FIRST NATIONAL BANCORP /GA/, 424B2, 1996-01-18

FIRST NATIONAL BANCORP /GA/
424B2, 1996-01-18
NATIONAL COMMERCIAL BANKS

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<PAGE> 1
Filed Pursuant to Rule 424(b)(2)
Registration No. 33-65515

[HEARD BANK]
LOGO

January 16, 1996

Dear Shareholder:

You are cordially invited to attend the Special Meeting of
Shareholders of The Bank of Heard County (the "Bank") which will be held on
February 13, 1996, at 10:00 a.m., local time, at the offices of The Bank of
Heard County, Court Square, Franklin, Georgia 30217.

At the Special Meeting, you will be asked to vote upon and approve the
Agreement and Plan of Merger dated August 3, 1995, (the "Merger Plan"), by and
between the Bank and First National Bancorp ("First Bancorp") wherein First
Bancorp is offering to acquire all of the issued and outstanding shares of the
Bank common stock, par value $100.00 per share, in an all stock transaction
whereby shareholders of the Bank will receive 325.58 shares of First Bancorp
common stock, par value $1.00 per share, for each share of the Bank common
stock ("Exchange Offer"). Cash will be paid in lieu of any fractional share
interests.

The proposed merger has been approved by the Board of Directors of the
Bank which has determined that the Exchange Offer is fair to, and in the best
interests of, the Bank and its shareholders and unanimously recommends that you
vote FOR approval of the Merger Plan.

Consummation of the merger is subject to certain conditions, including
the approval of the Merger Plan by the shareholders of the Bank and the
approval of the merger by various regulatory agencies. The enclosed Notice of
Special Meeting of Shareholders and Proxy Statement-Prospectus describe the
Exchange Offer and provide specific information concerning the Special Meeting.
Please read these materials carefully and consider the information contained in
them.

PLEASE NOTE THAT THE MERGER OF FIRST BANCORP INTO REGIONS FINANCIAL
CORPORATION ("REGIONS") IS PENDING PURSUANT TO A MERGER AGREEMENT BETWEEN THE
TWO CORPORATIONS. IF SUCH MERGER IS CONSUMMATED, EACH OUTSTANDING SHARE OF
FIRST BANCORP COMMON STOCK, INCLUDING THE FIRST BANCORP SHARES WHICH WILL BE
RECEIVED BY HEARD BANK SHAREHOLDERS IN THE MERGER OF HEARD BANK WITH FIRST
BANCORP, WILL BE CONVERTED INTO 0.76 OF A SHARE OF REGIONS COMMON STOCK.
PLEASE REFER TO THE ENCLOSED JOINT PROXY STATEMENT OF FIRST BANCORP AND REGIONS
FOR INFORMATION ABOUT REGIONS AND THE FIRST BANCORP/REGIONS MERGER, WHICH IS
SUBJECT TO APPROVAL BY VARIOUS REGULATORY AGENCIES AND BY THE SHAREHOLDERS OF
FIRST BANCORP AND REGIONS.

It is very important that your shares be represented at the Special
Meeting, regardless of whether you plan to attend in person. Failure to vote
will have the same effect as a vote against the proposal. Therefore, I urge
you to execute, date and return the enclosed Proxy Card in the enclosed
postage-paid envelope as soon as possible to ensure that your shares will be
voted at the Special Meeting.

We look forward to seeing you at the Special Meeting.

Sincerely,

Charles L. Goodson,
Chairman

<PAGE> 2

THE BANK OF HEARD COUNTY
COURT SQUARE
FRANKLIN, GEORGIA 30217

NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of The
Bank of Heard County (the "Bank") has been called by the Board of Directors and
will be held at 10:00 a.m. on February 13, 1996, at the offices of the Bank,
Court Square, Franklin, Georgia 30217, for the purpose of considering and
voting upon the following matters:

(1) To consider and vote upon the proposal to approve the
Agreement and Plan of Merger dated August 3, 1995, (the
"Merger Plan"), attached as Exhibit A to the Proxy Statement -
Prospectus dated January 12, 1996, between the Bank and First
National Bancorp ("First Bancorp") whereby (I) Interim Heard
Corporation (an interim corporation incorporated as a
subsidiary of First Bancorp to facilitate the merger) will be
merged into The Bank of Heard County in a reverse triangular
merger (the "Merger"); (ii) shareholders of the Bank will
receive 325.58 shares of First Bancorp common stock for each
share of the Bank common stock; and (iii) the Bank will be
acquired by First Bancorp;

(2) To approve the adjournment of the Special Meeting to solicit
additional proxies in the event that there are not sufficient
votes to approve the Merger; and

(3) Any other business as may properly be brought before the
Special Meeting or any adjournments thereof. Management at
present knows of no other business to be presented.

The approval of the Merger Plan, which has the support of your Board
of Directors, requires the affirmative vote of two-thirds (667 shares) of the
outstanding 1,000 shares of the Bank. Only those shareholders of record at the
close of business on January 3, 1996, shall be entitled to notice and to
vote at the Special Meeting of Shareholders, or any adjournments thereof.

For the Board of Directors,

Charles L. Goodson,
Chairman

Franklin, Georgia

January 16, 1996

SINCE THE AFFIRMATIVE VOTE OF TWO-THIRDS OF THE OUTSTANDING SHARES OF THE BANK
COMMON STOCK IS REQUIRED TO APPROVE THE MERGER PLAN, WE URGE YOU TO SIGN AND
RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE WHETHER OR NOT YOU PLAN
TO ATTEND THE SPECIAL MEETING IN PERSON. YOUR PROXY MAY BE REVOKED AT ANY TIME
PRIOR TO ITS EXERCISE IN THE MANNER DESCRIBED IN THE PROXY
STATEMENT-PROSPECTUS. ANY SHAREHOLDER PRESENT AT THE SPECIAL MEETING,
INCLUDING ANY ADJOURNMENTS THEREOF, MAY REVOKE HIS OR HER PROXY AND VOTE
PERSONALLY ON EACH MATTER BROUGHT BEFORE THE SPECIAL MEETING.
<PAGE> 3

PROXY STATEMENT FOR
THE BANK OF HEARD COUNTY
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY 13, 1996

FIRST NATIONAL BANCORP PROSPECTUS FOR 325,580 SHARES OF COMMON STOCK OF FIRST
NATIONAL BANCORP WHICH MAY BE ISSUED IN CONNECTION WITH THE MERGER OF INTERIM
HEARD CORPORATION WITH AND INTO THE BANK OF HEARD COUNTY IN A REVERSE
TRIANGULAR MERGER

================================================================================

FIRST NATIONAL BANCORP HAS FILED A REGISTRATION STATEMENT WITH THE SECURITIES
AND EXCHANGE COMMISSION COVERING THE MAXIMUM OF 325,580 SHARES OF COMMON STOCK
OF FIRST NATIONAL BANCORP TO BE ISSUED TO SHAREHOLDERS OF THE BANK OF HEARD
COUNTY IN CONNECTION WITH THE MERGER OF INTERIM HEARD CORPORATION INTO THE BANK
OF HEARD COUNTY IN A REVERSE TRIANGULAR MERGER. THIS PROXY STATEMENT ALSO
CONSTITUTES A PROSPECTUS OF FIRST NATIONAL BANCORP FILED AS PART OF SUCH
REGISTRATION STATEMENT. SEE "THE PROPOSED REORGANIZATION."

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROXY STATEMENT, AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY FIRST NATIONAL BANCORP. THIS PROXY STATEMENT DOES NOT CONSTITUTE
AN OFFER OF ANY SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH IT
RELATES OR AN OFFER TO ANY PERSON IN ANY JURISDICTION WHERE SUCH OFFER WOULD BE
UNLAWFUL. THE DELIVERY OF THIS PROXY STATEMENT AT ANY TIME DOES NOT IMPLY THAT
INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.

THE SHARES OF COMMON STOCK OF FIRST NATIONAL BANCORP TO BE ISSUED IN CONNECTION
WITH THE REORGANIZATION HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION; NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

THIS PROXY STATEMENT DOES NOT RELATE TO ANY RESALES OF COMMON STOCK OF FIRST
NATIONAL BANCORP RECEIVED BY ANY PERSON UPON CONSUMMATION OF THE MERGER AND NO
PERSON IS AUTHORIZED TO MAKE ANY USE OF THIS PROXY STATEMENT IN CONNECTION WITH
ANY SUCH RESALE.

ALL INFORMATION CONTAINED IN THIS PROXY STATEMENT WITH RESPECT TO FIRST
NATIONAL BANCORP AND ITS SUBSIDIARIES WAS SUPPLIED BY THOSE ENTITIES, AND ALL
INFORMATION WITH RESPECT TO THE BANK OF HEARD COUNTY WAS SUPPLIED BY THE BANK
OF HEARD COUNTY

THE DATE OF THIS PROXY STATEMENT IS JANUARY 16, 1996.
<PAGE> 4

________________________________________________________________________________

AVAILABLE INFORMATION
________________________________________________________________________________

First National Bancorp is subject to the informational requirements of the
Securities Exchange Act of 1934 and in accordance therewith files reports,
proxy statements and other information with the Securities and Exchange
Commission (the 'Commission"). Such reports, proxy and information statements
and other information filed by First National Bancorp can be inspected and
copied at the public reference facilities maintained by the Commission at the
Commission's office at 450 Fifth Street, N.W., Room 1024, Washington, D.C.
20549, and at the Commission's Regional Offices in New York (World Trade
Center, 13th Floor, New York, New York 10048) and Chicago (Northwestern Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661). Copies
of such material can be obtained from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates.

Additional information regarding First National Bancorp and the shares of
common stock offered hereby is contained in the Registration Statement and the
exhibits relating thereto filed with the Commission under the Securities Act of
1933, which may be inspected without charge at the office of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549, and copies thereof may be
obtained from the Commission at prescribed rates. This Proxy Statement does
not contain all of the information set forth in the Registration Statement and
exhibits thereto which First National Bancorp has filed with the Commission
under the Securities Act of 1933 and to which reference is hereby made for
further information with respect to First National Bancorp and the securities
offered hereby.

The common stock of First National Bancorp, $1.00 par value per share, is
traded on the NASDAQ National Market System and reports and other information
concerning First National Bancorp can be inspected at the offices of
NASDAQ National Market System at NASDAQ Reports Section, 3rd Floor, 1735 K
Street, N.W., Washington, D.C. 20006.
<PAGE> 5

________________________________________________________________________________

INCORPORATION BY REFERENCE
________________________________________________________________________________

There are hereby incorporated by reference in this Proxy
Statement-Prospectus the following documents and information heretofore filed
by First Bancorp with the Securities and Exchange Commission pursuant to the
Exchange Act:

1. Annual report on Form 10-K for the year ended December 31,
1994 (prior to restatement to give effect to the acquisition of FF Bancorp,
Inc.).

2. Quarterly reports on Form 10-Q for the quarters ended March
31, 1995, June 30, 1995, and September 30, 1995.

3. Current reports on Form 8-K dated April 11, 1995, July 5,
1995, July 19, 1995, July 25, 1995, August 3, 1995, August 16, 1995, August 28,
1995, October 25, 1995, and November 21, 1995.

4. Restated financial statements of First Bancorp as of December
31, 1994 and 1993 (which includes the effects of the merger with FF Bancorp,
Inc. consummated on July 3, 1995 and accounted for as a pooling-of-interests),
set forth in First Bancorp's current report on Form 8-K dated November 21,
1995.

5. The description of First Bancorp's common stock contained in
its Registration Statement No. 2-71367 on Form S-14, which constitutes its
Registration Statement filed under the Exchange Act, as such description is
updated by its current reports on Form 8-K dated April 20, 1988 and April 23,
1993.

All documents filed by First Bancorp pursuant to Section 13(a) or 15(d)
of the Exchange Act after the date hereof and prior to the date of the special
meeting of Heard Bank shareholders shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of filing thereof. Any
reference herein shall be deemed to be modified or superseded for purposes of
this Proxy Statement-Prospectus to the extent that a statement contained
herein, or in any other subsequently filed document that also is or is deemed
to be incorporated by reference herein, modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Proxy
Statement-Prospectus. In particular, reference is made to the First Bancorp
Current Report on Form 8-K dated November 21, 1995, which includes restated
historical financial statements and the related management's discussion and
analysis of financial condition and results of operations of First Bancorp in
light of the acquisition of FF Bancorp, Inc. effected July 3, 1995, and
accounted for by First Bancorp as a pooling-of-interests.

THIS PROXY STATEMENT-PROSPECTUS INCORPORATES DOCUMENTS OR PARTS OF
DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH.
UPON WRITTEN OR ORAL REQUEST OF ANY PERSON TO WHOM THIS PROXY STATEMENT-
PROSPECTUS IS DELIVERED, FIRST BANCORP WILL PROMPTLY FURNISH TO SUCH PERSON,
WITHOUT CHARGE, A COPY OF ANY AND ALL INFORMATION THAT HAS BEEN INCORPORATED BY
REFERENCE HEREIN. SUCH REQUESTS SHOULD BE DIRECTED TO C. TALMADGE GARRISON,
SECRETARY, P.O. DRAWER 937, GAINESVILLE, GEORGIA 30503 (770-503-2104). IN
ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE
BY FEBRUARY 6, 1996.
<PAGE> 6

PROXY STATEMENT
TABLE OF CONTENTS

<TABLE>
<S> <C>
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Recent Merger by First Bancorp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

MERGER OF FIRST BANCORP INTO REGIONS FINANCIAL CORPORATION . . . . . . . . . . . . . . . . . . . . . . . . 4

SUMMARY OF REORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Terms of the Agreement of Reorganization
and Plan of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Business of the Parties to the
Reorganization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Reasons for the Reorganization; Recommendation
of Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Operations of Bank and First
Bancorp after Reorganization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Regulatory Approval Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Vote Required to Approve Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Rights of Dissenting Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Conversion of Heard Bank Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Right of Termination of the Reorganization
Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Effect of Reorganization on Heard Bank
Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Tax Consequences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Accounting Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Expenses of Solicitation and Reorganization . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

PER SHARE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

MARKET AND STOCK PRICE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

First Bancorp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Heard Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Comparison of Stock Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

FIRST BANCORP AND HEARD BANK PRO
FORMA CONDENSED COMBINED BALANCE SHEET INFORMATION
(UNAUDITED) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

FIRST BANCORP AND HEARD BANK
PRO FORMA CONDENSED COMBINED STATEMENTS OF
INCOME (UNAUDITED) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

HEARD BANK SELECTED FINANCIAL DATA
(UNAUDITED) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

HEARD BANK MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1994,
1993, AND 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

HEARD BANK MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR THE THREE-MONTH AND NINE-MONTH
PERIODS ENDED SEPTEMBER 30, 1995 AND 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

</TABLE>
<PAGE> 7

<TABLE>
<S> <C>
HEARD BANK SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Principal Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Shares of Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

MANAGEMENT OF FIRST NATIONAL BANCORP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

THE PROPOSED REORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

The Agreement of Reorganization and Plan
of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Description of the Reorganization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Reasons for the Reorganization; Recommendation
of Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Conversion of Heard Bank Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Manner of Surrendering Heard
Bank Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Issuance of First Bancorp Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Source of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Shareholder Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Conditions to Certain Obligations of
Heard Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Conditions to Certain Obligations of
First Bancorp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Conditions to Certain Obligations of Both
First Bancorp and Heard Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Accounting Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

PENDING FIRST BANCORP/REGIONS MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

EFFECT OF REORGANIZATION ON
SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

Preemptive Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Cumulative Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Limitations of Liability of Directors;
Indemnification of Directors, Officers
and Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Dividend Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Shareholder Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Right of First Bancorp and Heard Bank
to Acquire their own Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Rights of Dissent and Appraisal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
State Taxation of Shares of Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Authorized Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Certain Restrictions on Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Restrictions on Stock of Both Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

Commitments to Subsidiary Banks
by First Bancorp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Federal Deposit Insurance Corporation
Improvement Act of 1991 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Recent Banking Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

RIGHTS OF DISSENTING
SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

FEDERAL INCOME TAX
CONSEQUENCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

</TABLE>
<PAGE> 8

<TABLE>
<S> <C>
DESCRIPTION OF
STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

First Bancorp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Heard Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

LEGAL OPINION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

OTHER BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

THE BANK OF HEARD COUNTY
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1

APPENDIX A -

Agreement of Reorganization and Plan
of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1

APPENDIX B -

Article 13 of the Georgia Business
Corporation Code relating to rights of
dissenting shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1

APPENDIX C -

Joint Proxy Statement of First National
Bancorp and Regions Financial Corporation

</TABLE>

<PAGE> 9

PROXY STATEMENT

FOR

SPECIAL MEETING OF SHAREHOLDERS OF

THE BANK OF HEARD COUNTY
TO BE HELD FEBRUARY 13, 1996

________________________________________________________________________________

INTRODUCTION
________________________________________________________________________________

This Proxy Statement is furnished in connection with THE SOLICITATION
BY THE BOARD OF DIRECTORS OF THE BANK OF HEARD COUNTY of proxies for use at the
special meeting of the shareholders of The Bank of Heard County to be held at
10:00 A.M. on February 13, 1996, at The Bank of Heard County, Court Square,
Franklin, Georgia. The approximate date of the mailing of this Proxy Statement
to shareholders was January 16, 1996.

