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Form
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10-Q
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☒
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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
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June 30, 2019
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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
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Birmingham
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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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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock, $.01 par value
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RF
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New York Stock Exchange
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Depositary Shares, each representing a 1/40th Interest in a Share of
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6.375% Non-Cumulative Perpetual Preferred Stock, Series A
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RF PRA
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New York Stock Exchange
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Depositary Shares, each representing a 1/40th Interest in a Share of
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6.375% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series B
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RF PRB
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New York Stock Exchange
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Depositary Shares, each representing a 1/40th Interest in a Share of
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5.700% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series C
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RF PRC
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New York Stock Exchange
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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 possible declines in property values, increases in unemployment rates and potential reductions of economic growth, which may adversely affect our lending and other businesses and our financial results and conditions.
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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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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 changes in law, adverse changes in the economic environment, declining operations of the reporting unit or other factors.
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•
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The effect of changes in tax laws, including the effect of any future interpretations of or amendments to Tax Reform, which may impact our earnings, capital ratios and our ability to return capital to stockholders.
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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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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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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 effectively compete with other traditional and non-traditional financial services companies, some of whom possess greater financial resources than we do or are subject to different regulatory standards than we are.
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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 and the enhancement of existing products and services to meet customers’ needs and respond to emerging technological trends in a timely manner could have a negative impact on our revenue.
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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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Changes in laws and regulations affecting our businesses, including legislation and regulations relating to bank products and services, as well as changes in the enforcement and interpretation of such laws and regulations by applicable governmental and self-regulatory agencies, which could require us to change certain business practices, increase compliance risk, reduce our revenue, impose additional costs on us, or otherwise negatively affect our businesses.
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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 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 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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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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The risks and uncertainties related to our acquisition or divestiture of businesses.
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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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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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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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Inability of our framework to manage risks associated with our business such as credit risk and operational risk, including third-party vendors and other service providers, which could, among other things, result in a breach of operating or security systems as a result of a cyber attack or similar act or failure to deliver our services effectively.
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•
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Dependence on key suppliers or vendors to obtain equipment and other supplies for our business on acceptable terms.
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•
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The inability of our internal 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. The severity and impact of future earthquakes, fires, hurricanes, tornadoes, droughts, floods and other weather-related events are difficult to predict and may be exacerbated by global climate change.
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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 ability to identify and address cyber-security risks such as data security breaches, malware, “denial of service” attacks, “hacking” and identity theft, including account take-overs, a failure of which could disrupt our business and result in the disclosure of and/or misuse or misappropriation of confidential or proprietary information, disruption or damage to our systems, increased costs, losses, or adverse effects to our reputation.
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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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Possible cessation or market replacement of LIBOR and the related effect on our LIBOR-based financial products and contracts, including, but not limited to, hedging products, debt obligations, investments, and loans.
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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 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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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 shareholders.
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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 our financial statements and how we report those results, and expectations and preliminary analyses relating to how such changes will affect our financial results could prove incorrect.
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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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Fluctuations in the price of our common stock and inability to complete stock repurchases in the time frame and/or on the terms anticipated.
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•
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The effects of any damage to our reputation resulting from developments related to any of the items identified above.
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June 30, 2019
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December 31, 2018
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(In millions, except share data)
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Assets
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Cash and due from banks
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$
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2,026
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$
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2,018
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Interest-bearing deposits in other banks
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2,462
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1,520
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Debt securities held to maturity (estimated fair value of $1,448 and $1,460, respectively)
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1,415
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1,482
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Debt securities available for sale
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22,699
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22,729
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Loans held for sale (includes $433 and $251 measured at fair value, respectively)
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508
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304
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Loans, net of unearned income
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83,553
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83,152
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Allowance for loan losses
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(853
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)
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(840
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)
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Net loans
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82,700
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82,312
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Other earning assets
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1,646
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1,719
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Premises and equipment, net
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1,950
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2,045
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Interest receivable
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389
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375
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Goodwill
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4,829
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4,829
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Residential mortgage servicing rights at fair value
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337
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418
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Other identifiable intangible assets, net
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101
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115
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Other assets
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6,456
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5,822
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Total assets
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$
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127,518
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$
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125,688
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Liabilities and Equity
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Deposits:
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Non-interest-bearing
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$
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34,678
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$
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35,053
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Interest-bearing
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60,293
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59,438
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Total deposits
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94,971
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94,491
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Borrowed funds:
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Short-term borrowings:
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Other short-term borrowings
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4,250
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1,600
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Total short-term borrowings
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4,250
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1,600
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Long-term borrowings
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9,213
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12,424
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Total borrowed funds
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13,463
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14,024
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Other liabilities
|
2,476
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2,083
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Total liabilities
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110,910
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|
|
110,598
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Equity:
|
|
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||||
Preferred stock, authorized 10 million shares, par value $1.00 per share
|
|
|
|
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Non-cumulative perpetual, liquidation preference $1,000.00 per share, including related surplus, net of issuance costs; issued—1,500,000 and 1,000,000 shares, respectively
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1,310
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|
|
820
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Common stock, authorized 3 billion shares, par value $.01 per share:
|
|
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||||
Issued including treasury stock—1,044,852,860 and 1,065,858,925 shares, respectively
|
11
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|
|
11
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Additional paid-in capital
|
13,380
|
|
|
13,766
|
|
||
Retained earnings
|
3,299
|
|
|
2,828
|
|
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Treasury stock, at cost—41,032,676 and 41,032,676 shares, respectively
|
(1,371
|
)
|
|
(1,371
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)
|
||
Accumulated other comprehensive income (loss), net
|
(21
|
)
|
|
(964
|
)
|
||
Total stockholders’ equity
|
16,608
|
|
|
15,090
|
|
||
Total liabilities and equity
|
$
|
127,518
|
|
|
$
|
125,688
|
|
|
Three Months Ended
June 30 |
|
Six Months Ended
June 30
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(In millions, except per share data)
|
||||||||||||||
Interest income, including other financing income on:
|
|
|
|
|
|
|
|
||||||||
Loans, including fees
|
$
|
992
|
|
|
$
|
881
|
|
|
$
|
1,973
|
|
|
$
|
1,732
|
|
Debt securities - taxable
|
163
|
|
|
156
|
|
|
328
|
|
|
310
|
|
||||
Loans held for sale
|
4
|
|
|
4
|
|
|
7
|
|
|
7
|
|
||||
Other earning assets
|
15
|
|
|
17
|
|
|
34
|
|
|
36
|
|
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Operating lease assets
|
14
|
|
|
18
|
|
|
29
|
|
|
38
|
|
||||
Total interest income, including other financing income
|
1,188
|
|
|
1,076
|
|
|
2,371
|
|
|
2,123
|
|
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Interest expense on:
|
|
|
|
|
|
|
|
||||||||
Deposits
|
125
|
|
|
57
|
|
|
233
|
|
|
106
|
|
||||
Short-term borrowings
|
14
|
|
|
6
|
|
|
27
|
|
|
7
|
|
||||
Long-term borrowings
|
96
|
|
|
73
|
|
|
198
|
|
|
145
|
|
||||
Total interest expense
|
235
|
|
|
136
|
|
|
458
|
|
|
258
|
|
||||
Depreciation expense on operating lease assets
|
11
|
|
|
14
|
|
|
23
|
|
|
30
|
|
||||
Total interest expense and depreciation expense on operating lease assets
|
246
|
|
|
150
|
|
|
481
|
|
|
288
|
|
||||
Net interest income and other financing income
|
942
|
|
|
926
|
|
|
1,890
|
|
|
1,835
|
|
||||
Provision for loan losses
|
92
|
|
|
60
|
|
|
183
|
|
|
50
|
|
||||
Net interest income and other financing income after provision for loan losses
|
850
|
|
|
866
|
|
|
1,707
|
|
|
1,785
|
|
||||
Non-interest income:
|
|
|
|
|
|
|
|
||||||||
Service charges on deposit accounts
|
181
|
|
|
175
|
|
|
356
|
|
|
346
|
|
||||
Card and ATM fees
|
120
|
|
|
112
|
|
|
229
|
|
|
216
|
|
||||
Investment management and trust fee income
|
59
|
|
|
58
|
|
|
116
|
|
|
116
|
|
||||
Capital markets income
|
39
|
|
|
57
|
|
|
81
|
|
|
107
|
|
||||
Mortgage income
|
31
|
|
|
37
|
|
|
58
|
|
|
75
|
|
||||
Securities gains (losses), net
|
(19
|
)
|
|
1
|
|
|
(26
|
)
|
|
1
|
|
||||
Other
|
83
|
|
|
72
|
|
|
182
|
|
|
158
|
|
||||
Total non-interest income
|
494
|
|
|
512
|
|
|
996
|
|
|
1,019
|
|
||||
Non-interest expense:
|
|
|
|
|
|
|
|
||||||||
Salaries and employee benefits
|
469
|
|
|
511
|
|
|
947
|
|
|
1,006
|
|
||||
Net occupancy expense
|
80
|
|
|
84
|
|
|
162
|
|
|
167
|
|
||||
Furniture and equipment expense
|
84
|
|
|
81
|
|
|
160
|
|
|
162
|
|
||||
Other
|
228
|
|
|
235
|
|
|
452
|
|
|
460
|
|
||||
Total non-interest expense
|
861
|
|
|
911
|
|
|
1,721
|
|
|
1,795
|
|
||||
Income from continuing operations before income taxes
|
483
|
|
|
467
|
|
|
982
|
|
|
1,009
|
|
||||
Income tax expense
|
93
|
|
|
89
|
|
|
198
|
|
|
217
|
|
||||
Income from continuing operations
|
390
|
|
|
378
|
|
|
784
|
|
|
792
|
|
||||
Discontinued operations:
|
|
|
|
|
|
|
|
||||||||
Income (loss) from discontinued operations before income taxes
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
||||
Income tax expense (benefit)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
||||
Net income
|
$
|
390
|
|
|
$
|
375
|
|
|
$
|
784
|
|
|
$
|
789
|
|
Net income from continuing operations available to common shareholders
|
$
|
374
|
|
|
$
|
362
|
|
|
$
|
752
|
|
|
$
|
760
|
|
Net income available to common shareholders
|
$
|
374
|
|
|
$
|
359
|
|
|
$
|
752
|
|
|
$
|
757
|
|
Weighted-average number of shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
1,010
|
|
|
1,119
|
|
|
1,015
|
|
|
1,123
|
|
||||
Diluted
|
1,012
|
|
|
1,128
|
|
|
1,020
|
|
|
1,135
|
|
||||
Earnings per common share from continuing operations:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.37
|
|
|
$
|
0.32
|
|
|
$
|
0.74
|
|
|
$
|
0.68
|
|
Diluted
|
0.37
|
|
|
0.32
|
|
|
0.74
|
|
|
0.67
|
|
||||
Earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.37
|
|
|
$
|
0.32
|
|
|
$
|
0.74
|
|
|
$
|
0.67
|
|
Diluted
|
0.37
|
|
|
0.32
|
|
|
0.74
|
|
|
0.67
|
|
|
Three Months Ended June 30
|
||||||
|
2019
|
|
2018
|
||||
|
(In millions)
|
||||||
Net income
|
$
|
390
|
|
|
$
|
375
|
|
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 zero and zero tax effect, respectively)
|
(2
|
)
|
|
(1
|
)
|
||
Net change in unrealized losses on securities transferred to held to maturity, net of tax
|
2
|
|
|
1
|
|
||
Unrealized gains (losses) on securities available for sale:
|
|
|
|
||||
Unrealized holding gains (losses) arising during the period (net of $88 and ($23) tax effect, respectively)
|
244
|
|
|
(66
|
)
|
||
Less: reclassification adjustments for securities gains (losses) realized in net income (net of ($3) and zero tax effect, respectively)
|
(16
|
)
|
|
1
|
|
||
Net change in unrealized gains (losses) on securities available for sale, net of tax
|
260
|
|
|
(67
|
)
|
||
Unrealized gains (losses) on derivative instruments designated as cash flow hedges:
|
|
|
|
||||
Unrealized holding gains (losses) on derivatives arising during the period (net of $102 and ($14) tax effect, respectively)
|
302
|
|
|
(42
|
)
|
||
Less: reclassification adjustments for gains (losses) on derivative instruments realized in net income (net of ($2) and $1 tax effect, respectively)
|
(6
|
)
|
|
4
|
|
||
Net change in unrealized gains (losses) on derivative instruments, net of tax
|
308
|
|
|
(46
|
)
|
||
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)
|
—
|
|
|
—
|
|
||
Less: reclassification adjustments for amortization of actuarial loss and settlements realized in net income (net of ($3) and ($2) tax effect, respectively)
|
(7
|
)
|
|
(8
|
)
|
||
Net change from defined benefit pension plans and other post employment benefits, net of tax
|
7
|
|
|
8
|
|
||
Other comprehensive income (loss), net of tax
|
577
|
|
|
(104
|
)
|
||
Comprehensive income
|
$
|
967
|
|
|
$
|
271
|
|
|
|
|
|
||||
|
Six Months Ended June 30
|
||||||
|
2019
|
|
2018
|
||||
|
(In millions)
|
||||||
Net income
|
$
|
784
|
|
|
$
|
789
|
|
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 zero and ($1) tax effect, respectively)
|
(3
|
)
|
|
(3
|
)
|
||
Net change in unrealized losses on securities transferred to held to maturity, net of tax
|
3
|
|
|
3
|
|
||
Unrealized gains (losses) on securities available for sale:
|
|
|
|
||||
Unrealized holding gains (losses) arising during the period (net of $165 and ($127) tax effect, respectively)
|
484
|
|
|
(376
|
)
|
||
