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Regions Financial Corporation

Regions Financial CorporationRFEarnings & Financial Report

NYSE · Financials · Regional Banks

Regions Financial Corporation is an American bank holding company headquartered in the Regions Center in Birmingham, Alabama. The company provides retail and commercial banking, trust, stock brokerage, and mortgage services. Its banking subsidiary, Regions Bank, operates about 2,000 automated teller machines and 1,300 branches in 15 states in the Southern and Midwestern United States.

What changed in Regions Financial Corporation's 10-K — 2023 vs 2024

Top changes in Regions Financial Corporation's 2024 10-K

630 paragraphs added · 589 removed · 446 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

73 edited+37 added−15 removed127 unchanged
A financial institution’s management is expected to maintain sufficient processes to effectively identify, prevent and detect a cyber-attack. A financial institution is also expected to develop appropriate processes to enable recovery of data and business operations if a critical service provider of the institution falls victim to cyber-attack.
A financial institution’s management is expected to maintain sufficient processes to effectively identify, prevent and detect a cyber-attack. A financial institution is also expected to develop appropriate processes to enable recovery of data and business operations if a critical service provider of the institution falls victim to a cyber-attack.
Accordingly, under the Tailoring Rules, Category IV firms are, among other things, (1) not subject to LCR or NSFR requirements (or, in certain cases, subject to reduced requirements), (2) remain eligible to opt-out of the requirement to recognize most elements of AOCI in regulatory capital, (3) not subject to company-run capital stress testing requirements, (4) subject to supervisory capital stress testing on a biennial instead of annual basis, (5) subject to requirements to develop and maintain a capital plan on an annual basis and (6) subject to certain liquidity risk management and risk committee requirements.
Accordingly, under the Tailoring Rules, Category IV firms are, among other things, (1) not subject to LCR or NSFR requirements (or, in certain cases, subject to reduced requirements), (2) eligible to opt-out of the requirement to recognize most elements of AOCI in regulatory capital, (3) not subject to company-run capital stress testing requirements, (4) subject to supervisory capital stress testing on a biennial instead of annual basis, (5) subject to requirements to develop and maintain a capital plan on an annual basis and (6) subject to certain liquidity risk management and risk committee requirements.
Among other things, the AMLA codifies a risk-based approach to anti-money laundering compliance for financial institutions; requires the development of standards by the U.S. Department of the Treasury for evaluating technology and internal processes for BSA compliance; and expands enforcement- and investigation-related authority, including a significant expansion in the available sanctions for certain BSA violations.
Among other things, the AMLA codifies a risk-based approach to anti-money laundering compliance for financial institutions; requires the development of standards by the U.S. Treasury for evaluating technology and internal processes for BSA compliance; and expands enforcement- and investigation-related authority, including a significant expansion in the available sanctions for certain BSA violations.
These documents are made available on our website as soon as reasonably practicable after they are electronically filed with or furnished to the SEC. The SEC also maintains an internet site (www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC, including Regions.
These documents are made available on our website as soon as reasonably practicable after they are electronically filed with or furnished to the SEC. The SEC also maintains an internet site (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC, including Regions.
Its principal executive offices are located at 1900 Fifth Avenue North, Birmingham, Alabama 35203, and its telephone number at that address is (800) 734-4667. Banking Operations Regions conducts its banking operations through Regions Bank, an Alabama state-chartered commercial bank that is a member of the Federal Reserve System.
Regions' principal executive offices are located at 1900 Fifth Avenue North, Birmingham, Alabama 35203, and its telephone number at that address is (800) 734-4667. Banking Operations Regions conducts its banking operations through Regions Bank, an Alabama state-chartered commercial bank that is a member of the Federal Reserve System.
Generally, a bank’s covered transactions with any affiliate are limited to 10% of the bank’s capital stock and surplus and covered transactions with all affiliates are limited to 20% of the bank’s capital stock and surplus. Deposit Insurance Regions Bank’s deposits are insured by the FDIC up to the applicable limits, which is currently $250,000 per account ownership type.
Generally, a bank’s covered transactions with any single affiliate are limited to 10% of the bank’s capital stock and surplus and covered transactions with all affiliates are limited to 20% of the bank’s capital stock and surplus. Deposit Insurance Regions Bank’s deposits are insured by the FDIC up to the applicable limits, which is currently $250,000 per account ownership type.
Our partnership with Guild Education Services, an education, skilling and mobility solution provider has allowed us to transition our tuition reimbursement program for associates to a best-in-class tuition assistance program that targets adult learners and provides coaching support and access to a curated catalog from Guild’s Learning Marketplace.
Our partnership with Guild, an education, skilling and mobility solution provider has allowed us to transition our tuition reimbursement program for associates to a best-in-class tuition assistance program that targets adult learners and provides coaching support and access to a curated catalog from Guild’s Learning Marketplace.
Examinations by Regions’ regulators consider not only compliance with applicable laws, regulations and supervisory policies of the agency, but also capital levels, asset quality, risk management effectiveness, the ability and performance of management and the board of directors, the effectiveness of internal controls, earnings, liquidity, interest rate risk management and various other factors.
Examinations by Regions’ regulators consider not only compliance with applicable laws, regulations and supervisory policies of the agency, but also capital levels, asset quality, risk management effectiveness, the ability and performance of management and the Board, the effectiveness of internal controls, earnings, liquidity, interest rate risk management and various other factors.
A strong and impactful human capital program begins at the top. Our Board oversees our corporate strategy and sets the tone for our culture, values and high ethical standards, and through its Committees, holds management accountable for results. The primary committee responsible for the oversight of human capital is the CHR Committee.
A strong and impactful human capital program begins at the top. Our Board oversees our corporate strategy and sets the tone for our culture, values and high ethical standards, and through its Committees, holds management accountable. The primary committee responsible for the oversight of human capital is the CHR Committee.
Regulatory Capital Requirements Regions and Regions Bank are each required to comply with applicable capital adequacy standards established by the Federal Reserve, which are based on the Basel III framework.
Senate. Regulatory Capital Requirements Regions and Regions Bank are each required to comply with applicable capital adequacy standards established by the Federal Reserve, which are based on the Basel III framework.
The severity of these mandatory and discretionary supervisory actions depends upon the capital category in which the institution is placed. Subject to a narrow exception, the FDIA requires the banking regulator to appoint a receiver or conservator for an institution that is critically undercapitalized. As of December 31, 2023, both Regions and Regions Bank were well-capitalized.
The severity of these mandatory and discretionary supervisory actions depends upon the capital category in which the institution is placed. Subject to a narrow exception, the FDIA requires the banking regulator to appoint a receiver or conservator for an institution that is critically undercapitalized. As of December 31, 2024, both Regions and Regions Bank were well-capitalized.
The Basel III-based U.S. capital rules, among other things, include both risk-based requirements, which compare three measures of capital to RWAs, as well as leverage requirements, which in the case of Category IV banking organizations such as Regions, consist of the Tier 1 leverage ratio described below.
The Basel III Rules, among other things, include both risk-based requirements, which compare three measures of capital to RWAs, as well as leverage requirements, which in the case of Category IV banking organizations such as Regions, consist of the Tier 1 leverage ratio described below.
Through the Guild program, associates can now pursue a degree or other educational opportunities tuition free while building their career at the same time. By removing barriers and expanding access to education, we are continuing our commitment to Build the Best Team.
Through the Guild program, associates can now pursue a degree or other educational opportunities while building their career at the same time. By removing barriers and expanding access to education, we are continuing our commitment to Build the Best Team.
BHC with $100 billion or more in total consolidated assets, 11 Table of Contents as well as its bank subsidiaries, to one of four categories based on its size and five other risk-based indicators: (1) cross-jurisdictional activity, (2) wSTWF, (3) non-bank assets, (4) off-balance sheet exposure and (5) status as a U.S. G-SIB.
BHC with $100 billion or more in total consolidated assets, as well as its bank subsidiaries, to one of four categories based on its size and five other risk-based indicators: (1) cross-jurisdictional activity, (2) wSTWF, (3) non-bank assets, (4) off-balance sheet exposure and (5) status as a U.S. G-SIB.
This tool provides the ability to inventory the skills our associates have, allowing us to target our development efforts on specific areas where elevated skills are needed. Regions also offers a leader and manager development program created to help people managers understand how to evaluate performance by leveraging the power of a strengths-based and engagement-focused workforce and culture.
This tool provides the ability to inventory the skills our associates have, allowing us to target our development efforts on specific areas where elevated skills are needed. Regions also offers leader development programs created to help people managers understand how to evaluate performance by leveraging the power of a strengths-based and engagement-focused workforce and culture.
We make available on our website, free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, Form DEF 14A, and current reports on Form 8-K, including exhibits, and amendments to those reports that are filed with or furnished to the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 21 Table of Contents 1934.
We make available on our website, free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, Form DEF 14A, and current reports on Form 8-K, including exhibits, and amendments to those reports that are filed with or furnished to the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934.
The guidelines prohibit excessive compensation as an unsafe and unsound practice, and describe compensation as excessive when the amounts paid are unreasonable or disproportionate to the services performed by an executive officer, employee, director or principal shareholder.
For example, the guidelines prohibit excessive compensation as an unsafe and unsound practice, and describe compensation as excessive when the amounts paid are unreasonable or disproportionate to the services performed by an executive officer, employee, director or principal shareholder.
These policies must establish loan portfolio diversification standards, prudent underwriting standards (including loan-to-value limits) that are clear and measurable, loan administration procedures and 15 Table of Contents documentation, approval and reporting requirements. The real estate lending policies must reflect consideration of the federal bank regulators’ Interagency Guidelines for Real Estate Lending Policies.
These policies must establish loan portfolio diversification standards, prudent underwriting standards (including loan-to-value limits) that are clear and measurable, loan administration procedures and documentation, approval and reporting requirements. The real estate lending policies must reflect consideration of the federal bank regulators’ Interagency Guidelines for Real Estate Lending Policies.
In addition, 17 Table of Contents consumers may also prevent disclosure among affiliated companies of certain non-public personal information that is assembled or used to determine eligibility for a product or service, such as that shown on consumer credit reports and application information.
In addition, consumers may also prevent disclosure among affiliated companies of certain non-public personal information that is assembled or used to determine eligibility for a product or service, such as that shown on consumer credit reports and application information.
The guidance sets forth the following three key principles with respect to incentive compensation arrangements: (i) the arrangements should provide employees with incentives that appropriately balance risk and financial results in a manner that does not encourage employees to expose their organizations to imprudent risk; (ii) the arrangements should be compatible with effective controls and risk management; and (iii) the arrangements should be supported by strong corporate governance.
The guidance sets forth the following three key principles with respect to incentive 18 Table of Contents compensation arrangements: (i) the arrangements should provide employees with incentives that appropriately balance risk and financial results in a manner that does not encourage employees to expose their organizations to imprudent risk; (ii) the arrangements should be compatible with effective controls and risk management; and (iii) the arrangements should be supported by strong corporate governance.
Item 1. Business Regions Financial Corporation is a FHC headquartered in Birmingham, Alabama operating in the South, Midwest and Texas. In addition, Regions operates several offices delivering specialty capabilities in New York, Washington D.C., Chicago and other locations nationwide.
Item 1. Business Regions Financial Corporation is a FHC headquartered in Birmingham, Alabama operating in the South, Midwest and Texas. In addition, Regions operates several offices delivering specialty capabilities in New York, Washington D.C., Chicago, Salt Lake City, and other locations nationwide.
Also available on our website are our (i) Corporate Governance Principles, (ii) Code of Business Conduct and Ethics, (iii) Code of Ethics for Senior Financial Officers, (iv) Fair Disclosure Policy, (v) the charters of our Audit Committee, Compensation and Human Resources Committee, Nominating and Corporate Governance Committee, Risk Committee, Technology Committee, and Executive Committee, and (vi) a number of ESG reports and documents.
Also available on our website are our (i) Corporate Governance Principles, (ii) Code of Business Conduct and Ethics, (iii) Code of Ethics for Senior Financial Officers, (iv) Fair Disclosure Policy, (v) the charters of our Audit Committee, Compensation and Human Resources Committee, Nominating and Corporate Governance Committee, Risk Committee, Technology Committee, and Executive Committee, and (vi) a number of voluntary disclosures, reports and other documents.
Properly managing risks is critical to the conduct of safe and sound banking activities and has become even more important as new technologies, product innovation and the size and speed of financial transactions have changed the nature of 14 Table of Contents banking markets.
Properly managing risks is critical to the conduct of safe and sound banking activities and has become even more important as new technologies, product innovation and the size and speed of financial transactions have changed the nature of banking markets.
The program should be designed to ensure the security and confidentiality of customer information, protect against unanticipated threats or hazards to the security or integrity of such information, and protect against unauthorized access to or use of such information that could result in substantial harm or inconvenience to any customer.
The program should be designed to ensure the security and confidentiality of customer information, protect against unanticipated 17 Table of Contents threats or hazards to the security or integrity of such information, and protect against unauthorized access to or use of such information that could result in substantial harm or inconvenience to any customer.
For those roles which we fill externally, we continually build talent pipelines with an eye toward not only current needs, but also future demands of our business. Regions uses innovative tools and structured processes to achieve our goals including applications and resources designed to reach larger and more diverse audiences.
For those roles which we fill externally, we continually build talent pipelines with an eye toward not only current needs, but also future demands of our business. Regions uses innovative tools and structured processes to achieve our goals including applications and resources designed to reach broader audiences.
The proposal would introduce a new measure of risk-weighted assets, which would reflect the proposed new standardized approaches for credit risk, operational risk and credit valuation adjustment risk, as well as a proposed new measure for market risk that would be based on both internal models and standardized supervisory models of market risk.
The proposal would introduce a new measure of RWAs, which would reflect the proposed new standardized approaches for credit risk, operational risk and credit valuation adjustment risk, as well as a proposed new measure for market risk that would be based on both internal models and standardized supervisory models of market risk.
OFAC also administers sanctions lists that have various associated prohibitions, including the Specially Designated Nationals and Blocked Persons List. U.S. persons are prohibited 19 Table of Contents from dealing with Specially Designated Nationals regardless of location, and all assets of Specially Designated Nationals and Blocked Persons are blocked.
OFAC also administers sanctions lists that have various associated prohibitions, including the Specially Designated Nationals and Blocked Persons List. U.S. persons are prohibited from dealing with Specially Designated Nationals regardless of location, and all assets of Specially Designated Nationals and Blocked Persons are blocked.
Federal law also requires financial institutions to implement a written information security program that includes administrative, technical, and physical safeguards appropriate to the size and complexity of the institution and the nature and scope of its activities.
Federal law also requires financial institutions to implement a written IS Program that includes administrative, technical, and physical safeguards appropriate to the size and complexity of the institution and the nature and scope of its activities.
Liquidity Requirements Under the Tailoring Rules, Category IV firms with less than $50 billion in wSTWF, including Regions and Regions Bank, are not subject to a LCR requirement or any NSFR requirement. However, BHCs that are Category IV firms are subject to minimum monthly liquidity buffers and liquidity stress testing requirements under the Federal Reserve’s enhanced prudential standards.
Liquidity Requirements Under the Tailoring Rules, Category IV firms with less than $50 billion in wSTWF, including Regions and Regions Bank, are not subject to an LCR or any NSFR. However, BHCs that are Category IV firms are subject to minimum quarterly liquidity buffers and liquidity stress testing requirements under the Federal Reserve’s enhanced prudential standards.
FHCs must obtain prior approval from the Federal Reserve before acquiring certain 16 Table of Contents non-bank financial companies with assets exceeding $10 billion. FHCs seeking approval to complete an acquisition must be well-capitalized and well-managed.
FHCs must obtain prior approval from the Federal Reserve before acquiring certain non-bank financial companies with assets exceeding $10 billion. FHCs seeking approval to complete an acquisition must be well-capitalized and well-managed.
The need to attract, retain and develop the right talent to accomplish our strategic plan is central to our success. As of December 31, 2023, Regions and its subsidiaries had 20,101 full-time equivalent employees supporting our consumer and commercial banking, wealth management and mortgage product and services primarily across the Southeast and Midwest.
The need to attract, retain and develop the right talent to accomplish our strategic plan is central to our success. As of December 31, 2024, Regions and its subsidiaries had 19,644 full-time equivalent employees supporting our consumer and commercial banking, wealth management and mortgage product and services primarily across the Southeast and Midwest.
The federal bank regulatory agencies have indicated that paying dividends that deplete an institution’s capital base to an inadequate level would be an unsafe and unsound banking practice. Under the FDIA, an insured institution may not pay a dividend if payment would cause it to become undercapitalized or if it already is undercapitalized. See “Safety and Soundness Standards” above.
The federal bank regulatory agencies have indicated that paying dividends that deplete an institution’s capital base to an inadequate level would be an unsafe and unsound banking practice. Under the FDIA, an insured institution may not pay a dividend if payment would cause it to become undercapitalized or if it already is undercapitalized. See “FDIA and Prompt Corrective Action” above.
This proposal is subject to a comment period. The Company will continue to evaluate this proposal and the potential impacts, if adopted as proposed. For more information, see the “Regulatory Requirements” section of Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report on Form 10-K.
This proposal was subject to a comment period that closed January 16, 2024. The Company will continue to evaluate this proposal and the potential impacts, if adopted as proposed. For more information, see the “Regulatory Requirements” section of Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report on Form 10-K.
Treasuries, with the maximum dividend rate capped at six percent. Regions Bank and its affiliates are also subject to supervision, regulation and examination by the CFPB with respect to consumer protection laws and regulations.
Treasuries, with the maximum dividend rate capped at six percent. Regions Bank and its affiliates that provide consumer financial products and services are also subject to supervision, regulation and examination by the CFPB with respect to consumer protection laws and regulations.
At December 31, 2023, Regions operated 2,023 ATMs and 1,271 total branch outlets primarily across the South, Midwest and Texas. The following table reflects the distribution of branch locations in each of the states in which Regions conducts its banking operations.
At December 31, 2024, Regions operated 2,011 ATMs and 1,253 total branch outlets primarily across the South, Midwest and Texas. The following table reflects the distribution of branch locations in each of the states in which Regions conducts its banking operations.
In addition, in the spring of 2022, federal banking regulators have imposed a new cybersecurity-related notification rule that requires banking organizations, including Regions and Regions Bank to notify their primary federal regulator as soon as possible and within 36 hours of incidents that, among other things, have materially disrupted or degraded, or are reasonably likely to materially disrupt or degrade, the banking organization’s ability to deliver services to a material portion of its customer base, jeopardize the viability of key operations of the banking organization or impact the stability of the financial sector.
In addition, in the spring of 2022, federal banking regulators have imposed a new cybersecurity-related notification rule that requires banking organizations, including Regions and Regions Bank to notify their primary federal regulator as soon as possible and within 36 hours of incidents that, among other things, have materially disrupted or degraded, or are reasonably likely to materially disrupt or degrade, the banking organization’s ability to deliver services to a material portion of its customer base, or ability to carry out key operations of the banking organization, the failure of which would pose a threat to the stability of the U.S. financial sector.
We expect this trend of state-level activity to persist and we are continually monitoring developments in the states in which our customers are located. Moreover, the United States Congress has considered, and is currently considering, various proposals for more comprehensive data privacy and cybersecurity legislation, to which Regions and/or Regions Bank may be subject to if passed.
