Regions Bank 2010 Annual Report Download - page 198

Total Unrealized Gains and Losses
Year Ended December 31, 2008
Securities
Available
for Sale
Derivatives,
net
(In millions)
The amount of total gains and losses for the period included in earnings,
attributable to the change in unrealized gains (losses) relating to assets and
liabilities still held at December 31, 2008:
Interest income ............................................. $— $—
Brokerage, investment banking and capital markets ................ — —
Mortgage income ........................................... — —
Other income .............................................. — 37
Other comprehensive income ..................................... (3) —
Total unrealized gains and (losses) ..................................... $ (3) $ 37
ITEMS MEASURED AT FAIR VALUE ON A NON-RECURRING BASIS
From time to time, certain assets may be recorded at fair value on a non-recurring basis. These
non-recurring fair value adjustments typically are a result of the application of lower of cost or fair value
accounting or a write-down occurring during the period. For example, if the fair value of an asset in these
categories falls below its cost basis, it is considered to be at fair value at the end of the period of the adjustment.
In periods where there is no adjustment, the asset is generally not considered to be at fair value. The following is
a description of the valuation methodologies used for certain assets that are recorded at fair value.
Foreclosed property and other real estate is carried in other assets at the lower of the recorded investment
in the loan or fair value less estimated costs to sell the property. The fair value for foreclosed property that is
based on either observable transactions of similar instruments or formally committed sale prices is classified as a
Level 2 measurement. If no formally committed sale price is available, a professional valuation is obtained.
Updated valuations are obtained on at least an annual basis. Foreclosed property exceeding established dollar
thresholds is valued based on appraisals. Appraisals are performed by third-parties with appropriate professional
certifications and conform to generally accepted appraisal standards as evidenced by the Uniform Standards of
Professional Appraisal Practice (“USPAP”). Regions’ policies related to appraisals conform with regulations
established by the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”) and other
regulatory guidance. Professional valuations are considered Level 2 measurements because they are based largely
on observable inputs. In some instances, management may decrease the estimate of fair value below the
appraised value, given trends in valuation of similar properties. These valuations are considered Level 3
measurements as management uses assumptions not observable in the market.
Loans held for sale for which the fair value option has not been elected are recorded at the lower of cost or
fair value and therefore are reported at fair value on a non-recurring basis. The fair values for loans held for sale
that are based on formally committed loan sale prices or valuations performed using observable inputs are
classified as a Level 2 measurement. If no formally committed sales price is available, a professional valuation is
obtained, consistent with the process described above for foreclosed property and real estate.
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