Item 1. Financial Statements (Unaudited)

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Item 1. Financial Statements (Unaudited)

REGIONS FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS




	March 31, 2023		December 31, 2022
	(In millions, except share data)
Assets
Cash and due from banks	$	2,395	$	1,997
Interest-bearing deposits in other banks	6,438		9,230

Debt securities held to maturity (estimated fair value of $749 and $751, respectively)	790		801
Debt securities available for sale (amortized cost of $31,214 and $31,367, respectively)	28,230		27,933
Loans held for sale (includes $242 and $196 measured at fair value, respectively)	564		354
Loans, net of unearned income	98,057		97,009
Allowance for loan losses	(1,472)		(1,464)
Net loans	96,585		95,545
Other earning assets	1,335		1,308
Premises and equipment, net	1,705		1,718
Interest receivable	538		511
Goodwill	5,733		5,733
Residential mortgage servicing rights at fair value	790		812
Other identifiable intangible assets, net	238		249
Other assets	8,794		9,029
Total assets	$	154,135	$	155,220
Liabilities and Equity
Deposits:
Non-interest-bearing	$	49,647	$	51,348
Interest-bearing	78,813		80,395
Total deposits	128,460		131,743
Borrowed funds:



Short-term borrowings	2,000		—
Long-term borrowings	2,307		2,284
Total borrowed funds	4,307		2,284
Other liabilities	4,466		5,242
Total liabilities	137,233		139,269
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—975,619,875 and 975,524,168 shares, respectively	10		10
Additional paid-in capital	11,996		11,988
Retained earnings	7,433		7,004
Treasury stock, at cost— 41,032,676 shares	(1,371)		(1,371)
Accumulated other comprehensive income (loss), net	(2,844)		(3,343)
Total shareholders’ equity	16,883		15,947
Noncontrolling interest	19		4
Total equity	16,902		15,951
Total liabilities and equity	$	154,135	$	155,220

See notes to consolidated financial statements.

REGIONS FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME


	Three Months Ended March 31
	2023		2022
	(In millions, except per share data)
Interest income on:
Loans, including fees	$	1,360	$	876
Debt securities	187		138
Loans held for sale	7		9
Other earning assets	87		29
Total interest income	1,641		1,052
Interest expense on:
Deposits	179		13
Short-term borrowings	5		—
Long-term borrowings	40		24
Total interest expense	224		37


Net interest income	1,417		1,015
Provision for (benefit from) credit losses	135		(36)
Net interest income after provision for (benefit from) credit losses	1,282		1,051
Non-interest income:
Service charges on deposit accounts	155		168
Card and ATM fees	121		124
Investment management and trust fee income	76		75
Capital markets income	42		73
Mortgage income	24		48
Securities gains (losses), net	(2)		—
Other	118		96
Total non-interest income	534		584
Non-interest expense:
Salaries and employee benefits	616		546
Equipment and software expense	102		95
Net occupancy expense	73		75
Other	236		217
Total non-interest expense	1,027		933
Income before income taxes	789		702
Income tax expense	177		154





Net income	$	612	$	548

Net income available to common shareholders	$	588	$	524
Weighted-average number of shares outstanding:
Basic	935		938
Diluted	942		947



Earnings per common share:
Basic	$	0.63	$	0.56
Diluted	0.62		0.55

See notes to consolidated financial statements.

REGIONS FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)


	Three Months Ended March 31
	2023		2022
	(In millions)
Net income	$	612	$	548
Other comprehensive income (loss), net of tax:
Unrealized losses on securities transferred to held to maturity:
Unrealized losses on securities transferred to held to maturity during the period (net of zero and zero tax effect, respectively)	—		—
Less: reclassification adjustments for amortization of unrealized losses on securities transferred to held to maturity (net of zero and zero tax effect, respectively)	—		(1)
Net change in unrealized losses on securities transferred to held to maturity, net of tax	—		1
Unrealized gains (losses) on securities available for sale:
Unrealized holding gains (losses) arising during the period (net of $114 and ($381) tax effect, respectively)	333		(1,117)
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 (losses) on securities available for sale, net of tax	335		(1,117)
Unrealized gains (losses) on derivative instruments designated as cash flow hedges:
Unrealized holding gains (losses) on derivatives arising during the period (net of $50 and ($106) tax effect, respectively)	148		(311)
Less: reclassification adjustments for gains (losses) on derivative instruments realized in net income (net of $(4) and $28 tax effect, respectively)	(11)		82
Net change in unrealized gains (losses) on derivative instruments, net of tax	159		(393)
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 ($2) and ($2) tax effect, respectively)	(5)		(6)
Net change from defined benefit pension plans and other post employment benefits, net of tax	5		6
Other comprehensive income (loss), net of tax	499		(1,503)
Comprehensive income (loss)	$	1,111	$	(955)

See notes to consolidated financial statements.

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		Non- controlling Interest
	Shares	Amount		Shares	Amount
	(In millions, except per share data)











BALANCE AT JANUARY 1, 2022	2	$	1,659	942	$	10	$	12,189	$	5,550	$	(1,371)	$	289	$	18,326	$	—

Net income	—	—		—	—		—		548		—		—		548		—

Other comprehensive income (loss), net of tax	—	—		—	—		—		—		—		(1,503)		(1,503)		—

Cash dividends declared	—	—		—	—		—		(159)		—		—		(159)		—
Preferred stock dividends	—	—		—	—		—		(24)		—		—		(24)		—
Impact of common stock share repurchases	—	—		(9)	—		(215)		—		—		—		(215)		—
Impact of common stock transactions under compensation plans, net	—	—		—	—		9		—		—		—		9		—
BALANCE AT MARCH 31, 2022	2	$	1,659	933	$	10	$	11,983	$	5,915	$	(1,371)	$	(1,214)	$	16,982	$	—

BALANCE AT JANUARY 1, 2023	2	$	1,659	934	$	10	$	11,988	$	7,004	$	(1,371)	$	(3,343)	$	15,947	$	4
Cumulative effect from change in accounting guidance	—	—		—	—		—		28		—		—		28		—
Net income	—	—		—	—		—		612		—		—		612		—

Other comprehensive income (loss), net of tax	—	—		—	—		—		—		—		499		499		—
Cash dividends declared	—	—		—	—		—		(187)		—		—		(187)		—
Preferred stock dividends	—	—		—	—		—		(24)		—		—		(24)		—




Impact of common stock transactions under compensation plans, net	—	—		—	—		8		—		—		—		8		—
Other	—	—		—	—		—		—		—		—		—		15
BALANCE AT MARCH 31, 2023	2	$	1,659	934	$	10	$	11,996	$	7,433	$	(1,371)	$	(2,844)	$	16,883	$	19

See notes to consolidated financial statements.

REGIONS FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS


	Three Months Ended March 31
	2023		2022
	(In millions)
Operating activities:
Net income	$	612	$	548
Adjustments to reconcile net income to net cash from operating activities:
Provision for (benefit from) credit losses	135		(36)
Depreciation, amortization and accretion, net	63		105

Securities (gains) losses, net	2		—

Deferred income tax expense (benefit)	43		73
Originations and purchases of loans held for sale	(826)		(1,292)
Proceeds from sales of loans held for sale	622		1,564

(Gain) loss on sale of loans, net	(8)		(20)


Net change in operating assets and liabilities:
Other earning assets	(27)		(319)
Interest receivable and other assets	297		(163)
Other liabilities	(742)		132
Other	25		(8)
Net cash from operating activities	196		584
Investing activities:
Proceeds from maturities of debt securities held to maturity	11		35
Proceeds from sales of debt securities available for sale	28		1,085
Proceeds from maturities of debt securities available for sale	729		1,283
Purchases of debt securities available for sale	(662)		(4,359)
Net (payments for) proceeds from bank-owned life insurance	2		—

Proceeds from sales of loans	43		366
Purchases of loans	(66)		(267)
Net change in loans	(1,130)		(1,641)
Purchases of mortgage servicing rights	(18)		(69)
Net purchases of other assets	(33)		(32)

Net cash from investing activities	(1,096)		(3,599)
Financing activities:
Net change in deposits	(3,283)		1,950
Net change in short-term borrowings	2,000		—



Cash dividends on common stock	(187)		(161)
Cash dividends on preferred stock	(24)		(24)


Repurchases of common stock	—		(215)
Taxes paid related to net share settlement of equity awards	—		(1)
Other	—		—
Net cash from financing activities	(1,494)		1,549
Net change in cash and cash equivalents	(2,394)		(1,466)
Cash and cash equivalents at beginning of year	11,227		29,411
Cash and cash equivalents at end of year	$	8,833	$	27,945

See notes to consolidated financial statements.

REGIONS FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1. BASIS OF PRESENTATION

Regions Financial Corporation (“Regions” or the "Company”) provides a full range of banking and bank-related services to individual and corporate customers through its subsidiaries and branch offices located across the South, Midwest and Texas as well as delivering specialty capabilities nationwide. Regions is subject to the regulations of certain government agencies and undergoes periodic examinations by certain regulatory authorities.

The accounting and reporting policies of Regions and the methods of applying those policies that materially affect the consolidated financial statements conform with GAAP and with general financial services industry practices. The accompanying interim financial statements have been prepared in accordance with the instructions for Form 10-Q and, therefore, do not include all information and notes to the consolidated financial statements necessary for a complete presentation of financial position, results of operations, comprehensive income (loss) and cash flows in conformity with GAAP. In the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair presentation of the consolidated financial statements have been included. These interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto in Regions’ Annual Report on Form 10-K for the year ended December 31, 2022. Regions has evaluated all subsequent events for potential recognition and disclosure through the filing date of this Form 10-Q.

During 2023, the Company adopted new accounting guidance. See below and Note 12 for related disclosures.

MODIFICATIONS TO BORROWERS EXPERIENCING FINANCIAL DIFFICULTY

On January 1, 2023, the Company adopted new accounting guidance that eliminated the recognition and measurement guidance for TDRs while enhancing disclosure requirements for certain loan refinancings and restructurings made to borrowers experiencing financial difficulty, also referred to as modifications to troubled borrowers. The guidance also requires disclosure of current-period gross write-offs by year of origination. Regions applied the guidance prospectively, except Regions used the modified-retrospective transition method related to the recognition and measurement of TDRs. The cumulative effect of the modified-retrospective application was a decrease in the allowance of $38 million and an increase to retained earnings of $28 million, net of taxes. Refer to Note 1 "Summary of Significant Accounting Policies" and Note 5 "Allowance for Credit Losses" in the Annual Report on Form 10-K for the year ended December 31, 2022 for additional information regarding TDRs and the related allowance for credit loss accounting prior to the adoption of modifications to troubled borrowers guidance.

Modifications to troubled borrowers

Modifications to troubled borrowers are loans where the borrower is experiencing financial difficulty at the time of modification and are undertaken in order to improve the likelihood of repayment. Modification types classified as modifications to troubled borrowers include interest rate reductions, other than insignificant term extensions, other than insignificant payment deferrals, principal forgiveness, or any combination of these. Further details are as follows:

Interest rate reduction modifications include instances where the absolute interest rate is reduced as part of the modification. In instances where the rate index changes for variable-rate loans, Regions evaluates whether or not the absolute interest rate decreases from the original rate to the updated rate.
Term extensions are maturity extensions, many of which occur through renewals or restructurings.
Payment deferrals include modifications wherein the contractual payment term is extended. Examples of payment deferral modifications include, but are not limited to, re-agings, payment delays or holidays, lengthening of amortization terms, allowing for an interest-only payment period, and capitalizing interest payments in loan restructurings.
Regions rarely grants principal forgiveness modifications.

Modifications to troubled borrowers are subject to policies governing accrual/non-accrual evaluation consistent with all other loans of the same product type as discussed in Note 1 "Summary of Significant Accounting Policies" in the Annual Report on Form 10-K for the year ended December 31, 2022. As such, modifications to troubled borrowers may include loans remaining on non-accrual, moving to non-accrual, or continuing on accrual status, depending on the individual facts and circumstances.

Allowance for credit losses

The allowance is intended to cover expected credit losses over the contractual life of loans measured at amortized cost, including unfunded commitments. Upon the adoption of modifications to troubled borrowers guidance in January 2023, the Company eliminated TDR and reasonable expectations of a TDR ("RETDR") designations and specific measurement rules within the calculation of the allowance credit losses, which resulted in a decrease to the allowance upon application of the modified-retrospective transition method discussed above. See Note 1 "Summary of Significant Accounting Policies" in the

Annual Report on Form 10-K for the year ended December 31, 2022 for previous discussion of allowance measurement methodology for these items.