Moreover, the United States Congress has considered, and is currently considering, various proposals for more comprehensive data privacy and cybersecurity legislation, to which Regions and/or Regions Bank may be subject if passed. We expect this trend of state and federal activity to persist, and we continue to monitor such developments in the geographic areas in which our customers are located.
The FDIC also concurrently maintained the Designated Reserve Ratio for the DIF at 2 percent. In November 2023, the FDIC issued a final rule to implement a special assessment to recoup losses to the DIF associated with bank failures in the first half of 2023.
The FDIC also concurrently maintained the Designated Reserve Ratio for the DIF at 2 percent. In November 2023, the FDIC issued a final rule to implement a special assessment to recoup losses to the DIF associated with bank failures in the first half of 2023, which became effective on April 1, 2024.
At December 31, 2023, Regions had total consolidated assets of approximately $152.2 billion, total consolidated deposits of approximately $127.8 billion and total consolidated shareholders’ equity of approximately $17.4 billion. The terms “Regions,” the “Company,” “we,” “us” and “our” as used herein mean collectively Regions Financial Corporation, a Delaware corporation, together with its subsidiaries when or where appropriate.
At December 31, 2024, Regions had total consolidated assets of approximately $157.3 billion, total consolidated deposits of approximately $127.6 billion and total consolidated shareholders’ equity of approximately $17.9 billion. The terms “Regions,” the “Company,” “we,” “us” and “our” as used herein mean collectively Regions Financial Corporation, a Delaware corporation, together with its subsidiaries when or where appropriate.
The CHR Committee strategically meets with subject matter experts regarding talent management and acquisition, succession planning, associate conduct, associate learning and development, diversity, equity, and inclusion, and associate retention.
The CHR Committee strategically meets with subject matter experts regarding talent management and acquisition, succession planning, associate conduct, associate learning and development, inclusive practices, and associate retention.
This plan did not include an increase in the deposit insurance assessment rate. Based on the FDIC’s recent projections, however, the FDIC determined that the DIF reserve ratio is at risk of not reaching the statutory minimum by the statutory deadline of September 30, 2028 without increasing the deposit insurance assessment rates.
Based on the FDIC’s recent projections, however, the FDIC determined that the DIF reserve ratio is at risk of not reaching the statutory minimum by the statutory deadline of September 30, 2028 without increasing the deposit insurance assessment rates.
Branches Florida 272 Tennessee 198 Alabama 186 Georgia 117 Mississippi 99 Texas 90 Louisiana 82 Arkansas 57 Missouri 49 Illinois 41 Indiana 40 South Carolina 18 Kentucky 9 North Carolina 7 Iowa 5 Utah 1 Total 1,271 Other Financial Services Operations In addition to its banking operations, Regions and its subsidiaries deliver specialty capabilities including merger and acquisition advisory services, capital markets solutions, home improvement lending, investment services, equipment financing for commercial clients and small business customers, low income housing tax credit corporate fund syndication and asset management, financing to CRA-qualified customers, investments and insurance products, broker-dealer services to commercial clients, and others.
Branches Florida 270 Tennessee 195 Alabama 185 Georgia 117 Mississippi 98 Texas 86 Louisiana 80 Arkansas 55 Missouri 48 Illinois 40 Indiana 40 South Carolina 18 Kentucky 9 North Carolina 6 Iowa 5 Utah 1 Total 1,253 Other Financial Services Operations In addition to its banking operations, Regions and its subsidiaries deliver specialty capabilities including merger and acquisition advisory services, capital markets solutions, home improvement lending, investment advisory services, equipment financing for commercial clients and small business customers, low income housing tax credit corporate fund syndication and asset management, financing to CRA-qualified customers, investment and insurance products, broker-dealer services to commercial clients, and others.
The rule is expected to result in a significant increase in the thresholds for large banks to receive “Outstanding” ratings in the future. The rule is expected to take effect on April 1, 2024, with most of the provisions becoming applicable on January 1, 2026.
The rule is expected to result in a significant increase in the thresholds for large banks to receive “Outstanding” ratings in the future. The rule was originally intended to take effect on April 1, 2024, with most of the provisions becoming applicable on January 1, 2026 and reporting of the collected data would not be required until 2027.
Reporting of the collected data will not be required until 2027. 18 Table of Contents Compensation Practices Our compensation practices are subject to oversight by the Federal Reserve. The federal banking regulators have provided guidance designed to ensure that incentive compensation arrangements at banking organizations take into account risk and are consistent with safe and sound practices.
Compensation Practices Our compensation practices are subject to oversight by the Federal Reserve. The federal banking regulators have provided guidance designed to ensure that incentive compensation arrangements at banking organizations take into account risk and are consistent with safe and sound practices.
We will continue to evaluate the impact of any changes in law and any new regulations promulgated, including changes in regulatory costs and fees, modifications to consumer products or disclosures and the requirements of the enhanced supervision provisions, among others.
Yet, such changes may have a material impact on Regions’ business, financial condition or results of operations. We will continue to evaluate the impact of any changes in law and any new regulations promulgated, including changes in regulatory costs and fees, modifications to consumer products or disclosures and the requirements of the enhanced supervision provisions, among others.
We also consider it critical to our success to invest in the professional development of all of our associates. We emphasize our commitment to professional development through opportunities such as technical, skills-based, management, and leadership training programs; formal talent and performance management processes; and sustainable career paths.
We emphasize our commitment to professional development through opportunities such as technical, skills-based, management, and leadership training programs; formal talent and performance management processes; and sustainable career paths.
Blocked assets (e.g., property and bank deposits) cannot be paid out, withdrawn, set off or transferred in any manner without a general or specific license from OFAC. Failure to comply with these sanctions could have serious legal and reputational consequences.
Blocked assets (e.g., property and bank deposits) cannot be paid out, withdrawn, set off or transferred in any manner without a general or specific license from OFAC.
As a Category IV banking organization, the capital degradation component of the SCB is calculated every other year, in even-numbered years. During a year in which a Category IV banking organization does not undergo a supervisory stress test, it will receive an updated SCB requirement that reflects its updated planned common stock dividends.
During a year in which a Category IV banking organization does not undergo a supervisory stress test, it will receive an updated SCB requirement that reflects its updated planned common stock dividends.
Depositor Preference Under federal law, claims of depositors and certain claims for both administrative expenses and employee compensation against an insured depository institution would be afforded a priority over other general unsecured claims against such an institution in the “liquidation or other resolution” of such an institution by any receiver.
Whether and how the guidance might be further changed or interpreted by the new administration is uncertain. 16 Table of Contents Depositor Preference Under federal law, claims of depositors and certain claims for both administrative expenses and employee compensation against an IDI would be afforded a priority over other general unsecured claims against such an institution in the “liquidation or other resolution” of such an institution by any receiver.
Additionally, on a quarterly basis the CHR Committee reviews the HCM Dashboard which includes a mixture of trending and point-in-time metrics designed to provide information and analysis of workforce demographics; talent acquisition; workforce stability (retention, turnover, etc.); and associate conduct and engagement. 20 Table of Contents In order to build the best team, it is necessary for us to fill talent needs with qualified, diverse and engaged associates.
Additionally, on a quarterly basis the CHR Committee reviews the HCM Dashboard which includes a mixture of trending and point-in-time metrics designed to provide information and analysis of workforce demographics; talent acquisition; workforce stability (retention, turnover, etc.); and associate conduct and engagement.
These regulatory agencies generally have broad enforcement authority and discretion to impose restrictions and limitations on the operations of a regulated entity, including the imposition of substantial monetary penalties and non-monetary requirements against a regulated entity where the relevant agency determines that the operations of the regulated entity or any of its subsidiaries fail to comply with applicable laws or regulations, are conducted in an unsafe or unsound manner or represent an unfair or deceptive act or practice.
These regulatory agencies generally have broad enforcement authority and discretion to impose restrictions and limitations on the operations of a regulated entity, including the imposition of substantial monetary penalties and non-monetary requirements against a regulated entity where the relevant agency determines that the operations of the regulated entity or any of its subsidiaries fail to comply with applicable laws or regulations, are conducted in an unsafe or unsound manner or represent an unfair or deceptive act or practice. 10 Table of Contents Permissible Activities under the BHC Act The BHC Act limits the activities permissible for BHCs to the business of banking, managing or controlling banks and such other activities as the Federal Reserve has determined to be so closely related to banking as to be properly incidental thereto.
As a Category IV banking organization, Regions’ SCB is determined through the Federal Reserve’s CCAR supervisory stress tests which include analyses using baseline and severely adverse economic and financial scenarios. Regions’ SCB requirement is determined by adding the Federal Reserve’s modeled capital degradation, in the supervisory severely adverse scenario, plus four quarters of planned common stock dividends.
As a Category IV banking organization, Regions’ SCB is determined through the Federal Reserve’s CCAR supervisory stress tests which include analyses using baseline and severely adverse economic and financial scenarios.
The FDIC imposes a risk-based deposit premium assessment system that determines assessment rates for an IDI based on an assessment rate calculator, which is based on a number of elements to measure the risk each IDI poses to the DIF. The assessment rate is applied to total average assets less tangible equity, as defined under the Dodd-Frank Act.
The FDIC imposes a risk-based deposit premium assessment system that determines assessment rates for an IDI based on an assessment rate calculator, which is based on a number of elements to measure the risk each IDI poses to the 15 Table of Contents DIF.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report on Form 10-K. FDIC Recordkeeping Requirements As a part of the FDIC Part 370 recordkeeping requirements, Regions is subject to facilitate rapid and accurate payment of FDIC-insured deposits to customers when large IDIs fail.
FDIC Recordkeeping Requirements As a part of the FDIC Part 370 recordkeeping requirements, Regions is subject to facilitate rapid and accurate payment of FDIC-insured deposits to customers when large IDIs fail.
Regions provides an array of digital products and services to our customers and we expect a bank’s digital offerings to be a key competitive differentiator. The continued move toward digital banking and financial services, combined with customer expectations regarding digital offerings, will require us to invest greater resources in technological improvements.
The continued move toward digital banking and financial services, combined with customer expectations regarding digital offerings, will require us to invest greater resources in technological improvements.
The FDIC separately requires insured depositary institutions with $100 billion or more in total assets, such as Regions Bank, to submit to the FDIC periodic plans for resolution in the event of the bank’s failure. Regions Bank submitted its most recent resolution plan in November 2022.
Resolution Planning Category IV firms such as Regions are not required to submit 165(d) resolution plans. The FDIC separately requires insured depositary institutions with $50 billion or more in total assets, such as Regions Bank, to submit to the FDIC periodic plans for resolution in the event of the bank’s failure.
Applicable banking laws and regulations also place restrictions on loans by FDIC-insured banks and their affiliates to their directors, executive officers and principal shareholders.
For Regions Bank, this limit includes credit exposures arising from loan and equivalent exposure and investment and trading exposure. Applicable banking laws and regulations also place restrictions on loans by FDIC-insured banks and their affiliates to their directors, executive officers and principal shareholders.
The agencies have identified a spectrum of risks facing banking institutions including, but not limited to, credit, market, liquidity, operational, legal, compliance and reputational risk. Some of the regulatory pronouncements have focused on operational risk, which arises from the potential that inadequate information systems, operational problems, breaches in internal controls, fraud or unforeseen catastrophes will result in unexpected losses.
Some of the regulatory pronouncements have focused on operational risk, which arises from the potential that inadequate information systems, operational problems, 13 Table of Contents breaches in internal controls, fraud or unforeseen catastrophes will result in unexpected losses.
New products and services, third-party risk management and cybersecurity are critical sources of operational risk that financial institutions are expected to address in the current environment. Regions Bank is expected to have active board and senior management oversight; adequate policies, procedures and limits; adequate risk measurement, monitoring and management information systems; and comprehensive and effective internal controls.
To address safety and soundness, Regions Bank is expected to have active board and senior management oversight; adequate policies, procedures and limits; adequate risk measurement, monitoring and management information systems; and comprehensive and effective internal controls.
The regulations could reduce the fees that Regions receives, alter the way Regions provides its products and services or expose Regions to greater risk of private litigation or regulatory enforcement action.
The regulations could reduce the fees that Regions receives, alter the way Regions provides its products and services or expose Regions to greater risk of private litigation or regulatory enforcement action. For example, the CFPB has, among other things, issued final rules as part of an initiative to reduce the amounts and types of fees financial institutions may charge.
The assessment rate schedule can change from time to time at the discretion of the FDIC, subject to certain limits. Under the current system, premiums are assessed quarterly. The FDIC, as required under the FDIA, established a plan in September 2020 to restore the DIF reserve ratio to meet or exceed the statutory minimum of 1.35 percent within eight years.
The FDIC, as required under the FDIA, established a plan in September 2020 to restore the DIF reserve ratio to meet or exceed the statutory minimum of 1.35 percent within eight years. This plan did not include an increase in the deposit insurance assessment rate.
The Company will continue to evaluate this proposal, as well as any potential future changes to the proposal, and the potential impacts on Regions.
The proposal has not been finalized. Recent public statements suggest changes to the proposal will ultimately be made before it is finalized. The Company will continue to evaluate this proposal, as well as any potential future changes to the proposal, and the potential impacts on Regions.
For Regions Bank, the buffer requirement is the 2.5 percent SCB. See Note 12 "Regulatory Capital Requirements and Restrictions" in Item 8. “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for details on minimum capital ratios and those needed to be well capitalized.
“Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for details on minimum capital ratios and those needed to be well capitalized.
Regulation of Broker Dealers and Investment Advisers Our subsidiaries, Regions Securities LLC and BlackArch Securities LLC, are registered broker-dealers with the SEC and FINRA, and Regions Investment Management, Inc. and Highland Associates, Inc. are registered investment advisers with the SEC. These subsidiaries are, as a result, subject to regulation and examination by the SEC, FINRA and other self-regulatory organizations.
These subsidiaries are, as a result, subject to regulation and examination by the SEC, FINRA and other self-regulatory organizations.
Limits on Exposure to One Borrower and Exposure to Insiders Alabama banking law imposes limits on the amount of credit a bank can extend to any one person (or group of related persons). For Regions Bank, this limit includes credit exposures arising from loan and equivalent exposure and investment and trading exposure.
This support may be required at times when Regions may not be inclined to provide it. 14 Table of Contents Limits on Exposure to One Borrower and Exposure to Insiders Alabama banking law imposes limits on the amount of credit a bank can extend to any one person (or group of related persons).
Furthermore, as a Category IV firm, Regions is obligated, at a minimum, to: (i) calculate collateral positions monthly; (ii) establish a more limited set of liquidity risk limits; (iii) monitor elements of intraday liquidity risk exposures; and (iv) report liquidity data on the FR 2052a on a monthly basis. 13 Table of Contents Resolution Planning Category IV firms such as Regions are not required to submit 165(d) resolution plans.
Additionally, as a 12 Table of Contents Category IV firm, Regions is required to engage in certain practices, including, but not limited to: (i) calculating collateral positions monthly; (ii) establishing an internally determined set of liquidity risk limits; (iii) monitoring elements of intraday liquidity risk exposures; and (iv) reporting liquidity data on the FR 2052a on a monthly basis.
Banking and other financial services statutes, regulations and policies are continually under review by United States Congress, state legislatures and federal and state regulatory agencies. In addition to laws and regulations, state and federal bank regulatory agencies may issue policy statements, interpretive letters and similar written guidance applicable to Regions and its subsidiaries.
In addition to laws and regulations, state and federal bank regulatory agencies may issue policy statements, interpretive letters and similar written guidance applicable to Regions and its subsidiaries. Regions cannot predict future changes in the applicable laws, regulations and regulatory agency policies, including any changes resulting from changes in the U.S. presidential administration and U.S. Congress.
Support of Subsidiary Banks Under the Dodd-Frank Act, Regions is expected to act as a source of financial strength to, and to commit resources to support, its subsidiary bank. This support may be required at times when Regions may not be inclined to provide it.
In addition, the DGCL does not permit Regions to repurchase shares of its capital stock where the repurchase would cause an impairment of the capital of the corporation. Support of Subsidiary Banks Under the Dodd-Frank Act, Regions is expected to act as a source of financial strength to, and to commit resources to support, its subsidiary bank.
For Category III and IV institutions, this includes removing the AOCI opt-out in calculating regulatory capital. The proposed effective date is July 1, 2025, subject to a three-year transition period ending July 1, 2028, over which the expanded total risk-weighted assets would be phased in.
For Category III and IV institutions, this includes removing the AOCI opt-out in calculating regulatory capital. The proposal, if enacted, would have an effective date of July 1, 2025, with certain elements, such as the recognition of accumulated other comprehensive income in regulatory capital and changes in risk-weighted assets calculated under the Expanded Risk-Based Approach, having a three-year phase-in period.
The rule also imposes requirements on bank service providers to notify their affected banking organization customers of certain computer-security incidents. Further, in 2023, the SEC issued regulations requiring public companies to disclose certain information regarding material cybersecurity incidents impacting those companies, as well as descriptions about how they manage material cybersecurity risks.
The rule also imposes requirements on bank service providers to notify their affected banking organization customers of certain computer-security incidents.
Our recruiting technology is agile, user friendly and allows us to offer to candidates a robust understanding of our needs, requirements and a view of our culture to support the building of a diverse, engaged workforce. Diversity, equity and inclusion are fundamental to our corporate strategy.
Our recruiting technology is agile, user friendly and allows us to offer to candidates a robust understanding of our needs, requirements and a view of our culture to support the building of an inclusive and engaged workforce. 20 Table of Contents Regions provides transparency into our workforce demographics by disclosing 2023 EEO-1 results on our 2023 Workforce Demographics Report available on our website, www.regions.com.
Supervision and Regulation We are subject to the extensive regulatory framework applicable to BHCs and their subsidiaries. This framework is intended primarily for the protection of depositors, the FDIC’s DIF and the banking system as a whole, and is not intended for the protection of shareholders or other investors.
This framework is intended primarily for the protection of depositors, the FDIC’s DIF and the banking system as a whole and is not intended for the protection of shareholders or other investors. 9 Table of Contents Banking and other financial services statutes, regulations and policies are continually under review by U.S. Congress, state legislatures and federal and state regulatory agencies.
The Regions Information Security Program is designed to reflect the requirements of these regulatory requirements and guidance.
In addition to the GLBA, we are subject to various other federal and state laws, regulations, rules and standards. The Regions IS Program is designed to reflect the regulatory requirements and guidance.
Removed
Regions cannot predict future changes in the applicable laws, regulations and regulatory agency policies, including 10 Table of Contents any changes resulting from changes in the U.S. presidential administration. Yet, such changes may have a material impact on Regions’ business, financial condition or results of operations.
Added
Business Segments Regions operates under three reportable segments: Corporate Bank, Consumer Bank, and Wealth Management, with the remainder in Other. See "Note 22 "Business Segment Information" in Item 8. “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for details on each of Regions reportable segments.
Removed
Permissible Activities under the BHC Act The BHC Act limits the activities permissible for BHCs to the business of banking, managing or controlling banks and such other activities as the Federal Reserve has determined to be so closely related to banking as to be properly incidental thereto.
Added
Supervision and Regulation We are subject to the extensive regulatory and supervisory framework applicable to BHCs and their subsidiaries.
Removed
While Regions was not required to participate in 2023 supervisory stress testing, the Company did receive its SCB reflecting planned capital changes including plans to increase its common stock dividend. For the fourth quarter of 2023 12 Table of Contents through the third quarter of 2024, the SCB continues to be floored at 2.5 percent, the regulatory minimum.
Added
Pause on Major Federal Reserve Rulemakings In January 2025, the Federal Reserve stated that Vice Chair for Supervision Michael Barr would step down from the position, effective February 28, 2025. The Federal Reserve stated that it will not issue any major rulemaking from the time of the announcement until a new vice chair for supervision is confirmed by the U.S.
Removed
In August 2023, the FDIC issued a proposal to amend its rules requiring covered IDIs, including Regions Bank, to periodically submit resolution plans to the FDIC.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

