Regions Bank 2008 Annual Report Download - page 108

REGIONS FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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
primarily in Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Mississippi,
Missouri, North Carolina, South Carolina, Tennessee, Texas and Virginia. The Company is subject to
competition from other financial institutions, is subject to the regulations of certain government agencies and
undergoes periodic examinations by those regulatory authorities.
The accounting and reporting policies of Regions and the methods of applying those policies that materially
affect the accompanying consolidated financial statements conform with accounting principles generally
accepted in the United States (“GAAP”) and with general financial services industry practices. In preparing the
financial statements, management is required to make estimates and assumptions that affect the reported amounts
of assets and liabilities as of the balance sheet dates and revenues and expenses for the periods shown. Actual
results could differ from the estimates and assumptions used in the consolidated financial statements including,
but not limited to, the estimates and assumptions related to the allowance for credit losses, intangibles, mortgage
servicing rights and income taxes.
BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of Regions, its subsidiaries and certain variable
interest entities (“VIEs”). Significant intercompany balances and transactions have been eliminated. Certain
amounts in prior-year financial statements have been reclassified to conform to the current year presentation,
except as otherwise noted. These reclassifications are immaterial and have no effect on net income (loss), total
assets or stockholders’ equity. Regions considers a voting rights entity to be a subsidiary and consolidates it if
Regions has a controlling financial interest in the entity. VIEs are consolidated if Regions is exposed to the
majority of the VIEs’ expected losses and/or residual returns (i.e., Regions is considered to be the primary
beneficiary). Unconsolidated investments in voting rights entities or VIEs in which Regions has significant
influence over operating and financing decisions (usually defined as a voting or economic interest of 20% to
50%) are accounted for using the equity method. Unconsolidated investments in voting rights entities or VIEs in
which Regions has a voting or economic interest of less than 20% are generally carried at cost. See Note 2 for
further discussion of VIEs.
CASH AND CASH FLOWS
Cash equivalents include cash and due from banks, interest-bearing deposits in other banks, and federal
funds sold and securities purchased under agreements to resell (which have a life of 90 days or less). Cash flows
from loans, either originated or acquired, are classified at that time according to management’s original intent to
either sell or hold the loan for the foreseeable future. When management’s intent is to sell the loan, the cash
flows of that loan are presented as operating cash flows. When management’s intent is to hold the loan for the
foreseeable future, the cash flows of that loan are presented as investing cash flows.
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