UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☒	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended	June 30, 2022

or

☐	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period from	to

Commission File Number: 001-34034

Regions Financial Corporation

(Exact name of registrant as specified in its charter)

Delaware	63-0589368
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1900 Fifth Avenue North
Birmingham
Alabama	35203
(Address of principal executive offices)	(Zip Code)

(800) 734-4667

(Registrant’s telephone number, including area code)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $.01 par value	RF	New York Stock Exchange
Depositary Shares, each representing a 1/40th Interest in a Share of
6.375% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series B	RF PRB	New York Stock Exchange
Depositary Shares, each representing a 1/40th Interest in a Share of
5.700% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series C	RF PRC	New York Stock Exchange
Depositary Shares, each representing a 1/40th Interest in a Share of
4.45% Non-Cumulative Perpetual Preferred Stock, Series E	RF PRE	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   ☒  Yes    ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   ☒  Yes  ☐  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one): ☒ Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company  ☐  Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    ☐  Yes   ☒  No

Securities registered pursuant to Section 12(b) of the Act:

As of August 3, 2022 there were 934,396,325 shares of the issuer's common stock, par value $.01 per share, outstanding.

1

REGIONS FINANCIAL CORPORATION

FORM 10-Q

INDEX

 

		Page
Forward-Looking Statements
Part I. Financial Information
Item 1.	Financial Statements (Unaudited)
	Consolidated Balance Sheets	8
	Consolidated Statements of Income	9
	Consolidated Statements of Comprehensive Income (Loss)	10
	Consolidated Statements of Changes in Equity	11
	Consolidated Statements of Cash Flows	12
	Notes to Consolidated Financial Statements	13
	Note 1 "Basis of Presentation"	13
	Note 2 "Debt Securities"	14
	Note 3 "Loans and the Allowance for Credit Losses"	17
	Note 4 "Loan Servicing"	28
	Note 5 "Shareholders' Equity and Accumulated Other Comprehensive Income"	30
	Note 6 "Earnings (Loss) per Common Share"	36
	Note 7 "Pension and Other Postretirement Benefits"	37
	Note 8 "Derivative Financial Instruments and Hedging Activities"	38
	Note 9 "Fair Value Measurements"	43
	Note 10 "Business Segment Information"	48
	Note 11 "Commitments, Contingencies and Guarantees"	49
	Note 12 "Recent Accounting Pronouncements"	51
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	54
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	86
Item 4.	Controls and Procedures	86
Part II. Other Information
Item 1.	Legal Proceedings	88
Item 1A.	Risk Factors	88
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	90
Item 6.	Exhibits	91
Signatures		92

2

Glossary of Defined Terms

Agencies - collectively, FNMA and GNMA.

ACL - Allowance for credit losses.

ALCO - Asset/Liability Management Committee.

ALLL - Allowance for loan and lease losses.

Allowance - Allowance for credit losses.

AMERIBOR - American Interbank Offered Rate.

AOCI - Accumulated other comprehensive income.

ARM - Adjustable rate mortgage.

ARRC - Alternative Reference Rates Committee.

Ascentium - Ascentium Capital, LLC.

ASU - Accounting Standards Update.

ATM - Automated teller machine.

Bank - Regions Bank.

Basel III Rules - Final capital rules adopting the Basel III capital framework approved by U.S. federal

    regulators in 2013.

Basel Committee - Basel Committee on Banking Supervision.

BHC - Bank Holding Company.

BITS - Technology policy division of the Bank Policy Institute.

Board - The Company’s Board of Directors.

BSBY - Bloomberg Short-Term Bank Yield index.

CAP - Customer Assistance Program.

CARES Act - Coronavirus Aid, Relief, and Economic Security Act 

CCAR - Comprehensive Capital Analysis and Review.

CECL - Accounting Standards Update 2016-13, Measurement of Credit Losses on Financial Instruments ("Current

    Expected Credit Losses")

CET1 - Common Equity Tier 1.

CFPB - Consumer Financial Protection Bureau.

Clearsight - Clearsight Advisors, Inc., a mergers and acquisitions firm acquired December 31, 2021.

Company - Regions Financial Corporation and its subsidiaries.

COVID-19 - Coronavirus Disease 2019.

CPI - Consumer price index.

CPR - Constant (or Conditional) prepayment rate.

Dodd-Frank Act - The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

DFAST - Dodd-Frank Act Stress Test.

DPD - Days past due.