114 edited+45 added−21 removed232 unchanged
These statutory provisions and provisions in our certificate of incorporation, including the rights of the holders of our preferred stock, could result in Regions being less attractive to a potential acquirer and thus adversely affect our share value. 37 Table of Contents Our amended and restated bylaws designate (i) the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our shareholders and (ii) the federal district courts of the United States as the sole and exclusive forum for any action asserting a cause of action arising under the Securities Act, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with our company or our company’s directors, officers or other employees .
These statutory provisions and provisions in our certificate of incorporation, including the rights of the holders of our preferred stock, could result in Regions being less attractive to a potential acquirer and thus adversely affect our share value. 38 Table of Contents Our amended and restated bylaws designate (i) the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our shareholders and (ii) the federal district courts of the United States as the sole and exclusive forum for any action asserting a cause of action arising under the Securities Act, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with our company or our company’s directors, officers or other employees .
Furthermore, any failure or perceived failure by us to comply with applicable privacy or data protection laws, rules and regulations may subject it to inquiries, examinations and investigations that could result in requirements to modify or cease certain operations or practices, significant liabilities or regulatory fines, penalties or other sanctions.
Furthermore, any failure or perceived failure by us to comply with applicable privacy or data protection laws, rules and regulations may subject us to inquiries, examinations and investigations that could result in requirements to modify or cease certain operations or practices, significant liabilities or regulatory fines, penalties or other sanctions.
Talent Management Risks • Our businesses may be adversely affected if we are unable to hire and retain qualified employees. • Our operations rely on its ability, and the ability of key external parties, to maintain appropriately-staffed workforces, and on the competence, trustworthiness, health and safety of employees.
Talent Management Risks • Our businesses may be adversely affected if we are unable to hire and retain qualified employees. • Our operations rely on our ability, and the ability of key external parties, to maintain appropriately-staffed workforces, and on the competence, trustworthiness, health and safety of employees.
Our ability to operate our businesses efficiently and profitably, to offer products and services that meet the expectations of our clients and customers, and to maintain an effective risk management framework is highly dependent on our ability to staff its operations appropriately and on the competence, integrity, health and safety of our employees.
Our ability to operate our businesses efficiently and profitably, to offer products and services that meet the expectations of our clients and customers, and to maintain an effective risk management framework is highly dependent on our ability to staff our operations appropriately and on the competence, integrity, health and safety of our employees.
These factors are influenced by both the pricing and mix of interest-earning assets and interest-bearing liabilities which, in turn, are impacted by external factors such as the local economy, competition for loans and deposits, the monetary policy of the FOMC and interest rates markets.
These factors are influenced by both the pricing and mix of interest-earning assets and interest-bearing liabilities which, in turn, are impacted by external factors such as the local economy, competition and demand for loans and deposits, the monetary policy of the FOMC and interest rates markets.
The cost of our deposits and short-term wholesale borrowings is heavily impacted by market-based liquidity conditions and interest rates, factors which are influenced directly and indirectly by a mixture of effects including the FOMC’s monetary policy and economic conditions.
The cost of our deposits and short-term wholesale borrowings is heavily impacted by market-based liquidity conditions and interest rates, factors which are influenced directly and indirectly by a mixture of effects including the FOMC’s monetary policy, and economic and financial conditions.
For more information concerning our legal and regulatory obligations with respect to Basel III and long-term debt requirements, please see the “Supervision and Regulation-Regulatory Capital Requirements” discussion within Item 1.
For more information concerning our legal and regulatory obligations with respect to Basel III Rules and long-term debt requirements, please see the “Supervision and Regulation-Regulatory Capital Requirements” discussion within Item 1.
Our operations rely on its ability, and the ability of key external parties, to maintain appropriately staffed workforces, and on the competence, trustworthiness, health and safety of employees.
Our operations rely on our ability, and the ability of key external parties, to maintain appropriately staffed workforces, and on the competence, trustworthiness, health and safety of employees.
The ratings assigned to Regions and Regions Bank remain subject to change at any time, and it is possible that any ratings agency will take action to downgrade Regions, Regions Bank or both in the future. Additionally, ratings agencies may also make substantial changes to their ratings policies and practices, which may affect our credit ratings.
The ratings assigned to Regions and Regions Bank remain subject to change at any time, and it is possible that any ratings agency could take action to downgrade Regions, Regions Bank or both in the future. Additionally, ratings agencies may also make substantial changes to their ratings policies and practices, which may affect our credit ratings.
Any of these could damage our reputation and otherwise adversely affect our businesses. In recent years, well-publicized incidents involving the inappropriate collection, use, sharing or storage of personal information have led to expanded governmental scrutiny of practices relating to the safeguarding of personal information by companies.
Any of these could damage our reputation and otherwise adversely affect our businesses. In recent years, well-publicized incidents involving the inappropriate collection, use, sharing, storage or other processing of personal information have led to expanded governmental scrutiny of practices relating to the safeguarding and other processing of personal information by companies.
A significant portion of our operations is located in the areas bordering the Gulf of Mexico and the Atlantic Ocean, regions that are susceptible to hurricanes, or in areas of the Southeastern U.S. that are susceptible to tornadoes and other severe weather events. In particular, in recent years, a number of severe hurricanes impacted areas in our footprint.
A significant portion of our operations is located in the areas bordering the Gulf region and the Atlantic Ocean, regions that are susceptible to hurricanes, or in areas of the Southeastern U.S. that are susceptible to tornadoes and other severe weather events. In particular, in recent years, a number of severe hurricanes impacted areas in our footprint.
In addition, such measures cannot predict the nature, timing or level of severe weather events or prevent the disruption that a catastrophic earthquake, fire, hurricane, tornado or other severe weather event could cause to the markets that we serve and any resulting adverse impact on our customers, such as hindering our borrowers’ ability to timely repay their loans and diminishing the value of any collateral held by us.
In addition, such measures cannot predict the nature, timing or level of severe weather events or prevent the disruption that a catastrophic earthquake, fire, hurricane, tornado or other severe weather event could cause to the markets that we serve and any resulting adverse impact on our customers, such as hindering our borrowers’ ability to timely repay their loans and diminishing the value 41 Table of Contents of any collateral held by us.
Man-made disasters and other events connected with the Gulf of Mexico or Atlantic Ocean, such as oil spills, could have similar effects. Climate change could intensify the severity of and increase the frequency of adverse effects of weather-related events impacting us and our customers.
Man-made disasters and other events connected with the Gulf region or Atlantic Ocean, such as oil spills, could have similar effects. Climate change could intensify the severity of and increase the frequency of adverse effects of weather-related events impacting us and our customers.
We are subject to extensive governmental regulation, which could have an adverse impact on our operations. We are subject to extensive state and federal regulation, supervision and examination governing almost all aspects of our operations, which limits the businesses in which we may permissibly engage.
We are subject to extensive governmental regulation, which could have an adverse impact on our operations and our business model. We are subject to extensive state and federal regulation, supervision and examination governing almost all aspects of our operations, which limits the businesses in which we may permissibly engage.
Cybersecurity risks for large financial institutions, such as us, have increased significantly in recent years in part because of the proliferation of technology-based products and services and the increased sophistication and activities of organized 27 Table of Contents crime, hackers, terrorists, nation-states, nation state-supported actors, activists and other external parties. This increase is expected to continue and further intensify.
Cybersecurity risks for large financial institutions, such as us, have increased significantly in recent years in part because of the proliferation of technology-based products and services and the increased sophistication and activities of organized crime, hackers, terrorists, nation-states, nation state-supported actors, activists and other external parties. This increase is expected to continue and further intensify.
The process for obtaining required regulatory approvals, particularly for large financial institutions, like Regions, can be difficult, time-consuming and unpredictable. We may fail to pursue, evaluate or complete strategic and competitively 35 Table of Contents significant business opportunities as a result of our inability, or our perceived inability, to obtain required regulatory approvals in a timely manner or at all.
The process for obtaining required regulatory approvals, particularly for large financial institutions, like Regions, can be difficult, time-consuming and unpredictable. We may fail to pursue, evaluate or complete strategic and competitively significant business opportunities as a result of our inability, or our perceived inability, to obtain required regulatory approvals in a timely manner or at all.
In addition, enforcement matters could impact our supervisory and CRA ratings, which may in turn restrict or limit our activities. Additional information relating to our litigation, investigations and other proceedings is discussed in Note 23 “Commitments, Contingencies and Guarantees” to the consolidated financial statements of this Annual Report on Form 10-K.
In addition, enforcement matters could impact our supervisory and CRA ratings, which may in turn restrict or limit our activities. 34 Table of Contents Additional information relating to our litigation, investigations and other proceedings is discussed in Note 23 “Commitments, Contingencies and Guarantees” to the consolidated financial statements of this Annual Report on Form 10-K.
A failure to maintain or enhance our competitive position with respect to technology, whether because of a failure to anticipate client expectations, a failure in the performance of technological developments or an untimely roll out of developments, may cause us to lose market share or incur additional expense. Strategic Risks Industry competition may adversely affect our degree of success.
A failure to maintain or enhance our competitive position with respect to technology, whether because of a failure to anticipate client expectations, a failure in the performance of technological developments or an untimely roll out of developments, may cause us to lose market share or incur additional expense. 29 Table of Contents Strategic Risks Industry competition may adversely affect our degree of success.
Second lien position lending carries higher credit risk because any decrease in real estate pricing may result in the value of the collateral being insufficient to cover the second lien after the first lien position has been satisfied. As of December 31, 2023, approximately $2.0 billion of our home equity lines and loans were in a second lien position.
Second lien position lending carries higher credit risk because any decrease in real estate pricing may result in the value of the collateral being insufficient to cover the second lien after the first lien position has been satisfied. As of December 31, 2024, approximately $2.2 billion of our home equity lines and loans were in a second lien position.
In 2022, the FDIC adopted a final rule to increase initial base deposit insurance assessment rate schedules by 2 basis points, which began with the first quarterly assessment period of 2023. The final rule requires the revised rates to remain in effect until the DIF reserve ratio meets or exceeds 1.35 percent.
In 2022, 36 Table of Contents the FDIC adopted a final rule to increase initial base deposit insurance assessment rate schedules by 2 basis points, which began with the first quarterly assessment period of 2023. The final rule requires the revised rates to remain in effect until the DIF reserve ratio meets or exceeds 1.35 percent.
Volatility and uncertainty related to inflation and the effects of inflation, which has led to increased costs for businesses and consumers and potentially contribute to poor business and economic conditions generally and may enhance or contribute to some of the risks of our business.
Volatility and uncertainty related to inflation and the effects of inflation, which has led to increased costs for businesses and consumers and potentially contribute to poor business economic conditions, has and may continue to enhance or contribute to some of the risks of our business.
These factors could result in higher delinquencies and greater charge-offs in future periods, which could materially adversely affect our business, financial condition or results of operations. Weakness in the commercial real estate markets could adversely affect our performance. As of December 31, 2023, approximately 9.0% of our loan portfolio consisted of investor real estate loans.
These factors could result in higher delinquencies and greater charge-offs in future periods, which could materially adversely affect our business, financial condition or results of operations. Weakness in the commercial real estate markets could adversely affect our performance. As of December 31, 2024, approximately 9.0 percent of our loan portfolio consisted of investor real estate loans.
The techniques used by cyber criminals change frequently, may not be recognized until launched (or may evade detection for considerable time), can be initiated from a variety of sources, including terrorist organizations and hostile foreign governments, and may see their frequency increased, and effectiveness enhanced, by the use of artificial intelligence.
The techniques used by cyber criminals change frequently, may not be recognized until launched (or may evade detection for considerable time), can be initiated from a variety of sources, including terrorist organizations and hostile foreign governments, and may see their frequency increased, and effectiveness enhanced, by the use of AI.
Although these past events have not resulted in a breach of our client data or account information, such attacks have adversely affected the performance of Regions Bank’s website, www.regions.com, and, in some instances, prevented customers from accessing Regions Bank’s secure websites for consumer and commercial applications.
Although these past events have not resulted in a breach of our client data or account information, such attacks have adversely affected the performance of Regions Bank’s website, www.regions.com, and, in some instances, prevented customers from accessing Regions Bank’s secure websites for 27 Table of Contents consumer and commercial applications.
Because of the uncertainty of estimates involved in these matters, we may be required to do one or more of the following: significantly increase the allowance for credit losses and/or sustain credit losses that are significantly higher than the allowance provided; recognize significant losses on assets carried at fair value; recognize significant impairment on our goodwill, other intangible assets or deferred tax asset balances; significantly increase our accrued income taxes; or significantly decrease the value of our residential MSRs.
Because of the uncertainty of estimates involved in these matters, we may be required to do one or more of the following: significantly increase the allowance for credit losses and/or sustain credit losses that are significantly higher than the allowance provided; recognize significant losses on assets carried at fair value; recognize significant impairment on our goodwill, other intangible assets or deferred tax asset balances; significantly increase our accrued income taxes; or 40 Table of Contents significantly decrease the value of our MSRs.
As new privacy and cybersecurity-related laws, regulations, rules and standards are implemented, the time and resources needed for us 28 Table of Contents to comply with such laws, regulations, rules and standards as well as our potential liability for non-compliance and reporting obligations in the case of cybersecurity or other similar incidents, may significantly increase.
As new privacy and cybersecurity-related laws, regulations, rules and standards are implemented, the time and resources needed for us to comply with such laws, regulations, rules and standards as well as our potential liability for non-compliance and reporting obligations in the case of cybersecurity or other similar incidents, may significantly increase.
Our regulatory capital position is discussed in greater detail in Note 12 "Regulatory Capital Requirements and Restrictions" to the consolidated financial statements of this Annual Report on Form 10-K. 34 Table of Contents We are subject to a variety of risks in connection with any sale of loans we may conduct.
Our regulatory capital position is discussed in greater detail in Note 12 "Regulatory Capital Requirements and Restrictions" to the consolidated financial statements of this Annual Report on Form 10-K. We are subject to a variety of risks in connection with any sale of loans we may conduct.
These risks also include the possibility that the value of the investment could decrease considerably, and dividends or other distributions concerning the investment could be reduced or eliminated. Discussed below are risk factors that could adversely affect our financial results and condition, as well as the value of, and return on investment in the Company.
These risks also include the possibility that the value of the investment could decrease considerably, and dividends or other distributions concerning the investment could be reduced or eliminated. 21 Table of Contents Discussed below are risk factors that could adversely affect our financial results and condition, as well as the value of, and return on investment in the Company.
If this information is inaccurate, we may be subject to regulatory action, reputational harm or other adverse effects with respect to the operation of our business, our financial condition and our results of operations. We are exposed to risk of environmental liability when we take title to property.
If this information is 32 Table of Contents inaccurate, we may be subject to regulatory action, reputational harm or other adverse effects with respect to the operation of our business, our financial condition and our results of operations. We are exposed to risk of environmental liability when we take title to property.
If Regions Bank is unable to make 36 Table of Contents dividend payments to us and sufficient cash or liquidity is not otherwise available, we may not be able to make dividend payments to our common and preferred shareholders or principal and interest payments on our outstanding debt. See the “Shareholders’ Equity” section of Item 7.
If Regions Bank is unable to make dividend payments to us and sufficient cash or liquidity is not otherwise available, we may not be able to make dividend payments to our common and preferred shareholders or principal and interest payments on our outstanding debt. See the “Shareholders’ Equity” section of Item 7.
We face substantial legal and operational risks in safeguarding personal information. Our businesses are subject to complex and evolving laws and regulations governing the privacy and protection of personal information of individuals.
We face substantial legal and operational risks in our safeguarding and other processing of personal information. Our businesses are subject to complex and evolving laws and regulations governing the privacy and protection of personal information of individuals.
That scrutiny has in some cases resulted in, and could in the future lead to, the adoption of stricter laws, rules and regulations relating to the collection, use, sharing and storage of personal information.
That scrutiny has in some cases resulted in, and could in the future lead to, the adoption of stricter laws, rules and regulations relating to the collection, use, sharing, storage and other processing of personal information.
Certain fraud risks, including identity theft and account takeover, may increase as a result of customers’ account or personally identifiable information being obtained through breaches of retailers’ or other third parties’ networks. Examples of external fraud we face include fraudulent checks, stolen checks and other check-related fraud.
Certain fraud risks, including identity theft and account takeover, may increase as a result of customers’ account or personal information being obtained through breaches of retailers’ or other third parties’ networks. Examples of external fraud we face include fraudulent checks, stolen checks and other check-related fraud.
If we become subject to significant environmental liabilities, our business, financial condition or results of operations could be adversely affected. 32 Table of Contents We can be negatively affected if we fail to identify and address operational risks associated with the introduction of or changes to products, services and delivery platforms.
If we become subject to significant environmental liabilities, our business, financial condition or results of operations could be adversely affected. We can be negatively affected if we fail to identify and address operational risks associated with the introduction of or changes to products, services and delivery platforms.
Although the exact amount of additional collateral is unknown, it is reasonable to conclude that we may be required to post additional collateral related to existing contracts with contingent credit features. Changes in the soundness of other financial institutions could adversely affect us.
Although the exact amount of additional collateral is unknown, it is reasonable to conclude that we may be required to post additional collateral related to existing contracts with contingent credit features. 25 Table of Contents Changes in the soundness of other financial institutions could adversely affect us.
Additional risks could arise in connection with any failure or perceived failure by us, our service providers or other third parties with which we do business to provide adequate disclosure or transparency to our customers about the personal information collected from them and its use, to receive, document or honor the privacy preferences expressed by our customers, to protect personal information from unauthorized disclosure or to maintain proper training on privacy practices for all employees or third parties who have access to personal information in our possession or control.
Additional risks may also arise in connection with a failure or perceived failure by us, our service providers or other third parties with which we do business to provide adequate disclosure or transparency to our customers about the personal information collected from them and its use, to receive, document or honor the privacy preferences expressed by our customers, to protect personal information from unauthorized disclosure or to maintain proper training on privacy practices for all employees or third parties who have access to personal information in our possession or control.
“Business,” and for more information concerning our compliance with capital and liquidity requirements, see Note 12 “Regulatory Capital Requirements and Restrictions” to the consolidated financial statements of this Annual Report on Form 10-K. Rulemaking changes and regulatory initiatives implemented by the CFPB may result in higher regulatory and compliance costs that may adversely affect our results of operations.
“Business,” and for more information concerning our compliance with capital requirements, see Note 12 "Regulatory Capital Requirements and Restrictions" to the consolidated financial statements of this Annual Report on Form 10-K. Rulemaking changes and regulatory initiatives implemented by the CFPB may result in higher regulatory and compliance costs that may adversely affect our results of operations.
The specific ESG factors considered, as well as the approach to incorporating the factors into a broader investment process, vary by investor and can shift over time. Our failure to align with, or remain aligned with, investors’ ESG-related priorities may negatively impact the trading price of our common stock. Damage to our reputation could significantly harm our businesses.
The specific factors considered, as well as the approach to incorporating the factors into a broader investment process, vary by investor and can shift over time. Our failure to align with, or remain aligned with, these priorities may negatively impact the trading price of our common stock. Damage to our reputation could significantly harm our businesses.
Any mishandling or misuse or personal information by us or third party affiliated with us could expose us to litigation or regulatory fines, penalties or other sanctions.
Any mishandling or misuse of personal information by us or a third party affiliated with us could expose us to litigation or regulatory fines, penalties or other sanctions.
Our management periodically determines the allowance for credit losses based on available information, including the quality of the loan portfolio, the value of the underlying collateral and the level of non-accrual loans, taking into account relevant information about past events, current conditions and reasonable and supportable forecasts of future economic conditions that affect the collectability of our loan portfolio.
Our management periodically determines the allowance for credit losses based on available information, including the quality of the loan portfolio, the value of the underlying collateral and the level of non-accrual loans, taking into account relevant information about past events, current conditions and R&S forecasts of future economic conditions that affect the collectability of our loan portfolio.
Individuals whose personal information may be protected by law can include our customers (and in some cases our customers’ customers), prospective customers, job applicants, employees, and the employees of our vendors and third parties.
Individuals whose personal information may be protected by law can include our customers (and in some cases our customers’ customers), prospective customers, job applicants, employees, and the employees of our vendors, service providers and other third parties.
They require management to make difficult, subjective or complex judgments about matters that are uncertain. Materially different amounts could be reported under different conditions or using different assumptions or estimates. The Company’s critical accounting estimates include: the allowance for credit losses; fair value measurements; intangible assets; residential MSRs; and income taxes.
They require management to make difficult, subjective or complex judgments about matters that are uncertain. Materially different amounts could be reported under different conditions or using different assumptions or estimates. The Company’s critical accounting estimates include: the allowance for credit losses; fair value measurements; intangible assets; mortgage servicing rights; and income taxes.
Legal, Regulatory and Compliance Risks • We are, and may in the future be, subject to litigation, investigations and governmental proceedings that may result in liabilities adversely affecting our financial condition, business or results of operations or in reputational harm. • We are subject to extensive governmental regulation, which could have an adverse impact on our operations. • We are subject to a variety of risks in connection with any sale of loans we may conduct. • We may be subject to more stringent capital and liquidity requirements. • Rulemaking changes and regulatory initiatives implemented by the CFPB may result in higher regulatory and compliance costs that may adversely affect our results of operations. • We may not be able to complete future acquisitions, may not be successful in realizing the benefits of any future acquisitions that are completed or may choose not to pursue acquisition opportunities we might find beneficial. • Increases in FDIC insurance assessments may adversely affect our earnings. • Unfavorable results from ongoing stress analyses may adversely affect our ability to retain customers or compete for new business opportunities. • We are a holding company and depend on our subsidiaries for dividends, distributions and other payments. • We may not pay dividends on shares of our capital stock. • Anti-takeover and banking laws and certain agreements and charter provisions may adversely affect share value. • Our amended and restated bylaws designate (i) the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our shareholders and (ii) the federal district courts of the United States as the sole and exclusive forum for any action asserting a cause of action arising under the Securities Act, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with our company or our company’s directors, officers or other employees. • We face substantial legal and operational risks in safeguarding personal information. • Differences in regulation can affect our ability to compete effectively.
Legal, Regulatory and Compliance Risks • We are, and may in the future be, subject to litigation, investigations and governmental proceedings that may result in liabilities adversely affecting our financial condition, business or results of operations or in reputational harm. • We are subject to extensive governmental regulation, which could have an adverse impact on our operations and our business model. 22 Table of Contents • We are subject to a variety of risks in connection with any sale of loans we may conduct. • We may be subject to more stringent capital and liquidity requirements. • Rulemaking changes and regulatory initiatives implemented by the CFPB may result in higher regulatory and compliance costs that may adversely affect our results of operations. • We are subject to numerous laws designed to protect consumers, including the CRA and fair lending laws, and a failure to comply with these laws could lead to a wide variety of penalties and other sanctions. • We may not be able to complete future acquisitions, may not be successful in realizing the benefits of any future acquisitions that are completed or may choose not to pursue acquisition opportunities we might find beneficial. • Increases in FDIC insurance assessments may adversely affect our earnings. • Unfavorable results from ongoing stress analyses may adversely affect our ability to retain customers or compete for new business opportunities. • We are a holding company and depend on our subsidiaries for dividends, distributions and other payments. • We may not pay dividends on shares of our capital stock. • Anti-takeover and banking laws and certain agreements and charter provisions may adversely affect share value. • Our amended and restated bylaws designate (i) the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our shareholders and (ii) the federal district courts of the United States as the sole and exclusive forum for any action asserting a cause of action arising under the Securities Act, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with our company or our company’s directors, officers or other employees. • We face substantial legal and operational risks in our safeguarding and other processing of personal information. • Differences in regulation can affect our ability to compete effectively.