Less: reclassification adjustments for securities gains (losses) realized in net income (net of ($5) and zero tax effect, respectively)
|
(21
|
)
|
|
1
|
|
||
Net change in unrealized gains (losses) on securities available for sale, net of tax
|
505
|
|
|
(377
|
)
|
||
Unrealized gains (losses) on derivative instruments designated as cash flow hedges:
|
|
|
|
||||
Unrealized holding gains (losses) on derivatives arising during the period (net of $138 and ($45) tax effect, respectively)
|
409
|
|
|
(134
|
)
|
||
Less: reclassification adjustments for gains (losses) on derivative instruments realized in net income (net of ($4) and $4 tax effect, respectively)
|
(12
|
)
|
|
12
|
|
||
Net change in unrealized gains (losses) on derivative instruments, net of tax
|
421
|
|
|
(146
|
)
|
||
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 realized in net income (net of ($5) and ($4) tax effect, respectively)
|
(14
|
)
|
|
(15
|
)
|
||
Net change from defined benefit pension plans and other post employment benefits, net of tax
|
14
|
|
|
14
|
|
||
Other comprehensive income (loss), net of tax
|
943
|
|
|
(506
|
)
|
||
Comprehensive income
|
$
|
1,727
|
|
|
$
|
283
|
|
|
Stockholders' Equity
|
|
|
||||||||||||||||||||||||||||||||||
|
Preferred Stock
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Treasury
Stock,
At Cost
|
|
Accumulated
Other
Comprehensive
Income (Loss), Net
|
|
Total
|
|
Non-
controlling
Interest
|
||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
(In millions, except per share data)
|
||||||||||||||||||||||||||||||||||||
BALANCE AT JANUARY 1, 2018
|
1
|
|
|
$
|
820
|
|
|
1,133
|
|
|
$
|
12
|
|
|
$
|
15,858
|
|
|
$
|
1,628
|
|
|
$
|
(1,377
|
)
|
|
$
|
(749
|
)
|
|
$
|
16,192
|
|
|
$
|
—
|
|
Cumulative effect from change in accounting guidance
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
414
|
|
|
—
|
|
|
—
|
|
|
414
|
|
|
—
|
|
||||||||
Other comprehensive income (loss), net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(402
|
)
|
|
(402
|
)
|
|
—
|
|
||||||||
Cash dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(101
|
)
|
|
—
|
|
|
—
|
|
|
(101
|
)
|
|
—
|
|
||||||||
Preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
||||||||
Common stock transactions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Impact of share repurchases
|
—
|
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
(235
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(235
|
)
|
|
—
|
|
||||||||
Impact of stock transactions under compensation plans, net
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
||||||||
BALANCE AT MARCH 31, 2018
|
1
|
|
|
$
|
820
|
|
|
1,122
|
|
|
$
|
12
|
|
|
$
|
15,639
|
|
|
$
|
1,923
|
|
|
$
|
(1,377
|
)
|
|
$
|
(1,151
|
)
|
|
$
|
15,866
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
BALANCE AT APRIL 1, 2018
|
1
|
|
|
$
|
820
|
|
|
1,122
|
|
|
$
|
12
|
|
|
$
|
15,639
|
|
|
$
|
1,923
|
|
|
$
|
(1,377
|
)
|
|
$
|
(1,151
|
)
|
|
$
|
15,866
|
|
|
$
|
—
|
|
Cumulative effect from change in accounting guidance
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
375
|
|
|
—
|
|
|
—
|
|
|
375
|
|
|
—
|
|
||||||||
Other comprehensive income (loss), net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(104
|
)
|
|
(104
|
)
|
|
—
|
|
||||||||
Cash dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(100
|
)
|
|
—
|
|
|
—
|
|
|
(100
|
)
|
|
—
|
|
||||||||
Preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
||||||||
Common stock transactions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Impact of share repurchases
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
(235
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(235
|
)
|
|
—
|
|
||||||||
Impact of stock transactions under compensation plans, net and other
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
6
|
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
||||||||
BALANCE AT JUNE 30, 2018
|
1
|
|
|
$
|
820
|
|
|
1,114
|
|
|
$
|
12
|
|
|
$
|
15,389
|
|
|
$
|
2,182
|
|
|
$
|
(1,371
|
)
|
|
$
|
(1,255
|
)
|
|
$
|
15,777
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
BALANCE AT JANUARY 1, 2019
|
1
|
|
|
$
|
820
|
|
|
1,025
|
|
|
$
|
11
|
|
|
$
|
13,766
|
|
|
$
|
2,828
|
|
|
$
|
(1,371
|
)
|
|
$
|
(964
|
)
|
|
$
|
15,090
|
|
|
$
|
—
|
|
Cumulative effect from change in accounting guidance
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
394
|
|
|
—
|
|
|
—
|
|
|
394
|
|
|
—
|
|
||||||||
Other comprehensive income (loss), net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
366
|
|
|
366
|
|
|
—
|
|
||||||||
Cash dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(142
|
)
|
|
—
|
|
|
—
|
|
|
(142
|
)
|
|
—
|
|
||||||||
Preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
||||||||
Common stock transactions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Impact of share repurchases
|
—
|
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
(190
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(190
|
)
|
|
—
|
|
||||||||
Impact of stock transactions under compensation plans, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
||||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
||||||||
BALANCE AT MARCH 31, 2019
|
1
|
|
|
$
|
820
|
|
|
1,013
|
|
|
$
|
11
|
|
|
$
|
13,584
|
|
|
$
|
3,066
|
|
|
$
|
(1,371
|
)
|
|
$
|
(598
|
)
|
|
$
|
15,512
|
|
|
$
|
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
BALANCE AT APRIL 1, 2019
|
1
|
|
|
$
|
820
|
|
|
1,013
|
|
|
$
|
11
|
|
|
$
|
13,584
|
|
|
$
|
3,066
|
|
|
$
|
(1,371
|
)
|
|
$
|
(598
|
)
|
|
$
|
15,512
|
|
|
$
|
11
|
|
Cumulative effect from change in accounting guidance
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
390
|
|
|
—
|
|
|
—
|
|
|
390
|
|
|
—
|
|
||||||||
Other comprehensive income (loss), net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
577
|
|
|
577
|
|
|
—
|
|
||||||||
Cash dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(141
|
)
|
|
—
|
|
|
—
|
|
|
(141
|
)
|
|
—
|
|
||||||||
Preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
||||||||
Preferred stock transactions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net proceeds from issuance of 500 thousand shares of Series C, fixed to floating rate, non-cumulative perpetual preferred stock, including related surplus
|
1
|
|
|
490
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
490
|
|
|
—
|
|
||||||||
Common stock transactions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Impact of share repurchases
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
|
|
|
(190
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(190
|
)
|
|
—
|
|
||||||||
Impact of stock transactions under compensation plans, net
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
||||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
||||||||
BALANCE AT JUNE 30, 2019
|
2
|
|
|
$
|
1,310
|
|
|
1,004
|
|
|
$
|
11
|
|
|
$
|
13,380
|
|
|
$
|
3,299
|
|
|
$
|
(1,371
|
)
|
|
$
|
(21
|
)
|
|
$
|
16,608
|
|
|
$
|
—
|
|
|
Six Months Ended June 30
|
||||||
|
2019
|
|
2018
|
||||
|
(In millions)
|
||||||
Operating activities:
|
|
|
|
||||
Net income
|
$
|
784
|
|
|
$
|
789
|
|
Adjustments to reconcile net income to net cash from operating activities:
|
|
|
|
||||
Provision for loan losses
|
183
|
|
|
50
|
|
||
Depreciation, amortization and accretion, net
|
212
|
|
|
239
|
|
||
Securities (gains) losses, net
|
26
|
|
|
(1
|
)
|
||
Deferred income tax expense
|
18
|
|
|
109
|
|
||
Originations and purchases of loans held for sale
|
(1,580
|
)
|
|
(1,645
|
)
|
||
Proceeds from sales of loans held for sale
|
1,420
|
|
|
1,525
|
|
||
(Gain) loss on sale of loans, net
|
(55
|
)
|
|
(33
|
)
|
||
Net change in operating assets and liabilities:
|
|
|
|
||||
Other earning assets
|
50
|
|
|
189
|
|
||
Interest receivable and other assets
|
(234
|
)
|
|
(92
|
)
|
||
Other liabilities
|
381
|
|
|
(439
|
)
|
||
Other
|
116
|
|
|
(31
|
)
|
||
Net cash from operating activities
|
1,321
|
|
|
660
|
|
||
Investing activities:
|
|
|
|
||||
Proceeds from maturities of debt securities held to maturity
|
65
|
|
|
89
|
|
||
Proceeds from sales of debt securities available for sale
|
4,121
|
|
|
67
|
|
||
Proceeds from maturities of debt securities available for sale
|
1,682
|
|
|
1,680
|
|
||
Purchases of debt securities available for sale
|
(5,167
|
)
|
|
(1,774
|
)
|
||
Net proceeds from (payments for) bank-owned life insurance
|
(4
|
)
|
|
2
|
|
||
Proceeds from sales of loans
|
327
|
|
|
280
|
|
||
Purchases of loans
|
(526
|
)
|
|
(215
|
)
|
||
Purchases of mortgage servicing rights
|
(10
|
)
|
|
(2
|
)
|
||
Net change in loans
|
(398
|
)
|
|
(767
|
)
|
||
Net purchases of other assets
|
(55
|
)
|
|
(74
|
)
|
||
Net cash from investing activities
|
35
|
|
|
(714
|
)
|
||
Financing activities:
|
|
|
|
||||
Net change in deposits
|
480
|
|
|
(1,606
|
)
|
||
Net change in short-term borrowings
|
2,650
|
|
|
900
|
|
||
Proceeds from long-term borrowings
|
20,774
|
|
|
8,100
|
|
||
Payments on long-term borrowings
|
(24,074
|
)
|
|
(6,301
|
)
|
||
Net proceeds from issuance of preferred stock
|
490
|
|
|
—
|
|
||
Cash dividends on common stock
|
(286
|
)
|
|
(203
|
)
|
||
Cash dividends on preferred stock
|
(32
|
)
|
|
(32
|
)
|
||
Repurchases of common stock
|
(380
|
)
|
|
(470
|
)
|
||
Taxes paid related to net share settlement of equity awards
|
(27
|
)
|
|
(32
|
)
|
||
Other
|
(1
|
)
|
|
3
|
|
||
Net cash from financing activities
|
(406
|
)
|
|
359
|
|
||
Net change in cash and cash equivalents
|
950
|
|
|
305
|
|
||
Cash and cash equivalents at beginning of year
|
3,538
|
|
|
3,981
|
|
||
Cash and cash equivalents at end of period
|
$
|
4,488
|
|
|
$
|
4,286
|
|
|
June 30, 2019
|
||||||||||||||||||||||||||
|
|
|
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)
|
||||||||||||||||||||||||||
Debt securities held to maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Residential agency
|
$
|
816
|
|
|
$
|
—
|
|
|
$
|
(29
|
)
|
|
$
|
787
|
|
|
$
|
18
|
|
|
$
|
(1
|
)
|
|
$
|
804
|
|
Commercial agency
|
631
|
|
|
—
|
|
|
(3
|
)
|
|
628
|
|
|
19
|
|
|
(3
|
)
|
|
644
|
|
|||||||
|
$
|
1,447
|
|
|
$
|
—
|
|
|
$
|
(32
|
)
|
|
$
|
1,415
|
|
|
$
|
37
|
|
|
$
|
(4
|
)
|
|
$
|
1,448
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Debt securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
U.S. Treasury securities
|
$
|
174
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
176
|
|
|
|
|
|
|
$
|
176
|
|
||||
Federal agency securities
|
42
|
|
|
2
|
|
|
—
|
|
|
44
|
|
|
|
|
|
|
44
|
|
|||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Residential agency
|
16,717
|
|
|
124
|
|
|
(90
|
)
|
|
16,751
|
|
|
|
|
|
|
16,751
|
|
|||||||||
Residential non-agency
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
|
|
|
|
2
|
|
|||||||||
Commercial agency
|
3,670
|
|
|
74
|
|
|
(3
|
)
|
|
3,741
|
|
|
|
|
|
|
3,741
|
|
|||||||||
Commercial non-agency
|
699
|
|
|
8
|
|
|
—
|
|
|
707
|
|
|
|
|
|
|
707
|
|
|||||||||
Corporate and other debt securities
|
1,249
|
|
|
30
|
|
|
(1
|
)
|
|
1,278
|
|
|
|
|
|
|
1,278
|
|
|||||||||
|
$
|
22,553
|
|
|
$
|
240
|
|
|
$
|
(94
|
)
|
|
$
|
22,699
|
|
|
|
|
|
|
$
|
22,699
|
|
|
December 31, 2018
|
||||||||||||||||||||||||||
|
|
|
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)
|
||||||||||||||||||||||||||
Debt securities held to maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Residential agency
|
$
|
883
|
|
|
$
|
—
|
|
|
$
|
(32
|
)
|
|
$
|
851
|
|
|
$
|
1
|
|
|
$
|
(10
|
)
|
|
$
|
842
|
|
Commercial agency
|
634
|
|
|
—
|
|
|
(3
|
)
|
|
631
|
|
|
—
|
|
|
(13
|
)
|
|
618
|
|
|||||||
|
$
|
1,517
|
|
|
$
|
—
|
|
|
$
|
(35
|
)
|
|
$
|
1,482
|
|
|
$
|
1
|
|
|
$
|
(23
|
)
|
|
$
|
1,460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Debt securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
U.S. Treasury securities
|
$
|
284
|
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
$
|
280
|
|
|
|
|
|
|
$
|
280
|
|
||||
Federal agency securities
|
43
|
|
|
—
|
|
|
—
|
|
|
43
|
|
|
|
|
|
|
43
|
|
|||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Residential agency
|
17,064
|
|
|
26
|
|
|
(466
|
)
|
|
16,624
|
|
|
|
|
|
|
16,624
|
|
|||||||||
Residential non-agency
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
|
|
|
|
2
|
|
|||||||||
Commercial agency
|
3,891
|
|
|
8
|
|
|
(64
|
)
|
|
3,835
|
|
|
|
|
|
|
3,835
|
|
|||||||||
Commercial non-agency
|
768
|
|
|
2
|
|
|
(10
|
)
|
|
760
|
|
|
|
|
|
|
760
|
|
|||||||||
Corporate and other debt securities
|
1,206
|
|
|
2
|
|
|
(23
|
)
|
|
1,185
|
|
|
|
|
|
|
1,185
|
|
|||||||||
|
$
|
23,258
|
|
|
$
|
38
|
|
|
$
|
(567
|
)
|
|
$
|
22,729
|
|
|
|
|
|
|
$
|
22,729
|
|
|
Amortized
Cost
|
|
Estimated
Fair Value
|
||||
|
(In millions)
|
||||||
Debt securities held to maturity:
|
|
|
|
||||
Mortgage-backed securities:
|
|
|
|
||||
Residential agency
|
$
|
816
|
|
|
$
|
804
|
|
Commercial agency
|
631
|
|
|
644
|
|
||
|
$
|
1,447
|
|
|
$
|
1,448
|
|
Debt securities available for sale:
|
|
|
|
||||
Due in one year or less
|
$
|
74
|
|
|
$
|
75
|
|
Due after one year through five years
|
1,016
|
|
|
1,031
|
|
||
Due after five years through ten years
|
319
|
|
|
333
|
|
||
Due after ten years
|
56
|
|
|
59
|
|
||
Mortgage-backed securities:
|
|
|
|
||||
Residential agency
|
16,717
|
|
|
16,751
|
|
||
Residential non-agency
|
2
|
|
|
2
|
|
||
Commercial agency
|
3,670
|
|
|
3,741
|
|
||
Commercial non-agency
|
699
|
|
|
707
|
|
||
|
$
|
22,553
|
|
|
$
|
22,699
|
|
|
June 30, 2019
|
||||||||||||||||||||||
|
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)
|
||||||||||||||||||||||
Debt securities held to maturity:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential agency
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
782
|
|
|
$
|
(13
|
)
|
|
$
|
782
|
|
|
$
|
(13
|
)
|
Commercial agency
|
—
|
|
|
—
|
|
|
133
|
|
|
(5
|
)
|
|
133
|
|
|
(5
|
)
|
||||||
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
915
|
|
|
$
|
(18
|
)
|
|
$
|
915
|
|
|
$
|
(18
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Debt securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential agency
|
$
|
1,287
|
|
|
$
|
(6
|
)
|
|
$
|
7,099
|
|
|
$
|
(84
|
)
|
|
$
|
8,386
|
|
|
$
|
(90
|
)
|
Commercial agency
|
—
|
|
|
—
|
|
|
498
|
|
|
(3
|
)
|
|
498
|
|
|
(3
|
)
|
||||||
Corporate and other debt securities
|
—
|
|
|
—
|
|
|
93
|
|
|
(1
|
)
|
|
93
|
|
|
(1
|
)
|
||||||
|
$
|
1,287
|
|
|
$
|
(6
|
)
|
|
$
|
7,690
|
|
|
$
|
(88
|
)
|
|
$
|
8,977
|
|
|
$
|
(94
|
)
|
|
December 31, 2018
|
||||||||||||||||||||||
|
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)
|
||||||||||||||||||||||
Debt securities held to maturity:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential agency
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
842
|
|
|
$
|
(42
|
)
|
|
$
|
842
|
|
|
$
|
(42
|
)
|
Commercial agency
|
486
|
|
|
(7
|
)
|
|
132
|
|
|
(9
|
)
|
|
618
|
|
|
(16
|
)
|
||||||
|
$
|
486
|
|
|
$
|
(7
|
)
|
|
$
|
974
|
|
|
$
|
(51
|
)
|
|
$
|
1,460
|
|
|
$
|
(58
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Debt securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury securities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
261
|
|
|
$
|
(4
|
)
|
|
$
|
261
|
|
|
$
|
(4
|
)
|
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential agency
|
2,830
|
|
|
(37
|
)
|
|
11,010
|
|
|
(429
|
)
|
|
13,840
|
|
|
(466
|
)
|
||||||
Commercial agency
|
1,073
|
|
|
(13
|
)
|
|
2,254
|
|
|
(51
|
)
|
|
3,327
|
|
|
(64
|
)
|
||||||
Commercial non-agency
|
229
|
|
|
(1
|
)
|
|
404
|
|
|
(9
|
)
|
|
633
|
|
|
(10
|
)
|
||||||
Corporate and other debt securities
|
659
|
|
|
(11
|
)
|
|
310
|
|
|
(12
|
)
|
|
969
|
|
|
(23
|
)
|
||||||
|
$
|
4,791
|
|
|
$
|
(62
|
)
|
|
$
|
14,239
|
|
|
$
|
(505
|
)
|
|
$
|
19,030
|
|
|
$
|
(567
|
)
|
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(In millions)
|
||||||||||||||
Gross realized gains
|
$
|
7
|
|
|
$
|
3
|
|
|
$
|
7
|
|
|
$
|
3
|
|
Gross realized losses
|
(26
|
)
|
|
—
|
|
|
(32
|
)
|
|
—
|
|
||||
OTTI
|
—
|
|
|
(2
|
)
|
|
(1
|
)
|
|
(2
|
)
|
||||
Debt securities available for sale gains (losses), net
|
$
|
(19
|
)
|
|
$
|
1
|
|
|
$
|
(26
|
)
|
|
$
|
1
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
|
(In millions, net of unearned income)
|
||||||
Commercial and industrial
|
$
|
40,438
|
|
|
$
|
39,282
|
|
Commercial real estate mortgage—owner-occupied
|
5,455
|
|
|
5,549
|
|
||
Commercial real estate construction—owner-occupied
|
415
|
|
|
384
|
|
||
Total commercial
|
46,308
|
|
|
45,215
|
|
||
Commercial investor real estate mortgage
|
4,795
|
|
|
4,650
|
|
||
Commercial investor real estate construction
|
1,658
|
|
|
1,786
|
|
||
Total investor real estate
|
6,453
|
|
|
6,436
|
|
||
Residential first mortgage
|
14,253
|
|
|
14,276
|
|
||
Home equity
|
8,802
|
|
|
9,257
|
|
||
Indirect—vehicles
|
2,415
|
|
|
3,053
|
|
||
Indirect—other consumer
|
2,796
|
|
|
2,349
|
|
||
Consumer credit card
|
1,303
|
|
|
1,345
|
|
||
Other consumer
|
1,223
|
|
|
1,221
|
|
||
Total consumer
|
30,792
|
|
|
31,501
|
|
||
|
$
|
83,553
|
|
|
$
|
83,152
|
|
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended June 30, 2019
|
||||||||||||||
|
Commercial
|
|
Investor Real
Estate
|
|
Consumer
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
Allowance for loan losses, April 1, 2019
|
$
|
537
|
|
|
$
|
54
|
|
|
$
|
262
|
|
|
$
|
853
|
|
Provision (credit) for loan losses
|
26
|
|
|
(1
|
)
|
|
67
|
|
|
92
|
|
||||
Loan losses:
|
|
|
|
|
|
|
|
||||||||
Charge-offs
|
(44
|
)
|
|
—
|
|
|
(69
|
)
|
|
(113
|
)
|
||||
Recoveries
|
6
|
|
|
1
|
|
|
14
|
|
|
21
|
|
||||
Net loan (losses) recoveries
|
(38
|
)
|
|
1
|
|
|
(55
|
)
|
|
(92
|
)
|
||||
Allowance for loan losses, June 30, 2019
|
525
|
|
|
54
|
|
|
274
|
|
|
853
|
|
||||
Reserve for unfunded credit commitments, April 1, 2019
|
46
|
|
|
4
|
|
|
—
|
|
|
50
|
|
||||
Provision (credit) for unfunded credit losses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Reserve for unfunded credit commitments, June 30, 2019
|
46
|
|
|
4
|
|
|
—
|
|
|
50
|
|
||||
Allowance for credit losses, June 30, 2019
|
$
|
571
|
|
|
$
|
58
|
|
|
$
|
274
|
|
|
$
|
903
|
|
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended June 30, 2018
|
||||||||||||||
|
Commercial
|
|
Investor Real
Estate
|
|
Consumer
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
Allowance for loan losses, April 1, 2018
|
$
|
547
|
|
|
$
|
54
|
|
|
$
|
239
|
|
|
$
|
840
|
|
Provision (credit) for loan losses
|
24
|
|
|
(8
|
)
|
|
44
|
|
|
60
|
|
||||
Loan losses:
|
|
|
|
|
|
|
|
||||||||
Charge-offs
|
(34
|
)
|
|
—
|
|
|
(61
|
)
|
|
(95
|
)
|
||||
Recoveries
|
14
|
|
|
2
|
|
|
17
|
|
|
33
|
|
||||
Net loan (losses) recoveries
|
(20
|
)
|
|
2
|
|
|
(44
|
)
|
|
(62
|
)
|
||||
Allowance for loan losses, June 30, 2018
|
551
|
|
|
48
|
|
|
239
|
|
|
838
|
|
||||
Reserve for unfunded credit commitments, April 1, 2018
|
45
|
|
|
4
|
|
|
—
|
|
|
49
|
|
||||
Provision (credit) for unfunded credit losses
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
Reserve for unfunded credit commitments, June 30, 2018
|
44
|
|
|
4
|
|
|
—
|
|
|
48
|
|
||||
Allowance for credit losses, June 30, 2018
|
$
|
595
|
|
|
$
|
52
|
|
|
$
|
239
|
|
|
$
|
886
|
|
|
Six Months Ended June 30, 2019
|
||||||||||||||
|
Commercial
|
|
Investor Real
Estate
|
|
Consumer
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
Allowance for loan losses, January 1, 2019
|
$
|
520
|
|
|
$
|
58
|
|
|
$
|
262
|
|
|
$
|
840
|
|
Provision (credit) for loan losses
|
64
|
|
|
(6
|
)
|
|
125
|
|
|
183
|
|
||||
Loan losses:
|
|
|
|
|
|
|
|
||||||||
Charge-offs
|
(74
|
)
|
|
—
|
|
|
(141
|
)
|
|
(215
|
)
|
||||
Recoveries
|
15
|
|
|
2
|
|
|
28
|
|
|
45
|
|
||||
Net loan (losses) recoveries
|
(59
|
)
|
|
2
|
|
|
(113
|
)
|
|
(170
|
)
|
||||
Allowance for loan losses, June 30, 2019
|
525
|
|
|
54
|
|
|
274
|
|
|
853
|
|
||||
Reserve for unfunded credit commitments, January 1, 2019
|
47
|
|
|
4
|
|
|
—
|
|
|
51
|
|
||||
Provision (credit) for unfunded credit losses
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
Reserve for unfunded credit commitments, June 30, 2019
|
46
|
|
|
4
|
|
|
—
|
|
|
50
|
|
||||
Allowance for credit losses, June 30, 2019
|
$
|
571
|
|
|
$
|
58
|
|
|
$
|
274
|
|
|
$
|
903
|
|
Portion of ending allowance for loan losses:
|
|
|
|
|
|
|
|
||||||||
Individually evaluated for impairment
|
$
|
125
|
|
|
$
|
2
|
|
|
$
|
30
|
|
|
$
|
157
|
|
Collectively evaluated for impairment
|
400
|
|
|
52
|
|
|
244
|
|
|
696
|
|
||||
Total allowance for loan losses
|
$
|
525
|
|
|
$
|
54
|
|
|
$
|
274
|
|
|
$
|
853
|
|
Portion of loan portfolio ending balance:
|
|
|
|
|
|
|
|
||||||||
Individually evaluated for impairment
|
$
|
532
|
|
|
$
|
22
|
|
|
$
|
400
|
|
|
$
|
954
|
|
Collectively evaluated for impairment
|
45,776
|
|
|
6,431
|
|
|
30,392
|
|
|
82,599
|
|
||||
Total loans evaluated for impairment
|
$
|
46,308
|
|
|
$
|
6,453
|
|
|
$
|
30,792
|
|
|
$
|
83,553
|
|
|
Six Months Ended June 30, 2018
|
||||||||||||||
|
Commercial
|
|
Investor Real
Estate
|
|
Consumer
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
Allowance for loan losses, January 1, 2018
|
$
|
591
|
|
|
$
|
64
|
|
|
$
|
279
|
|
|
$
|
934
|
|
Provision (credit) for loan losses
|
—
|
|
|
(12
|
)
|
|
62
|
|
|
50
|
|
||||
Loan losses:
|
|
|
|
|
|
|
|
||||||||
Charge-offs
|
(64
|
)
|
|
(8
|
)
|
|
(135
|
)
|
|
(207
|
)
|
||||
Recoveries
|
24
|
|
|
4
|
|
|
33
|
|
|
61
|
|
||||
Net loan (losses) recoveries
|
(40
|
)
|
|
(4
|
)
|
|
(102
|
)
|
|
(146
|
)
|
||||
Allowance for loan losses, June 30, 2018
|
551
|
|
|
48
|
|
|
239
|
|
|
838
|
|
||||
Reserve for unfunded credit commitments, January 1, 2018
|
49
|
|
|
4
|
|
|
—
|
|
|
53
|
|
||||
Provision (credit) for unfunded credit losses
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
||||
Reserve for unfunded credit commitments, June 30, 2018
|
44
|
|
|
4
|
|
|
—
|
|
|
48
|
|
||||
Allowance for credit losses, June 30, 2018
|
$
|
595
|
|
|
$
|
52
|
|
|
$
|
239
|
|
|
$
|
886
|
|
Portion of ending allowance for loan losses:
|
|
|
|
|
|
|
|
||||||||
Individually evaluated for impairment
|
$
|
156
|
|
|
$
|
5
|
|
|
$
|
27
|
|
|
$
|
188
|
|
