YoY and card penetration reaching 20%. Importantly, management is utilizing online lenders like GreenSky, a nationwide point-of-sale home improvement business, to drive growth as balances having increased to $660mn (1% of loans) from its 2014 inception. Of note, management expects challenged growth in auto, though its exclusive lending to the prime space limits the credit downside. Chart 38: How do you view the impact of new online lending startups on the banking industry? 60% 54% 50% 38% 40% ° 30% 20% te} 10% aM 0% A revenue growth opportunity Potential disruptors that will Online lending start ups don’t as banks partner with these likely take market share away _ offer anything proprietary new players from traditional lenders Source: BofA Merrill Lynch Global Research = Possible tailwind from regulation: Management at Regions noted that while it is still uncertain how the regulatory landscape will evolve, a more favorable environment could allow Regions to free up investments tied to regulatory initiatives and risk management. Management would likely direct these funds to product development and customer initiatives. " Asset sensitive, particularly to the long end: Regions’ executives noted its highly asset sensitive balance sheet given the more favorable rate back drop since 3Q. According to management, a 100bp parallel shift in the yield curve produces ~$175mn in incremental spread revenue (11% of ’17e operating income) with two- thirds of the impact coming from the middle to long end of the curve. Part of the benefit of a rate rise is derived from lower premium amortization on its investment portfolio from higher rates. Given the steepening of the yield curve, we expect Regions to benefit more than peers. = Branch network continuing to evolve: Management intends to increase the productivity of its branches through several measures. Firstly, it is designing smaller, more visible locations to drive traffic. Management is also implementing the universal bank