Modifications identified as modifications to troubled borrowers have no separate or distinct allowance measurement rules under the new guidance. As such, these loans are included in their respective loan pools (if they do not qualify for specific evaluation) and expected losses are determined by the Company's allowance models and qualitative framework.

FAIR VALUE MEASUREMENTS - FAIR VALUE OF FINANCIAL INSTRUMENTS

The method and assumptions used to estimate the fair value of certain financial instruments new to 2023 is discussed below. Refer to Note 1 "Summary of Significant Accounting Policies" in the Annual Report on Form 10-K for the year ended December 31, 2022 for additional information regarding fair value measurements.

Short-term borrowings: The carrying amounts of short-term borrowings reported in the consolidated balance sheets approximate the estimated fair values, and are considered Level 2 measurements as similar instruments are traded in active markets.

NOTE 2. DEBT SECURITIES

The amortized cost, gross unrealized gains and losses, and estimated fair value of debt securities held to maturity and debt securities available for sale are as follows:


	March 31, 2023
			Recognized in OCI (1)						Not recognized in OCI
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Carrying Value		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(In millions)
Debt securities held to maturity:


Mortgage-backed securities:
Residential agency	$	279	$	—	$	(10)	$	269	$	—	$	(16)	$	253
Commercial agency	522		—		(1)		521		—		(25)		496
	$	801	$	—	$	(11)	$	790	$	—	$	(41)	$	749

Debt securities available for sale:
U.S. Treasury securities	$	1,307	$	—	$	(102)	$	1,205					$	1,205
Federal agency securities	992		3		(49)		946						946
Obligations of states and political subdivisions	2		—		—		2						2
Mortgage-backed securities:
Residential agency	19,407		3		(2,245)		17,165						17,165

Commercial agency	8,192		2		(537)		7,657						7,657
Commercial non-agency	134		—		(11)		123						123
Corporate and other debt securities	1,180		3		(51)		1,132						1,132
	$	31,214	$	11	$	(2,995)	$	28,230					$	28,230


	December 31, 2022
			Recognized in OCI (1)						Not recognized in OCI
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Carrying Value		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(In millions)
Debt securities held to maturity:


Mortgage-backed securities:
Residential agency	$	289	$	—	$	(10)	$	279	$	—	$	(21)	$	258
Commercial agency	523		—		(1)		522		—		(29)		493
	$	812	$	—	$	(11)	$	801	$	—	$	(50)	$	751

Debt securities available for sale:
U.S. Treasury securities	$	1,310	$	—	$	(123)	$	1,187					$	1,187
Federal agency securities	898		—		(62)		836						836
Obligations of states and political subdivisions	2		—		—		2						2
Mortgage-backed securities:
Residential agency	19,477		—		(2,523)		16,954						16,954
Residential non-agency	1		—		—		1						1
Commercial agency	8,262		—		(649)		7,613						7,613
Commercial non-agency	198		—		(12)		186						186
Corporate and other debt securities	1,219		1		(66)		1,154						1,154
	$	31,367	$	1	$	(3,435)	$	27,933					$	27,933

(1)The gross unrealized losses recognized in OCI on securities held to maturity resulted from a transfer of securities available for sale to held to maturity in the second quarter of 2013.

Debt securities with carrying values of $11.9 billion and $8.8 billion at March 31, 2023 and December 31, 2022, respectively, were pledged to secure public funds, trust deposits and other borrowing arrangements.

The amortized cost and estimated fair value of debt securities held to maturity and debt securities available for sale at March 31, 2023, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.


	Amortized Cost		Estimated Fair Value
	(In millions)
Debt securities held to maturity:
Mortgage-backed securities:
Residential agency	$	279	$	253
Commercial agency	522		496
	$	801	$	749
Debt securities available for sale:
Due in one year or less	$	183	$	181
Due after one year through five years	2,290		2,172
Due after five years through ten years	843		782
Due after ten years	165		150
Mortgage-backed securities:
Residential agency	19,407		17,165

Commercial agency	8,192		7,657
Commercial non-agency	134		123
	$	31,214	$	28,230

The following tables present gross unrealized losses and the related estimated fair value of debt securities held to maturity and debt securities available for sale at March 31, 2023 and December 31, 2022. For debt securities transferred to held to maturity from available for sale, the analysis in the tables below compares the securities' original amortized cost to its current estimated fair value. All securities in an unrealized position are segregated between investments that have been in a continuous unrealized loss position for less than twelve months and for twelve months or more.


	March 31, 2023
	Less Than Twelve Months				Twelve Months or More				Total
	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
	(In millions)
Debt securities held to maturity:

Mortgage-backed securities:
Residential agency	$	—	$	—	$	253	$	(25)	$	253	$	(25)
Commercial agency	457		(20)		38		(6)		495		(26)
	$	457	$	(20)	$	291	$	(31)	$	748	$	(51)

Debt securities available for sale:
U.S Treasury securities	$	250	$	(2)	$	950	$	(100)	$	1,200	$	(102)
Federal agency securities	51		(1)		650		(48)		701		(49)
Mortgage-backed securities:
Residential agency	2,189		(84)		14,734		(2,161)		16,923		(2,245)

Commercial agency	3,533		(145)		3,608		(392)		7,141		(537)
Commercial non-agency	58		(6)		65		(5)		123		(11)
Corporate and other debt securities	363		(9)		654		(42)		1,017		(51)
	$	6,444	$	(247)	$	20,661	$	(2,748)	$	27,105	$	(2,995)


	December 31, 2022
	Less Than Twelve Months				Twelve Months or More				Total
	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
	(In millions)
Debt securities held to maturity:


Mortgage-backed securities:
Residential agency	$	251	$	(29)	$	7	$	(1)	$	258	$	(30)
Commercial agency	469		(26)		24		(4)		493		(30)
	$	720	$	(55)	$	31	$	(5)	$	751	$	(60)

Debt securities available for sale:
U.S. Treasury securities	$	276	$	(8)	$	903	$	(115)	$	1,179	$	(123)
Federal agency securities	766		(50)		53		(12)		819		(62)
Mortgage-backed securities:
Residential agency	9,350		(1,005)		7,578		(1,518)		16,928		(2,523)

Commercial agency	6,110		(400)		1,503		(249)		7,613		(649)

Commercial non-agency	141		(8)		45		(4)		186		(12)
Corporate and other debt securities	736		(36)		354		(30)		1,090		(66)
	$	17,379	$	(1,507)	$	10,436	$	(1,928)	$	27,815	$	(3,435)

The number of individual debt positions in an unrealized loss position in the tables above decreased from 1,806 at December 31, 2022 to 1,763 at March 31, 2023. The decrease in the number of securities and the total amount of unrealized losses from year-end 2022 was primarily due to changes in market interest rates. In instances where an unrealized loss existed, there was no indication of an adverse change in credit on the underlying positions in the tables above. As it relates to these positions, management believes no individual unrealized loss represented credit impairment as of those dates. The Company does not intend to sell, and it is not more likely than not that the Company will be required to sell, the positions before the recovery of their amortized cost basis, which may be at maturity.

Gross realized gains and gross realized losses on sales of debt securities available for sale were immaterial for the three months ended March 31, 2023. The cost of securities sold is based on the specific identification method. As part of the Company's normal process for evaluating impairment, management did not identify any positions where impairment was believed to exist in either of the three months ended March 31, 2023 or 2022.

NOTE 3. LOANS AND THE ALLOWANCE FOR CREDIT LOSSES

LOANS

The following table presents the distribution of Regions' loan portfolio by segment and class, net of unearned income:


	March 31, 2023		December 31, 2022
	(In millions)
Commercial and industrial	$	51,811	$	50,905
Commercial real estate mortgage—owner-occupied	4,938		5,103
Commercial real estate construction—owner-occupied	306		298
Total commercial	57,055		56,306
Commercial investor real estate mortgage	6,392		6,393
Commercial investor real estate construction	2,040		1,986
Total investor real estate	8,432		8,379
Residential first mortgage	19,172		18,810
Home equity lines	3,397		3,510
Home equity loans	2,446		2,489
Consumer credit card	1,219		1,248
Other consumer—exit portfolio	488		570
Other consumer	5,848		5,697
Total consumer	32,570		32,324
Total loans, net of unearned income	$	98,057	$	97,009

ALLOWANCE FOR CREDIT LOSSES

Regions determines the appropriate level of the allowance on a quarterly basis. Refer to Note 1 "Basis of Presentation" in the Annual Report on Form 10-K for the year ended December 31, 2022, for a description of the methodology prior to the adoption of modifications to troubled borrowers accounting on January 1, 2023.

ROLLFORWARD OF ALLOWANCE FOR CREDIT LOSSES

The following tables present analyses of the allowance for credit losses by portfolio segment for the years ended March 31, 2023, and 2022.


	Three Months Ended March 31, 2023
	Commercial		Investor Real Estate		Consumer		Total
	(In millions)
Allowance for loan losses, December 31, 2022	$	665	$	121	$	678	$	1,464
Cumulative change in accounting guidance(1)	(3)		(3)		(32)		(38)
Allowance for loan losses, January 1, 2023 (adjusted for change in accounting guidance)	662		118		646		1,426

Provision for (benefit from) loan losses	70		8		51		129

Loan losses:
Charge-offs	(49)		—		(56)		(105)
Recoveries	10		—		12		22
Net loan (losses) recoveries	(39)		—		(44)		(83)
Allowance for loan losses, March 31, 2023	693		126		653		1,472
Reserve for unfunded credit commitments, January 1, 2023	72		21		25		118
Provision for (benefit from) unfunded credit losses	5		6		(5)		6
Reserve for unfunded credit commitments, March 31, 2023	77		27		20		124
Allowance for credit losses, March 31, 2023	$	770	$	153	$	673	$	1,596

(1) See Note 1 for additional information.


	Three Months Ended March 31, 2022
	Commercial		Investor Real Estate		Consumer		Total
	(In millions)
Allowance for loan losses, January 1, 2022	$	682	$	79	$	718	$	1,479
Provision for (benefit from) loan losses	(49)		(4)		36		(17)

Loan losses:
Charge-offs	(26)		—		(51)		(77)
Recoveries	13		—		18		31
Net loan (losses) recoveries	(13)		—		(33)		(46)
Allowance for loan losses, March 31, 2022	620		75		721		1,416


Reserve for unfunded credit commitments, January 1, 2022	58		8		29		95
Provision for (benefit from) unfunded credit losses	(6)		—		(13)		(19)
Reserve for unfunded credit commitments, March 31, 2022	52		8		16		76
Allowance for credit losses, March 31, 2022	$	672	$	83	$	737	$	1,492

PORTFOLIO SEGMENT RISK FACTORS

Regions' portfolio segments are commercial, investor real estate, and consumer. Classes within each segment present unique credit risks. Refer to Note 5 "Allowance for Credit Losses" in the Annual Report on Form 10-K for the year ended December 31, 2022 for information regarding Regions' portfolio segments and related classes, as well as the risks specific to each.

CREDIT QUALITY INDICATORS

The commercial and investor real estate portfolio segments' primary credit quality indicator is internal risk ratings which are detailed by categories related to underlying credit quality and probability of default. Regions assigns these risk ratings at loan origination and reviews the relationship utilizing a risk-based approach on, at minimum, an annual basis or at any time management becomes aware of information affecting the borrowers' ability to fulfill their obligations. Both quantitative and qualitative factors are considered in this review process. Regions' ratings are aligned to federal banking regulators' definitions and are utilized to develop the associated allowance. Refer to Note 5 "Allowance for Credit Losses" in the Annual Report on Form 10-K for the year ended December 31, 2022 for information regarding commercial risk ratings.

Regions' consumer portfolio segment has various classes that present unique credit risks. Regions considers factors such as periodic updates of FICO scores, accrual status, days past due status, unemployment rates, home prices, and geography as credit quality indicators for the consumer loan portfolio. FICO scores are obtained at origination as part of Regions' formal underwriting process. Refreshed FICO scores are obtained by the Company quarterly for all consumer loans, including residential first mortgage loans. Current FICO data is not available for certain loans in the portfolio for various reasons; for example, if customers do not use sufficient credit, an updated score may not be available. These categories are utilized to develop the associated allowance for credit losses. The higher the FICO score the less probability of default and vice versa.