Collectively evaluated for impairment
|
395
|
|
|
43
|
|
|
212
|
|
|
650
|
|
||||
Total allowance for loan losses
|
$
|
551
|
|
|
$
|
48
|
|
|
$
|
239
|
|
|
$
|
838
|
|
Portion of loan portfolio ending balance:
|
|
|
|
|
|
|
|
||||||||
Individually evaluated for impairment
|
$
|
643
|
|
|
$
|
43
|
|
|
$
|
450
|
|
|
$
|
1,136
|
|
Collectively evaluated for impairment
|
42,746
|
|
|
5,718
|
|
|
30,878
|
|
|
79,342
|
|
||||
Total loans evaluated for impairment
|
$
|
43,389
|
|
|
$
|
5,761
|
|
|
$
|
31,328
|
|
|
$
|
80,478
|
|
•
|
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.
|
|
June 30, 2019
|
||||||||||||||||||
|
Pass
|
|
Special Mention
|
|
Substandard
Accrual
|
|
Non-accrual
|
|
Total
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Commercial and industrial
|
$
|
38,949
|
|
|
$
|
766
|
|
|
$
|
376
|
|
|
$
|
347
|
|
|
$
|
40,438
|
|
Commercial real estate mortgage—owner-occupied
|
5,133
|
|
|
176
|
|
|
78
|
|
|
68
|
|
|
5,455
|
|
|||||
Commercial real estate construction—owner-occupied
|
383
|
|
|
11
|
|
|
6
|
|
|
15
|
|
|
415
|
|
|||||
Total commercial
|
$
|
44,465
|
|
|
$
|
953
|
|
|
$
|
460
|
|
|
$
|
430
|
|
|
$
|
46,308
|
|
Commercial investor real estate mortgage
|
$
|
4,574
|
|
|
$
|
172
|
|
|
$
|
41
|
|
|
$
|
8
|
|
|
$
|
4,795
|
|
Commercial investor real estate construction
|
1,598
|
|
|
33
|
|
|
27
|
|
|
—
|
|
|
1,658
|
|
|||||
Total investor real estate
|
$
|
6,172
|
|
|
$
|
205
|
|
|
$
|
68
|
|
|
$
|
8
|
|
|
$
|
6,453
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
Accrual
|
|
Non-accrual
|
|
Total
|
||||||||||
|
|
|
|
|
(In millions)
|
||||||||||||||
Residential first mortgage
|
|
|
|
|
$
|
14,219
|
|
|
$
|
34
|
|
|
$
|
14,253
|
|
||||
Home equity
|
|
|
|
|
8,741
|
|
|
61
|
|
|
8,802
|
|
|||||||
Indirect—vehicles
|
|
|
|
|
2,415
|
|
|
—
|
|
|
2,415
|
|
|||||||
Indirect—other consumer
|
|
|
|
|
2,796
|
|
|
—
|
|
|
2,796
|
|
|||||||
Consumer credit card
|
|
|
|
|
1,303
|
|
|
—
|
|
|
1,303
|
|
|||||||
Other consumer
|
|
|
|
|
1,223
|
|
|
—
|
|
|
1,223
|
|
|||||||
Total consumer
|
|
|
|
|
$
|
30,697
|
|
|
$
|
95
|
|
|
$
|
30,792
|
|
||||
|
|
|
|
|
|
|
|
|
$
|
83,553
|
|
|
December 31, 2018
|
||||||||||||||||||
|
Pass
|
|
Special
Mention
|
|
Substandard
Accrual
|
|
Non-accrual
|
|
Total
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Commercial and industrial
|
$
|
37,963
|
|
|
$
|
666
|
|
|
$
|
346
|
|
|
$
|
307
|
|
|
$
|
39,282
|
|
Commercial real estate mortgage—owner-occupied
|
5,193
|
|
|
208
|
|
|
81
|
|
|
67
|
|
|
5,549
|
|
|||||
Commercial real estate construction—owner-occupied
|
356
|
|
|
7
|
|
|
13
|
|
|
8
|
|
|
384
|
|
|||||
Total commercial
|
$
|
43,512
|
|
|
$
|
881
|
|
|
$
|
440
|
|
|
$
|
382
|
|
|
$
|
45,215
|
|
Commercial investor real estate mortgage
|
$
|
4,444
|
|
|
$
|
52
|
|
|
$
|
143
|
|
|
$
|
11
|
|
|
$
|
4,650
|
|
Commercial investor real estate construction
|
1,773
|
|
|
6
|
|
|
7
|
|
|
—
|
|
|
1,786
|
|
|||||
Total investor real estate
|
$
|
6,217
|
|
|
$
|
58
|
|
|
$
|
150
|
|
|
$
|
11
|
|
|
$
|
6,436
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
Accrual
|
|
Non-accrual
|
|
Total
|
||||||||||
|
|
|
|
|
(In millions)
|
||||||||||||||
Residential first mortgage
|
|
|
|
|
$
|
14,236
|
|
|
$
|
40
|
|
|
$
|
14,276
|
|
||||
Home equity
|
|
|
|
|
9,194
|
|
|
63
|
|
|
9,257
|
|
|||||||
Indirect—vehicles
|
|
|
|
|
3,053
|
|
|
—
|
|
|
3,053
|
|
|||||||
Indirect—other consumer
|
|
|
|
|
2,349
|
|
|
—
|
|
|
2,349
|
|
|||||||
Consumer credit card
|
|
|
|
|
1,345
|
|
|
—
|
|
|
1,345
|
|
|||||||
Other consumer
|
|
|
|
|
1,221
|
|
|
—
|
|
|
1,221
|
|
|||||||
Total consumer
|
|
|
|
|
$
|
31,398
|
|
|
$
|
103
|
|
|
$
|
31,501
|
|
||||
|
|
|
|
|
|
|
|
|
$
|
83,152
|
|
|
June 30, 2019
|
||||||||||||||||||||||||||
|
Accrual Loans
|
|
|
|
|
|
|
||||||||||||||||||||
|
30-59 DPD
|
|
60-89 DPD
|
|
90+ DPD
|
|
Total
30+ DPD
|
|
Total
Accrual
|
|
Non-accrual
|
|
Total
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Commercial and industrial
|
$
|
56
|
|
|
$
|
18
|
|
|
$
|
11
|
|
|
$
|
85
|
|
|
$
|
40,091
|
|
|
$
|
347
|
|
|
$
|
40,438
|
|
Commercial real estate mortgage—owner-occupied
|
30
|
|
|
3
|
|
|
—
|
|
|
33
|
|
|
5,387
|
|
|
68
|
|
|
5,455
|
|
|||||||
Commercial real estate construction—owner-occupied
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
400
|
|
|
15
|
|
|
415
|
|
|||||||
Total commercial
|
88
|
|
|
21
|
|
|
11
|
|
|
120
|
|
|
45,878
|
|
|
430
|
|
|
46,308
|
|
|||||||
Commercial investor real estate mortgage
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
4,787
|
|
|
8
|
|
|
4,795
|
|
|||||||
Commercial investor real estate construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,658
|
|
|
—
|
|
|
1,658
|
|
|||||||
Total investor real estate
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
6,445
|
|
|
8
|
|
|
6,453
|
|
|||||||
Residential first mortgage
|
79
|
|
|
44
|
|
|
127
|
|
|
250
|
|
|
14,219
|
|
|
34
|
|
|
14,253
|
|
|||||||
Home equity
|
48
|
|
|
23
|
|
|
40
|
|
|
111
|
|
|
8,741
|
|
|
61
|
|
|
8,802
|
|
|||||||
Indirect—vehicles
|
32
|
|
|
10
|
|
|
6
|
|
|
48
|
|
|
2,415
|
|
|
—
|
|
|
2,415
|
|
|||||||
Indirect—other consumer
|
12
|
|
|
8
|
|
|
2
|
|
|
22
|
|
|
2,796
|
|
|
—
|
|
|
2,796
|
|
|||||||
Consumer credit card
|
10
|
|
|
7
|
|
|
20
|
|
|
37
|
|
|
1,303
|
|
|
—
|
|
|
1,303
|
|
|||||||
Other consumer
|
16
|
|
|
5
|
|
|
4
|
|
|
25
|
|
|
1,223
|
|
|
—
|
|
|
1,223
|
|
|||||||
Total consumer
|
197
|
|
|
97
|
|
|
199
|
|
|
493
|
|
|
30,697
|
|
|
95
|
|
|
30,792
|
|
|||||||
|
$
|
286
|
|
|
$
|
118
|
|
|
$
|
210
|
|
|
$
|
614
|
|
|
$
|
83,020
|
|
|
$
|
533
|
|
|
$
|
83,553
|
|
|
December 31, 2018
|
||||||||||||||||||||||||||
|
Accrual Loans
|
|
|
|
|
|
|
||||||||||||||||||||
|
30-59 DPD
|
|
60-89 DPD
|
|
90+ DPD
|
|
Total
30+ DPD
|
|
Total
Accrual
|
|
Non-accrual
|
|
Total
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Commercial and industrial
|
$
|
80
|
|
|
$
|
22
|
|
|
$
|
8
|
|
|
$
|
110
|
|
|
$
|
38,975
|
|
|
$
|
307
|
|
|
$
|
39,282
|
|
Commercial real estate mortgage—owner-occupied
|
12
|
|
|
7
|
|
|
—
|
|
|
19
|
|
|
5,482
|
|
|
67
|
|
|
5,549
|
|
|||||||
Commercial real estate construction—owner-occupied
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
376
|
|
|
8
|
|
|
384
|
|
|||||||
Total commercial
|
92
|
|
|
29
|
|
|
8
|
|
|
129
|
|
|
44,833
|
|
|
382
|
|
|
45,215
|
|
|||||||
Commercial investor real estate mortgage
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
4,639
|
|
|
11
|
|
|
4,650
|
|
|||||||
Commercial investor real estate construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,786
|
|
|
—
|
|
|
1,786
|
|
|||||||
Total investor real estate
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
6,425
|
|
|
11
|
|
|
6,436
|
|
|||||||
Residential first mortgage
|
85
|
|
|
53
|
|
|
150
|
|
|
288
|
|
|
14,236
|
|
|
40
|
|
|
14,276
|
|
|||||||
Home equity
|
47
|
|
|
26
|
|
|
34
|
|
|
107
|
|
|
9,194
|
|
|
63
|
|
|
9,257
|
|
|||||||
Indirect—vehicles
|
40
|
|
|
11
|
|
|
9
|
|
|
60
|
|
|
3,053
|
|
|
—
|
|
|
3,053
|
|
|||||||
Indirect—other consumer
|
13
|
|
|
7
|
|
|
1
|
|
|
21
|
|
|
2,349
|
|
|
—
|
|
|
2,349
|
|
|||||||
Consumer credit card
|
12
|
|
|
9
|
|
|
20
|
|
|
41
|
|
|
1,345
|
|
|
—
|
|
|
1,345
|
|
|||||||
Other consumer
|
15
|
|
|
5
|
|
|
5
|
|
|
25
|
|
|
1,221
|
|
|
—
|
|
|
1,221
|
|
|||||||
Total consumer
|
212
|
|
|
111
|
|
|
219
|
|
|
542
|
|
|
31,398
|
|
|
103
|
|
|
31,501
|
|
|||||||
|
$
|
310
|
|
|
$
|
140
|
|
|
$
|
227
|
|
|
$
|
677
|
|
|
$
|
82,656
|
|
|
$
|
496
|
|
|
$
|
83,152
|
|
|
Non-accrual Impaired Loans As of June 30, 2019
|
|||||||||||||||||||||||||
|
|
|
|
|
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
|
$
|
452
|
|
|
$
|
105
|
|
|
$
|
347
|
|
|
$
|
89
|
|
|
$
|
258
|
|
|
$
|
84
|
|
|
41.8
|
%
|
Commercial real estate mortgage—owner-occupied
|
74
|
|
|
6
|
|
|
68
|
|
|
5
|
|
|
63
|
|
|
23
|
|
|
39.2
|
|
||||||
Commercial real estate construction—owner-occupied
|
16
|
|
|
1
|
|
|
15
|
|
|
—
|
|
|
15
|
|
|
5
|
|
|
37.5
|
|
||||||
Total commercial
|
542
|
|
|
112
|
|
|
430
|
|
|
94
|
|
|
336
|
|
|
112
|
|
|
41.3
|
|
||||||
Commercial investor real estate mortgage
|
8
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
|
2
|
|
|
25.0
|
|
||||||
Total investor real estate
|
8
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
|
2
|
|
|
25.0
|
|
||||||
Residential first mortgage
|
25
|
|
|
6
|
|
|
19
|
|
|
—
|
|
|
19
|
|
|
2
|
|
|
32.0
|
|
||||||
Home equity
|
10
|
|
|
1
|
|
|
9
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
10.0
|
|
||||||
Total consumer
|
35
|
|
|
7
|
|
|
28
|
|
|
—
|
|
|
28
|
|
|
2
|
|
|
25.7
|
|
||||||
|
$
|
585
|
|
|
$
|
119
|
|
|
$
|
466
|
|
|
$
|
94
|
|
|
$
|
372
|
|
|
$
|
116
|
|
|
40.2
|
%
|
|
Accruing Impaired Loans As of June 30, 2019
|
|||||||||||||||||
|
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
|
$
|
86
|
|
|
$
|
2
|
|
|
$
|
84
|
|
|
$
|
12
|
|
|
16.3
|
%
|
Commercial real estate mortgage—owner-occupied
|
20
|
|
|
2
|
|
|
18
|
|
|
1
|
|
|
15.0
|
|
||||
Total commercial
|
106
|
|
|
4
|
|
|
102
|
|
|
13
|
|
|
16.0
|
|
||||
Commercial investor real estate mortgage
|
14
|
|
|
2
|
|
|
12
|
|
|
—
|
|
|
14.3
|
|
||||
Commercial investor real estate construction
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
Total investor real estate
|
16
|
|
|
2
|
|
|
14
|
|
|
—
|
|
|
12.5
|
|
||||
Residential first mortgage
|
202
|
|
|
9
|
|
|
193
|
|
|
19
|
|
|
13.9
|
|
||||
Home equity
|
173
|
|
|
—
|
|
|
173
|
|
|
9
|
|
|
5.2
|
|
||||
Consumer credit card
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Other consumer
|
5
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
||||
Total consumer
|
381
|
|
|
9
|
|
|
372
|
|
|
28
|
|
|
9.7
|
|
||||
|
$
|
503
|
|
|
$
|
15
|
|
|
$
|
488
|
|
|
$
|
41
|
|
|
11.1
|
%
|
|
Total Impaired Loans As of June 30, 2019
|
|||||||||||||||||||||||||
|
|
|
|
|
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
|
$
|
538
|
|
|
$
|
107
|
|
|
$
|
431
|
|
|
$
|
89
|
|
|
$
|
342
|
|
|
$
|
96
|
|
|
37.7
|
%
|
Commercial real estate mortgage—owner-occupied
|
94
|
|
|
8
|
|
|
86
|
|
|
5
|
|
|
81
|
|
|
24
|
|
|
34.0
|
|
||||||
Commercial real estate construction—owner-occupied
|
16
|
|
|
1
|
|
|
15
|
|
|
—
|
|
|
15
|
|
|
5
|
|
|
37.5
|
|
||||||
Total commercial
|
648
|
|
|
116
|
|
|
532
|
|
|
94
|
|
|
438
|
|
|
125
|
|
|
37.2
|
|
||||||
Commercial investor real estate mortgage
|
22
|
|
|
2
|
|
|
20
|
|
|
—
|
|
|
20
|
|
|
2
|
|
|
18.2
|
|
||||||
Commercial investor real estate construction
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||||
Total investor real estate
|
24
|
|
|
2
|
|
|
22
|
|
|
—
|
|
|
22
|
|
|
2
|
|
|
16.7
|
|
||||||
Residential first mortgage
|
227
|
|
|
15
|
|
|
212
|
|
|
—
|
|
|
212
|
|
|
21
|
|
|
15.9
|
|
||||||
Home equity
|
183
|
|
|
1
|
|
|
182
|
|
|
—
|
|
|
182
|
|
|
9
|
|
|
5.5
|
|
||||||
Consumer credit card
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||||
Other consumer
|
5
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
||||||
Total consumer
|
416
|
|
|
16
|
|
|
400
|
|
|
—
|
|
|
400
|
|
|
30
|
|
|
11.1
|
|
||||||
|
$
|
1,088
|
|
|
$
|
134
|
|
|
$
|
954
|
|
|
$
|
94
|
|
|
$
|
860
|
|
|
$
|
157
|
|
|
26.7
|
%
|
|
Non-accrual Impaired Loans As of December 31, 2018
|
|||||||||||||||||||||||||
|
|
|
|
|
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
|
$
|
384
|
|
|
$
|
77
|
|
|
$
|
307
|
|
|
$
|
113
|
|
|
$
|
194
|
|
|
$
|
62
|
|
|
36.2
|
%
|
Commercial real estate mortgage—owner-occupied
|
76
|
|
|
9
|
|
|
67
|
|
|
13
|
|
|
54
|
|
|
23
|
|
|
42.1
|
|
||||||
Commercial real estate construction—owner-occupied
|
9
|
|
|
1
|
|
|
8
|
|
|
—
|
|
|
8
|
|
|
3
|
|
|
44.4
|
|
||||||
Total commercial
|
469
|
|
|
87
|
|
|
382
|
|
|
126
|
|
|
256
|
|
|
88
|
|
|
37.3
|
|
||||||
Commercial investor real estate mortgage
|
11
|
|
|
—
|
|
|
11
|
|
|
4
|
|
|
7
|
|
|
1
|
|
|
9.1
|
|
||||||
Total investor real estate
|
11
|
|
|
—
|
|
|
11
|
|
|
4
|
|
|
7
|
|
|
1
|
|
|
9.1
|
|
||||||
Residential first mortgage
|
31
|
|
|
8
|
|
|
23
|
|
|
—
|
|
|
23
|
|
|
2
|
|
|
32.3
|
|
||||||
Home equity
|
11
|
|
|
2
|
|
|
9
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
18.2
|
|
||||||
Total consumer
|
42
|
|
|
10
|
|
|
32
|
|
|
—
|
|
|
32
|
|
|
2
|
|
|
28.6
|
|
||||||
|
$
|
522
|
|
|
$
|
97
|
|
|
$
|
425
|
|
|
$
|
130
|
|
|
$
|
295
|
|
|
$
|
91
|
|
|
36.0
|
%
|
|
Accruing Impaired Loans As of December 31, 2018
|
|||||||||||||||||
|
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
|
$
|
84
|
|
|
$
|
—
|
|
|
$
|
84
|
|
|
$
|
14
|
|
|
16.7
|
%
|
Commercial real estate mortgage—owner-occupied
|
26
|
|
|
2
|
|
|
24
|
|
|
2
|
|
|
15.4
|
|
||||
Total commercial
|
110
|
|
|
2
|
|
|
108
|
|
|
16
|
|
|
16.4
|
|
||||
Commercial investor real estate mortgage
|
15
|
|
|
1
|
|
|
14
|
|
|
1
|
|
|
13.3
|
|
||||
Total investor real estate
|
15
|
|
|
1
|
|
|
14
|
|
|
1
|
|
|
13.3
|
|
||||
Residential first mortgage
|
194
|
|
|
9
|
|
|
185
|
|
|
18
|
|
|
13.9
|
|
||||
Home equity
|
195
|
|
|
—
|
|
|
195
|
|
|
6
|
|
|
3.1
|
|
||||
Consumer credit card
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Other consumer
|
6
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
||||
Total consumer
|
396
|
|
|
9
|
|
|
387
|
|
|
24
|
|
|
8.3
|
|
||||
|
$
|
521
|
|
|
$
|
12
|
|
|
$
|
509
|
|
|
$
|
41
|
|
|
10.2
|
%
|
|
Total Impaired Loans As of December 31, 2018
|
|||||||||||||||||||||||||
|
|
|
|
|
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
|
$
|
468
|
|
|
$
|
77
|
|
|
$
|
391
|
|
|
$
|
113
|
|
|
$
|
278
|
|
|
$
|
76
|
|
|
32.7
|
%
|
Commercial real estate mortgage—owner-occupied
|
102
|
|
|
11
|
|
|
91
|
|
|
13
|
|
|
78
|
|
|
25
|
|
|
35.3
|
|
||||||
Commercial real estate construction—owner-occupied
|
9
|
|
|
1
|
|
|
8
|
|
|
—
|
|
|
8
|
|
|
3
|
|
|
44.4
|
|
||||||
Total commercial
|
579
|
|
|
89
|
|
|
490
|
|
|
126
|
|
|
364
|
|
|
104
|
|
|
33.3
|
|
||||||
Commercial investor real estate mortgage
|
26
|
|
|
1
|
|
|
25
|
|
|
4
|
|
|
21
|
|
|
2
|
|
|
11.5
|
|
||||||
Total investor real estate
|
26
|
|
|
1
|
|
|
25
|
|
|
4
|
|
|
21
|
|
|
2
|
|
|
11.5
|
|
||||||
Residential first mortgage
|
225
|
|
|
17
|
|
|
208
|
|
|
—
|
|
|
208
|
|
|
20
|
|
|
16.4
|
|
||||||
Home equity
|
206
|
|
|
2
|
|
|
204
|
|
|
—
|
|
|
204
|
|
|
6
|
|
|
3.9
|
|
||||||
Consumer credit card
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||||
Other consumer
|
6
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
||||||
Total consumer
|
438
|
|
|
19
|
|
|
419
|
|
|
—
|
|
|
419
|
|
|
26
|
|
|
10.3
|
|
||||||
|
$
|
1,043
|
|
|
$
|
109
|
|
|
$
|
934
|
|
|
$
|
130
|
|
|
$
|
804
|
|
|
$
|
132
|
|
|
23.1
|
%
|
(1)
|
Unpaid principal balance represents the contractual obligation due from the customer and includes the net book value plus charge-offs and payments applied.
|
(2)
|
Charge-offs and payments applied represents cumulative partial charge-offs taken, as well as interest payments received that have been applied against the outstanding principal balance.
|
(3)
|
Book value represents the unpaid principal balance less charge-offs and payments applied; it is shown before any allowance for loan losses.
|
(4)
|
Coverage % represents charge-offs and payments applied plus the related allowance as a percent of the unpaid principal balance.
|
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
||||||||||||||||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||||||||||||||
|
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
|
$
|
430
|
|
|
$
|
1
|
|
|
$
|
518
|
|
|
$
|
2
|
|
|
$
|
420
|
|
|
$
|
2
|
|
|
$
|
526
|
|
|
$
|
5
|
|
Commercial real estate mortgage—owner-occupied
|
82
|
|
|
—
|
|
|
138
|
|
|
2
|
|
|
88
|
|
|
1
|
|
|
152
|
|
|
5
|
|
||||||||
Commercial real estate construction—owner-occupied
|
15
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
6
|
|
|
—
|
|
||||||||
Total commercial
|
527
|
|
|
1
|
|
|
661
|
|
|
4
|
|
|
522
|
|
|
3
|
|
|
684
|
|
|
10
|
|
||||||||
Commercial investor real estate mortgage
|
20
|
|
|
1
|
|
|
75
|
|
|
1
|
|
|
21
|
|
|
1
|
|
|
75
|
|
|
2
|
|
||||||||
Commercial investor real estate construction
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
15
|
|
|
—
|
|
||||||||
Total investor real estate
|
22
|
|
|
1
|
|
|
75
|
|
|
1
|
|
|
22
|
|
|
1
|
|
|
90
|
|
|
2
|
|
||||||||
Residential first mortgage
|
213
|
|
|
2
|
|
|
214
|
|
|
2
|
|
|
211
|
|
|
3
|
|
|
251
|
|
|
4
|
|
||||||||
Home equity
|
186
|
|
|
2
|
|
|
238
|
|
|
4
|
|
|
192
|
|
|
5
|
|
|
245
|
|
|
7
|
|
||||||||
Consumer credit card
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||||||
Other consumer
|
5
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
7
|
|
|
—
|
|
||||||||
Total consumer
|
405
|
|
|
4
|
|
|
460
|
|
|
6
|
|
|
409
|
|
|
8
|
|
|
504
|
|
|
11
|
|
||||||||
Total impaired loans
|
$
|
954
|
|
|
$
|
6
|
|
|
$
|
1,196
|
|
|
$
|
11
|
|
|
$
|
953
|
|
|
$
|
12
|
|
|
$
|
1,278
|
|
|
$
|
23
|
|
|
|
|
|
|
|
|||||
|
Three Months Ended June 30, 2019
|
|||||||||
|
|
|
|
|
Financial Impact
of Modifications
Considered TDRs
|
|||||
|
Number of
Obligors
|
|
Recorded
Investment
|
|
Increase in
Allowance at
Modification
|
|||||
|
(Dollars in millions)
|
|||||||||
Commercial and industrial
|
23
|
|
|
$
|
32
|
|
|
$
|
—
|
|
Commercial real estate mortgage—owner-occupied
|
16
|
|
|
8
|
|
|
—
|
|
||
Total commercial
|
39
|
|
|
40
|
|
|
—
|
|
||
Commercial investor real estate mortgage
|
1
|
|
|
—
|
|
|
—
|
|
||
Commercial investor real estate construction
|
2
|
|
|
1
|
|
|
—
|
|
||
Total investor real estate
|
3
|
|
|
1
|
|
|
—
|
|
||
Residential first mortgage
|
34
|
|
|
8
|
|
|
1
|
|
||
Home equity
|
30
|
|
|
2
|
|
|
—
|
|
||
Consumer credit card
|
8
|
|
|
—
|
|
|
—
|
|
||
Indirect—vehicles and other consumer
|
19
|
|
|
1
|
|
|
—
|
|
||
Total consumer
|
91
|
|
|
11
|
|
|
1
|
|
||
|
133
|
|
|
$
|
52
|
|
|
$
|
1
|
|
|
|
|
|
|
|
|||||
|
Three Months Ended June 30, 2018
|
|||||||||
|
|
|
|
|
Financial Impact
of Modifications
Considered TDRs
|
|||||
|
Number of
Obligors
|
|
Recorded
Investment
|
|
Increase in
Allowance at
Modification
|
|||||
|
(Dollars in millions)
|
|||||||||
Commercial and industrial
|
26
|
|
|
$
|
50
|
|
|
$
|
1
|
|
Commercial real estate mortgage—owner-occupied
|
20
|
|
|
10
|
|
|
—
|
|
||
Total commercial
|
46
|
|
|
60
|
|
|
1
|
|
||
Commercial investor real estate mortgage
|
5
|
|
|
30
|
|
|
1
|
|
||
Total investor real estate
|
5
|
|
|
30
|
|
|
1
|
|
||
Residential first mortgage
|
45
|
|
|
6
|
|
|
1
|
|
||
Home equity
|
30
|
|
|
2
|
|
|
—
|
|
||
Consumer credit card
|
11
|
|
|
—
|
|
|
—
|
|
||
Indirect—vehicles and other consumer
|
20
|
|
|
—
|
|
|
—
|
|
||
Total consumer
|
106
|
|
|
8
|
|
|
1
|
|
||
|
157
|
|
|
$
|
98
|
|
|
$
|
3
|
|
|
Six Months Ended June 30, 2019
|
|||||||||
|
|
|
|
|
Financial Impact
of Modifications Considered TDRs |
|||||
|
Number of
Obligors |
|
Recorded
Investment |
|
Increase in
Allowance at Modification |
|||||
|
(Dollars in millions)
|
|||||||||
Commercial and industrial
|
49
|
|
|
$
|
110
|
|
|
$
|
1
|
|
Commercial real estate mortgage—owner-occupied
|
33
|
|
|
20
|
|
|
—
|
|
||
Commercial real estate construction—owner-occupied
|
1
|
|
|
2
|
|
|
—
|
|
||
Total commercial
|
83
|
|
|
132
|
|
|
1
|
|
||
Commercial investor real estate mortgage
|
4
|
|
|
11
|
|
|
—
|
|
||
Commercial investor real estate construction
|
4
|
|
|
1
|
|
|
—
|
|
||
Total investor real estate
|
8
|
|
|
12
|
|
|
—
|
|
||
Residential first mortgage
|
68
|
|
|
18
|
|
|
2
|
|
||
Home equity
|
64
|
|
|
5
|
|
|
—
|
|
||
Consumer credit card
|
26
|
|
|
—
|
|
|
—
|
|
||
Indirect—vehicles and other consumer
|
49
|
|
|
1
|
|
|
—
|
|
||
Total consumer
|
207
|
|
|
24
|
|
|
2
|
|
||
|
298
|
|
|
$
|
168
|
|
|
$
|
3
|
|
|
Six Months Ended June 30, 2018
|
|||||||||
|
|
|
|
|
Financial Impact
of Modifications Considered TDRs |
|||||
|
Number of
Obligors |
|
Recorded
Investment |
|
Increase in
Allowance at Modification |
|||||
|
(Dollars in millions)
|
|||||||||
Commercial and industrial
|
55
|
|
|
$
|
214
|
|
|
$
|
3
|
|
Commercial real estate mortgage—owner-occupied
|
38
|
|
|
24
|
|
|
—
|
|
||
Total commercial
|
93
|
|
|
238
|
|
|
3
|
|
||
Commercial investor real estate mortgage
|
15
|
|
|
49
|
|
|
2
|
|
||
Total investor real estate
|
15
|
|
|
49
|
|
|
2
|
|
||
Residential first mortgage
|
98
|
|
|
14
|
|
|
2
|
|
||
Home equity
|
47
|
|
|
3
|
|
|
—
|
|
||
Consumer credit card
|
25
|
|
|
—
|
|
|
—
|
|
||
Indirect—vehicles and other consumer
|
33
|
|
|
—
|
|
|
—
|
|
||
Total consumer
|
203
|
|
|
17
|
|
|
2
|
|
||
|
311
|
|
|
$
|
304
|
|
|
$
|
7
|
|
|
|
|
|
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(In millions)
|
||||||||||||||
Carrying value, beginning of period
|
$
|
386
|
|
|
$
|
356
|
|
|
$
|
418
|
|
|
$
|
336
|
|
Additions
|
8
|
|
|
9
|
|
|
15
|
|
|
17
|
|
||||
Increase (decrease) in fair value:
|
|
|
|
|
|
|
|
||||||||
Due to change in valuation inputs or assumptions
|
(43
|
)
|
|
10
|
|
|
(71
|
)
|
|
32
|
|
||||
Economic amortization associated with borrower repayments (1)
|
(14
|
)
|
|
(13
|
)
|
|
(25
|
)
|
|
(23
|
)
|
||||
Carrying value, end of period
|
$
|
337
|
|
|
$
|
362
|
|
|
$
|
337
|
|
|
$
|
362
|
|
|
June 30
|
||||||
|
2019
|
|
2018
|
||||
|
(Dollars in millions)
|
||||||
Unpaid principal balance
|
$
|
35,309
|
|
|
$
|
31,140
|
|
Weighted-average CPR (%)
|
12.5
|
%
|
|
8.6
|
%
|
||
Estimated impact on fair value of a 10% increase
|
$
|
(19
|
)
|
|
$
|
(22
|
)
|
Estimated impact on fair value of a 20% increase
|
$
|
(35
|
)
|
|
$
|
(41
|
)
|
Option-adjusted spread (basis points)
|
763
|
|
|
825
|
|
||
Estimated impact on fair value of a 10% increase
|
$
|
(10
|
)
|
|
$
|
(12
|
)
|
Estimated impact on fair value of a 20% increase
|
$
|
(20
|
)
|
|
$
|
(24
|
)
|
Weighted-average coupon interest rate
|
4.2
|
%
|
|
4.2
|
%
|
||
Weighted-average remaining maturity (months)
|
279
|
|
|
280
|
|
||
Weighted-average servicing fee (basis points)
|
27.2
|
|
|
27.5
|
|
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(In millions)
|
||||||||||||||
Servicing related fees and other ancillary income
|
$
|
26
|
|
|
$
|
23
|
|
|
$
|
52
|
|
|
$
|
46
|
|
|
Three Months Ended June 30, 2019
|
|
Six Months Ended June 30, 2019
|
||||
|
(In millions)
|
||||||
Operating lease cost
|
$
|
20
|
