NOTE 3—Securities

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


	June 30, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(In millions)
Securities available for sale:
U.S. Treasury securities	$	48	$	3	$	—		$	51
Federal agency securities		232		3		—			235
Obligations of states and political subdivisions		14		—		—			14
Mortgage-backed securities:
Residential agency		22,923		578		(7	)		23,494
Residential non-agency		13		1		—			14
Commercial agency		499		15		—			514
Commercial non-agency		619		18		—			637
Corporate and other debt securities		1,527		29		(5	)		1,551
Equity securities		722		2		(2	)		722

	$	26,597	$	649	$	(14	)	$	27,232

Securities held to maturity:
U.S. Treasury securities	$	2	$	1	$	—		$	3
Federal agency securities		3		—		—			3
Mortgage-backed securities:
Residential agency		8		—		—			8

	$	13	$	1	$	—		$	14


	December 31, 2011
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(In millions)
Securities available for sale:
U.S. Treasury securities	$	95	$	3	$	—		$	98
Federal agency securities		147		—		—			147
Obligations of states and political subdivisions		24		12		—			36
Mortgage-backed securities:
Residential agency		21,688		494		(7	)		22,175
Residential non-agency		15		1		—			16
Commercial agency		318		8		—			326
Commercial non-agency		314		7		—			321
Corporate and other debt securities		539		5		(7	)		537
Equity securities		817		2		(4	)		815

	$	23,957	$	532	$	(18	)	$	24,471

Securities held to maturity:
U.S. Treasury securities	$	4	$	—	$	—		$	4
Federal agency securities		3		—		—			3
Mortgage-backed securities:
Residential agency		9		1		—			10

	$	16	$	1	$	—		$	17

Entities included with the sale of Morgan Keegan and related affiliates had approximately $2 million in securities available for sale at December 31, 2011, which are included in the table above. There were no such securities at June 30, 2012 as these entities were sold during the second quarter as discussed in Note 2.

Equity securities in the tables above included the following amortized cost related to Federal Reserve Bank stock and Federal Home Loan Bank (“FHLB”) stock. Shares in the Federal Reserve Bank and FHLB are accounted for at amortized cost, which approximates fair value.


	June 30 2012		December 31 2011
	(In millions)
Federal Reserve Bank	$	480	$	481
Federal Home Loan Bank		135		219

Securities with carrying values of $14.0 billion and $14.3 billion at June 30, 2012 and December 31, 2011, respectively, were pledged to secure public funds, trust deposits and certain borrowing arrangements.

The amortized cost and estimated fair value of securities available for sale and securities held to maturity at June 30, 2012, 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)
Securities available for sale:
Due in one year or less	$	27	$	27
Due after one year through five years		636		641
Due after five years through ten years		910		928
Due after ten years		248		255
Mortgage-backed securities:
Residential agency		22,923		23,494
Residential non-agency		13		14
Commercial agency		499		514
Commercial non-agency		619		637
Equity securities		722		722

	$	26,597	$	27,232

Securities held to maturity:
Due in one year or less	$	3	$	3
Due after one year through five years		2		3
Due after five years through ten years		—		—
Due after ten years		—		—
Mortgage-backed securities:
Residential agency		8		8

	$	13	$	14

The following tables present gross unrealized losses and estimated fair value of securities available for sale at June 30, 2012 and December 31, 2011. These securities are segregated between investments that have been in a continuous unrealized loss position for less than twelve months and twelve months or more.


	June 30, 2012
	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)
Mortgage-backed securities:
Residential agency	$	950	$	(8	)	$	—	$	—		$	950	$	(8	)
Commercial agency		—		—			—		—			—		—
Commercial non-agency		—		—			—		—			—		—
All other securities		413		(5	)		18		(1	)		431		(6	)

	$	1,363	$	(13	)	$	18	$	(1	)	$	1,381	$	(14	)


	December 31, 2011
	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)
Mortgage-backed securities:
Residential agency	$	1,778	$	(7	)	$	—	$	—		$	1,778	$	(7	)
All other securities		291		(9	)		5		(2	)		296		(11	)

	$	2,069	$	(16	)	$	5	$	(2	)	$	2,074	$	(18	)

There was no gross unrealized loss on debt securities held to maturity at either June 30, 2012 or December 31, 2011.

For the securities included in the tables above, management does not believe any individual unrealized loss, which was comprised of 410 securities and 524 securities at June 30, 2012 and December 31, 2011, respectively, represented an other-than-temporary impairment as of those dates. The Company does not intend to sell, and it is not likely that the Company will be required to sell, the securities before the recovery of their amortized cost basis, which may be at maturity.

For both the three and six months ended June 30, 2012, Regions recorded a credit-related impairment charge of approximately $2 million. Regions did not record any credit-related impairment charges during the three or six months ended June 30, 2011.

Proceeds from sale, gross realized gains and gross realized losses from continuing operations on sales of securities available for sale are shown in the table below. The cost of securities sold is based on the specific identification method.


	Three Months Ended June 30				Six Months Ended June 30
	2012		2011		2012		2011
	(In millions)
Proceeds	$	272	$	4,060	$	1,670	$	6,479
Gross realized gains		12		24		24		106
Gross realized losses		—		—		—		—

Net securities gains	$	12	$	24	$	24	$	106

The following table details net gains (losses) for trading account securities:


	Three Months Ended June 30						Six Months Ended June 30
	2012			2011			2012		2011
	(in millions)						(in millions)
Total net gains (losses)	$	(1	)	$	10		$	29	$	31
Unrealized portion		(1	)		(1	)		24		13

Included in the table above are amounts related to activities of Morgan Keegan. The totals include net gains related to Morgan Keegan of zero for the three months ended June 30, 2012 and approximately $10 million for the three months ended June 30, 2011. There were approximately $25 million of total net gains for both the six months ended June 30, 2012 and 2011 related to Morgan Keegan activities. These amounts are included within results from discontinued operations.