Regions Bank 2010 Annual Report Download - page 74

Table 4—Volume and Yield/Rate Variances
2010 Compared to 2009
Change Due to
2009 Compared to 2008
Change Due to
Volume
Yield/
Rate Net Volume
Yield/
Rate Net
(Taxable equivalent basis––in millions)
Interest income on:
Federal funds sold and securities purchased under
agreements to resell ............................ $ 1 $ (1) $— $ (6) $ (9) $ (15)
Trading account assets ............................ (14) (7) (21) 5 (6) (1)
Securities:
Taxable .................................... 156 (249) (93) 159 (21) 138
Tax-exempt ................................. (16) (12) (28) (20) (12) (32)
Loans held for sale ............................... (12) (4) (16) 37 (18) 19
Loans, net of unearned income ...................... (342) (142) (484) (171) (1,173) (1,344)
Other interest-earning assets ........................ (6) 5 (1) 33 (34) (1)
Total interest-earning assets ........................ (233) (410) (643) 37 (1,273) (1,236)
Interest expense on:
Savings accounts ................................. 1 (2) (1) — 1 1
Interest-bearing transaction accounts ................. — (8) (8) (6) (81) (87)
Money market accounts ........................... 38 (103) (65) 49 (194) (145)
Money market accounts—foreign ................... (1) (1) (2) (18) (26) (44)
Time deposits—customer .......................... (181) (263) (444) 154 (208) (54)
Total customer deposits—interest-bearing ......... (143) (377) (520) 179 (508) (329)
Time deposits—non customer ...................... (1) — (1) (46) (27) (73)
Other foreign deposits ............................ (1) — (1) (22) (23) (45)
Total treasury deposits—interest-bearing .......... (2) — (2) (68) (50) (118)
Total interest-bearing deposits .............. (145) (377) (522) 111 (558) (447)
Federal funds purchased and securities sold under
agreements to repurchase ........................ (3) (6) (9) (66) (93) (159)
Other short-term borrowings ....................... (31) (4) (35) (60) (96) (156)
Long-term borrowings ............................ (102) (72) (174) 202 (163) 39
Total interest-bearing liabilities ..................... (281) (459) (740) 187 (910) (723)
Increase (decrease) in net interest income ............. $ 48 $ 49 $ 97 $(150) $ (363) $ (513)
Notes:
1. The change in interest not due solely to volume or yield/rate has been allocated to the volume column and
yield/rate column in proportion to the relationship of the absolute dollar amounts of the change in each.
2. The computation of taxable-equivalent net interest income is based on the statutory federal income tax rate
of 35 percent, adjusted for applicable state income taxes net of the related federal tax benefit.
Net interest income and interest-rate spread are also affected by the actions taken to manage interest rate
risk. As described in the “Market Risk-Interest Rate Risk” section of MD&A, Regions employs multiple tools in
order to manage the risk of variability in net interest income attributable to changes in interest rates. Among
these tools are interest rate derivatives. In 2010, net interest income attributable to interest rate derivatives for
hedging purposes was $515 million versus $526 million in 2009.
The mix of interest-earning assets can also affect the interest rate spread. Regions’ primary types of interest-
earning assets are loans and investment securities. Certain types of interest-earning assets have historically
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