Moreover, the market’s expectation of the future course of FOMC policy and economic factors interact to influence the path for market interest rates and the shape of the yield curve.
Moreover, the market’s expectation of the future course of FOMC policy and economic factors interact to influence the path for market interest rates, relative interest rate relationships and the shape of the yield curve.
Proposed changes to applicable capital and liquidity requirements, such as the Basel III proposal and the long-term debt proposal, could result in increased expenses or cost of funding, which could negatively affect our financial results or our ability to pay dividends and engage in share repurchases.
Proposed changes to applicable capital, liquidity and similar requirements, such as the Basel III endgame proposal and the long-term debt proposal, could result in increased expenses or 35 Table of Contents cost of funding, which could negatively affect our financial results or our ability to pay dividends and engage in share repurchases.
We expect to make additional investments in innovation and technology to address technological 29 Table of Contents disruption in the industry and improve client offerings and service. These changes allow us to better serve the our clients and to reduce costs.
We expect to make additional investments in innovation and technology to address technological disruption in the industry and improve client offerings and service. These changes allow us to better serve the our clients and to reduce costs.
We cannot be sure that such insurance will continue to be available to us 40 Table of Contents on commercially reasonable terms, or at all, or that our insurers will not deny coverage as to any future claim.
We cannot be sure that such insurance will continue to be available to us on commercially reasonable terms, or at all, or that our insurers will not deny coverage as to any future claim.
Although we endeavor to comply with our privacy policies, we may at times fail to do so or be alleged to have failed to do so.
Although we endeavor to comply with our privacy policies, we may at times or in the future fail to do so or be alleged to have failed to do so.
Regulations affecting banks and other financial institutions are undergoing continuous review and frequently change, and the ultimate effect of such changes cannot be predicted.
Regulations affecting banks and other financial institutions face continuous review, frequently change, and the ultimate effect of such changes cannot be predicted.
Estimates and Assumptions Risks • Our reported financial results depend on management’s selection of accounting methods and certain assumptions and estimates. • If the models that we use in our business perform poorly or provide inadequate information, our business or results of operations may be adversely affected. • Changes in our accounting policies or in accounting standards could materially affect how we report our financial results and condition. • The value of our goodwill and other intangible assets may decline in the future.
Estimates and Assumptions Risks • Our reported financial results depend on management’s selection of accounting methods and certain assumptions and estimates. • If the models that we use in our business perform poorly or provide inadequate information, our business or results of operations may be adversely affected. • Changes in our accounting policies or in accounting standards could materially affect how we report our financial results and condition.
Reputational Risks • We are subject to environmental, social and governance risks that could adversely affect our business, reputation and the trading price of our common stock. • Damage to our reputation could significantly harm our businesses.
Reputational Risks • We are subject to ESG risks that could adversely affect our business, reputation and the trading price of our common stock. • Damage to our reputation could significantly harm our businesses.
We provide traditional commercial, retail and mortgage banking services, as well as other financial services including asset management, wealth management, securities brokerage, merger-and-acquisition advisory services and other specialty 23 Table of Contents financing.
We provide traditional commercial, retail and mortgage banking services, as well as other financial services including asset management, wealth management, securities brokerage, merger-and-acquisition advisory services and other specialty financing.
While a persistently elevated, or 24 Table of Contents increasing, rate environment from current levels would continue to support net interest income, elevated rates also increase the cost of funding and competition for deposits.
While a persistently elevated, or increasing, rate environment from current levels would continue to support net interest income, elevated rates also increase the cost of funding and the potential for higher levels of competition for deposits.
Additionally, a growing number of investors (in particular institutional investors who hold and manage substantial equity positions, in some cases in nearly all major U.S. listed companies) are integrating ESG factors into their analysis of the expected risk and return of potential investments.
Additionally, a number of investors (in particular institutional investors who hold and manage substantial equity positions, in some cases in nearly all major U.S. listed companies) consider ESG-related factors in their analysis of the expected risk and return of potential investments.
Operational Risks • We are subject to a variety of operational risks, including the risk of fraud or theft by internal or external parties, which may adversely affect our business and results of operations. • We rely on other companies to provide key components of our business infrastructure. • We depend on the accuracy and completeness of information about clients and counterparties. 22 Table of Contents • We are exposed to risk of environmental liability when we take title to property. • We can be negatively affected if we fail to identify and address operational risks associated with the introduction of or changes to products, services and delivery platforms. • Enhanced regulatory and other standards for the oversight of vendors and other service providers can result in higher costs and other potential exposures.
Operational Risks • We are subject to a variety of operational risks, including the risk of fraud or theft by internal or external parties, which may adversely affect our business and results of operations. • We rely on other companies to provide key components of our business infrastructure. • We depend on the accuracy and completeness of information about clients and counterparties. • We are exposed to risk of environmental liability when we take title to property. • We can be negatively affected if we fail to identify and address operational risks associated with the introduction of or changes to products, services and delivery platforms. • Enhanced regulatory and other standards for the oversight of vendors and other service providers can result in higher costs and other potential exposures. • We are, and may in the future be, subject to claims and litigation calling into question our right to use the intellectual property underlying certain technology in our business.
For more information see the “We are subject to environmental, social and governance risks that could adversely affect our business, reputation and the trading price of our common stock” and “Weakness in commodity businesses could adversely affect our performance” risk factors above. 41 Table of Contents Item 1B. Unresolved Staff Comments None.
For more information see the “We are subject to ESG risks that could adversely affect our business, reputation and the trading price of our common stock” and “Weakness in commodity businesses could adversely affect our performance” risk factors above. Item 1B. Unresolved Staff Comments None.
The range of potential rate paths over the coming year is wide and will ultimately be driven by the path of inflation, labor market performance and economic growth. Estimates for net interest income exposure to interest rate changes have been reduced recently.
While the FOMC has initiated a rate easing cycle, the range of potential rate paths over the coming year is wide and will ultimately be driven by the path of inflation, labor market performance and economic growth. Estimates for net interest income exposure to interest rate changes have been reduced recently.
We rely on the mortgage secondary market to manage various risks. In 2023, we sold 35.1% of the mortgage loans we originated to the Agencies. We rely on the Agencies to purchase loans that meet their conforming loan requirements in order to reduce our credit risk and provide funding for additional loans we desire to originate.
We rely on the mortgage secondary market to manage various risks. In 2024, we sold 52.2 percent of the mortgage loans we originated to the Agencies. We rely on the Agencies to purchase loans that meet their conforming loan requirements in order to reduce our credit risk and provide funding for additional loans we desire to originate.
Home equity lending includes both home equity loans and lines of credit. At December 31, 2023, the Company's home equity portfolio included approximately $3.2 billion of home equity lines of credit and $2.4 billion of closed-end home equity loans (primarily originated as amortizing loans).
At December 31, 2024, the Company's home equity portfolio included approximately $3.2 billion of home equity lines of credit and $2.4 billion of closed-end home equity loans (primarily originated as amortizing loans).
Adverse changes in the economic conditions in these regions could materially adversely affect our business, results of operations or financial condition. 30 Table of Contents Weakness in the residential real estate markets could adversely affect our performance. As of December 31, 2023, consumer residential real estate loans represented approximately 26.3% of our total loan portfolio.
Adverse changes in the economic conditions in these regions could materially adversely affect our business, results of operations or financial condition. Weakness in the residential real estate markets could adversely affect our performance. As of December 31, 2024, consumer residential real estate loans represented approximately 26.5 percent of our total loan portfolio.
Effective liquidity management is essential for the operation of our business. We require sufficient liquidity to meet customer loan requests, customer deposit maturities/withdrawals, payments on our debt obligations as they come due and other cash commitments under both normal operating conditions and unpredictable circumstances causing industry or general financial market stress.
We require sufficient liquidity to meet customer loan requests, customer deposit maturities/withdrawals, payments on our debt obligations as they come due and other cash commitments under both normal operating conditions and unpredictable circumstances causing industry or general financial market stress.
Regulations and laws may be modified or repealed at any time, and new legislation may be enacted that will affect us, including those resulting from any changes to control of branches of the U.S government or leadership of administrative agencies resulting from upcoming elections.
Regulations, laws and guidance may be modified or repealed at any time, and new legislation may be enacted that will affect us, including those resulting from any changes to control of branches of the U.S government, as well as changes in leadership of most federal administrative agencies.
Differences in regulation can affect our ability to compete effectively. The content and application of laws and regulations affecting financial services firms sometimes vary according to factors such as the size of the firm, the jurisdiction in which it is organized or operates and other criteria.
“Business” and the “Technology Risks” discussion within in Item 1. “Risk Factors.” Differences in regulation can affect our ability to compete effectively. The content and application of laws and regulations affecting financial services firms sometimes vary according to factors such as the size of the firm, the jurisdiction in which it is organized or operates and other criteria.
Any such matters may result in material adverse consequences to our results of operations, financial condition or ability to conduct our business, including adverse judgments, settlements, fines, penalties (including civil money penalties under applicable banking laws), injunctions, restitution, orders, restrictions on our business activities or other relief.
Any such matters may result in material adverse consequences to our results of operations, financial condition or ability to conduct our business, including adverse judgments, settlements, fines, penalties (including civil money penalties under applicable banking laws), injunctions, restitution, orders, restrictions on our business activities, restrictions on mergers and acquisitions, limits to the fees we are able to charge, or other relief.
As a result, shares of our capital stock are effectively subordinated to all existing and future liabilities and obligations of our subsidiaries. At December 31, 2023, our subsidiaries’ total deposits and borrowings were approximately $128.3 billion. We may not pay dividends on shares of our capital stock.
As a result, shares of our capital stock are effectively subordinated to all existing and future liabilities and obligations of our subsidiaries. At December 31, 2024, our subsidiaries’ total deposits and borrowings were approximately $130.6 billion. 37 Table of Contents We may not pay dividends on shares of our capital stock.
The laws and regulations governing our business are intended primarily for the protection of our depositors, our customers, the financial system and the FDIC insurance fund, not our shareholders or other creditors.
The laws and regulations governing our business are intended primarily for the protection of our depositors, our customers, the FDIC's DIF and the banking financial system, not our shareholders or other creditors.
From time to time, the FASB and SEC change the financial accounting and reporting standards that govern the preparation of our financial statements. These changes can be difficult to predict and can materially impact how we record and report our financial condition and results of operations. The value of our goodwill and other intangible assets may decline in the future.
From time to time, the FASB and SEC change the financial accounting and reporting standards that govern the preparation of our financial statements. These changes can be difficult to predict and can materially impact how we record and report our financial condition and results of operations.
Risk Factor Summary Market Risks • Our businesses have been, and may continue to be, adversely affected by conditions in the financial markets and economic conditions generally. • Fluctuations in market interest rates, including the level and shape of the yield curve, may adversely affect our performance. • Transitions away from and the replacement of benchmark rates could adversely impact our business, financial condition and results of operations.
Risk Factor Summary Market Risks • Our businesses have been, and may continue to be, adversely affected by conditions in the financial markets and economic conditions generally. • Fluctuations in market interest rates, including the level and shape of the yield curve, may adversely affect our performance.
These types of laws, rules and regulations could prohibit or significantly restrict financial services firms such as us from sharing information among affiliates or with third parties such as vendors, and thereby increase compliance costs, or could restrict our use of personal data when developing or offering products or services to customers. 38 Table of Contents These restrictions could also inhibit our development or marketing of certain products or services, or increase the costs of offering them to customers.
These types of laws, rules and regulations could prohibit or significantly restrict financial services firms such as us from sharing information among affiliates or with third parties such as vendors or service providers, and thereby increase compliance costs, or could restrict our use of personal information when developing or offering products or services to customers.
Furthermore, disputes with counterparties concerning the valuation of collateral may increase in times of significant market stress, volatility or illiquidity, and we could suffer losses during these periods if we are unable to realize the fair value of collateral or to manage declines in the value of collateral. 26 Table of Contents Liquidity Risks Ineffective liquidity management could adversely affect our financial results and condition.
Furthermore, disputes with counterparties concerning the valuation of collateral may increase in times of significant market stress, volatility or illiquidity, and we could suffer losses during these periods if we are unable to realize the fair value of collateral or to manage declines in the value of collateral.
Losses in excess of the existing allowance for credit losses will reduce our net income and could adversely affect our business, results of operations or financial condition, perhaps materially. In addition, bank regulatory agencies will periodically review our allowance for credit losses and the value attributed to non-accrual loans and to real estate acquired through foreclosure.
In addition, bank regulatory agencies will periodically review our allowance for credit losses and the value attributed to non-accrual loans and to real estate acquired through foreclosure. Such regulatory agencies may require us to adjust our determination of the value for these items. These adjustments could materially adversely affect our business, results of operations or financial condition.
Since its formation, the CFPB has finalized a number of significant rules and introduced new regulatory initiatives, including, without limitation, by way of its enforcement authority and through public statements, that could have a significant impact on our business and the financial services industry more generally.
The CFPB has finalized a number of significant rules and introduced new regulatory initiatives, including, without limitation, by way of its enforcement authority and through public statements, that could have a significant impact on our business and the financial services industry more generally. We may also be required to add additional compliance personnel or incur other significant compliance-related expenses.
Such changes could affect the Company’s ability or willingness to provide certain products or services, necessitate changes to the Company’s business practices or have an adverse effect on our results of operations.
While the new administration may impact the government's position on fees, the changes proposed by the former administration could affect the Company’s ability or willingness to provide certain products or services, necessitate changes to the Company’s business practices or have an adverse effect on our results of operations.
Any of these actions could adversely affect our reported financial condition and results of operations. 39 Table of Contents If the models that we use in our business perform poorly or provide inadequate information, our business or results of operations may be adversely affected.
Any of these actions could adversely affect our reported financial condition and results of operations. If the models that we use in our business perform poorly or provide inadequate information, our business or results of operations may be adversely affected. We utilize quantitative models and machine learning models to assist in measuring risks and estimating or predicting certain financial values.
High vacancy and lower occupancy rates could also result in rents falling. The combination of these factors could result in deterioration in the fundamentals underlying the commercial real estate market and the deterioration in value of some of our loans. Any such deterioration could adversely affect the ability of our borrowers to repay the amounts due under their loans.
The combination of these factors could result in deterioration in the fundamentals underlying the commercial real estate market and the deterioration in value of some of our loans, as well as the ability of our borrowers to repay the amounts due under their loans.
The major ratings agencies regularly evaluate us, and their ratings are based on a number of factors, including our financial strength and conditions affecting the financial services industry generally.
Any future reductions in our credit ratings may increase our funding costs and place limitations on business activities. The major ratings agencies regularly evaluate us, and their ratings are based on a number of factors, including our financial strength and conditions affecting the financial services industry generally.
There are statutory and regulatory limitations on the payment of dividends by Regions Bank to us, as well as by us to our shareholders. Regulations of both the Federal Reserve and the State of Alabama affect the ability of Regions Bank to pay dividends and other distributions to us and to make loans to the holding company.
Regulations of both the Federal Reserve and the State of Alabama affect the ability of Regions Bank to pay dividends and other distributions to us and to make loans to the holding company.
Reputational Risks We are subject to environmental, social and governance risks that could adversely affect our business, reputation and the trading price of our common stock . We are subject to a variety of risks, including reputational risk, associated with environmental, social and governance, or ESG, issues.
Reputational Risks We are subject to ESG risks that could adversely affect our business, reputation and the trading price of our common stock .
Failing to comply with expectations and standards from investors, customers, regulators, policymakers and other stakeholders regarding ESG-related issues, or taking action in conflict with one or another of those stakeholders’ expectations, could also lead to loss of business, adverse publicity, an adverse impact on our reputation, customer complaints or public protests.
Failing to comply with expectations and standards, or taking action in conflict with one or multiple of those stakeholders’ expectations, could also lead to loss of business, impacts on our talent management strategy, adverse publicity, an adverse impact on our reputation, customer complaints or public protests.
Credit losses are inherent in the business of making loans and could have a material adverse effect on our operating results. We make various assumptions and judgments about the collectability of our loan portfolio and provide an allowance for credit losses based on a number of factors.
We make various assumptions and judgments about the collectability of our loan portfolio and provide an allowance for credit losses based on a number of factors.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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The Board's Risk Committee annually reviews and approves the Information Security Policy; reviews information and regular reports on the topic from members of management on at least a quarterly basis; and recommends actions and other steps to be taken, as it deems appropriate.
The Board's Risk Committee annually reviews and approves Regions' Information Security Policy; reviews information and regular reports on the topic from members of management on at least a quarterly basis; and recommends actions and other steps to be taken, as it deems appropriate.
For example, third parties may be used to assist in the event of a breach or to mitigate certain threats to Regions' environment. Internally, the Company regularly provides associates with cybersecurity training and education. To bolster these practices, Regions maintains cybersecurity insurance, which is reviewed annually, to cover potential financial losses from cyber events.
For example, third parties may be used to assist in the event of a breach or to mitigate certain threats to Regions' environment. Internally, the Company regularly provides associates with cybersecurity training and education at least annually. To bolster these practices, Regions maintains cybersecurity insurance, which is reviewed annually, to cover potential financial losses from cyber events.
The Board annually reviews the information security program and, through its various committees, is briefed at least quarterly on cybersecurity matters. In addition, our management follows a risk-based escalation process to notify the Audit Committee and Risk Committee outside of the regular reporting cycle when they identify an emerging risk or material issue. Cybersecurity Incidents.
The Board annually reviews the IS Program and, through its various committees, is briefed at least quarterly on cybersecurity matters. In addition, our management follows a risk-based escalation process to notify the Audit Committee and Risk Committee outside of the regular reporting cycle when they identify an emerging or risk or material issue.
The Board’s Technology Committee is charged with oversight of the overall role of technology in executing Regions’ business strategy and coordinates with the Risk Committee on risk assessment and management associated with technology-related strategic investments, major technology vendor relationships, and risks associated with information technology and security 42 Table of Contents activities.
The Board’s Technology Committee is charged with oversight of the overall role of technology in executing Regions’ business strategy and coordinates with the Risk Committee on risk assessment and management associated with technology-related strategic investments, major technology vendor relationships, and risks associated with information technology and security activities.
Regions will continue to develop and enhance controls, processes and technology to respond to evolving disruptive technology and to protect its systems from attacks or unauthorized access.
Regions is aiming to continue to develop and enhance controls, processes and technology to respond to evolving disruptive technology and to protect its systems from attacks or unauthorized access.
Thereafter, each engagement is reassessed on the established cadence associated with the inherent-risk tier, and performance scorecards are competed to ensure optimal delivery and to denote material changes in the engagement. Risk Management.
Thereafter, each engagement is reassessed on the established cadence associated with the inherent-risk tier, and performance scorecards are completed to to denote material changes in the engagement. Risk Management and Strategy.
The Information Security Policy establishes technical, administrative, and physical control directives that are implemented to protect informational assets from reasonably foreseeable risks and threats. The IS Program is supplemented by cybersecurity operations that protect the integrity and availability of information systems. As discussed above, Regions' TPRM function also conducts due diligence and ongoing oversight of the Company’s third-party vendors.
The IS Program is supplemented by cybersecurity operations that protect the integrity and availability of information systems. As discussed above, Regions' TPRM function also conducts due diligence and ongoing oversight of the Company’s third-party vendors.
The IS Program includes information security policies, procedures, and controls designed to prevent, detect, limit and respond to cyber-attack or other similar incidents which might impact Regions' technologies, systems, and networks. Regions' IS Program is designed and implemented to substantially align with standards promulgated by the NIST.
To manage cybersecurity risk, the Company has designed and implemented an IS Program that is led by our Chief Information Security Officer. The IS Program includes information security policies, procedures, and controls designed to prevent, detect, limit and respond to cyber-attacks or other similar incidents which might impact Regions' technologies, systems, and networks.
The Board considers both business and technical resilience, cybersecurity and technological innovation, and privacy considerations, along with related risk considerations and mitigation efforts, within the Company’s strategic plan. The Board is actively engaged in the oversight of Regions’ continuous efforts to reinforce and enhance its operational resilience and receives education on the cybersecurity landscape.
The Board is actively engaged in the oversight of Regions’ continuous efforts to reinforce and enhance its operational resilience and receives education on the cybersecurity landscape.
In addition, Regions participates in information sharing organizations to gather and share information with peer banks and other financial institutions to better prepare and protect its information systems from attack as well as topics including fraud. Governance.
In addition, Regions participates in information sharing organizations to gather and share information with peer banks and other financial institutions to better prepare and protect its information systems from attack. Governance. Regions’ system of internal controls also incorporates an organization-wide protocol for the reporting and escalation of cybersecurity matters, including to management and the Board.
In 2023, we did not identify any cybersecurity threats or incidents that have materially affected or are reasonably likely to materially affect our business strategy, results of operations or financial condition. Despite our efforts, we cannot eliminate all risks from cybersecurity threats, or provide assurances that we have not experienced an undetected cybersecurity incident.
We are not aware of any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents that have materially affected or are reasonably likely to materially affect the Company, including our business strategy, results of operations or financial condition.
To manage cybersecurity risk, the Company has designed and implemented an IS Program that is led by our Chief Information Security Officer, who has close to two decades of experience in the cybersecurity field, including leadership roles at multiple financial services organizations.
Our Chief Information Security Officer, who has close to two decades of experience in the cybersecurity field, including leadership roles at multiple financial services organizations, has primary responsibility for our IS Program. Cybersecurity Incidents. We have not experienced any material losses relating to cybersecurity threats or incidents for the year ended December 31, 2024.
Removed
Regions’ system of internal controls also incorporates an organization-wide protocol for the reporting and escalation of cybersecurity matters, including to management and the Board. The Board also receives updates on the Company’s enterprise services, which includes resilience, information technology, and cybersecurity.
Added
Regions' IS Program is designed and implemented to substantially align with standards 42 Table of Contents promulgated by the NIST. Regions' Information Security Policy establishes technical, administrative, and physical control directives that are implemented to protect informational assets from reasonably foreseeable risks and threats.
Removed
For more information about these risks, see the Technology Risks in Item 1A. "Risk Factors".
Added
The Board also receives updates on the Company’s enterprise services, which includes resilience, information technology, and cybersecurity. The Board considers both business and technical resilience, cybersecurity and technological innovation, and privacy considerations, along with related risk considerations and mitigation efforts, within the Company’s strategic plan.
Added
Despite our efforts, we cannot eliminate all risks from cybersecurity threats, or provide assurances that we have not experienced an undetected cybersecurity incident. For more information about these risks, see the “Technology Risks” discussion within in Item 1. “Risk Factors”.

