Regions Bank 2011 Annual Report Download - page 3

DEAR FELLOW
SHAREHOLDERS,
Although 2011 was clearly a diffi cult year given
the slow pace of economic recovery in the
United States and the volatility in the markets,
on a continuing operations basis we continued
to make steady
– albeit incremental – progress
on a number of key fronts. Even though we
experienced a net loss available to common
shareholders of $429 million, our core franchise
has strengthened and we achieved sustainable
profi tability from our continuing operations,
excluding goodwill impairment, with net income1
of $211 million or $0.17 per share in 2011.
While there is still work ahead, these results
demonstrate that we are successfully executing
our business plan, and I believe that we are well
positioned to capitalize on future opportunities.
Amid the sustained challenging economic en-
vironment and market turmoil, our associates
have done an excellent job staying focused on
what we can control. We recognize the realities
that come with regulatory reform and are mak-
ing the necessary adjustments to our evolving
business model. It is important to note that the
Southeast, where our franchise is primarily lo-
cated, is projected to outpace the national av-
erage in growth over the next few years. I am
confi dent our efforts will continue to produce re-
sults, given our brand favorability in the markets
we serve, our relentless focus on our custom-
ers and our commitment to delivering value and
outstanding service quality.
ECONOMIC AND
REGULATORY
ENVIRONMENT
Fragile National Economy. Without a doubt, we
have been operating in a very fragile U.S.
economy, marked by extremely high levels of
unemployment as well as a substantial decline
in home prices. Gross domestic product (GDP)
growth for 2011 slowed to 1.7%. While the un-
employment rate in December 2011 declined
to 8.5%, it has been 9% or higher in 28 of the
past 31 months. There are more than 13 million
Americans still unemployed and approximately
another 9 million working part-time. Almost 43%
of those unemployed have been out of work for
more than six months. If we are to see sustained
economic recovery, the labor market needs to
add about 125,000 jobs per month just to keep
the unemployment rate steady.
Another factor in our fragile national economy is
declining home prices. This decline is in stark
contrast to the yearly increases we saw in home
values following World War II when home owner-
ship became part of the American dream. Prior
to 2006, many Americans lived that dream and
placed sizeable portions of their wealth in their
homes. In spite of the current decline in home
prices, 65% of Americans own a home, while
just 57% of French and 46% of Germans are
homeowners. That statistic becomes even more
meaningful when you consider that America’s
recession has wiped out more than $6 trillion
in housing wealth since it began in late 2006.
As a result, today one of every four homeowners
owes more on their mortgage than their home
is worth.
Amid the sustained challenging economic environment
and market turmoil, our associates have done an
excellent job staying focused on what we can control.
1 Non-GAAP, see Form 10-K Table 2 for GAAP to non-GAAP reconciliation