|
|
$
|
41
|
|
|
June 30, 2019
|
|
Weighted-average remaining lease term (years)
|
9.2
|
|
Weighted-average discount rate (%)
|
3.3
|
%
|
|
June 30, 2019
|
||
|
(In millions)
|
||
2019 (excluding the six months ended June 30, 2019)
|
$
|
46
|
|
2020
|
91
|
|
|
2021
|
82
|
|
|
2022
|
73
|
|
|
2023
|
65
|
|
|
Thereafter
|
256
|
|
|
Total lease payments
|
$
|
613
|
|
Less: Imputed interest
|
108
|
|
|
Total present value of lease liabilities
|
$
|
505
|
|
|
Net Interest Income and Other Financing Income
|
||||||
|
Three Months Ended June 30, 2019
|
|
Six Months Ended June 30, 2019
|
||||
|
(In millions)
|
||||||
Sales-Type and Direct Financing
|
$
|
8
|
|
|
$
|
16
|
|
Operating
|
3
|
|
|
6
|
|
||
Leveraged
|
4
|
|
|
7
|
|
||
|
$
|
15
|
|
|
$
|
29
|
|
|
As of June 30, 2019
|
||||||||||||||
|
Sales-Type and Direct Financing
|
|
Operating
|
|
Leveraged
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
Lease receivable
|
$
|
1,058
|
|
|
$
|
136
|
|
|
$
|
185
|
|
|
$
|
1,379
|
|
Unearned income
|
(230
|
)
|
|
(34
|
)
|
|
(121
|
)
|
|
(385
|
)
|
||||
Guaranteed residual
|
42
|
|
|
—
|
|
|
—
|
|
|
42
|
|
||||
Unguaranteed residual
|
142
|
|
|
225
|
|
|
157
|
|
|
524
|
|
||||
Total net investment
|
$
|
1,012
|
|
|
$
|
327
|
|
|
$
|
221
|
|
|
$
|
1,560
|
|
|
June 30, 2019
|
||||||||||
|
Sales-Type and Direct Financing
|
|
Operating
|
|
Total
|
||||||
|
(In millions)
|
||||||||||
2019 (excluding the six months ended June 30, 2019)
|
$
|
101
|
|
|
$
|
25
|
|
|
$
|
126
|
|
2020
|
159
|
|
|
42
|
|
|
201
|
|
|||
2021
|
126
|
|
|
30
|
|
|
156
|
|
|||
2022
|
105
|
|
|
17
|
|
|
122
|
|
|||
2023
|
86
|
|
|
8
|
|
|
94
|
|
|||
Thereafter
|
481
|
|
|
14
|
|
|
495
|
|
|||
|
$
|
1,058
|
|
|
$
|
136
|
|
|
$
|
1,194
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
|||||||
|
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
|
|
|||
Series C
|
4/30/2019
|
|
5/15/2029
|
|
5.700
|
%
|
(2)
|
|
500
|
|
|
490
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
$
|
1,500
|
|
|
$
|
1,310
|
|
|
$
|
820
|
|
|
Three Months Ended June 30, 2019
|
||||||||||||||||||
|
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
|
$
|
(26
|
)
|
|
$
|
(152
|
)
|
|
$
|
50
|
|
|
$
|
(470
|
)
|
|
$
|
(598
|
)
|
Net change
|
2
|
|
|
260
|
|
|
308
|
|
|
7
|
|
|
577
|
|
|||||
End of period
|
$
|
(24
|
)
|
|
$
|
108
|
|
|
$
|
358
|
|
|
$
|
(463
|
)
|
|
$
|
(21
|
)
|
|
Three Months Ended June 30, 2018
|
||||||||||||||||||
|
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
|
$
|
(31
|
)
|
|
$
|
(463
|
)
|
|
$
|
(151
|
)
|
|
$
|
(506
|
)
|
|
$
|
(1,151
|
)
|
Net change
|
1
|
|
|
(67
|
)
|
|
(46
|
)
|
|
8
|
|
|
(104
|
)
|
|||||
End of period
|
$
|
(30
|
)
|
|
$
|
(530
|
)
|
|
$
|
(197
|
)
|
|
$
|
(498
|
)
|
|
$
|
(1,255
|
)
|
|
Six Months Ended June 30, 2019
|
||||||||||||||||||
|
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
|
$
|
(27
|
)
|
|
$
|
(397
|
)
|
|
$
|
(63
|
)
|
|
$
|
(477
|
)
|
|
$
|
(964
|
)
|
Net change
|
3
|
|
|
505
|
|
|
421
|
|
|
14
|
|
|
943
|
|
|||||
End of period
|
$
|
(24
|
)
|
|
$
|
108
|
|
|
$
|
358
|
|
|
$
|
(463
|
)
|
|
$
|
(21
|
)
|
|
Six Months Ended June 30, 2018
|
||||||||||||||||||
|
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
|
)
|
|
$
|
(153
|
)
|
|
$
|
(51
|
)
|
|
$
|
(512
|
)
|
|
$
|
(749
|
)
|
Net change
|
3
|
|
|
(377
|
)
|
|
(146
|
)
|
|
14
|
|
|
(506
|
)
|
|||||
End of period
|
$
|
(30
|
)
|
|
$
|
(530
|
)
|
|
$
|
(197
|
)
|
|
$
|
(498
|
)
|
|
$
|
(1,255
|
)
|
|
|
|
|
|
|
||||
|
Three Months Ended June 30, 2019
|
|
Three Months Ended June 30, 2018
|
|
|
||||
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
|
)
|
|
$
|
(1
|
)
|
|
Net interest income and other financing income
|
|
—
|
|
|
—
|
|
|
Tax (expense) or benefit
|
||
|
$
|
(2
|
)
|
|
$
|
(1
|
)
|
|
Net of tax
|
Unrealized gains and (losses) on available for sale securities:
|
|
|
|
|
|
||||
|
$
|
(19
|
)
|
|
$
|
1
|
|
|
Securities gains (losses), net
|
|
3
|
|
|
—
|
|
|
Tax (expense) or benefit
|
||
|
$
|
(16
|
)
|
|
$
|
1
|
|
|
Net of tax
|
|
|
|
|
|
|
||||
Gains and (losses) on cash flow hedges:
|
|
|
|
|
|
||||
Interest rate contracts
|
$
|
(8
|
)
|
|
$
|
5
|
|
|
Net interest income and other financing income
|
|
2
|
|
|
(1
|
)
|
|
Tax (expense) or benefit
|
||
|
$
|
(6
|
)
|
|
$
|
4
|
|
|
Net of tax
|
|
|
|
|
|
|
||||
Amortization of defined benefit pension plans and other post employment benefits:
|
|
|
|
|
|
||||
Actuarial gains (losses)(2)
|
$
|
(10
|
)
|
|
$
|
(10
|
)
|
|
Total before tax
|
|
3
|
|
|
2
|
|
|
Tax (expense) or benefit
|
||
|
$
|
(7
|
)
|
|
$
|
(8
|
)
|
|
Net of tax
|
|
|
|
|
|
|
||||
Total reclassifications for the period
|
$
|
(31
|
)
|
|
$
|
(4
|
)
|
|
Net of tax
|
|
Six Months Ended June 30, 2019
|
|
Six Months Ended
June 30, 2018
|
|
|
||||
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:
|
|
|
|
|
|
||||
|
$
|
(3
|
)
|
|
$
|
(4
|
)
|
|
Net interest income and other financing income
|
|
—
|
|
|
1
|
|
|
Tax (expense) or benefit
|
||
|
$
|
(3
|
)
|
|
$
|
(3
|
)
|
|
Net of tax
|
Unrealized gains and (losses) on available for sale securities:
|
|
|
|
|
|
||||
|
$
|
(26
|
)
|
|
$
|
1
|
|
|
Securities gains (losses), net
|
|
5
|
|
|
—
|
|
|
Tax (expense) or benefit
|
||
|
$
|
(21
|
)
|
|
$
|
1
|
|
|
Net of tax
|
|
|
|
|
|
|
||||
Gains and (losses) on cash flow hedges:
|
|
|
|
|
|
||||
Interest rate contracts
|
$
|
(16
|
)
|
|
$
|
16
|
|
|
Net interest income and other financing income
|
|
4
|
|
|
(4
|
)
|
|
Tax (expense) or benefit
|
||
|
$
|
(12
|
)
|
|
$
|
12
|
|
|
Net of tax
|
|
|
|
|
|
|
||||
Amortization of defined benefit pension plans and other post employment benefits:
|
|
|
|
|
|
||||
Actuarial gains (losses)(2)
|
$
|
(19
|
)
|
|
$
|
(19
|
)
|
|
Total before tax
|
|
5
|
|
|
4
|
|
|
Tax (expense) or benefit
|
||
|
$
|
(14
|
)
|
|
$
|
(15
|
)
|
|
Net of tax
|
|
|
|
|
|
|
||||
Total reclassifications for the period
|
$
|
(50
|
)
|
|
$
|
(5
|
)
|
|
Net of tax
|
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(In millions, except per share amounts)
|
||||||||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
390
|
|
|
$
|
378
|
|
|
$
|
784
|
|
|
$
|
792
|
|
Preferred stock dividends
|
(16
|
)
|
|
(16
|
)
|
|
(32
|
)
|
|
(32
|
)
|
||||
Income from continuing operations available to common shareholders
|
374
|
|
|
362
|
|
|
752
|
|
|
760
|
|
||||
Income from discontinued operations, net of tax
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
||||
Net income available to common shareholders
|
$
|
374
|
|
|
$
|
359
|
|
|
$
|
752
|
|
|
$
|
757
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding—basic
|
1,010
|
|
|
1,119
|
|
|
1,015
|
|
|
1,123
|
|
||||
Potential common shares
|
2
|
|
|
9
|
|
|
5
|
|
|
12
|
|
||||
Weighted-average common shares outstanding—diluted
|
1,012
|
|
|
1,128
|
|
|
1,020
|
|
|
1,135
|
|
||||
Earnings per common share from continuing operations available to common shareholders(1):
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.37
|
|
|
$
|
0.32
|
|
|
$
|
0.74
|
|
|
$
|
0.68
|
|
Diluted
|
0.37
|
|
|
0.32
|
|
|
0.74
|
|
|
0.67
|
|
||||
Earnings per common share from discontinued operations(1)(2)(3):
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.00
|
|
|
$
|
(0.00
|
)
|
|
$
|
0.00
|
|
|
$
|
(0.00
|
)
|
Diluted
|
0.00
|
|
|
(0.00
|
)
|
|
0.00
|
|
|
(0.00
|
)
|
||||
Earnings per common share(1):
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.37
|
|
|
$
|
0.32
|
|
|
$
|
0.74
|
|
|
$
|
0.67
|
|
Diluted
|
0.37
|
|
|
0.32
|
|
|
0.74
|
|
|
0.67
|
|
(1)
|
Certain per share amounts may not appear to reconcile due to rounding.
|
(2)
|
On April 4, 2018, Regions entered into a stock purchase agreement to sell Regions Insurance Group, Inc to BB&T Insurance Holdings, Inc. The transaction closed on July 2, 2018. The transaction generated an after-tax gain of $196 million. On January 11, 2012, Regions entered into a stock purchase agreement to sell Morgan Keegan and Company and related affiliates to Raymond James Financial Inc. The sale closed on April 2, 2012.
|
(3)
|
In a period where there is a loss from discontinued operations, basic weighted-average common shares outstanding are used to determine both basic and diluted earnings per share.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Qualified Plans
|
|
Non-qualified Plans
|
|
Total
|
|||||||||||||||||||
|
Three Months Ended June 30
|
|||||||||||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|||||||||||||
|
(In millions)
|
|||||||||||||||||||||||
Service cost
|
$
|
7
|
|
|
$
|
10
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
8
|
|
|
$
|
11
|
|
|
Interest cost
|
18
|
|
|
17
|
|
|
2
|
|
|
1
|
|
|
20
|
|
|
18
|
|
|||||||
Expected return on plan assets
|
(34
|
)
|
|
(40
|
)
|
|
—
|
|
|
—
|
|
|
(34
|
)
|
|
(40
|
)
|
|||||||
Amortization of actuarial loss
|
9
|
|
|
8
|
|
|
1
|
|
|
2
|
|
|
10
|
|
|
10
|
|
|||||||
Net periodic pension cost (credit)
|
$
|
—
|
|
|
$
|
(5
|
)
|
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
(1
|
)
|
|
Qualified Plans
|
|
Non-qualified Plans
|
|
Total
|
|||||||||||||||||||
|
Six Months Ended June 30
|
|||||||||||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|||||||||||||
|
(In millions)
|
|||||||||||||||||||||||
Service cost
|
$
|
15
|
|
|
$
|
19
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
17
|
|
|
$
|
21
|
|
|
Interest cost
|
37
|
|
|
35
|
|
|
3
|
|
|
2
|
|
|
40
|
|
|
37
|
|
|||||||
Expected return on plan assets
|
(68
|
)
|
|
(77
|
)
|
|
—
|
|
|
—
|
|
|
(68
|
)
|
|
(77
|
)
|
|||||||
Amortization of actuarial loss
|
17
|
|
|
16
|
|
|
2
|
|
|
3
|
|
|
19
|
|
|
19
|
|
|||||||
Net periodic pension cost (credit)
|
$
|
1
|
|
|
$
|
(7
|
)
|
|
$
|
7
|
|
|
$
|
7
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
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
|
$
|
3,682
|
|
|
|
|
|
|
$
|
3,231
|
|
|
|
|
|
||||||||
Derivatives in cash flow hedging relationships:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps
|
12,750
|
|
|
|
|
|
|
8,750
|
|
|
|
|
|
||||||||||
Interest rate floors (2)
|
6,750
|
|
|
$
|
238
|
|
|
|
|
3,250
|
|
|
$
|
72
|
|
|
|
||||||
Total derivatives designated as hedging instruments
|
$
|
23,182
|
|
|
$
|
238
|
|
|
|
|
$
|
15,231
|
|
|
$
|
72
|
|
|
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps
|
$
|
55,828
|
|
|
$
|
404
|
|
|
$
|
157
|
|
|
$
|
49,737
|
|
|
$
|
193
|
|
|
$
|
237
|
|
Interest rate options
|
7,922
|
|
|
24
|
|
|
10
|
|
|
7,178
|
|
|
29
|
|
|
20
|
|
||||||
Interest rate futures and forward commitments
|
36,696
|
|
|
10
|
|
|
19
|
|
|
7,961
|
|
|
4
|
|
|
9
|
|
||||||
Other contracts
|
8,493
|
|
|
40
|
|
|
54
|
|
|
7,287
|
|
|
72
|
|
|
74
|
|
||||||
Total derivatives not designated as hedging instruments
|
$
|
108,939
|
|
|
$
|
478
|
|
|
$
|
240
|
|
|
$
|
72,163
|
|
|
$
|
298
|
|
|
$
|
340
|
|
Total derivatives
|
$
|
132,121
|
|
|
$
|
716
|
|
|
$
|
240
|
|
|
$
|
87,394
|
|
|
$
|
370
|
|
|
$
|
340
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total gross derivative instruments, before netting
|
|
|
$
|
716
|
|
|
$
|
240
|
|
|
|
|
$
|
370
|
|
|
$
|
340
|
|
||||
Less: Legally enforceable master netting agreements
|
|
|
103
|
|
|
103
|
|
|
|
|
108
|
|
|
108
|
|
||||||||
Less: Cash collateral received/posted
|
|
|
255
|
|
|
92
|
|
|
|
|
135
|
|
|
71
|
|
||||||||
Total gross derivative instruments, after netting (3)
|
|
|
$
|
358
|
|
|
$
|
45
|
|
|
|
|
$
|
127
|
|
|
$
|
161
|
|
(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. There is no fair value presented for contracts that are characterized as settled daily.
|
(2)
|
Estimated fair value includes premium and change in fair value of the interest rate floors.
|
(3)
|
As of both June 30, 2019 and December 31, 2018, financial instruments posted of $24 million were not offset in the consolidated balance sheets.
|
|
Three Months Ended June 30, 2019
|
||||||||||
|
Interest Income
|
|
Interest Expense
|
||||||||
|
Debt securities-taxable
|
|
Loans, including fees
|
|
Long-term borrowings
|
||||||
|
(In millions)
|
||||||||||
Total amounts presented in the consolidated statements of income
|
$
|
163
|
|
|
$
|
992
|
|
|
$
|
96
|
|
|
|
|
|
|
|
||||||
Gains/(losses) on fair value hedging relationships:
|
|
|
|
|
|
||||||
Interest rate contracts:
|
|
|
|
|
|
||||||
Amounts related to interest settlements on derivatives
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(5
|
)
|
Recognized on derivatives
|
(1
|
)
|
|
—
|
|
|
57
|
|
|||
Recognized on hedged items
|
1
|
|
|
—
|
|
|
(57
|
)
|
|||
Income (expense) recognized on fair value hedges
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(5
|
)
|
|
|
|
|
|
|
||||||
Gains/(losses) on cash flow hedging relationships: (1)
|
|
|
|
|
|
||||||
Interest rate contracts:
|
|
|
|
|
|
||||||
Realized gains (losses) reclassified from AOCI into net income (2)
|
$
|
—
|
|
|
$
|
(8
|
)
|
|
$
|
—
|
|
Income (expense) recognized on cash flow hedges
|
$
|
—
|
|
|
$
|
(8
|
)
|
|
$
|
—
|
|
|
Three Months Ended June 30, 2018
|
||||||||||
|
Interest Income
|
|
Interest Expense
|
||||||||
|
Debt securities-taxable
|
|
Loans, including fees
|
|
Long-term borrowings
|
||||||
|
(In millions)
|
||||||||||
Total amounts presented in the consolidated statements of income
|
$
|
156
|
|
|
$
|
881
|
|
|
$
|
73
|
|
|
|
|
|
|
|
||||||
Gains/(losses) on fair value hedging relationships:
|
|
|
|
|
|
||||||
Interest rate contracts:
|
|
|
|
|
|
||||||
Amounts related to interest settlements on derivatives
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
Recognized on derivatives
|
2
|
|
|
—
|
|
|
(9
|
)
|
|||
Recognized on hedged items
|
(2
|
)
|
|
—
|
|
|
8
|
|
|||
Income (expense) recognized on fair value hedges
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
(5
|
)
|
|
|
|
|
|
|
||||||
Gains/(losses) on cash flow hedging relationships: (1)
|
|
|
|
|
|
||||||
Interest rate contracts:
|
|
|
|
|
|
||||||
Realized gains (losses) reclassified from AOCI into net income (2)
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
—
|
|
Income (expense) recognized on cash flow hedges
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
Six Months Ended June 30, 2019
|
||||||||||
|
Interest Income
|
|
Interest Expense
|
||||||||
|
Debt securities-taxable
|
|
Loans, including fees
|
|
Long-term borrowings
|
||||||
|
(In millions)
|
||||||||||
Total amounts presented in the consolidated statements of income
|
$
|
328
|
|
|
$
|
1,973
|
|
|
$
|
198
|
|
|
|
|
|
|
|
||||||
Gains/(losses) on fair value hedging relationships:
|
|
|
|
|
|
||||||
Interest rate contracts:
|
|
|
|
|
|
||||||
Amounts related to interest settlements on derivatives
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(11
|
)
|
Recognized on derivatives
|
(2
|
)
|
|
—
|
|
|
90
|
|
|||
Recognized on hedged items
|
2
|
|
|
—
|
|
|
(90
|
)
|
|||
Income (expense) recognized on fair value hedges
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(11
|
)
|
|
|
|
|
|
|
||||||
Gains/(losses) on cash flow hedging relationships: (1)
|
|
|
|
|
|
||||||
Interest rate contracts:
|
|
|
|
|
|
||||||
Realized gains (losses) reclassified from AOCI into net income (2)
|
$
|
—
|
|
|
$
|
(16
|
)
|
|
$
|
—
|
|
Income (expense) recognized on cash flow hedges
|
$
|
—
|
|
|
$
|
(16
|
)
|
|
$
|
—
|
|
|
Six Months Ended June 30, 2018
|
||||||||||
|
Interest Income
|
|
Interest Expense
|
||||||||
|
Debt securities-taxable
|
|
Loans, including fees
|
|
Long-term borrowings
|
||||||
|
(In millions)
|
||||||||||
Total amounts presented in the consolidated statements of income
|
$
|
310
|
|
|
$
|
1,732
|
|
|
$
|
145
|
|
|
|
|
|
|
|
||||||
Gains/(losses) on fair value hedging relationships:
|
|
|
|
|
|
||||||
Interest rate contracts:
|
|
|
|
|
|
||||||
Amounts related to interest settlements on derivatives
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
(5
|
)
|
Recognized on derivatives
|
5
|
|
|
—
|
|
|
(41
|
)
|
|||
Recognized on hedged items
|
(5
|
)
|
|
—
|
|
|
40
|
|
|||
Income (expense) recognized on fair value hedges
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
(6
|
)
|
|
|
|
|
|
|
||||||
Gains/(losses) on cash flow hedging relationships: (1)
|
|
|
|
|
|
||||||
Interest rate contracts:
|
|
|
|
|
|
||||||
Realized gains (losses) reclassified from AOCI into net income (2)
|
$
|
—
|
|
|
$
|
16
|
|
|
$
|
—
|
|
Income (expense) recognized on cash flow hedges
|
$
|
—
|
|
|
$
|
16
|
|
|
$
|
—
|
|
(1)
|
See Note 6 for gain or (loss) recognized for cash flow hedges in AOCI.
|
(2)
|
Pre-tax
|
|
June 30, 2019
|
||||||||||||||
|
Hedged Items Currently Designated
|
|
Hedged Items No Longer Designated
|
||||||||||||
|
Carrying Amount of Assets/(Liabilities)
|
|
Hedge Accounting Basis Adjustment
|
|
Carrying Amount of Assets/(Liabilities)
|
|
Hedge Accounting Basis Adjustment
|
||||||||
|
(In millions)
|
||||||||||||||
Debt securities available for sale
|
$
|
34
|
|
|
$
|
2
|
|
|
$
|
323
|
|
|
$
|
2
|
|
Long-term borrowings
|
(3,692
|
)
|
|
(40
|
)
|
|
—
|
|
|
—
|
|
|
December 31, 2018
|
||||||||||||||
|
Hedged Items Currently Designated
|
|
Hedged Items No Longer Designated
|
||||||||||||
|
Carrying Amount of Assets/(Liabilities)
|
|
Hedge Accounting Basis Adjustment
|
|
Carrying Amount of Assets/(Liabilities)
|
|
Hedge Accounting Basis Adjustment
|
||||||||
|
(In millions)
|
||||||||||||||
Debt securities available for sale
|
$
|
85
|
|
|
$
|
—
|
|
|
$
|
604
|
|
|
$
|
4
|
|
Long-term borrowings
|
(3,103
|
)
|
|
50
|
|
|
—
|
|
|
—
|
|
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
||||||||||||
Derivatives Not Designated as Hedging Instruments
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(In millions)
|
||||||||||||||
Capital markets income:
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
$
|
(4
|
)
|
|
$
|
5
|
|
|
$
|
(3
|
)
|
|
$
|
12
|
|
Interest rate options
|
5
|
|
|
6
|
|
|
7
|
|
|
13
|
|
||||
Interest rate futures and forward commitments
|
3
|
|
|
1
|
|
|
4
|
|
|
2
|
|
||||
Other contracts
|
(1
|
)
|
|
2
|
|
|
(1
|
)
|
|
4
|
|
||||
Total capital markets income
|
3
|
|
|
14
|
|
|
7
|
|
|
31
|
|
||||
Mortgage income:
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
35
|
|
|
(6
|
)
|
|
54
|
|
|
(24
|
)
|
||||
Interest rate options
|
2
|
|
|
—
|
|
|
5
|
|
|
3
|
|
||||
Interest rate futures and forward commitments
|
(3
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(4
|
)
|
||||
Total mortgage income
|
34
|
|
|
(7
|
)
|
|
58
|
|
|
(25
|
)
|
||||
|
$
|
37
|
|
|
$
|
7
|
|
|
$
|
65
|
|
|
$
|
6
|
|
|
June 30, 2019
|
|
|
December 31, 2018
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3(1)
|
|
Total
Estimated Fair Value
|
|
|
Level 1
|
|
Level 2
|
|
Level 3(1)
|
|
Total
Estimated Fair Value
|
||||||||||||||||
|
(In millions)
|
|||||||||||||||||||||||||||||||
Recurring fair value measurements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Debt securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. Treasury securities
|
$
|
176
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
176
|
|
|
|
$
|
280
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
280
|
|
Federal agency securities
|
—
|
|
|
44
|
|
|
—
|
|
|
44
|
|
|
|
—
|
|
|
43
|
|
|
—
|
|
|
43
|
|
||||||||
Mortgage-backed securities (MBS):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Residential agency
|
—
|
|
|
16,751
|
|
|
—
|
|
|
16,751
|
|
|
|
—
|
|
|
16,624
|
|
|
—
|
|
|
16,624
|
|
||||||||
Residential non-agency
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
||||||||
Commercial agency
|
—
|
|
|
3,741
|
|
|
—
|
|
|
3,741
|
|
|
|
—
|
|
|
3,835
|
|
|
—
|
|
|
3,835
|
|
||||||||
Commercial non-agency
|
—
|
|
|
707
|
|
|
—
|
|
|
707
|
|
|
|
—
|
|
|
760
|
|
|
—
|
|
|
760
|
|
||||||||
Corporate and other debt securities
|
—
|
|
|
1,277
|
|
|
1
|
|
|
1,278
|
|
|
|
—
|
|
|
1,182
|
|
|
3
|
|
|
1,185
|
|
||||||||
Total debt securities available for sale
|
$
|
176
|
|
|
$
|
22,520
|
|
|
$
|
3
|
|
|
$
|
22,699
|
|
|
|
$
|
280
|
|
|
$
|
22,444
|
|
|
$
|
5
|
|
|
$
|
22,729
|
|
Loans held for sale
|
$
|
—
|
|
|
$
|
433
|
|
|
$
|
—
|
|
|
$
|
433
|
|
|
|
$
|
—
|
|
|
$
|
251
|
|
|
$
|
—
|
|
|
$
|
251
|
|
Marketable equity securities
|
$
|
452
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
452
|
|
|
|
$
|
429
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
429
|
|
Residential mortgage servicing rights
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
337
|
|
|
$
|
337
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
418
|
|
|
$
|
418
|
|
Derivative assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate swaps
|
$
|
—
|
|
|
$
|
404
|
|
|
$
|
—
|
|
|
$
|
404
|
|
|
|
$
|
—
|
|
|
$
|
193
|
|
|
$
|
—
|
|
|
$
|
193
|
|
Interest rate options
|
—
|
|
|
252
|
|
|
10
|
|
|
262
|
|
|
|
—
|
|
|
96
|
|
|
5
|
|
|
101
|
|
||||||||
Interest rate futures and forward commitments
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
||||||||
Other contracts
|
1
|
|
|
38
|
|
|
1
|
|
|
40
|
|
|
|
2
|
|
|
70
|
|
|
—
|
|
|
72
|
|
||||||||
Total derivative assets
|
$
|
1
|
|
|
$
|
704
|
|
|
$
|
11
|
|
|
$
|
716
|
|
|
|
$
|
2
|
|
|
$
|
363
|
|
|
$
|
5
|
|
|
$
|
370
|
|
Derivative liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate swaps
|
$
|
—
|
|
|
$
|
157
|
|
|
$
|
—
|
|
|
$
|
157
|
|
|
|
$
|
—
|
|
|
$
|
237
|
|
|
$
|
—
|
|
|
$
|
237
|
|
Interest rate options
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|
20
|
|
||||||||
Interest rate futures and forward commitments
|
—
|
|
|
19
|
|
|
—
|
|
|
19
|
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
||||||||
Other contracts
|
1
|
|
|
48
|
|
|
5
|
|
|
54
|
|
|
|
2
|
|
|
69
|
|
|
3
|
|
|
74
|
|
||||||||
Total derivative liabilities
|
$
|
1
|
|
|
$
|
234
|
|
|
$
|
5
|
|
|
$
|
240
|
|
|
|
$
|
2
|
|
|
$
|
335
|
|
|
$
|
3
|
|
|
$
|
340
|
|
Non-recurring fair value measurements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Loans held for sale
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14
|
|
|
$
|
14
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10
|
|
|
$
|
10
|
|
Foreclosed property and other real estate
|
—
|
|
|
21
|
|
|
26
|
|
|
47
|
|
|
|
—
|
|
|
16
|
|
|
3
|
|
|
19
|
|
(1)
|
All following disclosures related to Level 3 recurring and non-recurring assets do not include those deemed to be immaterial.
