notes due May 2018
|
500
|
|
|
499
|
|
||
6.45% subordinated notes due June 2037
|
495
|
|
|
495
|
|
||
3.80% affiliate subordinated notes due February 2025
|
150
|
|
|
150
|
|
||
Other long-term debt
|
36
|
|
|
40
|
|
||
Valuation adjustments on hedged long-term debt
|
(1
|
)
|
|
(1
|
)
|
||
|
3,531
|
|
|
6,185
|
|
||
Elimination of 3.80% affiliate subordinated notes due February 2025
|
(150
|
)
|
|
(150
|
)
|
||
Total consolidated
|
$
|
6,102
|
|
|
$
|
7,763
|
|
Transitional Basis Basel III Regulatory Capital Rules
(1)
|
September 30, 2017
Ratio
(2)
|
|
December 31, 2016
Ratio
|
|
Minimum
Requirement
|
|
To Be Well
Capitalized
|
||||
Basel III common equity Tier 1 capital:
|
|
|
|
|
|
|
|
||||
Regions Financial Corporation
|
11.30
|
%
|
|
11.21
|
%
|
|
4.50
|
%
|
|
N/A
|
|
Regions Bank
|
12.44
|
|
|
12.14
|
|
|
4.50
|
|
|
6.50
|
%
|
Tier 1 capital:
|
|
|
|
|
|
|
|
||||
Regions Financial Corporation
|
12.11
|
%
|
|
11.98
|
%
|
|
6.00
|
%
|
|
6.00
|
%
|
Regions Bank
|
12.44
|
|
|
12.14
|
|
|
6.00
|
|
|
8.00
|
|
Total capital:
|
|
|
|
|
|
|
|
||||
Regions Financial Corporation
|
14.16
|
%
|
|
14.15
|
%
|
|
8.00
|
%
|
|
10.00
|
%
|
Regions Bank
|
14.18
|
|
|
14.00
|
|
|
8.00
|
|
|
10.00
|
|
Leverage capital:
|
|
|
|
|
|
|
|
||||
Regions Financial Corporation
|
10.21
|
%
|
|
10.20
|
%
|
|
4.00
|
%
|
|
N/A
|
|
Regions Bank
|
10.49
|
|
|
10.34
|
|
|
4.00
|
|
|
5.00
|
%
|
(1)
|
The 2017 and 2016 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 December 31, 2016
|
|||
|
S&P
|
Moody’s
|
Fitch
|
DBRS
|
Regions Financial Corporation
|
|
|
|
|
Senior unsecured debt
|
BBB
|
Baa2
|
BBB
|
BBBH
|
Subordinated debt
|
BBB-
|
Baa2
|
BBB-
|
BBB
|
Regions Bank
|
|
|
|
|
Short-term
|
A-2
|
P-1
|
F2
|
R-1L
|
Long-term bank deposits
|
N/A
|
A2
|
BBB+
|
AL
|
Long-term rating
|
BBB+
|
A2
|
BBB
|
N/A
|
Senior unsecured debt
|
BBB+
|
Baa2
|
BBB
|
AL
|
Subordinated debt
|
BBB
|
Baa2
|
BBB-
|
BBBH
|
Outlook
|
Stable
|
Stable
|
Positive
|
Stable
|
•
|
Preparation of Regions’ operating budgets
|
•
|
Monthly financial performance reporting
|
•
|
Monthly close-out reporting of consolidated results (management only)
|
•
|
Presentations to investors of Company performance
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
|
|
(Dollars in millions)
|
||||||
ADJUSTED NON-ACCRUAL LOANS AND SELECTED RATIOS
|
|
|
|
|
||||
Allowance for loan losses (GAAP)
|
A
|
$
|
1,041
|
|
|
$
|
1,091
|
|
Less: Direct energy portion
|
|
115
|
|
|
147
|
|
||
Adjusted allowance for loan losses (non-GAAP)
|
B
|
$
|
926
|
|
|
$
|
944
|
|
Total non-accrual loans (GAAP)
|
C
|
$
|
760
|
|
|
$
|
995
|
|
Less: Direct energy non-accrual loans
|
|
247
|
|
|
311
|
|
||
Adjusted total non-accrual loans (non-GAAP)
|
D
|
$
|
513
|
|
|
$
|
684
|
|
Allowance for loan losses to non-performing loans, excluding loans held for sale (GAAP)
|
A/C
|
1.37x
|
|
|
1.10x
|
|
||
Adjusted allowance for loan losses to non-performing loans, excluding loans held for sale (non-GAAP)
|
B/D
|
1.80x
|
|
|
1.38x
|
|
|
|
Three Months Ended September 30
|
|
Nine Months Ended September 30
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
(Dollars in millions)
|
||||||||||||||
INCOME
|
|
|
|
|
|
|
|
|
||||||||
Net income (GAAP)
|
|
$
|
311
|
|
|
$
|
320
|
|
|
$
|
928
|
|
|
$
|
868
|
|
Preferred dividends (GAAP)
|
|
(16
|
)
|
|
(16
|
)
|
|
(48
|
)
|
|
(48
|
)
|
||||
Net income available to common shareholders (GAAP)
|
E
|
$
|
295
|
|
|
$
|
304
|
|
|
$
|
880
|
|
|
$
|
820
|
|
ADJUSTED EFFICIENCY AND FEE INCOME RATIOS
|
|
|
|
|
|
|
|
|
||||||||
Non-interest expense from continuing operations (GAAP)
|
F
|
$
|
886
|
|
|
$
|
934
|
|
|
$
|
2,672
|
|
|
$
|
2,718
|
|
Significant items:
|
|
|
|
|
|
|
|
|
||||||||
Professional, legal and regulatory expenses
(1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||
Branch consolidation, property and equipment charges
|
|
(5
|
)
|
|
(5
