| Allowance for Credit Losses |
Regions determines the appropriate level of the allowance on a quarterly basis. The methodology is described in Note 1. ROLLFORWARD OF ALLOWANCE FOR CREDIT LOSSES The following tables present analyses of the allowance for credit losses by portfolio segment for the years ended December 31, 2019, 2018 and 2017. The total allowance for loan losses and the related loan portfolio ending balances are disaggregated to detail the amounts derived through individual evaluation and collective evaluation for impairment. The allowance for loan losses related to individually evaluated loans is attributable to reserves for non-accrual commercial and investor real estate loans and all TDRs. The allowance for loan losses and the loan portfolio ending balances related to collectively evaluated loans is attributable to the remainder of the portfolio. | | | | | | | | | | | | | | | | | | 2019 | | Commercial | | Investor Real Estate | | Consumer | | Total | | (In millions) | Allowance for loan losses, January 1, 2019 | $ | 520 |
| | $ | 58 |
| | $ | 262 |
| | $ | 840 |
| Provision (credit) for loan losses | 138 |
| | (16 | ) | | 265 |
| | 387 |
| Loan losses: | | | | | | | | Charge-offs | (150 | ) | | (1 | ) | | (292 | ) | | (443 | ) | Recoveries | 29 |
| | 4 |
| | 52 |
| | 85 |
| Net loan losses | (121 | ) | | 3 |
| | (240 | ) | | (358 | ) | Allowance for loan losses, December 31, 2019 | 537 |
| | 45 |
| | 287 |
| | 869 |
| Reserve for unfunded credit commitments, January 1, 2019 | 47 |
| | 4 |
| | — |
| | 51 |
| Provision (credit) for unfunded credit losses | (6 | ) | | — |
| | — |
| | (6 | ) | Reserve for unfunded credit commitments, December 31, 2019 | 41 |
| | 4 |
| | — |
| | 45 |
| Allowance for credit losses, December 31, 2019 | $ | 578 |
| | $ | 49 |
| | $ | 287 |
| | $ | 914 |
| Portion of ending allowance for loan losses: | | | | | | | | Individually evaluated for impairment | $ | 120 |
| | $ | 4 |
| | $ | 29 |
| | $ | 153 |
| Collectively evaluated for impairment | 417 |
| | 41 |
| | 258 |
| | 716 |
| Total allowance for loan losses | $ | 537 |
| | $ | 45 |
| | $ | 287 |
| | $ | 869 |
| Portion of loan portfolio ending balance: | | | | | | | | Individually evaluated for impairment | $ | 537 |
| | $ | 34 |
| | $ | 381 |
| | $ | 952 |
| Collectively evaluated for impairment | 45,302 |
| | 6,523 |
| | 30,186 |
| | 82,011 |
| Total loans evaluated for impairment | $ | 45,839 |
| | $ | 6,557 |
| | $ | 30,567 |
| | $ | 82,963 |
|
| | | | | | | | | | | | | | | | | | 2018 | | Commercial | | Investor Real Estate | | Consumer | | Total | | (In millions) | Allowance for loan losses, January 1, 2018 | $ | 591 |
| | $ | 64 |
| | $ | 279 |
| | $ | 934 |
| Provision (credit) for loan losses | 32 |
| | (5 | ) | | 202 |
| | 229 |
| Loan losses: | | | | | | | | Charge-offs | (148 | ) | | (9 | ) | | (276 | ) | | (433 | ) | Recoveries | 45 |
| | 8 |
| | 57 |
| | 110 |
| Net loan losses | (103 | ) | | (1 | ) | | (219 | ) | | (323 | ) | Allowance for loan losses, December 31, 2018 | 520 |
| | 58 |
| | 262 |
| | 840 |
| Reserve for unfunded credit commitments, January 1, 2018 | 49 |
| | 4 |
| | — |
| | 53 |
| Provision (credit) for unfunded credit losses | (2 | ) | | — |
| | — |
| | (2 | ) | Reserve for unfunded credit commitments, December 31, 2018 | 47 |
| | 4 |
| | — |
| | 51 |
| Allowance for credit losses, December 31, 2018 | $ | 567 |
| | $ | 62 |
| | $ | 262 |
| | $ | 891 |
| Portion of ending allowance for loan losses: | | | | | | | | Individually evaluated for impairment | $ | 104 |
| | $ | 2 |
| | $ | 26 |
| | $ | 132 |
| Collectively evaluated for impairment | 416 |
| | 56 |
| | 236 |
| | 708 |
| Total allowance for loan losses | $ | 520 |
| | $ | 58 |
| | $ | 262 |
| | $ | 840 |
| Portion of loan portfolio ending balance: | | | | | | | | Individually evaluated for impairment | $ | 490 |
| | $ | 25 |
| | $ | 419 |
| | $ | 934 |
| Collectively evaluated for impairment | 44,725 |
| | 6,411 |
| | 31,082 |
| | 82,218 |
| Total loans evaluated for impairment | $ | 45,215 |
| | $ | 6,436 |
| | $ | 31,501 |
| | $ | 83,152 |
|
| | | | | | | | | | | | | | | | | | 2017 | | Commercial | | Investor Real Estate | | Consumer | | Total | | (In millions) | Allowance for loan losses, January 1, 2017 | $ | 753 |
| | $ | 85 |
| | $ | 253 |
| | $ | 1,091 |
| Provision (credit) for loan losses | (28 | ) | | (42 | ) | | 220 |
| | 150 |
| Loan losses: | | | | | | | | Charge-offs | (176 | ) | | (2 | ) | | (256 | ) | | (434 | ) | Recoveries | 42 |
