REGIONS FINANCIAL CORP Management’s Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)

REGIONS FINANCIAL CORP Management’s Discussion and Analysis of Financial Condition and Results
of Operations (form 10-Q)

INTRODUCTION


The following discussion and analysis is part of Regions Financial Corporation's
("Regions" or the "Company") Quarterly Report on Form 10-Q filed with the SEC
and updates Regions' Annual Report on Form 10-K for the year ended December 31,
2021, which was previously filed with the SEC. This financial information is
presented to aid in understanding Regions' financial position and results of
operations and should be read together with the financial information contained
in Regions' Annual Report on Form 10-K. See Note 1 "Basis of Presentation" and
Note 12 "Recent Accounting Pronouncements" to the consolidated financial
statements for further detail. The emphasis of this discussion will be on the
three months ended March 31, 2022 compared to the three months ended March 31,
2021 for the consolidated statements of income. For the consolidated balance
sheets, the emphasis of this discussion will be the balances as of March 31,
2022 compared to December 31, 2021.

This discussion and analysis contains statements that may be considered
"forward-looking statements" as defined in the Private Securities Litigation
Reform Act of 1995. See pages 7 through 9 for additional information regarding
forward-looking statements.

CORPORATE PROFILE

Regions is a financial holding company headquartered in Birmingham, Alabama,
that operates 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. Regions provides financial solutions for
a wide range of clients including retail and mortgage banking services,
commercial banking services and wealth and investment services. Further, Regions
and its subsidiaries deliver specialty capabilities including merger and
acquisition advisory services, capital market solutions, home improvement
lending and others.

Regions conducts its banking operations through Regions Bank, an Alabama
state-chartered commercial bank that is a member of the Federal Reserve System.
At March 31, 2022, Regions operated 1,294 total branch outlets. Regions carries
out its strategies and derives its profitability from three reportable business
segments: Corporate Bank, Consumer Bank, and Wealth Management, with the
remainder in Other. See Note 10 "Business Segment Information" to the
consolidated financial statements for more information regarding Regions'
segment reporting structure.

Regions' business strategy is focused on providing a competitive mix of products
and services, delivering quality customer service, and continuing to develop and
optimize distribution channels that include a branch distribution network with
offices in convenient locations, as well as electronic and mobile banking.

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. Net interest income is primarily the difference
between the interest income Regions receives on interest-earning assets, such as
loans and securities, and the interest expense Regions pays on interest-bearing
liabilities, principally deposits and borrowings. Regions' net interest income
is impacted by the size and mix of its balance sheet components and the interest
rate spread between interest earned on its assets and interest paid on its
liabilities. 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. Results of operations are also affected by the
provision for credit losses and non-interest expenses such as salaries and
employee benefits, occupancy, professional, legal and regulatory expenses, FDIC
insurance assessments, and other operating expenses, as well as income taxes.

Economic conditions, competition, new legislation and related rules impacting
regulation of the financial services industry and the monetary and fiscal
policies of the Federal government significantly affect most, if not all,
financial institutions, including Regions. Lending and deposit activities and
fee income generation are influenced by levels of business spending and
investment, consumer income, consumer spending and savings, capital market
activities, and competition among financial institutions, as well as customer
preferences, interest rate conditions and prevailing market rates on competing
products in Regions' market areas.

On December 17, 2021, Regions entered into an agreement to acquire Clearsight
Advisors, Inc., a leading-edge mergers and acquisitions firm headquartered in
McLean, Virginia. The transaction closed on December 31, 2021.

On October 4, 2021, Regions entered into an agreement to acquire Sabal Capital
Partners, LLC, a diversified financial services firm that facilitates lending in
the small-balance commercial real estate market headquartered in Irvine,
California. The transaction closed on December 1, 2021. Refer to the
"Acquisitions" section for more detail.

On June 8, 2021, Regions entered into an agreement to acquire EnerBank, a
consumer lending institution specializing in home improvement lending
headquartered in Salt Lake City, Utah. The transaction closed on October 1,
2021
, and resulted in the addition of approximately $3.1 billion in loans to
consumers. Refer to the “Acquisitions” section for more detail.

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FIRST QUARTER OVERVIEW

First Quarter Results

Regions reported net income available to common shareholders of $524 million, or
$0.55 per diluted share, in the first quarter of 2022 compared to $614 million,
or $0.63 per diluted share, in the first quarter of 2021. The primary drivers of
the decrease in net income from the prior year period were a smaller benefit
from credit losses and lower non-interest income, partially offset by higher net
interest income.

For the first quarter of 2022, net interest income (taxable-equivalent basis)
totaled $1.0 billion, up $48 million compared to the first quarter of 2021. The
net interest margin (taxable-equivalent basis) was 2.85 percent for the first
quarter of 2022 and 3.02 percent in the first quarter of 2021. The increase in
net interest income was primarily driven by increases in average loan balances
and average debt securities balances, as well as lower funding costs. Net
interest margin was negatively impacted by continued elevated liquidity as
evidenced by higher average cash balances held at the Federal Reserve. Refer to
Table 18 "Consolidated Average Daily Balances and Yield/Rate Analysis" for
further details.

The benefit for credit losses totaled $36 million in the first quarter of 2022,
as compared to a benefit of $142 million during the first quarter of 2021. The
current quarter benefit was primarily due to positive asset quality and waning
pandemic concerns partially offset by loan growth and heightened economic
volatility. Refer to the "Allowance for Credit Losses" section for further
detail.

Net charge-offs totaled $46 million, or an annualized 0.21 percent of average
loans, in the first quarter of 2022, compared to $83 million, or an annualized
0.40 percent for the first quarter of 2021. The decrease was primarily driven by
broad-based improvements across most portfolios. Refer to the "Allowance for
Credit Losses" section for further detail.

The allowance was 1.67 percent of total loans, net of unearned income at March
31, 2022 compared to 1.79 percent at December 31, 2021. The decrease was a
result of the factors discussed above. The allowance was 446 percent of total
non-performing loans at March 31, 2022 compared to 349 percent at December 31,
2021. Refer to the "Allowance for Credit Losses" section for further detail.

Non-interest income was $584 million for the first quarter of 2022, a $57
million decrease from the first quarter of 2021. The decrease was primarily
driven by declines in mortgage income, capital markets income, and market value
adjustments on employee benefit assets. These decreases were partially offset by
increases in service charges, card and ATM fees, and other non-interest income.
See Table 22 "Non-Interest Income" for more detail.

Total non-interest expense was $933 million in the first quarter of 2022, a $5
million
increase from the first quarter of 2021. See Table 23 “Non-Interest
Expense” for more detail.


Income tax expense for the three months ended March 31, 2022 was $154 million
compared to $180 million for the same period in 2021. See "Income Taxes" toward
the end of the Management's Discussion and Analysis section of this report for
more detail.

Capital

Regions and Regions Bank are required to comply with regulatory capital
requirements established by Federal and State banking agencies, which include
quantitative requirements including the CET1 ratio. The CET1 ratio at March 31,
2022 was estimated at 9.39 percent. For additional information on Regions'
regulatory capital requirements see the "Regulatory Requirements" section.

In the second quarter of 2021, Regions received the results of the Company's
voluntary participation in 2021 CCAR. The FRB communicated that the Company
exceeded all minimum capital levels under the supervisory stress test and the
Company's stress capital buffer for the fourth quarter of 2021 through the third
quarter of 2022 will be floored at 2.5 percent.

As part of the Company's capital plan, on April 21, 2021, the Board authorized
the repurchase of up to $2.5 billion of the Company's common stock, permitting
purchases from the second quarter of 2021 through the first quarter of 2022.

On April 20, 2022, the Company declared a cash dividend for the second quarter
of 2022 of $0.17 per share of common stock. Also 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. As of May 4, 2022, Regions had repurchased approximately 725 thousand
shares of common stock at a total cost of $15 million under this plan. All of
these shares were immediately retired upon repurchase and therefore will not be
included in treasury stock.

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Expectations

                                              2022 Expectations
                     Category                                                  Expectation
            Total Adjusted Revenue (1)                                         Up 4.5-5.5%
           Adjusted Non-Interest Expense                                         Up 3-4%
            Adjusted Operating Leverage                                          Positive
                   Average Loans                                                 Up 4-5%
          Net Charge-Offs / Average Loans                           

Approximately 20-30 basis points

              Effective Tax Rate (2)                                        

21-23%

                                                               Near the 

mid-point of a 9.25-9.75% operating

                       CET1                                                       range


_____
(1)The total adjusted revenue expectation is consistent with the expectation
that was disclosed in Exhibit 99.3 of the Form 8-K filed with the SEC on April
22, 2022. This expectation utilizes the forward interest rate curve at March 31,
2022, and does not contemplate purchases of debt securities available for sale
subsequent to March 31, 2022. See the "Market Risk-Interest Rate Risk" section
for further discussion of those purchases.
(2)Does not include the impact of potential tax legislation.

Regions believes that expressing certain expectations as non-GAAP measures will
assist investors in analyzing the operating results of the Company and
predicting future performance on the same basis as that applied by management.
The reconciliation with respect to these forward-looking non-GAAP measures is
expected to be consistent with the actual non-GAAP reconciliations within
Management's Discussion and Analysis of this Form 10-Q.

BALANCE SHEET ANALYSIS

The following sections provide expanded discussion of significant changes in
certain line items in asset, liability, and shareholders’ equity categories.

CASH AND CASH EQUIVALENTS


Cash and cash equivalents decreased approximately $1.5 billion from year-end
2021 to March 31, 2022, due primarily to a decrease in cash on deposit with the
FRB. While deposit balances increased in the first quarter of 2022 due to
seasonality, Regions has an active cash management strategy in which the Company
has deployed some excess liquidity from deposit growth as opportunities exist
given market interest rates, primarily through securities purchases. See the
"Debt Securities", "Liquidity", and "Deposits" sections for more information.

DEBT SECURITIES

The following table details the carrying values of debt securities, including
both available for sale and held to maturity:

Table 1-Debt Securities


                                                                         March 31, 2022           December 31, 2021
                                                                                       (In millions)
U.S. Treasury securities                                               $         1,030          $            1,132
Federal agency securities                                                          700                          92
Obligations of states and political subdivisions                                     3                           4
Mortgage-backed securities:
Residential agency                                                              20,423                      19,319
Residential non-agency                                                               1                           1
Commercial agency                                                                6,307                       6,915
Commercial non-agency                                                              464                         536
Corporate and other debt securities                                              1,320                       1,381
                                                                       $        30,248          $           29,380


Debt securities available for sale, which constitute the majority of the
securities portfolio, are an important tool used to manage interest rate
sensitivity and provide a primary source of liquidity for the Company. Regions
maintains a highly rated securities portfolio consisting primarily of agency
mortgage-backed securities. See Note 2 "Debt Securities" to the consolidated
financial statements for additional information. Also see the "Market
Risk-Interest Rate Risk" and "Liquidity" sections for more information.

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Debt securities increased $868 million from December 31, 2021 to March 31, 2022
driven by increases in federal agency securities and residential agency
securities. In the first quarter of 2022, Regions made purchases of debt
securities available for sale, excluding normal reinvestment of maturities,
totaling approximately $2.1 billion consisting primarily of federal agency and
residential agency securities. Approximately $1.5 billion of the purchases
related to a hedging strategy with the remaining purchases related to active
cash management strategies. Partially offsetting the first quarter purchases
were declines in market valuations driven by an increase in market interest
rates.

See the “Market Risk-Interest Rate Risk” section for more information regarding
purchases of debt securities available for sale subsequent to March 31, 2022.

LOANS HELD FOR SALE


Loans held for sale totaled $694 million at March 31, 2022, consisting of $479
million of residential real estate mortgage loans, $168 million of commercial
loans, $40 million of consumer and other performing loans, and $7 million of
non-performing loans. At December 31, 2021, loans held for sale totaled $1.0
billion, consisting of $680 million of residential real estate mortgage loans,
$257 million of commercial loans, $53 million of consumer and other performing
loans, and $13 million of non-performing loans. The levels of residential real
estate mortgage loans held for sale that are part of the Company's mortgage
originations fluctuate depending on the timing of origination and sale to third
parties. 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. Levels of commercial
loans held for sale fluctuate based on timing of sale to third parties.