At the special meeting, shareholders will vote whether to approve the
Agreement of Reorganization and Plan of Merger (the "Reorganization Plan"). A
copy of the Reorganization Plan is attached hereto as Appendix A. Under the
Reorganization Plan, Interim Heard Corporation ("Interim Corporation"), a
wholly-owned subsidiary of First National Bancorp ("First Bancorp"), will be
merged with and into The Bank of Heard County, ("Heard Bank"). In the
reorganization, each outstanding share of common stock of Heard Bank will be
converted by exchange into 325.58 shares of common stock of First Bancorp. No
fractional shares will be issued, and, if necessary, a cash payment in lieu of
fractional shares will be made by First Bancorp. The exchange of stock under
the Reorganization Plan will be a result of the merger of Interim Corporation
into Heard Bank, with Heard Bank, as the survivor, being a wholly-owned
subsidiary of First Bancorp.

As of December 1, 1995, Heard Bank had authorized 1,000 shares of
common stock, with 1,000 shares issued and outstanding to approximately 26
shareholders. This constitutes Heard Bank's only class of stock under which
shares are issued and outstanding, with each share entitled to notice of and to
one vote at the Heard Bank shareholders' meeting or any adjournment thereof.
Only the Heard Bank shareholders of record at the close of business on
January 3, 1996, will be entitled to notice of and to vote at the special
meeting or any adjournment thereof.

As of December 1, 1995, First Bancorp had authorized 30,000,000 shares
of common stock, with 20,580,670 shares issued and outstanding to approximately
10,100 shareholders (including approximately 4,000 beneficial owners of shares
held by nominees). This constitutes First Bancorp's only class of stock, with
each share entitled to one vote, except in the case of election of directors,
in which event shareholders have cumulative voting rights.

Any proxy given by shareholders of Heard Bank pursuant to this
solicitation may be revoked at any time before it is voted by so notifying the
President of Heard Bank in writing prior to the
<PAGE> 10

meeting or by appearance at the meeting and requesting the right to vote in
person, without compliance with any other formalities.

If the proxy is properly signed and returned by a Heard Bank
shareholder and is not revoked, it will be voted at the meeting in the manner
specified therein. If a shareholder does not specify how the proxy is to be
voted, the proxy will be voted in accordance with the recommendations of
management in favor of the Reorganization Plan.

Heard Bank and First Bancorp will each pay its own expenses incurred
in connection with this solicitation, including the fees and expenses of legal
counsel and independent auditors and the printing and filing costs incurred in
connection with this Proxy Statement. In addition to solicitation by mail,
directors, officers and regular employees of Heard Bank may solicit proxies by
telephone, telegram or personal interview, for which they will receive no
compensation in addition to their regular salaries.

The principal executive offices of Heard Bank are located at Court
Square, P.O. Box 1450, Franklin, Georgia 30217-0127 and the telephone number at
that address is (706) 675-6657. The principal executive offices of First
Bancorp are located at 303 Jesse Jewell Parkway, Suite 700, Post Office Drawer
937, Gainesville, Georgia 30503, and the telephone number at that address is
(770) 503-2000.

First Bancorp, a Georgia corporation, is a multi-bank and thrift
holding company formed in 1981 and subject to regulation by the Board of
Governors of the Federal Reserve System, the Georgia Department of Banking and
Finance and the Securities and Exchange Commission. At the time of First
Bancorp's formation, The First National Bank of Gainesville ("FNBG") became a
wholly-owned subsidiary of First Bancorp. FNBG, which was formed in 1889 as a
national banking association, operates a full service banking, mortgage banking
and trust business in Hall County, Georgia, with a main office, six full
service branches and two stand-alone automated teller machine locations. The
First National Bank of Habersham ("FNBH") became a wholly-owned subsidiary of
First Bancorp in September, 1982. FNBH, which was formed in 1909, operates a
full service banking business in Habersham County, Georgia, with a main office
and two full service branches. Granite City Bank ("GCB") became a,
wholly-owned subsidiary of First Bancorp on August 1, 1984. GCB, which was
formed in 1928, operates a full service banking business in Elbert County,
Georgia, with a main office and two full service branches. Bank of Clayton
("BOC") became a wholly-owned subsidiary of First Bancorp in October 1984.
BOC, which was formed in 1904, operates a full service banking business in
Rabun County, Georgia, with a main office and one full service branch. First
National Bank of White County ("FNBW") (formerly The Peoples Bank) in
Cleveland, Georgia, became a wholly-owned subsidiary of First Bancorp in
September, 1985. FNBW, which was formed in 1941 (as The Peoples Bank),
operates a full service banking business in White County, Georgia, with a main
office in Cleveland, Georgia and one full service branch in Helen, Georgia. In
1986, FNBW, formerly a Georgia state banking institution, was converted to a
national bank, and its name was changed to First National Bank of White County.
First National Bank of Jackson County ("FNBJ") in Jefferson, Georgia, became a
wholly-owned subsidiary of First Bancorp in March 1986. FNBJ, which was formed

2
<PAGE> 11

in 1908, operates a full service banking business in Jackson County, Georgia
with a main office in Jefferson, Georgia and one full service branch in
Commerce, Georgia. The Citizens Bank of Toccoa, Georgia ("CBT") became a
wholly owned subsidiary of First Bancorp in December, 1986. CBT, which was
formed in 1951, operates a full service banking business in Stephens County,
Georgia with a main office and one full service branch in Toccoa, Georgia. The
Bank of Banks County ("BBC") became a wholly-owned subsidiary of First Bancorp
in June, 1987. BBC, which was formed in 1974, operates a full service banking
business in Banks County, Georgia with the main office in Homer, Georgia and
two full-service branches. First National Bank of Gilmer County ("FNBGC")
(formerly First State Bank of Gilmer County) became a wholly-owned subsidiary
of First Bancorp in December, 1987. FNBGC, which was formed in 1973 (as First
State Bank of Gilmer County), operates a full service banking business in
Gilmer County, Georgia, with a main office in Ellijay, Georgia and one
limited-service branch in East Ellijay, Georgia. On January 1, 1991, FNBGC,
formerly a Georgia state banking institution, was converted to a national bank,
and its name was changed to First National Bank of Gilmer County. On April 12,
1989 The Peoples Bank of Forsyth County ("PBF") became a wholly-owned
subsidiary of First Bancorp. PBF is a state banking association, formed in
December, 1983, which operates a full-service banking business in Forsyth
County, Georgia, with a main office and three full service branches. Pickens
County Bank ("PCB") became a wholly-owned subsidiary of First Bancorp on June
30, 1989. PCB, which was formed in 1976, operates a full service banking
business in Pickens County, Georgia, with its main office located in Jasper,
Georgia. First National Bank of Paulding County ("FNBPC") became a
wholly-owned subsidiary of First Bancorp on January 30, 1992. FNBPC, which was
formed in 1922, operates a full service banking business in Paulding County,
Georgia, with its main office located in Dallas, Georgia and with four full
service branches, one limited service branch and one stand alone ATM facility.
The Citizens Bank, Ball Ground, Georgia ("CBBG") became a wholly-owned
subsidiary of First Bancorp on October 30, 1992. CBBG, which was formed in
1926, operates a full service banking business in Cherokee County, Georgia,
with its main office located in Ball Ground, Georgia and with three full
service branches. The Bank of Villa Rica ("VRB"), Villa Rica, Georgia, became
a wholly-owned subsidiary of First Bancorp on May 31, 1993. VRB, which was
formed in 1899, operates a full service banking business in Carroll County,
Georgia, with its only office located in Villa Rica, Georgia. The Community
Bank of Carrollton ("CBC") became a wholly-owned subsidiary of First Bancorp on
August 31, 1993. CBC, which was formed in 1987, operates a full service
banking business in Carroll County, Georgia, with its only office located in
Carrollton, Georgia. The Commercial Bank, Douglasville, Georgia ("CBD") became
a wholly-owned subsidiary of First Bancorp on February 28, 1994. CBD, which
was formed in 1928, operates a full service banking business in Douglas County,
Georgia, with its main office in Douglasville, Georgia and with four full
service branches and four limited service branches. The Barrow Bank & Trust
Company ("BBT") became a wholly-owned subsidiary of First Bancorp on July 31,
1994. BBT, which was formed in 1989, operates a full service banking business
in Barrow County, Georgia, with its main office in Winder, Georgia and with one
full service branch. FF Bancorp, Inc. ("FF") became a wholly-owned subsidiary
of First Bancorp on July 3, 1995. FF was incorporated in Florida in May 1992,
became a

3
<PAGE> 12

multiple thrift holding company in July 1992, and became a multiple thrift and
one-bank holding company in April 1994. FF has three banking subsidiaries,
First Federal Savings Bank of New Smyrna ("NSB"), First Federal Savings Bank of
Citrus County ("CB") and The Key Bank of Florida ("KB"). NSB is a federal
savings bank, formed in 1935 as a mutual savings association and converted to a
stock savings bank on July 1, 1991. It operates a full-service banking
business in Volusia County, Florida. CB is a federal savings bank, which was
formed in 1963 as a mutual savings association and converted to a stock saving
bank on July 8, 1992. It operates a full service banking business in Citrus
County, Florida and also serves customers located in West Hernando County and
Marion County, Florida. KB is a state banking association which was formed in
December 1973 and which operates a full service banking business in the Tampa
Bay area of Florida.

Heard Bank is a state banking association, formed in 1905, and
operates a full-service banking business in Heard County, Georgia. The main
office of Heard Bank is located at Court Square, Franklin, Georgia, and the
building, containing approximately 5,600 square feet of useable office and
banking space, is owned by Heard Bank. From this office in Heard County, Heard
Bank carries on a full service banking business including making secured and
unsecured loans to finance commercial and personal transactions, accepting
deposits, and providing checking and savings accounts primarily for businesses
and residents of Heard County. Heard Bank also operates a limited service
facility in Ephesus, Georgia, conducting deposit business there three days per
week. An automated teller machine is also located at the Ephesus facility.
Heard Bank had approximately 19 employees (9 of whom were officers) as of
December 1, 1995.

RECENT MERGER BY FIRST BANCORP

On July 3, 1995, First Bancorp merged with FF Bancorp, Inc. ("FF") and
thereby acquired FF through the exchange of approximately 3,885,050 shares of
First Bancorp stock for 4,709,151 shares of FF stock. At June 30, 1995, total
assets of FF were $631,168,000, total stockholders' equity was $49,850,000, and
deposits were $572,858,000. FF had net income of $3,187,000 for the quarter
ended June 30, 1995 and $6,502,000 for its fiscal year ended December 31, 1994.

________________________________________________________________________________

MERGER OF FIRST BANCORP INTO REGIONS FINANCIAL CORPORATION
________________________________________________________________________________

On October 22, 1995, First Bancorp entered into an Agreement and Plan
of Reorganization (the "Regions Agreement") with Regions Financial Corporation
("Regions"). The Regions Agreement provides for the acquisition of First
Bancorp by Regions pursuant to the merger (the "Regions Merger") of First
Bancorp with and into Regions Merger Subsidiary, Inc., a newly formed
corporation organized under the laws of the State of Georgia and a wholly owned
subsidiary of Regions. As a result of the Regions Merger, each share of First
Bancorp common stock then issued and outstanding will be converted into and
exchanged for 0.76 of a share of Regions common stock. The Regions Merger is
subject to approval of First Bancorp shareholders holding a majority of the
outstanding shares of First

4
<PAGE> 13

Bancorp common stock and the approval of a majority of the votes cast by
Regions shareholders at a special shareholders meeting to be held to approve
the issuance of Regions common stock in the Regions Merger. The Regions Merger
was approved by First Bancorp shareholders on January 11, 1996 and by Regions
shareholders on January 11, 1996. The Regions Merger is also subject to
approval by the Federal Reserve, the Office of Thrift Supervision, the
Commissioner of Banking and Finance of the State of Georgia and the Department
of Banking and Finance of the State of Florida. The respective applications
for such approvals have been filed with each of these agencies.

Regions is a regional bank holding company headquartered in
Birmingham, Alabama, with approximately 288 banking offices in Alabama,
Florida, Georgia, Louisiana, and Tennessee. As of September 30, 1995, Regions
had total consolidated assets of approximately $13.8 billion, total
consolidated deposits of approximately $10.7 billion, and total consolidated
stockholders' equity of approximately $1.1 billion. Regions is the third
largest bank holding company headquartered in Alabama in terms of assets, based
on September 30, 1995 information. Regions operates banking subsidiaries in
Alabama, Florida, Georgia, Louisiana, and Tennessee and banking-related
subsidiaries engaged in mortgage banking, credit life insurance, leasing, and
securities brokerage activities with offices in various Southeastern states.
Through its subsidiaries, Regions offers a broad range of banking and
banking-related services.

Additional information about the Regions Merger is contained in the
joint proxy statement (the "Regions Proxy Statement") of First Bancorp and
Regions furnished to the shareholders of First Bancorp and Regions in
connection with the special shareholders meeting of each corporation, a copy of
said proxy statement being furnished herewith as Appendix C hereto and hereby
incorporated by reference.

If the merger of First Bancorp and Heard Bank is approved by the Heard
Bank shareholders and the various regulatory agencies, each share of First
Bancorp common stock received in the merger will be converted into 0.76 of a
share of Regions common stock in the event the Regions Merger is approved by
the various regulatory agencies. The Regions Merger is subject to additional
conditions set forth in the Regions Agreement as discussed in the Regions Proxy
Statement

Regions will provide without charge, upon the written or oral request
of any person, including any beneficial owner, to whom this proxy statement is
delivered, a copy of any and all information (excluding certain exhibits)
relating to Regions that has been incorporated by reference in the Regions
Proxy Statement. Such requests should be directed to Ronald C. Jackson,
Stockholder Assistance, Regions Financial Corporation, P.O. Box 1448,
Montgomery, Alabama 36102 (telephone (334) 832-8401). In order to ensure
timely delivery of the documents, any request should be made by February 6,
1996.

5
<PAGE> 14

________________________________________________________________________________

SUMMARY OF REORGANIZATION
________________________________________________________________________________

The following is a summary of certain features of the proposed
reorganization, which is qualified in its entirety by reference to the
Agreement of Reorganization and Plan of Merger (the "Reorganization Plan")
attached hereto as Appendix A and to the other textual information and
financial data set forth elsewhere in this Proxy Statement.

TERMS OF THE AGREEMENT OF REORGANIZATION AND PLAN OF MERGER

Pursuant to the Reorganization Plan, Interim Corporation, a Georgia
business corporation, has been organized as a wholly-owned subsidiary of First
Bancorp. Under the Reorganization Plan, Interim Corporation will be merged
with and into Heard Bank in a reverse triangular merger, with Heard Bank being
the surviving corporation in the merger under its charter and name. Heard Bank
will thereafter be operated as a wholly-owned subsidiary of First Bancorp. As
a result of the merger, each outstanding share of common stock of Heard Bank
(other than shares held by dissenters) will be converted into 325.58 shares of
common stock of First Bancorp.

BUSINESS OF THE PARTIES TO THE REORGANIZATION

First Bancorp currently is a multi-bank and multi-thrift holding
company with its banking subsidiaries in Georgia being The First National Bank
of Gainesville, First National Bank of Habersham, Granite City Bank in
Elberton, Georgia, Bank of Clayton, First National Bank of White County, First
National Bank of Jackson County, The Citizens Bank in Toccoa, Georgia, Bank of
Banks County, First National Bank of Gilmer County, The Peoples Bank of Forsyth
County, Pickens County Bank, First National Bank of Paulding County, Citizens
Bank, Ball Ground, Georgia, Bank of Villa Rica, The Community Bank of
Carrolton, the Commercial Bank, Douglasville, Georgia, and The Barrow Bank &
Trust Company. Its banking subsidiaries in Florida are First Federal Savings
Bank of New Smyrna, First Federal Savings Bank of Citrus County, and The Key
Bank of Florida.