DUS - Fannie Mae Delegated Underwriting & Servicing.

E&P - Extraction and production.

EnerBank - EnerBank USA, a consumer lending institution acquired October 1, 2021.

FASB - Financial Accounting Standards Board.

FCA - Financial Conduct Authority.

FDIC - The Federal Deposit Insurance Corporation.

Federal Reserve - The Board of Governors of the Federal Reserve System.

3

FHA - Federal Housing Administration.

FHLB - Federal Home Loan Bank.

FICO - The Financing Corporation, established by the Competitive Equality Banking Act of.1987.

FICO scores - Personal credit scores based on the model introduced by the Fair Isaac Corporation.

Fintechs - Financial Technology Companies.

FOMC - Federal Open Market Committee.

FRB - Federal Reserve Bank.

GAAP - Generally Accepted Accounting Principles in the United States.

GDP - Gross domestic product.

GNMA - Government National Mortgage Association.

HPI - Housing price index.

IRE - Investor real estate portfolio segment.

IRS - Internal Revenue Service.

LIBOR - London InterBank Offered Rate.

LROC - Liquidity Risk Oversight Committee.

LTV - Loan to value.

MBS - Mortgage-backed securities.

MSAs - Metropolitan Statistical Areas.

MSR - Mortgage servicing right.

NM - Not meaningful.

OAS - Option-adjusted spread.

OCC - Office of the Comptroller of the Currency.

OCI - Other comprehensive income.

PCD - Purchased credit deteriorated.

PD - Probability of default.

PPP - Paycheck Protection Program.

R&S - Reasonable and supportable.

S&P 500 - a stock market index that measures the stock performance of 500 large companies listed on stock exchanges in the United States.

Sabal - Sabal Capital Partners, LLC, a diversified financial services firm acquired December 1, 2021.

SBA - Small Business Administration.

SBIC - Small Business Investment Company.

SCB - Stress Capital Buffer.

SEC - U.S. Securities and Exchange Commission.

SOFR - Secured Overnight Financing Rate.

TDR - Troubled debt restructuring.

U.S. - United States.

U.S. Treasury - The United States Department of the Treasury.

USD - United States dollar.

UTB - Unrecognized tax benefits.

VIE - Variable interest entity.

Visa - The Visa, U.S.A. Inc. card association or its affiliates, collectively.

4

Forward-Looking Statements

This Quarterly Report on Form 10-Q, other periodic reports filed by Regions Financial Corporation under the Securities Exchange Act of 1934, as amended, and any other written or oral statements made by us or on our behalf to analysts, investors, the media and others, may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995.

The terms “Regions,” the “Company,” “we,” “us” and “our” as used herein mean collectively Regions Financial Corporation, a Delaware corporation, together with its subsidiaries when or where appropriate. The words “future,” “anticipates,” “assumes,” “intends,” “plans,” “seeks,” “believes,” “predicts,” “potential,” “objectives,” “estimates,” “expects,” “targets,” “projects,” “outlook,” “forecast,” “would,” “will,” “may,” “might,” “could,” “should,” “can,” and similar terms and expressions often signify forward-looking statements. Forward-looking statements are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control, including the scope and duration of the COVID-19 pandemic (including the impact of additional variants and resurgences), the effectiveness, availability and acceptance of any vaccines or therapies, and the direct and indirect impact of the COVID-19 pandemic on our customers, third parties and us. Forward-looking statements are not based on historical information, but rather are related to future operations, strategies, financial results or other developments. Forward-looking statements are based on management’s current expectations as well as certain assumptions and estimates made by, and information available to, management at the time the statements are made. Those statements are based on general assumptions and are subject to various risks, and because they also relate to the future they are likewise subject to inherent uncertainties and other factors that may cause actual results to differ materially from the views, beliefs and projections expressed in such statements. Therefore, we caution you against relying on any of these forward-looking statements. These risks, uncertainties and other factors include, but are not limited to, those described below:

•Current and future economic and market conditions in the United States generally or in the communities we serve (in particular the Southeastern United States), including the effects of possible declines in property values, increases in unemployment rates, financial market disruptions and potential reductions of economic growth, which may adversely affect our lending and other businesses and our financial results and conditions.

•Possible changes in trade, monetary and fiscal policies of, and other activities undertaken by, governments, agencies, central banks and similar organizations, which could have a material adverse effect on our earnings.