LOANS


Loans, net of unearned income, represented approximately 61 percent of Regions'
interest-earning assets as of March 31, 2022. The following table presents the
distribution of Regions' loan portfolio by portfolio segment and class, net of
unearned income:

Table 2-Loan Portfolio

                                                                                              March 31, 2022                        December 31, 2021
                                                                                                 (In millions, net of unearned income)
Commercial and industrial                                                       $             45,643                              $           43,758
Commercial real estate mortgage-owner-occupied (1)                                             5,181                                           5,287
Commercial real estate construction-owner-occupied (1)                                           273                                             264
Total commercial                                                                              51,097                                          49,309
Commercial investor real estate mortgage                                                       5,557                                           5,441
Commercial investor real estate construction                                                   1,607                                           1,586
Total investor real estate                                                                     7,164                                           7,027
Residential first mortgage                                                                    17,373                                          17,512
Home equity lines                                                                              3,602                                           3,744
Home equity loans                                                                              2,500                                           2,510
Consumer credit card                                                                           1,133                                           1,184
Other consumer-exit portfolios                                                                   909                                           1,071
Other consumer                                                                                 5,557                                           5,427
Total consumer                                                                                31,074                                          31,448
                                                                                $             89,335                              $           87,784


__________

(1)Collectively referred to as CRE.

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PORTFOLIO CHARACTERISTICS

The following sections describe the composition of the portfolio segments and
classes disclosed in Table 2, explain changes in balances from 2021 year-end,
and highlight the related risk characteristics. Regions believes that its loan
portfolio is well diversified by product, client, and geography throughout its
footprint. However, the loan portfolio may be exposed to certain concentrations
of credit risk which exist in relation to individual borrowers or groups of
borrowers, certain types of collateral, certain types of industries, certain
loan products, or certain regions of the country. Refer to Note 5 "Allowance for
Credit Losses" to the Annual Report on Form 10-K for the year ended December 31,
2021 for additional information regarding Regions' portfolio segments and
related classes, as well as the risks specific to each.

Commercial

The commercial portfolio segment includes commercial and industrial loans to
commercial customers for use in normal business operations to finance working
capital needs, equipment purchases and other expansion projects. Commercial and
industrial loans increased $1.9 billion since year-end 2021. The increase in
commercial and industrial loan balances was driven by new loan production and a
continued increase in line utilization. In the first quarter of 2022, commercial
and industrial loan growth was broad-based and included increases in the
information, manufacturing, real estate and wholesale goods industries. The
March 31, 2022 commercial and industrial loan balance also included $437 million
of PPP loans, a decrease of $311 million compared to December 31, 2021,
reflecting continued PPP loan forgiveness.

The commercial portfolio also includes owner-occupied commercial real estate
mortgage loans to operating businesses, which are loans for long-term financing
on land and buildings, and are repaid by cash generated by business operations.
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. These balances are spread across numerous industries as noted in the
table below. The Company manages the related risks to this portfolio by setting
certain lending limits for each significant industry.

The following tables provide detail of Regions’ commercial lending balances in
selected industries.

Table 3-Commercial Industry Exposure

                                                                        March 31, 2022
                                                                         Unfunded
                                                    Loans               Commitments            Total Exposure
                                                                         (In millions)
Administrative, support, waste and repair       $     1,498          $        1,119          $         2,617
Agriculture                                             341                     274                      615
Educational services                                  3,218                   1,013                    4,231
Energy                                                1,422                   2,741                    4,163
Financial services                                    5,579                   6,388                   11,967
Government and public sector                          2,873                     444                    3,317
Healthcare                                            3,788                   2,320                    6,108
Information                                           2,265                   1,296                    3,561
Manufacturing                                         4,979                   4,139                    9,118
Professional, scientific and technical services       2,287                   1,337                    3,624
Real estate (1)                                       7,658                   7,398                   15,056
Religious, leisure, personal and non-profit
services                                              1,673                     661                    2,334
Restaurant, accommodation and lodging                 1,527                     430                    1,957
Retail trade                                          2,412                   2,264                    4,676
Transportation and warehousing                        3,044                   1,566                    4,610
Utilities                                             2,215                   2,929                    5,144
Wholesale goods                                       4,095                   3,069                    7,164
Other (2)                                               223                   3,335                    3,558
Total commercial                                $    51,097          $       42,723          $        93,820


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                                                                     December 31, 2021 (3)
                                                                          Unfunded
                                                     Loans               Commitments            Total Exposure
                                                                         (In millions)
Administrative, support, waste and repair       $      1,489          $        1,141          $         2,630
Agriculture                                              336                     253                      589
Educational services                                   2,975                     948                    3,923
Energy                                                 1,361                   2,678                    4,039
Financial services                                     5,582                   5,933                   11,515
Government and public sector                           2,845                     526                    3,371
Healthcare                                             3,918                   2,270                    6,188
Information                                            1,929                   1,233                    3,162
Manufacturing                                          4,629                   4,270                    8,899
Professional, scientific and technical services        2,235                   1,409                    3,644
Real estate (1)                                        7,343                   7,720                   15,063
Religious, leisure, personal and non-profit
services                                               1,733                     730                    2,463
Restaurant, accommodation and lodging                  1,658                     433                    2,091
Retail trade                                           2,247                   2,307                    4,554
Transportation and warehousing                         3,030                   1,538                    4,568
Utilities                                              2,131                   2,895                    5,026
Wholesale goods                                        3,756                   3,189                    6,945
Other (2)                                                112                   2,425                    2,537
Total commercial                                $     49,309          $       41,898          $        91,207


________
(1)"Real estate" includes REITs, which are unsecured commercial and industrial
products that are real estate related.
(2)"Other" contains balances related to non-classifiable and invalid business
industry codes offset by payments in process and fee accounts that are not
available at the loan level.
(3)As customers' businesses evolve (e.g. up or down the vertical manufacturing
chain), Regions may need to change the assigned business industry code used to
define the customer relationship. When these changes occur, Regions does not
recast the customer history for prior periods into the new classification
because the business industry code used in the prior period was deemed
appropriate. As a result, comparable period changes may be impacted.

Investor Real Estate


Loans for real estate development are repaid through cash flows related to the
operation, sale or refinance of the property. This portfolio segment includes
extensions of credit to real estate developers or investors where repayment is
dependent on the sale of real estate or income generated from the real estate
collateral. A portion of Regions' investor real estate portfolio segment
consists of loans secured by residential product types (land, single-family and
condominium loans) within Regions' markets. Additionally, this category includes
loans made to finance income-producing properties such as apartment buildings,
office and industrial buildings, and retail shopping centers. Total investor
real estate loans increased $137 million in comparison to 2021 year-end
balances.

Residential First Mortgage


Residential first mortgage loans represent loans to consumers to finance a
residence. These loans are typically financed over a 15 to 30 year term and, in
most cases, are extended to borrowers to finance their primary residence. These
loans decreased $139 million in comparison to 2021 year-end balances. The
decrease in residential first mortgage loans was primarily driven by the first
quarter of 2022 re-securitization and sale of approximately $285 million of
Ginnie Mae loans that had been previously re-purchased from their pools.
Approximately $1.0 billion in new loan originations were retained on the balance
sheet through the first three months of 2022.

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 by $142 million in comparison to 2021 year-end balances,
continuing the pace of decline experienced in the past several years as payoffs
and paydowns outpaced production. Substantially all of this portfolio was
originated through Regions' branch network.

Beginning in December 2016, new home equity lines of credit have a 10-year draw
period and a 20-year repayment term. During the 10-year draw period customers do
not have an interest-only payment option, except on a very limited basis. From
May 2009 to December 2016, home equity lines of credit had a 10-year draw period
and a 10-year repayment term. Prior to

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May 2009, the predominant structure was a 20-year draw period with a balloon
payment upon maturity. The term "balloon payment" means there are no principal
payments required until the balloon payment is due for interest-only lines of
credit.

The following table presents information regarding the future principal payment
reset dates for the Company's home equity lines of credit as of March 31, 2022.
The balances presented are based on maturity date for lines with a balloon
payment and draw period expiration date for lines that convert to a repayment
period.

Table 4-Home Equity Lines of Credit – Future Principal Payment Resets

              First Lien       % of Total      Second Lien       % of Total       Total
                                        (Dollars in millions)
2022         $       101           2.81  %    $         81           2.25  %    $   182
2023                    83         2.30  %                63         1.74  %          146
2024                   125         3.47  %                84         2.34  %          209
2025                   123         3.40  %               127         3.53  %          250
2026                   170         4.73  %               172         4.78  %          342
2027-2032            1,366        37.92  %             1,018        28.26  %        2,384
2032-2036               41         1.14  %                41         1.13  %           82
Thereafter               4         0.12  %                 3         0.08  %            7
Total        $     2,013          55.89  %    $      1,589          44.11  %    $ 3,602


Home Equity Loans

Home equity loans are also secured by a first or second mortgage on the
borrower's residence, are primarily originated as amortizing loans, and allow
customers to borrow against the equity in their homes. Substantially all of this
portfolio was originated through Regions' branch network.

Other 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. The third party data indicates trends for MSAs. Regions uses the third
party valuation trends from the MSAs in the Company's footprint in its estimate.
The trend data is applied to the loan portfolios taking into account the age of
the most recent valuation and geographic area.

The following table presents current LTV data for components of the residential
first mortgage, home equity lines and home equity loans classes of the consumer
portfolio segment. Current LTV data for some loans in the portfolio is not
available due to mergers and systems integrations. The amounts in the table
represent the entire loan balance. For purposes of the table below, if the loan
balance exceeds the current estimated collateral the entire balance is included
in the "Above 100%" category, regardless of the amount of collateral available
to partially offset the shortfall.

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Table 5-Estimated Current Loan to Value Ranges

                                                                                    March 31, 2022
                                          Residential               Home Equity Lines of Credit                      Home Equity Loans
                                         First Mortgage             1st Lien              2nd Lien              1st Lien              2nd Lien
                                                                                     (In millions)
Estimated current LTV:
Above 100%                             $             3          $            -          $       -          $         2              $       -
Above 80% - 100%                                 1,505                       3                  5                   14                      4
80% and below                                   15,592                   1,983              1,527                2,300                    163
Data not available                                 273                      27                 57                   12                      5
                                       $        17,373          $        2,013          $   1,589          $     2,328              $     172




                                                                                   December 31, 2021
                                          Residential               Home Equity Lines of Credit                      Home Equity Loans
                                         First Mortgage             1st Lien              2nd Lien              1st Lien              2nd Lien
                                                                                     (In millions)
Estimated current LTV:
Above 100%                             $             5          $            1          $       -          $         2              $       1
Above 80% - 100%                                 1,667                       6                  8                   16                      4
80% and below                                   15,564                   2,053              1,588                2,305                    167
Data not available                                 276                      29                 59                   11                      4
                                       $        17,512          $        2,089          $   1,655          $     2,334              $     176


Consumer Credit Card

Consumer credit card lending represents primarily open-ended variable interest
rate consumer credit card loans. These balances decreased $51 million from
year-end 2021.

Other Consumer-Exit Portfolios


Other consumer-exit portfolios includes lending initiatives through third
parties consisting of loans made through automotive dealerships and other point
of sale lending. Regions ceased originating new loans related to these
businesses prior to 2020 and therefore the portfolio balance has decreased $162
million from year-end 2021.

Other Consumer

Other consumer loans primarily include indirect and direct consumer loans,
overdrafts and other revolving loans. Other consumer loans increased $130
million
from year-end 2021 primarily driven by an increase in consumer home
improvement lending from the fourth quarter 2021 acquisition of EnerBank.


