
	2022						2021
	Notional Amount		Estimated Fair Value				Notional Amount		Estimated Fair Value
			Gain(1)		Loss(1)				Gain(1)		Loss(1)
	(In millions)
Derivatives in fair value hedging relationships:
Interest rate swaps	$	1,423	$	1	$	158	$	7,900	$	—	$	32

Derivatives in cash flow hedging relationships:
Interest rate swaps	30,600		19		668		20,650		171		29


Total derivatives designated as hedging instruments	$	32,023	$	20	$	826	$	28,550	$	171	$	61
Derivatives not designated as hedging instruments:
Interest rate swaps	$	94,220	$	2,315	$	2,335	$	81,327	$	748	$	794
Interest rate options	12,506		94		85		15,990		48		19
Interest rate futures and forward commitments	985		8		5		2,739		11		3
Other contracts	12,173		172		127		9,456		133		135
Total derivatives not designated as hedging instruments	$	119,884	$	2,589	$	2,552	$	109,512	$	940	$	951
Total derivatives	$	151,907	$	2,609	$	3,378	$	138,062	$	1,111	$	1,012

Total gross derivative instruments, before netting			$	2,609	$	3,378			$	1,111	$	1,012
Less: Netting adjustments (2)			2,504		1,925				699		932
Total gross derivative instruments, after netting			$	105	$	1,453			$	412	$	80

(2)Netting adjustments represent amounts recorded to convert derivative assets and derivative liabilities from a gross basis to a net basis in accordance with applicable accounting guidance. The net basis takes into account the impact of cash collateral received or posted, legally enforceable master netting agreements, and variation margin that allow Regions to settle derivative contracts with the counterparty on a net basis and to offset the net position with the related cash collateral.

Derivatives entered into to manage interest rate risk and facilitate asset/liability management strategies are designated as hedging derivatives. Derivative financial instruments that qualify in a hedging relationship are classified, based on the exposure being hedged, as either fair value hedges or cash flow hedges. Additional information regarding accounting policies for derivatives is described in Note 1.

Regions enters into interest rate swap agreements to manage interest rate exposure on the Company’s fixed-rate borrowings. These agreements involve the receipt of fixed-rate amounts in exchange for floating-rate interest payments over the life of the agreements. Regions also enters into interest rate swap agreements to manage interest rate exposure on certain of the Company's fixed-rate prepayable and non-prepayable debt securities available for sale. These agreements involve the payment of fixed-rate amounts in exchange for floating-rate interest receipts.



	2022		2021
	(In millions)
Unrealized gains on terminated hedges included in AOCI - beginning of period	$	700	$	121
Unrealized gains (losses) on terminated hedges arising during the period	(291)		739
Reclassification adjustments for amortization of unrealized (gains) on terminated hedges into net income	(245)		(160)
Unrealized gains on terminated hedges included in AOCI - end of period	$	164	$	700

Regions expects to reclassify into earnings approximately $191 million in pre-tax expenses due to the net receipt/ payment of interest and amortization on all cash flow hedges within the next twelve months. Included in this amount is $54 million in pre-tax net gains related to the amortization of terminated cash flow hedges.


	2022
	Interest Income		Interest Income		Interest Expense
	Debt securities		Loans, including fees		Long-term borrowings
	(In millions)
Total income (expense) presented in the consolidated statements of income	$	688	$	4,088	$	(119)

Gains/(losses) on fair value hedging relationships:
Interest rate contracts:
Amounts related to interest settlements on derivatives	$	41	$	—	$	(16)
Recognized on derivatives	—		—		(124)
Recognized on hedged items	—		—		124
Income (expense) recognized on fair value hedges	$	41	$	—	$	(16)

Gains/(losses) on cash flow hedging relationships: (1)
Interest rate contracts:
Realized gains (losses) reclassified from AOCI into net income (2)	$	—	$	140	$	—
Income (expense) recognized on cash flow hedges	$	—	$	140	$	—


	2021
	Interest Income		Interest Expense
	Loans, including fees		Long-term borrowings
	(In millions)
Total income (expense) presented in the consolidated statements of income	$	3,452	$	(103)

Gains/(losses) on fair value hedging relationships:
Interest rate contracts:
Amounts related to interest settlements on derivatives	$	—	$	19
Recognized on derivatives	—		(51)
Recognized on hedged items	—		51
Income (expense) recognized on fair value hedges	$	—	$	19

Gains/(losses) on cash flow hedging relationships: (1)
Interest rate contracts:
Realized gains (losses) reclassified from AOCI into net income (2)	$	426	$	—
Income (expense) recognized on cash flow hedges	$	426	$	—


	2020
	Interest Income		Interest Expense
	Loans, including fees		Long-term borrowings
	(In millions)
Total income (expense) presented in the consolidated statements of income	$	3,610	$	(178)

Gains/(losses) on fair value hedging relationships:
Interest rate contracts:
Amounts related to interest settlements on derivatives	$	—	$	37
Recognized on derivatives	—		52
Recognized on hedged items	—		(51)
Income (expense) recognized on fair value hedges	$	—	$	38

Gains/(losses) on cash flow hedging relationships: (1)
Interest rate contracts:
Realized gains (losses) reclassified from AOCI into net income (2)	$	260	$	—
Income (expense) recognized on cash flow hedges	$	260	$	—

The following tables present the carrying amount and associated cumulative basis adjustment related to the application of hedge accounting that is included in the carrying amount of hedged assets and liabilities in fair value hedging relationships as of December 31:


	2022				2021
	Hedged Items Currently Designated					Hedged Items Currently Designated
	Carrying Amount of Assets/(Liabilities)		Hedge Accounting Basis Adjustment				Carrying Amount of Assets/(Liabilities)		Hedge Accounting Basis Adjustment
	(In millions)				(In millions)
Debt securities available for sale(1)(2)	$	23	$	—			$	9,901	$	—
Long-term borrowings	(1,239)		158				(1,363)		34

(1) As of December 31, 2021, the Company designated interest rate swaps as fair value hedges of debt securities available for sale under the portfolio layer method under which the Company designated $5.8 billion as the hedged amount from a closed portfolio of prepayable financial assets with a carrying amount of $9.1 billion.