|
)
|
|
(13
|
)
|
|
(41
|
)
|
||||
Loss on early extinguishment of debt
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
|
(14
|
)
|
||||
Salary and employee benefits—severance charges
|
|
(1
|
)
|
|
(3
|
)
|
|
(8
|
)
|
|
(16
|
)
|
||||
Adjusted non-interest expense (non-GAAP)
|
G
|
$
|
880
|
|
|
$
|
912
|
|
|
$
|
2,651
|
|
|
$
|
2,644
|
|
Net interest income and other financing income (GAAP)
|
|
$
|
898
|
|
|
$
|
835
|
|
|
$
|
2,639
|
|
|
$
|
2,545
|
|
Taxable-equivalent adjustment
|
|
23
|
|
|
21
|
|
|
67
|
|
|
63
|
|
||||
Net interest income and other financing income from continuing operations, taxable-equivalent basis
|
H
|
921
|
|
|
856
|
|
|
2,706
|
|
|
2,608
|
|
||||
Non-interest income from continuing operations (GAAP)
|
I
|
515
|
|
|
599
|
|
|
1,550
|
|
|
1,631
|
|
||||
Significant items:
|
|
|
|
|
|
|
|
|
||||||||
Securities (gains) losses, net
|
|
(8
|
)
|
|
—
|
|
|
(9
|
)
|
|
(1
|
)
|
||||
Insurance proceeds
(2)
|
|
—
|
|
|
(47
|
)
|
|
—
|
|
|
(50
|
)
|
||||
Leveraged lease termination gains, net
(3)
|
|
(1
|
)
|
|
(8
|
)
|
|
(1
|
)
|
|
(8
|
)
|
||||
Gain on sale of affordable housing residential mortgage loans
(4)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
||||
Adjusted non-interest income (non-GAAP)
|
J
|
$
|
506
|
|
|
$
|
544
|
|
|
$
|
1,535
|
|
|
$
|
1,572
|
|
Total revenue, taxable-equivalent basis
|
H+I=K
|
$
|
1,436
|
|
|
$
|
1,455
|
|
|
$
|
4,256
|
|
|
$
|
4,239
|
|
Adjusted total revenue, taxable-equivalent basis (non-GAAP)
|
H+J=L
|
$
|
1,427
|
|
|
$
|
1,400
|
|
|
$
|
4,241
|
|
|
$
|
4,180
|
|
Efficiency ratio (GAAP)
|
F/K
|
61.71
|
%
|
|
64.25
|
%
|
|
62.79
|
%
|
|
64.14
|
%
|
||||
Adjusted efficiency ratio (non-GAAP)
|
G/L
|
61.68
|
%
|
|
65.27
|
%
|
|
62.53
|
%
|
|
63.30
|
%
|
||||
Fee income ratio (GAAP)
|
I/K
|
35.83
|
%
|
|
41.17
|
%
|
|
36.41
|
%
|
|
38.48
|
%
|
||||
Adjusted fee income ratio (non-GAAP)
|
J/L
|
35.44
|
%
|
|
38.84
|
%
|
|
36.19
|
%
|
|
37.62
|
%
|
|
|
Three Months Ended September 30
|
|
Nine Months Ended September 30
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
(Dollars in millions)
|
||||||||||||||
RETURN ON AVERAGE TANGIBLE COMMON STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
||||||||
Average stockholders’ equity (GAAP)
|
|
$
|
16,790
|
|
|
$
|
17,311
|
|
|
$
|
16,748
|
|
|
$
|
17,184
|
|
Less: Average intangible assets (GAAP)
|
|
5,097
|
|
|
5,116
|
|
|
5,108
|
|
|
5,124
|
|
||||
Average deferred tax liability related to intangibles (GAAP)
|
|
(155
|
)
|
|
(161
|
)
|
|
(155
|
)
|
|
(163
|
)
|
||||
Average preferred stock (GAAP)
|
|
820
|
|
|
820
|
|
|
820
|
|
|
820
|
|
||||
Average tangible common stockholders’ equity (non-GAAP)
|
M
|
$
|
11,028
|
|
|
$
|
11,536
|
|
|
$
|
10,975
|
|
|
$
|
11,403
|
|
Return on average tangible common stockholders’ equity (non-GAAP)
(5)
|
E/M
|
10.62
|
%
|
|
10.48
|
%
|
|
10.72
|
%
|
|
9.60
|
%
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
|
|
(Dollars in millions, except per share data)
|
||||||
TANGIBLE COMMON RATIOS-CONSOLIDATED
|
|
|
|
|
||||
Ending stockholders’ equity (GAAP)
|
|
$
|
16,624
|
|
|
$
|
16,664
|
|
Less: Ending intangible assets (GAAP)
|
|
5,091
|
|
|
5,125
|
|
||
Ending deferred tax liability related to intangibles (GAAP)
|
|
(154
|
)
|
|
(155
|
)
|
||
Ending preferred stock (GAAP)
|
|
820
|
|
|
820
|
|
||
Ending tangible common stockholders’ equity (non-GAAP)
|
N
|
$
|
10,867
|
|
|
$
|
10,874
|
|
Ending total assets (GAAP)
|
|
$
|
123,271
|
|
|
$
|
125,968
|
|
Less: Ending intangible assets (GAAP)
|
|
5,091
|
|
|
5,125
|
|
||
Ending deferred tax liability related to intangibles (GAAP)
|
|
(154
|
)
|
|
(155
|
)
|
||
Ending tangible assets (non-GAAP)
|
O
|
$
|
118,334
|
|
|
$
|
120,998
|
|
End of period shares outstanding
|
P
|
1,165
|
|
|
1,215
|
|
||
Tangible common stockholders’ equity to tangible assets (non-GAAP)
|
N/O
|
9.18
|
%
|
|
8.99
|
%
|
