Regions Bank 2011 Annual Report Download - page 123

Short-Term Borrowings
See Note 11 “Short-Term Borrowings” to the consolidated financial statements for a summary of these
borrowings at December 31, 2011 and 2010. Short-term borrowings totaled $3.1 billion at December 31, 2011,
compared to $3.9 billion at December 31, 2010. The levels of these borrowings can fluctuate depending on the
Company’s funding needs and the sources utilized, as well as a result of customers’ activity.
COMPANY FUNDING SOURCES
Short-term borrowings used as a source of funding for the company totaled $1.0 billion at December 31,
2011, compared to $1.5 billion at December 31, 2010. Short-term FHLB advances were $500 million at
December 31, 2010 and there were no such borrowings at December 31, 2011.
Table 25 “Selected Short-Term Borrowings Data” provides selected information for certain short-term
borrowings used for funding purposes for the years 2011, 2010, and 2009.
Table 25—Selected Short-Term Borrowings Data
2011 2010 2009
(Dollars in millions)
Federal funds purchased:
Balance at year end .................................................. $ 18 $ 19 $ 30
Average outstanding (based on average daily balances) ..................... 19 68 441
Maximum amount outstanding at any month-end .......................... 22 106 2,011
Weighted-average interest rate at year end ................................ 0.1% 0.1% 0.1%
Weighted-average interest rate on amounts outstanding during the year (based on
average daily balances) ............................................. 0.1% 0.1% 0.2%
Securities sold under agreements to repurchase:
Balance at year end .................................................. $969 $ 763 $ 448
Average outstanding (based on average daily balances) ..................... 419 456 724
Maximum amount outstanding at any month-end .......................... 969 1,151 1,445
Weighted-average interest rate at year end ................................ (0.2)% 0.3% 0.4%
Weighted-average interest rate on amounts outstanding during the year (based on
average daily balances) ............................................. (0.6)% 0.2% 0.9%
The negative weighted-average interest rates on securities sold under agreements to repurchase during 2011
were the result of, in part, Regions’ entering into reverse-repurchase agreements. There are times when financing
costs associated with these transactions are lower than typical repurchase agreement rates as a result of a supply
and demand imbalance in particular collateral. Since short-term repurchase agreement rates were close to zero
during the last half of 2011, the supply and demand imbalance related to securities that Regions owned led to
negative financing rates.
CUSTOMER-RELATED BORROWINGS
Short-term borrowings that are the result of customer activity related to investment opportunities or
brokerage interests totaled $2.1 billion at December 31, 2011, compared to $2.4 billion at December 31, 2010.
The primary driver of this decrease was a $588 million decrease in repurchase agreements offered as commercial
banking investment opportunities for customers.
Repurchase agreements are also offered as commercial banking products as short-term investment
opportunities for customers. At the end of each business day, customer balances are swept into the agreement
account. In exchange for cash, Regions sells the customer securities with a commitment to repurchase them on
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