The following tables present applicable credit quality indicators for the loan portfolio segments and classes, excluding loans held for sale, by vintage year as of March 31, 2023 and December 31, 2022. Gross charge-offs are also presented by vintage year for the three months ended March 31, 2023 as a result of the prospective adoption of new accounting guidance. See Note 1 and Note 12 for additional information. Classes in the commercial and investor real estate portfolio segments are disclosed by risk rating. Classes in the consumer portfolio segment are disclosed by current FICO scores. Refer to Note 5 "Allowance for Credit Losses" in the Annual Report on Form 10-K for the year ended December 31, 2022 for more information regarding Regions' credit quality indicators.


	March 31, 2023
Term Loans													Revolving Loans			Revolving Loans Converted to Amortizing			Unallocated (1)			Total
Origination Year
2023	2022		2021		2020		2019		Prior
(In millions)
Commercial and industrial:
Risk Rating:
Pass	$	2,594	$	11,308	$	6,487	$	2,975	$	2,014	$	3,937		$	19,852		$	—		$	344		$	49,511
Special Mention	6		153		96		61		16		10			375			—			—			717
Substandard Accrual	229		179		93		44		77		33			543			—			—			1,198
Non-accrual	14		115		44		10		8		34			160			—			—			385
Total commercial and industrial	$	2,843	$	11,755	$	6,720	$	3,090	$	2,115	$	4,014		$	20,930		$	—		$	344		$	51,811
Gross charge-offs	$	—	$	13	$	21	$	3	$	5	$	5		$	2		$	—		$	—		$	49

Commercial real estate mortgage—owner-occupied:
Risk Rating:
Pass	$	188	$	969	$	1,090	$	831	$	453	$	1,064		$	88		$	—		$	(4)		$	4,679
Special Mention	3		11		43		12		34		17			2			—			—			122
Substandard Accrual	4		15		18		46		6		12			2			—			—			103
Non-accrual	1		3		8		7		1		14			—			—			—			34
Total commercial real estate mortgage—owner-occupied:	$	196	$	998	$	1,159	$	896	$	494	$	1,107		$	92		$	—		$	(4)		$	4,938
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—		$	—		$	—		$	—		$	—

Commercial real estate construction—owner-occupied:
Risk Rating:
Pass	$	7	$	127	$	63	$	23	$	14	$	47		$	10		$	—		$	—		$	291
Special Mention	—		2		—		—		—		2			—			—			—			4
Substandard Accrual	—		2		—		2		—		1			—			—			—			5
Non-accrual	—		1		—		1		—		4			—			—			—			6
Total commercial real estate construction—owner-occupied:	$	7	$	132	$	63	$	26	$	14	$	54		$	10		$	—		$	—		$	306
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—		$	—		$	—		$	—		$	—

Total commercial	$	3,046	$	12,885	$	7,942	$	4,012	$	2,623	$	5,175		$	21,032		$	—		$	340		$	57,055
Gross commercial charge-offs	$	—	$	13	$	21	$	3	$	5	$	5		$	2		$	—		$	—		$	49

Commercial investor real estate mortgage:
Risk Rating:
Pass	$	313	$	2,029	$	1,229	$	680	$	418	$	255		$	479		$	—		$	(6)		$	5,397
Special Mention	35		278		125		19		61		25			34			—			—			577
Substandard Accrual	38		107		—		56		81		69			—			—			—			351
Non-accrual	50		—		—		—		17		—			—			—			—			67
Total commercial investor real estate mortgage	$	436	$	2,414	$	1,354	$	755	$	577	$	349		$	513		$	—		$	(6)		$	6,392
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—		$	—		$	—		$	—		$	—

Commercial investor real estate construction:
Risk Rating:
Pass	$	50	$	557	$	444	$	96	$	51	$	1		$	700		$	—		$	(15)		$	1,884
Special Mention	—		80		55		—		—		—			1			—			—			136
Substandard Accrual	—		2		—		18		—		—			—			—			—			20
Non-accrual	—		—		—		—		—		—			—			—			—			—
Total commercial investor real estate construction	$	50	$	639	$	499	$	114	$	51	$	1		$	701		$	—		$	(15)		$	2,040
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—		$	—		$	—		$	—		$	—

Total investor real estate	$	486	$	3,053	$	1,853	$	869	$	628	$	350		$	1,214		$	—		$	(21)		$	8,432
Gross investor real estate charge-offs	$	—	$	—	$	—	$	—	$	—	$	—		$	—		$	—		$	—		$	—


	March 31, 2023
Term Loans													Revolving Loans			Revolving Loans Converted to Amortizing			Unallocated (1)			Total
Origination Year
2023	2022		2021		2020		2019		Prior
(In millions)
Residential first mortgage:
FICO scores
Above 720	$	398	$	2,625	$	4,482	$	4,693	$	878	$	2,671		$	—		$	—		$	—		$	15,747
681-720	62		308		391		285		77		319			—			—			—			1,442
620-680	29		178		184		119		53		308			—			—			—			871
Below 620	1		52		95		81		52		410			—			—			—			691
Data not available	4		28		55		48		14		102			3			—			167			421
Total residential first mortgage	$	494	$	3,191	$	5,207	$	5,226	$	1,074	$	3,810		$	3		$	—		$	167		$	19,172
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—		$	—		$	—		$	—		$	—

Home equity lines:
FICO scores
Above 720	$	—	$	—	$	—	$	—	$	—	$	—		$	2,486		$	47		$	—		$	2,533
681-720	—		—		—		—		—		—			373			11			—			384
620-680	—		—		—		—		—		—			215			9			—			224
Below 620	—		—		—		—		—		—			99			9			—			108
Data not available	—		—		—		—		—		—			112			5			31			148
Total home equity lines	$	—	$	—	$	—	$	—	$	—	$	—		$	3,285		$	81		$	31		$	3,397
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—		$	1		$	—		$	—		$	1

Home equity loans
FICO scores
Above 720	$	41	$	425	$	445	$	236	$	110	$	640		$	—		$	—		$	—		$	1,897
681-720	9		72		60		27		17		78			—			—			—			263
620-680	4		28		28		11		11		61			—			—			—			143
Below 620	—		6		9		4		6		45			—			—			—			70
Data not available	20		1		4		3		3		26			—			—			16			73
Total home equity loans	$	74	$	532	$	546	$	281	$	147	$	850		$	—		$	—		$	16		$	2,446
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—		$	—		$	—		$	—		$	—

Consumer credit card:
FICO scores
Above 720	$	—	$	—	$	—	$	—	$	—	$	—		$	675		$	—		$	—		$	675
681-720	—		—		—		—		—		—			240			—			—			240
620-680	—		—		—		—		—		—			204			—			—			204
Below 620	—		—		—		—		—		—			87			—			—			87
Data not available	—		—		—		—		—		—			13			—			—			13
Total consumer credit card	$	—	$	—	$	—	$	—	$	—	$	—		$	1,219		$	—		$	—		$	1,219
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—		$	12		$	—		$	—		$	12

Other consumer—exit portfolios:
FICO scores
Above 720	$	—	$	—	$	—	$	—	$	91	$	224		$	—		$	—		$	—		$	315
681-720	—		—		—		—		27		53			—			—			—			80
620-680	—		—		—		—		16		40			—			—			—			56
Below 620	—		—		—		—		7		23			—			—			—			30
Data not available	—		—		—		—		1		5			—			—			1			7
Total Other consumer- exit portfolios	$	—	$	—	$	—	$	—	$	142	$	345		$	—		$	—		$	1		$	488
Gross charge-offs	$	—	$	—	$	—	$	—	$	2	$	3		$	—		$	—		$	—		$	5


	March 31, 2023
Term Loans													Revolving Loans			Revolving Loans Converted to Amortizing			Unallocated (1)			Total
Origination Year
2023	2022		2021		2020		2019		Prior
(In millions)
Other consumer(2):
FICO scores
Above 720	$	403	$	1,842	$	610	$	349	$	196	$	160		$	112		$	—		$	—		$	3,672
681-720	42		515		184		98		45		39			65			—			—			988
620-680	20		387		144		68		31		29			56			—			—			735
Below 620	5		132		72		37		19		19			24			—			—			308
Data not available	76		25		6		5		126		74			2			—			(169)			145
Total other consumer	$	546	$	2,901	$	1,016	$	557	$	417	$	321		$	259		$	—		$	(169)		$	5,848
Gross charge-offs	$	4	$	17	$	8	$	4	$	2	$	3		$	—		$	—		$	—		$	38

Total consumer loans	$	1,114	$	6,624	$	6,769	$	6,064	$	1,780	$	5,326		$	4,766		$	81		$	46		$	32,570
Gross consumer charge-offs	$	4	$	17	$	8	$	4	$	4	$	6		$	13		$	—		$	—		$	56

Total Loans	$	4,646	$	22,562	$	16,564	$	10,945	$	5,031	$	10,851		$	27,012		$	81		$	365		$	98,057
Total Gross charge-offs	$	4	$	30	$	29	$	7	$	9	$	11		$	15		$	—		$	—		$	105


	December 31, 2022
Term Loans													Revolving Loans			Revolving Loans Converted to Amortizing			Unallocated (1)			Total
Origination Year
2022	2021		2020		2019		2018		Prior
(In millions)
Commercial and industrial:
Risk Rating:
Pass	$	11,948	$	7,167	$	3,277	$	2,297	$	1,026	$	3,283		$	19,599		$	—		$	313		$	48,910
Special Mention	85		120		70		30		32		1			282			—			—			620
Substandard Accrual	248		114		39		57		53		17			500			—			—			1,028
Non-accrual	95		55		11		9		36		6			135			—			—			347
Total commercial and industrial	$	12,376	$	7,456	$	3,397	$	2,393	$	1,147	$	3,307		$	20,516		$	—		$	313		$	50,905

Commercial real estate mortgage—owner-occupied:
Risk Rating:
Pass	$	1,058	$	1,175	$	929	$	479	$	519	$	626		$	89		$	—		$	(5)		$	4,870
Special Mention	7		32		17		10		15		12			2			—			—			95
Substandard Accrual	10		16		36		35		5		6			1			—			—			109
Non-accrual	1		2		9		1		5		11			—			—			—			29
Total commercial real estate mortgage—owner-occupied:	$	1,076	$	1,225	$	991	$	525	$	544	$	655		$	92		$	—		$	(5)		$	5,103

Commercial real estate construction—owner-occupied:
Risk Rating:
Pass	$	115	$	79	$	22	$	15	$	15	$	38		$	1		$	—		$	—		$	285
Special Mention	—		—		—		—		2		—			—			—			—			2
Substandard Accrual	2		—		2		—		—		1			—			—			—			5
Non-accrual	—		—		1		1		—		4			—			—			—			6
Total commercial real estate construction—owner-occupied:	$	117	$	79	$	25	$	16	$	17	$	43		$	1		$	—		$	—		$	298
Total commercial	$	13,569	$	8,760	$	4,413	$	2,934	$	1,708	$	4,005		$	20,609		$	—		$	308		$	56,306


	December 31, 2022
Term Loans													Revolving Loans			Revolving Loans Converted to Amortizing			Unallocated (1)			Total
Origination Year
2022	2021		2020		2019		2018		Prior
(In millions)
Commercial investor real estate mortgage:
Risk Rating:
Pass	$	2,332	$	1,321	$	634	$	466	$	257	$	94		$	490		$	—		$	(7)		$	5,587
Special Mention	229		75		—		18		—		3			38			—			—			363
Substandard Accrual	107				74		138		68		3			—			—			—			390
Non-accrual	52		—		—		—		—		1			—			—			—			53
Total commercial investor real estate mortgage	$	2,720	$	1,396	$	708	$	622	$	325	$	101		$	528		$	—		$	(7)		$	6,393

Commercial investor real estate construction:
Risk Rating:
Pass	$	458	$	402	$	205	$	112	$	—	$	1		$	722		$	—		$	(16)		$	1,884
Special Mention	25		52		—		—		—		—			5			—			—			82
Substandard Accrual	3		—		17		—		—		—			—			—			—			20
Non-accrual	—		—		—		—		—		—			—			—			—			—
Total commercial investor real estate construction	$	486	$	454	$	222	$	112	$	—	$	1		$	727		$	—		$	(16)		$	1,986
Total investor real estate	$	3,206	$	1,850	$	930	$	734	$	325	$	102		$	1,255		$	—		$	(23)		$	8,379