•Possible changes in market interest rates or capital markets could adversely affect our revenue and expense, the value of assets and obligations, and the availability and cost of capital and liquidity.

•The impact of pandemics, including the ongoing COVID-19 pandemic, on our businesses, operations, and financial results and conditions. The duration and severity of any pandemic, including the COVID-19 pandemic, could disrupt the global economy, adversely affect our capital and liquidity position, impair the ability of borrowers to repay outstanding loans and increase our allowance for credit losses, impair collateral values, and result in lost revenue or additional expenses.

•Any impairment of our goodwill or other intangibles, any repricing of assets, or any adjustment of valuation allowances on our deferred tax assets due to changes in tax law, adverse changes in the economic environment, declining operations of the reporting unit or other factors.

•The effect of new tax legislation and/or interpretation of existing tax law, which may impact our earnings, capital ratios, and our ability to return capital to shareholders.

•Possible changes in the creditworthiness of customers and the possible impairment of the collectability of loans and leases, including operating leases.

•Changes in the speed of loan prepayments, loan origination and sale volumes, charge-offs, credit loss provisions or actual credit losses where our allowance for credit losses may not be adequate to cover our eventual losses.

•Possible acceleration of prepayments on mortgage-backed securities due to low interest rates, and the related acceleration of premium amortization on those securities.

•Loss of customer checking and savings account deposits as customers pursue other, higher-yield investments, which could increase our funding costs.

•Possible changes in consumer and business spending and saving habits and the related effect on our ability to increase assets and to attract deposits, which could adversely affect our net income.

•Our ability to effectively compete with other traditional and non-traditional financial services companies, including fintechs, some of whom possess greater financial resources than we do or are subject to different regulatory standards than we are.

•Our inability to develop and gain acceptance from current and prospective customers for new products and services and the enhancement of existing products and services to meet customers’ needs and respond to emerging technological trends in a timely manner could have a negative impact on our revenue.

•Our inability to keep pace with technological changes, including those related to the offering of digital banking and financial services, could result in losing business to competitors.

5

•Changes in laws and regulations affecting our businesses, including legislation and regulations relating to bank products and services, as well as changes in the enforcement and interpretation of such laws and regulations by applicable governmental and self-regulatory agencies, including as a result of the changes in U.S. presidential administration, control of the U.S. Congress, and changes in personnel at the bank regulatory agencies, which could require us to change certain business practices, increase compliance risk, reduce our revenue, impose additional costs on us, or otherwise negatively affect our businesses.

•Our capital actions, including dividend payments, common stock repurchases, or redemptions of preferred stock, must not cause us to fall below minimum capital ratio requirements, with applicable buffers taken into account, and must comply with other requirements and restrictions under law or imposed by our regulators, which may impact our ability to return capital to shareholders.

•Our ability to comply with stress testing and capital planning requirements (as part of the CCAR process or otherwise) may continue to require a significant investment of our managerial resources due to the importance of such tests and requirements.

•Our ability to comply with applicable capital and liquidity requirements (including, among other things, the Basel III capital standards), including our ability to generate capital internally or raise capital on favorable terms, and if we fail to meet requirements, our financial condition and market perceptions of us could be negatively impacted.

•The effects of any developments, changes or actions relating to any litigation or regulatory proceedings brought against us or any of our subsidiaries.

•The costs, including possibly incurring fines, penalties, or other negative effects (including reputational harm) of any adverse judicial, administrative, or arbitral rulings or proceedings, regulatory enforcement actions, or other legal actions to which we or any of our subsidiaries are a party, and which may adversely affect our results.

•Our ability to manage fluctuations in the value of assets and liabilities and off-balance sheet exposure so as to maintain sufficient capital and liquidity to support our businesses.

•Our ability to execute on our strategic and operational plans, including our ability to fully realize the financial and nonfinancial benefits relating to our strategic initiatives.

•The risks and uncertainties related to our acquisition or divestiture of businesses, including our recently completed acquisitions of EnerBank, Sabal, and Clearsight, and risks related to such acquisitions, including that the expected synergies, cost savings and other financial or other benefits may not be realized within the expected timeframes, or might be less than projected; difficulties in integrating the businesses; and the inability of Regions to effectively cross-sell products following these acquisitions.

•The success of our marketing efforts in attracting and retaining customers.

•Our ability to recruit and retain talented and experienced personnel to assist in the development, management and operation of our products and services may be affected by changes in laws and regulations in effect from time to time.

•Fraud or misconduct by our customers, employees or business partners.