| | 23 |
| | 62 |
| | 127 |
| Net loan losses | (134 | ) | | 21 |
| | (194 | ) | | (307 | ) | Allowance for loan losses, December 31, 2017 | 591 |
| | 64 |
| | 279 |
| | 934 |
| Reserve for unfunded credit commitments, January 1, 2017 | 64 |
| | 5 |
| | — |
| | 69 |
| Provision (credit) for unfunded credit losses | (15 | ) | | (1 | ) | | — |
| | (16 | ) | Reserve for unfunded credit commitments, December 31, 2017 | 49 |
| | 4 |
| | — |
| | 53 |
| Allowance for credit losses, December 31, 2017 | $ | 640 |
| | $ | 68 |
| | $ | 279 |
| | $ | 987 |
| Portion of ending allowance for loan losses: | | | | | | | | Individually evaluated for impairment | $ | 171 |
| | $ | 8 |
| | $ | 47 |
| | $ | 226 |
| Collectively evaluated for impairment | 420 |
| | 56 |
| | 232 |
| | 708 |
| Total allowance for loan losses | $ | 591 |
| | $ | 64 |
| | $ | 279 |
| | $ | 934 |
| Portion of loan portfolio ending balance: | | | | | | | | Individually evaluated for impairment | $ | 756 |
| | $ | 96 |
| | $ | 706 |
| | $ | 1,558 |
| Collectively evaluated for impairment | 41,884 |
| | 5,738 |
| | 30,767 |
| | 78,389 |
| Total loans evaluated for impairment | $ | 42,640 |
| | $ | 5,834 |
| | $ | 31,473 |
| | $ | 79,947 |
|
PORTFOLIO SEGMENT RISK FACTORS The following describe the risk characteristics relevant to each of the portfolio segments. Commercial—The commercial portfolio segment includes commercial and industrial loans to commercial customers for use in normal business operations to finance working capital needs, equipment purchases or other expansion projects. Commercial also includes owner-occupied commercial real estate mortgage loans to operating businesses, which are loans for long-term financing of land and buildings, and are repaid by cash flow generated by business operations. Owner-occupied construction loans are made to commercial businesses for the development of land or construction of a building where the repayment is derived from revenues generated from the business of the borrower. Collection risk in this portfolio is driven by the creditworthiness of underlying borrowers, particularly cash flow from customers’ business operations, and the sensitivity to market fluctuations in commodity prices. Investor Real Estate—Loans for real estate development are repaid through cash flow related to the operation, sale or refinance of the property. This portfolio segment includes extensions of credit to real estate developers or investors where repayment is dependent on the sale of real estate or income generated from the real estate collateral. A portion of Regions’ investor real estate portfolio segment consists of loans secured by residential product types (land, single-family and condominium loans) within Regions’ markets. Additionally, these loans are made to finance income-producing properties such as apartment buildings, office and industrial buildings, and retail shopping centers. Loans in this portfolio segment are particularly sensitive to the valuation of real estate. Consumer—The consumer portfolio segment includes residential first mortgage, home equity, indirect-vehicles, indirect-other consumer, consumer credit card, and other consumer loans. Residential first mortgage loans represent loans to consumers to finance a residence. These loans are typically financed over a 15 to 30 year term and, in most cases, are extended to borrowers to finance their primary residence. Home equity lending includes both home equity loans and lines of credit. This type of lending, which is secured by a first or second mortgage on the borrower’s residence, allows customers to borrow against the equity in their home. Real estate market values as of the time the loan or line is secured directly affect the amount of credit extended and, in addition, changes in these values impact the depth of potential losses. Indirect-vehicles lending, which is lending initiated through third-party business partners, largely consists of loans made through automotive dealerships. Regions decided in January 2019 to discontinue its indirect auto lending business. Indirect-other consumer lending includes other lending through third parties. Consumer credit card lending includes Regions branded consumer credit card accounts. Other consumer loans include other revolving consumer accounts, direct consumer loans, and overdrafts. Loans in this portfolio segment are sensitive to unemployment and other key consumer economic measures.