|
|
Three Months Ended June 30, 2019
|
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Opening
Balance April 1, 2019 |
|
Total Realized /
Unrealized
Gains or Losses
|
|
Purchases
|
|
Sales
|
|
Issuances
|
|
Settlements
|
|
Transfers
into Level 3 |
|
Transfers
out of Level 3 |
|
Closing
Balance June 30, 2019 |
||||||||||||||
|
|
Included
in
Earnings
|
|
Included
in Other
Compre-
hensive
Income
(Loss)
|
|
||||||||||||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Level 3 Instruments Only
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential mortgage servicing rights
|
$
|
386
|
|
|
(57
|
)
|
(1)
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
337
|
|
|
Three Months Ended June 30, 2018
|
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Opening
Balance April 1, 2018 |
|
Total Realized /
Unrealized Gains or Losses |
|
Purchases
|
|
Sales
|
|
Issuances
|
|
Settlements
|
|
Transfers
into Level 3 |
|
Transfers
out of Level 3 |
|
Closing
Balance June 30, 2018 |
||||||||||||||
|
|
Included
in Earnings |
|
Included
in Other Compre- hensive Income (Loss) |
|
||||||||||||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Level 3 Instruments Only
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential mortgage servicing rights
|
$
|
356
|
|
|
(3
|
)
|
(1)
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
362
|
|
|
Six Months Ended June 30, 2019
|
||||||||||||||||||||||||||||||
|
Opening
Balance January 1, 2019 |
|
Total Realized /
Unrealized
Gains or Losses
|
|
Purchases
|
|
Sales
|
|
Issuances
|
|
Settlements
|
|
Transfers
into Level 3 |
|
Transfers
out of Level 3 |
|
Closing
Balance June 30, 2019 |
||||||||||||||
|
|
Included
in
Earnings
|
|
Included
in Other
Compre-
hensive
Income
(Loss)
|
|
||||||||||||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Level 3 Instruments Only
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential mortgage servicing rights
|
$
|
418
|
|
|
(96
|
)
|
(1)
|
—
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
337
|
|
|
Six Months Ended June 30, 2018
|
||||||||||||||||||||||||||||||
|
Opening
Balance January 1, 2018 |
|
Total Realized /
Unrealized Gains or Losses |
|
Purchases
|
|
Sales
|
|
Issuances
|
|
Settlements
|
|
Transfers
into Level 3 |
|
Transfers
out of Level 3 |
|
Closing
Balance June 30, 2018 |
||||||||||||||
|
|
Included
in Earnings |
|
Included
in Other Compre- hensive Income (Loss) |
|
||||||||||||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Level 3 Instruments Only
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential mortgage servicing rights
|
$
|
336
|
|
|
9
|
|
(1)
|
—
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
362
|
|
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(In millions)
|
||||||||||||||
Loans held for sale
|
$
|
(4
|
)
|
|
$
|
(3
|
)
|
|
$
|
(6
|
)
|
|
$
|
(6
|
)
|
Foreclosed property and other real estate
|
(31
|
)
|
|
(5
|
)
|
|
(39
|
)
|
|
(10
|
)
|
|
June 30, 2019
|
||||||
|
Level 3
Estimated Fair Value at June 30, 2019 |
|
Valuation
Technique
|
|
Unobservable
Input(s)
|
|
Quantitative Range of
Unobservable Inputs and
(Weighted-Average)
|
|
(Dollars in millions)
|
||||||
Recurring fair value measurements:
|
|
|
|
|
|
|
|
Residential mortgage servicing rights(1)
|
$337
|
|
Discounted cash flow
|
|
Weighted-average CPR (%)
|
|
5.1% - 45.0% (12.5%)
|
|
|
|
|
|
OAS (%)
|
|
5.7% - 13.0% (7.6%)
|
|
December 31, 2018
|
||||||
|
Level 3
Estimated Fair Value at December 31, 2018 |
|
Valuation
Technique
|
|
Unobservable
Input(s)
|
|
Quantitative Range of
Unobservable Inputs and
(Weighted-Average)
|
|
(Dollars in millions)
|
||||||
Recurring fair value measurements:
|
|
|
|
|
|
|
|
Residential mortgage servicing rights(1)
|
$418
|
|
Discounted cash flow
|
|
Weighted-average CPR (%)
|
|
4.4% - 42.6% (9.0%)
|
|
|
|
|
|
OAS (%)
|
|
5.7% - 15.0% (7.6%)
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
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
|
$
|
433
|
|
|
$
|
418
|
|
|
$
|
15
|
|
|
$
|
251
|
|
|
$
|
242
|
|
|
$
|
9
|
|
|
Net gains (losses) resulting from changes in fair value
|
||||||||||||||
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(In millions)
|
||||||||||||||
Mortgage loans held for sale, at fair value
|
$
|
5
|
|
|
$
|
3
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
June 30, 2019
|
||||||||||||||||||
|
Carrying
Amount
|
|
Estimated
Fair
Value(1)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
4,488
|
|
|
$
|
4,488
|
|
|
$
|
4,488
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Debt securities held to maturity
|
1,415
|
|
|
1,448
|
|
|
—
|
|
|
1,448
|
|
|
—
|
|
|||||
Debt securities available for sale
|
22,699
|
|
|
22,699
|
|
|
176
|
|
|
22,520
|
|
|
3
|
|
|||||
Loans held for sale
|
508
|
|
|
508
|
|
|
—
|
|
|
493
|
|
|
15
|
|
|||||
Loans (excluding leases), net of unearned income and allowance for loan losses(2)(3)
|
81,467
|
|
|
81,147
|
|
|
—
|
|
|
—
|
|
|
81,147
|
|
|||||
Other earning assets(4)
|
1,319
|
|
|
1,319
|
|
|
452
|
|
|
867
|
|
|
—
|
|
|||||
Derivative assets
|
716
|
|
|
716
|
|
|
1
|
|
|
704
|
|
|
11
|
|
|||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative liabilities
|
240
|
|
|
240
|
|
|
1
|
|
|
234
|
|
|
5
|
|
|||||
Deposits
|
94,971
|
|
|
95,010
|
|
|
—
|
|
|
95,010
|
|
|
—
|
|
|||||
Short-term borrowings
|
4,250
|
|
|
4,250
|
|
|
—
|
|
|
4,250
|
|
|
—
|
|
|||||
Long-term borrowings
|
9,213
|
|
|
9,544
|
|
|
—
|
|
|
9,212
|
|
|
332
|
|
|||||
Loan commitments and letters of credit
|
73
|
|
|
489
|
|
|
—
|
|
|
—
|
|
|
489
|
|
(1)
|
Estimated fair values are consistent with an exit price concept. The assumptions used to estimate the fair values are intended to approximate those that a market participant would use in a hypothetical orderly transaction. In estimating fair value, the Company makes adjustments for estimated changes in interest rates, market liquidity and credit spreads in the periods they are deemed to have occurred.
|
(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 on the loan portfolio's net carrying amount at June 30, 2019 was $320 million or 0.4 percent.
|
(3)
|
Excluded from this table is the capital lease carrying amount of $1.2 billion at June 30, 2019.
|
(4)
|
Excluded from this table is the operating lease carrying amount of $327 million at June 30, 2019.
|
|
December 31, 2018
|
||||||||||||||||||
|
Carrying
Amount
|
|
Estimated
Fair
Value(1)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
3,538
|
|
|
$
|
3,538
|
|
|
$
|
3,538
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Debt securities held to maturity
|
1,482
|
|
|
1,460
|
|
|
—
|
|
|
1,460
|
|
|
—
|
|
|||||
Debt securities available for sale
|
22,729
|
|
|
22,729
|
|
|
280
|
|
|
22,444
|
|
|
5
|
|
|||||
Loans held for sale
|
304
|
|
|
304
|
|
|
—
|
|
|
287
|
|
|
17
|
|
|||||
Loans (excluding leases), net of unearned income and allowance for loan losses(2)(3)
|
81,054
|
|
|
79,386
|
|
|
—
|
|
|
—
|
|
|
79,386
|
|
|||||
Other earning assets(4)
|
1,350
|
|
|
1,350
|
|
|
429
|
|
|
921
|
|
|
—
|
|
|||||
Derivative assets
|
370
|
|
|
370
|
|
|
2
|
|
|
363
|
|
|
5
|
|
|||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative liabilities
|
340
|
|
|
340
|
|
|
2
|
|
|
335
|
|
|
3
|
|
|||||
Deposits
|
94,491
|
|
|
94,531
|
|
|
—
|
|
|
94,531
|
|
|
—
|
|
|||||
Short-term borrowings
|
1,600
|
|
|
1,600
|
|
|
—
|
|
|
1,600
|
|
|
—
|
|
|||||
Long-term borrowings
|
12,424
|
|
|
12,610
|
|
|
—
|
|
|
12,408
|
|
|
202
|
|
|||||
Loan commitments and letters of credit
|
79
|
|
|
435
|
|
|
—
|
|
|
—
|
|
|
435
|
|
(1)
|
Estimated fair values are consistent with an exit price concept. The assumptions used to estimate the fair values are intended to approximate those that a market participant would use in a hypothetical orderly transaction. In estimating fair value, the Company makes adjustments for estimated changes in interest rates, market liquidity and credit spreads in the periods they are deemed to have occurred.
|
(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 on the loan portfolio's net carrying amount at December 31, 2018 was $1.7 billion or 2.1 percent.
|
(3)
|
Excluded from this table is the capital lease carrying amount of $1.1 billion at December 31, 2018.
|
(4)
|
Excluded from this table is the operating lease carrying amount of $369 million at December 31, 2018.
|
|
Three Months Ended June 30, 2019
|
||||||||||||||||||||||||||
|
Corporate Bank
|
|
Consumer
Bank
|
|
Wealth
Management
|
|
Other
|
|
Continuing
Operations
|
|
Discontinued
Operations
|
|
Consolidated
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Net interest income and other financing income (loss)
|
$
|
360
|
|
|
$
|
585
|
|
|
$
|
45
|
|
|
$
|
(48
|
)
|
|
$
|
942
|
|
|
$
|
—
|
|
|
$
|
942
|
|
Provision (credit) for loan losses
|
43
|
|
|
83
|
|
|
4
|
|
|
(38
|
)
|
|
92
|
|
|
—
|
|
|
92
|
|
|||||||
Non-interest income
|
135
|
|
|
292
|
|
|
82
|
|
|
(15
|
)
|
|
494
|
|
|
—
|
|
|
494
|
|
|||||||
Non-interest expense
|
232
|
|
|
521
|
|
|
87
|
|
|
21
|
|
|
861
|
|
|
—
|
|
|
861
|
|
|||||||
Income (loss) before income taxes
|
220
|
|
|
273
|
|
|
36
|
|
|
(46
|
)
|
|
483
|
|
|
—
|
|
|
483
|
|
|||||||
Income tax expense (benefit)
|
55
|
|
|
68
|
|
|
9
|
|
|
(39
|
)
|
|
93
|
|
|
—
|
|
|
93
|
|
|||||||
Net income (loss)
|
$
|
165
|
|
|
$
|
205
|
|
|
$
|
27
|
|
|
$
|
(7
|
)
|
|
$
|
390
|
|
|
$
|
—
|
|
|
$
|
390
|
|
Average assets
|
$
|
54,294
|
|
|
$
|
35,065
|
|
|
$
|
2,178
|
|
|
$
|
34,578
|
|
|
$
|
126,115
|
|
|
$
|
—
|
|
|
$
|
126,115
|
|
|
Three Months Ended June 30, 2018
|
||||||||||||||||||||||||||
|
Corporate Bank
|
|
Consumer Bank
|
|
Wealth
Management
|
|
Other
|
|
Continuing
Operations
|
|
Discontinued
Operations
|
|
Consolidated
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Net interest income and other financing income (loss)
|
$
|
337
|
|
|
$
|
552
|
|
|
$
|
49
|
|
|
$
|
(12
|
)
|
|
$
|
926
|
|
|
$
|
—
|
|
|
$
|
926
|
|
Provision (credit) for loan losses
|
43
|
|
|
76
|
|
|
4
|
|
|
(63
|
)
|
|
60
|
|
|
—
|
|
|
60
|
|
|||||||
Non-interest income
|
136
|
|
|
289
|
|
|
80
|
|
|
7
|
|
|
512
|
|
|
35
|
|
|
547
|
|
|||||||
Non-interest expense
|
232
|
|
|
517
|
|
|
86
|
|
|
76
|
|
|
911
|
|
|
38
|
|
|
949
|
|
|||||||
Income (loss) before income taxes
|
198
|
|
|
248
|
|
|
39
|
|
|
(18
|
)
|
|
467
|
|
|
(3
|
)
|
|
464
|
|
|||||||
Income tax expense (benefit)
|
49
|
|
|
62
|
|
|
10
|
|
|
(32
|
)
|
|
89
|
|
|
—
|
|
|
89
|
|
|||||||
Net income (loss)
|
$
|
149
|
|
|
$
|
186
|
|
|
$
|
29
|
|
|
$
|
14
|
|
|
$
|
378
|
|
|
$
|
(3
|
)
|
|
$
|
375
|
|
Average assets
|
$
|
51,076
|
|
|
$
|
34,862
|
|
|
$
|
2,317
|
|
|
$
|
34,547
|
|
|
$
|
122,802
|
|
|
$
|
158
|
|
|
$
|
122,960
|
|
|
Six Months Ended June 30, 2019
|
||||||||||||||||||||||||||
|
Corporate Bank
|
|
Consumer Bank
|
|
Wealth
Management
|
|
Other
|
|
Continuing
Operations
|
|
Discontinued
Operations
|
|
Consolidated
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Net interest income and other financing income (loss)
|
$
|
717
|
|
|
$
|
1,162
|
|
|
$
|
92
|
|
|
$
|
(81
|
)
|
|
$
|
1,890
|
|
|
$
|
—
|
|
|
$
|
1,890
|
|
Provision (credit) for loan losses
|
86
|
|
|
166
|
|
|
8
|
|
|
(77
|
)
|
|
183
|
|
|
—
|
|
|
183
|
|
|||||||
Non-interest income
|
266
|
|
|
574
|
|
|
160
|
|
|
(4
|
)
|
|
996
|
|
|
—
|
|
|
996
|
|
|||||||
Non-interest expense
|
465
|
|
|
1,035
|
|
|
175
|
|
|
46
|
|
|
1,721
|
|
|
—
|
|
|
1,721
|
|
|||||||
Income (loss) before income taxes
|
432
|
|
|
535
|
|
|
69
|
|
|
(54
|
)
|
|
982
|
|
|
—
|
|
|
982
|
|
|||||||
Income tax expense (benefit)
|
108
|
|
|
133
|
|
|
17
|
|
|
(60
|
)
|
|
198
|
|
|
—
|
|
|
198
|
|
|||||||
Net income (loss)
|
$
|
324
|
|
|
$
|
402
|
|
|
$
|
52
|
|
|
$
|
6
|
|
|
$
|
784
|
|
|
$
|
—
|
|
|
$
|
784
|
|
Average assets
|
$
|
54,074
|
|
|
$
|
35,232
|
|
|
$
|
2,190
|
|
|
$
|
34,334
|
|
|
$
|
125,830
|
|
|
$
|
—
|
|
|
$
|
125,830
|
|
|
Six Months Ended June 30, 2018
|
||||||||||||||||||||||||||
|
Corporate Bank
|
|
Consumer Bank
|
|
Wealth
Management
|
|
Other
|
|
Continuing
Operations
|
|
Discontinued
Operations
|
|
Consolidated
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Net interest income and other financing income (loss)
|
$
|
674
|
|
|
$
|
1,083
|
|
|
$
|
98
|
|
|
$
|
(20
|
)
|
|
$
|
1,835
|
|
|
$
|
—
|
|
|
$
|
1,835
|
|
Provision (credit) for loan losses
|
90
|
|
|
153
|
|
|
8
|
|
|
(201
|
)
|
|
50
|
|
|
—
|
|
|
50
|
|
|||||||
Non-interest income
|
280
|
|
|
565
|
|
|
156
|
|
|
18
|
|
|
1,019
|
|
|
69
|
|
|
1,088
|
|
|||||||
Non-interest expense
|
460
|
|
|
1,034
|
|
|
176
|
|
|
125
|
|
|
1,795
|
|
|
72
|
|
|
1,867
|
|
|||||||
Income (loss) before income taxes
|
404
|
|
|
461
|
|
|
70
|
|
|
74
|
|
|
1,009
|
|
|
(3
|
)
|
|
1,006
|
|
|||||||
Income tax expense (benefit)
|
101
|
|
|
115
|
|
|
17
|
|
|
(16
|
)
|
|
217
|
|
|
—
|
|
|
217
|
|
|||||||
Net income (loss)
|
$
|
303
|
|
|
$
|
346
|
|
|
$
|
53
|
|
|
$
|
90
|
|
|
$
|
792
|
|
|
$
|
(3
|
)
|
|
$
|
789
|
|
Average assets
|
$
|
51,056
|
|
|
$
|
34,906
|
|
|
$
|
2,338
|
|
|
$
|
34,761
|
|
|
$
|
123,061
|
|
|
$
|
165
|
|
|
$
|
123,226
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
|
(In millions)
|
||||||
Unused commitments to extend credit
|
$
|
52,305
|
|
|
$
|
51,406
|
|
Standby letters of credit
|
1,396
|
|
|
1,428
|
|
||
Commercial letters of credit
|
124
|
|
|
44
|
|
||
Liabilities associated with standby letters of credit
|
22
|
|
|
28
|
|
||
Assets associated with standby letters of credit
|
24
|
|
|
29
|
|
||
Reserve for unfunded credit commitments
|
50
|
|
|
51
|
|
|
Three Months Ended June 30, 2019
|
||||||||||||||||||||||||||
|
Corporate Bank
|
|
Consumer
Bank
|
|
Wealth
Management
|
|
Other Segment Revenue
|
|
Other(1)
|
|
Continuing
Operations
|
|
Discontinued
Operations
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Service charges on deposit accounts
|
$
|
38
|
|
|
$
|
139
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
181
|
|
|
$
|
—
|
|
Card and ATM fees
|
18
|
|
|
108
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
120
|
|
|
—
|
|
|||||||
Investment management and trust fee income
|
—
|
|
|
—
|
|
|
59
|
|
|
—
|
|
|
—
|
|
|
59
|
|
|
—
|
|
|||||||
Capital markets income
|
16
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|
39
|
|
|
—
|
|
|||||||
Mortgage income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31
|
|
|
31
|
|
|
—
|
|
|||||||
Investment services fee income
|
—
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|||||||
Commercial credit fee income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|
18
|
|
|
—
|
|
|||||||
Bank-owned life insurance
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
19
|
|
|
—
|
|
|||||||
Securities gains (losses), net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
(19
|
)
|
|
—
|
|
|||||||
Market value adjustments on employee benefit assets - defined benefit
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Market value adjustments on employee benefit assets - other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|
—
|
|
|||||||
Other miscellaneous income
|
2
|
|
|
14
|
|
|
—
|
|
|
1
|
|
|
11
|
|
|
28
|
|
|
—
|
|
|||||||
|
$
|
74
|
|
|
$
|
261
|
|
|
$
|
81
|
|
|
$
|
1
|
|
|
$
|
77
|
|
|
$
|
494
|
|
|
$
|
—
|
|
|
Three Months Ended June 30, 2018
|
||||||||||||||||||||||||||
|
Corporate Bank
|
|
Consumer
Bank
|
|
Wealth
Management
|
|
Other Segment Revenue
|
|
Other(1)
|
|
Continuing
Operations
|
|
Discontinued
Operations
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Service charges on deposit accounts
|
$
|
36
|
|
|
$
|
135
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
175
|
|
|
$
|
—
|
|
Card and ATM fees
|
14
|
|
|
102
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
112
|
|
|
—
|
|
|||||||
Investment management and trust fee income
|
—
|
|
|
—
|
|
|
58
|
|
|
—
|
|
|
—
|
|
|
58
|
|
|
—
|
|
|||||||
Capital markets income
|
26
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31
|
|
|
57
|
|
|
—
|
|
|||||||
Mortgage income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37
|
|
|
37
|
|
|
—
|
|
|||||||
Investment services fee income
|
—
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|||||||
Commercial credit fee income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
17
|
|
|
—
|
|
|||||||
Bank-owned life insurance
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|
18
|
|
|
—
|
|
|||||||
Securities gains (losses), net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|||||||
Market value adjustments on employee benefit assets - defined benefit
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|||||||
Market value adjustments on employee benefit assets - other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|||||||
Insurance commissions and fees
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
35
|
|
|||||||
Other miscellaneous income
|
4
|
|
|
12
|
|
|
1
|
|
|
—
|
|
|
2
|
|
|
19
|
|
|
—
|
|
|||||||
|
$
|
80
|
|
|
$
|
249
|
|
|
$
|
79
|
|
|
$
|
1
|
|
|
$
|
103
|
|
|
$
|
512
|
|
|
$
|
35
|
|
|
Six Months Ended June 30, 2019
|
||||||||||||||||||||||||||
|
Corporate Bank
|
|
Consumer
Bank
|
|
Wealth
Management
|
|
Other Segment Revenue
|
|
Other(1)
|
|
Continuing
Operations
|
|
Discontinued
Operations
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Service charges on deposit accounts
|
$
|
77
|
|
|
$
|
272
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
4
|
|
|
$
|
356
|
|
|
$
|
—
|
|
Card and ATM fees
|
31
|
|
|
207
|
|
|
—
|
|
|
1
|
|
|
(10
|
)
|
|
229
|
|
|
—
|
|
|||||||
Investment management and trust fee income
|
—
|
|
|
—
|
|
|
116
|
|
|
—
|
|
|
—
|
|
|
116
|
|
|
—
|
|
|||||||
Capital markets income
|
37
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44
|
|
|
81
|
|
|
—
|
|
|||||||
Mortgage income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
58
|
|
|
58
|
|
|
—
|
|
|||||||
Investment services fee income
|
—
|
|
|
—
|
|
|
39
|
|
|
—
|
|
|
—
|
|
|
39
|
|
|
—
|
|
|||||||
Commercial credit fee income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36
|
|
|
36
|
|
|
—
|
|
|||||||
Bank-owned life insurance
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42
|
|
|
42
|
|
|
—
|
|
|||||||
Securities gains (losses), net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(26
|
)
|
|
(26
|
)
|
|
—
|
|
|||||||
Market value adjustments on employee benefit assets - defined benefit
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
|
—
|
|
|||||||
Market value adjustments on employee benefit assets - other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
|
—
|
|
|||||||
Other miscellaneous income
|
8
|
|
|
34
|
|
|
2
|
|
|
(5
|
)
|
|
24
|
|
|
63
|
|
|
—
|
|
|||||||
|
$
|
153
|
|
|
$
|
513
|
|
|
$
|
159
|
|
|
$
|
(3
|
)
|
|
$
|
174
|
|
|
$
|
996
|
|
|
$
|
—
|
|
|
Six Months Ended June 30, 2018
|
||||||||||||||||||||||||||
|
Corporate Bank
|
|
Consumer
Bank
|
|
Wealth
Management
|
|
Other Segment Revenue
|
|
Other(1)
|
|
Continuing
Operations
|
|
Discontinued
Operations
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Service charges on deposit accounts
|
$
|
73
|
|
|
$
|
266
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
4
|
|
|
$
|
346
|
|
|
$
|
—
|
|
Card and ATM fees
|
26
|
|
|
198
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
216
|
|
|
—
|
|
|||||||
Investment management and trust fee income
|
—
|
|
|
—
|
|
|
116
|
|
|
—
|
|
|
—
|
|
|
116
|
|
|
—
|
|
|||||||
Capital markets income
|
44
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
63
|
|
|
107
|
|
|
—
|
|
|||||||
Mortgage income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
75
|
|
|
75
|
|
|
—
|
|
|||||||
Investment services fee income
|
—
|
|
|
—
|
|
|
36
|
|
|
—
|
|
|
—
|
|
|
36
|
|
|
—
|
|
|||||||
Commercial credit fee income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34
|
|
|
34
|
|
|
—
|
|
|||||||
Bank-owned life insurance
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|
35
|
|
|
—
|
|
|||||||
Securities gains (losses), net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|||||||
Market value adjustments on employee benefit assets - defined benefit
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|
—
|
|
|||||||
Market value adjustments on employee benefit assets - other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|||||||
Insurance commissions and fees
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
69
|
|
|||||||
Other miscellaneous income
|
9
|
|
|
21
|
|
|
2
|
|
|
—
|
|
|
23
|
|
|
55
|
|
|
—
|
|
|||||||
|
$
|
152
|
|
|
$
|
485
|
|
|
$
|
156
|
|
|
$
|
2
|
|
|
$
|
224
|
|
|
$
|
1,019
|
|
|
$
|
69
|
|
(1)
|
This revenue is not impacted by the accounting guidance related to revenue from contracts with customers and continues to be recognized when earned in accordance with the Company's existing revenue recognition policy.
|
Standard
|
Description
|
Required Date of Adoption
|
Effect on Regions' financial statements or other significant matters
|
Standards Adopted (or partially adopted) in 2019
|
|||
ASU 2016-02, Leases
ASU 2018-01, Land Easement Practical Expedient for Transition to Topic 842 ASU 2018-10, Narrow Amendments to Topic 842 ASU 2018-11, Targeted Improvements to Topic 842
ASU 2018-20, Narrow-Scope Improvements for Lessors
ASU 2019-01, Codification Improvements
|
This ASU creates ASC 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.
|
January 1, 2019
|
Regions adopted the standard on January 1, 2019 using the optional transition method, which allowed for a modified retrospective method of adoption with an immaterial cumulative effect adjustment to retained earnings without restating comparable periods. Regions elected the relief package of practical expedients for which there is no requirement to reassess existence of leases, their classification, and initial direct costs. Regions also applied the exemption for short-term leases with a term of less than one year, whereby Regions does not recognize a lease liability or right-of-use asset on the balance sheet but instead recognizes lease payments as an expense over the lease term as appropriate. For property leases, Regions did not elect the practical expedient to combine lease and non-lease components.