Residential first mortgage:
FICO scores
Above 720	$	2,485	$	4,455	$	4,765	$	899	$	327	$	2,445		$	—		$	—		$	—		$	15,376
681-720	337		412		313		83		42		300			—			—			—			1,487
620-680	168		183		129		53		34		295			—			—			—			862
Below 620	42		92		77		52		40		379			—			—			—			682
Data not available	27		45		47		13		4		98			2			—			167			403
Total residential first mortgage	$	3,059	$	5,187	$	5,331	$	1,100	$	447	$	3,517		$	2		$	—		$	167		$	18,810

Home equity lines:
FICO scores
Above 720	$	—	$	—	$	—	$	—	$	—	$	—		$	2,620		$	47		$	—		$	2,667
681-720	—		—		—		—		—		—			369			12			—			381
620-680	—		—		—		—		—		—			212			11			—			223
Below 620	—		—		—		—		—		—			99			8			—			107
Data not available	—		—		—		—		—		—			97			4			31			132
Total home equity lines	$	—	$	—	$	—	$	—	$	—	$	—		$	3,397		$	82		$	31		$	3,510

Home equity loans
FICO scores
Above 720	$	436	$	466	$	250	$	117	$	106	$	582		$	—		$	—		$	—		$	1,957
681-720	75		62		26		17		14		67			—			—			—			261
620-680	29		28		11		12		9		58			—			—			—			147
Below 620	4		8		4		5		7		38			—			—			—			66
Data not available	4		3		3		3		4		24			—			—			17			58
Total home equity loans	$	548	$	567	$	294	$	154	$	140	$	769		$	—		$	—		$	17		$	2,489


	December 31, 2022
Term Loans													Revolving Loans			Revolving Loans Converted to Amortizing			Unallocated (1)			Total
Origination Year
2022	2021		2020		2019		2018		Prior
(In millions)
Consumer credit card:
FICO scores
Above 720	$	—	$	—	$	—	$	—	$	—	$	—		$	719		$	—		$	—		$	719
681-720	—		—		—		—		—		—			246			—			—			246
620-680	—		—		—		—		—		—			204			—			—			204
Below 620	—		—		—		—		—		—			86			—			—			86
Data not available	—		—		—		—		—		—			9			—			(16)			(7)
Total consumer credit card	$	—	$	—	$	—	$	—	$	—	$	—		$	1,264		$	—		$	(16)		$	1,248

Other consumer- exit portfolios:
FICO scores
Above 720	$	—	$	—	$	—	$	102	$	172	$	96		$	—		$	—		$	—		$	370
681-720	—		—		—		30		40		23			—			—			—			93
620-680	—		—		—		17		30		17			—			—			—			64
Below 620	—		—		—		7		17		10			—			—			—			34
Data not available	—		—		—		1		3		3			—			—			2			9
Total other consumer- exit portfolios	$	—	$	—	$	—	$	157	$	262	$	149		$	—		$	—		$	2		$	570

Other consumer(2):
FICO scores
Above 720	$	2,072	$	674	$	382	$	215	$	99	$	80		$	119		$	—		$	—		$	3,641
681-720	493		200		106		50		23		20			66			—			—			958
620-680	348		153		73		34		19		15			55			—			—			697
Below 620	102		69		38		20		12		8			23			—			—			272
Data not available	61		6		5		130		73		5			2			—			(153)			129
Total other consumer	$	3,076	$	1,102	$	604	$	449	$	226	$	128		$	265		$	—		$	(153)		$	5,697
Total consumer loans	$	6,683	$	6,856	$	6,229	$	1,860	$	1,075	$	4,563		$	4,928		$	82		$	48		$	32,324
Total Loans	$	23,458	$	17,466	$	11,572	$	5,528	$	3,108	$	8,670		$	26,792		$	82		$	333		$	97,009

(1)These amounts consist of fees that are not allocated at the loan level and loans serviced by third parties wherein Regions does not receive FICO or vintage information.

(2)Other consumer class includes overdrafts and related gross charge-offs. Overdrafts are included in the current vintage year and the majority of overdraft gross charge-offs for the three months ended March 31, 2023 are also included in the current vintage year.

AGING AND NON-ACCRUAL ANALYSIS

The following tables include an aging analysis of DPD and loans on non-accrual status for each portfolio segment and class as of March 31, 2023 and December 31, 2022. Loans on non-accrual status with no related allowance totaled $205 million comprised of commercial and investor real estate loans at March 31, 2023. Loans on non-accrual status with no related allowance totaled $151 million comprised of commercial loans at December 31, 2022. Non–accrual loans with no related allowance typically include loans where the underlying collateral is deemed sufficient to recover all remaining principal. Loans that have been fully charged-off do not appear in the tables below.


	March 31, 2023
	Accrual Loans
	30-59 DPD		60-89 DPD		90+ DPD		Total 30+ DPD		Total Accrual		Non-accrual		Total
	(In millions)
Commercial and industrial	$	33	$	14	$	23	$	70	$	51,426	$	385	$	51,811
Commercial real estate mortgage—owner-occupied	5		2		—		7		4,904		34		4,938
Commercial real estate construction—owner-occupied	—		—		—		—		300		6		306
Total commercial	38		16		23		77		56,630		425		57,055
Commercial investor real estate mortgage	1		—		—		1		6,325		67		6,392
Commercial investor real estate construction	—		—		—		—		2,040		—		2,040
Total investor real estate	1		—		—		1		8,365		67		8,432
Residential first mortgage	74		37		77		188		19,146		26		19,172
Home equity lines	18		10		17		45		3,367		30		3,397
Home equity loans	7		3		8		18		2,440		6		2,446
Consumer credit card	9		6		15		30		1,219		—		1,219
Other consumer—exit portfolios	5		2		1		8		488		—		488
Other consumer	48		21		17		86		5,848		—		5,848
Total consumer	161		79		135		375		32,508		62		32,570
	$	200	$	95	$	158	$	453	$	97,503	$	554	$	98,057


	December 31, 2022
	Accrual Loans
	30-59 DPD		60-89 DPD		90+ DPD		Total 30+ DPD		Total Accrual		Non-accrual		Total
	(In millions)
Commercial and industrial	$	36	$	20	$	30	$	86	$	50,558	$	347	$	50,905
Commercial real estate mortgage—owner-occupied	7		2		1		10		5,074		29		5,103
Commercial real estate construction—owner-occupied	—		—		—		—		292		6		298
Total commercial	43		22		31		96		55,924		382		56,306
Commercial investor real estate mortgage	—		—		40		40		6,340		53		6,393
Commercial investor real estate construction	—		—		—		—		1,986		—		1,986
Total investor real estate	—		—		40		40		8,326		53		8,379
Residential first mortgage	87		45		81		213		18,779		31		18,810
Home equity lines	18		12		15		45		3,482		28		3,510
Home equity loans	8		3		8		19		2,483		6		2,489
Consumer credit card	9		7		15		31		1,248		—		1,248
Other consumer—exit portfolios	7		3		1		11		570		—		570
Other consumer	46		21		17		84		5,697		—		5,697
Total consumer	175		91		137		403		32,259		65		32,324
	$	218	$	113	$	208	$	539	$	96,509	$	500	$	97,009

MODIFICATIONS TO BORROWERS EXPERIENCING FINANCIAL DIFFICULTY

Modifications to troubled borrowers are loans where the borrower is experiencing financial difficulty at the time of modification and are undertaken in order to improve the likelihood of repayment. Typical modifications include accommodations such as renewals and forbearances. The majority of Regions' commercial and investor real estate modifications to troubled borrowers are the result of renewals of classified loans wherein there has been an interest rate reduction and/or maturity extension (that is considered other than insignificant). Similarly, Regions works to meet the individual needs of troubled consumer borrowers through its CAP. Regions designed the program to allow for customer-tailored modifications with the goal of keeping customers in their homes and avoiding foreclosure where possible. Modifications may be offered to any borrower experiencing financial hardship regardless of the borrower's payment status. Consumer modifications to troubled borrowers primarily involve an interest rate reduction and/or a payment deferral or maturity extension that is considered other than insignificant. All CAP modifications that involve an interest rate reduction, principal forgiveness, other than insignificant payment deferral or term extension and/or a combination of these are disclosed as modifications to troubled borrowers because the customer documents a financial hardship in order to participate. Refer to Note 1 "Basis of Presentation" for additional information regarding the Company's modifications to troubled borrowers.

For each portfolio segment and class, the following table presents the end of period balance of new modifications to troubled borrowers and the related percentage of the loan portfolio period-end balance by the type of modification. During the period presented, the Company did not make any modifications of principal forgiveness.


		Three months ended March 31, 2023
	Term Extension					Payment Deferral					Term Extension and Interest Rate Modification					Total
		$		%(1)			$		%(1)			$		%(1)			$		%(1)
		(Dollars in millions)
Commercial and industrial		$	18	0.03	%		$	164	0.32	%		$	—	—	%		$	182	0.35	%
Commercial real estate mortgage—owner-occupied		2		0.04	%		—		—	%		—		—	%		2		0.05	%
Commercial real estate construction—owner-occupied		1		0.17	%		—		—	%		—		—	%		1		0.17	%
Total commercial		21		0.04	%		164		0.29	%		—		—	%		185		0.32	%



Residential first mortgage		22		0.12	%		—		—	%		2		0.01	%		24		0.13	%
Home equity lines		1		0.02	%		—		—	%		—		—	%		1		0.03	%
Home equity loans		1		0.04	%		—		—	%		1		0.06	%		2		0.09	%



Total consumer		24		0.07	%		—		—	%		3		0.01	%		27		0.09	%
Total		$	45	0.05	%		$	164	0.17	%		$	3	—	%		$	212	0.22	%

(1) Amounts calculated based upon whole dollar values.

The following table presents the financial impact of modifications to troubled borrowers during the period presented by portfolio segment, class of financing receivable, and the type of modification. During the period presented, the Company did not make any modifications of principal forgiveness. The table includes new modifications to troubled borrowers, as well as renewals of existing modifications to troubled borrowers.


															Three Months Ended March 31, 2023
															Financial Effect
Term Extension
Commercial and industrial															Increased weighted-average contractual term by 5 months.
Commercial real estate mortgage—owner-occupied															Increased weighted-average contractual term by 6 months.
Commercial real estate construction—owner-occupied															Increased weighted-average contractual term by 5 months.




Residential first mortgage															Increased weighted-average contractual term by approximately 5 years.
Home equity lines															Increased weighted-average contractual term by approximately 20 years.
Home equity loans															Increased weighted-average contractual term by approximately 11 years.






Payment Deferral
Commercial and industrial															Payments were deferred for an average of 2 months. In instances where amortization periods were increased, the amortization period was doubled to maturity.


















































Combination - Term Extension and Interest Rate Modification







Residential first mortgage															Reduced weighted-average contractual interest rate by 1%. Increased weighted-average contractual term by approximately 7 years.

Home equity loans															Reduced weighted-average contractual interest rate by 2%. Increased weighted-average contractual term by approximately 17 years.

The following table includes aging and non-accrual performance for modifications to troubled borrowers modified in the three month period since the adoption of related accounting guidance by portfolio segment and class.


	March 31, 2023
	Current		30-89 DPD		90+ DPD		Non-Performing Loans		Total
	(In millions)
Commercial and industrial	$	169	$	—	$	—	$	13	$	182
Commercial real estate mortgage—owner-occupied	2		—		—		—		2
Commercial real estate construction—owner-occupied	—		—		—		1		1
Total commercial	171		—		—		14		185



Residential first mortgage	23		—		—		1		24
Home equity lines	1		—		—		—		1
Home equity loans	2		—		—		—		2



Total consumer	26		—		—		1		27
	$	197	$	—	$	—	$	15	$	212

Prior to the Company’s adoption of new guidance related to modifications to borrowers experiencing financial difficulty, Regions accounted for loans in which the borrower was experiencing financial difficulty at the modification date and wherein Regions had granted a concession to the borrower as a TDR. Like modifications to troubled borrowers, TDRs were undertaken in order to improve the likelihood of repayment of a loan. However, TDR modifications were different because they may have had a stated interest rate lower than the current market rate for new debt with similar risk, other modifications to the structure of the loan that fell outside of normal underwriting policies and procedures, or in limited circumstances forgiveness of principal and/or interest. Refer to Note 1 "Summary of Significant Accounting Policies" and Note 3 "Loans and the Allowance for Credit Losses" in the Annual Report on Form 10-K for the year ended December 31, 2022 for additional information.