CREDIT QUALITY INDICATORS The following tables present credit quality indicators for the loan portfolio segments and classes, excluding loans held for sale, as of December 31, 2019 and 2018. Commercial and investor real estate portfolio segments are detailed by categories related to underlying credit quality and probability of default. Regions assigns these categories 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. These categories are utilized to develop the associated allowance for credit losses. | | • | Pass—includes obligations where the probability of default is considered low; |
| | • | Special Mention—includes obligations that have potential weakness that may, if not reversed or corrected, weaken the credit or inadequately protect the Company’s position at some future date. Obligations in this category may also be subject to economic or market conditions that may, in the future, have an adverse effect on debt service ability; |
| | • | Substandard Accrual—includes obligations that exhibit a well-defined weakness that presently jeopardizes debt repayment, even though they are currently performing. These obligations are characterized by the distinct possibility that the Company may incur a loss in the future if these weaknesses are not corrected; |
| | • | Non-accrual—includes obligations where management has determined that full payment of principal and interest is in doubt. |
Substandard accrual and non-accrual loans are often collectively referred to as “classified.” Special mention, substandard accrual, and non-accrual loans are often collectively referred to as “criticized and classified.” Classes in the consumer portfolio segment are disaggregated by accrual status.
| | | | | | | | | | | | | | | | | | | | | | 2019 | | Pass | | Special Mention | | Substandard Accrual | | Non-accrual | | Total | | (In millions) | Commercial and industrial | $ | 38,318 |
| | $ | 598 |
| | $ | 708 |
| | $ | 347 |
| | $ | 39,971 |
| Commercial real estate mortgage—owner-occupied | 5,183 |
| | 110 |
| | 171 |
| | 73 |
| | 5,537 |
| Commercial real estate construction—owner-occupied | 304 |
| | 5 |
| | 11 |
| | 11 |
| | 331 |
| Total commercial | $ | 43,805 |
| | $ | 713 |
| | $ | 890 |
| | $ | 431 |
| | $ | 45,839 |
| Commercial investor real estate mortgage | $ | 4,738 |
| | $ | 171 |
| | $ | 25 |
| | $ | 2 |
| | $ | 4,936 |
| Commercial investor real estate construction | 1,602 |
| | 5 |
| | 14 |
| | — |
| | 1,621 |
| Total investor real estate | $ | 6,340 |
| | $ | 176 |
| | $ | 39 |
| | $ | 2 |
| | $ | 6,557 |
| | | | | | | | | | | | | | | | Accrual | | Non-accrual | | Total | | | | | | (In millions) | Residential first mortgage | | | | | $ | 14,458 |
| | $ | 27 |
| | $ | 14,485 |
| Home equity | | | | | 8,337 |
| | 47 |
| | 8,384 |
| Indirect—vehicles | | | | | 1,812 |
| | — |
| | 1,812 |
| Indirect—other consumer | | | | | 3,249 |
| | — |
| | 3,249 |
| Consumer credit card | | | | | 1,387 |
| | — |
| | 1,387 |
| Other consumer | | | | | 1,250 |
| | — |
| | 1,250 |
| Total consumer | | | | | $ | 30,493 |
| | $ | 74 |
| | $ | 30,567 |
| | | | | | | | | | $ | 82,963 |
|
| | | | | | | | | | | | | | | | | | | | | | 2018 | | Pass | | Special Mention | | Substandard Accrual | | Non-accrual | | Total | | (In millions) | Commercial and industrial | $ | 37,963 |
| | $ | 666 |
| | $ | 346 |
| | $ | 307 |
| | $ | 39,282 |
| Commercial real estate mortgage—owner-occupied | 5,193 |
| | 208 |
| | 81 |
| | 67 |
| | 5,549 |
| Commercial real estate construction—owner-occupied | 356 |
| | 7 |
| | 13 |
| | 8 |
| | 384 |
| Total commercial | $ | 43,512 |
| | $ | 881 |
| | $ | 440 |
| | $ | 382 |
| | $ | 45,215 |
| Commercial investor real estate mortgage | $ | 4,444 |
| | $ | 52 |
| | $ | 143 |
| | $ | 11 |
| | $ | 4,650 |