•Any inaccurate or incomplete information provided to us by our customers or counterparties.

•Inability of our framework to manage risks associated with our businesses, such as credit risk and operational risk, including third-party vendors and other service providers, which could, among other things, result in a breach of operating or security systems as a result of a cyber attack or similar act or failure to deliver our services effectively.

•Dependence on key suppliers or vendors to obtain equipment and other supplies for our businesses on acceptable terms.

•The inability of our internal controls and procedures to prevent, detect or mitigate any material errors or fraudulent acts.

•The effects of geopolitical instability, including wars, conflicts, civil unrest, and terrorist attacks and the potential impact, directly or indirectly, on our businesses.

•The effects of man-made and natural disasters, including fires, floods, droughts, tornadoes, hurricanes, and environmental damage (specifically in the Southeastern United States), which may negatively affect our operations and/or our loan portfolios and increase our cost of conducting business. The severity and frequency of future earthquakes, fires, hurricanes, tornadoes, droughts, floods and other weather-related events are difficult to predict and may be exacerbated by global climate change.

•Changes in commodity market prices and conditions could adversely affect the cash flows of our borrowers operating in industries that are impacted by changes in commodity prices (including businesses indirectly impacted by commodities prices such as businesses that transport commodities or manufacture equipment used in the production of

6

commodities), which could impair their ability to service any loans outstanding to them and/or reduce demand for loans in those industries.

•Our ability to identify and address cyber-security risks such as data security breaches, malware, ransomware, “denial of service” attacks, “hacking” and identity theft, including account take-overs, a failure of which could disrupt our businesses and result in the disclosure of and/or misuse or misappropriation of confidential or proprietary information, disruption or damage to our systems, increased costs, losses, or adverse effects to our reputation.

•Our ability to achieve our expense management initiatives.

•Market replacement of LIBOR and the related effect on our LIBOR-based financial products and contracts, including, but not limited to, derivative products, debt obligations, deposits, investments, and loans.

•Possible downgrades in our credit ratings or outlook could, among other negative impacts, increase the costs of funding from capital markets.

•The effects of problems encountered by other financial institutions that adversely affect us or the banking industry generally could require us to change certain business practices, reduce our revenue, impose additional costs on us, or otherwise negatively affect our businesses.

•The effects of the failure of any component of our business infrastructure provided by a third party could disrupt our businesses, result in the disclosure of and/or misuse of confidential information or proprietary information, increase our costs, negatively affect our reputation, and cause losses.

•Our ability to receive dividends from our subsidiaries, in particular Regions Bank, could affect our liquidity and ability to pay dividends to shareholders.

•Changes in accounting policies or procedures as may be required by the FASB or other regulatory agencies could materially affect our financial statements and how we report those results, and expectations and preliminary analyses relating to how such changes will affect our financial results could prove incorrect.

•Fluctuations in the price of our common stock and inability to complete stock repurchases in the time frame and/or on the terms anticipated.

•The effects of anti-takeover and exclusive forum laws and provision in our certificate of incorporation and bylaws.

•The effects of any damage to our reputation resulting from developments related to any of the items identified above.

•Other risks identified from time to time in reports that we file with the SEC.

You should not place undue reliance on any forward-looking statements, which speak only as of the date made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible to predict all of them. We assume no obligation and do not intend to update or revise any forward-looking statements that are made from time to time, either as a result of future developments, new information or otherwise, except as may be required by law.

See also the reports filed with the SEC, including the discussion under the “Risk Factors” section of Regions’ Annual Report on Form 10-K for the year ended December 31, 2021 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 as filed with the SEC and available on its website at www.sec.gov.