||
Tangible common book value per share (non-GAAP)
|
N/P
|
$
|
9.33
|
|
|
$
|
8.95
|
|
BASEL III COMMON EQUITY TIER 1 RATIO—FULLY PHASED-IN PRO-FORMA
(6)
|
|
|
|
|
||||
Stockholders’ equity (GAAP)
|
|
$
|
16,624
|
|
|
$
|
16,664
|
|
Non-qualifying goodwill and intangibles
|
|
(4,922
|
)
|
|
(4,955
|
)
|
||
Adjustments, including all components of accumulated other comprehensive income, disallowed deferred tax assets, threshold deductions and other adjustments
|
|
411
|
|
|
489
|
|
||
Preferred stock (GAAP)
|
|
(820
|
)
|
|
(820
|
)
|
||
Basel III common equity Tier 1
—
Fully Phased-In Pro-Forma (non-GAAP)
|
Q
|
$
|
11,293
|
|
|
$
|
11,378
|
|
Basel III risk-weighted assets
—
Fully Phased-In Pro-Forma (non-GAAP)
(7)
|
R
|
$
|
100,857
|
|
|
$
|
102,975
|
|
Basel III common equity Tier 1 ratio
—
Fully Phased-In Pro-Forma (non-GAAP)
|
Q/R
|
11.20
|
%
|
|
11.05
|
%
|
(1)
|
Regions recorded $3 million of contingent legal and regulatory accruals during the second quarter of 2016.
|
(2)
|
Insurance proceeds recognized in the first nine months of 2016 are related to the previously disclosed settlements with the Department of Housing and Urban Development as well as the 2010 class-action lawsuit.
|
(3)
|
The impact of the leveraged lease termination gains, net in the third quarters of 2017 and 2016 were fully offset by increased tax expense.
|
(5)
|
Income statement amounts have been annualized in calculation.
|
(6)
|
Current quarter amounts and the resulting ratio are estimated.
|
(7)
|
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 September 30
|
||||||||||||||||||||
|
2017
|
|
2016
|
||||||||||||||||||
|
Average
Balance
|
|
Income/
Expense
|
|
Yield/
Rate
|
|
Average
Balance
|
|
Income/
Expense
|
|
Yield/
Rate
|
||||||||||
|
(Dollars in millions; yields on taxable-equivalent basis)
|
||||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earning assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Trading account securities
|
$
|
189
|
|
|
$
|
1
|
|
|
1.19
|
%
|
|
$
|
117
|
|
|
$
|
—
|
|
|
—
|
%
|
Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Taxable
|
25,217
|
|
|
149
|
|
|
2.34
|
|
|
24,929
|
|
|
135
|
|
|
2.15
|
|
||||
Tax-exempt
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Loans held for sale
|
416
|
|
|
3
|
|
|
3.10
|
|
|
531
|
|
|
4
|
|
|
3.38
|
|
||||
Loans, net of unearned income
(1)(2)
|
79,585
|
|
|
850
|
|
|
4.23
|
|
|
81,283
|
|
|
784
|
|
|
3.82
|
|
||||
Investment in operating leases, net
|
586
|
|
|
3
|
|
|
2.84
|
|
|
761
|
|
|
6
|
|
|
2.85
|
|
||||
Other earning assets
|
2,779
|
|
|
12
|
|
|
1.64
|
|
|
3,751
|
|
|
9
|
|
|
0.93
|
|
||||
Total earning assets
|
108,772
|
|
|
1,018
|
|
|
3.72
|
|
|
111,373
|
|
|
938
|
|
|
3.34
|
|
||||
Allowance for loan losses
|
(1,048
|
)
|
|
|
|
|
|
(1,156
|
)
|
|
|
|
|
||||||||
Cash and due from banks
|
1,867
|
|
|
|
|
|
|
1,879
|
|
|
|
|
|
||||||||
Other non-earning assets
|
13,842
|
|
|
|
|
|
|
13,733
|
|
|
|
|
|
||||||||
|
$
|
123,433
|
|
|
|
|
|
|
$
|
125,829
|
|
|
|
|
|
||||||
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Savings
|
$
|
8,346
|
|
|
3
|
|
|
0.15
|
|
|
$
|
7,779
|
|
|
3
|
|
|
0.14
|
|
||
Interest-bearing checking
|
18,741
|
|
|
11
|
|
|
0.22
|
|
|
20,267
|
|
|
5
|
|
|
0.10
|
|
||||
Money market
|
26,325
|
|
|
13
|
|
|
0.19
|
|
|
26,974
|
|
|
9
|
|
|
0.12
|
|
||||
Time deposits
|
6,929
|
|
|
15
|
|
|
0.88
|
|
|
7,447
|
|
|
14
|
|
|
0.79
|
|
||||
Total interest-bearing deposits
(3)
|
60,341
|
|
|
42
|
|
|
0.28
|
|
|
62,467
|
|
|
31
|
|
|
0.19
|
|
||||
Other short-term borrowings
|
655
|
|
|
2
|
|
|
1.19
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Long-term borrowings
|
6,691
|
|
|
53
|
|
|
3.14
|
|
|
8,235
|
|
|
51
|
|
|
2.43
|
|
||||
Total interest-bearing liabilities
|
67,687
|
|
|
97
|
|
|
0.57
|
|
|
70,703
|
|
|
82
|
|
|
0.46
|
|
||||
Non-interest-bearing deposits
(3)
|
36,522
|
|
|
—