| Commercial investor real estate construction | 1,773 |
| | 6 |
| | 7 |
| | — |
| | 1,786 |
| Total investor real estate | $ | 6,217 |
| | $ | 58 |
| | $ | 150 |
| | $ | 11 |
| | $ | 6,436 |
| | | | | | | | | | | | | | | | Accrual | | Non-accrual | | Total | | | | | | (In millions) | Residential first mortgage | | | | | $ | 14,236 |
| | $ | 40 |
| | $ | 14,276 |
| Home equity | | | | | 9,194 |
| | 63 |
| | 9,257 |
| Indirect—vehicles | | | | | 3,053 |
| | — |
| | 3,053 |
| Indirect—other consumer | | | | | 2,349 |
| | — |
| | 2,349 |
| Consumer credit card | | | | | 1,345 |
| | — |
| | 1,345 |
| Other consumer | | | | | 1,221 |
| | — |
| | 1,221 |
| Total consumer | | | | | $ | 31,398 |
| | $ | 103 |
| | $ | 31,501 |
| | | | | | | | | | $ | 83,152 |
|
AGING ANALYSIS The following tables include an aging analysis of DPD for each portfolio segment and class as of December 31, 2019 and 2018: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2019 | | Accrual Loans | | | | | | | | 30-59 DPD | | 60-89 DPD | | 90+ DPD | | Total 30+ DPD | | Total Accrual | | Non-accrual | | Total | | (In millions) | Commercial and industrial | $ | 30 |
| | $ | 21 |
| | $ | 11 |
| | $ | 62 |
| | $ | 39,624 |
| | $ | 347 |
| | $ | 39,971 |
| Commercial real estate mortgage—owner-occupied | 11 |
| | 3 |
| | 1 |
| | 15 |
| | 5,464 |
| | 73 |
| | 5,537 |
| Commercial real estate construction—owner-occupied | 2 |
| | — |
| | — |
| | 2 |
| | 320 |
| | 11 |
| | 331 |
| Total commercial | 43 |
| | 24 |
| | 12 |
| | 79 |
| | 45,408 |
| | 431 |
| | 45,839 |
| Commercial investor real estate mortgage | 1 |
| | 1 |
| | — |
| | 2 |
| | 4,934 |
| | 2 |
| | 4,936 |
| Commercial investor real estate construction | — |
| | — |
| | — |
| | — |
| | 1,621 |
| | — |
| | 1,621 |
| Total investor real estate | 1 |
| | 1 |
| | — |
| | 2 |
| | 6,555 |
| | 2 |
| | 6,557 |
| Residential first mortgage | 83 |
| | 47 |
| | 136 |
| | 266 |
| | 14,458 |
| | 27 |
| | 14,485 |
| Home equity | 42 |
| | 18 |
| | 42 |
| | 102 |
| | 8,337 |
| | 47 |
| | 8,384 |
| Indirect—vehicles | 31 |
| | 10 |
| | 7 |
| | 48 |
| | 1,812 |
| | — |
| | 1,812 |
| Indirect—other consumer | 16 |
| | 9 |
| | 3 |
| | 28 |
| | 3,249 |
| | — |
| | 3,249 |
| Consumer credit card | 11 |
| | 8 |
| | 19 |
| | 38 |
| | 1,387 |
| | — |
| | 1,387 |
| Other consumer | 13 |
| | 5 |
| | 5 |
| | 23 |
| | 1,250 |
| | — |
| | 1,250 |
| Total consumer | 196 |
| | 97 |
| | 212 |
| | 505 |
| | 30,493 |
| | 74 |
| | 30,567 |
| | $ | 240 |
| | $ | 122 |
| | $ | 224 |
| | $ | 586 |
| | $ | 82,456 |
| | $ | 507 |
| | $ | 82,963 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2018 | | Accrual Loans | | | | | | | | 30-59 DPD | | 60-89 DPD | | 90+ DPD | | Total 30+ DPD | | Total Accrual | | Non-accrual | | Total | | (In millions) | Commercial and industrial | $ | 80 |
| | $ | 22 |
| | $ | 8 |
| | $ | 110 |
| | $ | 38,975 |
| | $ | 307 |
| | $ | 39,282 |
| Commercial real estate mortgage—owner-occupied | 12 |
| | 7 |
| | — |
| | 19 |
| | 5,482 |
| | 67 |
| | 5,549 |
| Commercial real estate construction—owner-occupied | — |
| | — |
| | — |
| | — |
| | 376 |
| | 8 |
| | 384 |
| Total commercial | 92 |
| | 29 |
| | 8 |
| | 129 |
| | 44,833 |
| | 382 |
| | 45,215 |
| Commercial investor real estate mortgage | 6 |
| | — |
| | — |
| | 6 |
| | 4,639 |
| | 11 |
| | 4,650 |
| Commercial investor real estate construction | — |
| | — |
| | — |
| | — |
| | 1,786 |
| | — |
| | 1,786 |
| Total investor real estate | 6 |
| | — |
| | — |
| | 6 |
| | 6,425 |
| | 11 |
| | 6,436 |
| Residential first mortgage | 85 |
| | 53 |
| | 150 |
| | 288 |
| | 14,236 |
| | 40 |
| | 14,276 |
| Home equity | 47 |
| | 26 |
| | 34 |
| | 107 |
| | 9,194 |
| | 63 |
| | 9,257 |
| Indirect—vehicles | 40 |
| | 11 |
| | 9 |
| | 60 |
| | 3,053 |
| | — |
| | 3,053 |
