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Fair Value Measurements
 3 Months Ended
Mar. 31, 2024
Fair Value Disclosures [Abstract]  
Fair Value Measurements
NOTE 10. FAIR VALUE MEASUREMENTS
See Note 1 "Summary of Significant Accounting Policies" to the consolidated financial statements of the Annual Report on Form 10-K for the year ended December 31, 2023 for a description of valuation methodologies for assets and liabilities measured at fair value on a recurring and non-recurring basis. Assets and liabilities measured at fair value rarely transfer between Level 1 and Level 2 measurements. Marketable equity securities and debt securities available for sale may be periodically transferred to or from Level 3 valuation based on management’s conclusion regarding the observability of inputs used in valuing the securities. Such transfers are accounted for as if they occur at the beginning of a reporting period.
The following table presents assets and liabilities measured at estimated fair value on a recurring basis:
 March 31, 2024December 31, 2023
 Level 1Level 2
Level 3 (1)
Total
Estimated Fair Value		Level 1Level 2
Level 3 (1)
Total
Estimated Fair Value
 (In millions)
Recurring fair value measurements
Debt securities available for sale:
U.S. Treasury securities$1,110 $— $— $1,110 $1,223 $— $— $1,223 
Federal agency securities— 545 — 545 — 1,043 — 1,043 
Obligations of states and political subdivisions— 2 — 2 — 2 — 2 
Mortgage-backed securities:
Residential agency— 18,350 — 18,350 — 17,372 — 17,372 
Commercial agency— 6,777 — 6,777 — 7,307 — 7,307 
Commercial non-agency— 82 — 82 — 83 — 83 
Corporate and other debt securities— 1,012 3 1,015 — 1,073 1 1,074 
Total debt securities available for sale$1,110 $26,768 $3 $27,881 $1,223 $26,880 $1 $28,104 
Loans held for sale$— $259 $— $259 $— $201 $— $201 
Marketable equity securities in other earning assets$747 $— $— $747 $813 $— $— $813 
Residential mortgage servicing rights$— $— $1,026 $1,026 $— $— $906 $906 
Derivative assets (2):
Interest rate swaps$— $1,965 $— $1,965 $— $1,813 $— $1,813 
Interest rate options— 66 10 76 — 83 4 87 
Interest rate futures and forward commitments— 10 10 — 7 — 7 
Other contracts— 180 — 180 198 — 198 
Total derivative assets$— $2,221 $10 $2,231 $— $2,101 $4 $2,105 
Derivative liabilities (2):
Interest rate swaps$— $2,869 $— $2,869 $— $2,419 $— $2,419 
Interest rate options— 62 — 62 — 70 — 70 
Interest rate futures and forward commitments— 1 — 1 — 12 — 12 
Other contracts— 164 — 164 — 189 1 190 
Total derivative liabilities$— $3,096 $— $3,096 $— $2,690 $1 $2,691 
_________
(1)All following disclosures related to Level 3 recurring assets do not include those deemed to be immaterial at March 31, 2024 and December 31, 2023.
(2)As permitted under U.S. GAAP, variation margin collateral payments made or received for derivatives that are centrally cleared are legally characterized as settled. As such, these derivative assets and derivative liabilities and the related variation margin collateral are presented on a net basis on the balance sheet.

Assets and liabilities in all levels could result in volatile and material price fluctuations. Realized and unrealized gains and losses on Level 3 assets represent only a portion of the risk to market fluctuations in Regions’ consolidated balance sheets. See Note 5 for a reconciliation of beginning and ending balances of residential MSRs for the three months ended March 31, 2024 and 2023.
RECURRING FAIR VALUE MEASUREMENTS USING SIGNIFICANT UNOBSERVABLE INPUTS
Residential mortgage servicing rights
The significant unobservable inputs used in the fair value measurement of residential MSRs are OAS and CPR. This valuation requires generating cash flow projections over multiple interest rate scenarios and discounting those cash flows at a risk-adjusted rate. Additionally, the impact of prepayments and changes in the OAS are based on a variety of underlying inputs including servicing costs. Increases or decreases to the underlying cash flow inputs will have a corresponding impact on the value of the MSR asset. The net change in unrealized gains (losses) included in earnings related to MSRs held at period end are disclosed as the changes in valuation inputs or assumptions included in the MSR rollforward table in Note 5 .