The following table presents the end of period balance for loans modified in a TDR during the period presented in 2022 by portfolio segment and class, and the financial impact of those modifications. The table includes modifications made to new TDRs, as well as renewals of existing TDRs.


	Three Months Ended March 31, 2022
				Financial Impact of Modifications Considered TDRs
	Number of Obligors	Recorded Investment		Increase in Allowance at Modification
	(Dollars in millions)
Commercial and industrial	10	$	37	$	—
Commercial real estate mortgage—owner-occupied	3	2		—
Commercial real estate construction—owner-occupied	—	—		—
Total commercial	13	39		—
Commercial investor real estate mortgage	1	8		—
Commercial investor real estate construction	—	—		—
Total investor real estate	1	8		—
Residential first mortgage	357	52		3
Home equity lines	22	2		1
Home equity loans	42	3		—
Consumer credit card	2	—		—
Other consumer—exit portfolios	—	—		—
Other consumer	2	—		—
Total consumer	425	57		4
	439	$	104	$	4

NOTE 4. SERVICING OF FINANCIAL ASSETS

RESIDENTIAL MORTGAGE BANKING ACTIVITIES

The fair value of residential MSRs is calculated using various assumptions including future cash flows, market discount rates, expected prepayment rates, servicing costs and other factors. A significant change in prepayments of mortgages in the servicing portfolio could result in significant changes in the valuation adjustments, thus creating potential volatility in the carrying amount of residential MSRs. The Company compares fair value estimates and assumptions to observable market data where available, and also considers recent market activity and actual portfolio experience.

The table below presents an analysis of residential MSRs under the fair value measurement method:


	Three Months Ended March 31
		2023		2022
		(In millions)
Carrying value, beginning of year		$	812	$	418
Additions		4		19
Purchases (1)		10		75
Increase (decrease) in fair value:
Due to change in valuation inputs or assumptions		(12)		47
Economic amortization associated with borrower repayments (2)		(24)		(17)
Carrying value, end of year		$	790	$	542

(1)Purchases of residential MSRs can be structured with cash hold back provisions, therefore the timing of payment may be made in future periods.

(2)Includes both total loan payoffs as well as partial paydowns. Regions' MSR decay methodology is a discounted net cash flow approach.

Data and assumptions used in the fair value calculation, as well as the valuation’s sensitivity to rate fluctuations, related to residential MSRs (excluding related derivative instruments) are as follows:


	March 31
	2023			2022
	(Dollars in millions)
Unpaid principal balance	$	54,557		$	41,639
Weighted-average CPR (%)	7.7		%	9.6		%
Estimated impact on fair value of a 10% increase	$	(43)		$	(48)
Estimated impact on fair value of a 20% increase	$	(84)		$	(78)
Option-adjusted spread (basis points)	546			445
Estimated impact on fair value of a 10% increase	$	(19)		$	(10)
Estimated impact on fair value of a 20% increase	$	(38)		$	(21)
Weighted-average coupon interest rate	3.6		%	3.5		%
Weighted-average remaining maturity (months)	306			299
Weighted-average servicing fee (basis points)	27.1			27.4

The sensitivity calculations above are hypothetical and should not be considered to be predictive of future performance. Changes in fair value based on adverse changes in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, the effect of an adverse variation in a particular assumption on the fair value of the residential MSRs is calculated without changing any other assumption, while in reality changes in one factor may result in changes in another, which may either magnify or counteract the effect of the change. The derivative instruments utilized by Regions would serve to reduce the estimated impacts to fair value included in the table above.

Servicing related fees, which include contractually specified servicing fees, late fees and other ancillary income resulting from the servicing of residential mortgage loans totaled $38 million and $27 million for the three months ended March 31, 2023 and 2022, respectively.

Residential mortgage loans are sold in the secondary market with standard representations and warranties regarding certain characteristics such as the quality of the loan, the absence of fraud, the eligibility of the loan for sale and the future servicing associated with the loan. Regions may be required to repurchase these loans at par, or make-whole or indemnify the purchasers for losses incurred when representations and warranties are breached.

Regions maintains an immaterial repurchase liability related to residential mortgage loans sold with representations and warranty provisions. This repurchase liability is reported in other liabilities on the consolidated balance sheets and reflects management’s estimate of losses based on historical repurchase and loss trends, as well as other factors that may result in anticipated losses different from historical loss trends. Adjustments to this reserve are recorded in other non-interest expense on the consolidated statements of income.

COMMERCIAL MORTGAGE BANKING ACTIVITIES

Regions is an approved DUS lender. The DUS program provides liquidity to the multi-family housing market. In connection with the DUS program, Regions services commercial mortgage loans, retains commercial MSRs and intangible assets associated with the DUS license, and assumes a loss share guarantee associated with the loans. Regions' related DUS commercial MSRs are recorded in other assets at the lower of cost or estimated fair value and are amortized in proportion to, and over the estimated period that net servicing income is expected to be received based on projections of the amount and timing of estimated future net cash flows. See Note 1 in the Annual Report on Form 10-K for the year ended December 31, 2022 for additional information. Also see Note 11 for additional information related to the guarantee.

Regions' DUS portfolio totaled $79 million and $81 million at March 31, 2023 and December 31, 2022, respectively. Regions periodically evaluates DUS MSRs for impairment based on fair value. The estimated fair value of the DUS commercial MSRs was approximately $94 million at March 31, 2023 and $96 million at December 31, 2022.

Servicing related fees in connection with the DUS program, which include contractually specified servicing fees, late fees and other ancillary income resulting from the servicing of DUS commercial mortgage loans totaled $5 million and $7 million for the three months ended March 31, 2023 and 2022, respectively.

NOTE 5. SHAREHOLDERS' EQUITY AND ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

PREFERRED STOCK

The following table presents a summary of the non-cumulative perpetual preferred stock:


														March 31, 2023		December 31, 2022
	Issuance Date	Earliest Redemption Date	Dividend Rate (1)			Liquidation Amount		Liquidation preference per Share		Liquidation preference per Depositary Share		Ownership Interest per Depositary Share	Shares Issued and Outstanding	Carrying Amount		Carrying Amount
	(Dollars in millions, except for share and per share amounts)
Series B	4/29/2014	9/15/2024	6.375	%	(2)	$	500	$	1,000	$	25	1/40th	500,000	$	433	$	433
Series C	4/30/2019	5/15/2029	5.700	%	(3)	500		1,000		25		1/40th	500,000	490		490
Series D	6/5/2020	9/15/2025	5.750	%	(4)	350		100,000		1,000		1/100th	3,500	346		346
Series E	5/4/2021	6/15/2026	4.450	%		400		1,000		25		1/40th	400,000	390		390
						$	1,750						1,403,500	$	1,659	$	1,659

(1)Dividends on all series of preferred stock, if declared, accrue and are payable quarterly in arrears.

(2)Dividends, if declared, will be paid quarterly at an annual rate equal to (i) for each period beginning prior to September 15, 2024, 6.375%, and (ii) for each period beginning on or after September 15, 2024, three-month LIBOR plus 3.536%.

(3)Dividends, if declared, will be paid quarterly at an annual rate equal to (i) for each period beginning prior to August 15, 2029, 5.700%, and (ii) for each period beginning on or after August 15, 2029, three-month LIBOR plus 3.148%.

(4)Dividends, if declared, will be paid quarterly at an annual rate equal to (i) for each period beginning prior to September 15, 2025, 5.750%, and (ii) for each period beginning on or after September 15, 2025, the five-year treasury rate as of the most recent reset dividend determination date plus 5.426%.

All series of preferred stock have no stated maturity and redemption is solely at Regions' option, subject to regulatory approval, in whole, or in part, after the earliest redemption date or in whole, but not in part, at any time following a regulatory capital treatment event for the Series B, Series C, Series D, and Series E preferred stock.

The Board of Directors declared a total of $24 million in cash dividends on all series of preferred stock during both the first three months of 2023 and 2022.

In the event Series B, Series C, Series D or Series E preferred shares are redeemed at the liquidation amounts, $67 million, $10 million, $4 million, or $10 million in excess of the redemption amount over the carrying amount will be recognized, respectively. Approximately $52 million of Series B preferred dividends that were recorded as a reduction of preferred stock, including related surplus, will be recorded as a reduction to common shareholders' equity. The remaining amounts listed represent issuance costs that were recorded as reductions to preferred stock, including related surplus, and will be recorded as reductions to net income available to common shareholders.

COMMON STOCK

Regions' 2022 stress testing results from the FRB reflected that the Company exceeded all minimum capital levels and the SCB will be floored at 2.5 percent for the fourth quarter of 2022 through the third quarter of 2023.

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 March 31, 2023, 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 were not included in treasury stock.

Regions declared $0.20 per share in cash dividends for the first quarter 2023 as compared to $0.17 per common share for the first quarter 2022.

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following tables present the balances and activity in AOCI on a pre-tax and net of tax basis for the three months ended March 31, 2023 and 2022 :


	Three Months Ended March 31, 2023
	Pre-tax AOCI Activity		Tax Effect (1)		Net AOCI Activity
	(In millions)
Total accumulated other comprehensive income (loss), beginning of period	$	(4,481)	$	1,138	$	(3,343)

Unrealized losses on securities transferred to held to maturity:
Beginning balance	$	(11)	$	2	$	(9)
Reclassification adjustments for amortization on unrealized losses (2)	—		—		—
Ending balance	$	(11)	$	2	$	(9)
Unrealized gains (losses) on securities available for sale:
Beginning balance	$	(3,433)	$	872	$	(2,561)
Unrealized gains (losses) arising during the period	447		(114)		333
Reclassification adjustments for securities (gains) losses realized in net income (3)	2		—		2
Change in AOCI from securities available for sale activity in the period	449		(114)		335
Ending balance	$	(2,984)	$	758	$	(2,226)
Unrealized gains (losses) on derivative instruments designated as cash flow hedges:
Beginning balance	$	(468)	$	119	$	(349)
Unrealized gains (losses) on derivatives arising during the period	198		(50)		148
Reclassification adjustments for (gains) losses realized in net income (2)	15		(4)		11
Change in AOCI from derivative activity in the period	213		(54)		159
Ending balance	$	(255)	$	65	$	(190)
Defined benefit pension plans and other post employment benefit plans:
Beginning balance	$	(569)	$	145	$	(424)

Reclassification adjustments for amortization of actuarial (gains) losses and settlements realized in net income (4)	7		(2)		5

Ending balance	$	(562)	$	143	$	(419)

Total other comprehensive income (loss)	669		(170)		499
Total accumulated other comprehensive income (loss), end of period	$	(3,812)	$	968	$	(2,844)


	Three Months Ended March 31, 2022
	Pre-tax AOCI Activity		Tax Effect (1)		Net AOCI Activity
	(In millions)
Total accumulated other comprehensive income (loss), beginning of period	$	387	$	(98)	$	289

Unrealized losses on securities transferred to held to maturity:
Beginning balance	$	(14)	$	3	$	(11)
Reclassification adjustments for amortization on unrealized (gains) losses (2)	1		—		1
Ending balance	$	(13)	$	3	$	(10)
Unrealized gains (losses) on securities available for sale:
Beginning balance	$	218	$	(55)	$	163
Unrealized gains (losses) arising during the period	(1,498)		381		(1,117)


Ending balance	$	(1,280)	$	326	$	(954)
Unrealized gains (losses) on derivative instruments designated as cash flow hedges:
Beginning balance	$	830	$	(209)	$	621
Unrealized gains (losses) on derivatives arising during the period	(417)		106		(311)
Reclassification adjustments for (gains) losses realized in net income (2)	(110)		28		(82)
Change in AOCI from derivative activity in the period	(527)		134		(393)
Ending balance	$	303	$	(75)	$	228
Defined benefit pension plans and other post employment benefit plans:
Beginning balance	$	(647)	$	163	$	(484)

Reclassification adjustments for amortization of actuarial (gains) losses and settlements realized in net income (4)	8		(2)		6

Ending balance	$	(639)	$	161	$	(478)

Total other comprehensive income (loss)	(2,016)		513		(1,503)
Total accumulated other comprehensive income (loss), end of period	$	(1,629)	$	415	$	(1,214)

(1)The impact of all AOCI activity is shown net of the related tax impact, calculated using an effective tax rate of approximately 25 percent.