First Bancorp is not engaged in any business other than normal banking
and mortgage banking services provided through its subsidiaries.

Through its subsidiaries, First Bancorp operates a full-service
banking business in Hall, Habersham, Elbert, Rabun, White, Jackson, Stephens,
Banks, Gilmer, Forsyth, Pickens, Paulding, Cherokee, Carroll, Douglas, and
Barrow Counties, Georgia and in Volusia, Citrus and Hillsborough Counties,
Florida. These First Bancorp subsidiaries provide such customary banking
services as checking and savings accounts, various other types of time
deposits, safe deposit facilities and money transfers. They also finance
commercial and personal transactions by making secured and unsecured loans.
Through The First National Bank of Gainesville, First Bancorp performs
corporate, employee benefit and personal trust services and provides other
financial services to its

6
<PAGE> 15

customers, including permanent residential mortgage loan financing. The First
National Bank of Gainesville engages in various residential mortgage banking
activities through a division called The Mortgage Source. First Federal
Savings Bank of New Smyrna and First Federal Savings Bank of Citrus County also
engage in traditional federal savings bank activities of primarily making
permanent residential mortgage loans. The First National Bank of Gainesville
also provides data processing services, through contractual arrangement with an
independent contractor, for banking applications to other banks in the area and
services mortgage loans which are owned by certain outside investors.

Heard Bank is a state banking association and operates a full-service
banking business in Heard County, Georgia. Heard Bank provides such customary
banking services as checking and savings accounts, various other types of time
deposits, safe deposit facilities and money transfers. It also finances
commercial and personal transactions by making secured and unsecured loans and
provides other financial services to its customers.

REASONS FOR THE REORGANIZATION; RECOMMENDATION OF BOARD OF DIRECTORS

The Board of Directors of Heard Bank has approved the Reorganization
Plan and recommends that the shareholders of Heard Bank vote in favor of its
approval.

In deciding to approve and recommend the Reorganization Plan, the
Board of Directors concluded that the Reorganization Plan offered shareholders
of Heard Bank the opportunity to exchange, at an equitable exchange ratio and
on a tax-free basis, their current equity investment for a more liquid
investment in a larger, more geographically diversified company, whose business
philosophy and financial and managerial resources should allow for continued
enhancement of shareholder value. See "THE PROPOSED REORGANIZATION - Reasons
for the Reorganization; Recommendation of Board of Directors." No independent
appraisal or opinion was obtained by the Board of Directors of Heard Bank in
determining or assessing the fairness of the exchange ratio utilized under the
Reorganization Plan.

OPERATIONS OF BANK AND FIRST BANCORP AFTER REORGANIZATION

If the reorganization is consummated, Heard Bank will become a
subsidiary of First Bancorp and will continue to operate as a banking
association and to engage in substantially the same business and activities in
which Heard Bank is presently engaged. It is contemplated that, at the time of
consummation, the officers and directors of Heard Bank will remain those who
are currently serving.

If the Reorganization Plan is consummated, the merger would have the
following effect on the balance sheet, income, and shares outstanding of First
Bancorp. The information presented is provided on a pro forma basis based upon
the September 30, 1995 financial statements of Heard Bank and of First Bancorp.
Total assets of First Bancorp would increase to approximately $3.154 billion on
a pro forma basis due to the addition of the assets of Heard Bank; Heard Bank's
assets would be

7
<PAGE> 16

approximately 1.33% of the total assets of First Bancorp after the merger.
Total deposits of subsidiaries of First Bancorp would increase to approximately
$2.624 billion on a pro forma basis due to the addition of the deposits of
Heard Bank; Heard Bank's deposits would be approximately 1.41% of the total
deposits of First Bancorp after the merger. The maximum number of First
Bancorp shares outstanding would increase to approximately 20,855,000 shares
due to the projected 325,580 shares which would be issued to Heard Bank
shareholders in the merger; the 325,580 shares would be approximately 1.56% of
outstanding shares of First Bancorp after the merger. The projections of
number of shares assume that no Heard Bank shareholders dissent from the
merger, and that 100% of the outstanding shares of Heard Bank are exchanged for
First Bancorp common stock. See "THE PROPOSED REORGANIZATION".

It is First Bancorp's intent that the board of directors of Heard Bank
operate as a board mostly made up of directors who are members of the local
community. First Bancorp will continue to be operated as a bank holding
company under the Federal Bank Holding Company Act of 1956, as amended, and the
bank holding company laws of Georgia, as a savings and loan holding company
under the Federal Savings and Loan Holding Company Act, as amended, and as a
reporting company under the Federal Securities Exchange Act of 1934.

PLEASE REFER TO THE REGIONS PROXY STATEMENT FOR INFORMATION ABOUT
REGIONS AND THE REGIONS MERGER.

REGULATORY APPROVAL REQUIRED

The merger is subject to the approval of the Federal Deposit Insurance
Corporation, the Georgia Department of Banking and Finance (the "Georgia
Department") and the Board of Governors of the Federal Reserve System.
Applications for those approvals have been filed with these agencies. Each of
these agencies has granted approval of the merger, subject to, among other
standard conditions, the approval of the shareholders of Heard Bank.

The Georgia Department's review of the application does not include an
evaluation of the proposed transaction from the financial perspective of the
individual shareholders of Heard Bank. Further, no shareholder should construe
an approval of the application by the Georgia Department to be a recommendation
that the shareholders vote to approve the proposal. Each shareholder entitled
to vote should evaluate the proposal to determine the personal financial impact
of the completion of the proposed transaction. Shareholders not fully
knowledgeable in such matters are advised to obtain the assistance of competent
professionals in evaluating all aspects of the proposal including any
determination that the completion of the proposed transaction is in the best
financial interest of the shareholder.

VOTE REQUIRED TO APPROVE MERGER

The affirmative vote of two-thirds (667 shares) of the outstanding
shares of Heard Bank common stock entitled to vote at the special shareholders
meeting is required for approval of the Reorganization Plan. Heard Bank
directors, executive officers, and their affiliates own approximately 66% (655
shares) of the outstanding shares of Heard Bank. The Board of Directors of
Heard Bank has approved the Reorganization Plan by the unanimous affirmative
vote of the directors and recommends that shareholders vote in favor of
approval. Each director has also agreed, in a letter agreement with First
Bancorp, to vote his shares in favor of approval of the Reorganization Plan.
The enclosed proxy, if properly executed, duly returned and not revoked, will
be voted in accordance with the instructions contained therein. If no
instructions are given, properly executed and returned proxies will be voted in
favor of the Reorganization Plan.

No vote is required by the shareholders of First Bancorp to carry out
the merger. First Bancorp directors, executive officers and their affiliates
(in regard to which they do not disclaim beneficial ownership of shares) own
approximately 7.2% of the outstanding stock of First Bancorp.

8
<PAGE> 17

RIGHTS OF DISSENTING SHAREHOLDERS

If the reorganization is consummated, shareholders of Heard Bank who
dissent are entitled under Section 7-1-537 of the Financial Institutions Code
of Georgia and Article 13 of the Georgia Business Corporation Code, and upon
compliance with the notice provisions referred to therein, to receive in cash
the value of their shares. Any shareholder desiring to dissent must deliver to
Heard Bank prior to or at the special shareholders meeting before the vote is
taken a written notice that he intends to demand payment of the fair value of
his shares if the Reorganization Plan is approved. In addition, a dissenting
shareholder must abstain from voting or must vote against the Reorganization
Plan. If the Reorganization Plan is approved, Heard Bank must send a written
dissenters' notice to dissenting shareholders no later than ten (10) days after
the merger is effectuated. The dissenters' notice must state where and when
the payment demand required of dissenting shareholders must be sent and where
and when stock certificates must be deposited. The date by which Heard Bank
must receive the payment demand may not be fewer than thirty (30) nor more than
sixty (60) days after the date the dissenters' notice is sent. A dissenting
shareholder sent the dissenters' notice must send Heard Bank the written
payment demand and deposit his stock certificates with Heard Bank in accordance
with the terms of the dissenters' notice. See "RIGHTS OF DISSENTING
SHAREHOLDERS."

CONVERSION OF HEARD BANK STOCK

As a result of the merger, each outstanding share of common stock of
Heard Bank (other than shares held by dissenters) will be converted into 325.58
shares of common stock of First Bancorp. Fractional shares of First Bancorp
common stock will not be issued in the merger. Any Heard Bank shareholder who
would be entitled to a fraction of a First Bancorp share shall receive a cash
payment in lieu of such fractional share in an amount determined by multiplying
the fraction of a share he would otherwise be entitled to receive by $21.50.

RIGHT OF TERMINATION OF THE REORGANIZATION PLAN

The obligations of First Bancorp and Interim Corporation to consummate
and effect the merger contemplated by the Reorganization Plan are subject to
the satisfaction of certain conditions. These conditions are fully described
in Paragraph 9 of the Reorganization Plan attached hereto as Appendix A. The
conditions include, but are not necessarily limited to, certain representations
of Heard Bank being true; no material adverse financial changes in Heard Bank;
and that the transaction will qualify to be accounted for using the
"pooling-of-interests" method of accounting. See the Reorganization Plan for
the full text of these conditions. See also "THE PROPOSED REORGANIZATION -
Conditions to Certain Obligations of First Bancorp."

The obligations of Heard Bank to consummate and effect the merger
contemplated by the Reorganization Plan are subject to the satisfaction of
certain conditions. These conditions are fully described in Paragraph 8 of the
Reorganization Plan attached hereto as Appendix A. The conditions include, but
are not necessarily limited to, certain representations of First Bancorp being
true; no

9
<PAGE> 18

material adverse financial changes in First Bancorp; and receipt of an opinion
of Stewart, Melvin & Frost, attorneys-at-law, regarding certain tax
consequences of the reorganization. "See "THE PROPOSED REORGANIZATION -
Conditions to Certain Obligations of Heard Bank."

The obligations of First Bancorp and Heard Bank under the
Reorganization Plan are, at the option of either of them, subject to the
satisfaction of certain conditions. These conditions are fully described in
Paragraph 10 of the Reorganization Plan attached as Appendix A. The conditions
include, but are not necessarily limited to, Heard Bank shareholder approval;
satisfaction of all laws, regulations and directives; and the stock of First
Bancorp being the subject of an effective registration statement under the
Federal Securities Act of 1933. See "THE PROPOSED REORGANIZATION - Conditions
to Certain Obligations of Both First Bancorp and Heard Bank."

The Reorganization Plan may be terminated based on the failure of the
conditions referred to in the Reorganization Plan, or the failure to consummate
the proposed reorganization due to no fault of the terminating party by
February 28, 1996.

EFFECT OF REORGANIZATION ON HEARD BANK SHAREHOLDERS

If the reorganization is consummated, the holders of the common stock
of Heard Bank will become holders of First Bancorp common stock through a stock
exchange in a statutory merger as outlined in the Reorganization Plan. For a
comparison of rights of the shareholders of Heard Bank and First Bancorp and
the effect of receiving cash for fractional or dissenting shares in the
Reorganization, please refer to the sections entitled "EFFECT OF REORGANIZATION
ON SHAREHOLDERS" and "FEDERAL INCOME TAX CONSEQUENCES."

TAX CONSEQUENCES

Consummation of the merger is conditioned on Heard Bank and First
Bancorp receiving an opinion from Stewart, Melvin & Frost, general counsel to
First Bancorp, to the effect that, under applicable provisions of the Internal
Revenue Code of 1986, as amended (the "Code"), no gain or loss will be
recognized for federal income tax purposes by Heard Bank, First Bancorp, or the
shareholders of Heard Bank who receive stock of First Bancorp in connection
with the proposed merger (except in connection with any cash received in lieu
of a fractional share) and to the effect that the merger qualifies as a
"reorganization" under Section 368 of the Code.

In order for the merger to qualify as a reorganization within the
meaning of Section 368(a)(1)(A) of the Code, there must be continuity of
interest by Heard Bank Shareholders in the surviving entity (First Bancorp)
after the merger. The disposition by Heard Bank shareholders of their First
Bancorp stock received in the merger due to the exchange of such stock for
Regions common stock in the Regions Merger could be determined by the Internal
Revenue Service ("I.R.S.") to be a violation of the continuity of interest
requirement and as a result, the exchange of Heard Bank stock for First Bancorp
stock in the merger could be determined to be a taxable event. However, there
are presently no I.R.S. rulings or cases holding such back-to-back mergers to
be a violation of the continuity of interest requirement, and it is the opinion
of Stewart, Melvin & Frost, based on the policy behind the continuity of
interest requirement, that the continuity of interest requirement for the
merger should not be violated by the exchange of First Bancorp stock received
in the merger for Regions stock in the Regions Merger. There can be no
assurance, however, that the I.R.S. will agree that the continuity of interest
requirement for the merger is not affected by the Regions Merger, and Stewart,
Melvin & Frost makes no such assurance.

Assuming the merger so qualifies as a "reorganization" for federal
income tax purposes, based on the representations of management of First
Bancorp and Heard Bank and subject to the immediately preceding paragraph, (i)
a Heard Bank shareholder who receives only shares of First Bancorp common stock
(and cash in lieu of a fractional share) in the merger will recognize no gain
or loss (except in connection with any such cash received in lieu of a
fractional share); and (ii) a Heard Bank shareholder who dissents and receives
only cash in the merger will recognize gain or loss with respect to Heard Bank
shares surrendered, subject to the provisions and limitations of Section 302 of
the Code, including the constructive ownership rules of Section 318 of the
Code. Any gain recognized will be taxable either as a dividend or as capital
gain, as discussed

10
<PAGE> 19

herein. The election to exchange shares for First Bancorp common stock or to
dissent and receive cash will affect the tax consequences of the merger to a
Heard Bank shareholder. If the merger qualifies as a Section 368
reorganization, neither First Bancorp nor Heard Bank will recognize gain or
loss as a result of the merger. EACH HOLDER OF HEARD BANK SHARES SHOULD
CONSULT HIS OWN TAX ADVISOR CONCERNING THE TAX CONSEQUENCES OF THE MERGER TO
SUCH HOLDER. SEE "FEDERAL INCOME TAX CONSEQUENCES."

ACCOUNTING TREATMENT

If the proposed reorganization is consummated, it is contemplated that
the acquisition will be accounted for by First Bancorp using the
"pooling-of-interests" method of accounting.

EXPENSES OF SOLICITATION AND REORGANIZATION

First Bancorp and Heard Bank will each pay its own expenses in
connection with this solicitation and the transactions contemplated by the
Reorganization Plan including all fees and expenses of its respective legal
counsel and independent auditors. See the Reorganization Plan attached hereto
as Appendix "A".

________________________________________________________________________________

PER SHARE INFORMATION
________________________________________________________________________________

The following table sets forth at the dates and for the periods
indicated historical, pro forma, and equivalent per share information with
respect to book value, net income and cash dividends declared on First Bancorp
and Heard Bank common stock. The pro forma and equivalent per share
information gives effect to the proposed acquisition of Heard Bank under the
pooling-of-interests method of accounting. In presenting pro forma and
equivalent per share amounts, First Bancorp data reflects one share of Heard
Bank common stock as 325.58 shares of First Bancorp common stock for each of
the 1,000 shares of Heard Bank common stock. The pro forma and equivalent
share information assumes that Heard Bank shareholders exchange 100% of their
shares for First Bancorp stock. Historical information for First Bancorp
includes the results of FF Bancorp, Inc., which was acquired by First Bancorp
on July 3, 1995 and accounted for as a pooling-of-interests. Since historical
information for First Bancorp includes the results of FF Bancorp, Inc., pro
forma and equivalent share information necessarily include the results of FF
Bancorp, Inc. This table should be read in conjunction with the financial
statements of the organizations and the pro forma condensed combined balance
sheet and statements of income information appearing elsewhere in this Proxy
Statement or incorporated herein by reference. ALSO, PLEASE REFER TO THE
REGIONS PROXY STATEMENT FOR INFORMATION ABOUT REGIONS AND THE REGIONS MERGER.