|
|
|
—
|
|
|
35,469
|
|
|
—
|
|
|
—
|
|
||||
Total funding sources
|
104,209
|
|
|
97
|
|
|
0.37
|
|
|
106,172
|
|
|
82
|
|
|
0.30
|
|
||||
Net interest spread
|
|
|
|
|
3.15
|
|
|
|
|
|
|
2.88
|
|
||||||||
Other liabilities
|
2,440
|
|
|
|
|
|
|
2,350
|
|
|
|
|
|
||||||||
Stockholders’ equity
|
16,784
|
|
|
|
|
|
|
17,307
|
|
|
|
|
|
||||||||
|
$
|
123,433
|
|
|
|
|
|
|
$
|
125,829
|
|
|
|
|
|
||||||
Net interest income and other financing income/margin on a taxable-equivalent basis from continuing operations
(4)
|
|
|
$
|
921
|
|
|
3.36
|
%
|
|
|
|
$
|
856
|
|
|
3.06
|
%
|
(1)
|
Loans, net of unearned income include non-accrual loans for all periods presented.
|
(2)
|
Interest income includes net loan fees of
$5 million
and
$7 million
for the
three months ended September 30, 2017
and
2016
, respectively.
|
(3)
|
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
0.17%
and
0.12%
for the
three months ended September 30, 2017
and
2016
, respectively.
|
(4)
|
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.
|
|
Nine Months Ended September 30
|
||||||||||||||||||||
|
2017
|
|
2016
|
||||||||||||||||||
|
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
|
$
|
1
|
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
5
|
|
|
$
|
—
|
|
|
—
|
%
|
Trading account securities
|
154
|
|
|
3
|
|
|
2.37
|
|
|
121
|
|
|
4
|
|
|
4.40
|
|
||||
Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Taxable
|
25,186
|
|
|
448
|
|
|
2.38
|
|
|
24,744
|
|
|
427
|
|
|
2.30
|
|
||||
Tax-exempt
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Loans held for sale
|
488
|
|
|
11
|
|
|
3.17
|
|
|
450
|
|
|
11
|
|
|
3.38
|
|
||||
Loans, net of unearned income
(1)(2)
|
79,956
|
|
|
2,468
|
|
|
4.11
|
|
|
81,583
|
|
|
2,356
|
|
|
3.84
|
|
||||
Investment in operating leases, net
|
632
|
|
|
14
|
|
|
3.00
|
|
|
792
|
|
|
17
|
|
|
2.79
|
|
||||
Other earning assets
|
2,917
|
|
|
33
|
|
|
1.50
|
|
|
3,590
|
|
|
27
|
|
|
0.99
|
|
||||
Total earning assets
|
109,334
|
|
|
2,977
|
|
|
3.62
|
|
|
111,286
|
|
|
2,842
|
|
|
3.39
|
|
||||
Allowance for loan losses
|
(1,070
|
)
|
|
|
|
|
|
(1,141
|
)
|
|
|
|
|
||||||||
Cash and due from banks
|
1,874
|
|
|
|
|
|
|
1,794
|
|
|
|
|
|
||||||||
Other non-earning assets
|
13,886
|
|
|
|
|
|
|
13,795
|
|
|
|
|
|
||||||||
|
$
|
124,024
|
|
|
|
|
|
|
$
|
125,734
|
|
|
|
|
|
||||||
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Savings
|
$
|
8,253
|
|
|
10
|
|
|
0.15
|
|
|
$
|
7,688
|
|
|
8
|
|
|
0.15
|
|
||
Interest-bearing checking
|
19,305
|
|
|
27
|
|
|
0.19
|
|
|
20,755
|
|
|
15
|
|
|
0.10
|
|
||||
Money market
|
26,751
|
|
|
32
|
|
|
0.16
|
|
|
26,794
|
|
|
23
|
|
|
0.11
|
|
||||
Time deposits
|
7,026
|
|
|
45
|
|
|
0.86
|
|
|
7,385
|
|
|
40
|
|
|
0.73
|
|
||||
Total interest-bearing deposits
(3)
|
61,335
|
|
|
114
|
|
|
0.25
|
|
|
62,622
|
|
|
86
|
|
0.18
|
|
|||||
Other short-term borrowings
|
457
|
|
|
4
|
|
|
1.02
|
|
|
3
|
|
|
—
|
|
|
—
|
|
||||
Long-term borrowings
|
6,964
|
|
|
153
|
|
|
2.92
|
|
|
8,520
|
|
|
148
|
|
|
2.29
|
|
||||
Total interest-bearing liabilities
|
68,756
|
|
|
271
|
|
|
0.53
|
|
|
71,145
|
|
|
234
|
|
0.44
|
|
|||||
Non-interest-bearing deposits
(3)
|
36,100
|
|
|
—
|
|
|
—
|
|
|
35,107
|
|
|
—
|
|
|
—
|
|
||||
Total funding sources
|
104,856
|
|
|
271
|
|
|
0.34
|
|
|
106,252
|
|
|
234
|
|
0.29
|
|
|||||
Net interest spread
|
|
|
|
|
3.09
|
|
|
|
|
|
|
2.95
|
|
||||||||
Other liabilities
|
2,424
|
|
|
|
|
|
|
2,300
|
|
|
|
|
|
||||||||
Stockholders’ equity
|
16,744
|
|
|
|
|
|
|
17,182
|
|
|
|
|
|
||||||||
|
$
|
124,024
|
|
|
|
|
|
|
$
|
125,734
|
|
|
|
|
|
||||||
Net interest income and other financing income/margin on a taxable-equivalent basis from continuing operations
(4)
|
|
|
$
|
2,706
|
|
|
3.31
|
%
|
|
|
|
$
|
2,608
|
|
|
3.13
|
%
|
(1)
|
Loans, net of unearned income include non-accrual loans for all periods presented.