The following tables present detailed information regarding material assets and liabilities measured at fair value using significant unobservable inputs (Level 3) as of March 31, 2024 and December 31, 2023. The tables include the valuation techniques and the significant unobservable inputs utilized. The range of each significant unobservable input as well as the weighted-average within the range utilized at March 31, 2024 and December 31, 2023 are included. Following the tables are descriptions of the valuation techniques and the sensitivity of the techniques to changes in the significant unobservable inputs.
 March 31, 2024
 Level 3
Estimated Fair Value		Valuation
Technique		Unobservable
Input(s)		Quantitative Range of
Unobservable Inputs and
(Weighted-Average)
 (Dollars in millions)
Recurring fair value measurements:
Residential mortgage servicing rights (1)
$1,026Discounted cash flowWeighted-average CPR (%)
3.9% - 28.0% (8.2%)
OAS (%)
4.6% - 8.2% (4.9%)

_________
(1)See Note 5 for additional disclosures related to assumptions used in the fair value calculation for residential mortgage servicing rights.
 December 31, 2023
 Level 3
Estimated Fair Value		Valuation
Technique		Unobservable
Input(s)		Quantitative Range of
Unobservable Inputs and
(Weighted-Average)
 (Dollars in millions)
Recurring fair value measurements:
Residential mortgage servicing rights (1)
$906Discounted cash flowWeighted-average CPR (%)
5.6% - 21.5% (8.2%)
OAS (%)
4.5% -8.2% (4.8%)
_______
(1)See Note 6 to the consolidated financial statements of the Annual Report on Form 10-K for the year ended December 31, 2023 for additional disclosures related to assumptions used in the fair value calculation for residential mortgage servicing rights.
FAIR VALUE OPTION
The Company has elected the option to measure certain commercial and industrial loans held for sale at fair value, as these loans are actively traded in the secondary market. The Company is able to obtain fair value estimates for substantially all of these loans through a third party valuation service that is broadly used by market participants. While most of the loans are traded in the market, the volume and level of trading activity is subject to variability and the loans are not exchange-traded. The balance of these loans held for sale was immaterial at March 31, 2024 and December 31, 2023.
Regions has elected the fair value option for all eligible agency residential first mortgage loans originated with the intent to sell. This election allows for a more effective offset of the changes in fair values of the loans and the derivative instruments used to economically hedge them without the burden of complying with the requirements for hedge accounting. Fair values of residential first mortgage loans held for sale are based on traded market prices of similar assets where available and/or discounted cash flows at market interest rates, adjusted for securitization activities that include servicing values and market conditions, and are recorded in loans held for sale. At March 31, 2024, the aggregate fair value of these loans totaled $232 million compared to aggregate unpaid principal of $227 million. At December 31, 2023, the aggregate fair value of these loans totaled $184 million compared to aggregate unpaid principal of $177 million.
Interest income on mortgage loans held for sale is recognized based on contractual rates and is reflected in interest income on loans held for sale. The following details net gains and losses resulting from changes in fair value of residential mortgage loans held for sale, which were recorded in mortgage income in the consolidated statements of income during the three months ended March 31, 2024 and 2023. A net loss resulting from changes in fair value of residential mortgage loans held for sale totaled $2 million during the three months ended March 31, 2024. A net gain resulting from changes in fair value of residential mortgage loans held for sale totaled $2 million during the three months ended March 31, 2023. These changes in fair
value are mostly offset by economic hedging activities. An immaterial portion of these amounts was attributable to changes in instrument-specific credit risk.