Item 2. Properties

Properties — owned and leased real estate

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Item 2. Properties Regions’ corporate headquarters occupy the main banking facility of Regions Bank, located at 1900 Fifth Avenue North, Birmingham, Alabama 35203. At December 31, 2023, Regions Bank, Regions’ banking subsidiary, operated 1,271 banking offices. At December 31, 2023, there were no significant encumbrances on the offices, equipment and other operational facilities owned by Regions and its subsidiaries.
Item 2. Properties Regions’ corporate headquarters occupy the main banking facility of Regions Bank, located at 1900 Fifth Avenue North, Birmingham, Alabama 35203. At December 31, 2024, Regions Bank, Regions’ banking subsidiary, operated 1,253 banking offices. At December 31, 2024, there were no significant encumbrances on the offices, equipment and other operational facilities owned by Regions and its subsidiaries.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Item 3. Legal Proceedings Information required by this item is set forth in Note 23 "Commitments, Contingencies and Guarantees" in the Notes to the Consolidated Financial Statements, which are included in Item 8. of this Annual Report on Form 10-K.
Legal Proceedings The information presented in the Legal Contingencies section of Note 23 "Commitments, Contingencies and Guarantees" of the Notes to Consolidated Financial Statements, which is included in Item 8. of this Annual Report on Form 10-K is incorporated herein by reference. see Note 12 "Regulatory Capital Requirements and Restrictions" to the consolidated financial statements of this Annual Report on Form 10-K