(2)Reclassification amount is recognized in net interest income in the consolidated statements of income.

(3)Reclassification amount is recognized in securities gains (losses), net in the consolidated statements of income.

(4)Reclassification amount is recognized in other non-interest expense in the consolidated statements of income. Additionally, these accumulated other comprehensive income (loss) components are included in the computation of net periodic pension cost (see Note 7 for additional details).

NOTE 6. EARNINGS PER COMMON SHARE

The following table sets forth the computation of basic earnings per common share and diluted earnings per common share:


	Three Months Ended March 31
	2023		2022
	(In millions, except per share data)
Numerator:
Net income	$	612	$	548
Preferred stock dividends and other	(24)		(24)


Net income available to common shareholders	$	588	$	524
Denominator:
Weighted-average common shares outstanding—basic	$	935	$	938
Potential common shares	7		9
Weighted-average common shares outstanding—diluted	$	942	$	947






Earnings per common share:
Basic	$	0.63	$	0.56
Diluted	0.62		0.55

The effects from the assumed exercise of 3 million in restricted stock units and awards and performance stock units for both the three months ended March 31, 2023 and March 31, 2022 were not included in the above computations of diluted earnings per common share because such amounts would have had an antidilutive effect on earnings per common share.

NOTE 7. PENSION AND OTHER POSTRETIREMENT BENEFITS

Regions' defined benefit pension plans cover certain employees as the pension plans are closed to new entrants. The Company also sponsors a SERP, which is a non-qualified pension plan that provides certain senior executive officers defined benefits in relation to their compensation.

Net periodic pension cost (benefit) included the following components:


	Qualified Plans				Non-qualified Plans					Total
	Three Months Ended March 31
	2023		2022			2023		2022			2023		2022
	(In millions)
Service cost	$	5	$	9		$	—	$	—		$	5	$	9
Interest cost	21		14			2		1			23		15
Expected return on plan assets	(30)		(35)			—		—			(30)		(35)
Amortization of actuarial loss	6		6			1		2			7		8


Net periodic pension (benefit) cost	$	2	$	(6)		$	3	$	3		$	5	$	(3)

The service cost component of net periodic pension (benefit) cost is recorded in salaries and employee benefits on the consolidated statements of income. Components other than service cost are recorded in other non-interest expense on the consolidated statements of income.

Regions' funding policy for the qualified plans is to contribute annually at least the amount required by IRS minimum funding standards. Regions made no contributions during the three months ended March 31, 2023.

Regions also provides other postretirement benefits, such as defined benefit health care plans and life insurance plans, that cover certain retired employees. There was no material impact from other postretirement benefits on the consolidated financial statements for the three months ended March 31, 2023 or 2022.

NOTE 8. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

The following tables present the notional amount and estimated fair value of derivative instruments on a gross basis as of December 31:


	March 31, 2023						December 31, 2022
	Notional Amount		Estimated Fair Value				Notional Amount		Estimated Fair Value
	Gain(1)		Loss(1)		Gain(1)		Loss(1)
	(In millions)
Derivatives in fair value hedging relationships:
Interest rate swaps	$	1,423	$	—	$	136	$	1,423	$	1	$	158

Derivatives in cash flow hedging relationships:
Interest rate swaps	27,800		75		473		30,600		19		668
Interest rate options	1,500		23		19		—		—		—
Total derivatives in cash flow hedging relationships	29,300		98		492		30,600		19		668
Total derivatives designated as hedging instruments	$	30,723	$	98	$	628	$	32,023	$	20	$	826
Derivatives not designated as hedging instruments:
Interest rate swaps	$	102,385	$	1,961	$	1,960	$	94,220	$	2,315	$	2,335
Interest rate options	11,417		83		68		12,506		94		85
Interest rate futures and forward commitments	912		7		6		985		8		5
Other contracts	11,839		197		190		12,173		172		127
Total derivatives not designated as hedging instruments	$	126,553	$	2,248	$	2,224	$	119,884	$	2,589	$	2,552
Total derivatives	$	157,276	$	2,346	$	2,852	$	151,907	$	2,609	$	3,378

Total gross derivative instruments, before netting			$	2,346	$	2,852			$	2,609	$	3,378
Less: Netting adjustments (2)			2,249		1,646				2,504		1,925
Total gross derivative instruments, after netting			$	97	$	1,206			$	105	$	1,453

(1)Derivatives in a gain position are recorded as other assets and derivatives in a loss position are recorded as other liabilities on the consolidated balance sheets. Includes accrued interest as applicable.

(2)Netting adjustments represent amounts recorded to convert derivative assets and derivative liabilities from a gross basis to a net basis in accordance with applicable accounting guidance. The net basis takes into account the impact of cash collateral received or posted, legally enforceable master netting agreements, and variation margin that allow Regions to settle derivative contracts with the counterparty on a net basis and to offset the net position with the related cash collateral.

HEDGING DERIVATIVES

Derivatives entered into to manage interest rate risk and facilitate asset/liability management strategies are designated as hedging derivatives. Derivative financial instruments that qualify in a hedging relationship are classified, based on the exposure being hedged, as either fair value hedges or cash flow hedges. See Note 1 "Summary of Significant Accounting Policies" of the Annual Report on Form 10-K for the year ended December 31, 2022, for additional information regarding accounting policies for derivatives.

FAIR VALUE HEDGES

Fair value hedge relationships mitigate exposure to the change in fair value of an asset, liability or firm commitment.

Regions enters into interest rate swap agreements to manage interest rate exposure on the Company’s fixed-rate borrowings. These agreements involve the receipt of fixed-rate amounts in exchange for floating-rate interest payments over the life of the agreements. Regions also enters into interest rate swap agreements to manage interest rate exposure on certain of the Company's fixed-rate prepayable and non-prepayable debt securities available for sale. These agreements involve the payment of fixed-rate amounts in exchange for floating-rate interest receipts.

CASH FLOW HEDGES

Cash flow hedge relationships mitigate exposure to the variability of future cash flows or other forecasted transactions.

Regions enters into interest rate swaps, options (e.g., floors, caps and collars), and agreements with a combination of these instruments to manage overall cash flow changes related to interest rate risk exposure on variable rate loans. The agreements effectively modify the Company’s exposure to interest rate risk by utilizing receive fixed/pay LIBOR or SOFR interest rate swaps and interest rate floors. As of March 31, 2023, Regions is hedging its exposure to the variability in future cash flows into 2029.

The following table presents the pre-tax impact of terminated cash flow hedges on AOCI. The balance of terminated cash flow hedges in AOCI will be amortized into earnings through 2026.


	Three Months Ended March 31
		2023		2022
		(In millions)
Unrealized gains on terminated hedges included in AOCI - beginning of period		$	164	$	700
Unrealized gains (losses) on terminated hedges arising during the period		(19)		—
Reclassification adjustments for amortization of unrealized (gains) on terminated hedges into net income		(20)		(76)
Unrealized gains on terminated hedges included in AOCI - end of period		$	125	$	624

Regions expects to reclassify into earnings approximately $215 million in pre-tax expenses due to the net receipt/ payment of interest and amortization on all cash flow hedges within the next twelve months. Included in this amount is $33 million in pre-tax net gains related to the amortization of terminated cash flow hedges.

The following tables present the effect of hedging derivative instruments on the consolidated statements of income and the total amounts for the respective line items affected:


	Three Months Ended March 31, 2023
	Interest Income		Interest Income		Interest Expense
	Debt securities		Loans, including fees		Long-term borrowings
	(In millions)
Total income (expense) presented in the consolidated statements of income	$	187	$	1,360	$	(40)

Gains/(losses) on fair value hedging relationships:
Interest rate contracts:
Amounts related to interest settlements on derivatives	$	—	$	—	$	(14)
Recognized on derivatives	—		—		23
Recognized on hedged items	—		—		(23)
Income (expense) recognized on fair value hedges	$	—	$	—	$	(14)

Gains/(losses) on cash flow hedging relationships: (1)
Interest rate contracts:
Realized gains (losses) reclassified from AOCI into net income (2)	$	—	$	(15)	$	—
Income (expense) recognized on cash flow hedges	$	—	$	(15)	$	—


	Three Months Ended March 31, 2022
	Interest Income		Interest Income		Interest Expense
	Debt securities		Loans, including fees		Long-term borrowings
	(In millions)
Total income (expense) presented in the consolidated statements of income	$	138	$	876	(24		)

Gains/(losses) on fair value hedging relationships:
Interest rate contracts:
Amounts related to interest settlements on derivatives	$	—	$	—	$	1
Recognized on derivatives	22		—		(64)
Recognized on hedged items	(22)		—		64
Income (expense) recognized on fair value hedges	$	—	$	—	$	1

Gains/(losses) on cash flow hedging relationships: (1)
Interest rate contracts:
Realized gains (losses) reclassified from AOCI into net income (2)	$	—	$	110	$	—
Income (expense) recognized on cash flow hedges	$	—	$	110	$	—

(1)See Note 5 for gain or (loss) recognized for cash flow hedges in AOCI.

(2)Pre-tax

The following tables present the carrying amount and associated cumulative basis adjustment related to the application of hedge accounting that is included in the carrying amount of hedged assets and liabilities in fair value hedging relationships.


	March 31, 2023				December 31, 2022
	Hedged Items Currently Designated					Hedged Items Currently Designated
	Carrying Amount of Assets/(Liabilities)		Hedge Accounting Basis Adjustment				Carrying Amount of Assets/(Liabilities)		Hedge Accounting Basis Adjustment
	(In millions)				(In millions)
Debt securities available for sale(1)	$	24	$	—			$	23	$	—
Long-term borrowings	(1,263)		135				(1,239)		158

(1) Carrying amount represents amortized cost.

DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS

The Company holds a portfolio of interest rate swaps, option contracts, and futures and forward commitments that result from transactions with its commercial customers in which they manage their risks by entering into a derivative with Regions. The Company monitors and manages the net risk in this customer portfolio and enters into separate derivative contracts in order to reduce the overall exposure to pre-defined limits. For both derivatives with its end customers and derivatives Regions enters into to mitigate the risk in this portfolio, the Company is subject to market risk and the risk that the counterparty will default. The contracts in this portfolio are not designated as accounting hedges and are marked-to market through earnings (in capital markets income) and included in other assets and other liabilities, as appropriate.

Regions enters into interest rate lock commitments, which are commitments to originate mortgage loans whereby the interest rate on the loan is determined prior to funding and the customers have locked into that interest rate. At March 31, 2023 and December 31, 2022, Regions had $212 million and $118 million, respectively, in total notional amount of interest rate lock commitments. Regions manages market risk on interest rate lock commitments and mortgage loans held for sale with corresponding forward sale commitments. Residential mortgage loans held for sale are recorded at fair value with changes in fair value recorded in mortgage income. Commercial mortgage loans held for sale are recorded at either the lower of cost or market or at fair value based on management's election. At March 31, 2023 and December 31, 2022, Regions had $350 million and $233 million, respectively, in total notional amounts related to these forward sale commitments. Changes in mark-to-market from both interest rate lock commitments and corresponding forward sale commitments related to residential mortgage loans are included in mortgage income. Changes in mark-to-market from both interest rate lock commitments and corresponding forward sale commitments related to commercial mortgage loans are included in capital markets income.

Regions has elected to account for residential MSRs at fair value with any changes to fair value recorded in mortgage income. Concurrent with the election to use the fair value measurement method, Regions began using various derivative instruments in the form of forward rate commitments, futures contracts, swaps and swaptions to mitigate the effect of changes in the fair value of its residential MSRs in its consolidated statements of income. As of March 31, 2023 and December 31, 2022, the total notional amount related to these contracts was $3.1 billion and $3.4 billion, respectively.