11
<PAGE> 20

<TABLE>
<CAPTION>
Cash
Dividends
Book Value Net Income Declared
Per Share Per Share Per Share
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
HISTORICAL:

FIRST BANCORP(1)

At or for the
fiscal year ended
December 31, 1994 $ 13.35 1.72 .778

At or for the
fiscal year ended
December 31, 1993 N/A 1.75 .705

At or for the
fiscal year ended
December 31, 1992 N/A 1.50 .640

At or for the nine-
month period ended
September 30, 1995 14.82 1.26 .625

HEARD BANK(2)

At or for the
fiscal year ended
December 31, 1994 $4,080.52 445.64 55.00

At or for the
fiscal year ended
December 31, 1993 N/A 403.58 55.00

At or for the
fiscal year ended
December 31, 1992 N/A 377.85 55.00

At or for the nine-
month period ended
September 30, 1995 4,520.75 455.23 15.00
</TABLE>

[TABLE CONTINUED NEXT PAGE]

(1) The primary source of funds of First Bancorp to pay
stockholder dividends is dividends from its subsidiary banks. The subsidiary
banks are subject to certain statutory and regulatory restrictions regarding
the payment of dividends. For a discussion of such restrictions, see "EFFECT
OF REORGANIZATION ON SHAREHOLDERS - Dividend Restrictions - First Bancorp."

(2) The primary source of funds of Heard Bank to pay stockholder
dividends is earnings of Heard Bank. Heard Bank is subject to certain
statutory and regulatory restrictions regarding the payment of dividends. For
a discussion of such restrictions, see "EFFECT OF REORGANIZATION ON
SHAREHOLDERS - Dividends Restrictions - Heard Bank."

12
<PAGE> 21

FIRST BANCORP

At or for the
fiscal year ended
12-31-94 $ 13.34 1.71 N/A

At or for the
fiscal year ended
12-31-93 N/A 1.74 N/A

At or for the
fiscal year ended
12-31-92 N/A 1.49 N/A

At or for the nine-
month period ended
9-30-95 14.81 1.27 N/A

FIRST BANCORP/HEARD BANK MERGER
EQUIVALENT SHARE INFORMATION:

HEARD BANK(1)

At or for the
fiscal year ended
12-31-94 $4,343.24 556.74 253.30

At or for the
fiscal year ended
12-31-93 N/A 566.51 229.53

At or for the
fiscal year ended
12-31-92 N/A 485.11 208.37

At or for the nine-
month period ended
9-30-95 4,821.83 413.49 203.49

FIRST BANCORP/REGIONS MERGER
EQUIVALENT SHARE INFORMATION:

HEARD BANK(2)

At or for the
fiscal year ended
12-31-94 $5,258.12 767.07 296.93

At or for the
fiscal year ended
12-31-93 4,921.60 690.36 257.34

At or for the
fiscal year ended
12-31-92 4,208.97 598.81 225.17

At or for the nine-
month period ended
9-30-95 5,668.87 616.13 244.97
</TABLE>

______________________

(1) Equivalent book value and net income per share data for Heard Bank
were determined by multiplying pro forma amounts for First Bancorp by the
exchange ratio of 325.58. Equivalent dividends per share data for Heard Bank
were determined by multiplying historical amounts for First Bancorp by the
exchange ratio of 325.58.

(2) Equivalent book value and net income per share data for Heard Bank
were determined by multiplying Regions and First National pro forma combined
amounts shown on page 8 of the Regions Proxy Statement (Appendix C hereto) by
the First Bancorp/Heard Bank exchange ratio (325.58) and then by the
Regions/First Bancorp exchange ratio (0.76). Equivalent dividends per share
data for Heard Bank were determined by multiplying historical amounts for
Regions shown on page 8 of the Regions Proxy Statement (Appendix C hereto) by
the First Bancorp/Heard Bank exchange ratio of (325.58) and then by the
Regions/First Bancorp exchange ratio (0.76).

13
<PAGE> 22

________________________________________________________________________________

MARKET AND STOCK PRICE INFORMATION
________________________________________________________________________________

FIRST BANCORP

The following table sets forth the high and low sales prices in the
over-the-counter market, where First Bancorp's common stock is traded, for the
period from January 1, 1993, to September 30, 1995. The prices are based upon
trades on the NASDAQ National Market System. As of December 1, 1995, there
were approximately 6,100 holders of record of First Bancorp common stock, and
possibly as many as 10,100 beneficial owners if shareholders who own stock in
names of investment firms are considered. PLEASE REFER TO THE REGIONS PROXY
STATEMENT FOR INFORMATION ABOUT REGIONS AND THE REGIONS MERGER.

<TABLE>
<CAPTION>
SALE PRICE
-----------------
HIGH LOW
---- ---
<S> <C> <C>
January 11, 1996 $31.50 (closing price)

1995

4th Quarter $33.00 $27.00
3rd Quarter 28.00 21.00
2nd Quarter 22.00 19.75
1st Quarter 20.75 18.00

1994

4th Quarter 20.75 16.62
3th Quarter 22.25 20.00
2nd Quarter 21.50 19.75
1st Quarter 22.25 20.25

1993

4th Quarter 21.25 19.50
3rd Quarter 22.50 19.75
2nd Quarter 22.25 20.00
1st Quarter 21.50 17.50
</TABLE>

HEARD BANK

There is no established public trading market for Heard Bank stock,
and therefore no established market prices exist. Heard Bank is aware of
isolated transactions in its common stock which

14
<PAGE> 23

have occurred during the last two years in the $3,750 to $4,000 per share
range. However, there can be no assurance that these transactions reflected
bona fide, arm's-length negotiations. There may have been other trades of
which Heard Bank management is unaware. As of December 1, 1995, there
were approximately 26 Heard Bank shareholders.

COMPARISON OF STOCK PRICES

A Letter of Intent regarding the acquisition of Heard Bank by First
Bancorp was signed on July 25, 1995, with public announcement of the merger
proposal being made on July 26, 1995. As of the first business day preceding
public announcement, the closing price of First Bancorp stock was $21.25 per
share. As previously stated, there is no established trading market for Heard
Bank stock, but based on management's best estimate the trading price for Heard
Bank stock on the date preceding public announcement of the merger proposal
would have been $4,000. Provided below is a table comparing the market value of
First Bancorp stock and the estimated value of Heard Bank stock as of the date
preceding public announcement of the proposed merger.

<TABLE>
<CAPTION>
Historical Historical Value of
Market Market Value Heard Bank
Value per per Heard Share on
First Bank Share Equivalent
Bancorp per Share
Share Basis(2)
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
As of July 25, $21.25 $4,000.00(1) $6,918.58
1995
</TABLE>

___________________

(1) Based on the last sale of Heard Bank stock of which management has
knowledge, which sale occurred on November 21, 1994.

(2) Equivalent per share value was determined by multiplying the historical
market value per First Bancorp share by the exchange ratio of 325.58.

15
<PAGE> 24

FIRST BANCORP AND HEARD BANK
PRO FORMA CONDENSED COMBINED BALANCE SHEET INFORMATION (UNAUDITED)

First Bancorp has entered into the Merger Plan with Heard Bank which, if
consummated, would result in Heard Bank becoming a subsidiary of First Bancorp.
Under the Merger Plan, the 1,000 outstanding common shares of Heard Bank will
be exchanged for 325,580 shares of First Bancorp common stock. No cash, except
for fractional shares, will be offered in the transaction which will be
accounted for as a pooling-of-interests. The following unaudited pro forma
combined balance sheet information of First Bancorp and Heard Bank at September
30, 1995 gives effect to the proposed acquisition of Heard Bank. The pro forma
condensed combined balance sheet should be read in conjunction with the
financial statements of the respective entities appearing elsewhere or
incorporated by reference in this Proxy Statement. PLEASE REFER TO THE REGIONS
PROXY STATEMENT FOR PRO FORMA INFORMATION ABOUT REGIONS AND FIRST BANCORP AND
THE REGIONS MERGER.

<TABLE>
<CAPTION>
HEARD BANK

FIRST HEARD PRO-FORMA PRO-FORMA

BANCORP BANK ADJUSTMENTS COMBINED
------------------------------------------------------
(AMOUNTS ARE PRESENTED IN THOUSANDS)
<S> <C> <C> <C> <C>
Cash and due from banks $ 98,244 2,069 - 100,313

Federal funds sold 91,652 1,300 - 92,952

Interest-bearing deposits in other
financial institutions 10,708 - - 10,708

Investment securities available-for-sale 663,106 - - 663,106

Investment securities held-to-maturity 152,312 6,961 - 159,273

Loans, net 1,944,638 30,861 - 1,975,499

Premises and equipment, net 67,209 413 - 67,622

Other assets 84,006 268 - 84,274
------------------------------------------------------
Total assets $3,111,875 41,872 - 3,153,747
======================================================

Deposits $2,587,123 37,021 - 2,624,144

Federal funds purchased, securities sold
under agreements to repurchase, and
other short-term borrowings 95,082 - - 95,082

Long-term debt 79,641 - - 79,641

Other liabilities 45,763 331 - 46,094
------------------------------------------------------
Total liabilities
2,807,609 37,352 - 2,844,961
------------------------------------------------------
Common stock 20,529 100 326(A) 20,855
(100)(A)
Additional paid-in-capital 86,468 2,300 (226)(A) 88,542

Retained earnings 194,731 2,120 - 196,851

Net unrealized holding gains on investment
securities available-for-sale 2,538 - - 2,538
------------------------------------------------------
Total shareholders' equity 304,266 4,520 - 308,786
------------------------------------------------------
Total liabilities and
shareholders' equity $3,111,875 41,872 - 3,153,747
======================================================
</TABLE>

____________________

(A) Reflects the acquisition of 1,000 shares of Heard Bank common stock by
First Bancorp and the elimination of the common stock of Heard Bank.

16
<PAGE> 25

FIRST BANCORP AND HEARD BANK
PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME (UNAUDITED)

The following unaudited pro forma condensed combined statements of income of
First Bancorp and subsidiaries for each of the years in the three-year period
ended December 31, 1994 and each of the nine month periods ended September 30,
1995 and 1994, give effect to its proposed acquisition of Heard Bank for
325,580 shares of First Bancorp common stock. The amounts shown for First
Bancorp include the acquisition of FF Bancorp, Inc. completed on July 3, 1995
and accounted for as a pooling-of-interests. The acquisition of Heard Bank
will be accounted for as a pooling-of-interests and hence all periods presented
reflect combined First Bancorp and Heard Bank data. The pro forma condensed
combined statements of income should be read in conjunction with the notes to
the pro-forma financial statements and separate financial statements and
related notes of the respective entities appearing elsewhere or incorporated
herein by reference in this Proxy Statement. The pro-forma financial data has
been prepared based upon the historical financial statements of First Bancorp
and Heard Bank. These pro-forma statements may not be indicative of the
results that actually would have occurred if the transactions had been in
effect on the dates indicated or which may be obtained in the future. PLEASE
REFER TO THE REGIONS PROXY STATEMENT FOR PRO FORMA INFORMATION ABOUT REGIONS
AND FIRST BANCORP AND THE REGIONS MERGER.

<TABLE>
<CAPTION>
NINE MONTHS ENDED YEARS ENDED DECEMBER 31,
SEPTEMBER 30,
-------------------------------------------- -----------------------------
1995 1994 1994 1993 1992
-------------------------------------------- -----------------------------
(AMOUNTS ARE PRESENTED IN THOUSANDS, EXCEPT PER SHARE DATA)

First Heard Pro-Forma
Bancorp Bank Combined
----------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Interest income $ 179,720 2,592 182,312 153,298 208,902 193,720 203,147
Interest expense 84,994 1,171 86,165 63,376 87,261 83,708 101,533
---------------------------------------------------------------------------
Net interest income 94,726 1,421 96,147 89,922 121,641 110,012 101,614
Provision for loan losses 1,963 - 1,963 (136) 1,627 3,212 12,345
Other income 21,791 176 21,967 22,734 28,344 33,225 31,496
Other expenses 77,371 907 78,278 73,671 100,044 92,320 79,854
---------------------------------------------------------------------------
Income before income taxes and cumulative
effect of accounting change 37,183 690 37,873 39,121 48,314 47,705 40,911
Income tax expense 11,332 235 11,567 11,301 13,232 13,826 11,598
---------------------------------------------------------------------------
Income before cumulative effect
of accounting change 25,851 455 26,306 27,820 35,082 33,879 29,313
Cumulative effect of accounting change - - - - - 984 -
---------------------------------------------------------------------------
Net income $ 25,851 455 26,306 27,824 35,082 34,863 29,313
===========================================================================
Net income per share based on weighted average
shares and common share equivalents $1.27 1.37 1.71 1.74 1.49
=====================================================
Weighted average number of outstanding shares
and common share equivalents 20,791 20,379 20,458 19,994 19,631
=====================================================
</TABLE>

17
<PAGE> 26

HEARD BANK

SELECTED FINANCIAL DATA (UNAUDITED)

The following selected financial data has been derived from the financial
statements of Heard Bank. This table is only a summary and should be read in
conjunction with the financial statements of Heard Bank contained in this Proxy
Statement and other financial information contained herein.

<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
--------------------- --------------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
----------- -------- -------- ------- -------- ------ ------
(amounts are presented in thousands, except per share data)

<S> <C> <C> <C> <C> <C> <C> <C>
Net interest income $ 1,421 1,745 1,754 1,716 1,619 1,342 1,386
=========== ====== ====== ====== ====== ====== ======

Provision for loan losses $ 0 0 50 50 50 50 25
=========== ====== ====== ====== ====== ====== ======

Net income $ 455 376 446 404 378 272 282
=========== ====== ====== ====== ====== ====== ======

Net income per share $ 455 376 446 404 378 272 282
=========== ====== ====== ====== ====== ====== ======

Cash dividends declared per share $ 15.00 10.00 55.00 55.00 55.00 50.00 50.00
=========== ====== ====== ====== ====== ====== ======

Total assets (end of period) $ 41,872 36,076 39,422 34,243 32,572 29,397 26,857
=========== ====== ====== ====== ====== ====== ======

Total average stockholders'
equity $ 4,250 3,850 3,886 3,678 3,137 2,978 2,730
=========== ====== ====== ====== ====== ====== ======

Total average assets $ 39,316 35,747 37,162 34,414 30,452 27,346 25,629
=========== ====== ====== ====== ====== ====== ======

Ratios:
Net income to average
assets(1) 1.55% 1.41% 1.20% 1.17% 1.24% .99% 1.10%
=========== ====== ====== ====== ====== ====== ======

Net income to average
stockholders' equity(1) 14.31% 13.06% 11.48% 10.98% 12.05% 9.13% 10.33%
=========== ====== ====== ====== ====== ====== ======

Average stockholders'
equity to average assets 10.81% 10.77% 10.46% 10.69% 10.30% 10.89% 10.65%
=========== ====== ====== ====== ====== ====== ======
</TABLE>

(1) Ratios for the nine months ended September 30, 1995 and 1994 are
annualized.

18
<PAGE> 27

HEARD BANK MANAGEMENT'S DISCUSSIONS AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992

The following is a discussion of Heard Bank's financial condition as
of December 31, 1994 and results of operations for the years ended December 31,
1994, 1993, and 1992, respectively. These comments should be read in
conjunction with Heard Bank's financial statements and related notes and the
statistical information appearing elsewhere in this Proxy Statement.

FINANCIAL CONDITION

Heard Bank manages its balance sheet to maximize long-term earnings
opportunities while maintaining the integrity of its financial position and
quality of earnings. In this regard, management classifies the balance sheet
into earning assets and funds. Earning assets include federal funds sold,
interest-bearing deposits in banks, investment securities (including mutual
funds), and loans. Funds include demand deposits, interest-bearing NOW and
IMMA deposits, savings deposits and time deposits.

The following provides a summary analysis of the changes in Heard
Bank's balance sheet for the year ended December 31, 1994, as compared to
December 31, 1993.

<TABLE>
<CAPTION>
December 31, December 31, Change
1994 1993 Amount Percent
----------- ----------- -------------------------
<S> <C> <C> <C> <C>
Earning Assets:
Federal funds sold $ 900,000 $ 1,700,000 $ (800,000) (47.06)%
Investment securities 8,629,011 6,654,248 1,974,763 29.68
Loans 27,401,035 23,777,442 3,623,593 15.24
----------- ------------ ----------- ------
Total earning assets $36,930,046 $ 32,131,690 $ 4,798,356 14.93%
=========== ============ =========== ======

Funds:

Noninterest-bearing demand deposits $ 4,762,166 $ 3,432,653 $ 1,329,513 38.73%
Interest-bearing NOW and IMMA deposits 6,560,553 5,763,950 796,603 13.82
Savings deposits 3,515,385 3,186,747 328,638 10.31
Time deposits 20,336,979 18,078,492 2,258,487 12.49
----------- ------------ ----------- ------
Total funds $35,175,083 $ 30,461,842 $ 4,713,241 15.47%
=========== ============ =========== ======
</TABLE>

The net increase in earning assets of $4,798,356 or 14.93%, was
primarily due to the increase in loans of $3,623,593 and investment securities
of $1,974,763. These increases were partially funded by a decrease in federal
funds sold of $800,000. The additional funding of earning assets came from an
increase in deposit funds of $4,713,241.