Regions considers factors such as periodic updates of FICO scores, unemployment,
home prices, and geography as credit quality indicators for consumer loans. FICO
scores are obtained at origination and refreshed FICO scores are obtained by the
Company quarterly for all consumer loans. For more information on credit quality
indicators refer to Note 3 "Loans and the Allowance for Credit Losses" .

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ALLOWANCE

The allowance consists of two components: the allowance for loan losses and the
reserve for unfunded credit commitments. Unfunded credit commitments includes
items such as letters of credit, financial guarantees and binding unfunded loan
commitments.

The allowance totaled $1.5 billion as of March 31, 2022 compared to $1.6 billion
at December 31, 2021, which represents management's best estimate of expected
losses over the life of the loan and credit commitment portfolios. Key drivers
of the change in the allowance are presented in Table 6 below. While many of
these items overlap regarding impact, they are included in the category most
relevant.

Table 6- Allowance Changes

                                                             Three Months Ended
                                                     March 31, 2022      March 31, 2021
                                                               (In millions)

Allowance for credit losses, beginning balance $ 1,574 $

2,293


Net charge-offs                                            (46)             

(83)

Provision over (less than) net charge-offs:

  Economic/Qualitative                                     (54)                   (130)
  Changes in portfolio credit quality/uncertainty          (13)                    (14)
  Changes in specific reserves                               8                     (17)
  Other portfolio changes (1)                               23                      19

Total provision over (less than) net charge-offs           (82)             

(225)

Allowance for credit losses, ending balance $ 1,492 $

     2,068




_______
(1)This line item includes the net impact of portfolio growth, portfolio
run-off, pay-downs and changes in the mix of total outstanding loans. This line
item excludes the impact of PPP loans of $437 million and $4.3 billion as of
March 31, 2022 and 2021, respectively, which are fully backed by the U.S.
government and have an immaterial associated allowance.

Credit metrics are monitored throughout the quarter in order to understand
external macro-views, trends and industry outlooks, as well as Regions' internal
specific views of credit metrics and trends. The first quarter of 2022 exhibited
continued strong asset quality performance. While total net charge-offs remained
relatively flat, commercial and investor real estate criticized balances
decreased approximately $366 million and classified balances decreased $238
million compared to the fourth quarter of 2021. Non-performing loans, excluding
held for sale, and non-performing assets decreased approximately $116 million
and $123 million, respectively, compared to the fourth quarter of 2021.

Regions' March 2022 baseline forecast was generally improved compared to the
December 2021 forecast with continued increases in key model variables including
HPI and unemployment with stable GDP growth after the first quarter of 2022. The
March 2022 baseline forecast anticipates above-trend real GDP growth in 2022,
supported primarily by consumer spending and business investments in equipment,
machinery and intellectual property, with potential for further support from
government spending in 2023 and beyond. The Company expects that by mid-2023 the
economy will be back on a GDP growth path of around 2.5 percent that prevailed
prior to the COVID-19 pandemic. While the baseline forecast anticipates a
double-digit increase in the HPI for full-year 2022, quarter over quarter growth
is expected to decelerate sharply into 2023. As measured by CPI, inflation is
expected to remain above the FOMC's 2.0 percent target for the remainder of 2022
and into 2023. Furthermore, ongoing disruptions in supply chains and shipping
networks, labor supply constraints, inflationary pressures, and geopolitical
tensions provide significant uncertainty over the near-term forecast.

Patterns of economic activity within the Regions footprint are expected to be
broadly similar to those seen in the U.S. as a whole. In deriving its March 2022
forecast, Regions benchmarks its internal forecast with external forecasts and
external data available.

The table below reflects a range of macroeconomic factors utilized in the Base
forecast over the two-year R&S forecast period as of March 31, 2022. The
unemployment rate is the most significant macroeconomic factor among the CECL
models. Unemployment rates in the first quarter and the forecasted periods
remained normalized.

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Table 7- Macroeconomic Factors in the Forecast

                                     Pre-R&S                                                                        Base R&S Forecast
                                      Period                                                                         March 31, 2022
                                      1Q2022              2Q2022              3Q2022            4Q2022            1Q2023            2Q2023            3Q2023            4Q2023            1Q2024
Real GDP, annualized % change            1.1  %                3.4  %            4.8  %            3.5  %            3.2  %            3.0  %            2.5  %            2.5  %            2.3  %
Unemployment rate                        3.8  %                3.5  %            3.3  %            3.3  %            3.2  %            3.1  %            3.1  %            3.1  %            3.0  %
HPI, year-over-year % change            19.0  %               15.9  %           11.5  %            7.9  %            4.1  %            2.5  %            2.6  %            2.7  %            3.0  %
S&P 500                                   4,456                 4,439             4,496             4,561             4,631             4,722             4,804             4,886             4,960
CPI, year-over-year % change             7.9  %                7.6  %            6.6  %            5.2  %            3.6  %            2.4  %            2.1  %            2.1  %            2.0  %


The waning pandemic concerns and positive credit performance during the quarter
(described above) were significant drivers of the modeled decreases in the
allowance.


While Regions' quantitative allowance methodologies strive to reflect all risk
factors, any estimate involves assumptions and uncertainties resulting in some
level of imprecision. The qualitative framework has a general imprecision
component which is meant to acknowledge that model and forecast errors are
inherent in any modeling estimate. The March 31, 2022 general imprecision
allowance remained relatively stable compared to the fourth quarter of 2021 and
reflects uncertainty in the current environment, including the risk of
persistent inflation at elevated levels, geopolitical tension impacts and supply
chain issues.

Based on the overall analysis performed, management deemed an allowance of $1.5
billion
to be appropriate to absorb expected credit losses in the loan and
credit commitment portfolios as of March 31, 2022.





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Details regarding the allowance and net charge-offs, including an analysis of
activity from the previous year's totals, are included in Table 8 "Allowance for
Credit Losses." Net charge-offs decreased $37 million year-over-year, primarily
driven by a decline in net charge-offs in the commercial and industrial
portfolio and commercial investor real estate mortgage portfolio partially
offset by $9 million in net charge-offs from the addition of the EnerBank. 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 during the remainder of 2022 and beyond. See the "Quarterly
Overview" section for details on expectations for net charge-offs in 2022.

Table 8-Allowance for Credit Losses

                                                                                           Three Months Ended March 31
                                                                                             2022                  2021
                                                                                              (Dollars in millions)
Allowance for loan losses at January 1                                                 $        1,479          $   2,167

Loans charged-off:
Commercial and industrial                                                                          23                 45
Commercial real estate mortgage-owner-occupied                                                      3                  1
Commercial real estate construction-owner-occupied                                                  -                  1
Commercial investor real estate mortgage                                                            -                 15

Residential first mortgage                                                                          -                  1
Home equity lines                                                                                   1                  2
Home equity loans                                                                                   1                  -
Consumer credit card                                                                               10                 12
Other consumer-exit portfolios                                                                      6                 11
Other consumer                                                                                     33                 26
                                                                                                   77                114
Recoveries of loans previously charged-off:
Commercial and industrial                                                                          13                 16
Commercial real estate mortgage-owner-occupied                                                      -                  -
Commercial real estate construction-owner-occupied                                                  -                  -
Commercial investor real estate mortgage                                                            -                  -

Residential first mortgage                                                                          2                  1
Home equity lines                                                                                   3                  3
Home equity loans                                                                                   1                  -
Consumer credit card                                                                                2                  3
Other consumer-exit portfolios                                                                      2                  2
Other consumer                                                                                      8                  6
                                                                                                   31                 31
Net charge-offs (recoveries):
Commercial and industrial                                                                          10                 29
Commercial real estate mortgage-owner-occupied                                                      3                  1
Commercial real estate construction-owner-occupied                                                  -                  1
Commercial investor real estate mortgage                                                            -                 15

Residential first mortgage                                                                         (2)                 -
Home equity lines                                                                                  (2)                (1)
Home equity loans                                                                                   -                  -
Consumer credit card                                                                                8                  9
Other consumer-exit portfolios                                                                      4                  9
Other consumer                                                                                     25                 20
                                                                                                   46                 83
Provision for (benefit from) loan losses                                                          (17)              (108)

Allowance for loan losses at March 31                                                           1,416              1,976
Reserve for unfunded credit commitments at January 1                                               95                126
Provision for (benefit from) unfunded credit losses                                               (19)               (34)
Reserve for unfunded credit commitments at March 31                                                76                 92
Allowance for credit losses at March 31                                                $        1,492          $   2,068
Loans, net of unearned income, outstanding at end of period                            $       89,335          $  84,755

Average loans, net of unearned income, outstanding for the period

            $       87,814          $  84,755


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                                                                                              Three Months Ended March 31
                                                                                             2022                    2021
                                                                                                 (Dollars in millions)

Net loan charge-offs (recoveries) as a % of average loans, annualized (1):
Commercial and industrial

                                                                        0.09  %                 0.28  %
Commercial real estate mortgage-owner-occupied                                                   0.20  %                 0.09  %
Commercial real estate construction-owner-occupied                                              (0.03) %                 0.93  %
Total commercial                                                                                 0.10  %                 0.26  %
Commercial investor real estate mortgage                                                        (0.01) %                 1.11  %

Total investor real estate                                                                      (0.01) %                 0.82  %
Residential first mortgage                                                                      (0.05) %                    -  %
Home equity-lines of credit                                                                     (0.17) %                (0.06) %
Home equity-closed-end                                                                          (0.07) %                    -  %
Consumer credit card                                                                             2.83  %                 3.19  %
Other consumer-exit portfolios                                                                   1.83  %                 1.98  %
Other consumer                                                                                   1.89  %                 3.56  %
Total consumer                                                                                   0.44  %                 0.52  %
Total                                                                                            0.21  %                 0.40  %
Ratios:

Allowance for credit losses at end of period to loans, net of unearned income

                    1.67  %                 2.44  %

Allowance for loan losses at end of period to loans, net of unearned income

                      1.59  %                 2.33  %

Allowance for credit losses at end of period to non-performing loans, excluding loans
held for sale

                                                                                     446  %                  280  %
Allowance for loan losses at end of period to non-performing loans, excluding loans
held for sale                                                                                     423  %                  268  %


_______

(1)Amounts have been calculated using whole dollar values.


Allocation of the allowance for credit losses by portfolio segment and class is
summarized as follows:

Table 9-Allowance Allocation

                                                                                  March 31, 2022                                                     December 31, 2021
                                                                                    Allowance            Allowance to                                    Allowance            Allowance to
                                                            Loan Balance           Allocation             Loans % (1)            Loan Balance           Allocation             Loans % (1)
                                                                                                                 (Dollars in millions)
Commercial and industrial                                 $      45,643          $        557                     1.2  %       $      43,758          $        613                     1.4  %
Commercial real estate mortgage-owner-occupied                    5,181                   107                     2.1  %               5,287                   118                     2.2  %
Commercial real estate construction-owner-occupied                  273                     8                     2.8  %                 264                     9                     3.5  %
Total commercial                                                 51,097                   672                     1.3  %              49,309                   740                     1.5  %
Commercial investor real estate mortgage                          5,557                    74                     1.3  %               5,441                    77                     1.4  %
Commercial investor real estate construction                      1,607                     9                     0.6  %               1,586                    10                     0.6  %
Total investor real estate                                        7,164                    83                     1.2  %               7,027                    87                     1.2  %
Residential first mortgage                                       17,373                   119                     0.7  %              17,512                   122                     0.7  %
Home equity lines                                                 3,602                    75                     2.1  %               3,744                    83                     2.2  %
Home equity loans                                                 2,500                    27                     1.1  %               2,510                    28                     1.1  %
Consumer credit card                                              1,133                   122                    10.8  %               1,184                   120                    10.2  %
Other consumer-exit portfolios                                      909                    61                     6.7  %               1,071                    64                     6.0  %
Other consumer                                                    5,557                   333                     6.0  %               5,427                   330                     6.1  %
Total consumer                                                   31,074                   737                     2.4  %              31,448                   747                     2.4  %
Total                                                     $      89,335          $      1,492                     1.7  %       $      87,784          $      1,574                     1.8  %


_______

(1)Amounts have been calculated using whole dollar values.