The Company holds a portfolio of interest rate swaps, option contracts, and futures and forward commitments that result from transactions with its commercial customers in which they manage their risks by entering into a derivative with Regions. The Company monitors and manages the net risk in this customer portfolio and enters into separate derivative contracts in order to reduce the overall exposure to pre-defined limits. For both derivatives with its end customers and derivatives Regions enters into to mitigate the risk in this portfolio, the Company is subject to market risk and the risk that the counterparty will default. The contracts in this portfolio are not designated as accounting hedges and are marked-to market through earnings (in capital markets income) and included in other assets and other liabilities, as appropriate.

Regions enters into interest rate lock commitments, which are commitments to originate mortgage loans whereby the interest rate on the loan is determined prior to funding and the customers have locked into that interest rate. At December 31, 2022 and 2021, Regions had $118 million and $419 million, respectively, in total notional amount of interest rate lock commitments. Regions manages market risk on interest rate lock commitments and mortgage loans held for sale with corresponding forward sale commitments. Residential mortgage loans held for sale are recorded at fair value with changes in fair value recorded in mortgage income. Commercial mortgage loans held for sale are recorded at either the lower of cost or market or at fair value based on management's election. At December 31, 2022 and 2021, Regions had $233 million and $987 million, respectively, in total notional amounts related to these forward sale commitments. Changes in mark-to-market from both interest rate lock commitments and corresponding forward sale commitments related to residential mortgage loans are included in mortgage income. Changes in mark-to-market from both interest rate lock commitments and corresponding forward sale commitments related to commercial mortgage loans are included in capital markets income.

Regions has elected to account for residential MSRs at fair value with any changes to fair value recorded in mortgage income. Concurrent with the election to use the fair value measurement method, Regions began using various derivative instruments in the form of forward rate commitments, futures contracts, swaps and swaptions to mitigate the effect of changes in the fair value of its residential MSRs in its consolidated statements of income. As of December 31, 2022 and 2021, the total notional amount related to these contracts was $3.4 billion and $4.5 billion, respectively.



Derivatives Not Designated as Hedging Instruments	2022		2021		2020
	(In millions)
Capital markets income:
Interest rate swaps	$	108	$	46	$	21
Interest rate options	23		28		36
Interest rate futures and forward commitments	10		15		14
Other contracts	11		4		1
Total capital markets income	152		93		72
Mortgage income:
Interest rate swaps	(118)		(45)		83
Interest rate options	(14)		(32)		30
Interest rate futures and forward commitments	(4)		13		(2)
Total mortgage income	(136)		(64)		111
	$	16	$	29	$	183

Regions has both bought and sold credit protection in the form of participations on interest rate swaps (swap participations). These swap participations, which meet the definition of credit derivatives, were entered into in the ordinary course of business to serve the credit needs of customers. Swap participations, whereby Regions has purchased credit protection, entitle Regions to receive a payment from the counterparty if the customer fails to make payment on any amounts due to Regions upon early termination of the swap transaction and have maturities between 2023 and 2029. Swap participations, whereby Regions has sold credit protection have maturities between 2023 and 2038. For contracts where Regions sold credit protection, Regions would be required to make payment to the counterparty if the customer fails to make payment on any amounts due to the counterparty upon early termination of the swap transaction. Regions bases the current status of the prepayment/performance risk on bought and sold credit derivatives on recently issued internal risk ratings consistent with the risk management practices of unfunded commitments.

Regions’ maximum potential amount of future payments under these contracts as of December 31, 2022 was approximately $482 million. This scenario occurs if variable interest rates were at zero percent and all counterparties defaulted with zero recovery. The fair value of sold protection at December 31, 2022 and 2021 was immaterial. In transactions where Regions has sold credit protection, recourse to collateral associated with the original swap transaction is available to offset some or all of Regions’ obligation.

Regions has bought credit protection in the form of credit default indices. These indices, which meet the definition of credit derivatives, were entered into in the ordinary course of business to economically hedge credit spread risk in commercial mortgage loans held for sale whereby the fair value option has been elected. Credit derivatives, whereby Regions has purchased credit protection, entitle Regions to receive a payment from the counterparty if losses on the underlying index exceed a certain threshold, dependent upon the tranche rating of the capital structure.

Certain of Regions’ derivative instrument contracts with broker-dealers contain credit-related termination provisions and/or credit related provisions regarding the posting of collateral, allowing those broker-dealers to terminate the contracts in the event that Regions’ and/or Regions Bank’s credit ratings falls below specified ratings from certain major credit rating agencies. The aggregate fair values of all derivative instruments with any credit-risk-related contingent features that were in a liability position on December 31, 2022 and 2021, were $17 million and $81 million, respectively, for which Regions had posted collateral of $20 million and $84 million, respectively, in the normal course of business.