Terms

Series

5.700% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series C

Liquidation Preference

$25.00

Coupon Rate

5.7%

Rate Type

Fixed To Floating

Annual Dividend

$1.43

Payment Frequency

Quarterly

Cumulative

No

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

May 15, 2029

First Call Price

$25.00

Capital Stack Ranking

Junior To: All Existing And Future Indebtedness Of Regions Financial Corporation, All Liabilities And Obligations Of Subsidiaries (Structurally Subordinated), Any Future Preferred Stock Expressly Designated As Senior; Pari Passu With: Series A Preferred Stock (6.375% Non-Cumulative Perpetual), Series B Preferred Stock (6.375% Fixed-To-Floating Rate Non-Cumulative Perpetual); Senior To: Common Stock, Any Future Junior Capital Stock

Regulatory (Basel III) Call

Yes

Tax Classification

Qualified Dividend

Qualifies for QDI

Yes

Qualifies for DRD

Yes

Depositary Share Fraction

0.025

Shares Offered

20,000,000

Prospectus Summary

Regions Financial Corporation is offering 20,000,000 depositary shares, each representing a 1/40th interest in a share of its 5.700% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series C, with a liquidation preference of $25 per depositary share. The fixed coupon of 5.700% per annum applies from issuance through August 14, 2029; thereafter, dividends reset quarterly to 3-month LIBOR plus 314.8 basis points. The Series C is non-cumulative, meaning that if the board chooses not to declare a dividend in any quarter, that payment is permanently foregone — there is no obligation to make it up in future periods, and no arrearage accumulates. As a holding company issue, the Series C Preferred Stock is structurally subordinated to all liabilities at the Regions Bank subsidiary level (approximately $105.4 billion of subsidiary deposits and borrowings as of year-end 2018), because Regions Financial Corporation depends on dividends from Regions Bank for cash flow. At the holding company level, the preferred ranks junior to all existing and future debt (~$12.4 billion in long-term debt) and senior only to common stock. It ranks pari passu with the existing Series A and Series B preferred stock. Regions may redeem the entire series at any time — without the option to partially redeem — if a regulatory capital treatment event occurs, meaning the Preferred Stock loses its qualification as Additional Tier 1 capital under Federal Reserve rules. This provision protects Regions' capital ratios but can force investors into reinvestment risk at an inconvenient time. At the $25 offering price, the Series C yields 5.70% during the fixed-rate period, equating to $0.35625 per depositary share per quarter, payable on February 15, May 15, August 15, and November 15 (beginning August 15, 2019). Dividends are expected to qualify as 'qualified dividend income' for individual investors (eligible for the 15%/20% preferential rate) and may qualify for the dividends-received deduction for corporate holders, provided Regions has sufficient current or accumulated earnings and profits — which is not guaranteed in all future years. The dividend stopper prevents Regions from paying dividends on common stock or repurchasing junior securities if full Series C dividends have not been declared and paid for the most recently completed dividend period.

Summarized from the SEC prospectus filing.

Distribution History

Floating Rate Terms

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If Regions has not paid full dividends on the Series C Preferred Stock for the most recently completed dividend period, it is prohibited from paying dividends on or repurchasing common stock or other junior securities.

Other Preferreds from Regions Financial Corporation

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 50 (Average)