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TROUBLED DEBT RESTRUCTURINGS (TDRs)


TDRs are modified loans in which a concession is provided to a borrower
experiencing financial difficulty. Residential first mortgage, home equity,
consumer credit card and other consumer TDRs are consumer loans modified under
the CAP. Commercial and investor real estate loan modifications are not the
result of a formal program, but represent situations where modifications were
offered as a workout alternative. Renewals of classified commercial and investor
real estate loans are considered to be TDRs, even if no reduction in interest
rate is offered, if the existing terms are considered to be below market.
Insignificant modifications are not considered TDRs. More detailed information
is included in Note 3 "Loans and the Allowance for Credit Losses" to the
consolidated financial statements.

As provided initially in the CARES Act and subsequently extended through the
Consolidated Appropriations Act, certain loan modifications related to the
COVID-19 pandemic beginning March 1, 2020 through January 1, 2022 were eligible
for relief from TDR classification. Regions elected this provision of both Acts;
therefore, modified loans that met the required guidelines for relief were not
considered TDRs and are excluded from the December 31, 2021 disclosures below.
The following table summarizes the loan balance and related allowance for
accruing and non-accruing TDRs for the periods presented:

Table 10-Troubled Debt Restructurings


                                                             March 31, 2022                                 December 31, 2021
                                                    Loan              Allowance for Credit           Loan            Allowance for Credit
                                                   Balance                   Losses                 Balance                 Losses
                                                                                     (In millions)
Accruing:
Commercial                                    $       84              $               4          $       81          $               4
Investor real estate                                   9                              1                   1                          -
Residential first mortgage                           249                             31                 220                         31
Home equity lines                                     28                              4                  28                          3
Home equity loans                                     54                              8                  58                          8

Consumer credit card                                   -                              -                   -                          -
Other consumer                                                4                       -                   4                          -
                                                     428                             48                 392                         46
Non-accrual status or 90 days past due and
still accruing:
Commercial                                            71                             14                  87                         14

Residential first mortgage                            30                              4                  31                          5
Home equity lines                                      2                              -                   2                          -
Home equity loans                                      6                              1                   6                          1

                                                     109                             19                 126                         20
Total TDRs - Loans                            $      537              $              67          $      518          $              66


The following table provides an analysis of the changes in commercial and
investor real estate TDRs. TDRs with subsequent restructurings that meet the
definition of a TDR are only reported as TDR additions in the period they were
first modified. Other than resolutions such as charge-offs, foreclosures,
payments, sales and transfers to held for sale, Regions may remove loans from
TDR classification if the following conditions are met: the borrower's financial
condition improves such that the borrower is no longer in financial difficulty,
the loan has not had any forgiveness of principal or interest, the loan has not
been restructured as an "A" note/"B" note, the loan has been reported as a TDR
over one fiscal year-end and the loan is subsequently refinanced or restructured
at market terms such that it qualifies as a new loan.

For the consumer portfolio, changes in TDRs are primarily due to additions from
CAP modifications and outflows from payments and charge-offs. Given the types of
concessions currently being granted under the CAP as detailed in Note 3 "Loans
and the Allowance for Credit Losses" to the consolidated financial statements,
Regions does not expect that the market interest rate condition will be widely
achieved. Therefore, Regions expects consumer loans modified through CAP to
continue to be identified as TDRs for the remaining term of the loan.

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Table 11-Analysis of Changes in Commercial and Investor Real Estate TDRs

                                                 Three Months Ended March 31, 2022            Three Months Ended March 31, 2021
                                                                         Investor                                    Investor
                                                  Commercial            Real Estate           Commercial            Real Estate
                                                                                 (In millions)
Balance, beginning of period                   $         168          $          1          $        201          $         44
Additions                                                 44                     8                    20                     5
Charge-offs                                               (3)                    -                    (1)                    -

Other activity, inclusive of payments and
removals (1)                                             (54)                    -                   (18)                  (37)
Balance, end of period                         $         155          $          9          $        202          $         12


________

(1)The majority of this category consists of payments and sales. It also
includes normal amortization/accretion of loan basis adjustments, loans
transferred to held for sale, removals and reclassifications between portfolio
segments and commercial and investor real estate loans refinanced or
restructured as new loans and removed from the TDR classification.

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NON-PERFORMING ASSETS

The following table presents non-performing assets as of March 31, 2022 and
December 31, 2021:

Table 12-Non-Performing Assets

March 31, 2022 December 31, 2021

                                                                                           (Dollars in millions)
Non-performing loans:
Commercial and industrial                                                       $          216          $           305
Commercial real estate mortgage-owner-occupied                                              32                       52
Commercial real estate construction-owner-occupied                                          10                       11
Total commercial                                                                           258                      368
Commercial investor real estate mortgage                                                     2                        3

Total investor real estate                                                                   2                        3
Residential first mortgage                                                                  31                       33
Home equity lines                                                                           37                       40
Home equity loans                                                                            7                        7

Total consumer                                                                              75                       80
Total non-performing loans, excluding loans held for sale                                  335                      451
Non-performing loans held for sale                                                           7                       13
Total non-performing loans(1)                                                              342                      464
Foreclosed properties                                                                        9                       10

Total non-performing assets(1)                                                  $          351          $           474
Accruing loans 90 days past due:
Commercial and industrial                                                       $            5          $             5
Commercial real estate mortgage-owner-occupied                                               1                        1

Total commercial                                                                             6                        6

Residential first mortgage(2)                                                               61                       74
Home equity lines                                                                           19                       21
Home equity loans                                                                           11                       12

Consumer credit card                                                                        12                       12
Other consumer-exit portfolios                                                               2                        2
Other consumer                                                                              14                       13
Total consumer                                                                             119                      134
                                                                                $          125          $           140

Non-performing loans(1) to loans and non-performing loans held for sale

               0.38  %                  0.53    %
Non-performing assets(1) to loans, foreclosed properties, and non-performing
loans held for sale                                                                       0.39  %                  0.54    %


_________
(1)Excludes accruing loans 90 days past due.
(2)Excludes residential first mortgage loans that are 100% guaranteed by the FHA
and all guaranteed loans sold to Ginnie Mae where Regions has the right but not
the obligation to repurchase. Total 90 days or more past due guaranteed loans
excluded were $37 million at March 31, 2022 and $49 million at December 31,
2021.

Non-performing loans at March 31, 2022 decreased compared to year-end levels,
primarily driven by improvements in retail, restaurant, accommodation and
lodging, energy, administrative, support, and waste and repair, as well as,
manufacturing industries.


Economic trends such as interest rates, unemployment, volatility in commodity
prices, and collateral valuations will impact the future level of non-performing
assets. Circumstances related to individually large credits could also result in
volatility.

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The following table provides an analysis of non-accrual loans (excluding loans
held for sale) by portfolio segment:

Table 13- Analysis of Non-Accrual Loans

Non-Accrual Loans, Excluding Loans Held for Sale

Three Months Ended March 31, 2022

                                                                             Investor
                                                     Commercial             Real Estate           Consumer(1)            Total
                                                                                   (In millions)
Balance at beginning of period                   $           368          $          3          $         80          $     451
Additions                                                     50                     -                     -                 50
Net payments/other activity                                  (54)                   (1)                   (5)               (60)
Return to accrual                                            (76)                    -                     -                (76)
Charge-offs on non-accrual loans(2)                          (23)                    -                     -                (23)
Transfers to held for sale(3)                                 (7)                    -                     -                 (7)

Balance at end of period                         $           258          $          2          $         75          $     335


                                                                               Non-Accrual Loans, Excluding Loans Held for Sale
                                                                                       Three Months Ended March 31, 2021
                                                                                                       Investor
                                                                  Commercial                          Real Estate           Consumer(1)             Total
                                                                                                 (In millions)
Balance at beginning of period                    $         524                                     $        114          $        107          $      745
Additions                                                   134                                                2                     -                 136
Net payments/other activity                                 (64)                                               -                     3                 (61)
Return to accrual                                           (18)                                               -                     -                 (18)
Charge-offs on non-accrual loans(2)                         (42)                                             (15)                    -                 

(57)

Transfers to held for sale(3)                                (4)                                              (1)                    -                  

(5)

Transfers to real estate owned                               (2)                                               -                     -                  (2)

Balance at end of period                          $         528                                     $        100          $        110          $      738


________
(1)All net activity within the consumer portfolio segment other than sales and
transfers to held for sale (including related charge-offs) is included as a
single net number within the net payments/other activity line.
(2)Includes charge-offs on loans on non-accrual status and charge-offs taken
upon sale and transfer of non-accrual loans to held for sale.
(3)Transfers to held for sale are shown net of charge-offs recorded upon
transfer.

GOODWILL

Goodwill totaled $5.7 billion at both March 31, 2022 and December 31, 2021.
Refer to Note 1 “Summary of Significant Accounting Policies” and Note 9
“Intangible Assets” to the consolidated financial statements included in the
Annual Report on Form 10-K for the year ended December 31, 2021 for the
methodologies and assumptions used in the goodwill impairment analysis.

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DEPOSITS

Regions competes with other banking and financial services companies for a share
of the deposit market. Regions' ability to compete in the deposit market depends
heavily on the pricing of its deposits and how effectively the Company meets
customers' needs. Regions employs various means to meet those needs and enhance
competitiveness, such as providing a high level of customer service and
competitive pricing and convenient branch locations for its customers. Regions
also serves customers through providing centralized, high-quality banking
services through the Company's digital channels and contact center.

The following table summarizes deposits by category:

Table 14-Deposits

                               March 31, 2022       December 31, 2021
                                            (In millions)
Non-interest-bearing demand   $        59,590      $           58,369
Interest-bearing checking              28,001                  28,018
Savings                                16,101                  15,134
Money market-domestic                  31,677                  31,408
Time deposits                           5,653                   6,143
Total deposits                $       141,022      $          139,072


Total deposits at March 31, 2022 increased approximately $2.0 billion compared
to year-end 2021 levels, driven by non-interest bearing demand, savings and
money market. These increases were offset by a decline in time deposits while
interest-bearing checking remained stable. Although the pace of deposit growth
has slowed compared to 2021 activity, increases across those categories were
primarily driven by seasonality resulting in increased consumer deposit
balances. Time deposits decreased due to maturities, including maturities of
time deposits acquired through EnerBank as these deposits are not being replaced
when they mature, and, to a lesser degree, continued lower interest rates
resulting in a decrease in the utilization of time deposit accounts.

LONG-TERM BORROWINGS

Table 15-Long-Term Borrowings


                                                   March 31, 2022      

December 31, 2021

                                                               (In 

millions)

Regions Financial Corporation (Parent):


2.25% senior notes due May 2025                   $          746      $     

746

1.80% senior notes due August 2028                           645            

645

7.75% subordinated notes due September 2024                  100            

100

6.75% subordinated debentures due November 2025              154            

154

7.375% subordinated notes due December 2037                  298            

298

Valuation adjustments on hedged long-term debt               (98)                    (34)
                                                           1,845                   1,909
Regions Bank:

6.45% subordinated notes due June 2037                       496                     496

Other long-term debt                                           2                       2

                                                             498                     498
Total consolidated                                $        2,343      $            2,407


Long-term borrowings decreased by approximately $64 million since year-end 2021
due entirely to valuation adjustments. See the "Liquidity" section for further
detail of Regions' borrowing capacity with the FHLB, which is currently not
being utilized.