|
(2)
|
Interest income includes net loan fees of $16 million and $26 million for the nine months ended September 30, 2017 and
2016
, respectively.
|
(3)
|
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 0.16% and 0.12% for the nine months ended September 30, 2017 and
2016
, respectively.
|
(4)
|
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
September 30, 2017
|
||
|
(In millions)
|
||
Gradual Change in Interest Rates
|
|
||
+ 200 basis points
|
|
$222
|
|
+ 100 basis points
|
131
|
|
|
- 50 basis points
|
(68
|
)
|
|
|
|
||
Instantaneous Change in Interest Rates
|
|
||
+ 200 basis points
|
|
$215
|
|
+ 100 basis points
|
154
|
|
|
- 50 basis points
|
(102
|
)
|
|
September 30, 2017
|
|||||||||||||||||||
|
|
|
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
|
$
|
2,850
|
|
|
$
|
—
|
|
|
$
|
29
|
|
|
3.3
|
|
|
1.4
|
%
|
|
1.3
|
%
|
Receive variable/pay fixed
|
280
|
|
|
1
|
|
|
8
|
|
|
8.9
|
|
|
1.3
|
|
|
2.6
|
|
|||
Derivatives in cash flow hedging relationships:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Receive fixed/pay variable
|
7,150
|
|
|
21
|
|
|
153
|
|
|
5.9
|
|
|
1.4
|
|
|
1.3
|
|
|||
Total derivatives designated as hedging instruments
|
$
|
10,280
|
|
|
$
|
22
|
|
|
$
|
190
|
|
|
5.2
|
|
|
1.4
|
%
|
|
1.3
|
%
|
|
Three Months Ended September 30
|
|
Quarter-to-Date Change 9/30/2017 vs. 9/30/2016
|
|||||||||||
|
2017
|
|
2016
|
|
Amount
|
|
Percent
|
|||||||
|
(Dollars in millions)
|
|||||||||||||
Service charges on deposit accounts
|
$
|
175
|
|
|
$
|
166
|
|
|
$
|
9
|
|
|
5.4
|
%
|
Card and ATM fees
|
103
|
|
|
105
|
|
|
(2
|
)
|
|
(1.9
|
)%
|
|||
Investment management and trust fee income
|
58
|
|
|
54
|
|
|
4
|
|
|
7.4
|
%
|
|||
Mortgage income
|
32
|
|
|
46
|
|
|
(14
|
)
|
|
(30.4
|
)%
|
|||
Capital markets fee income and other
|
35
|
|
|
42
|
|
|
(7
|
)
|
|
(16.7
|
)%
|
|||
Insurance commissions and fees
|
35
|
|
|
38
|
|
|
(3
|
)
|
|
(7.9
|
)%
|
|||
Bank-owned life insurance
|
20
|
|
|
22
|
|
|
(2
|
)
|
|
(9.1
|
)%
|
|||
Commercial credit fee income
|
17
|
|
|
17
|
|
|
—
|
|
|
NM
|
|
|||
Investment services fee income
|
15
|
|
|
15
|
|
|
—
|
|
|
NM
|
|
|||
Insurance proceeds
|
—
|
|
|
47
|
|
|
(47
|
)
|
|
(100.0
|
)%
|
|||
Securities gains (losses), net
|
8
|
|
|
—
|
|
|
8
|
|
|
NM
|
|
|||
Market value adjustments on employee benefit assets
|
3
|
|
|
4
|
|
|
(1
|
)
|
|
(25.0
|
)%
|
|||
Other miscellaneous income
|
14
|
|
|
43
|
|
|
(29
|
)
|
|
(67.4
|
)%
|
|||
|
$
|
515
|
|
|
$
|
599
|
|
|
$
|
(84
|
)
|
|
(14.0
|
)%
|
|
Nine Months Ended September 30
|
|
Year-to-Date Change 9/30/2017 vs. 9/30/2016
|
|||||||||||
|
2017
|
|
2016
|
|
Amount
|
|
Percent
|
|||||||
|
(Dollars in millions)
|
|||||||||||||
Service charges on deposit accounts
|
$
|
512
|
|
|
$
|
491
|
|
|
$
|
21
|
|
|
4.3
|
%
|
Card and ATM fees
|
311
|
|
|
299
|
|
|
12
|
|
|
4.0
|
%
|
|||
Investment management and trust fee income
|
171
|
|
|
156
|
|
|
15
|
|
|
9.6
|
%
|
|||
Mortgage income
|
113
|
|
|
130
|
|
|
(17
|
)
|
|
(13.1
|
)%
|
|||
Capital markets fee income and other
|
105
|
|
|
121
|
|
|
(16
|
)
|
|
(13.2
|
)%
|
|||
Insurance commissions and fees
|
108
|
|
|
114
|
|
|
(6
|
)
|
|
(5.3
|
)%
|
|||
Bank-owned life insurance
|
61
|
|
|
75
|
|
|
(14
|
)
|
|
(18.7
|
)%
|
|||
Commercial credit fee income
|
53
|
|
|
54
|
|
|
(1
|
)
|
|
(1.9
|
)%
|
|||
Investment services fee income
|
46
|
|
|
46
|
|
|
—
|
|
|
NM
|
|
|||
Insurance proceeds
|
—
|
|
|
50
|
|
|
(50
|
)
|
|
(100.0
|
)%
|
