Regions Bank 2008 Annual Report Download - page 69

Non-interest-bearing deposits remained relatively unchanged versus the prior year, increasing by $39.4
million in 2008. Movement of balances to interest-bearing offerings, including Regions’ money market accounts
and time deposits, among other product types or investment alternatives was a factor in limiting growth.
Non-interest-bearing deposits accounted for approximately 20 percent of total deposits at year-end 2008 as
compared to 19 percent at year-end 2007.
Savings balances were also consistent with prior year as they increased $16.3 million to $3.7 billion,
generally reflecting customers’ preference for higher-paying accounts, including money market accounts.
Interest-bearing transaction accounts declined 5.2 percent to $15.0 billion due to pricing pressure from
community banks as well as larger competitors. Customers also migrated to time deposits in order to take
advantage of higher rates.
Domestic money market products, which exclude foreign money market accounts, are one of Regions’ most
significant funding sources, accounting for 21 percent of total deposits in 2008, compared to 20 percent in 2007.
These balances increased 2.8 percent in 2008 to $19.5 billion as compared to the prior year. Money market
accounts were down most of the year; however, Regions experienced a significant increase in the fourth quarter
of 2008 as customers moved into money market accounts and time deposits to take advantage of higher rates.
Also, foreign money market accounts decreased $1.7 billion, or 48 percent, to $1.8 billion in 2008.
Included in customer time deposits are certificates of deposit and individual retirement accounts. The
balance of customer time deposits increased 22 percent in 2008 to $32.4 billion compared to $26.5 billion in
2007. The increase was primarily due to customers’ demand for higher-rate deposits. Customer time deposits
accounted for 36 percent of total deposits in 2008 compared to 28 percent in 2007.
Total treasury deposits, which are used mainly for overnight funding purposes, decreased by $7.8 billion
during 2008, due to the Company’s use of other funding sources, including increased customer-based deposits
and the additional funding provided through new governmental liquidity programs. The Company’s choice of
overnight funding sources is dependent on the Company’s particular funding needs and the relative attractiveness
of each offering.
The sensitivity of Regions’ deposit rates to changes in market interest rates is reflected in Regions’ average
interest rate paid on interest-bearing deposits. The rate paid on interest-bearing deposits decreased to 2.38 percent
in 2008 from 3.47 percent in 2007. This decrease is largely due to the significant decrease in market rates as
evidenced by the Federal Funds rate in 2008, somewhat offset by increased competitive pressures. Table 16
“Maturity of Time Deposits of $100,000 or More” presents maturities of time deposits of $100,000 or more at
December 31, 2008 and 2007.
Table 16—Maturity of Time Deposits of $100,000 or More
2008 2007
(In thousands)
Time deposits of $100,000 or more, maturing in:
3 months or less .................................................. $ 2,805,489 $ 4,718,158
Over 3 through 6 months ........................................... 1,977,046 2,706,805
Over 6 through 12 months .......................................... 3,038,186 4,522,942
Over 12 months .................................................. 4,893,356 801,575
$12,714,077 $12,749,480
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