| Indirect—other consumer | 13 |
| | 7 |
| | 1 |
| | 21 |
| | 2,349 |
| | — |
| | 2,349 |
| Consumer credit card | 12 |
| | 9 |
| | 20 |
| | 41 |
| | 1,345 |
| | — |
| | 1,345 |
| Other consumer | 15 |
| | 5 |
| | 5 |
| | 25 |
| | 1,221 |
| | — |
| | 1,221 |
| Total consumer | 212 |
| | 111 |
| | 219 |
| | 542 |
| | 31,398 |
| | 103 |
| | 31,501 |
| | $ | 310 |
| | $ | 140 |
| | $ | 227 |
| | $ | 677 |
| | $ | 82,656 |
| | $ | 496 |
| | $ | 83,152 |
|
IMPAIRED LOANS The following tables present details related to the Company’s impaired loans as of December 31, 2019 and 2018. Loans deemed to be impaired include all TDRs and all non-accrual commercial and investor real estate loans, excluding leases. Loans that have been fully charged-off do not appear in the tables below. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Non-accrual Impaired Loans 2019 | | | | | | Book Value(3) | | | | | | Unpaid Principal Balance(1) | | Charge-offs and Payments Applied(2) | | Total Impaired Loans on Non-accrual Status | | Impaired Loans on Non-accrual Status with No Related Allowance | | Impaired Loans on Non-accrual Status with Related Allowance | | Related Allowance for Loan Losses | | Coverage %(4) | | (Dollars in millions) | Commercial and industrial | $ | 444 |
| | $ | 97 |
| | $ | 347 |
| | $ | 66 |
| | $ | 281 |
| | $ | 80 |
| | 39.9 | % | Commercial real estate mortgage—owner-occupied | 83 |
| | 10 |
| | 73 |
| | 8 |
| | 65 |
| | 20 |
| | 36.1 |
| Commercial real estate construction—owner-occupied | 13 |
| | 2 |
| | 11 |
| | 3 |
| | 8 |
| | 5 |
| | 53.8 |
| Total commercial | 540 |
| | 109 |
| | 431 |
| | 77 |
| | 354 |
| | 105 |
| | 39.6 |
| Commercial investor real estate mortgage | 2 |
| | — |
| | 2 |
| | — |
| | 2 |
| | 1 |
| | 50.0 |
| Total investor real estate | 2 |
| | — |
| | 2 |
| | — |
| | 2 |
| | 1 |
| | 50.0 |
| Residential first mortgage | 23 |
| | 7 |
| | 16 |
| | — |
| | 16 |
| | 2 |
| | 39.1 |
| Home equity | 6 |
| | 1 |
| | 5 |
| | — |
| | 5 |
| | — |
| | 16.7 |
| Total consumer | 29 |
| | 8 |
| | 21 |
| | — |
| | 21 |
| | 2 |
| | 34.5 |
| | $ | 571 |
| | $ | 117 |
| | $ | 454 |
| | $ | 77 |
| | $ | 377 |
| | $ | 108 |
| | 39.4 | % |
| | | | | | | | | | | | | | | | | | | | | Accruing Impaired Loans 2019 | | Unpaid Principal Balance(1) | | Charge-offs and Payments Applied(2) | | Book Value(3) | | Related Allowance for Loan Losses | | Coverage %(4) | | (Dollars in millions) | Commercial and industrial | $ | 93 |
| | $ | 1 |
| | $ | 92 |
| | $ | 14 |
| | 16.1 | % | Commercial real estate mortgage—owner-occupied | 15 |
| | 1 |
| | 14 |
| | 1 |
| | 13.3 |
| Total commercial | 108 |
| | 2 |
| | 106 |
| | 15 |
| | 15.7 |
| Commercial investor real estate mortgage | 25 |
| | 3 |
| | 22 |
| | 1 |
| | 16.0 |
| Commercial investor real estate construction | 10 |
| | — |
| | 10 |
| | 2 |
| | 20.0 |
| Total investor real estate | 35 |
| | 3 |
| | 32 |
| | 3 |
| | 17.1 |
| Residential first mortgage | 210 |
| | 9 |
| | 201 |
| | 20 |
| | 13.8 |
| Home equity | 154 |
| | — |
| | 154 |
| | 7 |
| | 4.5 |
| Consumer credit card | 1 |
| | — |
| | 1 |
| | — |
| | — |
| Other consumer | 4 |
| | — |
| | 4 |
| | — |
| | — |
| Total consumer | 369 |
| | 9 |
| | 360 |
| | 27 |
| | 9.8 |
| | $ | 512 |
| | $ | 14 |
| | $ | 498 |
| | $ | 45 |
| | 11.5 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total Impaired Loans 2019 | | | | | | Book Value(3) | | | | | | Unpaid Principal Balance(1) | | Charge-offs and Payments Applied(2) | | Total Impaired Loans | | Impaired Loans with No Related Allowance | | Impaired Loans with Related Allowance | | Related Allowance for Loan Losses | | Coverage %(4) | | (Dollars in millions) | Commercial and industrial | $ | 537 |
| | $ | 98 |
| | $ | 439 |
| | $ | 66 |
| | $ | 373 |
| | $ | 94 |