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SHAREHOLDERS' EQUITY

Shareholders' equity was $17.0 billion at March 31, 2022 as compared to $18.3
billion at December 31, 2021. During the first three months of 2022, net income
increased shareholders' equity by $548 million, cash dividends on common stock
reduced shareholders' equity by $159 million, and cash dividends on preferred
stock reduced shareholders' equity by $24 million. Changes in AOCI decreased
shareholders' equity by $1.5 billion, primarily due to the net change in
unrealized gains (losses) on securities available for sale and derivative
instruments as a result of significant changes in market interest rates during
the three months ended March 31, 2022. Common stock repurchased during the first
three months of 2022 reduced shareholders' equity $215 million. These shares
were immediately retired and therefore are not included in treasury stock.

See Note 5 “Shareholders’ Equity and Accumulated Other Comprehensive Income”
section for additional information.

REGULATORY REQUIREMENTS


Regions and Regions Bank are required to comply with regulatory capital
requirements established by Federal and State banking agencies. These regulatory
capital requirements involve quantitative measures of the Company's assets,
liabilities and selected off-balance sheet items, and also qualitative judgments
by the regulators. Failure to meet minimum capital requirements can subject the
Company to a series of increasingly restrictive regulatory actions. Under the
Basel III Rules, Regions is designated as a standardized approach bank. Regions
is a "Category IV" institution under the FRB's rules for tailoring enhanced
prudential standards.

Federal banking agencies allowed a phase-in of the impact of CECL on regulatory
capital. At December 31, 2021, the add-back to regulatory capital was calculated
as the impact of initial adoption, adjusted for 25 percent of subsequent changes
in the allowance. The amount is phased-in over a three-year period beginning in
2022. At March 31, 2022, the net impact of the add-back on CET1 was
approximately $306 million, or approximately 26 basis points. The add-back
amount will decrease by approximately $100 million or 10 basis points in both
2023 and 2024.

The following table summarizes the applicable holding company and bank
regulatory requirements:

Table 16-Basel III Regulatory Capital Requirements


                                             March 31, 2022              December 31, 2021                  Minimum                 To Be Well
                                                Ratio (1)                      Ratio                      Requirement               Capitalized
Common equity Tier 1 capital:
Regions Financial Corporation                         9.39  %                           9.57  %                   4.50  %                       N/A
Regions Bank                                         11.19                             11.05                      4.50                      6.50  %
Tier 1 capital:
Regions Financial Corporation                        10.82  %                          11.03  %                   6.00  %                   6.00  %
Regions Bank                                         11.19                             11.05                      6.00                      8.00
Total capital:
Regions Financial Corporation                        12.54  %                          12.74  %                   8.00  %                  10.00  %
Regions Bank                                         12.54                             12.38                      8.00                     10.00
Leverage capital:
Regions Financial Corporation                         8.00  %                           8.08  %                   4.00  %                       N/A
Regions Bank                                          8.28                              8.09                      4.00                      5.00  %


_______

(1)The current quarter Basel III CET1 capital, Tier 1 capital, Total capital,
and Leverage capital ratios are estimated.

The Company’s stress capital buffer is floored at 2.5 percent through the third
quarter of 2022.

See the “First Quarter Overview” section for details on expectations of a range
for CET1 during 2022.


Additional discussion of the Basel III Rules, their applicability to Regions,
recent proposals and final rules issued by the federal banking agencies and
recent laws enacted that impact regulatory requirements is included in the
"Supervision and Regulation" subsection of the "Business" section in the 2021
Annual Report on Form 10-K and the "Regulatory Requirements" section of
Management's Discussion and Analysis in the 2021 Annual Report on Form 10-K.
Additional discussion is also included in Note 12 "Regulatory Capital
Requirements and Restrictions" to the consolidated financial statements in the
2021 Annual Report on Form 10-K.

LIQUIDITY


Regions maintains a robust liquidity management framework designed to
effectively manage liquidity risk in accordance with sound risk management
principals and regulatory expectations. The framework establishes sustainable
processes and tools to effectively identify, measure, mitigate, monitor, and
report liquidity risks beginning with Regions' Liquidity Management

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Policy and the Liquidity Risk Appetite Statements approved by the Board.
Processes within the liquidity management framework include, but are not limited
to, liquidity risk governance, cash management, liquidity stress testing,
liquidity risk limits, contingency funding plans, and collateral management.
While the framework is designed to comply with liquidity regulations, the
processes are further tailored to be commensurate with Regions' operating model
and risk profile.

See the "Liquidity" section for more information. Also, see the "Supervision and
Regulation-Liquidity Regulation" subsection of the "Business" section, the "Risk
Factors" section and the "Liquidity" section in the 2021 Annual Report on Form
10-K for additional information.

NON-GAAP MEASURES


The table below presents computations of earnings and certain other financial
measures, which exclude certain items that are included in the financial results
presented in accordance with GAAP. These non-GAAP financial measures include
"adjusted non-interest expense", "adjusted non-interest income", "adjusted total
revenue", "adjusted total revenue, taxable-equivalent basis", and "adjusted
operating leverage ratio". Regions believes that excluding certain items
provides a meaningful base for period-to-period comparisons. which management
believes will assist investors in analyzing the operating results of the Company
and predicting future performance. These non-GAAP financial measures are also
used by management to assess the performance of Regions' business because
management does not consider the activities related to the adjustments to be
indications of ongoing operations. Regions believes that presentation of these
non-GAAP financial measures will permit investors to assess the performance of
the Company on the same basis as that applied by management. Management and the
Board utilize these non-GAAP financial measures as follows:

•Preparation of Regions’ operating budgets

•Monthly financial performance reporting

•Monthly close-out reporting of consolidated results

•Presentations to investors of Company performance

•Metrics for incentive compensation


Non-interest expense (GAAP) is presented excluding adjustments to arrive at
adjusted non-interest expense (non-GAAP). Net interest income (GAAP) is
presented with taxable-equivalent adjustments to arrive at net interest income
on a taxable-equivalent basis (GAAP). Non-interest income (GAAP) is presented
excluding adjustments to arrive at adjusted non-interest income (non-GAAP). Net
interest income (GAAP) and adjusted non-interest income (non-GAAP) are added
together to arrive at adjusted total revenue (non-GAAP). Net interest income on
a taxable-equivalent basis (GAAP) and adjusted non-interest income (non-GAAP)
are added together to arrive at adjusted total revenue on a taxable-equivalent
basis (non-GAAP). The adjusted operating leverage ratio (non-GAAP), which is a
measure of productivity, is generally calculated as the year over year
percentage change in adjusted total revenue on a taxable-equivalent basis less
the year over year percentage change in adjusted total non-interest expense.
Management uses this ratio to monitor performance and believes it provides
meaningful information to investors.

Non-GAAP financial measures have inherent limitations, are not required to be
uniformly applied and are not audited. Although these non-GAAP financial
measures are frequently used by stakeholders in the evaluation of a company,
they have limitations as analytical tools, and should not be considered in
isolation, or as a substitute for analyses of results as reported under GAAP. In
particular, a measure of earnings that excludes selected items does not
represent the amount that effectively accrues directly to shareholders.

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The following tables provide: 1) a reconciliation of non-interest expense (GAAP)
to adjusted non-interest expense (non-GAAP), 2) a reconciliation of non-interest
income (GAAP) to adjusted non-interest income (non-GAAP), 3) a computation of
adjusted total revenue (non-GAAP), 4) a computation of adjusted total revenue on
a taxable-equivalent basis (non-GAAP) and 5) presentation of the operating
leverage ratio (GAAP) and the adjusted operating leverage ratio (non-GAAP).

Table 17-GAAP to Non-GAAP Reconciliations

                                                                                          Three Months Ended March 31
                                                                                            2022                  2021
                                                                                             (Dollars in millions)

ADJUSTED OPERATING LEVERAGE RATIOS
Non-interest expense (GAAP)                                                         A $         933           $     928

Adjustments:

Contribution to Regions' Financial Corporation foundation                                         -                  (2)
  Branch consolidation, property and equipment charges                                           (1)                 (5)

Salary and employee benefits-severance charges                                                    -                  (3)

Adjusted non-interest expense (non-GAAP)                                            B $         932           $     918
Net interest income (GAAP)                                                          C $       1,015           $     967
Taxable-equivalent adjustment (GAAP)                                                             11                  11
Net interest income, taxable-equivalent basis (GAAP)                                D $       1,026           $     978

Non-interest income (GAAP)                                                          E $         584           $     641
Adjustments:
Securities (gains) losses, net                                                                    -                  (1)
Gain on equity investment                                                                         -                  (3)
Leveraged lease termination gains                                                                (1)                  -

Adjusted non-interest income (non-GAAP)                                             F $         583           $     637
Total revenue                                                                   C+E=G $       1,599           $   1,608
Adjusted total revenue (non-GAAP)                                               C+F=H $       1,598           $   1,604
Total revenue, taxable-equivalent basis (GAAP)                                  D+E=I $       1,610           $   1,619
Adjusted total revenue, taxable-equivalent basis (non-GAAP)                     D+F=J $       1,609           $   1,615
Operating leverage ratio (GAAP) (1)                                                           (1.08)  %            2.58  %
Adjusted operating leverage ratio (non-GAAP) (1)                                              (1.86)  %            2.05  %


_______

(1)Amounts have been calculated using whole dollar values.





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OPERATING RESULTS

NET INTEREST INCOME AND MARGIN

Table 18-Consolidated Average Daily Balances and Yield/Rate Analysis

                                                                                            Three Months Ended March 31
                                                                          2022                                                        2021
                                                     Average            Income/             Yield/              Average            Income/             Yield/
                                                     Balance            Expense            Rate (1)             Balance            Expense            Rate (1)
                                                                             (Dollars in millions; yields on taxable-equivalent basis)
Assets
Earning assets:
Federal funds sold and securities purchased
under agreements to resell                       $          2          $     -                  0.18  %       $       -          $      -                     -  %

Debt securities (2)                                    29,342              138                  1.88             27,180               133                  1.96

Loans held for sale                                       782                9                  4.89              1,603                12                  3.10
Loans, net of unearned income (3)(4)                   87,814              887                  4.07             84,755               865              

4.11

Interest-bearing deposits in other banks               26,606               13                  0.20             16,509                 4                  0.10
Other earning assets                                    1,306               16                  5.02              1,279                10                  3.27

Total earning assets                                  145,852            1,063                  2.93            131,326             1,024                  3.14
Unrealized gains/(losses) on securities
available for sale, net (2)                              (549)                                                      867
Allowance for loan losses                              (1,472)                                                   (2,139)
Cash and due from banks                                 2,200                                                     1,931
Other non-earning assets                               15,697                                                    14,569
                                                 $    161,728                                                 $ 146,554
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Savings                                          $     15,539                5                  0.13          $  12,340                 5                  0.15
Interest-bearing checking                              27,771                2                  0.03             24,171                 2                  0.04
Money market                                           31,402                2                  0.02             29,425                 3                  0.04
Time deposits                                           5,905                4                  0.30              5,158                 9                  0.74
Other deposits                                              -                -                     -                  4                 -                  1.81
Total interest-bearing deposits (5)                    80,617               13                  0.07             71,098                19                  0.11

Other short-term borrowings                                 9                -                  0.16                  -                 -                     -
Long-term borrowings                                    2,390               24                  4.06              3,192                27                  3.42
Total interest-bearing liabilities                     83,016               37                  0.18             74,290                46               

0.25

Non-interest-bearing deposits (5)                      58,117                -                     -             51,839                 -                     -
Total funding sources                                 141,133               37                  0.11            126,129                46                  0.15
Net interest spread (2)                                                                         2.75                                                       2.89
Other liabilities                                       2,878                                                     2,387
Shareholders' equity                                   17,717                                                    18,038

                                                 $    161,728                                                 $ 146,554
Net interest income /margin on a
taxable-equivalent basis (6)                                           $ 1,026                  2.85  %                          $    978                  3.02  %


________
(1)Amounts have been calculated using whole dollar values.
(2)Debt securities are included on an amortized cost basis with yield and net
interest margin calculated accordingly.
(3)Loans, net of unearned income include non-accrual loans for all periods
presented.
(4)Interest income includes net loan fees of $18 million and $34 million for the
three months ended March 31, 2022 and 2021, respectively.
(5)Total deposit costs may be calculated by dividing total interest expense on
deposits by the sum of interest-bearing deposits and non-interest-bearing
deposits. The rates for total deposit costs equal 0.04% and 0.06% for the three
months ended March 31, 2022 and 2021, respectively.
(6)The computation of taxable-equivalent net interest income is based on the
statutory federal income tax rate of 21% for both March 31, 2022 and 2021
adjusted for applicable state income taxes net of the related federal tax
benefit.



