Regions Bank 2012 Annual Report Download - page 86

Table 6—Non-Interest Expense from Continuing Operations
Year Ended December 31
2012 2011 2010
(In millions)
Salaries and employee benefits .............................................. $1,763 $1,604 $1,640
Net occupancy expense .................................................... 382 388 411
Furniture and equipment expense ............................................. 261 275 277
Professional and legal expenses .............................................. 114 175 170
Amortization of core deposit intangible ........................................ 83 95 107
Other real estate owned expense ............................................. 52 162 209
Credit/checkcard expenses .................................................. 64 50 41
Branch consolidation and property and equipment charges ......................... — 75 —
(Gain)/loss on loans held for sale, net ......................................... (61) 1 32
Deposit administrative fee .................................................. 162 217 220
Marketing ............................................................... 87 62 66
Outside services .......................................................... 82 62 52
Loss on early extinguishment of debt .......................................... 11 — 108
REIT investment early termination costs ....................................... 42 — —
Provision (credit) for unfunded credit commitments .............................. 5 7 (3)
Regulatory charge ......................................................... — — 75
Goodwill impairment ...................................................... — 253 —
Other miscellaneous expenses ............................................... 479 436 454
$3,526 $3,862 $3,859
Salaries and Employee Benefits
Total salaries and employee benefits increased $159 million, or 10 percent, in 2012. The year-over-year
increase was primarily due to higher pension costs, annual merit increases, restricted stock awards and incentive
increases, including mortgage-related incentives, partially offset by a decline in headcount from 23,707 at
December 31, 2011 to 23,427 at December 31, 2012.
Regions provides employees who meet established employment requirements with a benefits package that
includes 401(k), pension, and medical, life and disability insurance plans. The pension plan has been closed to
new enrollments since 2006. Regions’ 401(k) plan includes a Company match of eligible employee
contributions. See Note 17 “Employee Benefit Plans” to the consolidated financial statements for further details.
There are various incentive plans in place in many of Regions’ lines of business that are tied to the
performance levels of employees. In general, incentives are used to reward employees for selling products and
services, for productivity improvements and for achievement of corporate financial goals. These achievements
are determined through a review of profitability and risk management. Regions’ long-term incentive plan
provides for the granting of stock options, restricted stock, restricted stock units and performance shares. See
Note 16 “Share-Based Payments” to the consolidated financial statements for further information.
Net Occupancy Expense
Net occupancy expense includes rents, depreciation and amortization, utilities, maintenance, insurance,
taxes, and other expenses of premises occupied by Regions and its affiliates. Net occupancy expense decreased
$6 million, or 2 percent, in 2012. Rent expense decreased as a result of branch consolidations that occurred in
early 2010 and late 2011, as well as a result of other lease downsizing efforts. At December 31, 2012, Regions
had 1,711 branches compared to 1,726 at December 31, 2011.
Furniture and Equipment Expense
Furniture and equipment expense decreased by 5 percent to $261 million in 2012 primarily driven by branch
consolidations.
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