| | 35.8 | % | Commercial real estate mortgage—owner-occupied | 98 |
| | 11 |
| | 87 |
| | 8 |
| | 79 |
| | 21 |
| | 32.7 |
| Commercial real estate construction—owner-occupied | 13 |
| | 2 |
| | 11 |
| | 3 |
| | 8 |
| | 5 |
| | 53.8 |
| Total commercial | 648 |
| | 111 |
| | 537 |
| | 77 |
| | 460 |
| | 120 |
| | 35.6 |
| Commercial investor real estate mortgage | 27 |
| | 3 |
| | 24 |
| | — |
| | 24 |
| | 2 |
| | 18.5 |
| Commercial investor real estate construction | 10 |
| | — |
| | 10 |
| | — |
| | 10 |
| | 2 |
| | 20.0 |
| Total investor real estate | 37 |
| | 3 |
| | 34 |
| | — |
| | 34 |
| | 4 |
| | 18.9 |
| Residential first mortgage | 233 |
| | 16 |
| | 217 |
| | — |
| | 217 |
| | 22 |
| | 16.3 |
| Home equity | 160 |
| | 1 |
| | 159 |
| | — |
| | 159 |
| | 7 |
| | 5.0 |
| Consumer credit card | 1 |
| | — |
| | 1 |
| | — |
| | 1 |
| | — |
| | — |
| Other consumer | 4 |
| | — |
| | 4 |
| | — |
| | 4 |
| | — |
| | — |
| Total consumer | 398 |
| | 17 |
| | 381 |
| | — |
| | 381 |
| | 29 |
| | 11.6 |
| | $ | 1,083 |
| | $ | 131 |
| | $ | 952 |
| | $ | 77 |
| | $ | 875 |
| | $ | 153 |
| | 26.2 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Non-accrual Impaired Loans 2018 | | | | | | Book Value(3) | | | | | | Unpaid Principal Balance(1) | | Charge-offs and Payments Applied(2) | | Total Impaired Loans on Non-accrual Status | | Impaired Loans on Non-accrual Status with No Related Allowance | | Impaired Loans on Non-accrual Status with Related Allowance | | Related Allowance for Loan Losses | | Coverage %(4) | | (Dollars in millions) | Commercial and industrial | $ | 384 |
| | $ | 77 |
| | $ | 307 |
| | $ | 113 |
| | $ | 194 |
| | $ | 62 |
| | 36.2 | % | Commercial real estate mortgage—owner-occupied | 76 |
| | 9 |
| | 67 |
| | 13 |
| | 54 |
| | 23 |
| | 42.1 |
| Commercial real estate construction—owner-occupied | 9 |
| | 1 |
| | 8 |
| | — |
| | 8 |
| | 3 |
| | 44.4 |
| Total commercial | 469 |
| | 87 |
| | 382 |
| | 126 |
| | 256 |
| | 88 |
| | 37.3 |
| Commercial investor real estate mortgage | 11 |
| | — |
| | 11 |
| | 4 |
| | 7 |
| | 1 |
| | 9.1 |
| Total investor real estate | 11 |
| | — |
| | 11 |
| | 4 |
| | 7 |
| | 1 |
| | 9.1 |
| Residential first mortgage | 31 |
| | 8 |
| | 23 |
| | — |
| | 23 |
| | 2 |
| | 32.3 |
| Home equity | 11 |
| | 2 |
| | 9 |
| | — |
| | 9 |
| | — |
| | 18.2 |
| Total consumer | 42 |
| | 10 |
| | 32 |
| | — |
| | 32 |
| | 2 |
| | 28.6 |
| | $ | 522 |
| | $ | 97 |
| | $ | 425 |
| | $ | 130 |
| | $ | 295 |
| | $ | 91 |
| | 36.0 | % |
| | | | | | | | | | | | | | | | | | | | | Accruing Impaired Loans 2018 | | Unpaid Principal Balance(1) | | Charge-offs and Payments Applied(2) | | Book Value(3) | | Related Allowance for Loan Losses | | Coverage %(4) | | (Dollars in millions) | Commercial and industrial | $ | 84 |
| | $ | — |
| | $ | 84 |
| | $ | 14 |
| | 16.7 | % | Commercial real estate mortgage—owner-occupied | 26 |
| | 2 |
| | 24 |
| | 2 |
| | 15.4 |
| Total commercial | 110 |
| | 2 |
| | 108 |
| | 16 |
| | 16.4 |
| Commercial investor real estate mortgage | 15 |
| | 1 |
| | 14 |
| | 1 |
| | 13.3 |
| Total investor real estate | 15 |
| | 1 |
| | 14 |
| | 1 |
| | 13.3 |
| Residential first mortgage | 194 |
| | 9 |
| | 185 |
| | 18 |
| | 13.9 |
| Home equity | 195 |
| | — |
| | 195 |
| | 6 |
| | 3.1 |
| Consumer credit card | 1 |
| | — |
| | 1 |
| | — |
| | — |
| Other consumer | 6 |
| | — |
| | 6 |
| | — |
| | — |
| Total consumer | 396 |
| | 9 |
| | 387 |
| | 24 |
| | 8.3 |
| | $ | 521 |
| | $ | 12 |
| | $ | 509 |
| | $ | 41 |
| | 10.2 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total Impaired Loans 2018 | | | | | | Book Value(3) | | | | | | Unpaid Principal Balance(1) | | Charge-offs and Payments Applied(2) | | Total Impaired Loans | | Impaired Loans with No Related Allowance | | Impaired Loans with Related Allowance | | Related Allowance for Loan Losses | | Coverage %(4) | | (Dollars in millions) | Commercial and industrial | $ | 468 |