|||
Securities gains (losses), net
|
9
|
|
|
1
|
|
|
8
|
|
|
NM
|
|
|||
Market value adjustments on employee benefit assets
|
10
|
|
|
—
|
|
|
10
|
|
|
NM
|
|
|||
Other miscellaneous income
|
51
|
|
|
94
|
|
|
(43
|
)
|
|
(45.7
|
)%
|
|||
|
$
|
1,550
|
|
|
$
|
1,631
|
|
|
$
|
(81
|
)
|
|
(5.0
|
)%
|
|
Three Months Ended September 30
|
|
Quarter-to-Date Change 9/30/2017 vs. 9/30/2016
|
|||||||||||
|
2017
|
|
2016
|
|
Amount
|
|
Percent
|
|||||||
|
(Dollars in millions)
|
|||||||||||||
Salaries and employee benefits
|
$
|
483
|
|
|
$
|
486
|
|
|
$
|
(3
|
)
|
|
(0.6
|
)%
|
Net occupancy expense
|
91
|
|
|
87
|
|
|
4
|
|
|
4.6
|
%
|
|||
Furniture and equipment expense
|
84
|
|
|
80
|
|
|
4
|
|
|
5.0
|
%
|
|||
Outside services
|
41
|
|
|
38
|
|
|
3
|
|
|
7.9
|
%
|
|||
Marketing
|
24
|
|
|
25
|
|
|
(1
|
)
|
|
(4.0
|
)%
|
|||
FDIC insurance assessments
|
28
|
|
|
29
|
|
|
(1
|
)
|
|
(3.4
|
)%
|
|||
Professional, legal and regulatory expenses
|
21
|
|
|
29
|
|
|
(8
|
)
|
|
(27.6
|
)%
|
|||
Branch consolidation, property and equipment charges
|
5
|
|
|
5
|
|
|
—
|
|
|
NM
|
|
|||
Credit/checkcard expenses
|
13
|
|
|
14
|
|
|
(1
|
)
|
|
(7.1
|
)%
|
|||
Provision (credit) for unfunded credit losses
|
(8
|
)
|
|
8
|
|
|
(16
|
)
|
|
(200.0
|
)%
|
|||
Visa class B shares expense
|
4
|
|
|
11
|
|
|
(7
|
)
|
|
(63.6
|
)%
|
|||
Loss on early extinguishment of debt
|
—
|
|
|
14
|
|
|
(14
|
)
|
|
(100.0
|
)%
|
|||
Other miscellaneous expenses
|
100
|
|
|
108
|
|
|
(8
|
)
|
|
(7.4
|
)%
|
|||
|
$
|
886
|
|
|
$
|
934
|
|
|
$
|
(48
|
)
|
|
(5.1
|
)%
|
|
Nine Months Ended September 30
|
|
Year-to-Date Change 9/30/2017 vs. 9/30/2016
|
|||||||||||
|
2017
|
|
2016
|
|
Amount
|
|
Percent
|
|||||||
|
(Dollars in millions)
|
|||||||||||||
Salaries and employee benefits
|
$
|
1,458
|
|
|
$
|
1,441
|
|
|
$
|
17
|
|
|
1.2
|
%
|
Net occupancy expense
|
262
|
|
|
259
|
|
|
3
|
|
|
1.2
|
%
|
|||
Furniture and equipment expense
|
249
|
|
|
237
|
|
|
12
|
|
|
5.1
|
%
|
|||
Outside services
|
124
|
|
|
113
|
|
|
11
|
|
|
9.7
|
%
|
|||
Marketing
|
70
|
|
|
78
|
|
|
(8
|
)
|
|
(10.3
|
)%
|
|||
FDIC insurance assessments
|
81
|
|
|
71
|
|
|
10
|
|
|
14.1
|
%
|
|||
Professional, legal and regulatory expenses
|
71
|
|
|
63
|
|
|
8
|
|
|
12.7
|
%
|
|||
Branch consolidation, property and equipment charges
|
13
|
|
|
41
|
|
|
(28
|
)
|
|
(68.3
|
)%
|
|||
Credit/checkcard expenses
|
39
|
|
|
41
|
|
|
(2
|
)
|
|
(4.9
|
)%
|
|||
Provision (credit) for unfunded credit losses
|
(10
|
)
|
|
20
|
|
|
(30
|
)
|
|
(150.0
|
)%
|
|||
Visa class B shares expense
|
8
|
|
|
15
|
|
|
(7
|
)
|
|
(46.7
|
)%
|
|||
Other miscellaneous expenses
|
307
|
|
|
339
|
|
|
(32
|
)
|
|
(9.4
|
)%
|
|||
|
$
|
2,672
|
|
|
$
|
2,718
|
|
|
$
|
(46
|
)
|
|
(1.7
|
)%
|
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
|
||||||
July 1-31, 2017
|
7,150,000
|
|
|
$
|
14.53
|
|
|
7,150,000
|
|
|
$
|
1,365,974,410
|
|
August 1-31, 2017
|
27,446,180
|
|
|
$
|
14.40
|
|
|
27,446,180
|
|
|
$
|
970,271,526
|
|
September 1-30, 2017
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
970,271,526
|
|
Total 3rd Quarter
|
34,596,180
|
|
|
$
|
14.43
|
|
|
34,596,180
|
|
|
$
|
970,271,526
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
3.3
|
|
|
|
|
|
3.4
|
|
|
|
|
|
10.1
|
|
|
|
|
|
12
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32
|
|
|
|
|
|
101
|
|
Interactive Data File
|
|
|
|
DATE: November 8, 2017
|
|
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)
|
1.
