FDIC - Statistics on Depository Institutions Report
	Regions Bank	Peer Group	Regions Bank	Peer Group
	12/31/2017	12/31/2017	12/31/2016	12/31/2016
Performance Ratios (%, annualized)
Yield on earning assets	3.40%	3.88%	3.35%	3.78%
Cost of funding earning assets	0.23%	0.37%	0.20%	0.32%
Net interest margin	3.17%	3.50%	3.15%	3.45%
Noninterest income to assets	1.63%	1.73%	1.49%	1.80%
Noninterest expense to assets	2.69%	2.80%	2.74%	2.84%
Loan and lease loss provision to assets	0.21%	0.42%	0.20%	0.32%
Net operating income to assets	1.03%	1.15%	0.90%	1.20%
Return on assets (ROA)	1.03%	1.14%	0.91%	1.19%
Pretax return on assets	1.49%	1.63%	1.32%	1.71%
Return on equity (ROE)	7.86%	10.04%	6.90%	10.56%
Retained earnings to average equity (YTD only)	0.62%	3.51%	1.58%	4.04%
Net charge-offs to loans and leases	0.34%	0.56%	0.30%	0.48%
Loan and lease loss provision to net charge-offs	94.44%	112.55%	101.26%	101.58%
Earnings coverage of net loan charge-offs (x)	7.63	5.48	7.64	6.39
Efficiency ratio*	60.68%	56.72%	63.98%	57.37%
Assets per employee ($ millions)	5.86	7.09	5.55	7.04
Cash dividends to net income (YTD only)	92.14%	65.03%	77.05%	61.72%
Condition Ratios (%)
Earning assets to total assets	86.79%	89.45%	87.23%	89.28%
Loss allowance to loans and leases	1.35%	1.41%	1.36%	1.43%
Loss allowance to noncurrent loans and leases	84.50%	101.12%	97.06%	100.37%
Noncurrent assets plus other real estate owned to assets	1.16%	0.98%	1.01%	1.02%
Noncurrent loans to loans	1.60%	1.39%	1.49%	1.42%
Net loans and leases to assets	63.76%	66.10%	64.34%	66.04%
Net loans and leases to deposits	79.40%	86.57%	80.92%	87.74%
Net loans and leases to core deposits	83.42%	98.15%	85.38%	98.65%
Domestic deposits to total assets	80.15%	74.43%	79.32%	73.04%
Equity capital to assets	12.87%	11.25%	12.89%	11.30%
Core capital (leverage) ratio	10.34%	9.25%	10.28%	9.33%
Tier 1 risk-based capital ratio	12.14%	10.96%	11.68%	10.92%
Total risk-based capital ratio	14.00%	13.01%	13.59%	12.95%
Common equity tier 1 capital ratio	12.14%	10.71%	11.68%	10.69%
*Efficiency ratio: Noninterest expense less amortization of intangible assets as a percent of net interest income plus noninterest income.

Based on the information above, which of the following statements about Regions Banks profitability is accurate?

Multiple Choice

• Regions Bank has been more profitable than its peers because it has achieved a larger spread between its yield on earning assets and its cost of funds.

• Regions Bank has been less profitable than its peers because of its higher operating expenses.

• Regions Bank has been less profitable than its peers because of its lower yield on earning assets, which is the reason for its lower net interest margin.

• Regions Bank has been less profitable than its peers because it has a higher cost of funds.