Regions Bank 2012 Annual Report Download - page 222

The Consumer Services segment represents the Company’s branch network, including consumer banking
products and services related to residential first mortgages, home equity lines and loans, indirect loans, consumer
credit cards and other consumer loans, as well as the corresponding deposit relationships. These services are also
provided through alternative channels such as the internet and telephone banking.
The Wealth Management segment includes wealth management products and services such as trust
activities, commercial insurance and credit related products, and investment management. Wealth Management
customers include individuals and institutional clients who desire services that include investment advice,
assistance in managing assets, and estate planning.
Discontinued Operations includes all brokerage and investment activities associated with Morgan Keegan.
As discussed in Note 3, Regions closed the sale of Morgan Keegan and related entities on April 2, 2012.
Other includes the Company’s Treasury function, the securities portfolio, wholesale funding activities,
interest rate risk management activities and other corporate functions that are not related to a strategic business
unit. Also within Other are certain reconciling items in order to translate the segment results that are based on
management accounting practices into consolidated results. Management accounting practices utilized by
Regions as the basis of presentation for segment results include the following:
• Net interest income is presented based upon a funds transfer pricing (“FTP”) approach, for which
market-based funding charges/credits are assigned within the segments. By allocating a cost or a credit
to each product based on the FTP framework, management is able to more effectively measure the net
interest margin contribution of its assets/liabilities by segment. The summation of the interest income/
expense and FTP charges/credits for each segment is its designated net interest income. The variance
between the Company’s cumulative FTP charges and cumulative FTP credits is offset in Other.
• Provision for loan losses is allocated to each segment based on actual net charge-offs that have been
recognized by the segment. The difference between the consolidated provision for loan losses and the
segments’ net charge-offs is reflected in Other.
• Income tax expense (benefit) is calculated for Business Services, Consumer Services, and Wealth
Management based on a consistent federal and state statutory rate. Discontinued Operations reflects the
actual income tax expense (benefit) of its results. Any difference between the Company’s consolidated
income tax expense (benefit) and the segments’ calculated amounts is reflected in Other.
• Management reporting allocations of certain expenses are made in order to analyze the financial
performance of the segments. These allocations consist of operational and overhead cost pools and are
intended to represent the total costs to support a segment.
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