|
Who has access to the aircraft?
|
2.
|
For what purposes may the aircraft be used?
|
3.
|
In which circumstances are use of the aircraft to be paid for by the passenger?
|
4.
|
What are the tax and disclosure implications of aircraft use?
|
•
|
Examples of Business Travel include, but are not limited to, travel to attend meetings with Company customers, travel to attend Company, Board or Board Committee meetings, and other travel that generally furthers the business purposes of the Company. The mere fact that a passenger also accomplishes a personal goal or receives a personal benefit shall not preclude the travel from being deemed Business Travel, provided the accomplishment of the personal goal or receipt of a personal benefit is incidental to the overall business-related purpose of the trip.
|
•
|
If questions arise over the characterization of a flight as Business Travel or Personal Travel, the Chief Executive Officer (“CEO”) of the Company or his or her designee shall determine the appropriate characterization, unless the passenger is the CEO, in which case the determination shall be made by the Compensation Committee of the Board of Directors of the Company, or the full Board of Directors of the Company.
|
•
|
Examples of Personal Travel include, but are not limited to, travel for vacation, travel to attend a family function (such as a funeral, birth, or other occasion), and travel to receive medical treatment (other than medical services required by the Company).
|
•
|
Personal Travel includes trips in which a business objective is achieved if that business objective is merely incidental to the overall personal purpose of the trip.
|
•
|
A trip may include both Personal Travel and Business Travel. For example, travel from Point A to Point C with a stop in Point B may be both Personal Travel and Business Travel if the trip from Point A to Point C is purely for business purposes, but the stop in Point B is for personal purposes. However, if a stop between Point A and Point C is necessary (such as for refueling) and Point B creates no additional expense to the Company over the least expensive location for a stop, then the stop at Point B shall be considered incidental to the business purpose of the trip, notwithstanding any personal benefit that the passenger may receive by stopping at Point B.
|
•
|
For example, if an associate traveling on Business Travel takes along a spouse or other personal guest, any additional costs specifically attributable to the travel of the spouse or guest are Incremental Costs.
|
•
|
The Incremental Cost of a trip includes only the costs applicable to the trip, not the cost of owning and maintaining the aircraft.
|
1.
|
Fuel, oil, lubricants, and other additives.
|
2.
|
Travel expenses of the crew, including food, lodging, and ground transportation.
|
3.
|
Hangar and tie-down costs away from the aircraft's base of operation.
|
4.
|
Insurance obtained for the specific flight.
|
5.
|
Landing fees, airport taxes, and similar assessments.
|
6.
|
Customs, foreign permit, and similar fees directly related to the flight.
|
7.
|
In-flight food and beverages.
|
8.
|
Passenger ground transportation.
|
9.
|
Flight planning and weather contract services.
|
10.
|
An additional charge of up to 100% of the cost of fuel, oil, lubricants, and other additives.
|
1.
|
The Chairman of the Board of Directors and the CEO.
|
2.
|
The Lead Independent Director of the Board of Directors of Regions (the “Board”).
|
3.
|
Board Members to facilitate their efficient attendance at Board and Board Committee meetings.
|
4.
|
Executive Council members.
|
5.
|
Operating Committee members.
|
6.
|
Other members of senior management, as approved by the CEO or his or her designee.
|
7.
|
In appropriate circumstances, associates with a business-related purpose, all as approved by the CEO or his or her designee, provided however that the CEO or his or her designee shall, on a case by case basis, determine whether such individual may be in a higher priority category.
|
8.
|
In appropriate circumstances, contractors, consultants, customers, potential customers, and other individuals who have a business relationship with the Company, all as approved by the CEO or his or her designee, provided however that the CEO or his or her designee shall, on a case by case basis, determine whether such individual may be in a higher priority category.
|
•
|
If the travel is solely Business Travel, the Permitted Person should have no tax consequences if traveling alone or in the company of other Permitted Persons.
|
•
|
If the Business Travel includes one or more personal flights, the Company shall value the personal portion using the Standard Industry Fare Level (“SIFL”) rates as periodically published by the U.S. Department of Transportation and shall include such amount in the Permitted Person’s taxable income reported to the Internal Revenue Service (“IRS”) for
|
•
|
If the Permitted Person is accompanied by a spouse or other guest, the spouse’s or guest’s travel shall be valued using the SIFL rates and shall be included in the Permitted Person’s taxable income for the year of travel, to the extent that such amount exceeds the amount paid by the Permitted Person to the Company for the trip, if any.