7

PART I

FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

REGIONS FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

	June 30, 2022		December 31, 2021
	(In millions, except share data)
Assets
Cash and due from banks	$	2,301	$	1,350
Interest-bearing deposits in other banks	18,199		28,061
Debt securities held to maturity (estimated fair value of $817 and $950, respectively)	836		899
Debt securities available for sale (amortized cost of $31,263 and $28,263, respectively)	29,052		28,481
Loans held for sale (includes $369 and $783 measured at fair value, respectively)	612		1,003
Loans, net of unearned income	93,458		87,784
Allowance for loan losses	(1,425)		(1,479)
Net loans	92,033		86,305
Other earning assets	1,428		1,187
Premises and equipment, net	1,768		1,814
Interest receivable	365		319
Goodwill	5,749		5,744
Residential mortgage servicing rights at fair value	770		418
Other identifiable intangible assets, net	279		305
Other assets	7,516		7,052
Total assets	$	160,908	$	162,938
Liabilities and Equity
Deposits:
Non-interest-bearing	$	58,510	$	58,369
Interest-bearing	79,753		80,703
Total deposits	138,263		139,072
Borrowed funds:
Long-term borrowings	2,319		2,407
Total borrowed funds	2,319		2,407
Other liabilities	3,819		3,133
Total liabilities	144,401		144,612
Equity:
Preferred stock, authorized 10 million shares, par value $1.00 per share:
Non-cumulative perpetual, including related surplus, net of issuance costs; issued— 1,403,500 shares	1,659		1,659
Common stock, authorized 3 billion shares, par value $0.01 per share:
Issued including treasury stock— 975,373,716 and 982,940,601 shares, respectively	10		10
Additional paid-in capital	11,962		12,189
Retained earnings	6,314		5,550
Treasury stock, at cost—41,032,676 shares	(1,371)		(1,371)
Accumulated other comprehensive income (loss), net	(2,067)		289
Total shareholders’ equity	16,507		18,326
Total liabilities and equity	$	160,908	$	162,938

See notes to consolidated financial statements.

8

REGIONS FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

	Three Months Ended June 30				Six Months Ended June 30
	2022		2021		2022		2021
	(In millions, except per share data)
Interest income on:
Loans, including fees	$	932	$	849	$	1,808	$	1,703
Debt securities	157		131		295		264
Loans held for sale	10		12		19		24
Other earning assets	56		14		85		28
Total interest income	1,155		1,006		2,207		2,019
Interest expense on:
Deposits	20		17		33		36
Long-term borrowings	27		26		51		53
Total interest expense	47		43		84		89
Net interest income	1,108		963		2,123		1,930
Provision for (benefit from) credit losses	60		(337)		24		(479)
Net interest income after provision for (benefit from) credit losses	1,048		1,300		2,099		2,409
Non-interest income:
Service charges on deposit accounts	165		163		333		320
Card and ATM fees	133		128		257		243
Capital markets income	112		61		185		161
Mortgage income	47		53		95		143
Investment management and trust fee income	72		69		147		135
Securities gains (losses), net	—		1		—		2
Other	111		144		207		256
Total non-interest income	640		619		1,224		1,260
Non-interest expense:
Salaries and employee benefits	575		532		1,121		1,078
Equipment and software expense	97		89		192		179
Net occupancy expense	75		75		150		152
Other	201		202		418		417
Total non-interest expense	948		898		1,881		1,826
Income before income taxes	740		1,021		1,442		1,843
Income tax expense	157		231		311		411
Net income	$	583	$	790	$	1,131	$	1,432
Net income available to common shareholders	$	558	$	748	$	1,082	$	1,362
Weighted-average number of shares outstanding:
Basic	934		958		936		959
Diluted	940		965		943		967
Earnings per common share:
Basic	$	0.60	$	0.78	$	1.16	$	1.42
Diluted	$	0.59	$	0.77	$	1.15	$	1.41

See notes to consolidated financial statements.