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Previously served as Head of Corporate Banking Group of registrant and Regions Bank and as South Region President of Regions Bank. Prior to joining Regions, served as President of Whitney National Bank and Whitney Holding Corporation. 2011 David J. Turner, Jr. 60 Senior Executive Vice President and Chief Financial Officer of registrant and Regions Bank. 2010 Kate R.
Turner, Jr. 63 Chairman, President and Chief Executive Officer of registrant and Regions Bank. Previously served as Head of Corporate Banking Group of registrant and Regions Bank and as South Region President of Regions Bank. Prior to joining Regions, served as President of Whitney National Bank and Whitney Holding Corporation. 2011 David J.
Item 4. Mine Safety Disclosures. Not applicable. Information About Our Executive Officers Information concerning the Executive Officers of Regions as of February 23, 2024 , is set forth below. Executive Officer Age Position and Offices Held with Registrant and Subsidiaries Executive Officer Since John M. Turner, Jr. 62 President and Chief Executive Officer of registrant and Regions Bank.
Item 4. Mine Safety Disclosures. Not applicable. 43 Table of Contents Information About Our Executive Officers Information concerning the Executive Officers of Regions as of February 21, 2025 , is set forth below. Executive Officer Age Position and Offices Held with Registrant and Subsidiaries Executive Officer Since John M.
Danella 45 Senior Executive Vice President and Head of Consumer Banking Group of registrant and Regions Bank. Previously served as Chief Strategy and Client Experience Officer; Head of Strategic Planning & Consumer Bank Products and Origination Partnerships; and as Head of Strategic Planning and Corporate Development of registrant and Regions Bank.
Previously served as Chief Strategy and Client Experience Officer; Head of Strategic Planning & Consumer Bank Products and Origination Partnerships; and as Head of Strategic Planning and Corporate Development of registrant and Regions Bank. Previously served as Head of Private Wealth Management of Regions Bank. Prior to joining Regions, served as Vice President of Capital Group Companies. 2018 David R.
Dandridge Massey 53 Senior Executive Vice President and Chief Enterprise Operations and Technology Officer of registrant and Regions Bank. Previously served as Head of Digital and Contact Center Banking and Head of Enterprise Technology Strategic Services at Truist Bank. 2022 43 Table of Contents Scott M.
Previously served as Head of Digital and Contact Center Banking and Head of Enterprise Technology Strategic Services at Truist Bank. 2022 Tara A. Plimpton 56 Senior Executive Vice President, Chief Legal Officer and Corporate Secretary of registrant and Regions Bank. Previously served as General Counsel of registrant and Regions Bank.
Plimpton 55 Senior Executive Vice President, Chief Legal Officer and Corporate Secretary of registrant and Regions Bank. Previously served as General Counsel of registrant and Regions Bank. Prior to joining Regions, served as Vice President and General Counsel of GE Global Operations and as General Counsel of GE Energy Connections. 2020 William D.
Prior to joining Regions, served as Vice President and General Counsel of GE Global Operations and as General Counsel of GE Energy Connections. 2020 William D. Ritter 54 Senior Executive Vice President and Head of Wealth Management Group of registrant and Regions Bank. Director of Highland Associates, Inc. 2010 Brian R.
Previously served as Regional President, Mid-America Region of Regions Bank. 2010 Russell Zusi 49 Senior Executive Vice President and Chief Risk Officer of registrant and Regions Bank.
Willman 52 Senior Executive Vice President and Head of Corporate Banking Group of registrant and Regions Bank. Previously served as Head of Commercial Banking of registrant and Regions Bank. 2024 Russell Zusi 50 Senior Executive Vice President and Chief Risk Officer of registrant and Regions Bank.
Previously served as Head of Private Wealth Management of Regions Bank. Prior to joining Regions, served as Vice President of Capital Group Companies. 2018 David R. Keenan 56 Senior Executive Vice President and Chief Administrative and Human Resources Officer of registrant and Regions Bank. Previously served as Chief Human Resources Officer of registrant and Regions Bank. 2010 C.
Keenan 57 Senior Executive Vice President and Chief Administrative and Human Resources Officer of registrant and Regions Bank. Previously served as Chief Human Resources Officer of registrant and Regions Bank. 2010 C. Dandridge Massey 54 Senior Executive Vice President and Chief Enterprise Operations and Technology Officer of registrant and Regions Bank.
Peters 62 Senior Executive Vice President and Chief Transformation Officer of registrant and Regions Bank. Previously served as Director of Regions Investment Services, Inc. Previously served as Head of Consumer Banking Group and as Consumer Services Group Head of registrant and Regions Bank. 2010 Tara A.
Turner, Jr. 61 Senior Executive Vice President and Chief Financial Officer of registrant and Regions Bank. 2010 Kate R. Danella 46 Senior Executive Vice President and Head of Consumer Banking Group of registrant and Regions Bank.
Removed
Ritter 53 Senior Executive Vice President and Head of Wealth Management Group of registrant and Regions Bank. Director of Highland Associates, Inc. 2010 Ronald G. Smith 63 Senior Executive Vice President and Head of Corporate Banking Group of registrant and Regions Bank. Director of Regions Equipment Finance Corporation. Manager of RFC Financial Services Holding LLC.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+3 added−1 removed2 unchanged
Restrictions on the ability of Regions Bank to transfer funds to Regions at December 31, 2023, are set forth in Note 12 "Regulatory Capital Requirements and Restrictions" to the consolidated financial statements, which are included in Item 8. of this Annual Report on Form 10-K.
Restrictions on the ability of Regions Bank to transfer funds to Regions at December 31, 2024, are set forth in Note 12 "Regulatory Capital Requirements and Restrictions" to the consolidated financial statements, which are included in Item 8. of this Annual Report on Form 10-K.
Item 5. Market For Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities Regions common stock, par value $.01 per share, is listed for trading on the New York Stock Exchange under the symbol RF. Information relating to compensation plans under which Regions' equity securities are authorized for issuance is presented in Part III, Item 12.
Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Regions common stock, par value $.01 per share, is listed for trading on the NYSE under the symbol RF. Information relating to compensation plans under which Regions' equity securities are authorized for issuance is presented in Part III, Item 12.
As of February 21, 2024, there were 35,025 holders of record of Regions common stock (including participants in the Broadridge Direct Stock Purchase and Dividend Reinvestment Plan for Regions Financial Corporation).
As of February 20, 2025, there were 33,446 holders of record of Regions common stock (including participants in the Broadridge Direct Stock Purchase and Dividend Reinvestment Plan for Regions Financial Corporation).
Issuer Purchases of Equity Securities On April 20, 2022, the Board authorized the repurchase of up to $2.5 billion of the Company's common stock, permitting purchases from the second quarter of 2022 through the fourth quarter of 2024. The following table presents information regarding issuer purchases of equity securities during the fourth quarter of 2023.
Issuer Purchases of Equity Securities On April 20, 2022, the Board authorized the repurchase of up to $2.5 billion of the Company's common stock, permitting purchases from the second quarter of 2022 through the fourth quarter of 2024. On December 10, 2024, the Board authorized an extension of the common stock repurchase program through the fourth quarter of 2025.
Period Total Number of Shares Purchased Average Price Paid per Share (1) 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 October 1-31, 2023 6,437,685 $ 14.22 6,437,685 $ 2,393,179,589 November 1-30, 2023 5,653,231 $ 15.66 5,653,231 $ 2,304,697,925 December 1-31, 2023 4,038,243 $ 17.36 4,038,243 $ 2,234,699,026 Total Fourth Quarter 16,129,159 $ 15.82 16,129,159 $ 2,234,699,026 _____ (1) Average price paid does not reflect the 1 percent excise tax charged on public company share repurchases. 45 Table of Contents PERFORMANCE GRAPH The graph below compares the yearly percentage change in the cumulative total return of Regions common stock against the cumulative total return of the S&P 500 Index and the S&P 500 Banks Index for the past five years.
Period Total Number of Shares Purchased Average Price Paid per Share (1) 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 October 1-31, 2024 1,762,867 $ 23.82 1,762,867 $ 1,904,952,464 November 1-30, 2024 635,715 $ 23.60 635,715 $ 1,889,942,945 December 1-31, 2024 — $ — — $ 1,889,942,945 Total Fourth Quarter 2,398,582 $ 23.76 2,398,582 $ 1,889,942,945 _____ (1) Average price paid does not reflect the 1 percent excise tax charged on public company share repurchases. 45 Table of Contents COMMON STOCK PERFORMANCE GRAPH The graph below compares the yearly percentage change in the cumulative total return of Regions common stock against the cumulative total return of the S&P 500 Index and the S&P 500 Banks Index for the past five years.
All of these shares were immediately retired upon repurchase and therefore were not included in treasury stock.
The following table presents information regarding issuer purchases of equity securities during the fourth quarter of 2024. All of these shares were immediately retired upon repurchase and therefore were not included in treasury stock.
Removed
Cumulative Total Return 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 Regions $ 100.00 $ 133.30 $ 131.12 $ 182.78 $ 187.01 $ 176.35 S&P 500 Index 100.00 131.47 155.65 200.29 163.98 207.04 S&P 500 Banks Index 100.00 140.64 121.29 164.28 132.73 147.28
Added
In accordance with the rules of the SEC, this section, captioned “Common Stock Performance Graph,” is not incorporated by reference into any of our future filings made under the Securities Exchange Act of 1934 (Exchange Act) or the Securities Act of 1933 (Securities Act).
Added
The Common Stock Performance Graph, including its accompanying table and footnotes, is not deemed to be soliciting material or to be filed under the Exchange Act or the Securities Act.
Added
Cumulative Total Return 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Regions $ 100.00 $ 98.37 $ 137.12 $ 140.29 $ 132.30 $ 168.05 S&P 500 Index 100.00 118.39 152.34 124.73 157.48 196.85 S&P 500 Banks Index 100.00 86.25 116.81 94.38 104.72 144.74