| | $ | 77 |
| | $ | 391 |
| | $ | 113 |
| | $ | 278 |
| | $ | 76 |
| | 32.7 | % | Commercial real estate mortgage—owner-occupied | 102 |
| | 11 |
| | 91 |
| | 13 |
| | 78 |
| | 25 |
| | 35.3 |
| Commercial real estate construction—owner-occupied | 9 |
| | 1 |
| | 8 |
| | — |
| | 8 |
| | 3 |
| | 44.4 |
| Total commercial | 579 |
| | 89 |
| | 490 |
| | 126 |
| | 364 |
| | 104 |
| | 33.3 |
| Commercial investor real estate mortgage | 26 |
| | 1 |
| | 25 |
| | 4 |
| | 21 |
| | 2 |
| | 11.5 |
| Total investor real estate | 26 |
| | 1 |
| | 25 |
| | 4 |
| | 21 |
| | 2 |
| | 11.5 |
| Residential first mortgage | 225 |
| | 17 |
| | 208 |
| | — |
| | 208 |
| | 20 |
| | 16.4 |
| Home equity | 206 |
| | 2 |
| | 204 |
| | — |
| | 204 |
| | 6 |
| | 3.9 |
| Consumer credit card | 1 |
| | — |
| | 1 |
| | — |
| | 1 |
| | — |
| | — |
| Other consumer | 6 |
| | — |
| | 6 |
| | — |
| | 6 |
| | — |
| | — |
| Total consumer | 438 |
| | 19 |
| | 419 |
| | — |
| | 419 |
| | 26 |
| | 10.3 |
| | $ | 1,043 |
| | $ | 109 |
| | $ | 934 |
| | $ | 130 |
| | $ | 804 |
| | $ | 132 |
| | 23.1 | % |
_________ | | (1) | Unpaid principal balance represents the contractual obligation due from the customer and includes the net book value plus charge-offs and payments applied. |
| | (2) | Charge-offs and payments applied represents cumulative partial charge-offs taken, as well as interest payments received that have been applied against the outstanding principal balance. |
| | (3) | Book value represents the unpaid principal balance less charge-offs and payments applied; it is shown before any allowance for loan losses. |
| | (4) | Coverage % represents charge-offs and payments applied plus the related allowance as a percent of the unpaid principal balance. |
The following table presents the average balances of total impaired loans and interest income for the years ended December 31, 2019, 2018 and 2017. Interest income recognized represents interest on accruing loans modified in a TDR. | | | | | | | | | | | | | | | | | | | | | | | | | | 2019 | | 2018 | | 2017 | | Average
Balance | | Interest
Income
Recognized | | Average
Balance | | Interest
Income
Recognized | | Average
Balance | | Interest
Income
Recognized | | (In millions) | Commercial and industrial | $ | 409 |
| | $ | 5 |
| | $ | 486 |
| | $ | 9 |
| | $ | 747 |
| | $ | 12 |
| Commercial real estate mortgage—owner-occupied | 88 |
| | 1 |
| | 131 |
| | 6 |
| | 226 |
| | 5 |
| Commercial real estate construction—owner-occupied | 14 |
| | — |
| | 7 |
| | — |
| | 5 |
| | — |
| Total commercial | 511 |
| | 6 |
| | 624 |
| | 15 |
| | 978 |
| | 17 |
| Commercial investor real estate mortgage | 22 |
| | 2 |
| | 61 |
| | 3 |
| | 81 |
| | 4 |
| Commercial investor real estate construction | 5 |
| | — |
| | 7 |
| | — |
| | 39 |
| | 2 |
| Total investor real estate | 27 |
| | 2 |
| | 68 |
| | 3 |
| | 120 |
| | 6 |
| Residential first mortgage | 214 |
| | 8 |
| | 230 |
| | 8 |
| | 450 |
| | 15 |
| Home equity | 180 |
| | 10 |
| | 230 |
| | 12 |
| | 280 |
| | 14 |
| Indirect—vehicles | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| Consumer credit card | 1 |
| | — |
| | 1 |
| | — |
| | 2 |
| | — |
| Other consumer | 5 |
| | — |
| | 7 |
| | — |
| | 9 |
| | 1 |
| Total consumer | 400 |
| | 18 |
| | 468 |
| | 20 |
| | 741 |
| | 30 |
| Total impaired loans | $ | 938 |
| | $ | 26 |
| | $ | 1,160 |
| | $ | 38 |
| | $ | 1,839 |
| | $ | 53 |
|