The standard resulted in recognition of right-of-use assets and lease liabilities for operating leases, while accounting for finance leases remains largely unchanged. Adoption of the standard resulted in the recognition of additional right-of-use assets and lease liabilities for operating leases of approximately $451 million as of January 1, 2019.
Operating lease right-of-use assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As most leases do not state an implicit rate, Regions utilizes the incremental borrowing rate based on information available at the commencement date to determine the present value of the lease payments. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Lease expenses are recognized on a straight-line basis over the lease term.
|
ASU 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
|
The adoption of this guidance did not have a material impact.
|
ASU 2018-07,
Compensation - Stock Compensation |
This ASU amends and expands the scope of Topic 718, Compensation-Stock Compensation, to include share-based payment transactions for acquiring goods and services for non-employees. Under this guidance, the accounting for share-based payments to non-employees and employees will be substantially aligned. The measurement of equity-classified non-employee awards will now be fixed at the grant date.
|
January 1, 2019
|
The adoption of this guidance did not have a material impact.
|
ASU 2018-09, Codification Improvements
|
The FASB issued this ASU to clarify, improve, and correct errors in the Codification. The ASU covers nine amendments, which affect a wide variety of Topics including business combinations, debt, derivatives and hedging, and defined contribution pension plans. Some amendments do not require transition guidance and are effective upon issuance, while others will be applicable for Regions starting in 2019.
|
January 1, 2019
|
The adoption of this guidance did not have a material impact.
|
ASU 2018-16, Derivatives and Hedging
|
This ASU amends Topic 815, Derivatives and Hedging, to expand the list of U.S. benchmark interest rates permitted in applying hedge accounting. The amendments permit all entities that elect to apply hedge accounting to benchmark interest rate hedges under ASC 815, Derivatives and Hedging, to use the OIS rate based on the SOFR as a U.S. benchmark interest rate in addition to the four eligible U.S. benchmark interest rates. The amendments should be applied prospectively for qualifying new or redesignated hedging relationships entered into on or after the date of adoption.
|
January 1, 2019
|
The adoption of this guidance did not have a material impact.
|
Standard
|
Description
|
Required Date of Adoption
|
Effect on Regions' financial statements or other significant matters
|
Standards Not Yet Adopted
|
|||
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.
|
ASU 2018-15, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement
|
This ASU amends Topic 350-40, Intangibles-Goodwill and Other-Internal-Use Software, regarding a customer's accounting for implementation, set-up, and other upfront costs incurred in a cloud computing arrangement that is hosted by the vendor, i.e. a service contract. Customers will apply the same criteria for capitalizing implementation costs as they would for an arrangement that has a software license. The amendments also prescribe the balance sheet, income statement, and cash flow classification of the capitalized implementation costs and related amortization expense, and require additional quantitative and qualitative disclosures.
|
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.
|
ASU 2018-17, Targeted Improvements to Related Party Guidance for Variable Interest Entities
|
This ASU amends Topic 810, Consolidation, guidance on how all reporting entities evaluate indirect interests held through related parties in common control arrangements when determining whether fees paid to decision makers and service providers are variable interests.
|
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.
|
ASU 2019-04, Codification Improvements to Topics 815 and 825
|
This ASU amends Topic 815, Derivatives and Hedging, by providing clarification on ASU 2017-12, which the Company previously adopted. The amendment provides clarity on the term used to measure the change in fair value on a partial term hedge of interest rate risk. The amendment also provides additional guidance on the amortization of the basis adjustment on partial term hedges.
This ASU also amends Topic 825, Financial Instruments, by providing clarification on ASU 2016-01, which the Company previously adopted. The amendment clarifies that an entity must remeasure a security without a readily determinable fair value at fair value in accordance with Topic 820 when an orderly transaction is identified for an identical or similar investment.
|
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.
|
2019 Expectations
|
||
Category
|
|
Expectation
|
Full year adjusted average loan growth
|
|
Low to mid-single digits
|
Full year adjusted total revenue growth
|
|
Lower end of 2%-4% (1)
|
Full year adjusted non-interest expense
|
|
Stable to down slightly (2)
|
Net charge-offs / average loans
|
|
40-50 basis points
|
Effective tax rate
|
|
20%-22%
|
|
|
Expect to generate positive adjusted operating leverage.
|
(1)
|
Revised from previous expectation of 2%-4%.
|
(2)
|
Revised from previous expectation of relatively stable.
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
|
(In millions)
|
||||||
U.S. Treasury securities
|
$
|
176
|
|
|
$
|
280
|
|
Federal agency securities
|
44
|
|
|
43
|
|
||
Mortgage-backed securities:
|
|
|
|
||||
Residential agency
|
17,538
|
|
|
17,475
|
|
||
Residential non-agency
|
2
|
|
|
2
|
|
||
Commercial agency
|
4,369
|
|
|
4,466
|
|
||
Commercial non-agency
|
707
|
|
|
760
|
|
||
Corporate and other debt securities
|
1,278
|
|
|
1,185
|
|
||
|
$
|
24,114
|
|
|
$
|
24,211
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
|
(In millions, net of unearned income)
|
||||||
Commercial and industrial
|
$
|
40,438
|
|
|
$
|
39,282
|
|
Commercial real estate mortgage—owner-occupied
|
5,455
|
|
|
5,549
|
|
||
Commercial real estate construction—owner-occupied
|
415
|
|
|
384
|
|
||
Total commercial
|
46,308
|
|
|
45,215
|
|
||
Commercial investor real estate mortgage
|
4,795
|
|
|
4,650
|
|
||
Commercial investor real estate construction
|
1,658
|
|
|
1,786
|
|
||
Total investor real estate
|
6,453
|
|
|
6,436
|
|
||
Residential first mortgage
|
14,253
|
|
|
14,276
|
|
||
Home equity
|
8,802
|
|
|
9,257
|
|
||
Indirect—vehicles
|
2,415
|
|
|
3,053
|
|
||
Indirect—other consumer
|
2,796
|
|
|
2,349
|
|
||
Consumer credit card
|
1,303
|
|
|
1,345
|
|
||
Other consumer
|
1,223
|
|
|
1,221
|
|
||
Total consumer
|
30,792
|
|
|
31,501
|
|
||
|
$
|
83,553
|
|
|
$
|
83,152
|
|
|
June 30, 2019
|
||||||||||
|
Loans
|
|
Unfunded Commitments
|
|
Total Exposure
|
||||||
|
(In millions)
|
||||||||||
Administrative, support, waste and repair
|
$
|
1,402
|
|
|
$
|
942
|
|
|
$
|
2,344
|
|
Agriculture
|
504
|
|
|
235
|
|
|
739
|
|
|||
Educational services
|
2,675
|
|
|
604
|
|
|
3,279
|
|
|||
Energy
|
2,374
|
|
|
2,328
|
|
|
4,702
|
|
|||
Financial services
|
4,305
|
|
|
3,818
|
|
|
8,123
|
|
|||
Government and public sector
|
2,791
|
|
|
518
|
|
|
3,309
|
|
|||
Healthcare
|
3,641
|
|
|
1,791
|
|
|
5,432
|
|
|||
Information
|
1,678
|
|
|
794
|
|
|
2,472
|
|
|||
Manufacturing
|
4,574
|
|
|
3,864
|
|
|
8,438
|
|
|||
Professional, scientific and technical services
|
1,814
|
|
|
1,249
|
|
|
3,063
|
|
|||
Real estate
|
6,731
|
|
|
6,835
|
|
|
13,566
|
|
|||
Religious, leisure, personal and non-profit services
|
1,689
|
|
|
787
|
|
|
2,476
|
|
|||
Restaurant, accommodation and lodging
|
2,016
|
|
|
519
|
|
|
2,535
|
|
|||
Retail trade
|
2,533
|
|
|
1,869
|
|
|
4,402
|
|
|||
Transportation and warehousing
|
1,961
|
|
|
1,168
|
|
|
3,129
|
|
|||
Utilities
|
1,759
|
|
|
2,428
|
|
|
4,187
|
|
|||
Wholesale goods
|
3,511
|
|
|
2,470
|
|
|
5,981
|
|
|||
Other (1)
|
350
|
|
|
2,915
|
|
|
3,265
|
|
|||
Total commercial
|
$
|
46,308
|
|
|
$
|
35,134
|
|
|
$
|
81,442
|
|
|
December 31, 2018 (2)
|
||||||||||
|
Loans
|
|
Unfunded Commitments
|
|
Total Exposure
|
||||||
|
(In millions)
|
||||||||||
Administrative, support, waste and repair
|
$
|
1,353
|
|
|
$
|
882
|
|
|
$
|
2,235
|
|
Agriculture
|
550
|
|
|
235
|
|
|
785
|
|
|||
Educational services
|
2,500
|
|
|
606
|
|
|
3,106
|
|
|||
Energy
|
2,275
|
|
|
2,408
|
|
|
4,683
|
|
|||
Financial services
|
4,063
|
|
|
3,670
|
|
|
7,733
|
|
|||
Government and public sector
|
2,826
|
|
|
506
|
|
|
3,332
|
|
|||
Healthcare
|
3,854
|
|
|
1,869
|
|
|
5,723
|
|
|||
Information
|
1,446
|
|
|
1,002
|
|
|
2,448
|
|
|||
Manufacturing
|
4,543
|
|
|
4,061
|
|
|
8,604
|
|
|||
Professional, scientific and technical services
|
1,730
|
|
|
1,434
|
|
|
3,164
|
|
|||
Real estate
|
6,696
|
|
|
6,567
|
|
|
13,263
|
|
|||
Religious, leisure, personal and non-profit services
|
1,735
|
|
|
766
|
|
|
2,501
|
|
|||
Restaurant, accommodation and lodging
|
2,071
|
|
|
590
|
|
|
2,661
|
|
|||
Retail trade
|
2,362
|
|
|
2,267
|
|
|
4,629
|
|
|||
Transportation and warehousing
|
1,869
|
|
|
974
|
|
|
2,843
|
|
|||
Utilities
|
1,729
|
|
|
2,287
|
|
|
4,016
|
|
|||
Wholesale goods
|
3,356
|
|
|
2,549
|
|
|
5,905
|
|
|||
Other (1)
|
257
|
|
|
2,458
|
|
|
2,715
|
|
|||
Total commercial
|
$
|
45,215
|
|
|
$
|
35,131
|
|
|
$
|
80,346
|
|
(1)
|
"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.
|
(2)
|
As customers' businesses evolve (e.g. up or down the vertical manufacturing chain), Regions may need to change the assigned business industry code used to define the customer relationship. When these changes occur, Regions does not recast the customer history for prior periods into the new classification because the business industry code used in the prior period was deemed appropriate. As a result, comparable period changes may be impacted.
|
|
First Lien
|
|
% of Total
|
|
Second Lien
|
|
% of Total
|
|
Total
|
||||||||
|
(Dollars in millions)
|
||||||||||||||||
2019
|
$
|
38
|
|
|
0.68
|
%
|
|
$
|
33
|
|
|
0.59
|
%
|
|
$
|
71
|
|
2020
|
93
|
|
|
1.68
|
|
|
69
|
|
|
1.24
|
|
|
162
|
|
|||
2021
|
114
|
|
|
2.06
|
|
|
101
|
|
|
1.82
|
|
|
215
|
|
|||
2022
|
123
|
|
|
2.22
|
|
|
120
|
|
|
2.15
|
|
|
243
|
|
|||
2023
|
158
|
|
|
2.84
|
|
|
142
|
|
|
2.56
|
|
|
300
|
|
|||
2024-2028
|
2,220
|
|
|
39.92
|
|
|
2,093
|
|
|
37.63
|
|
|
4,313
|
|
|||
2029-2033
|
143
|
|
|
2.56
|
|
|
111
|
|
|
2.00
|
|
|
254
|
|
|||
Thereafter
|
1
|
|
|
0.02
|
|
|
2
|
|
|
0.03
|
|
|
3
|
|
|||
Total
|
$
|
2,890
|
|
|
51.98
|
%
|
|
$
|
2,671
|
|
|
48.02
|
%
|
|
$
|
5,561
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
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%
|
$
|
38
|
|
|
$
|
21
|
|
|
$
|
34
|
|
|
$
|
64
|
|
|
$
|
28
|
|
|
$
|
52
|
|
80% - 100%
|
1,740
|
|
|
139
|
|
|
281
|
|
|
1,720
|
|
|
168
|
|
|
346
|
|
||||||
Below 80%
|
12,191
|
|
|
5,601
|
|
|
2,554
|
|
|
12,117
|
|
|
5,852
|
|
|
2,627
|
|
||||||
Data not available
|
284
|
|
|
63
|
|
|
109
|
|
|
375
|
|
|
66
|
|
|
118
|
|
||||||
|
$
|
14,253
|
|
|
$
|
5,824
|
|
|
$
|
2,978
|
|
|
$
|
14,276
|
|
|
$
|
6,114
|
|
|
$
|
3,143
|
|
|
June 30, 2019
|
||||||||||||||||||||||||||
|
Residential
First Mortgage
|
|
Home Equity
|
|
Indirect—Vehicles
|
|
Indirect—Other Consumer
|
|
Consumer
Credit Card
|
|
Other
Consumer
|
||||||||||||||||
|
|
1st Lien
|
|
2nd Lien
|
|
|
|
|
|||||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Below 620
|
$
|
699
|
|
|
$
|
248
|
|
|
$
|
134
|
|
|
$
|
238
|
|
|
$
|
64
|
|
|
$
|
99
|
|
|
$
|
69
|
|
620-680
|
739
|
|
|
407
|
|
|
232
|
|
|
259
|
|
|
248
|
|
|
224
|
|
|
147
|
|
|||||||
681-720
|
1,253
|
|
|
643
|
|
|
353
|
|
|
297
|
|
|
495
|
|
|
277
|
|
|
223
|
|
|||||||
Above 720
|
11,215
|
|
|
4,399
|
|
|
2,211
|
|
|
1,573
|
|
|
1,855
|
|
|
695
|
|
|
719
|
|
|||||||
Data not available
|
347
|
|
|
127
|
|
|
48
|
|
|
48
|
|
|
134
|
|
|
8
|
|
|
65
|
|
|||||||
|
$
|
14,253
|
|
|
$
|
5,824
|
|
|
$
|
2,978
|
|
|
$
|
2,415
|
|
|
$
|
2,796
|
|
|
$
|
1,303
|
|
|
$
|
1,223
|
|
|
December 31, 2018
|
||||||||||||||||||||||||||
|
Residential
First Mortgage
|
|
Home Equity
|
|
Indirect—Vehicles
|
|
Indirect—Other Consumer
|
|
Consumer
Credit Card
|
|
Other
Consumer
|
||||||||||||||||
|
|
1st Lien
|
|
2nd Lien
|
|
|
|
|
|||||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Below 620
|
$
|
700
|
|
|
$
|
239
|
|
|
$
|
142
|
|
|
$
|
272
|
|
|
$
|
56
|
|
|
$
|
98
|
|
|
$
|
69
|
|
620-680
|
747
|
|
|
429
|
|
|
259
|
|
|
332
|
|
|
212
|
|
|
229
|
|
|
148
|
|
|||||||
681-720
|
1,270
|
|
|
708
|
|
|
376
|
|
|
384
|
|
|
405
|
|
|
288
|
|
|
223
|
|
|||||||
Above 720
|
11,104
|
|
|
4,610
|
|
|
2,316
|
|
|
1,992
|
|
|
1,474
|
|
|
721
|
|
|
704
|
|
|||||||
Data not available
|
455
|
|
|
128
|
|
|
50
|
|
|
73
|
|
|
202
|
|
|
9
|
|
|
77
|
|
|||||||
|
$
|
14,276
|
|
|
$
|
6,114
|
|
|
$
|
3,143
|
|
|
$
|
3,053
|
|
|
$
|
2,349
|
|
|
$
|
1,345
|
|
|
$
|
1,221
|
|
|
Six Months Ended June 30
|
||||||
|
2019
|
|
2018
|
||||
|
(Dollars in millions)
|
||||||
Allowance for loan losses at beginning of year
|
$
|
840
|
|
|
$
|
934
|
|
Loans charged-off:
|
|
|
|
||||
Commercial and industrial
|
69
|
|
|
54
|
|
||
Commercial real estate mortgage—owner-occupied
|
5
|
|
|
10
|
|
||
Commercial investor real estate mortgage
|
—
|
|
|
8
|
|
||
Commercial investor real estate construction
|
—
|
|
|
—
|
|
||
Residential first mortgage
|
3
|
|
|
9
|
|
||
Home equity
|
11
|
|
|
14
|
|
||
Indirect—vehicles
|
15
|
|
|
21
|
|
||
Indirect—other consumer
|
35
|
|
|
22
|
|
||
Consumer credit card
|
34
|
|
|
31
|
|
||
Other consumer
|
43
|
|
|
38
|
|
||
|
215
|
|
|
207
|
|
||
Recoveries of loans previously charged-off:
|
|
|
|
||||
Commercial and industrial
|
12
|
|
|
20
|
|
||
Commercial real estate mortgage—owner-occupied
|
3
|
|
|
4
|
|
||
Commercial investor real estate mortgage
|
1
|
|
|
3
|
|
||
Commercial investor real estate construction
|
1
|
|
|
1
|
|
||
Residential first mortgage
|
2
|
|
|
4
|
|
||
Home equity
|
8
|
|
|
9
|
|
||
Indirect—vehicles
|
7
|
|
|
9
|
|
||
Indirect—other consumer
|
—
|
|
|
—
|
|
||
Consumer credit card
|
4
|
|
|
4
|
|
||
Other consumer
|
7
|
|
|
7
|
|
||
|
45
|
|
|
61
|
|
||
Net charge-offs:
|
|
|
|
||||
Commercial and industrial
|
57
|
|
|
34
|
|
||
Commercial real estate mortgage—owner-occupied
|
2
|
|
|
6
|
|
||
Commercial investor real estate mortgage
|
(1
|
)
|
|
5
|
|
||
Commercial investor real estate construction
|
(1
|
)
|
|
(1
|
)
|
||
Residential first mortgage
|
1
|
|
|
5
|
|
||
Home equity
|
3
|
|
|
5
|
|
||
Indirect—vehicles
|
8
|
|
|
12
|
|
||
Indirect—other consumer
|
35
|
|
|
22
|
|
||
Consumer credit card
|
30
|
|
|
27
|
|
||
Other consumer
|
36
|
|
|
31
|
|
||
|
170
|
|
|
146
|
|
||
Provision (credit) for loan losses
|
183
|
|
|
50
|
|
||
Allowance for loan losses at June 30
|
$
|
853
|
|
|
$
|
838
|
|
Reserve for unfunded credit commitments at beginning of year
|
$
|
51
|
|
|
$
|
53
|
|
Provision (credit) for unfunded credit losses
|
(1
|
)
|
|
(5
|
)
|
||
Reserve for unfunded credit commitments at June 30
|
$
|
50
|
|
|
$
|
48
|
|
Allowance for credit losses at June 30
|
$
|
903
|
|
|
$
|
886
|
|
Loans, net of unearned income, outstanding at end of period
|
$
|
83,553
|
|
|
$
|
80,478
|
|
Average loans, net of unearned income, outstanding for the period
|
$
|
83,816
|
|
|
$
|
79,924
|
|
Ratios:
|
|
|
|
||||
Allowance for loan losses at end of period to loans, net of unearned income
|
1.02
|
%
|
|
1.04
|
%
|
||
Allowance for loan losses at end of period to non-performing loans, excluding loans held for sale
|
160
|
%
|
|
141
|
%
|
||
Net charge-offs as percentage of average loans, net of unearned income (annualized)
|
0.41
|
%
|
|
0.37
|
%
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||
|
Loan
Balance
|
|
Allowance for
Loan Losses
|
|
Loan
Balance
|
|
Allowance for
Loan Losses
|
||||||||
|
(In millions)
|
||||||||||||||
Accruing:
|
|
|
|
|
|
|
|
||||||||
Commercial
|
$
|
101
|
|
|
$
|
13
|
|
|
$
|
108
|
|
|
$
|
17
|
|
Investor real estate
|
15
|
|
|
1
|
|
|
14
|
|
|
1
|
|
||||
Residential first mortgage
|
179
|
|
|
18
|
|
|
170
|
|
|
16
|
|
||||
Home equity
|
168
|
|
|
8
|
|
|
189
|
|
|
6
|
|
||||
Consumer credit card
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Other consumer
|
5
|
|
|
—
|
|
|
6
|
|
|
—
|
|
||||
|
469
|
|
|
40
|
|
|
488
|
|
|
40
|
|
||||
Non-accrual status or 90 days past due and still accruing:
|
|
|
|
|
|
|
|
||||||||
Commercial
|
182
|
|
|
30
|
|
|
183
|
|
|
18
|
|
||||
Investor real estate
|
5
|
|
|
—
|
|
|
5
|
|
|
—
|
|
||||
Residential first mortgage
|
33
|
|
|
3
|
|
|
38
|
|
|
4
|
|
||||
Home equity
|
14
|
|
|
1
|
|
|
15
|
|
|
—
|
|
||||
|
234
|
|
|
34
|
|
|
241
|
|
|
22
|
|
||||
Total TDRs - Loans
|
$
|
703
|
|
|
$
|
74
|
|
|
$
|
729
|
|
|
$
|
62
|
|
|
|
|
|
|
|
|
|
||||||||
TDRs - Held For Sale
|
7
|
|
|
—
|
|
|
5
|
|
|
—
|
|
||||
Total TDRs
|
$
|
710
|
|
|
$
|
74
|
|
|
$
|
734
|
|
|
$
|
62
|
|
|
Six Months Ended
June 30, 2019 |
|
Six Months Ended
June 30, 2018 |
||||||||||||
|
Commercial
|
|
Investor
Real Estate |
|
Commercial
|
|
Investor
Real Estate |
||||||||
|
(In millions)
|
||||||||||||||
Balance, beginning of period
|
$
|
291
|
|
|
$
|
19
|
|
|
$
|
347
|
|
|
$
|
91
|
|
Inflows
|
100
|
|
|
2
|
|
|
207
|
|
|
48
|
|
||||
Outflows:
|
|
|
|
|
|
|
|
||||||||
Charge-offs
|
(14
|
)
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
||||
Payments, sales and other (1)
|
(94
|
)
|
|
(1
|
)
|
|
(200
|
)
|
|
(98
|
)
|
||||
Balance, end of period
|
$
|
283
|
|
|
$
|
20
|
|
|
$
|
336
|
|
|
$
|
41
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
|
(Dollars in millions)
|
||||||
Non-performing loans:
|
|
|
|
||||
Commercial and industrial
|
$
|
347
|
|
|
$
|
307
|
|
Commercial real estate mortgage—owner-occupied
|
68
|
|
|
67
|
|
||
Commercial real estate construction—owner-occupied
|
15
|
|
|
8
|
|
||
Total commercial
|
430
|
|
|
382
|
|
||
Commercial investor real estate mortgage
|
8
|
|
|
11
|
|
||
Total investor real estate
|
8
|
|
|
11
|
|
||
Residential first mortgage
|
34
|
|
|
40
|
|
||
Home equity
|
61
|
|
|
63
|
|
||
Total consumer
|
95
|
|
|
103
|
|
||
Total non-performing loans, excluding loans held for sale
|
533
|
|
|
496
|
|
||
Non-performing loans held for sale
|
11
|
|
|
10
|
|
||
Total non-performing loans(1)
|
544
|
|
|
506
|
|
||
Foreclosed properties
|
55
|
|
|
52
|
|
||
Non-marketable investments received in foreclosure
|
5
|
|
|
8
|
|
||
Total non-performing assets(1)
|
$
|
604
|
|
|
$
|
566
|
|
Accruing loans 90 days past due:
|
|
|
|
||||
Commercial and industrial
|
$
|
11
|
|
|
$
|
8
|
|
Total commercial
|
11
|
|
|
8
|
|
||
Residential first mortgage(2)
|
61
|
|
|
66
|
|
||
Home equity
|
40
|
|
|
34
|
|
||
Indirect—vehicles
|
6
|
|
|
9
|
|
||
Indirect—other consumer
|
2
|
|
|
1
|
|
||
Consumer credit card
|
20
|
|
|
20
|
|
||
Other consumer
|
4
|
|
|
5
|
|
||
Total consumer
|
133
|
|
|
135
|
|
||
|
$
|
144
|
|
|
$
|
143
|
|
Restructured loans not included in the categories above
|
$
|
469
|
|
|
$
|
488
|
|
Non-performing loans(1) to loans and non-performing loans held for sale
|
0.64
|
%
|
|
0.61
|
%
|
||
Non-performing assets(1) to loans, foreclosed properties, non-marketable investments, and non-performing loans held for sale
|
0.72
|
%
|
|
0.68
|
%
|
(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 $66 million at June 30, 2019 and $84 million at December 31, 2018.