The increase in funds of $4,713,241, or 15.47%, was due to the
increase in all deposit categories.

The amount of total loans (net of unearned income) outstanding as of
December 31, 1994, based on remaining scheduled repayments of principal, are
shown by maturity in the following table:

LOAN PORTFOLIO MATURITY

<TABLE>
<CAPTION>
Maturity
------------------------------------------------------------
After 1 But
December 31, 1994 Within 1 Year Within 5 Years After 5 Years Total
- ---------------------------------------------- ------------- -------------- ------------- -----
<S> <C> <C> <C> <C>
Total Loans (all loans are fixed rates) $6,762,248 $9,540,385 $11,447,270 $27,749,903
========== ========== =========== ===========
</TABLE>

19
<PAGE> 28

ASSET QUALITY

Heard Bank monitors and manages asset quality according to various
risk elements as summarized below:

<TABLE>
<CAPTION>
Risk Elements
----------------------------------------------------------
December 31, 1994 December 31, 1993
------------------------- -------------------
Amount % of Loans Amount % of Loans
------ ---------- ------ ----------
<S> <C> <C> <C> <C>
Nonperforming loans:
Total nonperforming loans -0- -0- -0- -0-
------ -------
Other real estate -0- -0- -0- -0-
------ -------
Total nonperforming assets -0- -0- -0- -0-
------ -------
Loans past due 90 days or more -0- -0- 188,026 .59%
------ -------
Nonperforming assets plus loans past
due 90 days or more -0- -0- 188,026 .59%
------ -------

Allowance for loan losses/nonperforming loans N/A N/A

Allowance for loans losses/nonperforming
assets N/A 167.96%

Allowance for loan losses/loans, net of
unearned income 1.26% 1.31%
</TABLE>

Nonperforming loans are comprised of loans accounted for on a
nonaccrual basis ("nonaccrual loans"). Nonperforming assets consist of
nonperforming loans plus other real estate owned. Loans which are
contractually past due 90 days or more as to interest or principal payments are
not considered nonperforming loans by management, but have been included for
informational purposes.

Accrual of interest on loans is discontinued when reasonable doubt
exists as to the full, timely collection of interest or principal. All
interest previously accrued in the current year, but not collected, is reversed
against current period interest income.

Heard Bank has experienced few nonperforming and underperforming loans
and assets in recent years. Heard Bank has worked to keep the amount of loans
classified as nonperforming at a minimum. Management monitors past due loans
extremely closely as evidenced by the minimal amount of loans past due 90 days
or over. The allowance for loan losses at December 31, 1994 was 1.26% of loans
outstanding, down slightly from the 1.31% reported at December 31, 1993, which
is at a satisfactory level.

LIQUIDITY AND INTEREST RATE SENSITIVITY

Liquidity management involves the ability to meet the cash flow
requirements of customers who may be either depositors wanting to withdraw
funds or borrowers needing assurance that sufficient funds will be available to
meet their credit needs and the ability to fund Heard Bank commitments.
Interest rate sensitivity management seeks to maintain consistent and
acceptable net interest spreads and to enhance growth of net interest income
through periods of changing interest rates.

Heard Bank seeks to meet day to day liquidity needs through management
of the cash and federal fund accounts. If needed, additional funds may be
obtained through federal funds purchased. Heard Bank maintains banking
relationships whereby Heard Bank can borrow federal funds if needed for
liquidity. Short-term liquidity is maintained by the management of funds
invested in short-term instruments such as federal funds sold and
interest-bearing deposits with other financial institutions. Long-term
liquidity is maintained through the management

20
<PAGE> 29

of investment securities and the loan portfolio in conjunction with adding to
the core deposit base through the procurement of additional funds from
depositors or through money market instruments.

It is the policy of Heard Bank to maintain a financial profile which
attempts to insulate Heard Bank's profits against the uncontrollable influence
of widely fluctuating interest rates. This is accomplished through an
appropriate balance between interest sensitive assets and interest sensitive
liabilities. This sensitivity is impacted through management of the repricing
and maturity dates of assets and liabilities. The management of interest
sensitive assets and liabilities can be attained through analysis of the
interest rate sensitivity gap position and by periodically adjusting the
pricing of bank products to move customer deposit investment dollars and
subsequent Heard Bank earning asset dollars into the product area which will
give Heard Bank the best net interest margin. Beta is a meausre of risk that
is expressed numerically as a deviation from the market interest rates. The
"beta-adjusted" gap differs from the "standard" or regulatory gap measures by
adding supportable management judgements to the rate sensitivity of rate
related assets and liabilities that do not change in direct proportion to
market rate changes. The Beta gap position of Heard Bank at December 31, 1994
in a 3-month, 6-month and 12-month time horizon is shown below.

<TABLE>
<CAPTION>
Time Horizon
---------------------------------------------
3-Month 6-Month 12-Month
------------ ----------- -----------
<S> <C> <C> <C>
Beta Adjusted Gap Position:
Rate sensitive assets $ 8,403,310 $13,866,831 $23,084,384
Rate sensitive liabilities 9,910,116 14,208,709 17,423,394
----------- ----------- -----------
Dollar Gap $ 1,506,806 $ 341,878 $ 5,660,990
=========== =========== ===========

Gap Ratio .85% .98% 1.33%
=========== =========== ===========
</TABLE>

This Beta gap ratio, which indicates Heard Bank is liability
sensitive, has a positive effect on earnings in a period of falling interest
rates since interest bearing liabilities are normally shorter term than earning
assets and are repriced to lower rates quicker than the earning assets. The
reverse would be true in a period of rising interest rates, and Heard Bank will
need to consider this in asset/liability planning. At December 31, 1994,
management feels the Beta gap position is satisfactory, given the current
interest rate environment.

NET INTEREST INCOME

Interest income from loans to and investment in securities of states,
municipalities and other public entities is not subject to Federal income tax
except where the minimum tax provisions or the disallowed interest provisions
of current tax law applies. In order to make the pre-tax income and resultant
yields of non-taxable loans and investment securities comparable to taxable
loan and investment securities, and for the purposes of this analysis, a
tax-equivalent adjustment, taking into account the effect of the disallowed
interest, is added to interest income. The income statements considering the
tax-equivalent adjustment based on a 34% rate for the years ending at December
31, 1994, 1993 and 1992, are shown in the following table:

21
<PAGE> 30

Condensed Statements of Income
(Tax equivalent basis)

<TABLE>
<CAPTION>
Years Ended
----------------------------------------------------------------
December 31, December 31, December 31,
1994 1993 1992
------------ ------------ ------------
<S> <C> <C> <C>
Interest income $ 2,987,535 $ 2,843,271 $ 2,800,018
Tax-equivalent adjustment 5,604 5,409 2,494
----------- ----------- -----------
Interest income, tax-equivalent basis 2,993,139 2,848,680 2,802,512
Interest expense 1,242,583 1,127,662 1,181,105
----------- ----------- -----------
Net interest income, tax-equivalent basis 1,750,556 1,721,018 1,621,407
Provision for loan losses (50,000) (50,000) (50,000)
Other income 232,561 186,282 213,035
Other expenses (1,264,750) (1,299,232) (1,234,290)
----------- ----------- -----------
Income before income taxes 668,367 558,068 550,152
Income taxes (217,122) (149,082) (169,809)
Tax-equivalent adjustment (5,604) (5,409) (2,494)
----------- ----------- -----------
Income taxes, tax-equivalent basis (222,726) (154,491) (172,303)
----------- ----------- -----------
Net income $ 445,641 $ 403,577 $ 377,849
=========== =========== ===========
</TABLE>

For the year ended December 31, 1994, interest income, on a tax
equivalent basis, increased 5.07%, or $144,459, compared to 1993. The increase
resulted primarily from an increase in loans. Total interest expense for the
year ended December 31, 1994 increased 10.19%, or $114,921 compared to the same
period in 1993. Net interest income is an effective measure of how well
management has balanced Heard Bank's interest sensitive assets and liabilities.
Net interest income, on a tax equivalent basis, increased $29,538, or 1.72%
over 1993 as a result of an overall increase in interest-earning assets and
interest-bearing liabilities.

PROVISION FOR LOAN LOSSES

The provision for loan losses is the charge to operations that
management feels is necessary to maintain an adequate allowance for loan
losses. It is based on the growth of the loan portfolio, the amount of net
loan losses insured in previous periods, and management's estimation of
potential future charge-offs based on an evaluation of loan portfolio risks and
certain economic factors. Net charge-offs charged to the allowance was $16,937
for the year ended December 31, 1994. The allowance for loan losses was at
$348,868 as of December 31, 1994. This level is based on Heard Bank's analysis
of the loan portfolio during the year. The allowance was equal to 1.26% of
total loans at December 31, 1994, down from 1.31% at December 31, 1993.

OTHER INCOME

Other income of $232,561 increased $46,279, or 24.84%, in the year
ended December 31, 1994 from the same period in 1993. The increase came
primarily from service charges on deposit accounts which increased $39,000.
Other operating income increased slightly.

OTHER EXPENSES

Total other expenses of $1,264,750 for the year ended December 31,
1994 decreased $34,482, or 2.65%, from the comparable period in 1993. The
decrease is primarily attributable to a decrease in salaries and benefits
expense of $37,000. Other operating expenses, net occupancy and furniture and
equipment expense were stable over 1994 and 1993.

22
<PAGE> 31

FEDERAL INCOME TAX

The effective income tax rates for the years ended December 31, 1994
and 1993 were 32.76% and 26.98% respectively. Heard Bank's effective income
tax rates have approximated statutory rates in recent years.

PERFORMANCE RATIOS

Results of operations can be measured by various ratios. Two widely
recognized performance indicators are return on average equity and return on
average assets. Heard Bank's return on average equity was 11.47% for the year
ended December 31, 1994 and return on average assets was 1.21%. These ratios
indicate that the earnings have improved during 1994 over 1993. Heard Bank has
met its liquidity and capital needs.

CAPITAL RESOURCES AND ADEQUACY

Heard Bank has consistently maintained a satisfactory level of
capital, as measured by its average equity to average assets ratio of 10.46% at
December 31, 1994 compared to an average equity to average assets ratio of
10.69% at December 31, 1993. Average equity increased $208,000, or 5.66%, for
the year ended December 31, 1994 through earnings retention.

23
<PAGE> 32

HEARD BANK MANAGEMENT'S DISCUSSIONS AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE
THREE-MONTH AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 1995 AND 1994

The following is a discussion of Heard Bank's financial condition as
of September 30, 1995 and results of operations for the three-month and
nine-month periods ended September 30, 1995 and 1994, respectively. These
comments should be read in conjunction with Heard Bank's financial statements
and related notes and the statistical information appearing elsewhere in this
Proxy Statement.

FINANCIAL CONDITION

Heard Bank manages its balance sheet to maximize long-term earnings
opportunities while maintaining the integrity of its financial position and
quality of earnings. In this regard, management classifies the balance sheet
into earning assets and funds. Earning assets include federal funds sold,
interest-bearing deposits in banks, investment securities, and loans. Funds
include demand deposits, interest-bearing NOW and IMMA deposits, savings
deposits and time deposits.

The following provides a summary analysis of the changes in Heard
Bank's balance sheet for the nine months ended September 30, 1995, as compared
to December 31, 1994.

<TABLE>
<CAPTION>
September 30, December 31, Change
1995 1994 Amount Percent
------------------- ------------------- -----------------------
<S> <C> <C> <C> <C>
Earning Assets:

Federal funds sold $ 1,300,000 $ 900,000 (400,000) 44.44%
Investment securities 6,961,000 8,629,000 (1,668,000) (19.33)
Loans 30,861,000 27,401,000 3,460,000 12.63
-------------- ------------ -----------
Total earning assets $ 39,122,000 $ 36,930,000 $ 2,192,000 5.94%
============== ============ ===========

Funds:

Noninterest-bearing demand deposits $ 3,919,000 $ 4,762,000 $ (843,000) (17.70)%
Interest-bearing NOW and IMMA deposits 5,339,000 6,561,000 (1,222,000) (18.63)
Savings deposits 3,438,000 3,515,000 77,000 (2.19)
Time deposits 24,325,000 20,337,000 3,983,000 19.61
-------------- ------------
Total deposits funds $ 37,021,000 $ 35,175,000 $ 1,846,000 5.25%
============== ============ ===========
</TABLE>

The net increase in earning assets of $2,192,000 or 5.60%, was
primarily due to the increase in loans of $3,460,000, and increase in federal
funds sold of $400,000. The increase in loans and federal funds was funded by
decreases in investment securities of $1,668,000 and an increase in total
deposit funds of $1,846,000.

24
<PAGE> 33

The net increase in deposit funds of $1,846,000, or 5.25%, was
primarily due to an increase in time deposits of $3,988,000 with a decrease in
interest-bearing NOW and IMMA deposits of $1,222,000 and a decrease in
non-interest bearing demand deposits of $843,000.

The amount of total loans (net of unearned income) outstanding as of
September 30, 1995, based on remaining scheduled repayments of principal, are
shown by maturity in the following table:

LOAN PORTFOLIO MATURITY

<TABLE>
<CAPTION>
Maturity
-----------------------------------------------------------------------
After 1 But
September 30, 1995 Within 1 Year Within 5 Years After 5 Years Total
- --------------------------------- ------------- -------------- ------------- -----
<S> <C> <C> <C> <C>
Total Loans (all loans are fixed rates) $6,951,000 $12,699,000 $11,571,000 $31,221,000
========== =========== =========== ===========
</TABLE>

ASSET QUALITY

Heard Bank monitors and manages asset quality according to various
risk elements as summarized below:

<TABLE>
<CAPTION>
Risk Elements
September 30, 1995 December 31, 1994
-------------------------- --------------------------
Amount % of Loans Amount % of Loans
-------------------------- --------------------------
<S> <C> <C> <C> <C>
Nonperforming loans:
Nonaccrual loans $24,000 .08% $ -0- -0-
------- -----
Total nonperforming loans 24,000 .08% -0- -0-
Other real estate -- .-- -0- -0-
------- -----
Total nonperforming assets 24,000 .08% -0-
Loans past due 90 days or more -- .-- -0-
------- -----
Nonperforming assets plus loans past
due 90 days or more 24,000 .089% -0- -0-
------- -----

Allowance for loan losses/nonperforming loans 1,500 .00% N/A

Allowance for loans losses/nonperforming
assets 1,500 .00% N/A

Allowance for loan losses/loans, net of
unearned income 1 .15% 1.26%
</TABLE>

Nonperforming loans are comprised of loans accounted for on a
Nonaccrual basis ("Nonaccrual loans"). Nonperforming assets consist of
nonperforming loans. Loans which are contractually past due 90 days or more as
to interest or principal payments are not considered nonperforming loans by
management, but have been included for informational purposes.

Heard Bank has experienced few nonperforming and underperforming
loans and assets in recent years. Heard Bank has worked to keep the amount of
loans classified as nonperforming at a minimum.

Management monitors past due loans extremely close as evidenced by the
minimal amount of loans past due 90 days or over. The

25
<PAGE> 34

allowance for loan losses at September 30, 1995 of $360,000 was 1.15% of net
loans outstanding, down slightly from the 1.26% reported at December 31, 1994,
but still at a level which management considers satisfactory.

LIQUIDITY AND INTEREST RATE SENSITIVITY

It is the policy of Heard Bank to maintain a financial profile which
attempts to insulate Heard Bank's profits against the uncontrollable influence
of widely fluctuating interest rates. This is accomplished through an
appropriate balance between interest sensitive assets and interest sensitive
liabilities. This sensitivity is impacted through management of the repricing
and maturity dates of assets and liabilities. The management of interest
sensitive assets and liabilities can be attained through analysis of the
interest rate sensitivity gap position and by periodically adjusting the
pricing of bank products to move customer deposit investment dollars and
subsequent Bank earning asset dollars into the product area which will give the
Bank the best net interest margin. Beta is a measure of risk that is
expressed numerically as a deviation from the market interest rates. The
"beta-adjusted" gap differs from the "standard" or regulatory gap measures by
adding supportable management judgements to the rate sensitivity of rate
related assets and liabilities that do not change in direct proportion to
market rate changes. The Beta gap position of Heard Bank at September 30, 1995
in a 3-month, 6-month and 12-month time horizon is shown below.