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

231 edited+96 added−103 removed116 unchanged
The primary risk exposures identified and managed through the Company’s risk management framework are market risk, liquidity risk, credit risk, operational risk, legal risk, compliance risk, reputational risk and strategic risk. 77 Table of Contents • Market risk is the risk to the Company’s financial condition resulting from adverse movements in market rates or prices, such as interest rates, foreign exchange rates or equity prices. • Liquidity risk is the potential that the Company will be unable to meet its obligations as they come due because of an inability to liquidate assets or obtain adequate funding (referred to as "funding liquidity risk") or the potential that the Company cannot easily unwind or offset specific exposures without significantly lowering market prices because of inadequate market depth or market disruptions (referred to as "market liquidity risk"). • Credit risk is the risk that arises from the potential that a borrower or counterparty will fail to perform on an obligation. • Operational risk is the risk of loss resulting from inadequate or failed internal processes, people, and systems or from external events. • Legal risk is defined as the risk associated with the failure to meet Regions' legal obligations from legislative, regulatory, or contractual perspectives. • Compliance risk is the risk to current or anticipated earnings or capital arising from violations of laws, rules, or regulations, or from non-conformance with prescribed practices, internal policies and procedures, or ethical standards. • Reputational risk is the potential that negative publicity regarding the Company’s business practices, whether true or not, will cause a decline in the customer base, costly litigation, or revenue reductions. • Strategic risk is the risk to current or projected financial condition and resilience from adverse business decisions, poor implementation of business decisions, or lack of responsiveness to changes in the banking industry and operating environment.
The primary risk exposures identified and managed through the Company’s risk management framework are market risk, liquidity risk, credit risk, operational risk, legal risk, compliance risk, reputational risk and strategic risk. • Market risk is the risk to the Company’s financial condition resulting from adverse movements in market rates or prices, such as interest rates, foreign exchange rates or equity prices. • Liquidity risk is the potential that the Company will be unable to meet its obligations as they come due because of an inability to liquidate assets or obtain adequate funding (referred to as "funding liquidity risk") or the potential that the 76 Table of Contents Company cannot easily unwind or offset specific exposures without significantly lowering market prices because of inadequate market depth or market disruptions (referred to as "market liquidity risk"). • Credit risk is the risk that arises from the potential that a borrower or counterparty will fail to perform on an obligation. • Operational risk is the risk of loss resulting from inadequate or failed internal processes, people, and systems or from external events. • Legal risk is defined as the risk associated with the failure to meet Regions' legal obligations from legislative, regulatory, or contractual perspectives. • Compliance risk is the risk to current or anticipated earnings or capital arising from violations of laws, rules, or regulations, or from non-conformance with prescribed practices, internal policies and procedures, or ethical standards. • Reputational risk is the potential that negative publicity regarding the Company’s business practices, whether true or not, will cause a decline in the customer base, costly litigation, or revenue reductions. • Strategic risk is the risk to current or projected financial condition and resilience from adverse business decisions, poor implementation of business decisions, or lack of responsiveness to changes in the banking industry and operating environment.
In rising rate scenarios only, management assumes that the mix of deposits will further change versus the base case as informed by analyses of prior rate cycles. Currently, however, much of the anticipated mix shift has already occurred or is expected to occur within the baseline scenario, mitigating the amount of additional remixing in higher rate scenarios.
In rising rate scenarios only, management assumes that the mix of deposits will change versus the base case as informed by analyses of prior rate cycles. Currently, however, much of the anticipated mix shift has already occurred or is expected to occur within the baseline scenario, mitigating the amount of additional remixing in higher rate scenarios.
These techniques require management to make estimates regarding future net servicing cash flows, taking into consideration historical and forecasted residential mortgage loan prepayment rates, discount rates, escrow balances and servicing costs. Changes in interest rates, prepayment speeds or other factors impact the fair value of residential MSRs which impacts earnings.
These techniques require management to make estimates regarding future net servicing cash flows, taking into consideration historical and forecasted mortgage loan prepayment rates, discount rates, escrow balances and servicing costs. Changes in interest rates, prepayment speeds or other factors impact the fair value of MSRs which impacts earnings.
In evaluating the liquidity within the securities portfolio, unencumbered investment securities are primarily comprised of U.S Treasury securities and agency MBS. Unencumbered investment securities also includes certain corporate bonds considered to be highly liquid and other securities, primarily non-agency commercial MBS. Regions’ financing arrangement with the FHLB adds additional flexibility in managing the Company's liquidity position.
In evaluating the liquidity within the securities portfolio, unencumbered investment securities are primarily comprised of U.S Treasury securities and residential and commercial agency MBS. Unencumbered investment securities also includes certain corporate bonds considered to be highly liquid and other securities, primarily non-agency commercial MBS. Regions’ financing arrangement with the FHLB adds additional flexibility in managing the Company's liquidity position.
Although sales of residential MSRs do occur, residential MSRs do not trade in an active market with readily observable market prices and the exact terms and conditions of sales may not be readily available, and are therefore Level 3 valuations in the fair value hierarchy previously discussed in the "Fair Value Measurements" section.
Although sales of MSRs do occur, MSRs do not trade in an active market with readily observable market prices and the exact terms and conditions of sales may not be readily available, and are therefore Level 3 valuations in the fair value hierarchy previously discussed in the "Fair Value Measurements" section.
Allowance for Credit Losses The allowance for credit losses (“allowance”) consists of two components: the allowance for loan losses and the reserve for unfunded credit commitments. Unfunded credit commitments include items such as letters of credit, financial guarantees and binding unfunded loan commitments. Regions determines its allowance in accordance with GAAP and applicable regulatory guidance.
Allowance The allowance consists of two components: the allowance for loan losses and the reserve for unfunded credit commitments. Unfunded credit commitments include items such as letters of credit, financial guarantees and binding unfunded loan commitments. Regions determines its allowance in accordance with GAAP and applicable regulatory guidance.
Management believes the most significant potential impact of inflation on financial results is a direct result of Regions’ ability to manage the impact of changes in interest rates. The Company’s interest rate risk positioning was mostly neutral as of December 31, 2023, and therefore, net interest income increases or declines only modestly from higher or lower interest rates.
Management believes the most significant potential impact of inflation on financial results is a direct result of Regions’ ability to manage the impact of changes in interest rates. The Company’s interest rate risk positioning was mostly neutral as of December 31, 2024, and therefore, net interest income increases or declines only modestly from higher or lower interest rates.
Incremental deposit pricing outperformance or underperformance of 5 percent in a parallel, instantaneous 100 basis point shock would increase or decrease net interest income by approximately $42 million. The table below summarizes Regions' positioning over the next 12 months in various parallel yield curve shifts (i.e., including all yield curve tenors).
Incremental deposit pricing outperformance or underperformance of 5 percent in a parallel, instantaneous 100 basis point shock would increase or decrease net interest income by approximately $43 million. The table below summarizes Regions' positioning over the next 12 months in various parallel yield curve shifts (i.e., including all yield curve tenors).
The emphasis of this discussion will be on operations for the years 2023 and 2022; in addition, financial information for prior years will also be presented when appropriate. Regions’ profitability, like that of many other financial institutions, is dependent on its ability to generate revenue from net interest income as well as non-interest income sources.
The emphasis of this discussion will be on operations for the years 2024 and 2023; in addition, financial information for prior years will also be presented when appropriate. Regions’ profitability, like that of many other financial institutions, is dependent on its ability to generate revenue from net interest income as well as non-interest income sources.
This unfavorable scenario resulted in an allowance approximately 16 percent higher than the allowance using the expected scenario. Similar to the scenarios above, it is difficult to estimate how potential changes in credit risk factors might affect the overall allowance because of the wide variety of credit risk factors that are considered in estimating the allowance.
This unfavorable scenario resulted in an allowance approximately 15 percent higher than the allowance using the expected scenario. Similar to the scenarios above, it is difficult to estimate how potential changes in credit risk factors might affect the overall allowance because of the wide variety of credit risk factors that are considered in estimating the allowance.
Furthermore, the highly liquid nature of the available for sale securities portfolio (for example, the agency guaranteed MBS portfolio) can be readily used as a source of cash through various secured borrowing arrangements. Regions' securities portfolio consists of U.S. Treasury securities, federal agency securities, MBS and corporate and other debt.
Furthermore, the highly liquid nature of the available for sale securities portfolio (for example, the agency guaranteed MBS portfolio) can be readily used as a source of cash through various secured borrowing arrangements. Regions' securities portfolio consists of residential and commercial agency MBS, U.S. Treasury securities, federal agency securities, and corporate and other debt.
Intangible Assets Regions’ intangible assets consist primarily of the excess of cost over the fair value of net assets of acquired businesses (“goodwill”) and other identifiable intangible assets (primarily relationship assets and agency commercial real estate licenses). Goodwill totaled $5.7 billion at both December 31, 2023 and December 31, 2022.
Intangible Assets Regions’ intangible assets consist primarily of the excess of cost over the fair value of net assets of acquired businesses (“goodwill”) and other identifiable intangible assets (primarily relationship assets and agency commercial real estate licenses). Goodwill totaled $5.7 billion at both December 31, 2024 and December 31, 2023.
As noted, economic trends such as interest rates, unemployment, volatility in commodity prices, collateral valuations and inflationary pressure will impact the future levels of net charge-offs and may result in volatility of certain credit metrics in 2024 and beyond.
As noted, economic trends such as interest rates, unemployment, volatility in commodity prices, collateral valuations and inflationary pressure will impact the future levels of net charge-offs and may result in volatility of certain credit metrics in 2025 and beyond.
As of December 31, 2023, Regions' net interest income profile was mostly neutral to both gradual and instantaneous parallel yield curve shifts as compared to the base case for the 12-month measurement horizon ending December 2024.
As of December 31, 2024, Regions' net interest income profile was mostly neutral to both gradual and instantaneous parallel yield curve shifts as compared to the base case for the 12-month measurement horizon ending December 2025.
Hedging activity has reduced the exposure to net interest income late in the rising interest rate cycle as intended. Refer to Table 25 "Interest Rate Sensitivity" for additional details on Regions’ interest rate sensitivity. Additionally, inflation has the potential to impact credit risk.
Hedging activity has reduced the exposure to net interest income late in the rising interest rate cycle as intended. Refer to Table 24 "Interest Rate Sensitivity" for additional details on Regions’ interest rate sensitivity. Additionally, inflation has the potential to impact credit risk.
Furthermore, over the 12 month horizon, an increase of $1 billion in deposit remixing would decrease net interest income by approximately $27 million, and a decrease of $1 billion in deposit remixing would increase net interest income by $27 million in the parallel, instantaneous +100 basis point scenario.
Furthermore, over the 12 month horizon, an increase of $1 billion in deposit remixing would decrease net interest income by approximately $24 million, and a decrease of $1 billion in deposit remixing would increase net interest income by $24 million in the parallel, instantaneous +100 basis point scenario.
Details regarding the allowance for credit losses, including an analysis of activity from the previous year’s total, are included in Table 18 "Allowance for Credit Losses". Also, refer to Table 19 "Allowance Allocation" for details pertaining to management’s allocation of the allowance to each loan category.
Details regarding the allowance for credit losses, including an analysis of activity from the previous year’s total, are included in Table 17 "Allowance for Credit Losses". Also, refer to Table 18 "Allowance Allocation" for details pertaining to management’s allocation of the allowance to each loan category.
Additionally, changes in factors and inputs may be directionally inconsistent, such that improvement in one factor may offset deterioration in others. However, to consider the impact of a hypothetical alternate economic forecast, Regions estimated the allowance using a scenario that was one standard deviation unfavorable to the expected scenario for each macroeconomic variable.
Additionally, changes in factors and inputs may be 50 Table of Contents directionally inconsistent, such that improvement in one factor may offset deterioration in others. However, to consider the impact of a hypothetical alternate economic forecast, Regions estimated the allowance using a scenario that was one standard deviation unfavorable to the expected scenario for each macroeconomic variable.
Maturities in the loan portfolio provide a steady flow of funds, and are supplemented by Regions' deposit base. Cash reserves, liquid assets and secured borrowing capabilities aid in the management of liquidity in normal and stressed conditions, and/or meeting the need of contingent events such as obligations related to potential litigation.
Maturities in the loan portfolio provide a steady flow of funds, and are supplemented by Regions' deposit base. 82 Table of Contents Cash reserves, liquid assets and secured borrowing capabilities aid in the management of liquidity in normal and stressed conditions, and/or meeting the need of contingent events such as obligations related to potential litigation.
In the event of a cyber-attack or other data breach, Regions may be required to incur significant expenses, including with respect to remediation costs, costs of implementing additional preventative measures, addressing any reputational harm and addressing any related regulatory inquiries or civil litigation arising from the event. See Part I Item1C.
In the event of a cyber-attack or other data breach, Regions may be required to incur significant expenses, including with respect to remediation costs, costs of implementing additional preventative measures, addressing any reputational harm and addressing any related regulatory inquiries or civil litigation arising from the event. See Part I, Item 1C.
In addition, the effective tax rate is affected by items that may occur in any given period but are not consistent from period-to-period, such as the termination of certain leveraged leases, share-based payments, valuation allowance changes and changes to unrecognized tax benefits. Accordingly, the comparability of the effective tax rate between periods may be impacted.
In addition, the effective tax rate is affected by items that may occur in any given period but are not consistent from period-to-period, such as the termination of certain leveraged leases, share-based payments, valuation allowance changes and changes to UTBs. Accordingly, the comparability of the effective tax rate between periods may be impacted.
(2) Excludes residential first mortgage loans that are 100% guaranteed by the FHA and all guaranteed loans sold to Ginnie Mae where Regions has the right but not the obligation to repurchase. Total 90+ days or more past due guaranteed loans excluded were $34 million at December 31, 2023 and $34 million at December 31, 2022.
(2) Excludes residential first mortgage loans that are 100% guaranteed by the FHA and all guaranteed loans sold to Ginnie Mae where Regions has the right but not the obligation to repurchase. Total 90+ days or more past due guaranteed loans excluded were $55 million at December 31, 2024 and $34 million at December 31, 2023.
The parallel, instantaneous +100 basis point shock scenario in Table 25 incorporates an incremental beta between 40 and 45 percent when compared to the base case scenario, while the parallel, instantaneous -100 basis point shock scenario incorporates an incremental beta between 35 and 40 percent when compared to the base case scenario.
The parallel, instantaneous +100 basis point shock scenario in Table 24 incorporates an incremental beta between 40 and 45 percent when compared to the base case scenario, while the parallel, instantaneous -100 basis point shock scenario incorporates an incremental beta between 35 and 40 percent when compared to the base case scenario.
Home Equity Lines Home equity lines are secured by a first or second mortgage on the borrower's residence and allow customers to borrow against the equity in their homes. Home equity lines decreased $289 million in comparison to year-end 2022 balances, as payoffs and paydowns continue to outpace production. Substantially all of this portfolio was originated through Regions’ branch network.
Home Equity Lines Home equity lines are secured by a first or second mortgage on the borrower's residence and allow customers to borrow against the equity in their homes. Home equity lines decreased $71 million in comparison to year-end 2023 balances, as payoffs and paydowns continue to outpace production. Substantially all of this portfolio was originated through Regions' branch network.
Any changes, if they occur, can be significant to the Company’s consolidated financial position, results of operations or cash flows. See Note 1 "Summary of Significant Accounting Policies" and Note 19 "Income Taxes" to the consolidated financial statements for further details and discussion.
Any changes, if they occur, can be significant to the Company’s consolidated financial position, results of operations or cash flows. 52 Table of Contents See Note 1 "Summary of Significant Accounting Policies" and Note 19 "Income Taxes" to the consolidated financial statements for further details and discussion.
The estimated exposure associated with the rising and falling rate scenarios in Table 25 below reflects the combined impacts of movements in short-term and long-term interest rates.
The estimated exposure associated with the rising and falling rate scenarios in Table 24 below reflects the combined impacts of movements in short-term and long-term interest rates.
The yields presented in Table 2 are calculated based on the amortized cost of each debt security and yields earned throughout each year. Yields are calculated based on whole dollar amounts.
The yields presented in Table 1 are calculated based on the amortized cost of each debt security and yields earned throughout each year. Yields are calculated based on whole dollar amounts.
Additional information on the credit rating ranking within the overall classification system is located on the website of each credit rating agency. SHAREHOLDERS' AND TOTAL EQUITY Shareholders’ equity was $17.4 billion at December 31, 2023 as compared to $15.9 billion at December 31, 2022.
Additional information on the credit rating ranking within the overall classification system is located on the website of each credit rating agency. SHAREHOLDERS' AND TOTAL EQUITY Shareholders’ equity was $17.9 billion at December 31, 2024 as compared to $17.4 billion at December 31, 2023.
The scenarios are inclusive of all interest rate hedging activities. More information regarding hedges is disclosed in Table 26 and its accompanying description.
The scenarios are inclusive of all interest rate hedging activities. More information regarding hedges is disclosed in Table 25 and its accompanying description.
Valuation techniques typically include option 53 Table of Contents pricing models, discounted cash flow models and similar techniques, but may also include the use of market prices of assets or liabilities that are not directly comparable to the subject asset or liability.
Valuation techniques typically include option pricing models, discounted cash flow models and similar techniques, but may also include the use of market prices of assets or liabilities that are not directly comparable to the subject asset or liability.
Cybersecurity found earlier in this report for further information. 86 Table of Contents FINANCIAL DISCLOSURE AND INTERNAL CONTROLS Regions maintains internal controls over financial reporting, which generally include those controls relating to the preparation of the consolidated financial statements in conformity with GAAP.
Cybersecurity found earlier in this report for further information. FINANCIAL DISCLOSURE AND INTERNAL CONTROLS Regions maintains internal controls over financial reporting, which generally include those controls relating to the preparation of the consolidated financial statements in conformity with GAAP.
This statement is 78 Table of Contents designed to be a high-level document that sets the tone for the Board’s risk appetite, which is the maximum amount of risk the Company is willing to accept in pursuit of its business objectives.
This statement is designed to be a high-level document that sets the tone for the Board’s risk appetite, which is the maximum amount of risk the Company is willing to accept in pursuit of its business objectives.
(7) The computation of taxable-equivalent net interest income is based on the statutory federal income tax rate of 21%, adjusted for applicable state income taxes net of the related federal tax benefit. 56 Table of Contents Table 3 "Volume and Yield/Rate Variances" provides additional information with which to analyze the changes in net interest income.
(7) The computation of taxable-equivalent net interest income is based on the statutory federal income tax rate of 21%, adjusted for applicable state income taxes net of the related federal tax benefit. 54 Table of Contents Table 2 "Volume and Yield/Rate Variances" provides additional information with which to analyze the changes in net interest income.
A valuation allowance is provided when it is more-likely- 54 Table of Contents than-not that some portion of the deferred tax asset will not be realized. The Company currently maintains a valuation allowance for certain state carryforwards.
A valuation allowance is provided when it is more-likely-than-not that some portion of the deferred tax asset will not be realized. The Company currently maintains a valuation allowance for certain state carryforwards.
Interest income on loans, net of unearned income, also includes net loan fees of $130 million, $109 million and $154 million for the years ended December 31, 2023, 2022 and 2021, respectively. (6) 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.
Interest income on loans, net of unearned income, also includes net loan fees of $142 million, $130 million and $109 million for the years ended December 31, 2024, 2023 and 2022 , respectively. (6) 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 same economic trends that impact net charge-offs, as discussed above, will impact the future level of non-performing assets.
The same economic trends that impact net charge-offs, as discussed above, will impact the future level of non-performing loans.
Any downgrade in credit ratings by one or more ratings agencies may impact Regions in several ways, including, but not limited to, Regions’ access to the capital markets or short-term funding, borrowing cost and capacity, collateral requirements, and acceptability of its letters of credit, thereby potentially adversely impacting Regions’ financial condition and liquidity.
Any downgrade in credit ratings by one or more ratings agencies may impact Regions in several ways, including, but not limited to, Regions’ access to the capital markets or short-term funding, borrowing cost and capacity, collateral requirements, and acceptability of its letters of credit, thereby potentially adversely impacting Regions’ financial condition and liquidity. See “Risk Factors” for more information.
Additional deposit balance outflow of $1 billion would reduce net interest income by $21 million over 12 months in the parallel, instantaneous +100 basis point scenario in Table 25. Conversely, if an additional $1 billion are retained, a positive benefit of $21 million would be expected over 12 months in the parallel, instantaneous +100 basis point scenario Table 25.
Additional deposit balance outflow of $1 billion would reduce net interest income by $19 million over 12 months in the parallel, instantaneous +100 basis point scenario in Table 24. Conversely, if an additional $1 billion are retained, a positive benefit of $19 million would be expected over 12 months in the parallel, instantaneous +100 basis point scenario in Table 24.
The Basel III Rules also officially defined CET1. Regions' CET1 ratio at December 31, 2023 was estimated to be 10.26%. For more information, refer to the following additional sections within this Form 10-K: • “Supervision and Regulation” discussion within Item 1.
The Basel III Rules also officially defined CET1. Regions' CET1 ratio at December 31, 2024 was estimated to be 10.80%. For more information, refer to the following additional sections within this Form 10-K: • “Supervision and Regulation” discussion within Item 1.
(2) Unencumbered investment securities comprise securities that are eligible as collateral for secured transactions through market channels or are eligible to be pledged to the FHLB or the Federal Reserve Discount Window.
(2) Unencumbered investment securities comprise securities that are eligible as collateral for secured transactions through market channels or are eligible to be pledged to the FHLB, the Federal Reserve discount window, or the Standing Repo Facility.
The magnitude of the remixing shift is rate dependent and equates to approximately $1.6 billion over 12 months in the parallel, instantaneous +100 basis point scenario in Table 25.
The magnitude of the remixing shift is rate dependent and equates to approximately $1.1 billion over 12 months in the parallel, instantaneous +100 basis point scenario in Table 24.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations EXECUTIVE OVERVIEW Management believes the following sections provide an overview of several of the most relevant matters necessary for an understanding of the financial aspects of Regions's business, particularly regarding its 2023 results.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations EXECUTIVE OVERVIEW Management believes the following sections provide an overview of several of the most relevant matters necessary for an understanding of the financial aspects of Regions' business, particularly regarding its 2024 results.