Net interest income is Regions' principal source of income and is one of the
most important elements of Regions' ability to meet its overall performance
goals. Both net interest income and net interest margin are influenced by market
interest rates, and in the first quarter of 2022, the FOMC increased the Fed
funds rate by 25 basis points, with additional rate increases expected in 2022.

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Net interest income (taxable-equivalent basis) increased for the first three
months of 2022 compared to the same period in 2021. The increase in net interest
income was driven primarily by average loan growth and rising interest rates.
Also contributing to the increase was slightly higher hedge-related income,
lower funding costs, and a larger securities portfolio. These increases were
partially offset by a decline in PPP forgiveness income when compared to first
quarter of 2021.

Net interest margin was equal to 2.85 percent and 3.02 percent for the first
three months of 2022 and 2021, respectively. The decline was primarily driven by
continued elevated liquidity as indicated by higher cash balances.

See the “First Quarter Overview” section for the Company’s expectations for
interest income as a component of total revenue. See also the “Market
Risk-Interest Rate Risk” section below for additional information.

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.
To quantify this risk, Regions measures the change in its net interest income in
various interest rate scenarios compared to a base case scenario. Net interest
income sensitivity to market rate movements is a useful short-term indicator of
Regions' interest rate risk.

Sensitivity Measurement-Financial simulation models are Regions' primary tools
used to measure interest rate exposure. Using a wide range of sophisticated
simulation techniques provides management with extensive information on the
potential impact to net interest income caused by changes in interest rates.
Models are structured to simulate cash flows and accrual characteristics of
Regions' balance sheet. Assumptions are made about the direction and volatility
of interest rates, the slope of the yield curve, and the changing composition of
the balance sheet that results from both strategic plans and from customer
behavior. Among the assumptions are expectations of balance sheet growth and
composition, the pricing and maturity characteristics of existing business and
the characteristics of future business. Interest rate-related risks are
expressly considered, such as pricing spreads, the pricing of deposit accounts,
prepayments and other option risks. Regions considers these factors, as well as
the degree of certainty or uncertainty surrounding their future behavior.

The primary objective of asset/liability management at Regions is to coordinate
balance sheet composition with interest rate risk management to sustain
reasonable and stable net interest income throughout various interest rate
cycles. In computing interest rate sensitivity for measurement, Regions compares
a set of alternative interest rate scenarios to the results of a base case
scenario derived using "market forward rates." The standard set of interest rate
scenarios includes the traditional instantaneous parallel rate shifts of plus
100 and 200 basis points. Given low market rates by historical standards, the
Company focuses on a falling rate shock scenario where all rates fall to levels
consistent with historical 12-month average rate minimums. In addition to
parallel curve shifts, multiple curve steepening and flattening scenarios are
contemplated. Regions includes simulations of gradual interest rate movements
phased in over a six-month period that may more realistically mimic the speed of
potential interest rate movements.

Exposure to Interest Rate Movements-As of March 31, 2022, Regions was asset
sensitive to both gradual and instantaneous parallel yield curve shifts as
compared to the base case for the 12-month measurement horizon ending March
2023
.


The first quarter of 2022 continued the trend of balance sheet growth in
low-cost deposits observed throughout 2021. Retention of these balance sheet
liquidity inflows is uncertain and some amount of the recent deposit growth may
be more rate sensitive under a rising rate scenario. Therefore, additional
sensitivity analysis focused on pandemic-related "surge" deposit pricing
behavior and retention is outlined in Table 19.

The estimated exposure associated with the rising and falling rate scenarios in
the table below reflects the combined impacts of movements in short-term and
long-term interest rates. Currently, net interest income is projected to benefit
from rising short-term interest rates (i.e. asset sensitive profile). An
increase or reduction in short-term interest rates (such as the Fed Funds rate,
the rate of Interest on Excess Reserves, 1-month LIBOR, SOFR and BSBY) will
drive the yield on assets and liabilities contractually tied to such rates
higher or lower. Under either environment, it is expected that changes in
funding costs and balance sheet hedging income will only somewhat offset the
change in asset yields. Importantly, the potential to retain "surge" deposits
with lower than expected repricing behavior represents an opportunity for
further net interest income growth in the increasing rate scenario as well.

Net interest income remains exposed to intermediate yield curve tenors. While
this was a headwind to net interest income during the pandemic, it represents a
tailwind to net interest income growth as the yield curve rises. An increase in
intermediate and long-term interest rates (such as intermediate to longer-term
U.S. Treasuries, swap and mortgage rates) will drive yields higher on certain
fixed rate, newly originated or renewed loans, increase 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.
Approximately 70 percent of fixed rate asset production is at the 5-year tenor
point or shorter.

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The interest rate sensitivity analysis presented below in Table 19 is informed
by a variety of assumptions and estimates regarding the progression of the
balance sheet in both the baseline scenario as well as the scenarios of
instantaneous and gradual shifts in the yield curve. Though there are many
assumptions which affect the estimates for net interest income, those pertaining
to deposit pricing, deposit mix and overall balance sheet composition are
particularly impactful. Given the uncertainties associated with the prolonged
period of low interest rates and industry liquidity, management evaluates the
impact to its sensitivity analysis of these key assumptions. Sensitivity
calculations are hypothetical and should not be considered to be predictive of
future results.

The Company's baseline balance sheet assumptions include management's best
estimate for balance sheet growth in the coming 12 months. However, the behavior
of pandemic-related "surge" deposits under a rising rate scenario is uncertain.
Since year-end 2019, the last period-end free from the effects of COVID-19,
deposit balances have increased by approximately $42 billion, exclusive of
deposits acquired in the EnerBank acquisition, and approximately $27 billion of
the increase was determined to be attributable to pandemic-related surge
deposits. Therefore, Table 19 includes two balance sheet scenarios to help
inform a potential range of outcomes. The first is an opportunity scenario, and
assumes that these deposits behave more like stable, legacy balances, which is
consistent with historical disclosures. The second scenario assumes that these
depositors will be more sensitive to rate, requiring a higher interest rate in
order to hold their balances with the bank. These deposits, including
non-interest bearing products, are attributed with an approximate 70 percent
repricing beta in rising rate scenarios. Importantly, the impact to net interest
income under a changing rate environment is the same whether the "surge" deposit
balances are held at a higher beta or the balances attrite and the funding is
replaced with wholesale sources. Given the evolving nature of the environment,
estimates have been conservatively derived. Should the balances remain with the
Company longer or demonstrate less sensitivity to interest rates, there is
potential for upside (e.g. the opportunity scenario). The disclosure in Table 19
does not prescribe a view as to the longevity of surge deposits on the balance
sheet.

The behavior of deposit pricing in response to changes in interest rate levels
is largely informed by analyses of prior rate cycles. In the base case scenario
in Table 19, interest-bearing deposits reprice using an approximately 30 percent
beta. The deposit beta model is dynamic across both interest rate level and
time. Currently, the Scenario One gradual +100 basis point shock outlined in the
table below includes an approximate 25 percent to 30 percent interest-bearing
deposit beta for legacy deposits. Again, the "surge" deposit interest-bearing
deposit beta is bookended in each scenario, assuming legacy betas and a 70
percent beta, respectively. Deposit pricing outperformance or underperformance
of 5 percent in that scenario would increase or decrease net interest income by
approximately $31 million, respectively.

In rising rate scenarios only, management assumes that the mix of legacy
deposits will change versus the base case as informed by analyses of prior rate
cycles. Management assumes that in rising rate scenarios, some shift from
non-interest bearing to interest-bearing products will occur. The magnitude of
the shift is rate dependent and equates to approximately $3 billion over 12
months in the gradual +100 basis point scenario in Table 19.

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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 scenarios are inclusive of all interest rate hedging activities. More
information regarding hedges is disclosed in Table 20 and its accompanying
description. Importantly, outstanding receive-fixed cash flow hedges begin to
mature in September 2022.

Table 19-Interest Rate Sensitivity

                                                                                                                     Scenario Two:
                                                          Scenario One: Estimated Annual Change                 Estimated Annual Change
                                                                 in Net Interest Income                         in Net Interest Income
                                                                 March 31, 2022(1)(2)(3)                       March 31, 2022 (1)(2)(4)
                                                                                           (In millions)
Gradual Change in Interest Rates
+ 200 basis points                                                              $417                                           $207
+ 100 basis points                                                               221                                            116
 - 100 basis points (floored)(5)                                                (260)                                          (260)

Instantaneous Change in Interest Rates
+ 200 basis points                                                              $484                                           $226
+ 100 basis points                                                               271                                            142
 - 100 basis points (floored)(5)                                                (332)                                          (332)


_________

(1)Disclosed interest rate sensitivity levels represent the 12-month forward
looking net interest income changes as compared to market forward rate cases and
include expected balance sheet growth and remixing.
(2)Active cash flow hedges reflected within the measurement horizon (See Table
21 for additional information regarding hedge start and maturity dates).
(3)Scenario One assumes all deposits (including "surge" deposits) perform
consistently with historical experiences.
(4)Scenario Two accounts for uncertainty in "surge" deposit balances. Assumes an
approximate 70% beta on "surge" balances (approximately $27 billion projected
"surge" deposit balance).
(5)The -100 basis point (floored) scenario represents a rate shock where all
rates are floored at 12-month average historical lows.

Regions has established scenarios by which yield curve tenors will fall to a
consistent level. The shock magnitude for each tenor, when compared to market
forward rates, equates to the lesser of the shock scenario amount, or a rate
equal to the historical 12-month average minimum. For example, the 10-year
Treasury yield falls to 81 basis points. The falling rate scenarios in Table 19
above quantify the expected impact for both gradual and instantaneous shocks
under this environment.

Interest rate movements may also have an impact on the value of Regions’
securities portfolio, which can directly impact the carrying value of
shareholders’ equity.


Regions' comprehensive interest rate risk management approach uses derivatives
and debt securities to manage its interest rate risk position. At the end of the
first quarter of 2022, as part of its current hedging strategy, the Company
executed $4.2 billion of notional value cash flow hedging derivative trades
(included in Table 20 below) and purchased $1.5 billion in debt securities
available for sale. The cash flow hedging relationships are forward starting
receive fixed/pay variable interest rate swaps, of which $1.2 billion will begin
in the fourth quarter of 2023 and the remainder in the first quarter of 2024.
The receive fixed rates on these cash flow hedges ranged from 2.1 to 2.6
percent. The purchased debt securities available for sale consisted primarily of
federal agency and residential agency securities.

The Company continued to add cash flow hedging derivatives and debt securities
available for sale subsequent to March 31, 2022, as part of its hedging
strategy. From April 1, 2022 through May 4, 2022, Regions entered into
approximately $3.5 billion of notional value forward starting cash flow hedges
that have start dates in the third quarter of 2023 and mature within three to
four years of their start dates. The receive fixed rates on these cash flow
hedges ranged from 2.8 to 3.1 percent. In that same time period, Regions also
purchased approximately $700 million of debt securities available for sale
consisting primarily of federal agency and residential agency securities.

See further discussion below regarding hedging derivatives executed during first
quarter of 2022.


Derivatives-Regions uses financial derivative instruments for management of
interest rate sensitivity. ALCO, which consists of members of Regions' senior
management team, in its oversight role for the management of interest rate
sensitivity, approves the use of derivatives in balance sheet hedging
strategies. Derivatives are also used to offset the risks associated with
customer derivatives, which include interest rate, credit and foreign exchange
risks. The most common derivatives Regions employs are forward rate contracts,
Eurodollar futures contracts, interest rate swaps, options on interest rate
swaps, interest rate caps and floors, and forward sale commitments.