9

REGIONS FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

	Three Months Ended June 30
	2022		2021
	(In millions)
Net income	$	583	$	790
Other comprehensive income, net of tax:
Unrealized losses on securities transferred to held to maturity:
Unrealized losses on securities transferred to held to maturity during the period (net of zero and zero tax effect, respectively)	—		—
Less: reclassification adjustments for amortization of unrealized losses on securities transferred to held to maturity (net of zero and zero tax effect, respectively)	(1)		(1)
Net change in unrealized losses on securities transferred to held to maturity, net of tax	1		1
Unrealized gains on securities available for sale:
Unrealized holding gains (losses) arising during the period (net of ($237) and $23 tax effect, respectively)	(694)		71
Less: reclassification adjustments for securities gains (losses) realized in net income (net of zero and zero tax effect, respectively)	—		1
Net change in unrealized gains on securities available for sale, net of tax	(694)		70
Unrealized gains on derivative instruments designated as cash flow hedges:
Unrealized holding gains (losses) on derivatives arising during the period (net of ($34) and $18 tax effect, respectively)	(109)		56
Less: reclassification adjustments for gains (losses) on derivative instruments realized in net income (net of $20 and $26 tax effect, respectively)	58		78
Net change in unrealized gains on derivative instruments, net of tax	(167)		(22)
Defined benefit pension plans and other post employment benefits:
Net actuarial gains (losses) arising during the period (net of zero and zero tax effect, respectively)	—		—
Less: reclassification adjustments for amortization of actuarial loss and settlements realized in net income (net of ($1) and ($4) tax effect, respectively)	(7)		(10)
Net change from defined benefit pension plans and other post employment benefits, net of tax	7		10
Other comprehensive income (loss), net of tax	(853)		59
Comprehensive income (loss)	$	(270)	$	849
	Six Months Ended June 30
	2022		2021
	(In millions)
Net income	$	1,131	$	1,432
Other comprehensive income, net of tax:
Unrealized losses on securities transferred to held to maturity:
Unrealized losses on securities transferred to held to maturity during the period (net of zero and zero tax effect, respectively)	—		—
Less: reclassification adjustments for amortization of unrealized losses on securities transferred to held to maturity (net of zero and ($1) tax effect, respectively)	(2)		(3)
Net change in unrealized losses on securities transferred to held to maturity, net of tax	2		3
Unrealized gains on securities available for sale:
Unrealized holding gains (losses) arising during the period (net of ($618) and ($115) tax effect, respectively)	(1,811)		(339)
Less: reclassification adjustments for securities gains (losses) realized in net income (net of zero and zero tax effect, respectively)	—		2
Net change in unrealized gains on securities available for sale, net of tax	(1,811)		(341)
Unrealized gains on derivative instruments designated as cash flow hedges:
Unrealized holding gains (losses) on derivatives arising during the period (net of ($140) and ($65) tax effect, respectively)	(420)		(192)
Less: reclassification adjustments for gains (losses) on derivative instruments realized in net income (net of $48 and $52 tax effect, respectively)	140		154
Net change in unrealized gains on derivative instruments, net of tax	(560)		(346)
Defined benefit pension plans and other post employment benefits:
Net actuarial gains (losses) arising during the period (net of zero and zero tax effect, respectively)	—		—
Less: reclassification adjustments for amortization of actuarial loss and settlements realized in net income (net of ($3) and ($7) tax effect, respectively)	(13)		(20)
Net change from defined benefit pension plans and other post employment benefits, net of tax	13		20
Other comprehensive income (loss), net of tax	(2,356)		(664)
Comprehensive income (loss)	$	(1,225)	$	768

See notes to consolidated financial statements.

10

REGIONS FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

	Shareholders' Equity
	Preferred Stock			Common Stock			Additional Paid-In Capital		Retained Earnings		Treasury Stock, At Cost		Accumulated Other Comprehensive Income (Loss), Net		Total
	Shares	Amount		Shares	Amount
	(In millions)
BALANCE AT JANUARY 1, 2021	2	$	1,656	960	$	10	$	12,731	$	3,770	$	(1,371)	$	1,315	$	18,111
Net income	—	—		—	—		—		642		—		—		642
Other comprehensive income (loss), net of tax	—	—		—	—		—		—		—		(723)		(723)
Cash dividends declared	—	—		—	—		—		(149)		—		—		(149)
Preferred stock dividends	—	—		—	—		—		(28)		—		—		(28)
Impact of common stock transactions under compensation plans, net	—	—		1	—		9		—		—		—		9
BALANCE AT MARCH 31, 2021	2	$	1,656	961	$	10	$	12,740	$	4,235	$	(1,371)	$	592	$	17,862
BALANCE AT APRIL 1, 2021	2	$	1,656	961	$	10	$	12,740	$	4,235	$	(1,371)	$	592	$	17,862
Net income	—	—		—	—		—		790		—		—		790
Other comprehensive income (loss), net of tax	—	—		—	—		—		—		—		59		59
Cash dividends declared	—	—		—	—		—		(147)		—		—		(147)
Preferred stock dividends	—	—		—	—		—		(29)		—		—		(29)
Net proceeds from issuance of Series E preferred stock	—	390		—	—		—		—		—		—		390
Redemption of Series A preferred stock	—	(387)		—	—		(100)		(13)		—		—		(500)
Impact of common share repurchases	—	—		(8)			(167)		—		—		—		(167)
Impact of common stock transactions under compensation plans, net	—	—		2	—		(6)		—		—		—		(6)
BALANCE AT JUNE 30, 2021	2	$	1,659	955	$	10	$	12,467	$	4,836	$	(1,371)	$