Furthermore, corporate deposits include those that are operational in nature (where the primary use is certain operational services such as clearing, custody, payments or other cash management activities). A significant amount of the Company's deposit base is insured by the FDIC or collateralized, with approximately $11.2 billion in deposits collateralized in public funds or in trusts at December 31, 2023.
Furthermore, corporate deposits include those that are operational in nature (where the primary use is certain operational services such as clearing, custody, payments or other cash management activities). A significant amount of the Company's deposit base is insured by the FDIC or collateralized, with approximately $10.7 billion in deposits collateralized in public funds or in trusts at December 31, 2024.
Non-interest income includes fees from service charges on deposit accounts, card and ATM fees, mortgage servicing and secondary marketing, investment management and trust activities, capital markets and other customer services which Regions provides.
Non-interest income includes fees from service charges on deposit accounts, card and ATM fees, mortgage servicing and secondary marketing, investment management and 49 Table of Contents trust activities, capital markets and other customer services which Regions provides.
This includes uncertainty with respect to absolute interest rate levels as well as relative interest rate levels, which are impacted by both the shape and the slope of the various yield curves that affect the financial products and services that the Company offers.
MARKET RISK—INTEREST RATE RISK Regions’ primary market risk is interest rate risk. This includes uncertainty with respect to absolute interest rate levels as well as relative interest rate levels, which are impacted by both the shape and the slope of the various yield curves that affect the financial products and services that the Company offers.
Table 7— Relative Contractual Maturities Debt Securities Maturing as of December 31, 2023 Within One Year After One But Within Five Years After Five But Within Ten Years After Ten Years Total (Dollars in millions) U.S.
Table 6— Relative Contractual Maturities Debt Securities Maturing as of December 31, 2024 Within One Year After One But Within Five Years After Five But Within Ten Years After Ten Years Total (Dollars in millions) U.S.
Specific characteristics of the underlying loans greatly impact the estimated value of the related residential MSRs. As a result, Regions stratifies its residential mortgage servicing portfolio on the basis of certain risk characteristics, including loan type and contractual note rate, and values its residential MSRs using discounted cash flow modeling techniques.
Specific characteristics of the underlying loans greatly impact the estimated value of the related residential and commercial MSRs. As a result, Regions stratifies its portfolios on the basis of certain risk characteristics, including loan type and contractual note rate, as applicable. Regions values its residential and commercial MSRs using discounted cash flow modeling techniques.
(2) Debt securities are included on an amortized cost basis with yield and net interest margin calculated accordingly. (3) Interest income on debt securities includes hedging expense of $1 million, h edging income of $41 million, and zero for the years ended December 31, 2023, 2022 and 2021, respectively.
(2) Debt securities are included on an amortized cost basis with yield and net interest margin calculated accordingly. (3) Interest income on debt securities includes hedging income of $7 million, hedging expense of $1 million, and hedging income of $41 million for the years ended December 31, 2024, 2023 and 2022, respectively.
(5) Interest income on loans, net of unearned income, includes hedging expense of $236 million and hedging income of $140 million and $426 million for the years ended December 31, 2023, 2022, and 2021, respectively.
(5) Interest income on loans, net of unearned income, includes hedging expense of $420 million and $236 million and hedging income of $140 million for the years ended December 31, 2024, 2023 and 2022, respectively.
See also the "Market Risk-Interest Rate Risk" section in Management's Discussion and Analysis for additional information. 55 Table of Contents Table 2 "Consolidated Average Daily Balances and Yield/Rate Analysis" presents a detail of net interest income (on a taxable-equivalent basis), the net interest margin, and the net interest spread.
See Table 6 for more information. See also the "Market Risk-Interest Rate Risk" section in Management's Discussion and Analysis for additional information. 53 Table of Contents Table 1 "Consolidated Average Daily Balances and Yield/Rate Analysis" presents a detail of net interest income (on a taxable-equivalent basis), the net interest margin, and the net interest spread.
Refer to the "Cash and Cash Equivalents" and "Deposits" sections for more information. The securities portfolio also serves as a primary source and storehouse of liquidity. Proceeds from maturities and principal and interest payments of securities provide a continual flow of funds available for cash needs (see Note 3 "Debt Securities" to the consolidated financial statements).
The securities portfolio also serves as a primary source and storehouse of liquidity. Proceeds from maturities and principal and interest payments of securities provide a continual flow of funds available for cash needs (see Note 3 "Debt Securities" to the consolidated financial statements).
An increase or reduction in short-term interest rates (such as the Fed Funds rate, the rate of Interest on Excess Reserves, and SOFR) will drive the yield on assets and liabilities contractually tied to such rates higher or lower.
An increase or reduction in short-term interest rates (such as the Fed Funds rate, the interest rate on reserve balances, and SOFR) will drive the yield on assets and liabilities contractually tied to such rates higher or lower.
Estimates and assumptions most significant to Regions are related primarily to the allowance for credit losses, fair value measurements, intangible assets (goodwill and other identifiable intangible assets), residential MSRs and income taxes, and are summarized in the following discussion and in the notes to the consolidated financial statements.
Estimates and assumptions most significant to Regions are related primarily to the allowance, fair value measurements, intangible assets (goodwill and other identifiable intangible assets), MSRs measured at fair value, and income taxes, and are summarized in the following discussion and in the notes to the consolidated financial statements.
The allowance was 1.73 percent of total loans, net of unearned income at December 31, 2023, an increase from 1.63 percent at December 31, 2022. The coverage ratio of allowance to non-performing loans excluding held for sale was 211 percent at December 31, 2023, compared to 317 percent at December 31, 2022.
The allowance was 1.79 percent of total loans, net of unearned income at December 31, 2024, an increase from 1.73 percent at December 31, 2023. The coverage ratio of allowance to non-performing loans excluding held for sale was 186 percent at December 31, 2024, compared to 211 percent at December 31, 2023.
Refer to Note 6 "Servicing of Financial Assets" to the consolidated financial statements for quantitative disclosures reflecting the effect that changes in management's assumptions would have on the fair value of residential MSRs. Refer to Note 6 "Servicing of Financial Assets" to the consolidated financial statements for additional disclosure on residential mortgage servicing rights.
Refer to Note 6 "Servicing of Financial Assets" to the consolidated financial statements for additional information including quantitative disclosures reflecting the effect that changes in management's assumptions would have on the fair value of MSRs.
(2) Includes forward starting notional. For more information on notional by year, see Table 27. (3) All floating rates are SOFR based and may include SOFR conversion spread. (4) Interest rate options have an average cap strike of 6.22% and a floor of 1.86%.
(2) Includes forward starting notional with maturity relative to current quarter-end. For more information on notional by year, see Table 26. (3) All floating rates are SOFR based and may include SOFR conversion spread. (4) Interest rate options have an average cap strike of 6.22% and a floor of 1.86%.
LOANS GENERAL Loans, net of unearned income, represented 74 percent of interest-earning assets as of December 31, 2023 compared to 71 percent as of December 31, 2022.
LOANS GENERAL Loans, net of unearned income, represented 70 percent of interest-earning assets as of December 31, 2024 compared to 74 percent as of December 31, 2023.
The estimates of uninsured deposits and average account size were based on methodologies used in the Company's Call Report, which is prepared on an unconsolidated bank basis. See the "Executive Overview" section for details on expectations for deposits in 2024. See also the "Liquidity" and "Market Risk-Interest Rate Risk" sections for further discussion.
The estimates of uninsured deposits and average account size were based on methodologies used in the Company's Call Report, which is prepared on an unconsolidated bank basis. See the "Liquidity" and "Market Risk-Interest Rate Risk" sections for further discussion on liquidity and interest rates.
For more information, refer to the following additional sections within this Form 10-K: • Adjusted Net Charge-offs within the Table 1 "GAAP to Non-GAAP Reconciliations" • "Portfolio Characteristics" section of MD&A • “Allowance for Credit Losses” discussion within the “Critical Accounting Policies and Estimates” section of MD&A • “Provision for Credit Losses” discussion within the “Operating Results” section of MD&A • “Loans,” “Allowance for Credit Losses,” and “Non-performing Assets” discussions within the “Balance Sheet Analysis” section of MD&A • Note 4 "Loans" to the consolidated financial statements • Note 5 "Allowance for Credit Losses" to the consolidated financial statements Liquidity At the end of 2023, Regions Bank had $4.2 billion in cash on deposit with the Federal Reserve Bank and the loan-to-deposit ratio was 77 percent.
For more information, refer to the following additional sections within this Form 10-K: • "Portfolio Characteristics" section of MD&A • “Allowance for Credit Losses” discussion within the “Critical Accounting Policies and Estimates” section of MD&A • “Provision for Credit Losses” discussion within the “Operating Results” section of MD&A • “Loans,” “Allowance for Credit Losses,” and “Non-performing Assets” discussions within the “Balance Sheet Analysis” section of MD&A • Note 4 "Loans" to the consolidated financial statements • Note 5 "Allowance for Credit Losses" to the consolidated financial statements Liquidity At the end of 2024, Regions Bank had $7.8 billion in cash on deposit with the Federal Reserve Bank and the loan-to-deposit ratio was 76 percent.
Time deposit accounts with balances of $250,000 or more totaled $2.6 billion and $790 million at December 31, 2023 and 2022, respectively.
Time deposit accounts with balances of $250,000 or more totaled $2.8 billion and $2.6 billion at December 31, 2024 and 2023, respectively.
Capital Markets Income Capital markets income primarily relates to capital raising activities that include securities underwriting and placement, loan syndication, as well as foreign exchange, derivatives, merger and acquisition and other advisory services. Capital markets income decreased in 2023 compared to 2022, driven primarily by negative credit/debit valuation adjustments in 2023 due to rate and spread movements.
Capital Markets Income Capital markets income primarily relates to capital raising activities that include securities underwriting and placement, loan syndication, as well as foreign exchange, derivatives, merger and acquisition and other advisory services. Capital markets income increased in 2024 compared to 2023, impacted by a benefit from less negative credit/debit valuation adjustments due to rate and spread movements.
COMPARISON OF 2022 WITH 2021 Refer to the “2022 Results” and "Operating Results" sections of Management's Discussion and Analysis of the Annual Report on Form 10-K for the year ended December 31, 2022, for comparisons of 2022 with 2021.
COMPARISON OF 2023 WITH 2022 Refer to the “2023 Results” and "Operating Results" sections of Management's Discussion and Analysis of the Annual Report on Form 10-K for the year ended December 31, 2023, for comparisons of 2023 with 2022. 85 Table of Contents
Under the Basel III Rules, Regions is designated as a standardized approach bank. The Basel III Rules maintain the minimum guidelines for Regions to be considered well-capitalized for Tier 1 capital and Total capital at 6.0% and 10.0%, respectively. At December 31, 2023, Regions’ Tier 1 capital and Total capital ratios were estimated to be 11.57% and 13.35%, respectively.
Under the Basel III Rules, Regions is designated as a standardized approach bank. The Basel III Rules maintain the minimum guidelines for Regions to be considered well-capitalized for Tier 1 capital and Total capital at 6.0% and 10.0%, respectively. At December 31, 2024, Regions’ Tier 1 capital and Total capital ratios were estimated to be 12.17% and 14.06%, respectively.
Substantially all of this portfolio was originated through Regions’ branch network. Consumer Credit Quality Data The Company calculates an estimate of the current value of property secured as collateral for both residential first mortgage and home equity lending products (“current LTV”). The estimate is based on home price indices compiled by a third party.
Substantially all of this portfolio was originated through Regions’ branch network. Consumer Credit Quality Data The Company calculates an estimate of the current value of property secured as collateral for both residential first mortgage and home equity lending products (“current LTV”).
As of December 31, 2023, the Company’s review indicated there was no impairment in the value of the other identifiable intangible assets. Residential Mortgage Servicing Rights Regions has elected to measure and report its residential MSRs using the fair value method.
As of December 31, 2024, the Company’s review indicated there was no impairment in the value of the other identifiable intangible assets. Mortgage Servicing Rights Regions has elected to measure and report both its residential MSRs and commercial MSRs through non-DUS agency programs using the fair value method.
While this was a headwind to net interest income during a low rate environment, it represents a tailwind to net interest income growth as the yield curve rises and remains elevated. Elevated, or increasing intermediate and long-term interest rates (such as intermediate to longer-term U.S.
While this was a headwind to net interest income during a low rate environment, it represents a tailwind to net interest income growth given higher interest rates today. Elevated, or increasing intermediate and long-term interest rates (such as intermediate to longer-term U.S.
During 2023, the provision for credit losses totaled $553 million and net charge-offs were $397 million. This compares to a provision for credit losses of $271 million and net charge-offs of $263 million in 2022.
During 2024, the provision for credit losses totaled $487 million and net charge-offs were $458 million. This compares to a provision for credit losses of $553 million and net charge-offs of $397 million in 2023.
See the "Allowance" section for further information. 2023 Results Regions reported net income available to common shareholders of $2.0 billion or $2.11 per diluted share in 2023 compared to net income available to common shareholders of $2.1 billion or $2.28 per diluted share in 2022.
See the "Allowance" section for further information. 47 Table of Contents 2024 Results Regions reported net income available to common shareholders of $1.8 billion or $1.93 per diluted share in 2024 compared to net income available to common shareholders of $2.0 billion or $2.11 per diluted share in 2023.
The rates for total deposit costs equaled 0.99% , 0.14% and 0.05% for the years ended December 31, 2023, 2022 and 2021, respectively.
The rates for total deposit costs equaled 1.56% , 0.99% and 0.14% for the years ended December 31, 2024, 2023 and 2022, respectively.
Treasuries, swaps and mortgage rates) will drive yields higher on certain fixed-rate, newly originated or renewed loans, increase 80 Table of Contents prospective yields on certain investment portfolio purchases, and reduce amortization of premium expense on existing securities in the investment portfolio. The opposite is true in an environment where intermediate and long-term interest rates fall.
Treasuries, swaps and mortgage rates) will drive yields higher on certain fixed-rate, newly originated or renewed loans, and increase prospective yields on certain investment portfolio purchases. The opposite is true in an environment where intermediate and long-term interest rates fall.
Owner-occupied commercial real estate construction loans are made to commercial businesses for the development of land or construction of a building where the repayment is derived from revenues generated from the business of the borrower. Over half of the Company’s total loans are included in the commercial portfolio segment.
Owner-occupied commercial real estate construction loans are made to commercial businesses for the development of land or construction of a building where the repayment is derived from revenues generated from the business of the borrower.
LOANS HELD FOR SALE The following table presents Regions’ loans held for sale by type as of December 31: Table 8—Loans Held for Sale 2023 2022 (In millions) Commercial $ 208 $ 153 Residential first mortgage 184 160 Consumer and other performing 5 38 Non-performing 3 3 $ 400 $ 354 Commercial loans held for sale include commercial loans originated for sale to third parties and commercial loans originally recorded as held for investment when management has the intent to sell.
LOANS HELD FOR SALE The following table presents Regions’ loans held for sale by type at December 31: Table 7—Loans Held for Sale 2024 2023 (In millions) Commercial $ 372 $ 208 Residential first mortgage 222 184 Consumer and other performing — 5 Non-performing — 3 $ 594 $ 400 Commercial loans held for sale include commercial mortgage loans originated for sale to third parties and commercial loans originally recorded as held for investment when management has the intent to sell.
RATINGS Table 24 "Credit Ratings" reflects the debt ratings information of Regions Financial Corporation and Regions Bank by S&P, Moody’s, Fitch and DBRS as of December 31, 2023.
RATINGS Table 23 "Credit Ratings" reflects the debt ratings information of Regions Financial Corporation and Regions Bank by S&P, Moody’s, Fitch and DBRS.
Regions may, from time to time, consider opportunistically retiring outstanding issued securities, including subordinated debt in privately negotiated or open market transactions for cash or common shares. Regulatory approval would be required for retirement of some instruments. See Note 14 "Shareholders' Equity and Accumulated Other Comprehensive Income (Loss)" to the consolidated financial statements for additional information.
Refer to Note 11 "Borrowed Funds" to the consolidated financial statements for additional information. Regions may, from time to time, consider opportunistically retiring outstanding issued securities, including subordinated debt in privately negotiated or open market transactions for cash or common shares. Regulatory approval would be required for retirement of some instruments.
Average earning assets in 2023 totaled $137.9 billion, a decrease of $6.1 billion as compared to the prior year, primarily due to a decrease in interest-bearing deposits in other banks offset by a growth in loans, net of unearned income. See the "Loans", "Debt Securities", and "Cash and Cash Equivalents" sections for further details.
Average earning assets in 2024 totaled $137.5 billion, a decrease of $383 million as compared to the prior year, primarily due to a modest decline in loans, net of unearned income, partially offset by growth in debt securities and interest-bearing deposits in other banks. See the "Loans" and "Debt Securities" sections for further details.
See the "Executive Overview" section for details on average loan growth expectations for 2024. The following sections describe the composition of the portfolio segments and classes disclosed in Table 9, explain changes in balances from year-end 2022 and highlight the related risk characteristics. Regions believes that its loan portfolio is well diversified by product, client, and geography throughout its footprint.
The following sections describe the composition of the portfolio segments and classes disclosed in Table 9, explain changes in balances from year-end 2023 and highlight the related risk characteristics. Regions believes that its loan portfolio is well diversified by product, client, and geography throughout its footprint.
Interest rate options are contracts that allow the buyer to purchase or sell a financial instrument at a predetermined price and time. Forward sale commitments are contractual obligations to sell market instruments at a future date for an already agreed-upon price.
The notional principal is not exchanged but is used as a reference for the size of interest settlements. Interest rate options are contracts that allow the buyer to purchase or sell a financial instrument at a predetermined price and time. Forward sale commitments are contractual obligations to sell market instruments at a future date for an already agreed-upon price.
For more information on credit quality indicators refer to Note 5 "Allowance for Credit Losses". ALLOWANCE The allowance consists of two components: the allowance for loan losses and the reserve for unfunded credit commitments.
For more information on credit quality indicators refer to Note 5 "Allowance for Credit Losses". ALLOWANCE The allowance represents management's best estimate of expected losses over the life of the loan portfolio and consists of two components: the allowance for loan losses and the reserve for unfunded credit commitments.
For further discussion and analysis of the total allowance for credit losses, see the "Allowance for Credit Losses" and “Risk Management” sections found later in this report. See also Note 5 "Allowance for Credit Losses" to the consolidated financial statements.
For further discussion and analysis of the total allowance for credit losses, see the "Allowance for Credit Losses" and “Risk Management” sections found later in this report.
Table 18—Allowance for Credit Losses 2023 2022 2021 (Dollars in millions) Allowance for loan losses at January 1 $ 1,464 $ 1,479 $ 2,167 Cumulative effect from change in accounting guidance (1) (38) — — Allowance for loan losses, January 1 (as adjusted for change in accounting guidance) (1) 1,426 1,479 2,167 Loans charged-off: Commercial and industrial 195 102 124 Commercial real estate mortgage—owner-occupied 2 5 3 Commercial real estate construction—owner-occupied — — 1 Commercial investor real estate mortgage — 5 20 Residential first mortgage 1 1 2 Home equity lines 3 5 6 Home equity loans 1 1 1 Consumer credit card 52 40 43 Other consumer—exit portfolios 50 18 31 Other consumer 186 198 97 490 375 328 Recoveries of loans previously charged-off: Commercial and industrial 50 47 56 Commercial real estate mortgage—owner-occupied 2 3 3 Commercial investor real estate mortgage — 2 3 Residential first mortgage 1 5 5 Home equity lines 7 12 14 Home equity loans 1 2 4 Consumer credit card 8 8 11 Other consumer—exit portfolios 3 5 5 Other consumer 21 28 23 93 112 124 Net charge-offs (recoveries): Commercial and industrial 145 55 68 Commercial real estate mortgage—owner-occupied — 2 — Commercial real estate construction—owner-occupied — — 1 Commercial investor real estate mortgage — 3 17 Residential first mortgage — (4) (3) Home equity lines (4) (7) (8) Home equity loans — (1) (3) Consumer credit card 44 32 32 Other consumer—exit portfolios 47 13 26 Other consumer 165 170 74 397 263 204 Provision for (benefit from) loan losses 547 248 (493) Initial allowance on acquired PCD loans — — 9 Allowance for loan losses at December 31 1,576 1,464 1,479 Reserve for unfunded credit commitments at January 1 118 95 126 Provision for (benefit from) unfunded credit losses 6 23 (31) Reserve for unfunded credit commitments at December 31 124 118 95 Allowance for credit losses at December 31 $ 1,700 $ 1,582 $ 1,574 Loans, net of unearned income, outstanding at end of period $ 98,379 $ 97,009 $ 87,784 Average loans, net of unearned income, outstanding for the period $ 98,239 $ 92,282 $ 84,802 71 Table of Contents 2023 2022 2021 Net loan charge-offs (recoveries) as a % of average loans, annualized (2) : Commercial and industrial 0.28 % 0.11 % 0.16 % Commercial real estate mortgage—owner-occupied — % 0.04 % — % Commercial real estate construction—owner-occupied (0.09) % (0.03) % 0.42 % Total commercial 0.26 % 0.11 % 0.14 % Commercial investor real estate mortgage — % 0.06 % 0.30 % Commercial investor real estate construction (0.01) % — % — % Total investor real estate (0.01) % 0.04 % 0.23 % Residential first mortgage — % (0.02) % (0.02) % Home equity lines (0.10) % (0.19) % (0.20) % Home equity loans (0.02) % (0.05) % (0.11) % Consumer credit card 3.58 % 2.72 % 2.83 % Other consumer—exit portfolios 12.79 % 1.75 % 1.70 % Other consumer 2.74 % 2.99 % 2.41 % Total 0.40 % 0.29 % 0.24 % Ratios (2) : Allowance for credit losses at end of period to loans, net of unearned income 1.73 % 1.63 % 1.79 % Allowance for loan losses to loans, net of unearned income 1.60 % 1.51 % 1.69 % Allowance for credit losses at end of period to non-performing loans, excluding loans held for sale 211 % 317 % 349 % Allowance for loan losses to non-performing loans, excluding loans held for sale 196 % 293 % 328 % _______ (1) See Note 1 for additional information.
Table 17—Allowance for Credit Losses Twelve Months Ended December 31 2024 2023 2022 (Dollars in millions) Allowance for loan losses at January 1 $ 1,576 $ 1,464 $ 1,479 Cumulative effect from change in accounting guidance (1) — (38) — Allowance for loan losses, January 1 (as adjusted for change in accounting guidance) (1) 1,576 1,426 1,479 Loans charged-off: Commercial and industrial 257 195 102 Commercial real estate mortgage—owner-occupied 4 2 5 Commercial real estate construction—owner-occupied — — — Commercial investor real estate mortgage 42 — 5 Residential first mortgage 2 1 1 Home equity lines 3 3 5 Home equity loans — 1 1 Consumer credit card 63 52 40 Other consumer—exit portfolios 1 50 18 Other consumer 189 186 198 561 490 375 Recoveries of loans previously charged-off: Commercial and industrial 57 50 47 Commercial real estate mortgage—owner-occupied 2 2 3 Commercial real estate construction—owner-occupied 1 — — Commercial investor real estate mortgage 3 — 2 Residential first mortgage 3 1 5 Home equity lines 6 7 12 Home equity loans — 1 2 Consumer credit card 8 8 8 Other consumer—exit portfolios 1 3 5 Other consumer 22 21 28 103 93 112 Net charge-offs (recoveries): Commercial and industrial 200 145 55 Commercial real estate mortgage—owner-occupied 2 — 2 Commercial real estate construction—owner-occupied (1) — — Commercial investor real estate mortgage 39 — 3 Residential first mortgage (1) — (4) Home equity lines (3) (4) (7) Home equity loans — — (1) Consumer credit card 55 44 32 Other consumer—exit portfolios — 47 13 Other consumer 167 165 170 458 397 263 Provision for loan losses 495 547 248 Allowance for loan losses at December 31 1,613 1,576 1,464 Reserve for unfunded credit commitments at January 1 124 118 95 Provision for (benefit from) unfunded credit losses (8) 6 23 Reserve for unfunded credit commitments at December 31 116 124 118 Allowance for credit losses at December 31 $ 1,729 $ 1,700 $ 1,582 Loans, net of unearned income, outstanding at end of period $ 96,727 $ 98,379 $ 97,009 Average loans, net of unearned income, outstanding for the period $ 97,036 $ 98,239 $ 92,282 70 Table of Contents Twelve Months Ended December 31 2024 2023 2022 Net loan charge-offs (recoveries) as a % of average loans, annualized (2) : Commercial and industrial 0.40 % 0.28 % 0.11 % Commercial real estate mortgage—owner-occupied 0.04 % — % 0.04 % Commercial real estate construction—owner-occupied (0.18) % (0.09) % (0.03) % Total commercial 0.37 % 0.26 % 0.11 % Commercial investor real estate mortgage 0.60 % — % 0.06 % Commercial investor real estate construction — % (0.01) % — % Total investor real estate 0.45 % (0.01) % 0.04 % Residential first mortgage (0.01) % — % (0.02) % Home equity lines (0.08) % (0.10) % (0.19) % Home equity loans (0.02) % (0.02) % (0.05) % Consumer credit card 4.04 % 3.58 % 2.72 % Other consumer—exit portfolios (3.88) % 12.79 % 1.75 % Other consumer 2.71 % 2.74 % 2.99 % Total 0.47 % 0.40 % 0.29 % Ratios (2) : Allowance for credit losses at end of period to loans, net of unearned income 1.79 % 1.73 % 1.63 % Allowance for credit losses at end of period to non-performing loans, excluding loans held for sale 186 % 211 % 317 % _______ (1) See Note 1 to the consolidated financial statements for additional information.

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