The following table presents the location and amount of gain or (loss) recognized in income on derivatives not designated as hedging instruments in the consolidated statements of income for the periods presented below:


	Three Months Ended March 31
Derivatives Not Designated as Hedging Instruments		2023		2022
		(In millions)
Capital markets income:
Interest rate swaps		$	(28)	$	31
Interest rate options		9		11
Interest rate futures and forward commitments		4		(4)
Other contracts		(2)		3
Total capital markets income		(17)		41
Mortgage income:
Interest rate swaps		7		(46)
Interest rate options		3		(10)
Interest rate futures and forward commitments		(1)		16
Total mortgage income		9		(40)
		$	(8)	$	1

CREDIT DERIVATIVES

Regions has both bought and sold credit protection in the form of participations on interest rate swaps (swap participations). These swap participations, which meet the definition of credit derivatives, were entered into in the ordinary course of business to serve the credit needs of customers. Swap participations, whereby Regions has purchased credit protection, entitle Regions to receive a payment from the counterparty if the customer fails to make payment on any amounts due to Regions upon early termination of the swap transaction and have maturities between 2023 and 2029. Swap participations, whereby Regions has sold credit protection have maturities between 2023 and 2038. For contracts where Regions sold credit protection, Regions would be required to make payment to the counterparty if the customer fails to make payment on any amounts due to the counterparty upon early termination of the swap transaction. Regions bases the current status of the prepayment/performance risk on bought and sold credit derivatives on recently issued internal risk ratings consistent with the risk management practices of unfunded commitments.

Regions’ maximum potential amount of future payments under these contracts as of March 31, 2023 was approximately $483 million. This scenario occurs if variable interest rates were at zero percent and all counterparties defaulted with zero recovery. The fair value of sold protection at March 31, 2023 and 2022 was immaterial. In transactions where Regions has sold credit protection, recourse to collateral associated with the original swap transaction is available to offset some or all of Regions’ obligation.

Regions has bought credit protection in the form of credit default indices. These indices, which meet the definition of credit derivatives, were entered into in the ordinary course of business to economically hedge credit spread risk in commercial mortgage loans held for sale whereby the fair value option has been elected. Credit derivatives, whereby Regions has purchased credit protection, entitle Regions to receive a payment from the counterparty if losses on the underlying index exceed a certain threshold, dependent upon the tranche rating of the capital structure.

CONTINGENT FEATURES

Certain of Regions’ derivative instrument contracts with broker-dealers contain credit-related termination provisions and/or credit related provisions regarding the posting of collateral, allowing those broker-dealers to terminate the contracts in the event that Regions’ and/or Regions Bank’s credit ratings falls below specified ratings from certain major credit rating agencies. The aggregate fair values of all derivative instruments with any credit-risk-related contingent features that were in a liability position on March 31, 2023 and December 31, 2022, were $27 million and $17 million, respectively, for which Regions had posted collateral of $29 million and $20 million, respectively, in the normal course of business.

NOTE 9. FAIR VALUE MEASUREMENTS

See Note 1 "Summary of Significant Accounting Policies" to the consolidated financial statements of the Annual Report on Form 10-K for the year ended December 31, 2022 for a description of valuation methodologies for assets and liabilities measured at fair value on a recurring and non-recurring basis. Assets and liabilities measured at fair value rarely transfer between Level 1 and Level 2 measurements. Marketable equity securities and debt securities available for sale may be periodically transferred to or from Level 3 valuation based on management’s conclusion regarding the observability of inputs used in valuing the securities. Such transfers are accounted for as if they occur at the beginning of a reporting period.

The following table presents assets and liabilities measured at estimated fair value on a recurring basis:


	March 31, 2023								December 31, 2022
	Level 1		Level 2		Level 3 (1)		Total Estimated Fair Value		Level 1		Level 2		Level 3 (1)		Total Estimated Fair Value
	(In millions)
Recurring fair value measurements
Debt securities available for sale:
U.S. Treasury securities	$	1,205	$	—	$	—	$	1,205	$	1,187	$	—	$	—	$	1,187
Federal agency securities	—		946		—		946		—		836		—		836
Obligations of states and political subdivisions	—		2		—		2		—		2		—		2
Mortgage-backed securities:
Residential agency	—		17,165		—		17,165		—		16,954		—		16,954
Residential non-agency	—		—		—		—		—		—		1		1
Commercial agency	—		7,657		—		7,657		—		7,613		—		7,613
Commercial non-agency	—		123		—		123		—		186		—		186
Corporate and other debt securities	—		1,130		2		1,132		—		1,153		1		1,154
Total debt securities available for sale	$	1,205	$	27,023	$	2	$	28,230	$	1,187	$	26,744	$	2	$	27,933
Loans held for sale	$	—	$	223	$	19	$	242	$	—	$	177	$	19	$	196
Marketable equity securities in other earning assets	$	650	$	—	$	—	$	650	$	529	$	—	$	—	$	529
Residential mortgage servicing rights	$	—	$	—	$	790	$	790	$	—	$	—	$	812	$	812
Derivative assets (2):
Interest rate swaps	$	—	$	2,036	$	—	$	2,036	$	—	$	2,335	$	—	$	2,335
Interest rate options	—		97		9		106		—		91		3		94
Interest rate futures and forward commitments	—		7		—		7		—		8		—		8
Other contracts	—		197		—		197		3		169		—		172
Total derivative assets	$	—	$	2,337	$	9	$	2,346	$	3	$	2,603	$	3	$	2,609

Derivative liabilities (2):
Interest rate swaps	$	—	$	2,569	$	—	$	2,569	$	—	$	3,161	$	—	$	3,161
Interest rate options	—		87		—		87		—		85		—		85
Interest rate futures and forward commitments	—		6		—		6		—		5		—		5
Other contracts	2		187		1		190		2		124		1		127
Total derivative liabilities	$	2	$	2,849	$	1	$	2,852	$	2	$	3,375	$	1	$	3,378

(1)All following disclosures related to Level 3 recurring assets do not include those deemed to be immaterial.

(2)As permitted under U.S. GAAP, variation margin collateral payments made or received for derivatives that are centrally cleared are legally characterized as settled. As such, these derivative assets and derivative liabilities and the related variation margin collateral are presented on a net basis on the balance sheet.

Assets and liabilities in all levels could result in volatile and material price fluctuations. Realized and unrealized gains and losses on Level 3 assets represent only a portion of the risk to market fluctuations in Regions’ consolidated balance sheets. Further, derivatives included in Levels 2 and 3 are used by ALCO in a holistic approach to managing price fluctuation risks.

The following tables present an analysis for residential MSRs for the three months ended March 31, 2023 and 2022, respectively.


	Residential mortgage servicing rights
	Three Months Ended March 31
	2023		2022
	(In millions)
Carrying value, beginning of period	$	812	$	418
Total realized/unrealized gains (losses) included in earnings (1)	(36)		30
Additions	4		19
Purchases	10		75
Carrying value, end of period	$	790	$	542

(1) Included in mortgage income. Amounts presented exclude offsetting impact from related derivatives.

RECURRING FAIR VALUE MEASUREMENTS USING SIGNIFICANT UNOBSERVABLE INPUTS

The significant unobservable inputs used in the fair value measurement of residential MSRs are OAS and CPR. This valuation requires generating cash flow projections over multiple interest rate scenarios and discounting those cash flows at a risk-adjusted rate. Additionally, the impact of prepayments and changes in the OAS are based on a variety of underlying inputs including servicing costs. Increases or decreases to the underlying cash flow inputs will have a corresponding impact on the value of the MSR asset. The net change in unrealized gains (losses) included in earnings related to MSRs held at period end are disclosed as the changes in valuation inputs or assumptions included in the MSR rollforward table in Note 4 .

The following tables present detailed information regarding material assets and liabilities measured at fair value using significant unobservable inputs (Level 3) as of March 31, 2023, and December 31, 2022. The tables include the valuation techniques and the significant unobservable inputs utilized. The range of each significant unobservable input as well as the weighted-average within the range utilized at March 31, 2023 and December 31, 2022 are included. Following the tables are descriptions of the valuation techniques and the sensitivity of the techniques to changes in the significant unobservable inputs.


	March 31, 2023
	Level 3 Estimated Fair Value at March 31, 2023	Valuation Technique	Unobservable Input(s)	Quantitative Range of Unobservable Inputs and (Weighted-Average)
	(Dollars in millions)
Recurring fair value measurements:
Residential mortgage servicing rights (1)	$790	Discounted cash flow	Weighted-average CPR (%)	6.2% - 18.5% (7.7%)
			OAS (%)	5.2% - 8.2% (5.5%)

(1)See Note 4 for additional disclosures related to assumptions used in the fair value calculation for residential mortgage servicing rights.


	December 31, 2022
	Level 3 Estimated Fair Value at December 31, 2022	Valuation Technique	Unobservable Input(s)	Quantitative Range of Unobservable Inputs and (Weighted-Average)
	(Dollars in millions)
Recurring fair value measurements:
Residential mortgage servicing rights (1)	$812	Discounted cash flow	Weighted-average CPR (%)	6.1% - 15.1% (7.4%)
			OAS (%)	4.8% -8.2% (5.1%)

(1)See Note 6 to the consolidated financial statements of the Annual Report on Form 10-K for the year ended December 31, 2022 for additional disclosures related to assumptions used in the fair value calculation for residential mortgage servicing rights.

FAIR VALUE OPTION

As discussed above, the Company elected the option to measure certain commercial mortgage loans held for sale at fair value. At March 31, 2023 and December 31, 2022, the balance of these loans was immaterial.

The Company has elected the option to measure certain commercial and industrial loans held for sale at fair value, as these loans are actively traded in the secondary market. The Company is able to obtain fair value estimates for substantially all of these loans through a third party valuation service that is broadly used by market participants. While most of the loans are traded in the market, the volume and level of trading activity is subject to variability and the loans are not exchange-traded. The balance of these loans held for sale was immaterial at March 31, 2023 and December 31, 2022.

Regions has elected the fair value option for all eligible agency residential first mortgage loans originated with the intent to sell. This election allows for a more effective offset of the changes in fair values of the loans and the derivative instruments used to economically hedge them without the burden of complying with the requirements for hedge accounting. Fair values of residential first mortgage loans held for sale are based on traded market prices of similar assets where available and/or discounted cash flows at market interest rates, adjusted for securitization activities that include servicing values and market conditions, and are recorded in loans held for sale.

The following table summarizes the difference between the aggregate fair value and the aggregate unpaid principal balance for mortgage loans held for sale measured at fair value:


	March 31, 2023						December 31, 2022
	Aggregate Fair Value		Aggregate Unpaid Principal		Aggregate Fair Value Less Aggregate Unpaid Principal		Aggregate Fair Value		Aggregate Unpaid Principal		Aggregate Fair Value Less Aggregate Unpaid Principal
	(In millions)
Residential mortgage loans held for sale, at fair value	$	203	$	198	$	5	$	160	$	157	$	3

Interest income on mortgage loans held for sale is recognized based on contractual rates and is reflected in interest income on loans held for sale. The following table details net gains and losses resulting from changes in fair value of residential mortgage loans held for sale, which were recorded in mortgage income in the consolidated statements of income during the three months ended March 31, 2023 and 2022. These changes in fair value are mostly offset by economic hedging activities. An immaterial portion of these amounts was attributable to changes in instrument-specific credit risk.


	Three Months Ended March 31
	2023		2022
	(In millions)
Net gains (losses) resulting from changes in fair value of residential mortgage loans held for sale	$	2	$	(23)

NON-RECURRING FAIR VALUE MEASUREMENTS

Items measured at fair value on a non-recurring basis include loans held for sale for which the fair value option has not been elected, foreclosed property and other real estate and equity investments without a readily determinable fair value; all of which may be considered either Level 2 or Level 3 valuation measurements. Non-recurring fair value adjustments related to loans held for sale, foreclosed property and other real estate are typically a result of the application of lower of cost or fair value accounting during the period. Non-recurring fair value adjustments related to equity investments without readily determinable fair values are the result of impairments or price changes from observable transactions. The balances of each of these assets, as well as the related fair value adjustments during the periods, were immaterial at both March 31, 2023 and December 31, 2022.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts and estimated fair values, as well as the level within the fair value hierarchy, of the Company’s financial instruments as of March 31, 2023 are as follows:


	March 31, 2023
	Carrying Amount		Estimated Fair Value(1)		Level 1		Level 2		Level 3
	(In millions)
Financial assets:
Cash and cash equivalents	$	8,833	$	8,833	$	8,833	$	—	$	—
Debt securities held to maturity	790		749		—		749		—
Debt securities available for sale	28,230		28,230		1,205		27,023		2
Loans held for sale	564		564		—		545		19
Loans (excluding leases), net of unearned income and allowance for loan losses(2)(3)	95,095		91,198		—		—		91,198
Other earning assets	1,335		1,335		650		685		—
Derivative assets	2,346		2,346		—		2,337		9

Financial liabilities:
Derivative liabilities	2,852		2,852		2		2,849		1
Deposits with no stated maturity(4)	120,687		120,687		—		120,687		—
Time deposits(4)	7,773		7,668		—		7,668		—
Short-term borrowings	2,000		2,000		—		2,000		—
Long-term borrowings	2,307		2,301		—		2,300		1
Loan commitments and letters of credit	156		156		—		—		156

(1)Estimated fair values are consistent with an exit price concept. The assumptions used to estimate the fair values are intended to approximate those that a market participant would use in a hypothetical orderly transaction. In estimating fair value, the Company makes adjustments for estimated changes in interest rates, market liquidity and credit spreads in the periods they are deemed to have occurred.

