Regions Bank 2011 Annual Report Download - page 155

CASH EQUIVALENTS AND CASH FLOWS
Cash equivalents include cash and due from banks, interest-bearing deposits in other banks, and federal
funds sold and securities purchased under agreements to resell. Cash flows from loans, either originated or
acquired, are classified at that time according to management’s original intent to either sell or hold the loan for
the foreseeable future. When management’s intent is to sell the loan, the cash flows of that loan are presented as
operating cash flows. When management’s intent is to hold the loan for the foreseeable future, the cash flows of
that loan are presented as investing cash flows.
The following table summarizes supplemental cash flow information for the years ended December 31:
2011 2010 2009
(In millions)
Cash paid (received) during the period for:
Interest on deposits and borrowings .................................. $919 $1,442 $2,086
Income taxes, net ................................................. (98) (555) 137
Non-cash transfers:
Loans held for sale and loans transferred to other real estate ............... 532 649 890
Loans transferred to loans held for sale ................................ 973 594 374
Properties transferred to held for sale ................................. 51 6 68
SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL AND SECURITIES SOLD UNDER
AGREEMENTS TO REPURCHASE
Securities purchased under agreements to resell and securities sold under agreements to repurchase are
treated as collateralized financing transactions. It is Regions’ policy to take possession of securities purchased
under resell agreements.
TRADING ACCOUNT ASSETS
Trading account assets, which are primarily held for the purpose of selling at a profit, consist of debt and
marketable equity securities and are carried at estimated fair value. The majority of the amounts in trading
account assets are related to the activities of Morgan Keegan (see Note 3 and Note 25). See the “Fair Value
Measurements” section below for discussion of determining fair value. Gains and losses, both realized and
unrealized, related to Morgan Keegan activities are included in discontinued operations. Gains and losses, both
realized and unrealized, related to continuing operations are included in capital markets and investment income.
See Note 4 for further detail of trading account assets.
SECURITIES
Management determines the appropriate classification of debt and equity securities at the time of purchase
and periodically re-evaluates such designations. Debt securities are classified as securities held to maturity when
the Company has the intent and ability to hold the securities to maturity. Securities held to maturity are presented
at amortized cost. Debt securities not classified as securities held to maturity or trading account assets and
marketable equity securities not classified as trading account assets are classified as securities available for sale.
Securities available for sale are presented at estimated fair value with changes in unrealized gains and losses, net
of taxes, reported as a component of other comprehensive income (loss). See the “Fair Value Measurements”
section below for discussion of determining fair value.
The amortized cost of debt securities classified as securities held to maturity and securities available for sale
is adjusted for amortization of premiums and accretion of discounts to maturity, or in the case of mortgage-
backed securities, over the estimated life of the security, using the effective yield method. Such amortization or
accretion is included in interest income on securities. Realized gains and losses are included in net securities
gains (losses). The cost of securities sold is based on the specific identification method.
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