SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________________________________________________________
FORM 8-K
CURRENT REPORT
______________________________________________________________________________
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
February 8, 1998
DATE OF REPORT (Date of earliest event reported)
FIRST COMMERCIAL CORPORATION
(Exact name of registrant as specified in its charter)
ARKANSAS 0-9676 71-0540166
(State or other (Commission (IRS Employer
jurisdiction of incorporation) File Number) Identification Number)
400 West Capitol Avenue,
Little Rock, Arkansas 72201
(Address of principal executive offices)
(Zip Code)
(501) 371-7000
(Registrant's telephone number, including area code)
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Item 5: Other Events
On February 8, 1998, First Commercial Corporation (the "Registrant") and
Regions Financial Corporation ("Regions") entered into an Agreement and Plan of
Merger (the "Agreement"), pursuant to which the Registrant will be merged with
and into Regions, with Regions as the surviving entity (the "Merger"). The
Boards of Directors of the Registrant and Regions approved the Agreement and
the transactions contemplated thereby at separate meetings held on February 8,
1998. A joint press release was issued by the Registrant and Regions on
February 9, 1998 regarding the proposed transactions. A copy of the press
release is attached hereto as Exhibit 99 and is incorporated herein by
reference.
Under the terms of the Agreement, Regions will exchange 1.7 shares of its
common stock for each share of the Registrant's common stock, with certain
exceptions. The Merger is expected to be a tax-free reorganization for federal
income tax purposes and accounted for as a pooling of interests. It is
expected that the Merger will be consummated during the third quarter of 1998,
pending approval by the shareholders of the Registrant and Regions, regulatory
approval and other customary conditions of closing.
The Agreement contains provisions granting the Registrant the right to
terminate the Agreement which are intended, in general, to protect the
Registrant's shareholders against an excessive decline in the value of Regions'
common stock. The termination right is dependent upon the average closing
price of Regions' common stock being less than 80% of a reference price and
less than 85% of a weighted index of the stock prices of a group of seventeen
bank holding companies, all as described more specifically in the Agreement.
In the event the Registrant gives notice of its intention to terminate the
Agreement based on such provisions, Regions has the right to elect to adjust
the exchange ratio in accordance with the terms of the Agreement and thereby
would extinguish the Registrant's right to terminate.
In connection with the Agreement, the Registrant entered into a Stock
Option Agreement pursuant to which it granted to Regions an option to purchase
up to 7,480,450 shares of the Registrant's common stock, representing 19.9% of
the outstanding shares of the Registrant's common stock without giving effect
to the exercise of the option. The option is exercisable at a purchase price
of $59.00 per share, upon certain terms and in accordance with certain
conditions. Under the terms of the Agreement, the Total Profit and the
Notional Total Profit, as each term is defined in the Agreement, that Regions
or any other holder may realize as a result of exercising the option may not
exceed $130,000,000.
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Item 7: Financial Statement and Exhibits
(c) Exhibits.
99 Press Release
Page 3
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FIRST COMMERCIAL CORPORATION
By: /s/ J. Lynn Wright
__________________________________
J. Lynn Wright
Chief Financial Officer
Date: February 13, 1998
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Exhibit Index
Exhibits to Form 8-K
Number in Sequential
Exhibit Table Exhibit Page Number
- ------------- -------------- -----------
99 Press Release
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Exhibit 99
February 9, 1998
REGIONS FINANCIAL AND FIRST COMMERCIAL CORPORATION TO MERGE
First Commercial Corporation, parent company of First Commercial Bank,
N.A., and Regions Financial Corporation announced jointly today that they have
signed a definitive agreement that provides for the merger of First Commercial
into Regions.
The merger of First Commercial, Arkansas' largest bank holding company,
with Regions, a multi-bank holding company headquartered in Birmingham,
Alabama, will create the nation's 26th largest banking company with assets of
$32.8 billion and 667 banking locations in nine southern states. The addition
of First Commercial, with $6.9 billion in assets, gives Regions the number one
market share in Arkansas and new banking locations in Texas, Louisiana and
Tennessee.