(2)The estimated fair value of portfolio loans assumes sale of the loans to a third-party financial investor. Accordingly, the value to the Company if the loans were held to maturity is not reflected in the fair value estimate. The fair value discount on the loan portfolio's net carrying amount at March 31, 2023 was $3.9 billion or 4.1 percent.

(3)Excluded from this table is the sales-type, direct financing, and leveraged lease carrying amount of $1.5 billion at March 31, 2023.

(4)The fair value of non-interest-bearing demand accounts, interest-bearing checking accounts, savings accounts, and money market accounts is the amount payable on demand at the reporting date (i.e., the carrying amount) as these instruments have an indeterminate maturity date. Fair values for time deposits are estimated by using discounted cash flow analyses, based on market spreads to benchmark rates.

The carrying amounts and estimated fair values, as well as the level within the fair value hierarchy, of the Company's financial instruments as of December 31, 2022 are as follows:


	December 31, 2022
	Carrying Amount		Estimated Fair Value(1)		Level 1		Level 2		Level 3
	(In millions)
Financial assets:
Cash and cash equivalents	$	11,227	$	11,227	$	11,227	$	—	$	—
Debt securities held to maturity	801		751		—		751		—
Debt securities available for sale	27,933		27,933		1,187		26,744		2
Loans held for sale	354		354		—		335		19
Loans (excluding leases), net of unearned income and allowance for loan losses(2)(3)	94,044		89,540		—		—		89,540
Other earning assets	1,308		1,308		529		779		—
Derivative assets	2,609		2,609		3		2,603		3
Financial liabilities:
Derivative liabilities	3,378		3,378		2		3,375		1
Deposits with no stated maturity(4)	125,971		125,971		—		125,971		—
Time deposits(4)	5,772		5,697		—		5,697		—

Long-term borrowings	2,284		2,376		—		2,375		1
Loan commitments and letters of credit	153		153		—		—		153

(3)Excluded from this table is the sales-type, direct financing, and leveraged lease carrying amount of $1.5 billion at December 31, 2022.

NOTE 10. BUSINESS SEGMENT INFORMATION

Each of Regions’ reportable segments is a strategic business unit that serves specific needs of Regions’ customers based on the products and services provided. The segments are based on the manner in which management views the financial performance of the business. The Company has three reportable segments: Corporate Bank, Consumer Bank, and Wealth Management, with the remainder in Other. Additional information about the Company's reportable segments is included in Regions' Annual Report on Form 10-K for the year ended December 31, 2022.

The application and development of management reporting methodologies is a dynamic process and is subject to periodic enhancements. As these enhancements are made, financial results presented by each reportable segment may be periodically revised. Accordingly, the prior periods were updated to reflect these enhancements.

The following tables present financial information for each reportable segment for the periods indicated:


	Three Months Ended March 31, 2023
	Corporate Bank		Consumer Bank		Wealth Management		Other		Consolidated
	(In millions)
Net interest income	$	525	$	838	$	54	$	—	$	1,417
Provision for (benefit from) credit losses	80		67		2		(14)		135
Non-interest income	161		258		114		1		534
Non-interest expense	313		588		110		16		1,027
Income (loss) before income taxes	293		441		56		(1)		789
Income tax expense (benefit)	73		110		14		(20)		177
Net income	$	220	$	331	$	42	$	19	$	612
Average assets	$	69,093	$	37,156	$	2,086	$	44,747	$	153,082


	Three Months Ended March 31, 2022
	Corporate Bank		Consumer Bank		Wealth Management		Other		Consolidated
	(In millions)
Net interest income	$	433	$	547	$	35	$	—	$	1,015
Provision for (benefit from) credit losses	69		70		2		(177)		(36)
Non-interest income	184		304		103		(7)		584
Non-interest expense	278		558		97		—		933
Income before income taxes	270		223		39		170		702
Income tax expense	68		56		10		20		154
Net income	$	202	$	167	$	29	$	150	$	548
Average assets	$	60,292	$	36,272	$	2,130	$	63,034	$	161,728

NOTE 11. COMMITMENTS, CONTINGENCIES AND GUARANTEES

COMMERCIAL COMMITMENTS

Regions issues off-balance sheet financial instruments in connection with lending activities. The credit risk associated with these instruments is essentially the same as that involved in extending loans to customers and is subject to Regions’ normal credit approval policies and procedures. Regions measures inherent risk associated with these instruments by recording a reserve for unfunded commitments based on an assessment of the likelihood that the guarantee will be funded and the creditworthiness of the customer or counterparty. Collateral is obtained based on management’s assessment of the creditworthiness of the customer. Credit risk is represented in unused commitments to extend credit, standby letters of credit and commercial letters of credit. Refer to Note 23 "Commitments, Contingencies and Guarantees" in the Annual Report on Form 10-K for the year ended December 31, 2022 for more information regarding these instruments.

Credit risk associated with these instruments is represented by the contractual amounts indicated in the following table:


	March 31, 2023		December 31, 2022
	(In millions)
Unused commitments to extend credit	$	65,097	$	65,460
Standby letters of credit	1,886		1,962
Commercial letters of credit	54		75
Liabilities associated with standby letters of credit	32		35
Assets associated with standby letters of credit	33		37
Reserve for unfunded credit commitments	124		118

LEGAL CONTINGENCIES

Regions and its subsidiaries are routinely subject to actual or threatened legal proceedings, including litigation and regulatory matters, arising in the ordinary course of business. Litigation matters range from individual actions involving a single plaintiff to class action lawsuits and can involve claims for substantial or indeterminate alleged damages or for injunctive or other relief. Regulatory investigations and enforcement matters may involve formal or informal proceedings and other inquiries initiated by various governmental agencies, law enforcement authorities, and self-regulatory organizations, and can result in fines, penalties, restitution, changes to Regions’ business practices, and other related costs, including reputational damage. At any given time, these legal proceedings are at varying stages of adjudication, arbitration, or investigation, and may relate to a variety of topics, including common law tort and contract claims, as well as statutory consumer protection-related claims, among others.

Assessment of exposure that could result from legal proceedings is complex because these proceedings often involve inherently unpredictable factors, including, but not limited to, the following: whether the proceeding is in early stages; whether damages or the amount of potential fines, penalties, and restitution are unspecified, unsupported, or uncertain; whether there is a potential for punitive or other pecuniary damages; whether the matter involves legal uncertainties, including novel issues of law; whether the matter involves multiple parties and/or jurisdictions; whether discovery or other investigation has begun or is not complete; whether material facts may be disputed or unsubstantiated; whether meaningful settlement discussions have commenced; and whether the matter involves class allegations. As a result of these complexities, Regions may be unable to develop an estimate or range of loss.

Regions evaluates legal proceedings based on information currently available, including advice of counsel. Regions establishes accruals for those matters when a loss is considered probable and the related amount is reasonably estimable. Additionally, when it is practicable and reasonably possible that it may experience losses in excess of established accruals, Regions estimates possible loss contingencies. Regions currently estimates that the aggregate amount of reasonably possible losses that it may experience, in excess of what has been accrued, is immaterial. While the final outcomes of legal proceedings

are inherently unpredictable, management is currently of the opinion that the outcomes of pending and threatened matters will not have a material effect on Regions’ business, consolidated financial position, results of operations or cash flows as a whole.

As available information changes, the matters for which Regions is able to estimate, as well as the estimates themselves, will be adjusted accordingly. Regions’ estimates are subject to significant judgment and uncertainties, and the matters underlying the estimates will change from time to time. In the event of unexpected future developments, it is possible that an adverse outcome in any such matter could be material to Regions’ business, consolidated financial position, results of operations, or cash flows as a whole for any particular reporting period of occurrence.

Some of Regions’ exposure with respect to loss contingencies may be offset by applicable insurance coverage. However, in determining the amounts of any accruals or estimates of possible loss contingencies, Regions does not take into account the availability of insurance coverage. To the extent that Regions has an insurance recovery, the proceeds are recorded in the period the recovery is received.

GUARANTEES

FANNIE MAE LOSS SHARE GUARANTEE

Regions sells commercial loans to Fannie Mae through the DUS lending program and through other platforms. The DUS program provides liquidity to the multi-family housing market. Regions services loans sold to Fannie Mae and is required to provide a loss share guarantee equal to one-third of the principal balance for the majority of the commercial servicing portfolio. At March 31, 2023 and December 31, 2022, the Company's DUS servicing portfolio totaled approximately $5.0 billion and $4.9 billion, respectively. Regions has additional loans sold to Fannie Mae outside of the DUS program that are also subject to a loss share guarantee and at March 31, 2023 and December 31, 2022, these serviced loans totaled approximately $550 million and $655 million, respectively. Regions' maximum quantifiable contingent liability related to all loans subject to a loss share guarantee was approximately $1.8 billion at both March 31, 2023 and December 31, 2022. The Company would be liable for this amount only if all of the loans it services for Fannie Mae, for which the Company retains some risk of loss, were to default and all of the collateral underlying these loans was determined to be without value at the time of settlement. Therefore, the maximum quantifiable contingent liability is not representative of the actual loss the Company would be expected to incur. The estimated fair value of the associated loss share guarantee recorded as a liability on the Company's consolidated balance sheets was immaterial at both March 31, 2023 and December 31, 2022. Refer to Note 1 in the Annual Report on Form 10-K for the year ended December 31, 2022 for additional information.

NOTE 12. RECENT ACCOUNTING PRONOUNCEMENTS


Standard	Description	Required Date of Adoption	Effect on Regions' financial statements or other significant matters
Standards Adopted (or partially adopted) in 2023
ASU 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures	This Update is intended to improve the decision usefulness of information provided to investors about certain loan refinancing, restructurings, and write-offs. The amendments in the Update eliminate the accounting guidance for TDRs by creditors that have adopted CECL while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors made to borrowers experiencing financial difficulty. The Update also requires that a public business entity disclose current-period gross write-offs by year of origination for financing receivables and net investment in leases. The amendments in this Update should be applied prospectively, except for the transition method related to the recognition and measurement of TDRs for which there is an option to apply a modified retrospective transition method, resulting in a cumulative-effect adjustment to retained earnings in the period of adoption.	January 1, 2023	The adoption of this guidance did not have a material impact. See Note 1 Basis of Presentation for additional information.
2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions	This Update clarifies how the fair value of equity securities subject to contractual sale restrictions is determined. ASU 2022-03 clarifies that a contractual sale restriction should not be considered in measuring fair value. It also requires entities with investments in equity securities subject to contractual sale restrictions to disclose certain qualitative and quantitative information about such securities.	January 1, 2023	The adoption of this guidance did not have a material impact.


Standard	Description	Required Date of Adoption	Effect on Regions' financial statements or other significant matters
Standards Not Yet Adopted
ASU 2023-02, Investments —Equity Method and Joint Ventures (Topic 323) Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method	This Update allows entities to elect to account for equity investments made primarily for the purpose of receiving income tax credits using the proportional amortization method, regardless of the tax credit program through which the investment earns income tax credits, if certain conditions were met. The Update also sets forth the conditions needed to apply the proportional amortization method. The Update further eliminates certain low income housing tax credit-specific guidance to align the accounting more closely for low income housing tax credits with the accounting for other equity investments in tax credit structures and require that the delayed equity contribution apply only to tax equity investments accounted for using the proportional amortization method.	January 1, 2024	The adoption of this guidance is not likely to have a material impact. Regions will continue to evaluate through date of adoption.

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