TROUBLED DEBT RESTRUCTURINGS Regions regularly modifies commercial and investor real estate loans in order to facilitate a workout strategy. Typical modifications include accommodations, such as renewals and forbearances. The majority of Regions’ commercial and investor real estate TDRs are the result of renewals of classified loans at an interest rate that is not considered to be a market interest rate. For smaller dollar commercial loans, Regions may periodically grant interest rate and other term concessions, similar to those under the consumer program described below. Regions works to meet the individual needs of consumer borrowers to stem foreclosure 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. Modification may be offered to any borrower experiencing financial hardship regardless of the borrower’s payment status. Consumer TDRs primarily involve an interest rate concession, however under the CAP, Regions may also offer a short-term deferral, a term extension, a new loan product, or a combination of these options. For loans restructured under the CAP, Regions expects to collect the original contractually due principal. The gross original contractual interest may be collectible, depending on the terms modified. All CAP modifications are considered TDRs regardless of the term because they are concessionary in nature and because the customer documents a financial hardship in order to participate. As noted above, the majority of Regions’ TDRs are results of interest rate concessions and not a forgiveness of principal. Accordingly, the financial impact of the modifications is best illustrated by the impact to the allowance calculation at the loan or pool level, as a result of the loans being considered impaired due to their TDR status. Regions most often does not record a charge-off at the modification date. The following tables present the end of period balance for loans modified in a TDR during the periods presented by portfolio segment and class, and the financial impact of those modifications. The tables include modifications made to new TDRs, as well as renewals of existing TDRs. Loans first reported as TDRs for the years ended December 31, 2019 and 2018 totaled approximately $239 million and $374 million, respectively.
| | | | | | | | | | | | 2019 | | | | | | Financial Impact of Modifications Considered TDRs | | Number of Obligors | | Recorded Investment | | Increase in Allowance at Modification | | (Dollars in millions) | Commercial and industrial | 97 | | $ | 259 |
| | $ | 3 |
| Commercial real estate mortgage—owner-occupied | 51 | | 29 |
| | — |
| Commercial real estate construction—owner-occupied | 1 | | 2 |
| | — |
| Total commercial | 149 | | 290 |
| | 3 |
| Commercial investor real estate mortgage | 12 | | 26 |
| | — |
| Commercial investor real estate construction | 12 | | 18 |
| | 2 |
| Total investor real estate | 24 | | 44 |
| | 2 |
| Residential first mortgage | 159 | | 32 |
| | 4 |
| Home equity | 99 | | 7 |
| | — |
| Consumer credit card | 37 | | — |
| | — |
| Indirect—vehicles and other consumer | 75 | | 1 |
| | — |
| Total consumer | 370 | | 40 |
| | 4 |
| | 543 | | $ | 374 |
| | $ | 9 |
|
| | | | | | | | | | | | 2018 | | | | | | Financial Impact of Modifications Considered TDRs | | Number of Obligors | | Recorded Investment | | Increase in Allowance at Modification | | (Dollars in millions) | Commercial and industrial | 113 | | $ | 353 |
| | $ | 5 |
| Commercial real estate mortgage—owner-occupied | 67 | | 42 |
| | — |
| Commercial real estate construction—owner-occupied | 1 | | 2 |
| | — |
| Total commercial | 181 | | 397 |
| | 5 |
| Commercial investor real estate mortgage | 25 | | 76 |
| | 3 |
| Total investor real estate | 25 | | 76 |
| | 3 |
| Residential first mortgage | 184 | | 31 |
| | 4 |
| Home equity | 106 | | 7 |
| | — |
| Consumer credit card | 54 | | 1 |
| | — |
| Indirect—vehicles and other consumer | 77 | | 1 |
| | — |
| Total consumer | 421 | | 40 |
| | 4 |
| | 627 | | $ | 513 |
| | $ | 12 |
|
|