NON-RECURRING FAIR VALUE MEASUREMENTS
Items measured at fair value on a non-recurring basis include loans held for sale for which the fair value option has not been elected, foreclosed property and other real estate and equity investments without a readily determinable fair value; all of which may be considered either Level 2 or Level 3 valuation measurements. Non-recurring fair value adjustments related to loans held for sale, foreclosed property and other real estate are typically a result of the application of lower of cost or fair value accounting during the period. Non-recurring fair value adjustments related to equity investments without readily determinable fair values are the result of impairments or price changes from observable transactions. The balances of each of these assets, as well as the related fair value adjustments during the periods, were immaterial at both March 31, 2024 and December 31, 2023.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amounts and estimated fair values, as well as the level within the fair value hierarchy, of the Company’s financial instruments as of March 31, 2024 are as follows:
 March 31, 2024
 Carrying
Amount
Estimated
Fair
Value(1)
Level 1Level 2Level 3
 (In millions)
Financial assets:
Cash and cash equivalents$11,250 $11,250 $11,250 $— $— 
Debt securities held to maturity743 701 — 701 — 
Debt securities available for sale27,881 27,881 1,110 26,768 3 
Loans held for sale417 417 — 414 3 
Loans (excluding leases), net of unearned income and allowance for loan losses(2)(3)
93,557 89,366 — — 89,366 
Other earning assets1,478 1,478 747 731 — 
Derivative assets2,231 2,231 — 2,221 10 
Financial liabilities:
Derivative liabilities3,096 3,096 — 3,096 — 
Deposits with no stated maturity(4)
113,529 113,529 — 113,529 — 
Time deposits(4)
15,453 15,391 — 15,391 — 
Short-term borrowings1,000 1,000 — 1,000 — 
Long-term borrowings3,327 3,319 — 3,318 1 
Loan commitments and letters of credit145 145 — — 145 
_________
(1)Estimated fair values are consistent with an exit price concept. The assumptions used to estimate the fair values are intended to approximate those that a market participant would use in a hypothetical orderly transaction. In estimating fair value, the Company makes adjustments for estimated changes in interest rates, market liquidity and credit spreads in the periods they are deemed to have occurred.
(2)The estimated fair value of portfolio loans assumes sale of the loans to a third-party financial investor. Accordingly, the value to the Company if the loans were held to maturity is not reflected in the fair value estimate. The fair value discount on the loan portfolio's net carrying amount at March 31, 2024 was $4.2 billion or 4.5 percent.
(3)Excluded from this table is the sales-type, direct financing, and leveraged lease carrying amount of $1.7 billion at March 31, 2024.
(4)The fair value of non-interest-bearing demand accounts, interest-bearing checking accounts, savings accounts, and money market accounts is the amount payable on demand at the reporting date (i.e., the carrying amount) as these instruments have an indeterminate maturity date. Fair values for time deposits are estimated by using discounted cash flow analyses, based on market spreads to benchmark rates.
The carrying amounts and estimated fair values, as well as the level within the fair value hierarchy, of the Company's financial instruments as of December 31, 2023 are as follows:
 December 31, 2023
 Carrying
Amount
Estimated
Fair
Value(1)
Level 1Level 2Level 3
 (In millions)
Financial assets:
Cash and cash equivalents$6,801 $6,801 $6,801 $— $— 
Debt securities held to maturity754 716 — 716 — 
Debt securities available for sale28,104 28,104 1,223 26,880 1 
Loans held for sale400 400 — 397 3 
Loans (excluding leases), net of unearned income and allowance for loan losses(2)(3)
95,141 91,352 — — 91,352 
Other earning assets 1,417 1,417 813 604 — 
Derivative assets2,105 2,105 — 2,101 4 
Financial liabilities:
Derivative liabilities2,691 2,691 — 2,690 1 
Deposits with no stated maturity(4)
112,816 112,816 — 112,816 — 
Time deposits(4)
14,972 14,905 — 14,905 — 
Long-term borrowings2,330 2,319 — 2,318 1 
Loan commitments and letters of credit156 156 — — 156 
_________
(1)Estimated fair values are consistent with an exit price concept. The assumptions used to estimate the fair values are intended to approximate those that a market participant would use in a hypothetical orderly transaction. In estimating fair value, the Company makes adjustments for estimated changes in interest rates, market liquidity and credit spreads in the periods they are deemed to have occurred.
(2)The estimated fair value of portfolio loans assumes sale of the loans to a third-party financial investor. Accordingly, the value to the Company if the loans were held to maturity is not reflected in the fair value estimate. The fair value discount on the loan portfolio's net carrying amount at December 31, 2023 was $3.8 billion or 4.0 percent.
(3)Excluded from this table is the sales-type, direct financing, and leveraged lease carrying amount of $1.7 billion at December 31, 2023.
(4)The fair value of non-interest-bearing demand accounts, interest-bearing checking accounts, savings accounts, and money market accounts is the amount payable on demand at the reporting date (i.e., the carrying amount) as these instruments have an indeterminate maturity date. Fair values for time deposits are estimated by using discounted cash flow analyses, based on market spreads to benchmark rates.