Forward rate contracts are commitments to buy or sell financial instruments at a
future date at a specified price or yield. A

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Eurodollar futures contract is a future on a Eurodollar deposit. Eurodollar
futures contracts subject Regions to market risk associated with changes in
interest rates. Because futures contracts are cash settled daily, there is
minimal credit risk associated with Eurodollar futures. Interest rate swaps are
contractual agreements typically entered into to exchange fixed for variable (or
vice versa) streams of interest payments. 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. Foreign currency contracts involve the exchange of
one currency for another on a specified date and at a specified rate. These
contracts are executed on behalf of the Company's customers and are used by
customers to manage fluctuations in foreign exchange rates. The Company is
subject to the credit risk that another party will fail to perform.

Regions has made use of interest rate swaps and floors in balance sheet hedging
strategies to effectively convert a portion of its fixed-rate funding position
to a variable-rate position, to effectively convert a portion of its fixed-rate
debt securities available for sale portfolio to a variable-rate position, and to
effectively convert a portion of its floating-rate loan portfolios to
fixed-rate. Regions also uses derivatives to economically manage interest rate
and pricing risk associated with its mortgage origination business. In the
period of time that elapses between the origination and sale of mortgage loans,
changes in interest rates have the potential to cause a decline in the value of
the loans in this held-for-sale portfolio. Futures contracts and forward sale
commitments are used to protect the value of the loan pipeline and loans held
for sale from changes in interest rates and pricing.

The following table presents additional information about hedging interest rate
derivatives used by Regions to manage interest rate risk:

Table 20-Hedging Derivatives by Interest Rate Risk Management Strategy

                                                                                             March 31, 2022
                                                                                                       Weighted-Average
                                                        Notional
                                                         Amount                Maturity (Years)           Receive Rate(1)           Pay Rate(1)
                                                                                         (Dollars in millions)
Derivatives in fair value hedging relationships:
Receive variable/pay fixed - debt securities
available for sale                                          6,500                            0.7                    2.2                      0.8
Receive fixed/pay variable - borrowed funds                 1,400                            4.5                    0.6                      0.4

Derivatives in cash flow hedging relationships:
Receive fixed/pay variable - floating-rate loans(1)  $     24,850                            2.3                    1.1  %                   0.9  %

Total derivatives designated as hedging instruments $ 32,750

_________

(1)Variable rate indexes on hedge contracts reference a combination of
short-term benchmarks, primarily 1-month LIBOR with approximately $3.2 billion
of new hedges pay SOFR.


The following table presents the average asset hedge notional amounts that are
active during each of the remaining quarterly periods in 2022 and later annual
periods. All asset hedge notional amounts mature prior to the end of 2029.

Table 21-Schedule of Notional for Cash Flow Hedging Derivatives

                                                                                                Average Active Notional Amount
                                           Quarters Ended (1)                                                                          Years Ended
                           6/30/2022          9/30/2022           12/31/2022            2023             2024              2025             2026             2027             2028            2029
                                                                                                         (in millions)
Asset Hedging
Relationship:
Receive fixed/pay
variable swaps            $  20,650          $  20,650          $    16,988          $ 9,644          $ 10,676          $ 5,645          $ 4,200          $ 3,951          $ 1,654          $    4
Receive variable/pay
fixed swaps                       -              1,130                5,299                -                 -                -                -                -                -               -
Net receive fixed/pay
variable swaps            $  20,650          $  19,520          $    11,689          $ 9,644          $ 10,676          $ 5,645          $ 4,200          $ 3,951          $ 1,654          $    4


_________

(1)All cash flow hedges are reflected within the 12-month measurement horizon
and included in income sensitivity levels as disclosed in Table 19.


Regions manages the credit risk of these instruments in much the same way as it
manages credit risk of the loan portfolios by establishing credit limits for
each counterparty and through collateral agreements for dealer transactions. For
non-dealer

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transactions, the need for collateral is evaluated on an individual transaction
basis and is primarily dependent on the financial strength of the counterparty.
Credit risk is also reduced significantly by entering into legally enforceable
master netting agreements. When there is more than one transaction with a
counterparty and there is a legally enforceable master netting agreement in
place, the exposure represents the net of the gain and loss positions with and
collateral received from and/or posted to that counterparty. Most hedging
interest rate swap derivatives traded by Regions are subject to mandatory
clearing. The counterparty risk for cleared trades effectively moves from the
executing broker to the clearinghouse allowing Regions to benefit from the risk
mitigation controls in place at the respective clearinghouse. The "Credit Risk"
section in this report contains more information on the management of credit
risk.

Regions also uses derivatives to meet the needs of its customers. Interest rate
swaps, interest rate options and foreign exchange forwards are the most common
derivatives sold to customers. Other derivative instruments with similar
characteristics are used to hedge market risk and minimize volatility associated
with this portfolio. Instruments used to service customers are held in the
trading account, with changes in value recorded in the consolidated statements
of income.

The primary objective of Regions' hedging strategies is to mitigate the impact
of interest rate changes, from an economic perspective, on net interest income
and other financing income and the net present value of its balance sheet. The
overall effectiveness of these hedging strategies is subject to market
conditions, the quality of Regions' execution, the accuracy of its valuation
assumptions, counterparty credit risk and changes in interest rates.

See Note 8 “Derivative Financial Instruments and Hedging Activities” to the
consolidated financial statements for a tabular summary of Regions’ quarter-end
derivatives positions and further discussion.


Regions accounts for residential MSRs at fair market value with any changes to
fair value being recorded within mortgage income. Regions enters into derivative
transactions to economically mitigate the impact of market value fluctuations
related to residential MSRs. Derivative instruments entered into in the future
could be materially different from the current risk profile of Regions' current
portfolio.

LIBOR TRANSITION

On March 5, 2021, the FCA announced that LIBOR will not be available for use
after December 31, 2021. Further, existing contracts referencing 1-week or
2-month USD LIBOR settings must be remediated no later than December 31, 2021.
Regions successfully remediated contracts referencing 1-week or 2-month USD
LIBOR prior to December 31, 2021. Additionally, Regions ceased origination of
all new LIBOR-based lending prior to December 31, 2021. Existing contracts
referencing all other USD LIBOR settings must be remediated no later than June
30, 2023. Regions holds instruments that may be impacted by the discontinuance
of LIBOR, including loans, investments, derivative products, floating-rate
obligations, and other financial instruments that use LIBOR as a benchmark rate.
However, Regions' LIBOR exposure is primarily in settings other than 1-week or
2-month USD LIBOR. The Company has established a LIBOR Transition Program, which
includes dedicated leadership and staff, with all relevant business lines and
support groups engaged. As part of this program, the Company continues to
identify, assess, and monitor risks associated with the discontinuation of
LIBOR. Steps to mitigate risks associated with the transition are being overseen
by Regions' Executive LIBOR Steering Committee. Regions is following industry
efforts to develop alternative reference rates and is operationally ready to
offer new benchmarks as they are adopted by regulatory agencies and industry
groups.

Regions has taken proactive steps to facilitate the transition on behalf of
customers, which include:

•The adoption and ongoing implementation of fallback provisions that provide for
the determination of replacement rates for LIBOR-linked financial products.

•The adoption of new products linked to alternative reference rates, such as
adjustable-rate mortgages, consistent with guidance provided by the US
regulators, ARRC, and GSEs.


•The discontinuation of LIBOR-based commercial lending prior to December 31,
2021, consistent with regulatory guidelines. The Company is providing multiple
alternative rates based on market competition and demand, including SOFR, BSBY,
and AMERIBOR.

Regions continues to evaluate its financial and operational infrastructure in
its effort to transition all financial and strategic processes, systems, and
models to reference rates other than LIBOR. Regions has also implemented
processes to educate all client-facing associates and coordinate communications
with customers regarding the transition.

Regions has exposure to LIBOR-based products throughout several lines of
business. As of March 31, 2022, Regions had the following exposures that
reference LIBOR:

•Approximately $30.4 billion of total outstanding commercial and investor real
estate loans and approximately $858 million of total consumer loans;

•Securities within the investment portfolio of approximately $285 million;

•Notional amount of interest rate derivatives totaling approximately $135
billion
;

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•Series B and C preferred stock with total carrying values of $433 million and
$490 million, respectively that reference LIBOR when their dividend rate begins
to float after 2023.

On March 15, 2022, the Adjustable Interest Rate Act was signed into law with the
purpose of establishing a clear and uniform process for replacing LIBOR in
existing contracts. Among the provisions of this legislation, contracts may be
transitioned to SOFR to gain a legal safe harbor. The Company has assessed the
impact of this legislation and expects to allow certain clients to fallback to
SOFR upon the cessation of LIBOR, consistent with the guidelines in the
legislation.

In the third quarter of 2020, Regions adopted temporary accounting relief for
affected transactions that reference LIBOR. See Note 1 "Summary of Significant
Accounting Policies" in Regions' Annual Report on Form 10-K for the year ended
December 31, 2020 for details.

LIQUIDITY


Liquidity is an important factor in the financial condition of Regions and
affects Regions' ability to meet the needs of the Company and its customers.
Regions' goal in liquidity management is to maintain liquidity sources and
reserves sufficient to satisfy the cash flow requirements of depositors and
borrowers, under normal and stressed conditions. Accordingly, Regions maintains
a variety of liquidity sources to fund its obligations, as further described
below. Furthermore, Regions performs specific procedures, including scenario
analyses and stress testing to evaluate and maintain appropriate levels of
available liquidity in alignment with liquidity risk.

Regions' operation of its business provides a generally balanced liquidity base
which is comprised of customer assets, consisting principally of loans, and
funding provided by customer deposits and borrowed funds. Maturities in the loan
portfolio provide a steady flow of funds, and are supplemented by Regions'
relatively steady deposit base.

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
2 "Debt Securities" to the consolidated financial statements). Furthermore, the
highly liquid nature of the portfolio (for example, the agency guaranteed MBS
portfolio) can be readily used as a source of cash through various secured
borrowing arrangements. Cash reserves, liquid assets and secured borrowing
capabilities (including borrowing capacity at the FHLB, as discussed below) 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. See Note 11 "Commitments, Contingencies and Guarantees" to the
consolidated financial statements for additional discussion of the Company's
funding requirements. Liquidity needs can also be met by borrowing funds in
national money markets, though Regions does maintain limits on short-term
unsecured funding due to the volatility that can affect such markets.

The balance with the FRB is the primary component of the balance sheet line
item, "interest-bearing deposits in other banks." At March 31, 2022, Regions had
approximately $25.7 billion in cash on deposit with the FRB and other depository
institutions, a decrease from approximately $28.1 billion at December 31, 2021,
due to the use of active cash management strategies used to deploy increases in
deposit balances. The average balance held with the FRB was approximately $26.6
billion and $16.5 billion for the three months ended March 31, 2022 and 2021,
respectively. Refer to the "Cash and Cash Equivalents" section for more
information.

Regions’ borrowing availability with the FRB as of March 31, 2022, based on
assets pledged as collateral on that date, was $14.9 billion.


Regions' financing arrangement with the FHLB adds additional flexibility in
managing the Company's liquidity position. As of March 31, 2022, Regions had no
FHLB borrowings and its total borrowing capacity from the FHLB totaled
approximately $16.3 billion. FHLB borrowing capacity is contingent on the amount
of collateral pledged to the FHLB. Regions Bank pledged certain eligible
securities and loans as collateral for the outstanding FHLB advances.
Additionally, investment in FHLB stock is required in relation to the level of
outstanding borrowings. The FHLB has been and is expected to continue to be a
reliable and economical source of funding.

Regions maintains a shelf registration statement with the SEC that can be
utilized by Regions to issue various debt and/or equity securities.
Additionally, Regions’ Board has authorized Regions Bank to issue up to $10
billion
in aggregate principal amount of bank notes outstanding at any one
time. Refer to Note 11 “Borrowed Funds” to the consolidated financial statements
in the 2021 Annual Report on Form 10-K 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. See Note 5 "Shareholders' Equity
and Accumulated Other Comprehensive Income" to the consolidated financial
statements for additional information.