<TABLE>
<CAPTION>
Time Horizon
-------------------------------------------
3 Month 6 Month 12 Month
------------- ------------ -------------
<S> <C> <C> <C>
Beta Adjusted Gap Position:
Rate sensitive assets $ 10,584,000 $ 16,320,000 $ 21,339,000
Rate sensitive liabilities 8,579,000 19,238.000 24,094,000
------------- ------------- ------------
Dollar Gap 2,005,000 ($2,918,000) ($2,755,000)
============= ============= ============

Gap Ratio 1.23 0.85 0.89
============= ============= ============
</TABLE>

26
<PAGE> 35

This Beta gap ratio, which indicates Heard Bank is liability
sensitive, has a positive effect on earnings in a period of falling interest
rates since interest bearing liabilities are normally shorter term than earning
assets and are repriced to lower rates quicker than the earning assets. The
reverse would be true in a period of rising interest rates, and Heard Bank will
need to consider this in asset/liability planning. At September 30, 1995,
management feels the Beta gap position is satisfactory, given the current
interest rate environment.

NET INTEREST INCOME

Interest income from loans to and investment in securities of states,
municipalities and other public entities is not subject to Federal income tax
except where the minimum tax provisions or the disallowed interest provisions
of current tax law applies. In order to make the pre-tax income and resultant
yields of non-taxable loans and investment securities comparable to taxable
loan and investment securities, and for the purposes of this analysis, a
tax-equivalent adjustment, taking into account the effect of the disallowed
interest, is added to interest income. The income statement considering the
tax-equivalent adjustment based on a 34% rate for the three and six month
periods ending at September 30, 1995, and 1994, are shown in the following
table:

Condensed Statements of Income
(Tax equivalent basis)
(In Thousands)

Three Months Ended Nine Months Ended
------------------------------ -------------------------------
September 30, September 30, September 30, September 30,
1995 1994 1995 1994
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Interest income $ 899 $ 757 $ 2,592 $ 2,209
Tax-equivalent adjustment 1 1 2 5
----- ----- ------- -------
Interest income, tax-equivalent basis 900 758 2,594 2,214
Interest expense (424) (313) (1,170) (914)
----- ----- ------- -------
Net interest income, tax-equivalent basis 476 445 1,424 1,300
Provision for loan losses - - - -
Other income 55 57 176 169
Other expenses (304) (335) (907) (895)
----- ----- ------- -------
Income before income taxes 227 167 693 574
Income taxes (78) (58) (235) (193)
Tax-equivalent adjustment (1) (1) (2) (5)

Income taxes, tax-equivalent basis (79) (59) (237) (198)
----- ----- ------- -------
Net income $ 148 $ 108 $ 455 $ 376
===== ===== ======= =======
</TABLE>

For the nine months ended September 30, 1995, interest income, on a
tax equivalent basis, increased 17.16%, or $380,000, compared to the same
period in 1994. The increase resulted primarily from an increase in loans.
Total interest expense for the nine months ended September 30, 1995 increased
28.04%, or $256,000 compared to the same period in 1994. Net interest income
is an effective measure of how well management has balanced Heard Bank's
interest sensitive assets and liabilities. Net interest income, on a tax
equivalent basis,

27
<PAGE> 36

increased $124,000, or 9.52% over 1994 as a result of an overall increase in
interest-earning assets and interest-bearing liabilities.

PROVISION FOR LOAN LOSSES

The provision for loan losses is the charge to operations that
management feels is necessary to maintain an adequate allowance for loan
losses. It is based on the growth of the loan portfolio, the amount of net
loan losses incurred in previous periods, and management's estimation of
potential future charge-offs based on an evaluation of loan portfolio risks and
certain economic factors. Net recoveries credited to the allowance was $11,000
for the nine months ended September 30, 1995. The allowance for loan losses
was at $360,000 as of September 30, 1995. This level is based on Heard Bank's
analysis of the loan portfolio during the year. The allowance was equal to
1.15% of total loans at September 30, 1995, down from 1.26% at December 31,
1994.

OTHER INCOME

Other income of $176,000 increased $7,000, or 4.40%, in the nine month
period ended September 30, 1995 from the same period in 1994. The net increase
came from service charges on deposit accounts which increased $17,000 while
other operating income declined by $10,000.

Other income for the three month period ended September 30, 1995
increased $1,000, or 1.85%, over the third quarter of 1994. The increase came
primarily from an increase in service charges on deposits of $2,000 with an
offsetting decrease in other operating income of $5,000.

OTHER EXPENSES

Total other expenses of $907,000 for the nine months period ended
September 30, 1995 increased $13,000, or 1.41%, from the comparable period in
1994. The increase is primarily attributable to increases in salary and
employee benefit expenses while slight decreases were experienced in net
occpany expenses and furniture and equipment expenses.

Total other expenses of $304,000 for the three month period ended
Sepember 30, 1995 decreased by $31,000, or 9.13%, from the same period in 1994.
The net decrease is attributable to an increase of $19,000 in salaries and
employee benefits while furniture and equipment expenses decreased $8,000 and
other operating expenses decreased $41,000 due primarily to a refund of
previously paid FDIC insurance premiums.

28
<PAGE> 37

FEDERAL INCOME TAX

The effective income tax rates for the nine months ended September 30,
1995 and 1994 were 34.05% and 33.91% respectively. Heard Bank's effective
income tax rates have approximated statutory rates in recent years.

PERFORMANCE RATIOS

Results of operations can be measured by various ratios. Two widely
recognized performance indicators are return on average equity and return on
average assets. Heard Bank's return on average equity was 13.80% for the nine
month period ended September 30, 1995, and return on average assets was 1.46%.
These ratios indicate that the earnings have improved during 1995, over 1994.
Heard Bank has met its liquidity and capital needs.

CAPITAL RESOURCES AND ADEQUACY

Heard Bank has consistently maintained a satisfactory level of
capital, as measured by its average equity to average assets ratio of 10.58% at
September 30, 1995 compared to an average equity to average assets ratio of
10.79% at December 31, 1994. Heard Bank's average equity increased $415,000,
or 10.69%, for the nine months ended September 30, 1995 through earnings
retention.

SELECTED STATISTICAL INFORMATION (UNAUDITED)

The following sets forth certain selected statistical information and
should be read in conjunction with the financial statements of Heard Bank
included elsewhere in this Proxy Statement.

LOANS

Nonperforming loans consist principally of loans accounted for on a
nonaccrual basis ("nonaccrual loans"). Nonperforming loans were $24,000 at
September 30, 1995. As additional information, outstanding balances of past
due loans (30 days or more) at September 30, 1995 were approximately $431,000.

ALLOWANCE FOR LOAN LOSSES

The following table summarizes loan balances at September 30, 1995,
and at December 31, 1994 and 1993, and average loans outstanding during the
nine month and annual periods, changes in the allowance for loan losses arising
from loans charged-off by loan category and additions to the allowance which
have been charged to operating expense.

29
<PAGE> 38

Nine Months
Ended Years ended December 31,
(In Thousands) ------------------ -----------------------------
September 30, 1995 1994 1993
------------------ ----------- ------------
<S> <C> <C> <C>
Amounts of net loans outstanding at the end of period $ 30,861 $ 27,401 $ 23,777
Average amount of net loans outstanding 29,131 25,589 23,039
Allowance for loan losses at beginning of period 349 316 258
Loans charged-off:
Consumer installment 14 19 31
Commercial and all other loans 22 20 2
-------- -------- --------
Total loans charged-off 36 39 33
-------- -------- --------
Recoveries of loans previously charged off:
Consumer installment 24 18 33
Commercial and all other loans 23 4 8
-------- -------- --------
Total loans recovered 47 22 41
-------- -------- --------
Net loans charged-off (recovered) (11) 17 (8)
Provision for loan losses -0- 50 50
-------- -------- --------
Allowance for loan losses at end of period $ 360 $ 349 $ 316
======== ======== ========
Ratio of net loans charged-off (recovered)
to average net loans outstanding (.04)% .07% (.03)%
======== ======== ========
</TABLE>

Credit reviews of the loan portfolio designed to identify potential
charges to the allowance for loan losses, as well as to determine the adequacy
of the allowance, are made on a quarterly basis during the year. These reviews
are conducted by the responsible lending officers and a loan committee taking
into account such factors as financial strengths of the borrowers, the value of
applicable collateral, past loss experience, anticipated loan losses, growth in
the loan portfolio and other factors including prevailing and anticipated
economic conditions. The conclusions are reviewed and approved by senior
management and the Board of Directors of Heard Bank. Management believes that
the allowance for loan losses is adequate to provide for potential loan losses,
based on information available and conditions prevailing at the date of
determination of the allowance.

30
<PAGE> 39
________________________________________________________________________________

HEARD BANK SHAREHOLDERS
________________________________________________________________________________

PRINCIPAL SHAREHOLDERS

The following table sets forth the beneficial owners of Heard Bank's
only outstanding class of common stock, $100.00 par value, who to Heard Bank's
knowledge own beneficially more than five percent (5%) of Heard Bank's
outstanding common stock as of December 1, 1995. The table also indicates the
number and percentage of total outstanding shares of First Bancorp which such
persons would own if they receive 325.58 First Bancorp shares in the
reorganization in exchange for each share of their Heard Bank stock, assuming
325,580 shares of First Bancorp common stock will be issued.

<TABLE>
<CAPTION>
HEARD BANK FIRST BANCORP STOCK
COMMON STOCK AS A RESULT OF
MERGER

Amount & Amount &
Nature of Nature of
Name and Beneficial Percent Beneficial Percent
Address Ownership of Class Ownership of Class
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mrs. Erin Brannan
P.O. Box 203 56 5.60% 18,232 .09%
Franklin, GA 30217

Charles L. Goodson1
4 Brookside Dr. 564 56.40% 183,627 .88%
Newnan, GA 30263

Elna Goodson
P.O. Box 254 79 7.90% 25,720 .12%
Franklin, GA 30217
</TABLE>

___________________

(1) Included in the listing above for Charles L. Goodson, are 444
shares held in a trust, over which Mr. Goodson has voting and investment power.

31
<PAGE> 40

SHARES OF MANAGEMENT

The directors and executive officers of Heard Bank and the common
stock of Heard Bank beneficially owned by them as of December 1, 1995, are set
forth in the following table. The table also indicates the number and
percentage of total outstanding shares of First Bancorp which such persons
would own if they receive 325.58 First Bancorp shares in the reorganization in
exchange for each share of their Heard Bank stock, assuming 325,580 shares of
First Bancorp common stock will be issued.

<TABLE>
<CAPTION>
HEARD BANK FIRST BANCORP STOCK
COMMON STOCK AS A RESULT OF MERGER

Number of Number of
Shares Shares
Name and Beneficially % of Beneficially % of
Office Owned Class Owned Class
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Charles L. Goodson 564 56.40% 183,627 .88%
Director, Chairman

Talmadge Davis(2) 41 4.10% 13,348 .06%
Director

R. F. Dennis -0- -0- -0- -0-
Director

Emmett Harrod -0- -0- -0- -0-
Director

Mack Lipford -0- -0- -0- -0-
Director

Jackie L. Reed(3) 7 .70% 2,279 .01%
Director, President,
and CEO

Page E. Goodson(4) 43 4.30% 13,999 .07%
Director,
Exec. Vice President

All Executive 655 65.50% 213,253 1.02%
Officers and
Directors as a group
</TABLE>

________________________
(1) Included in the listing above for Charles L. Goodson are 444
Shares held in a trust, over which Mr. Goodson has voting and investment power.

(2) Included in the listing above for Talmadge Davis are 14 shares
held in an estate account, over which Mr. Davis has voting and investment power.

(3) The shares shown for Mr. Reed are held in an IRA account, over
which Mr. Reed has voting and investment power.

(4) Included in the listing above for Page E. Goodson are 6 shares
held in an IRA account, over which Mr. Goodson has voting and investment power.

32
<PAGE> 41

________________________________________________________________________________

MANAGEMENT OF FIRST BANCORP
________________________________________________________________________________

Information with respect to each person who will serve as a director
or an executive officer of First Bancorp after the consummation of the
Reorganization Plan set forth in First Bancorp's Annual Report on Form 10-K for
the year ended December 31, 1994 is hereby incorporated herein by reference.

On April 10, 1995, Richard A. McNeece, Chairman and Chief Executive
Officer of First Bancorp, resigned from his positions with First Bancorp and
its subsidiaries effective June 30, 1995. Peter D. Miller, President and Chief
Administrative and Financial Officer of First Bancorp, has assumed day to day
operations until a successor to Mr. McNeece is elected by the First Bancorp
Board of Directors.

On July 25, 1995, the Board of Directors of First Bancorp appointed
Charles H. Byrd, President of First Federal Savings Bank of New Smyrna, ("New
Smyrna Bank"), and Tildon W. Smith, Executive Vice President of FF Bancorp,
Inc., to the Board of Directors of First Bancorp.

Charles H. Byrd serves as a director of FF Bancorp, Inc. and as
President of New Smyrna Bank. He is 56 years of age and has served as an
officer and director of New Smyrna Bank since 1973.

Tildon W. Smith serves as Excutive Vice President of FF Bancorp, Inc.
Mr. Smith oversees corporate strategic planning, development of new bank
products and asset management for New Smyrna Bank and FF Bancorp, Inc. Prior to
his association and employment with FF Bancorp and New Smyrna Bank, Mr. Smith
served as Senior Financial Advisor for Synovus Securities, Inc., a wholly owned
subsidiary of Synovus Financial Corp. from August, 1990 to February, 1992.
From 1981 to August, 1989, Mr. Smith was a Vice President and Senior Securities
Trader with First Wachovia of Atlanta.

PLEASE REFER TO THE REGIONS PROXY STATEMENT FOR INFORMATION ABOUT
REGIONS AND THE REGIONS MERGER.

________________________________________________________________________________

THE PROPOSED REORGANIZATION
________________________________________________________________________________

THE AGREEMENT OF REORGANIZATION AND PLAN OF MERGER

Reference is made to a copy of the Reorganization Plan set forth in
full as Appendix A hereto for a complete statement of terms of the proposed
reorganization. The statements contained herein with respect

33
<PAGE> 42

to the Reorganization Plan are qualified in their entirety by reference to
Appendix A.

DESCRIPTION OF THE REORGANIZATION

The Boards of Directors of First Bancorp and Heard Bank have
determined that it is desirable for First Bancorp and Heard Bank to enter into
the Reorganization Plan whereby First Bancorp will acquire all of the
outstanding shares of Heard Bank in exchange for First Bancorp shares in a
reverse triangular merger.

If the Reorganization Plan is approved, each outstanding share of
common stock of Heard Bank (other than shares held by dissenters) will be
converted by exchange into 325.58 shares of common stock of First Bancorp.

Under the Reorganization Plan, First Bancorp has the right to split
its stock or to issue stock dividends prior to the consummation of the
reorganization without the approval of Heard Bank. The Reorganization Plan
provides that in such event the number of shares to be issued to Heard Bank
shareholders will be adjusted proportionately to give the Heard Bank
shareholders the benefit of any such stock split or stock dividend. First
Bancorp currently has no plans to declare any stock split or stock dividend
prior to consummation of the transactions contemplated by the Reorganization
Plan.

If the Reorganization Plan is approved by the shareholders of Heard
Bank and by all regulatory authorities required to approve the merger, then
upon consummation of the reorganization, Interim Corporation, a wholly-owned
subsidiary of First Bancorp, will be merged with and into Heard Bank, which
will be the surviving corporation, in a reverse triangular merger with First
Bancorp thereby acquiring all of the outstanding shares of common stock of
Heard Bank in exchange for First Bancorp common stock. Such merger will be
pursuant to the applicable provisions of the Business Corporation Code of
Georgia (Official Code of Georgia Annotated, Section 14-2-1101 et seq.). The
Articles of Incorporation of Heard Bank will be the Articles of Incorporation
of the surviving institution, and the name of the surviving institution will be
"The Bank of Heard County." The bylaws of Heard Bank will continue to be the
bylaws of the surviving institution. The corporate existence of Interim
Corporation will end when it is merged into Heard Bank as the surviving
institution.

It is contemplated that the established office and facilities of Heard
Bank immediately prior to the merger will remain the established office and
facilities of Heard Bank, and that the officers, directors, and employees of
Heard Bank will continue to be the officers, directors, and employees of Heard
Bank.