|
|
Non-Accrual Loans, Excluding Loans Held for Sale
Six Months Ended June 30, 2019 |
||||||||||||||
|
Commercial
|
|
Investor
Real Estate
|
|
Consumer(1)
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
Balance at beginning of period
|
$
|
382
|
|
|
$
|
11
|
|
|
$
|
103
|
|
|
$
|
496
|
|
Additions
|
250
|
|
|
1
|
|
|
—
|
|
|
251
|
|
||||
Net payments/other activity
|
(82
|
)
|
|
(4
|
)
|
|
(8
|
)
|
|
(94
|
)
|
||||
Return to accrual
|
(13
|
)
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
||||
Charge-offs on non-accrual loans(2)
|
(63
|
)
|
|
—
|
|
|
—
|
|
|
(63
|
)
|
||||
Transfers to held for sale(3)
|
(22
|
)
|
|
—
|
|
|
—
|
|
|
(22
|
)
|
||||
Transfers to real estate owned
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||
Sales
|
(20
|
)
|
|
—
|
|
|
—
|
|
|
(20
|
)
|
||||
Balance at end of period
|
$
|
430
|
|
|
$
|
8
|
|
|
$
|
95
|
|
|
$
|
533
|
|
|
Non-Accrual Loans, Excluding Loans Held for Sale
Six Months Ended June 30, 2018 |
||||||||||||||
|
Commercial
|
|
Investor
Real Estate
|
|
Consumer(1)
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
Balance at beginning of period
|
$
|
528
|
|
|
$
|
6
|
|
|
$
|
116
|
|
|
$
|
650
|
|
Additions
|
204
|
|
|
19
|
|
|
—
|
|
|
223
|
|
||||
Net payments/other activity
|
(145
|
)
|
|
(3
|
)
|
|
(9
|
)
|
|
(157
|
)
|
||||
Return to accrual
|
(24
|
)
|
|
(1
|
)
|
|
—
|
|
|
(25
|
)
|
||||
Charge-offs on non-accrual loans(2)
|
(58
|
)
|
|
(8
|
)
|
|
—
|
|
|
(66
|
)
|
||||
Transfers to held for sale(3)
|
(14
|
)
|
|
—
|
|
|
(3
|
)
|
|
(17
|
)
|
||||
Transfers to real estate owned
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||
Sales
|
(2
|
)
|
|
(9
|
)
|
|
—
|
|
|
(11
|
)
|
||||
Balance at end of period
|
$
|
487
|
|
|
$
|
4
|
|
|
$
|
104
|
|
|
$
|
595
|
|
(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 $6 million recorded upon transfer for the six months ended June 30, 2019 and 2018, respectively.
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
|
(In millions)
|
||||||
Non-interest-bearing demand
|
$
|
34,678
|
|
|
$
|
35,053
|
|
Savings
|
8,659
|
|
|
8,788
|
|
||
Interest-bearing transaction
|
18,625
|
|
|
19,175
|
|
||
Money market—domestic
|
24,729
|
|
|
24,111
|
|
||
Time deposits
|
7,731
|
|
|
7,122
|
|
||
Customer deposits
|
94,422
|
|
|
94,249
|
|
||
Corporate treasury time deposits
|
549
|
|
|
242
|
|
||
|
$
|
94,971
|
|
|
$
|
94,491
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
|
(In millions)
|
||||||
Regions Financial Corporation (Parent):
|
|
|
|
||||
3.20% senior notes due February 2021
|
$
|
1,101
|
|
|
$
|
1,101
|
|
2.75% senior notes due August 2022
|
996
|
|
|
996
|
|
||
3.80% senior notes due August 2023
|
995
|
|
|
497
|
|
||
7.75% subordinated notes due September 2024
|
100
|
|
|
100
|
|
||
6.75% subordinated debentures due November 2025
|
157
|
|
|
157
|
|
||
7.375% subordinated notes due December 2037
|
298
|
|
|
298
|
|
||
Valuation adjustments on hedged long-term debt
|
35
|
|
|
(47
|
)
|
||
|
3,682
|
|
|
3,102
|
|
||
Regions Bank:
|
|
|
|
||||
FHLB advances
|
3,102
|
|
|
6,902
|
|
||
2.75% senior notes due April 2021
|
549
|
|
|
548
|
|
||
3 month LIBOR plus 0.38% of floating rate senior notes due April 2021
|
349
|
|
|
349
|
|
||
3.374% senior notes converting to 3 month LIBOR plus 0.50%, callable August 2020, due August 2021
|
499
|
|
|
499
|
|
||
3 month LIBOR plus 0.50% of floating rate senior notes, callable August 2020, due August 2021
|
499
|
|
|
499
|
|
||
6.45% subordinated notes due June 2037
|
495
|
|
|
495
|
|
||
Other long-term debt
|
33
|
|
|
33
|
|
||
Valuation adjustments on hedged long-term debt
|
5
|
|
|
(3
|
)
|
||
|
5,531
|
|
|
9,322
|
|
||
Total consolidated
|
$
|
9,213
|
|
|
$
|
12,424
|
|
Transitional Basis Basel III Regulatory Capital Rules
|
June 30, 2019
Ratio (1)
|
|
December 31, 2018
Ratio
|
|
Minimum
Requirement
|
|
To Be Well
Capitalized
|
||||
Basel III common equity Tier 1 capital:
|
|
|
|
|
|
|
|
||||
Regions Financial Corporation
|
9.87
|
%
|
|
9.90
|
%
|
|
4.50
|
%
|
|
N/A
|
|
Regions Bank
|
11.54
|
|
|
11.59
|
|
|
4.50
|
|
|
6.50
|
%
|
Tier 1 capital:
|
|
|
|
|
|
|
|
||||
Regions Financial Corporation
|
11.11
|
%
|
|
10.68
|
%
|
|
6.00
|
%
|
|
6.00
|
%
|
Regions Bank
|
11.54
|
|
|
11.59
|
|
|
6.00
|
|
|
8.00
|
|
Total capital:
|
|
|
|
|
|
|
|
||||
Regions Financial Corporation
|
12.88
|
%
|
|
12.46
|
%
|
|
8.00
|
%
|
|
10.00
|
%
|
Regions Bank
|
12.86
|
|
|
12.92
|
|
|
8.00
|
|
|
10.00
|
|
Leverage capital:
|
|
|
|
|
|
|
|
||||
Regions Financial Corporation
|
9.66
|
%
|
|
9.32
|
%
|
|
4.00
|
%
|
|
N/A
|
|
Regions Bank
|
10.05
|
|
|
10.12
|
|
|
4.00
|
|
|
5.00
|
%
|
|
|
|
|
|
As of June 30, 2019 and December 31, 2018
|
|||
|
S&P
|
Moody’s
|
Fitch
|
DBRS
|
Regions Financial Corporation
|
|
|
|
|
Senior unsecured debt
|
BBB+
|
Baa2
|
BBB+
|
AL
|
Subordinated debt
|
BBB
|
Baa2
|
BBB
|
BBBH
|
Regions Bank
|
|
|
|
|
Short-term
|
A-2
|
P-1
|
F2
|
R-IL
|
Long-term bank deposits
|
N/A
|
A2
|
A-
|
A
|
Senior unsecured debt
|
A-
|
Baa2
|
BBB+
|
A
|
Subordinated debt
|
BBB+
|
Baa2
|
BBB
|
AL
|
Outlook
|
Stable
|
Positive
|
Stable
|
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
|
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(Dollar in millions)
|
||||||||||||||
ADJUSTED AVERAGE BALANCES OF LOANS
|
|
|
|
|
|
|
|
||||||||
Average total loans
|
$
|
83,905
|
|
|
$
|
79,957
|
|
|
$
|
83,816
|
|
|
$
|
79,925
|
|
Add: Purchasing card balances (1)
|
—
|
|
|
228
|
|
|
—
|
|
|
218
|
|
||||
Less: Balances of residential first mortgage loans sold (2)
|
—
|
|
|
—
|
|
|
—
|
|
|
81
|
|
||||
Less: Indirect—vehicles
|
2,578
|
|
|
3,260
|
|
|
2,750
|
|
|
3,284
|
|
||||
Adjusted average total loans (non-GAAP)
|
$
|
81,327
|
|
|
$
|
76,925
|
|
|
$
|
81,066
|
|
|
$
|
76,778
|
|
|
|
Three Months Ended June 30
|
|
Six Months Ended
June 30 |
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
(Dollars in millions)
|
||||||||||||||
INCOME — CONSOLIDATED
|
|
|
|
|
|
|
|
|
||||||||
Net income (GAAP)
|
|
$
|
390
|
|
|
$
|
375
|
|
|
$
|
784
|
|
|
$
|
789
|
|
Preferred dividends (GAAP)
|
|
(16
|
)
|
|
(16
|
)
|
|
(32
|
)
|
|
(32
|
)
|
||||
Net income available to common shareholders (GAAP)
|
A
|
$
|
374
|
|
|
$
|
359
|
|
|
$
|
752
|
|
|
$
|
757
|
|
ADJUSTED EFFICIENCY AND FEE INCOME RATIOS — CONTINUING OPERATIONS
|
|
|
|
|
|
|
|
|
||||||||
Non-interest expense (GAAP)
|
B
|
$
|
861
|
|
|
$
|
911
|
|
|
$
|
1,721
|
|
|
$
|
1,795
|
|
Significant items:
|
|
|
|
|
|
|
|
|
||||||||
Branch consolidation, property and equipment charges
|
|
(2
|
)
|
|
(1
|
)
|
|
(8
|
)
|
|
(4
|
)
|
||||
Expenses associated with residential mortgage loan sale
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
||||
Salary and employee benefits—severance charges
|
|
(2
|
)
|
|
(34
|
)
|
|
(4
|
)
|
|
(49
|
)
|
||||
Adjusted non-interest expense (non-GAAP)
|
C
|
$
|
857
|
|
|
$
|
876
|
|
|
$
|
1,709
|
|
|
$
|
1,738
|
|
Net interest income and other financing income (GAAP)
|
D
|
$
|
942
|
|
|
$
|
926
|
|
|
$
|
1,890
|
|
|
$
|
1,835
|
|
Taxable-equivalent adjustment
|
|
14
|
|
|
12
|
|
|
27
|
|
|
25
|
|
||||
Net interest income and other financing income, taxable-equivalent basis - continuing operations
|
E
|
956
|
|
|
938
|
|
|
1,917
|
|
|
1,860
|
|
||||
Non-interest income (GAAP)
|
F
|
494
|
|
|
512
|
|
|
996
|
|
|
1,019
|
|
||||
Significant items:
|
|
|
|
|
|
|
|
|
||||||||
Securities (gains) losses, net
|
|
19
|
|
|
(1
|
)
|
|
26
|
|
|
(1
|
)
|
||||
Leveraged lease termination gains
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
||||
Gain on sale of affordable housing residential mortgage loans (3)
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
||||
Adjusted non-interest income (non-GAAP)
|
G
|
$
|
513
|
|
|
$
|
511
|
|
|
$
|
1,014
|
|
|
$
|
1,014
|
|
Total revenue
|
D+F=H
|
$
|
1,436
|
|
|
$
|
1,438
|
|
|
$
|
2,886
|
|
|
$
|
2,854
|
|
Adjusted total revenue
|
D+G=I
|
$
|
1,455
|
|
|
$
|
1,437
|
|
|
$
|
2,904
|
|
|
$
|
2,849
|
|
Total revenue, taxable-equivalent basis
|
E+F=J
|
$
|
1,450
|
|
|
$
|
1,450
|
|
|
$
|
2,913
|
|
|
$
|
2,879
|
|
Adjusted total revenue, taxable-equivalent basis (non-GAAP)
|
E+G=K
|
$
|
1,469
|
|
|
$
|
1,449
|
|
|
$
|
2,931
|
|
|
$
|
2,874
|
|
Efficiency ratio (GAAP)
|
B/J
|
59.37
|
%
|
|
62.74
|
%
|
|
59.09
|
%
|
|
62.33
|
%
|
||||
Adjusted efficiency ratio (non-GAAP)
|
C/K
|
58.33
|
%
|
|
60.41
|
%
|
|
58.31
|
%
|
|
60.47
|
%
|
||||
Fee income ratio (GAAP)
|
F/J
|
34.09
|
%
|
|
35.31
|
%
|
|
34.20
|
%
|
|
35.40
|
%
|
||||
Adjusted fee income ratio (non-GAAP)
|
G/K
|
34.96
|
%
|
|
35.24
|
%
|
|
34.61
|
%
|
|
35.28
|
%
|
||||
RETURN ON AVERAGE TANGIBLE COMMON STOCKHOLDERS’ EQUITY — CONSOLIDATED
|
|
|
|
|
|
|
|
|
||||||||
Average stockholders’ equity (GAAP)
|
|
$
|
15,927
|
|
|
$
|
15,682
|
|
|
$
|
15,562
|
|
|
$
|
15,765
|
|
Less: Average intangible assets (GAAP)
|
|
4,933
|
|
|
5,066
|
|
|
4,937
|
|
|
5,071
|
|
||||
Average deferred tax liability related to intangibles (GAAP)
|
|
(94
|
)
|
|
(98
|
)
|
|
(94
|
)
|
|
(99
|
)
|
||||
Average preferred stock (GAAP)
|
|
1,154
|
|
|
820
|
|
|
988
|
|
|
820
|
|
||||
Average tangible common stockholders’ equity (non-GAAP)
|
L
|
$
|
9,934
|
|
|
$
|
9,894
|
|
|
$
|
9,731
|
|
|
$
|
9,973
|
|
Return on average tangible common stockholders’ equity (non-GAAP)(4)
|
A/L
|
15.11
|
%
|
|
14.54
|
%
|
|
15.58
|
%
|
|
15.31
|
%
|
(1)
|
On December 31, 2018, purchasing cards were reclassified to commercial and industrial loans from other assets.
|
(2)
|
Adjustments to average loan balances assume a simple day-weighted average impact for the first quarter of 2018.
|
(3)
|
The gain on sale of affordable housing residential mortgage loans in the first quarter of 2019 was the result of the sale of approximately $167 million of loans.
|
(4)
|
Income statement amounts have been annualized in calculation.
|
|
Three Months Ended June 30
|
||||||||||||||||||||
|
2019
|
|
2018
|
||||||||||||||||||
|
Average
Balance
|
|
Income/
Expense
|
|
Yield/
Rate
|
|
Average
Balance
|
|
Income/
Expense
|
|
Yield/
Rate
|
||||||||||
|
(Dollars in millions; yields on taxable-equivalent basis)
|
||||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earning assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt securities—taxable
|
$
|
24,539
|
|
|
$
|
163
|
|
|
2.67
|
%
|
|
$
|
24,386
|
|
|
$
|
156
|
|
|
2.57
|
%
|
Loans held for sale
|
398
|
|
|
4
|
|
|
4.14
|
|
|
388
|
|
|
4
|
|
|
4.21
|
|
||||
Loans, net of unearned income (1)(2)
|
83,905
|
|
|
1,006
|
|
|
4.79
|
|
|
79,957
|
|
|
893
|
|
|
4.46
|
|
||||
Investment in operating leases, net
|
340
|
|
|
3
|
|
|
3.45
|
|
|
439
|
|
|
4
|
|
|
3.59
|
|
||||
Other earning assets
|
1,959
|
|
|
15
|
|
|
3.00
|
|
|
2,558
|
|
|
17
|
|
|
2.60
|
|
||||
Total earning assets
|
111,141
|
|
|
1,191
|
|
|
4.28
|
|
|
107,728
|
|
|
1,074
|
|
|
3.98
|
|
||||
Allowance for loan losses
|
(857
|
)
|
|
|
|
|
|
(848
|
)
|
|
|
|
|
||||||||
Cash and due from banks
|
1,857
|
|
|
|
|
|
|
1,953
|
|
|
|
|
|
||||||||
Other non-earning assets
|
13,974
|
|
|
|
|
|
|
14,127
|
|
|
|
|
|
||||||||
|
$
|
126,115
|
|
|
|
|
|
|
$
|
122,960
|
|
|
|
|
|
||||||
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Savings
|
$
|
8,806
|
|
|
3
|
|
|
0.16
|
|
|
$
|
8,981
|
|
|
3
|
|
|
0.15
|
|
||
Interest-bearing checking
|
18,869
|
|
|
33
|
|
|
0.71
|
|
|
19,534
|
|
|
18
|
|
|
0.38
|
|
||||
Money market
|
24,350
|
|
|
49
|
|
|
0.79
|
|
|
24,235
|
|
|
19
|
|
|
0.30
|
|
||||
Time deposits
|
9,010
|
|
|
40
|
|
|
1.78
|
|
|
6,692
|
|
|
17
|
|
|
0.98
|
|
||||
Total interest-bearing deposits (3)
|
61,035
|
|
|
125
|
|
|
0.82
|
|
|
59,442
|
|
|
57
|
|
|
0.38
|
|
||||
Federal funds purchased and securities sold under agreements to repurchase
|
244
|
|
|
1
|
|
|
2.41
|
|
|
41
|
|
|
1
|
|
|
1.83
|
|
||||
Other short-term borrowings
|
1,965
|
|
|
13
|
|
|
2.54
|
|
|
1,161
|
|
|
5
|
|
|
1.90
|
|
||||
Long-term borrowings
|
10,855
|
|
|
96
|
|
|
3.52
|
|
|
8,742
|
|
|
73
|
|
|
3.35
|
|
||||
Total interest-bearing liabilities
|
74,099
|
|
|
235
|
|
|
1.27
|
|
|
69,386
|
|
|
136
|
|
|
0.79
|
|
||||
Non-interest-bearing deposits (3)
|
33,883
|
|
|
—
|
|
|
—
|
|
|
35,811
|
|
|
—
|
|
|
—
|
|
||||
Total funding sources
|
107,982
|
|
|
235
|
|
|
0.87
|
|
|
105,197
|
|
|
136
|
|
|
0.52
|
|
||||
Net interest spread
|
|
|
|
|
3.01
|
|
|
|
|
|
|
3.19
|
|
||||||||
Other liabilities
|
2,195
|
|
|
|
|
|
|
2,081
|
|
|
|
|
|
||||||||
Stockholders’ equity
|
15,927
|
|
|
|
|
|
|
15,682
|
|
|
|
|
|
||||||||
Noncontrolling Interest
|
11
|
|
|
|
|
|
|
—
|
|
|
|
|
|
||||||||
|
$
|
126,115
|
|
|
|
|
|
|
$
|
122,960
|
|
|
|
|
|
||||||
Net interest income and other financing income/margin on a taxable-equivalent basis (4)
|
|
|
$
|
956
|
|
|
3.45
|
%
|
|
|
|
$
|
938
|
|
|
3.49
|
%
|
(1)
|
Loans, net of unearned income include non-accrual loans for all periods presented.
|
(2)
|
Interest income includes net loan fees of $2 million and $6 million for the three months ended June 30, 2019 and 2018, 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 0.53% and 0.24% for the three months ended June 30, 2019 and 2018, respectively.
|
(4)
|
The computation of taxable-equivalent net interest income and other financing income is based on the statutory federal income tax rate of 21% for both June 30, 2019 and 2018, adjusted for applicable state income taxes net of the related federal tax benefit.
|
|
Six Months Ended June 30
|
||||||||||||||||||||
|
2019
|
|
2018
|
||||||||||||||||||
|
Average Balance
|
|
Income/
Expense |
|
Yield/
Rate |
|
Average
Balance |
|
Income/
Expense |
|
Yield/
Rate |
||||||||||
|
(Dollars in millions; yields on taxable-equivalent basis)
|
||||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earning assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt securities—taxable
|
$
|
24,395
|
|
|
$
|
328
|
|
|
2.69
|
%
|
|
$
|
24,486
|
|
|
$
|
310
|
|
|
2.56
|
%
|
Loans held for sale
|
350
|
|
|
7
|
|
|
3.92
|
|
|
373
|
|
|
7
|
|
|
3.73
|
|
||||
Loans, net of unearned income (1)(2)
|
83,816
|
|
|
2,000
|
|
|
4.78
|
|
|
79,924
|
|
|
1,757
|
|
|
4.40
|
|
||||
Investment in operating leases, net
|
352
|
|
|
6
|
|
|
3.43
|
|
|
456
|
|
|
8
|
|
|
3.19
|
|
||||
Other earning assets
|
1,904
|
|
|
34
|
|
|
3.62
|
|
|
2,706
|
|
|
36
|
|
|
2.66
|
|
||||
Total earning assets
|
110,817
|
|
|
2,375
|
|
|
4.29
|
|
|
107,945
|
|
|
2,118
|
|
|
3.93
|
|
||||
Allowance for loan losses
|
(850
|
)
|
|
|
|
|
|
(890
|
)
|
|
|
|
|
||||||||
Cash and due from banks
|
1,875
|
|
|
|
|
|
|
1,952
|
|
|
|
|
|
||||||||
Other non-earning assets
|
13,988
|
|
|
|
|
|
|
14,219
|
|
|
|
|
|
||||||||
|
$
|
125,830
|
|
|
|
|
|
|
$
|
123,226
|
|
|
|
|
|
||||||
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Savings
|
$
|
8,829
|
|
|
7
|
|
|
0.17
|
|
|
$
|
8,799
|
|
|
7
|
|
|
0.16
|
|
||
Interest-bearing checking
|
19,087
|
|
|
66
|
|
|
0.70
|
|
|
19,734
|
|
|
34
|
|
|
0.35
|
|
||||
Money market
|
24,171
|
|
|
89
|
|
|
0.74
|
|
|
24,417
|
|
|
33
|
|
|
0.27
|
|
||||
Time deposits
|
8,570
|
|
|
71
|
|
|
1.67
|
|
|
6,752
|
|
|
32
|
|
|
0.94
|
|
||||
Total interest-bearing deposits (3)
|
60,657
|
|
|
233
|
|
|
0.77
|
|
|
59,702
|
|
|
106
|
|
0.36
|
|
|||||
Federal funds purchased and securities sold under agreements to repurchase
|
293
|
|
|
3
|
|
|
2.41
|
|
|
72
|
|
|
1
|
|
|
1.55
|
|
||||
Other short-term borrowings
|
1,851
|
|
|
24
|
|
|
2.54
|
|
|
661
|
|
|
6
|
|
|
1.85
|
|
||||
Long-term borrowings
|
11,301
|
|
|
198
|
|
|
3.49
|
|
|
9,135
|
|
|
145
|
|
|
3.17
|
|
||||
Total interest-bearing liabilities
|
74,102
|
|
|
458
|
|
|
1.25
|
|
|
69,570
|
|
|
258
|
|
0.75
|
|
|||||
Non-interest-bearing deposits (3)
|
33,889
|
|
|
—
|
|
|
—
|
|
|
35,638
|
|
|
—
|
|
|
—
|
|
||||
Total funding sources
|
107,991
|
|
|
458
|
|
|
0.85
|
|
|
105,208
|
|
|
258
|
|
0.49
|
|
|||||
Net interest spread
|
|
|
|
|
3.04
|
|
|
|
|
|
|
3.18
|
|
||||||||
Other liabilities
|
2,272
|
|
|
|
|
|
|
2,253
|
|
|
|
|
|
||||||||
Stockholders’ equity
|
15,562
|
|
|
|
|
|
|
15,765
|
|
|
|
|
|
||||||||
Noncontrolling Interest
|
5
|
|
|
|
|
|
|
—
|
|
|
|
|
|
||||||||
|
$
|
125,830
|
|
|
|
|
|
|
$
|
123,226
|
|
|
|
|
|
||||||
Net interest income and other financing income/margin on a taxable-equivalent basis (4)
|
|
|
$
|
1,917
|
|
|
3.49
|
%
|
|
|
|
$
|
1,860
|
|
|
3.48
|
%
|
|
Estimated Annual Change
in Net Interest Income
June 30, 2019(1)
|
||
|
(In millions)
|
||
Gradual Change in Interest Rates
|
|
||
+ 200 basis points
|
|
$145
|
|
+ 100 basis points
|
86
|
|
|
- 100 basis points(2)
|
(111
|
)
|
|
- 200 basis points (floored)
|
(195
|
)
|
|
|
|
||
Instantaneous Change in Interest Rates
|
|
||
+ 200 basis points
|
|
$149
|
|
+ 100 basis points
|
111
|
|
|
- 100 basis points
|
(183
|
)
|
|
- 200 basis points (floored)
|
(297
|
)
|
(1)
|
Disclosed interest rate sensitivity levels represent the 12 month forward looking net interest income and other financing income changes as compared to market forward rate cases and include expected balance sheet remixing.