Regions' liquidity policy requires the holding company to maintain cash
sufficient to cover the greater of (1) 18 months of debt service and other cash
needs or (2) a minimum cash balance of $500 million. Cash and cash equivalents
at the holding company totaled $1.1 billion at March 31, 2022. Overall liquidity
risk limits are established by the Board through its Risk

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Appetite Statement and Liquidity Policy. The Company’s Board, LROC and ALCO
regularly review compliance with the established limits.

CREDIT RISK


Regions' objective regarding credit risk is to maintain a credit portfolio that
provides for stable credit costs with acceptable volatility through an economic
cycle. Regions has various processes to manage credit risk as described below.
In order to assess the risk profile of the loan portfolio, Regions considers
risk factors within the loan portfolio segments and classes, the current U.S.
economic environment and that of its primary banking markets, as well as
counterparty risk. See the "Portfolio Characteristics" section of the Annual
Report on Form 10-K for the year ended December 31, 2021 for a discussion of
risk characteristics of each loan type.

INFORMATION SECURITY RISK


Regions faces information security risks, such as evolving and adaptive cyber
attacks that are conducted regularly against financial institutions in attempts
to compromise or disable information systems. Such attempts have increased in
recent years, and the trend is expected to continue for a number of reasons,
including increases in technology-based products and services used by us and our
customers, the growing use of mobile, cloud, and other emerging technologies,
and the increasing sophistication and activities of organized crime, hackers,
terrorists, nation-states, activists and other external parties or fraud on the
part of employees.

As a result of the COVID-19 pandemic, Regions has experienced a modest increase
in cyber events, such as phishing attempts and malicious traffic from outside
the U.S. However, the Company's layered control environment has effectively
detected and prevented any material impact related to these events.

Even when Regions successfully prevents cyber attacks to its own network, the
Company may still incur losses that result from customers' account information
being obtained through breaches of retailers' networks that enable customer
transactions. The related fraud losses, as well as the costs of re-issuing new
cards, may impact Regions' financial results. In addition, Regions also relies
on some vendors to provide certain business infrastructure components, and
although Regions actively assesses and monitors the information security
capabilities of these vendors, Regions' reliance on them may also increase
exposure to information security risk.

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. Refer to the "Information Security Risk" section in Management's
Discussion and Analysis included in the Annual Report on Form 10-K for the year
ended December 31, 2021 for further discussion of Regions' information security
risk.

PROVISION FOR (BENEFIT FROM) CREDIT LOSSES


The provision for (benefit from) credit losses is used to maintain the allowance
for loan losses and the reserve for unfunded credit losses at a level that in
management's judgment is appropriate to absorb expected credit losses over the
contractual life of the loan and credit commitment portfolio at the balance
sheet date. The benefit from credit losses totaled $36 million in the first
quarter of 2022 compared to a benefit from credit losses of $142 million during
the first quarter of 2021. Refer to the "Allowance" section for further detail.

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NON-INTEREST INCOME

Table 22-Non-Interest Income

                                               Three Months Ended March 31                  Quarter-to-Date Change 3/31/2022 vs. 3/31/2021
                                                 2022                  2021                       Amount                          Percent
                                                                                   (Dollars in millions)
Service charges on deposit accounts        $          168          $     157          $                11                                 7.0  %
Card and ATM fees                                     124                115                            9                                 7.8  %
Capital markets income                                 73                100                          (27)                              (27.0) %
Investment management and trust fee income             75                 66                            9                                13.6  %
Mortgage income                                        48                 90                          (42)                              (46.7) %
Investment services fee income                         26                 25                            1                                 4.0  %
Commercial credit fee income                           22                 22                            -                                   -  %
Bank-owned life insurance                              14                 17                           (3)                              (17.6) %

Market value adjustments on employee
benefit assets - other                                (14)                 7                          (21)                             (300.0) %
Gain on equity investment                               -                  3                           (3)                             (100.0) %
Securities gains (losses), net                          -                  1                           (1)                             (100.0) %

Other miscellaneous income                             48                 38                           10                                26.3  %
                                           $          584          $     641          $               (57)                               (8.9) %



Service charges on deposit accounts-Service charges on deposit accounts include
non-sufficient fund and overdraft fees, corporate analysis service charges,
overdraft protection fees and other customer transaction-related service
charges.


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 the first
quarter of 2022 compared to the same period in 2021 due primarily to decreases
in securities underwriting and placement, M&A advisory fees, and commercial swap
income. M&A advisory fees were impacted by timing of transactions. Additionally,
debt and real estate capital markets were impacted by uncertainty surrounding
interest rates, geopolitical tensions and volatility in credit spreads. The
declines were partially offset by an increase in loan syndication revenue.

Investment management and trust fee income-Investment management and trust fee
income represents income from asset management services provided to individuals,
businesses and institutions. Investment management and trust fee income
increased due primarily to increased production and sales, and positive
market-related impacts on asset values in the first quarter of 2022.

Mortgage income-Mortgage income is generated through the origination and
servicing of residential mortgage loans for long-term investors and sales of
residential mortgage loans in the secondary market. The decrease in mortgage
income in the first quarter of 2022 compared to the same period in 2021 was due
primarily to lower mortgage production as a result of higher interest rates.
Additionally, mortgage income was impacted by reductions in the valuation of
mortgage servicing rights and related hedges. Mortgage income in the first
quarter of 2022 also included approximately $12 million in gains associated with
the re-securitization and sale of Ginnie Mae loans previously repurchased from
their pools.

Market value adjustments on employee benefit assets-Market value adjustments on
employee benefit assets are the reflection of market value variations related to
assets held for certain employee benefits. Market value adjustments on employee
benefit assets decreased in the first quarter of 2022 compared to the same
period in 2021 due to market volatility. The adjustments are offset in salaries
and benefits.

Securities gains (losses), net-Net securities gains (losses) primarily result
from the Company’s asset/liability management process. See Table 1 “Debt
Securities
” section for additional information.


Other miscellaneous income-Other miscellaneous income includes net revenue from
affordable housing, valuation adjustments to equity investments (other than the
item shown separately above), fees from safe deposit boxes, check fees and other
miscellaneous income. Net revenue from affordable housing includes actual gains
and losses resulting from the sale of affordable housing investments, cash
distributions from the investments and any related impairment charges. Other
miscellaneous income increased in the first quarter of 2022 compared to the same
period of 2021 primarily due to an increase in commercial loan and leasing
related fee income generated from Ascentium and an increase in other consumer
income.

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NON-INTEREST EXPENSE

Table 23-Non-Interest Expense

                                                  Three Months Ended March 31                Quarter-to-Date Change 3/31/2022 vs. 3/31/2021
                                                    2022                  2021                      Amount                        Percent
                                                                                    (Dollars in millions)
Salaries and employee benefits                $          546          $     546          $             -                                    -  %
Equipment and software expense                            95                 90                        5                                  5.6  %
Net occupancy expense                                     75                 77                       (2)                                (2.6) %
Outside services                                          38                 38                        -                                    -  %
Marketing                                                 24                 22                        2                                  9.1  %
Professional, legal and regulatory expenses               17                 29                      (12)                               (41.4) %
Credit/checkcard expenses                                 26                 14                       12                                 85.7  %
FDIC insurance assessments                                14                 10                        4                                 40.0  %
Visa class B shares expense                                5                  4                        1                                 25.0  %

Branch consolidation, property and equipment
charges                                                    1                  5                       (4)                               (80.0) %
Other miscellaneous expenses                              92                 93                       (1)                                (1.1) %
                                              $          933          $     928          $             5                                  0.5  %




Salaries and employee benefits-Salaries and employee benefits consist of
salaries, incentive compensation, long-term incentives, payroll taxes, and other
employee benefits such as 401(k), pension, and medical, life and disability
insurance, as well as, expenses from liabilities held for employee benefit
purposes. Full-time equivalent headcount increased to 19,723 at March 31, 2022
from 18,926 at March 31, 2021, reflecting the additional associates from
acquisitions in the fourth quarter of 2021. While headcount increased, salaries
and employee benefits expense remained stable primarily due to lower incentive
compensation during the first quarter of 2022.

Professional, legal and regulatory expenses-Professional, legal, and regulatory
expenses consist of amounts related to legal, consulting, other professional
fees and regulatory charges. Professional, legal, and regulatory expenses
decreased in the first quarter of 2022 compared to the same period in 2021
primarily due to a decline in legal fees.

Credit/Checkcard expenses-Credit/Checkcard expenses include credit and checkcard
fraud and expenses. Credit/checkcard increased in the first quarter of 2022
compared to the same period in 2021 primarily due to an accrual increase
associated with a previous debit card matter.


Branch consolidation, property and equipment charges-Branch consolidation,
property and equipment charges include valuation adjustments related to owned
branches when the decision to close them is made. Accelerated depreciation and
lease write-off charges are recorded for leased branches through and at the
actual branch close date. Branch consolidation, property and equipment charges
also include costs related to occupancy optimization initiatives.

INCOME TAXES


The Company's income tax expense for the three months ended March 31, 2022 was
$154 million compared to $180 million for the three months ended March 31, 2021,
resulting in effective tax rates of 21.9 percent for both periods. See the
"First Quarter Overview" for the Company's near-term expectations for future tax
rates.

The effective tax rate is affected by many factors including, but not limited
to, the level of pre-tax income, the mix of income between various tax
jurisdictions with differing tax rates, enacted tax legislation, net tax
benefits related to affordable housing investments, bank-owned life insurance
income, tax-exempt interest and nondeductible expenses. 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.

At March 31, 2022, the Company reported a net deferred tax asset of $136 million
compared to a net deferred tax liability of $306 million at December 31, 2021.
The change in the net deferred tax position was due primarily to the deferred
tax impact of unrealized losses on securities available for sale and derivative
instruments arising during the period.

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ACQUISITIONS

EnerBank

On October 1, 2021, Regions completed its acquisition of home improvement lender
EnerBank. The acquisition of EnerBank allows Regions to provide customers with
home improvement financing solutions using EnerBank's loan programs and digital
solutions to support a wide range of home improvement needs.

As a result of the acquisition, Regions recorded approximately $3.3 billion of
assets of which $3.1 billion were loans that are included in Regions’ other
consumer loan portfolio. Regions also assumed $2.8 billion of liabilities,
consisting almost entirely of time deposits that the Company expects will
attrite over time. The premiums recorded related to the acquired assets and
assumed liabilities were immaterial.


Fair value estimates are considered preliminary as of March 31, 2022. Fair value
estimates, including loans, intangible assets and goodwill, are subject to
change for up to one year after the acquisition date as additional information
becomes available.

Regions recorded PCD loans of $198 million as a result of the acquisition.
Regions recorded an immaterial ALLL related to these loans, which was included
in the total acquired asset value as part of the acquisition.


In conjunction with the acquisition, Regions recognized initial goodwill of $361
million and other intangible assets of $176 million. The other intangible assets
were primarily comprised of customer relationship intangibles and will be
amortized over the expected useful life of each recognized asset.

Sabal


On December 1, 2021, Regions completed its acquisition of Sabal, a financial
services firm that leverages technology to facilitate off-balance-sheet lending
in the small balance commercial real estate market.

As a result of the acquisition, Regions recorded approximately $360 million of
assets, which included loans held for sale totaling $82 million, as well as a
commercial mortgage servicing asset and securities that were immaterial. Regions
also assumed $114 million of liabilities, consisting primarily of borrowings
that were paid off following closing.

In conjunction with the acquisition, Regions recognized initial goodwill of $146
million
and other intangible assets that were immaterial.


Fair value estimates are considered preliminary as of March 31, 2022. Fair value
estimates, including acquired assets and goodwill, are subject to change for up
to one year after the acquisition date as additional information becomes
available.

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