|
•
|
If the travel is solely Business Travel, there shall not be any amount reportable.
|
•
|
If the travel includes one or more personal flights, the Company shall report the Incremental Cost of the Personal Travel as a perquisite in its annual proxy filings.
|
•
|
If the Permitted Person is accompanied by a spouse or other guest, any non-de minimis Incremental Cost of the spouse’s or guest’s travel shall be treated as a perquisite in the Company’s annual proxy filings.
|
•
|
The amount reported shall not include any amount paid by the Permitted Person to the Company for the trip, if any.
|
•
|
Allowing the spouse or other guest of the Permitted Person to travel with the Permitted Person, where the Permitted Person is engaged in Business Travel. Except in unusual circumstances, a spouse or guest will be permitted only when the spouse or guest does not preclude Business Travel of other Permitted Persons on the same trip.
|
•
|
Appending Personal Travel to Business Travel in appropriate circumstances.
|
•
|
Combining Personal Travel and Business Travel where the Business Travel would be allowed if the purpose of the Personal Travel did not exist.
|
•
|
The Company requests that the Permitted Person use Corporate Aircraft for security reasons or other reasons that have a business value to the Company.
|
•
|
In the case of a medical or family emergency.
|
•
|
If the travel is solely Personal Travel, the Company shall value the Personal Travel using SIFL rates and shall include such amount in the Permitted Person’s taxable income reported to the IRS for the year of travel, to the extent that such amount exceeds the amount paid by the Permitted Person to the Company for the trip, if any. In valuing the Personal Travel, any legs of travel that qualify as Business Travel will be disregarded.
|
•
|
If the Permitted Person is accompanied by a spouse or other guest, the spouse’s or guest’s travel shall be valued using the SIFL rates and shall be included in the Permitted Person’s taxable income reported to the IRS for the year of travel, to the extent that such amount exceeds the amount paid by the Permitted Person to the Company for the trip, if any.
|
•
|
The Company shall report the Incremental Cost of the Personal Travel as a perquisite in its annual proxy filings.
|
•
|
If the Permitted Person is accompanied by a spouse or other guest, the non-de minimis Incremental Cost of the spouse’s or guest’s travel shall be treated as a perquisite to the NEO in the Company’s annual proxy filings.
|
•
|
The amount reported shall not include any amount paid by the Permitted Person to the Company for the trip, if any.
|
•
|
Flights should be scheduled, where possible, to make the most efficient and cost effective use of Corporate Aircraft, taking into account other Permitted Persons who may use the aircraft for Business Travel.
|
•
|
Short flight segments of less than 115 land miles will not be permitted unless such segment is a business-related stop on a longer trip that constitutes Business Travel.
|
•
|
Permitted Persons should be considerate of the wait time of pilots and flight crew in scheduling their flights, particularly regarding overnight stays. Generally, overnight stays are to be avoided, and the Company may seek reimbursement of the costs of overnight stays even in the event of Business Travel if the CEO deems that an overnight stay could reasonably have been avoided.
|
|
Three Months Ended September 30
|
|
Nine Months Ended September 30
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(Dollars in millions)
|
||||||||||||||
Excluding Interest on Deposits
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations before income taxes
|
$
|
451
|
|
|
$
|
471
|
|
|
$
|
1,323
|
|
|
$
|
1,244
|
|
Fixed charges excluding preferred stock dividends
|
69
|
|
|
65
|
|
|
199
|
|
|
191
|
|
||||
Income for computation excluding interest on deposits
|
520
|
|
|
536
|
|
|
1,522
|
|
|
1,435
|
|
||||
Interest expense excluding interest on deposits
|
55
|
|
|
51
|
|
|
157
|
|
|
148
|
|
||||
One-third of rent expense
|
14
|
|
|
14
|
|
|
42
|
|
|
43
|
|
||||
Preferred stock dividends
|
16
|
|
|
16
|
|
|
48
|
|
|
48
|
|
||||
Fixed charges including preferred stock dividends
|
85
|
|
|
81
|
|
|
247
|
|
|
239
|
|
||||
Ratio of earnings to fixed charges, excluding interest on deposits
|
6.12x
|
|
|
6.63x
|
|
|
6.17x
|
|
|
6.02x
|
|
||||
Including Interest on Deposits
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations before income taxes
|
$
|
451
|
|
|
$
|
471
|
|
|
$
|
1,323
|
|
|
$
|
1,244
|
|
Fixed charges excluding preferred stock dividends
|
111
|
|
|
96
|
|
|
313
|
|
|
277
|
|
||||
Income for computation including interest on deposits
|
562
|
|
|
567
|
|
|
1,636
|
|
|
1,521
|
|
||||
Interest expense including interest on deposits
|
97
|
|
|
82
|
|
|
271
|
|
|
234
|
|
||||
One-third of rent expense
|
14
|
|
|
14
|
|
|
42
|
|
|
43
|
|
||||
Preferred stock dividends
|
16
|
|
|
16
|
|
|
48
|
|
|
48
|
|
||||
Fixed charges including preferred stock dividends
|
127
|
|
|
112
|
|
|
361
|
|
|
325
|
|
||||
Ratio of earnings to fixed charges, including interest on deposits
|
4.43x
|
|
|
5.08x
|
|
|
4.54x
|
|
|
4.69x
|
|
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;
|
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
/ 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
|