All rights, privileges, immunities, powers and franchises of Heard
Bank and Interim Corporation in and to every type of property,

34
<PAGE> 43

real, personal and mixed, and choses in action will be vested in Heard Bank as
the surviving institution by virtue of the merger without any deed or other
transfer. All property, real, personal and mixed, including all choses in
action, all debts due on whatever account and all and every other interest or
right belonging to or due to each of the merging entities including all liens,
mortgages, security interests and properties held as collateral for debts owed
such organizations will be vested in Heard Bank as the surviving institution
without further act or deed; the title to any real estate, or interest therein,
vested in either of the merging entities will not revert or be in any way
impaired by reason of the merger; and Heard Bank as the surviving institution
will, thenceforth, be responsible and liable for all of the liabilities and
obligations of Heard Bank and Interim Corporation.

If the Reorganization Plan is approved and consummated, First Bancorp
will own nineteen subsidiary commercial banks: First National Bank of Jackson
County; First National Bank of Habersham; The First National Bank of
Gainesville; Granite City Bank; Bank of Clayton; First National Bank of White
County; The Citizens Bank, Toccoa; Bank of Banks County; First National Bank of
Gilmer County; The Peoples Bank of Forsyth County; Pickens County Bank; First
National Bank of Paulding County; Citizens Bank, Ball Ground, Georgia; Bank of
Villa Rica; The Community Bank of Carrollton; The Commercial Bank,
Douglasville, Georgia; Barrow Bank & Trust Company, Winder, Georgia; The Key
Bank of Florida (through FF Bancorp, Inc.); and Heard Bank. First Bancorp also
owns (through FF Bancorp, Inc.) two federal savings banks: First Federal
Savings Bank of New Smyrna and First Federal Savings Bank of Citrus County.

IF THE PENDING MERGER OF FIRST BANCORP INTO REGIONS IS CONSUMMATED,
REGIONS WILL ACQUIRE FIRST BANCORP AND ALL OF ITS SUBSIDIARIES. PLEASE REFER
TO THE REGIONS PROXY STATEMENT FOR INFORMATION ABOUT REGIONS AND THE REGIONS
MERGER.

REASONS FOR THE REORGANIZATION; RECOMMENDATION OF BOARD OF DIRECTORS

The Board of Directors of Heard Bank has approved the Reorganization
Plan and recommends that the shareholders of Heard Bank vote in favor of its
approval.

In deciding to approve and recommend the Reorganization Plan, the
Board of Directors considered a number of factors, including, among others, the
fairness of the exchange ratio, the opportunity to continue their investment in
Heard Bank through the investment in First Bancorp, the enhancement of the
geographic diversity of the stock investment, the financial condition and
performance of First Bancorp, the tax-free nature of the exchange to the
shareholders of Heard Bank electing to receive First Bancorp stock, the market
for First Bancorp stock, the local focus of First Bancorp's management and
business philosophy whereby Heard Bank would be managed by the current

35
<PAGE> 44

management, and the additional financial and management resources that would be
available for delivery of banking services in Heard County. All factors were
considered important and no relative or specific weights were assigned to them.

The Board of Directors of Heard Bank believes that the proposed
exchange ratio of 325.58 shares of First Bancorp stock for each share of Heard
Bank stock, which was negotiated at arms length, is fair to the shareholders of
Heard Bank. In assessing the fairness of the exchange ratio, the Board
examined the financial condition and historical performance of First Bancorp
and Heard Bank, the historical trading prices of First Bancorp stock and the
historical trading prices of Heard Bank stock based on the small number of
stock sales which have occurred, the dividend payment history of First Bancorp
and Heard Bank, and other information. Based on that information and its
analysis, the Board concluded that the value of the exchange of 325.58 First
Bancorp shares for each share of outstanding common stock of Heard Bank,
represented a fair multiple of the book value, market value and earnings per
share of Heard Bank stock. The Board did not obtain an independent appraisal
or opinion concerning the fairness of the exchange ratio. See "PER SHARE
INFORMATION," "MARKET AND STOCK PRICE" and other financial information
appearing elsewhere in this Proxy Statement.

The Board of Directors believes that the proposed reorganization will
offer the shareholders of Heard Bank the opportunity to continue their
investment in Heard Bank through their investment in First Bancorp, while
enhancing the geographic diversity of that investment. Shareholders of Heard
Bank currently own an equity interest in a $42 million asset state banking
institution operating only in Heard County. Following the proposed
reorganization, those shareholders would own an equity investment in a $3.2
billion asset multi-bank holding company operating 18 banks across North
Georgia, and 3 banks in Florida. ALSO, PLEASE REFER TO THE REGIONS PROXY
STATEMENT FOR INFORMATION ABOUT REGIONS AND THE REGIONS MERGER.

The proposed Reorganization Plan allows shareholders of Heard Bank to
exchange their current equity interest for common stock of First Bancorp
without recognizing income for federal income tax purposes. Income would be
recognized upon a subsequent sale of the First Bancorp stock received if the
sales price exceeds the shareholder's tax basis in the stock sold. See
"FEDERAL INCOME TAX CONSEQUENCES."

The Board of Directors viewed favorably the enhanced investment
liquidity offered by the proposed Reorganization Plan. Unlike Heard Bank
stock, the common stock of First Bancorp is traded in the over-the-counter
market. Subject to certain restrictions applicable to affiliates, the stock of
First Bancorp should generally be more readily marketable than the stock of
Heard Bank. See "MARKET AND STOCK PRICE INFORMATION."

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<PAGE> 45

First Bancorp's business philosophy emphasizes local management of its
subsidiary banks under the direction of a board of directors comprised
primarily of local citizens. Following the proposed reorganization Heard Bank
anticipates that no significant changes will be made to the management of Heard
Bank. Banking decisions will continue to be made locally. Centralization of
certain functions and access to greater financial and other resources of the
First Bancorp organization should allow Heard Bank to deliver more efficiently
an even greater array of banking services than currently offered. ALSO, PLEASE
REFER TO THE REGIONS PROXY STATEMENT FOR INFORMATION ABOUT REGIONS AND THE
REGIONS MERGER.

THE BOARD OF DIRECTORS OF HEARD BANK RECOMMENDS THAT HEARD BANK SHAREHOLDERS
VOTE FOR THE REORGANIZATION PLAN.

CONVERSION OF HEARD BANK STOCK

Upon consummation of the reorganization, each of the outstanding
shares of common stock of Heard Bank will be converted into 325.58 shares of
fully paid and non-assessable common stock of First Bancorp. Please refer to
the preceding section entitled "Reasons for the Reorganization" for a
discussion of how stock values and prices were arrived at for Heard Bank and
First Bancorp stock. Of course, First Bancorp share prices are subject to
market fluctuations. See "MARKET AND STOCK PRICE INFORMATION".

Owners of five percent or more of Heard Bank common stock and the
Heard Bank directors and officers who are shareholders of Heard Bank will
receive First Bancorp common stock on the same basis as other shareholders of
Heard Bank. Assuming consummation of the merger and receipt by Heard Bank
shareholders of 325.58 First Bancorp shares for each share of Heard Bank stock,
Heard Bank shareholders would receive a maximum of 325,580 First Bancorp
shares, which would be approximately 1.57% of the shares of First Bancorp
common stock outstanding immediately after consummation of the Reorganization
Plan. See "Description of the Reorganization."

IF THE REORGANIZATION PLAN IS APPROVED, EACH SHARE OF HEARD BANK
COMMON STOCK (OTHER THAN SHARES HELD BY DISSENTERS) WILL BE CONVERTED INTO
325.58 SHARES OF FIRST BANCORP COMMON STOCK AS A RESULT OF THE MERGER.

PLEASE NOTE THAT THE MERGER OF FIRST BANCORP INTO REGIONS IS PENDING
PURSUANT TO A MERGER AGREEMENT BETWEEN THE TWO CORPORATIONS. IF SUCH MERGER IS
CONSUMMATED, EACH OUTSTANDING SHARE OF FIRST BANCORP COMMON STOCK, INCLUDING
THE FIRST BANCORP SHARES WHICH WILL BE RECEIVED BY HEARD BANK SHAREHOLDERS IN
THE MERGER OF HEARD BANK WITH FIRST BANCORP, WILL BE CONVERTED INTO 0.76 OF A
SHARE OF REGIONS COMMON STOCK. PLEASE REFER TO THE ENCLOSED REGIONS PROXY
STATEMENT FOR INFORMATION ABOUT REGIONS AND THE REGIONS MERGER, WHICH MERGER IS
SUBJECT TO APPROVAL BY VARIOUS REGULATORY AGENCIES. THE REGIONS MERGER HAS
BEEN APPROVED BY THE SHAREHOLDERS OF FIRST BANCORP AND OF REGIONS.

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<PAGE> 46

FRACTIONAL SHARES

No fractional shares will be issued. Any shareholder who would be
entitled to a fraction of a First Bancorp share will receive a cash payment in
lieu of such fractional share in an amount determined by multiplying the
fraction of a share he would otherwise be entitled to receive by $21.50.

MANNER OF SURRENDERING HEARD BANK STOCK

After the effective date of the reorganization, each holder of a
certificate or certificates representing shares of common stock of Heard Bank
(except holders who have filed notice of their election to dissent from the
merger in accordance with applicable law) will surrender such certificates to
First Bancorp, and will receive in exchange a certificate representing the
number of shares of First Bancorp stock into which such Heard Bank shares have
been converted at the conversion ratio set forth in this Proxy Statement and in
the Reorganization Plan and a First Bancorp check in payment for any fractional
share of First Bancorp stock. After the effective date, until surrendered,
each Heard Bank certificate, except certificates held by persons who have filed
notice of their election to dissent from the merger in accordance with
applicable law, shall be deemed for all corporate purposes to evidence the
number of whole shares of First Bancorp common stock into which the Heard Bank
stock represented by such certificate shall have been converted, and such
certificates, as between the holders and First Bancorp shall evidence the
holder's right to receive First Bancorp stock certificates in accordance with
the Reorganization Plan; PLEASE NOTE, HOWEVER, THAT FIRST BANCORP STOCK
CERTIFICATES WILL NOT BE DISTRIBUTED TO HEARD BANK SHAREHOLDERS UNTIL THEIR
HEARD BANK CERTIFICATES HAVE BEEN SURRENDERED TO FIRST BANCORP, AND DIVIDENDS
OR OTHER DISTRIBUTIONS PAYABLE TO HEARD BANK SHAREHOLDERS IN RESPECT OF FIRST
BANCORP STOCK INTO WHICH HEARD BANK STOCK HAS BEEN CONVERTED UNDER THE
REORGANIZATION PLAN WILL BE RETAINED, WITHOUT INTEREST, FOR THE ACCOUNT OF SUCH
SHAREHOLDERS AND WILL NOT BE PAID UNTIL THEIR HEARD BANK CERTIFICATES HAVE BEEN
SURRENDERED IN EXCHANGE FOR FIRST BANCORP CERTIFICATES. NO INTEREST WILL BE
PAYABLE ON CASH PAYMENTS TO WHICH HEARD BANK SHAREHOLDERS MAY BE ENTITLED,
EITHER BEFORE OR AFTER THE EFFECTIVE DATE UNLESS SUCH CASH PAYMENTS ARE
WITHHELD DUE TO THE NEGLIGENCE OR BAD FAITH OF FIRST BANCORP.

ISSUANCE OF FIRST BANCORP SHARES

Subject to the terms and conditions of the Reorganization Plan, First
Bancorp will issue to each Heard Bank shareholder after the effective date of
the reorganization, upon surrender of his Heard Bank stock certificates to
First Bancorp accompanied by properly completed and signed endorsements and
transmittal instructions, certificates representing shares of First Bancorp
stock in accordance with the Reorganization Plan.

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<PAGE> 47

SOURCE OF FUNDS

Consummation of the transaction will be almost entirely a stock for
stock exchange with the only cash payments required being those for fractional
shares and those for dissenting shares, if any. First Bancorp will pay these
amounts from internal funds.

SHAREHOLDER APPROVAL

Consummation of the Reorganization Plan requires the affirmative vote
of the holders of at least two-thirds of the outstanding shares of common stock
of Heard Bank. Approval of the shareholders of First Bancorp is not required.

CONDITIONS TO CERTAIN OBLIGATIONS OF HEARD BANK

Under the Reorganization Plan, the obligation of Heard Bank to
consummate and effect the merger contemplated by the Reorganization Plan is
subject to the satisfaction of certain conditions, including the following:

(a) There shall have been issued an opinion of Stewart, Melvin &
Frost, counsel to First Bancorp, to the effect that, under applicable
provisions of the Internal Revenue Code of 1986, as amended, no gain
or loss will be recognized for federal income tax purposes by Heard
Bank, First Bancorp or the shareholders of Heard Bank to the extent
that they receive only stock of First Bancorp in connection with the
proposed reorganization. The opinion will not state that cash
received in exchange for fractional shares or in the exercise of
dissenters' rights will be nontaxable.

(b) As of the date of the merger, there shall have occurred no
material adverse change in the financial condition or results of
operations of First Bancorp from that represented in the consolidated
financial statements of First Bancorp and FF Bancorp, Inc., taken as a
whole, from that represented in the consolidated financial statements
of Bancorp as of June 30, 1995, and in the consolidated financial
statements of FF Bancorp, Inc., as of December 31, 1994, which were
provided to Heard Bank prior to execution of the Reorganization Plan,
and there shall not have occurred any loss or damage to any of its
properties or assets which would materially impair its ability to
conduct its business after the merger as it is now being conducted.

(C) The representations of First Bancorp contained in the
Reorganization Plan shall be true in all material respects as of the
date of the merger.

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<PAGE> 48

CONDITIONS TO CERTAIN OBLIGATIONS OF FIRST BANCORP

Under the Reorganization Plan, the obligation of First Bancorp to
consummate and effect the merger contemplated by the Reorganization Plan is
subject to the satisfaction of certain conditions, including the following:

(a) The representations of Heard Bank contained in the
Reorganization Plan shall be true in all material respects as of the
date thereof and as of the time of the merger.

(b) Heard Bank shall have performed all agreements and covenants
required by the Reorganization Plan to be performed by it at or prior
to the merger.

(c) As of the proposed date of the merger, there shall have
occurred no material adverse change in the financial condition or
results of operations of Heard Bank, taken as a whole, from that
presented in the financial statements of Heard Bank as of April 30,
1995, which were provided to First Bancorp prior to execution of the
Reorganization Plan, and there shall not have occurred any loss or
damage to any of its properties or assets, taken as a whole, which
would materially adversely affect its financial condition, taken as a
whole, or impair its ability to conduct its business, taken as a
whole, after the merger as now being conducted.

(d) First Bancorp shall have received an opinion of KPMG Peat
Marwick LLP, in form and substance reasonably satisfactory to the
Board of Directors of First Bancorp to the effect that the transactions
contemplated by the Reorganization Plan may be accounted for by First
Bancorp using the "pooling of interests" method of accounting.

CONDITIONS TO CERTAIN OBLIGATIONS OF BOTH FIRST BANCORP AND HEARD BANK

Under the Reorganization Plan, the obligations of First Bancorp and
Heard Bank to consummate the merger contemplated by the Reorganization Plan
are, at the option of either of them, subject to the following conditions
having been satisfied:

(a) The holders of at least two-thirds of the shares of issued and
outstanding stock of Heard Bank shall have voted in favor of the
merger at the special meeting of the shareholders duly called and held
with respect thereto pursuant to proper notice of such meeting
accompanied by a proper proxy statement.

(b) Any and all orders, permits, approvals, licenses or
qualifications from authorities administering federal laws or laws of
any state or other political subdivision having jurisdiction required
for the consummation of the transaction contemplated by the
Reorganization Plan shall have been

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<PAGE> 49

obtained. The Reorganization Plan and the sale or exchange of the
shares therein contemplated must be in compliance with regulations and
directives of all governmental agencies having jurisdiction.

(c) At the time of mailing the Proxy Statements to shareholders of
Heard Bank and thereafter through the closing date, the First Bancorp
stock to be received by Heard Bank shareholders upon the conversion of
their stock (subject to no stop order) shall be the subject of an
effective registration statement under the Federal Securities Act of
1933 and shall be duly registered or qualified under the securities
laws of all states in which registration or qualification is required,
or must be exempt therefrom.

ACCOUNTING TREATMENT

First Bancorp will account for the merger as a pooling-of-interests
transaction in accordance with generally accepted accounting principles, which,
among other things, requires that the number of shares of Heard Bank stock
acquired for cash pursuant to the exercise of dissenters' rights or in lieu of
fractional shares not exceed 10% of the outstanding shares of Heard Bank stock.
Under this accounting treatment, assets and liabilities of Heard Bank would be
added to those of First Bancorp at their recorded book values, and the
shareholders' equity of the two companies would be combined in First Bancorp's
consolidated balance sheet. Financial statements of First Bancorp issued after
consummation of the merger will be restated to reflect the consolidated
operations of First Bancorp and Heard Bank as if the merger had taken place
prior to the periods covered by the financial statements.