|
(2)
|
Forward starting cash flow hedges already transacted will reduce sensitivity levels through 2020 as they continue to move into the measurement horizon (see Table 20 for additional information regarding hedge start dates). Estimates for a gradual parallel yield curve shift of minus 100 basis points, inclusive of forward starting cash flow hedges already transacted, would be a decrease to net interest income and other financing income of approximately 3 percent in the current quarter, approximately 1.5 percent at year-end 2019, and less than 1 percent by year-end 2020.
|
|
June 30, 2019
|
||||||||||||||
|
|
|
Weighted-Average
|
|
|
||||||||||
|
Notional
Amount |
|
Maturity (Years)
|
|
Receive Rate(1)
|
|
Pay Rate(1)
|
|
Strike Price(1)(2)
|
||||||
|
(Dollars in millions)
|
||||||||||||||
Derivatives in fair value hedging relationships:
|
|
|
|
|
|
|
|
|
|
||||||
Receive fixed/pay variable swaps
|
$
|
3,650
|
|
|
2.7
|
|
|
1.9
|
%
|
|
2.5
|
%
|
|
—
|
%
|
Receive variable/pay fixed swaps
|
32
|
|
|
6.3
|
|
|
2.6
|
|
|
2.7
|
|
|
—
|
|
|
Derivatives in cash flow hedging relationships:
|
|
|
|
|
|
|
|
|
|
||||||
Receive fixed/pay variable swaps
|
12,750
|
|
|
5.7
|
|
|
2.1
|
|
|
2.0
|
|
|
—
|
|
|
Interest rate floors
|
6,750
|
|
|
5.3
|
|
|
—
|
|
|
—
|
|
|
2.1
|
|
|
Total derivatives designated as hedging instruments
|
$
|
23,182
|
|
|
5.1
|
|
|
2.1
|
%
|
|
2.1
|
%
|
|
2.1
|
%
|
(1)
|
Variable rate indexes on swap and floor contracts reference a combination of short-term LIBOR benchmarks, primarily 1 month LIBOR.
|
(2)
|
Strike price is not adjusted for premiums paid on interest rate floors.
|
|
Notional Amount
|
||||||||||||||||||||||||||||||
|
Years Ended
|
||||||||||||||||||||||||||||||
|
2019(1)(2)
|
|
2020(1)(2)
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
2025
|
|
2026
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Receive fixed/pay variable swaps
|
$
|
5,500
|
|
|
$
|
12,000
|
|
|
$
|
12,750
|
|
|
$
|
12,750
|
|
|
$
|
10,450
|
|
|
$
|
9,450
|
|
|
$
|
3,325
|
|
|
$
|
1,250
|
|
Interest rate floors
|
750
|
|
|
6,500
|
|
|
6,750
|
|
|
6,750
|
|
|
6,750
|
|
|
4,000
|
|
|
250
|
|
|
—
|
|
||||||||
Cash flow hedges
|
$
|
6,250
|
|
|
$
|
18,500
|
|
|
$
|
19,500
|
|
|
$
|
19,500
|
|
|
$
|
17,200
|
|
|
$
|
13,450
|
|
|
$
|
3,575
|
|
|
$
|
1,250
|
|
(1)
|
As forward starting cash flow hedges are transacted within the 12 month measurement horizon, they will reduce 12 month net interest income and other financing income sensitivity levels as disclosed in Table 18.
|
(2)
|
Start dates for $10.3 billion of the $12.0 billion notional of the cash flow swaps and $4.8 billion of the $6.5 billion notional of the interest rate floors are at the beginning of 2020.
|
|
Three Months Ended June 30
|
|
Quarter-to-Date Change 6/30/2019 vs. 6/30/2018
|
|||||||||||
|
2019
|
|
2018
|
|
Amount
|
|
Percent
|
|||||||
|
(Dollars in millions)
|
|||||||||||||
Service charges on deposit accounts
|
$
|
181
|
|
|
$
|
175
|
|
|
$
|
6
|
|
|
3.4
|
%
|
Card and ATM fees
|
120
|
|
|
112
|
|
|
8
|
|
|
7.1
|
%
|
|||
Investment management and trust fee income
|
59
|
|
|
58
|
|
|
1
|
|
|
1.7
|
%
|
|||
Capital markets income
|
39
|
|
|
57
|
|
|
(18
|
)
|
|
(31.6
|
)%
|
|||
Mortgage income
|
31
|
|
|
37
|
|
|
(6
|
)
|
|
(16.2
|
)%
|
|||
Investment services fee income
|
20
|
|
|
19
|
|
|
1
|
|
|
5.3
|
%
|
|||
Commercial credit fee income
|
18
|
|
|
17
|
|
|
1
|
|
|
5.9
|
%
|
|||
Bank-owned life insurance
|
19
|
|
|
18
|
|
|
1
|
|
|
5.6
|
%
|
|||
Securities gains (losses), net
|
(19
|
)
|
|
1
|
|
|
(20
|
)
|
|
NM
|
|
|||
Market value adjustments on employee benefit assets - defined benefit
|
—
|
|
|
(1
|
)
|
|
1
|
|
|
(100.0
|
)%
|
|||
Market value adjustments on employee benefit assets - other
|
(2
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
100.0
|
%
|
|||
Other miscellaneous income
|
28
|
|
|
20
|
|
|
8
|
|
|
40.0
|
%
|
|||
|
$
|
494
|
|
|
$
|
512
|
|
|
$
|
(18
|
)
|
|
(3.5
|
)%
|
|
Six Months Ended June 30
|
|
Year-to-Date 6/30/2019 vs. 6/30/2018
|
|||||||||||
|
2019
|
|
2018
|
|
Amount
|
|
Percent
|
|||||||
|
(Dollars in millions)
|
|||||||||||||
Service charges on deposit accounts
|
$
|
356
|
|
|
$
|
346
|
|
|
$
|
10
|
|
|
2.9
|
%
|
Card and ATM fees
|
229
|
|
|
216
|
|
|
13
|
|
|
6.0
|
%
|
|||
Investment management and trust fee income
|
116
|
|
|
116
|
|
|
—
|
|
|
—
|
%
|
|||
Capital markets income
|
81
|
|
|
107
|
|
|
(26
|
)
|
|
(24.3
|
)%
|
|||
Mortgage income
|
58
|
|
|
75
|
|
|
(17
|
)
|
|
(22.7
|
)%
|
|||
Investment services fee income
|
39
|
|
|
36
|
|
|
3
|
|
|
8.3
|
%
|
|||
Commercial credit fee income
|
36
|
|
|
34
|
|
|
2
|
|
|
5.9
|
%
|
|||
Bank-owned life insurance
|
42
|
|
|
35
|
|
|
7
|
|
|
20.0
|
%
|
|||
Securities gains (losses), net
|
(26
|
)
|
|
1
|
|
|
(27
|
)
|
|
NM
|
|
|||
Market value adjustments on employee benefit assets - defined benefit
|
5
|
|
|
(2
|
)
|
|
7
|
|
|
(350.0
|
)%
|
|||
Market value adjustments on employee benefit assets - other
|
(3
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|
200.0
|
%
|
|||
Other miscellaneous income
|
63
|
|
|
56
|
|
|
7
|
|
|
12.5
|
%
|
|||
|
$
|
996
|
|
|
$
|
1,019
|
|
|
$
|
(23
|
)
|
|
(2.3
|
)%
|
|
Three Months Ended June 30
|
|
Quarter-to-Date Change 6/30/2019 vs 6/30/2018
|
|||||||||||
|
2019
|
|
2018
|
|
Amount
|
|
Percent
|
|||||||
|
(Dollars in millions)
|
|||||||||||||
Salaries and employee benefits
|
$
|
469
|
|
|
$
|
511
|
|
|
$
|
(42
|
)
|
|
(8.2
|
)%
|
Net occupancy expense
|
80
|
|
|
84
|
|
|
(4
|
)
|
|
(4.8
|
)%
|
|||
Furniture and equipment expense
|
84
|
|
|
81
|
|
|
3
|
|
|
3.7
|
%
|
|||
Outside services
|
52
|
|
|
48
|
|
|
4
|
|
|
8.3
|
%
|
|||
Professional, legal and regulatory expenses
|
26
|
|
|
33
|
|
|
(7
|
)
|
|
(21.2
|
)%
|
|||
Marketing
|
23
|
|
|
25
|
|
|
(2
|
)
|
|
(8.0
|
)%
|
|||
FDIC insurance assessments
|
12
|
|
|
25
|
|
|
(13
|
)
|
|
(52.0
|
)%
|
|||
Credit/checkcard expenses
|
18
|
|
|
13
|
|
|
5
|
|
|
38.5
|
%
|
|||
Branch consolidation, property and equipment charges
|
2
|
|
|
1
|
|
|
1
|
|
|
100.0
|
%
|
|||
Visa class B shares expense
|
3
|
|
|
10
|
|
|
(7
|
)
|
|
(70.0
|
)%
|
|||
Provision (credit) for unfunded credit losses
|
—
|
|
|
(1
|
)
|
|
1
|
|
|
(100.0
|
)%
|
|||
Other miscellaneous expenses
|
92
|
|
|
81
|
|
|
11
|
|
|
13.6
|
%
|
|||
|
$
|
861
|
|
|
$
|
911
|
|
|
$
|
(50
|
)
|
|
(5.5
|
)%
|
|
Six Months Ended June 30
|
|
Year-to-Date 6/30/2019 vs. 6/30/2018
|
|||||||||||
|
2019
|
|
2018
|
|
Amount
|
|
Percent
|
|||||||
|
(Dollars in millions)
|
|||||||||||||
Salaries and employee benefits
|
$
|
947
|
|
|
$
|
1,006
|
|
|
$
|
(59
|
)
|
|
(5.9
|
)%
|
Net occupancy expense
|
162
|
|
|
167
|
|
|
(5
|
)
|
|
(3.0
|
)%
|
|||
Furniture and equipment expense
|
160
|
|
|
162
|
|
|
(2
|
)
|
|
(1.2
|
)%
|
|||
Outside services
|
97
|
|
|
95
|
|
|
2
|
|
|
2.1
|
%
|
|||
Professional, legal and regulatory expenses
|
46
|
|
|
60
|
|
|
(14
|
)
|
|
(23.3
|
)%
|
|||
Marketing
|
46
|
|
|
51
|
|
|
(5
|
)
|
|
(9.8
|
)%
|
|||
FDIC insurance assessments
|
25
|
|
|
49
|
|
|
(24
|
)
|
|
(49.0
|
)%
|
|||
Credit/checkcard expenses
|
34
|
|
|
26
|
|
|
8
|
|
|
30.8
|
%
|
|||
Branch consolidation, property and equipment charges
|
8
|
|
|
4
|
|
|
4
|
|
|
100.0
|
%
|
|||
Visa class B shares expense
|
7
|
|
|
12
|
|
|
(5
|
)
|
|
(41.7
|
)%
|
|||
Provision (credit) for unfunded credit losses
|
(1
|
)
|
|
(5
|
)
|
|
4
|
|
|
(80.0
|
)%
|
|||
Other miscellaneous expenses
|
190
|
|
|
168
|
|
|
22
|
|
|
13.1
|
%
|
|||
|
$
|
1,721
|
|
|
$
|
1,795
|
|
|
$
|
(74
|
)
|
|
(4.1
|
)%
|
Period
|
|
Total Number of
Shares Purchased
|
|
Average Price Paid
Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Approximate Dollar Value of Shares That May Yet Be Purchased Under Publicly Announced Plans or Programs
|
||||||
April 1-30, 2019
|
|
2,500,000
|
|
|
$
|
15.42
|
|
|
2,500,000
|
|
|
$
|
151,331,881
|
|
May 1-31, 2019
|
|
10,318,352
|
|
|
$
|
14.64
|
|
|
10,318,352
|
|
|
$
|
78,981
|
|
June 1-30, 2019
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
78,981
|
|
Total 2nd Quarter
|
|
12,818,352
|
|
|
$
|
14.80
|
|
|
12,818,352
|
|
|
$
|
78,981
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
3.3
|
|
|
|
|
|
3.4
|
|
|
|
|
|
3.5
|
|
|
|
|
|
4.1
|
|
|
|
|
|
4.2
|
|
|
|
|
|
10.1
|
|
|
|
|
|
10.2
|
|
|
|
|
|
10.3
|
|
|
|
|
|
10.4
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32
|
|
|
|
|
|
101
|
|
The following materials from Regions' Form 10-Q Report for the quarterly period ended June 30, 2019, formatted in Inline XBRL: (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Income; (iii) the Consolidated Statements of Comprehensive Income; (iv) the Consolidated Statements of Changes in Stockholders' Equity; (v) the Consolidated Statements of Cash Flows; and (vi) the Notes to the Consolidated Financial Statements.
|
|
|
|
104
|
|
The cover page of Regions' Form 10-Q Report for the quarter ended June 30, 2019, formatted in Inline XBRL (included within the Exhibit 101 attachments).
|
|
|
|
DATE: August 7, 2019
|
|
Regions Financial Corporation
|
|
|
|
|
|
/S/ HARDIE B. KIMBROUGH, JR.
|
|
|
Hardie B. Kimbrough, Jr.
Executive Vice President and Controller
(Chief Accounting Officer and Authorized Officer)
|
(i)
|
Capital - Capital Action Decision Tree Status, as defined in the Capital Policy, must remain in either “Monitor Capital” or “Capital Deployment” status; and
|
(ii)
|
Liquidity - Total Primary Liquidity must remain above the minimum established by the Enterprise Risk Appetite Objectives.
|
•
|
If your employment terminates due to your death, then as soon as practicable following your death, your Award will fully vest (unless prohibited by applicable laws, rules, or regulations), and shares of Stock equivalent to the Maximum Award will be issued to your estate.
|
•
|
If your employment terminates due to (a) your Disability or (b) your Retirement (on or after age 65 or on or after you attain age 55 with 10 years of continuous service) any time on or after November 30, 2019, then (i) the portion of this Award not subject to vesting based on achievement of the Capital and Liquidity Performance Thresholds (____%) will fully vest upon your termination of employment (unless prohibited by applicable laws, rules, or regulations), and shares of Stock will be issued to you, and (ii) the portion of this Award subject to vesting based on achievement of the Capital and Liquidity Performance Thresholds (____%) will continue to vest in accordance with its terms.
|
•
|
If the Company terminates your employment without Cause but through no fault of your own (as determined in the Company’s sole discretion), the Restricted Stock Units equivalent to the Maximum Award will be prorated for the portion of the Service Vesting Period between the grant date and the date your employment terminated, and then (i) the pro rata portion of this Award not subject to vesting based on achievement of the Capital and Liquidity Performance Thresholds (____%) will fully vest upon your termination of employment (unless prohibited by applicable laws, rules, or regulations),
|
•
|
Notwithstanding anything in the Plan to the contrary, in the event of a Change in Control, the portion of your Award that is subject to vesting based on achievement of the Capital and Liquidity Performance Thresholds for any Performance Threshold Measurement Period that ends after the closing of the Change in Control will convert to time-based vesting for the duration of the applicable Performance Threshold Measurement Periods. If your employment is terminated by the Company without Cause or by you for Good Reason, in each case, within the twenty-four (24) month period following the Change in Control, this Award (i.e., the portion of this Award not subject to vesting based on achievement of the Capital and Liquidity Performance Thresholds (____%) and the portion of this Award subject to vesting based on achievement of the Capital and Liquidity Performance Thresholds but converted to time-based vesting in accordance with the preceding sentence (up to ____%)) will fully vest upon your termination of employment (unless prohibited by applicable laws, rules, or regulations), and shares of Stock equivalent to the Maximum Award will be issued to you.
|
•
|
If your employment terminates during the Service Vesting Period for any reason other than those listed above, your Award will be forfeited as of your termination date.
|
(i)
|
Capital - Capital Action Decision Tree Status, as defined in the Capital Policy, must remain in either “Monitor Capital” or “Capital Deployment” status; and
|
(ii)
|
Liquidity - Total Primary Liquidity must remain above the minimum established by the Enterprise Risk Appetite Objectives.
|
(i)
|
EPS Growth - the Company’s growth in cumulative compounded diluted earnings per share from continuing operations (“EPS Growth”); and
|
(ii)
|
ROATCE - the Company’s return on average tangible common stockholders’ equity, which is defined as net income from continuing operations available to common shareholders divided by average tangible common shareholders’ equity, with average tangible common shareholders’ equity equal to average stockholders’ equity less the sum of (a) average intangible assets, net of their related average deferred tax liability and (b) average preferred stock (“ROATCE”).
|
•
|
If your employment terminates due to your death, then as soon as practicable following your death, the Performance Threshold Measurement Periods, the Performance Vesting Period, the Service Vesting Period, and any other restrictions imposed upon your Award will lapse (unless prohibited by applicable laws, rules, or regulations), and shares of Stock equivalent to the Target Grant will be issued to your estate.
|
•
|
If your employment terminates due to your Disability, then this Award will continue to vest in accordance with its terms, and you will be entitled to receive the number of shares of Stock, if any, at the end of the Service Vesting Period that you otherwise would have received (i.e., based on actual achievement of the Performance Thresholds and the Performance Goals) had your employment continued through the date of delivery of such Stock. In the event your employment terminates due to your Disability and your death occurs prior to the end of the Service Vesting Period, then as soon as practicable following your death, all restrictions imposed upon your Award will lapse (unless prohibited by applicable laws, rules, or regulations), and shares of Stock equivalent to the Target Grant will be issued to your estate.
|
•
|
If any time on or after November 30, 2019, you terminate your employment due to Retirement (on or after age 65 or on or after you attain age 55 with 10 years of continuous service), then this Award will continue to vest in accordance with its terms, and you will be entitled to receive the number of shares of Stock, if any, at the end of the Service Vesting Period that you otherwise would have received (i.e., based on actual achievement of the Performance Thresholds and the Performance Goals) had your employment continued through the date of delivery of such Stock.
|
•
|
If the Company terminates your employment without Cause but through no fault of your own (as determined in the Company’s sole discretion), this Award will continue to vest in accordance with its terms, and you will be entitled to receive the number of shares of Stock, if any, at the end of the Service Vesting Period that you otherwise would have received (i.e., based on actual achievement of the Performance Thresholds and the Performance Goals) had your employment continued through the payment date, which amount will be prorated for the portion of the Service Vesting Period between the grant date and the date your employment terminated.
|
•
|
Notwithstanding anything in the Plan to the contrary, in the event of a Change in Control, this Award will convert to Restricted Stock Units equal to the number of shares of Stock underlying the Target Grant, which Restricted Stock Units will vest and become payable in accordance with the service-based vesting conditions in the Notice of Grant, provided you are employed by the Company as of such payment date. Notwithstanding the foregoing, if your employment is terminated by the Company without Cause or by you for Good Reason, in each case, within the twenty-four (24) month period following the Change in Control, all restrictions imposed upon your Award will lapse (unless prohibited by applicable laws, rules, or regulations), and such Restricted Stock Units will be issued to you.
|
•
|
If your employment terminates during the Service Vesting Period for any reason other than those listed above, your Award will be forfeited as of your termination date.
|
(i)
|
Capital - Capital Action Decision Tree Status, as defined in the Capital Policy, must remain in either “Monitor Capital” or “Capital Deployment” status; and
|
(ii)
|
Liquidity - Total Primary Liquidity must remain above the minimum established by the Enterprise Risk Appetite Objectives.
|
(i)
|
EPS Growth - the Company’s growth in cumulative compounded diluted earnings per share from continuing operations (“EPS Growth”); and
|
(ii)
|
ROATCE - the Company’s return on average tangible common stockholders’ equity, which is defined as net income from continuing operations available to common shareholders divided by average tangible common shareholders’ equity, with average tangible common shareholders’ equity equal to average stockholders’ equity less the sum of (a) average intangible assets, net of their related average deferred tax liability and (b) average preferred stock (“ROATCE”).
|
•
|
If your employment terminates due to your death, then as soon as practicable following your death, the Performance Threshold Measurement Periods, the Performance Vesting Period, the Service Vesting Period, and any other restrictions imposed upon your Award will lapse (unless prohibited by applicable laws, rules, or regulations), and a cash amount equal to the Target Value will be paid to your estate.
|
•
|
If your employment terminates due to your Disability, then this Award will continue to vest in accordance with its terms and you will be entitled to receive a cash payment under the PUs, if any, at the end of the Service Vesting Period that you otherwise would have received (i.e., based on actual achievement of the Performance Thresholds and the Performance Goals) had your employment continued through the payment date. In the event your employment terminates due to your Disability and your death occurs prior to the end of the Service Vesting Period, then as soon as practicable following your death, all restrictions imposed upon your Award will lapse (unless prohibited by applicable laws, rules, or regulations), and a cash amount equal to the Target Value will be paid to your estate.
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•
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If any time on or after November 30, 2019, you terminate your employment due to Retirement (on or after age 65 or on or after you attain age 55 with 10 years of continuous service), then this Award will continue to vest in accordance with its terms and you will be entitled to receive a cash payment under the PUs, if any, at the end of the Service Vesting Period that you otherwise would have received (i.e., based on actual achievement of the Performance Thresholds and the Performance Goals) had your employment continued through the payment date.
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•
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If the Company terminates your employment without Cause but through no fault of your own (as determined in the Company’s sole discretion), this Award will continue to vest in accordance with its terms and you will be entitled to receive a cash payment under the PUs, if any, at the end of the Service Vesting Period that you otherwise would have received (i.e., based on actual achievement of the Performance Thresholds and the Performance Goals) had your employment continued through the payment date, which amount will be prorated for the portion of the Service Vesting Period between the grant date and the date your employment terminated.
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•
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Notwithstanding anything in the Plan to the contrary, in the event of a Change in Control, the value of the PUs under this Award will be locked in at the Target Value and will vest and become payable in accordance with the service-based vesting conditions in the Notice of Grant, provided you are employed by the Company as of such payment date. Notwithstanding the foregoing, if your employment is terminated by the Company without Cause or by you for Good Reason, in each case, within the twenty-four (24) month period following the Change in Control, all restrictions imposed upon your Award will lapse (unless prohibited by applicable laws, rules, or regulations), and a cash payment equal to the Target Value will be paid to you.
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•
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If your employment terminates during the Service Vesting Period for any reason other than those listed above, your Award will be forfeited as of your termination date.
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Regions Financial Corporation;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/S/ JOHN M. TURNER, JR.
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John M. Turner, Jr.
President and Chief Executive Officer
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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/ DAVID J. TURNER, JR.
|
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/ JOHN M. TURNER, JR.
|
|
/S/ DAVID J. TURNER, JR.
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John M. Turner, Jr.
President and Chief Executive Officer
|
|
David J. Turner, Jr.
Chief Financial Officer
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