Barnett Grace, chairman, president and CEO of First Commercial
Corporation, stated, "First Commercial has chosen a merger partner that will
generate superior long-term value for our stockholders. This merger between
First Commercial and Regions, two highly respected and high-performing
institutions with remarkably similar cultures will be an excellent combination
and mean good things for our customers, bankers and stockholders."
Jack Fleischauer, Jr., chairman and CEO of First Commercial Bank in
Little Rock, added, "We are excited about the prospect of providing our
customers with a broader range of products and services through a greatly
expanded regional network of banks and cutting-edge technologies. We are
convinced that Regions' track record of quality products and exceptional
service will complement First Commercial Bank's unique brand of customer
service."
Carl E. Jones, Jr., president and chief executive officer of Regions,
said, "Affiliation with a high-performance bank like First Commercial fits
well with Regions' vision of becoming America's best-performing bank. I am
confident that First Commercial bankers will feel at home with Regions because
our styles are so similar. Customers will be pleased with the range of
products and services available from Regions and with the convenience of
finding offices of their bank wherever they go throughout the South. The
strong asset base and considerable earnings power of the combined franchises
should result in continued high returns to our shareholders."
Under the terms of the agreement, Regions will exchange 1.7 shares of
its common stock for each share of First Commercial common stock. Based on
Regions' closing stock price of $40.50 on February 6, 1998, the transaction
would be valued at approximately $2.7 billion and represent an exchange value
of $68.85 for each share of First Commercial common stock. The merger, which
is expected to be a tax-free reorganization for federal income tax purposes
and accounted for as a pooling of interests, is expected to be consummated
during the third quarter of 1998, pending Regions and First Commercial
shareholder approval, regulatory approval and other customary conditions of
closing. Approximately 65.9 million shares of Regions common stock are
expected to be issued in the transaction.
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To demonstrate Regions' ongoing commitment to the communities that First
Commercial serves, Regions is establishing a Small Business Investment
Corporation initially funded with $5 million. This will provide funds for
development of new businesses in the communities that First Commercial
Corporation services. Regions is also establishing a charitable foundation
with a commitment of $7.5 million.
The transaction is expected to be slightly dilutive to Regions' 1998
earnings per share and accretive thereafter. In connection with this
transaction, Regions anticipates incurring a pre-tax merger charge of
approximately $85 million.
In connection with the execution of the merger agreement, First
Commercial granted Regions an option to purchase, under certain circumstances,
up to 19.9% of First Commercial's outstanding shares of common stock. First
Commercial has 38,790,428 shares of common stock outstanding, which includes
1.2 million shares to be issued in connection with First Commercial's pending
acquisition of Federal Savings Bank of Rogers, Arkansas (total assets of $480
million), that is expected to be consummated in March, 1998.
First Commercial Corporation, headquartered in Little Rock, is a $6.9
billion multi-bank holding company with 26 affiliate banks in Arkansas,
Tennessee, Texas and Louisiana and a 50% interest in two banks in Oklahoma.
First Commercial has the highest market share among banks in Arkansas, where
it operates 64 banking offices. First Commercial also operates banking-related
affiliates in the areas of mortgage banking, trust services, securities
brokerage, asset management and accounts receivable factoring. First
Commercial's common stock is traded in the Nasdaq national market under the
symbol FCLR.
Regions Financial Corporation is a $23 billion regional multi-bank
holding company providing banking services from 435 full-service offices in
Alabama, Florida, Georgia, Louisiana and Tennessee. Regions also provides
bank-related services in the fields of mortgage banking, trust, insurance,
securities brokerage and mutual funds. In addition to the First Commercial
transaction, Regions currently has seven other pending acquisitions, three in
South Carolina, two in Georgia, one in Florida and one in Louisiana. After
all pending acquisitions (including First Commercial) are completed, Regions
will have assets of approximately $32.8 billion, loans of $22.5 billion,
deposits of $26.0 billion and stockholders' equity of $2.8 billion. Regions'
common stock is traded in the Nasdaq national market system under the symbol
RGBK.
For additional information, contact:
At First Commercial:
Lynn Wright, Chief Financial Officer 501/371-7142
Kevin Sabin, Director of Marketing 501/371-6767
At Regions:
Robert P. Houston, Executive Vice President and Comptroller 334/832-8494
Ronald C. Jackson, Senior Vice President and Director of Investor Relations
205/326-7374
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