v3.19.3.a.u2
Regulatory Capital Requirements and Restrictions
 12 Months Ended
Dec. 31, 2019
Banking and Thrift [Abstract]  
Regulatory Capital Requirements and Restrictions
Regions and Regions Bank are required to comply with regulatory capital requirements established by Federal and State banking agencies. These regulatory capital requirements involve quantitative measures of the Company’s assets, liabilities and certain off-balance sheet items, and also qualitative judgments by the regulators. Failure to meet minimum capital requirements can subject the Company to a series of increasingly restrictive regulatory actions. Banking regulations identify five capital categories: well-capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized. At December 31, 2019 and 2018, Regions and Regions Bank exceeded all current regulatory requirements, and were classified as "well-capitalized." Management believes that no events or changes have occurred subsequent to December 31, 2019 that would change this designation.
Quantitative measures established by regulation to ensure capital adequacy require institutions to maintain minimum ratios of common equity Tier 1, Tier 1, and Total capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital to average tangible assets (the "Leverage" ratio).
The following tables summarize the applicable holding company and bank regulatory capital requirements:
 
December 31, 2019 (1)
 
Minimum Requirement
 
To Be Well
Capitalized
 
Amount
 
Ratio
 
Transitional Basis Basel III Regulatory Capital Rules
(Dollars in millions)
Basel III common equity Tier 1 capital:
 
 
 
 
 
 
 
Regions Financial Corporation
$
10,228

 
9.68
%
 
4.50
%
 
N/A

Regions Bank
12,212

 
11.58

 
4.50

 
6.50
%
Tier 1 capital:
 
 
 
 
 
 
 
Regions Financial Corporation
$
11,537

 
10.91
%
 
6.00
%
 
6.00
%
Regions Bank
12,212

 
11.58

 
6.00

 
8.00

Total capital:
 
 
 
 
 
 
 
Regions Financial Corporation
$
13,406

 
12.68
%
 
8.00
%
 
10.00
%
Regions Bank
13,621

 
12.92

 
8.00

 
10.00

Leverage capital:
 
 
 
 
 
 
 
Regions Financial Corporation
$
11,537

 
9.65
%
 
4.00
%
 
N/A

Regions Bank
12,212

 
10.24

 
4.00

 
5.00
%

 
December 31, 2018
 
Minimum Requirement
 
To Be Well
Capitalized
 
Amount
 
Ratio
 
Transitional Basis Basel III Regulatory Capital Rules
(Dollars in millions)
Basel III common equity Tier 1 capital:
 
 
 
 
 
 
 
Regions Financial Corporation
$
10,371

 
9.90
%
 
4.50
%
 
N/A

Regions Bank
12,109

 
11.59

 
4.50

 
6.50
%
Tier 1 capital:
 
 
 
 
 
 
 
Regions Financial Corporation
$
11,190

 
10.68
%
 
6.00
%
 
6.00
%
Regions Bank
12,109

 
11.59

 
6.00

 
8.00

Total capital:
 
 
 
 
 
 
 
Regions Financial Corporation
$
13,056

 
12.46
%
 
8.00
%
 
10.00
%
Regions Bank
13,494

 
12.92

 
8.00

 
10.00

Leverage capital:
 
 
 
 
 
 
 
Regions Financial Corporation
$
11,190

 
9.32
%
 
4.00
%
 
N/A

Regions Bank
12,109

 
10.12

 
4.00

 
5.00
%

 _________
(1) The 2019 Basel III CET1 capital, Tier 1 capital, Total capital, and Leverage capital ratios are estimated.
Substantially all net assets are owned by subsidiaries. The primary source of operating cash available to Regions is provided by dividends from subsidiaries. Statutory limits are placed on the amount of dividends the subsidiary bank can pay without prior regulatory approval. In addition, regulatory authorities require the maintenance of minimum capital-to-asset ratios at banking subsidiaries. Under the Federal Reserve’s Regulation H, Regions Bank may not, without approval of the Federal Reserve, declare or pay a dividend to Regions if the total of all dividends declared in a calendar year exceeds the total of (a) Regions Bank’s net income for that year and (b) its retained net income for the preceding two calendar years, less any required transfers to additional paid-in capital or to a fund for the retirement of preferred stock. Under Alabama law, Regions Bank may not pay a dividend to Regions in excess of 90 percent of its net earnings until the bank’s surplus is equal to at least 20 percent of capital. Regions Bank is also required by Alabama law to seek the approval of the Alabama Superintendent of Banking prior to paying a dividend to Regions if the total of all dividends declared by Regions Bank in any calendar year will exceed the total of (a) Regions Bank’s net earnings for that year, plus (b) its retained net earnings for the preceding two years, less any required transfers to surplus. The statute defines net earnings as “the remainder of all earnings from current operations plus actual recoveries on loans and investments and other assets, after deducting from the total thereof all current operating expenses, actual losses, accrued dividends on preferred
stock, if any, and all federal, state and local taxes.” In addition to dividend restrictions, Federal statutes also prohibit unsecured loans from banking subsidiaries to the parent company.
In addition, Regions must adhere to various HUD regulatory guidelines including required minimum capital to maintain their HUD approved status. Failure to comply with the HUD guidelines could result in withdrawal of this certification. As of December 31, 2019, Regions was in compliance with HUD guidelines. Regions is also subject to various capital requirements by secondary market investors.