Regions Bank 2008 Annual Report Download - page 120

in other assets. Interest expense on the junior subordinated debentures is reported in interest expense on long-
term borrowings. For regulatory reporting and capital adequacy purposes, the Federal Reserve Board has
indicated that such trust preferred securities will continue to constitute Tier 1 Capital until further notice.
Regions periodically invests in various limited partnerships that sponsor affordable housing projects, which
are funded through a combination of debt and equity with equity typically comprising 30% to 50% of the total
partnerships’ capital. These partnerships meet the definition of a VIE. Due to the nature of the management
activities of the general partner, Regions is not the primary beneficiary of these partnerships. Regions’ equity
method investments as of December 31, 2008 and 2007 were $710.0 million and $457.3 million, respectively,
which are included in other assets. Regions reports its equity share of the partnership gains and losses as an
adjustment to non-interest income. The Company also receives credits toward its federal income tax liabilities,
which are reported as a reduction of income tax expense (or increase to income tax benefit) and a reduction of
federal income taxes payable. Unfunded commitments to the partnerships included in other liabilities were
$298.1 million and $156.8 million, respectively. Additionally, Regions has short-term construction loans or
letters of credit with certain of the partnerships totaling $187.7 million and $68.9 million as of December 31,
2008 and 2007, respectively. The portion of the letters of credit which was funded was $114.8 million and $49.6
million, at December 31, 2008 and 2007, respectively. The funded portion is classified with commercial loans on
the consolidated balance sheets.
NOTE 3. BUSINESS COMBINATIONS AND ASSETS HELD FOR SALE
On November 4, 2006, Regions completed its merger with AmSouth Bancorporation (“AmSouth”),
headquartered in Birmingham, Alabama. Regions’ consolidated financial statements include the results of
operations of acquired companies only from their respective dates of acquisition. The following unaudited
summary information presents the consolidated results of operations of Regions on a pro forma basis for the year
ended December 31, 2006 as if AmSouth had been acquired on January 1, 2006. The pro forma summary
information does not necessarily reflect the results of operations that would have occurred if the acquisition had
occurred at the beginning of the period presented, or of results which may occur in the future.
Unaudited Amounts as of
December 31, 2006
(In thousands, except per
share data)
Net interest income .......................................... $4,809,582
Provision for loan losses ..................................... 235,173
Net interest income after provision for loan losses ................. 4,574,409
Non-interest income ......................................... 2,625,456
Non-interest expense ........................................ 4,524,482
Income before income taxes from continuing operations ............ 2,675,383
Income taxes ............................................... 849,071
Income from continuing operations ......................... 1,826,312
Discontinued operations (Note 4):
Loss from discontinued operations before income taxes ......... (32,606)
Income tax benefit ...................................... (13,230)
Loss from discontinued operations, net of taxes ............... (19,376)
Net income ................................................ $1,806,936
Weighted-average number of shares outstanding:
Basic ................................................. 732,594
Diluted ............................................... 737,902
Earnings per share from continuing operations:
Basic ................................................. $ 2.49
Diluted ............................................... 2.48
Earnings per share:
Basic ................................................. 2.47
Diluted ............................................... 2.45
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