________________________________________________________________________________

PENDING FIRST BANCORP/REGIONS MERGER
________________________________________________________________________________

On October 22, 1995, First Bancorp entered into the Regions Agreement
with Regions. The Regions Agreement provides for the acquisition of First
Bancorp by Regions pursuant to the merger (the "Regions Merger") of First
Bancorp with and into Regions Merger Subsidiary, Inc., a newly formed
corporation organized under the laws of the State of Georgia and a wholly owned
subsidiary of Regions. As a result of the Regions Merger, each share of First
Bancorp common stock then issued and outstanding will be converted into and
exchanged for 0.76 of a share of Regions common stock. The Regions Merger is
subject to approval of First Bancorp shareholders holding a majority of the
outstanding shares of First Bancorp common stock and the approval of a majority
of the votes cast by Regions shareholders at a special shareholders meeting to
be held to approve the issuance of Regions common stock in the Regions Merger.
The Regions Merger was approved by First Bancorp shareholders

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<PAGE> 50

on January 11, 1996 and by Regions shareholders on January 11, 1996. The
Regions Merger is also subject to approval by the Federal Reserve, the Office
of Thrift Supervision, the Commissioner of Banking and Finance of the State of
Georgia and the Department of Banking and Finance of the State of Florida. The
respective applications for such approvals have been filed with each of these
agencies.

Regions is a regional bank holding company headquartered in
Birmingham, Alabama, with approximatley 288 banking offices in Alabama,
Florida, Georgia, Louisiana, and Tennessee. As of September 30, 1995, Regions
had total consolidated assets of approximately $13.8 billion, total
consolidated deposits of approximately $10.7 billion, and total consolidated
stockholders' equity of approximately $1.1 bilion. Regions is the third
largest bank holding company headquartered in Alabama in terms of assets, based
on September 30, 1995 information. Regions operates banking subsidiaries in
Alabama, Florida, Georgia, Louisiana, and Tennessee and banking-related
subsidiaries engaged in mortgage banking, credit life insurance, leasing, and
securities brokerage activities with offices in various Southeastern states.
Through its subsidiaries, Regions offers a broad range of banking and
banking-related services.

Additional information about the Regions Merger is contained in the
Regions Proxy Statement, a copy of which is being furnished herewith as
Appendix C hereto.

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________________________________________________________________________________

EFFECT OF REORGANIZATION ON SHAREHOLDERS
________________________________________________________________________________

If the proposed reorganization is consummated, the holders of the
common stock of Heard Bank will receive common stock of First Bancorp, in
exchange for their Heard Bank shares. The rights of holders of common stock of
First Bancorp will be governed by the provisions of the Georgia Business
Corporation Code and Federal and State laws regulating bank holding companies,
and thrift holding companies, rather than by State and Federal banking laws.

Upon conversion of a shareholder's Heard Bank stock into First Bancorp
stock, the shareholder's percentage of equity ownership in First Bancorp will
be substantially less than his or her present percentage of equity ownership in
Heard Bank. Shareholders will receive dividend distributions in the form of
cash, stock or other property on each share of Heard Bank stock converted into
shares of First Bancorp stock if, when and in the form that such dividends are
declared by the Board of Directors of First Bancorp.

After the merger, the former shareholders of Heard Bank will have no
continuing interest in the assets or business of Heard Bank except as
shareholders of First Bancorp.

ALSO, PLEASE REFER TO THE REGIONS PROXY STATEMENT FOR INFORMATION
ABOUT REGIONS AND THE REGIONS MERGER.

PREEMPTIVE RIGHTS

FIRST BANCORP COMMON STOCK

Shareholders of First Bancorp do not have the preemptive right to
subscribe for additional shares in proportion to the number of shares of
capital stock owned at the time any increase is authorized. Consequently, an
offering of First Bancorp stock, after the reorganization, could result in an
existing shareholder's percentage of ownership being reduced by an increase in
the number of outstanding shares. In addition, shares of First Bancorp can be
issued by authorization of the Board of Directors of First Bancorp without any
approval of the shareholders, except in certain instances prescribed by the
Georgia Business Corporation Code.

HEARD BANK COMMON STOCK

The Financial Institutions Code of Georgia generally provides Heard
Bank shareholders with preemptive rights on the issuance of additional shares
of stock. Each shareholder is entitled to subscribe for such shares in
proportion to the number of shares owned at the time the increase is authorized
by the shareholders. Heard Bank shareholders have no preemptive rights with
respect to: (i) Heard Bank shares issued as a share dividend; (ii) fractional
shares; (iii) shares released by waiver from their preemptive right by the

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affirmative vote or written consent of the holders of two-thirds of the shares
of the class to be issued; (iv) shares issued pursuant to share plans for
officers and employees as authorized by the Financial Institutions Code of
Georgia; and (v) shares issued pursuant to acquisition of substantially all of
the assets of another bank or trust company.

CUMULATIVE VOTING RIGHTS

FIRST BANCORP COMMON STOCK

The shareholders of First Bancorp have cumulative voting rights in the
election of directors, that is, the right to vote the number of shares owned by
them for as many persons as there are directors to be elected, or to accumulate
such shares and give one candidate as many votes as the number of directors to
be elected multiplied by the number of their shares shall equal, or to
distribute them on the same principle among as many candidates as they shall
desire. The purpose of cumulative voting is to allow minority shareholders a
better chance to elect representation on the Board of Directors which is closer
in proportion to their stock ownership. The voting upon other transactions by
the shareholders of First Bancorp is on the basis of one vote for each share
without any cumulative voting rights.

HEARD BANK COMMON STOCK

Shareholders of Heard Bank have no cumulative voting rights in the
election of directors; for all purposes each holder of record of shares of
common stock of Heard Bank is entitled to one vote for each share of common
stock outstanding in his name, on the books of the bank.

LIMITATIONS OF LIABILITY OF DIRECTORS; INDEMNIFICATION OF DIRECTORS, OFFICERS
AND EMPLOYEES

FIRST BANCORP

The bylaws of First Bancorp provide for the indemnification of
directors and officers of the corporation. The provisions allow
indemnification of such persons for reasonable expenses and damages incurred in
connection with any action, suit or proceeding, civil or criminal, to which
they shall be made a party by reason of their being or having been a director,
officer or employee. However, no person shall be indemnified or reimbursed in
relation to any matter in such action, suit or proceeding as to which he shall
be finally adjudged to have been guilty of or liable for gross negligence,
wilful misconduct, or criminal acts. First Bancorp's bylaws also provide for
the purchase of insurance for the purpose of such indemnification. First
Bancorp currently provides this insurance coverage. These indemnification
provisions are in addition to indemnification otherwise provided under the
Georgia Business Corporation Code (O.C.G.A. Section 14-2-851), which is
hereinafter described. The Georgia

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<PAGE> 53

Business Corporation Code (O.C.G.A. Section 14-2-851) provides that an officer
or director may be indemnified (1) in the case of actions by third persons, if
he acted in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, in regard to criminal actions, he had no
reasonable cause to believe that his conduct was unlawful and (2) in the case
of actions by or on behalf of the corporation, if he acted in good faith and in
a manner he reasonably believed to be in the best interests of the corporation
unless he has been adjudged liable for negligence or misconduct in the
performance of his duty to the corporation. Even if adjudged liable to the
corporation and consequently not entitled to indemnification, the court in
which such action is brought may determine that the officer or director should,
nevertheless, be indemnified in view of all the relevant circumstances.

In addition to the above-described indemnification provisions, the
articles of incorporation of First Bancorp have provisions limiting the
liability of directors.

As permitted by Georgia law, the articles of incorporation of First
Bancorp were amended in 1990 to limit the standards of conduct required of
directors by providing that no director shall be personally liable to the
corporation or its shareholders for monetary damages for breach of duty of care
or other duty as a director; provided, however, that this provision does not
eliminate or limit the liability of a director:

(a) For any appropriation, in violation of his duties, of any
business opportunity of the corporation;

(b) For acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law;

(c) For the types of liabilities set forth in Official Code of
Georgia Annotated Section 14-2-832 (relating primarily to improper
dividends or other distributions by the corporation);

(d) For any transaction from which the director derives an
improper personal benefit; or

(e) For any liability or expenses related to any action or
omission by a director occurring prior to the adoption of the
amendment.

Further, the right of First Bancorp or its shareholders to seek injunctive or
other equitable relief not involving monetary damages is not limited by the
above provisions.

HEARD BANK

The bylaws of Heard Bank provide for the indemnification of its
directors, trustees, officers, employees, and agents, and any persons

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<PAGE> 54

serving, at the request of the bank, as a director, trustee, officer, employee,
or agent of another firm, corporation, trust, or other organization or
enterprise. The provisions allow indemnification of such persons for
reasonable expense incurred in connection with any action, suit, or proceeding,
civil or criminal, to which such person shall be made a party by reason of the
fact that he serves in such capacity. However, no person shall be so
indemnified or reimbursed in relation to any matter which such action, suit, or
proceeding as to which he shall finally be adjudged to have been guilty of or
liable for gross negligence, wilful misconduct, or criminal acts, nor shall any
persons be indemnified or reimbursed in any matter which has been the subject
of a compromised settlement except with the approval of the holders of record
of a majority of the outstanding shares of capital stock from the bank or
majority of the members of the board of directors then holding office,
excluding the votes of the directors who are parties to the same, or
substantially the same action suit or proceeding. Heard Bank's bylaws provide
for the advancement of expenses incurred in defending any action, suit, or
proceeding as referred to above. Heard Bank's bylaws also provide for the
purchase of insurance for the purpose of such indemnification. Heard Bank
currently provides this insurance coverage.

DIVIDEND RESTRICTIONS

FIRST BANCORP

Under the Georgia Business Corporation Code, dividends may be declared
and distributed by First Bancorp so long as:

(a) such distribution would not render First Bancorp unable to pay
its debts as they become due in the usual course of business; or

(b) such distribution would not cause First Bancorp's total assets
to be less than the sum of its total liabilities plus the amount that
would be needed, if First Bancorp were to be dissolved at the time of
the distribution, to satisfy the preferential rights upon dissolution
of shareholders whose preferential rights are superior to those
receiving the distribution (no preferential rights presently exist).

The primary source of funds available to First Bancorp to pay
shareholder dividends are dividends from its wholly owned bank and thrift
subsidiaries. Upon receipt of the dividends from the subsidiary banks and
thrifts, First Bancorp would then decide upon the issuance of dividends to its
shareholders (including those shareholders receiving First Bancorp stock
pursuant to the Reorganization Plan) based upon the decision by the First
Bancorp Board of Directors that a level of earnings should be retained and not
paid in the form of dividends to shareholders. Other factors affecting the
amount of earnings retained are the dividends restrictions imposed by bank and
thrift regulatory authorities in the

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<PAGE> 55

normal course of business. Further restrictions could result from a review by
regulatory authorities of each bank's or thrift's capital adequacy, which is
the relationship between a bank or thrift's capital and its risk adjusted
assets and deposits, and other comparable ratios. The amount available for
cash dividends from the subsidiary banks and thrifts for payment in 1995
without prior regulatory approval is approximately $31,870,000, plus 1995 net
earnings of the six subsidiary national banks and the excess of the thrifts'
equity over the amount required for their respective liquidation accounts or
regulatory capital requirements upon approval by the thrifts' primary
regulator. At December 31, 1994, approximately $233,745,000 of First Bancorp's
investment in bank and thrift subsidiaries was restricted as to dividend
payments from banks and thrifts to First Bancorp under the foregoing regulatory
limitations.

HEARD BANK

Under the Financial Institutions Code of Georgia, Heard Bank may
declare and pay dividends on its outstanding shares in cash, property, or its
own shares, except when Heard Bank is insolvent or when payment thereof would
render Heard Bank insolvent or when the declaration or payment thereof would be
contrary to any restrictions contained in the Articles of Incorporation (none
appear other than as shown below), and subject to the following additional
limitations:

(a) Dividends may be declared and paid in cash or property only
out of the retained earnings of the bank.

(b) Dividends may not be paid unless total paid-in-capital and
appropriate retained earnings equal at least 20% of the bank's capital
stock.

(c) Dividends may be declared by the Board of Directors and paid
in the authorized but unissued shares of the bank out of any retained
earnings of the bank; provided that such shares shall be issued at not
less than the par value thereof, there shall be transferred to capital
stock at the time such dividend is paid an amount of retained earnings
at least equal to the aggregate par value of the shares to be issued
as a dividend, and after payment of the dividend the bank shall
continue to maintain the paid-in capital and/or appropriated retained
earnings requirements of the Financial Institutions Code of Georgia.

(d) Unless prior approval is granted by the Georgia Department of
Banking and Finance, total classified assets at the most recent
examination of the bank, the conclusions of which may have been
presented to its Board of Directors, must not exceed 80% of equity
capital as reflected at such examination.

(e) Unless prior approval is granted by the Georgia Department of
Banking and Finance, the ratio of equity capital to adjusted

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<PAGE> 56

total assets of the bank must not be less than 6.0%. Equity capital
for this purpose means the aggregate par value of all common stock,
paid-in surplus, retained earnings, capital reserves, reserves for
loan losses, the aggregate par value of preferred stock which is not
redeemable, and other instruments which are required by their
provisions to be converted into common stock.

(f) Unless prior approval is granted by the Georgia Department of
Banking and Finance, the aggregate amount of dividends declared or
anticipated to be declared in the calendar year does not exceed 50% of
the net profits of the bank after taxes but before dividends for the
previous year.

Under the above regulatory dividend restrictions, the approximate
amount of funds that can be paid by Heard Bank in the form of shareholder
dividends in 1995, without prior approval from the state regulatory authority
is $220,000. In general terms, at December 31, 1994, approximately $1,461,000
of Heard Bank's retained earnings was restricted as to dividend payments
without prior approval from the state regulatory authority.

SHAREHOLDER VOTING RIGHTS

FIRST BANCORP

A majority vote of the shareholders is required under the Georgia
Business Corporation Code for the approval of certain mergers and
consolidations, for the sale, exchange or lease of substantially all the
assets, or for the dissolution of First Bancorp. A majority vote of the
shareholders is also required to increase the amount of authorized capital
stock of First Bancorp. However, First Bancorp may enter into merger
transactions without shareholder approval pursuant to Section 14-2-1103 of the
Georgia Business Corporation Code if (i) First Bancorp is the surviving
corporation, (ii) the merger will not effect any change in or amendment to its
articles of incorporation, (iii) each share of First Bancorp outstanding
immediately prior to the effectiveness of the merger is to remain outstanding
and unchanged after the merger, and (iv) either no new shares of First Bancorp
are to be issued or any new shares of First Bancorp to be issued under the plan
of merger may be issued by the Board of Directors without further authorization
by the shareholders of First Bancorp.

Shares of First Bancorp stock may be issued by authorization of the
Board of Directors of First Bancorp without any approval of the shareholders,
except in certain instances prescribed by the Georgia Business Corporation
Code. Therefore, in most cases the Board of Directors will be able to issue
shares of First Bancorp stock for any lawful corporate purpose without the
approval of the shareholders, and the shareholders will not have any preemptive
right to acquire such shares in proportion to their ownership interest in First
Bancorp.

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<PAGE> 57

As stated above, shareholders of First Bancorp have cumulative voting
rights in the election of directors; otherwise each share is entitled to one
vote on all corporate matters.

HEARD BANK

A majority vote of the shareholders is required under the Financial
Institutions Code of Georgia for the sale, exchange or lease of substantially
all the assets or to increase the amount of authorized capital of Heard Bank.
In addition, the approval of the Georgia Department of Banking and Finance is
required for the issuance of additional Heard Bank shares, and such shares may
generally be issued only for cash. A two-thirds vote of the shareholders is
required for the approval of certain mergers, a consolidation or a voluntary
dissolution of Heard Bank.

Heard Bank shareholders do not have cumulative voting rights in the
election of directors. Each share of Heard Bank stock is entitled to one vote
on all corporate matters requiring shareholder vote.

RIGHT OF FIRST BANCORP AND HEARD BANK TO ACQUIRE THEIR OWN SHARES

Under the Georgia Business Corporation Code, First Bancorp has the
right to acquire its own shares by gift, bequest, merger, consolidation, or
exchange of its shares, and by purchase if purchased out of unreserved and
unrestricted earned surplus available therefor. Under state banking laws,
except in limited circumstances with the approval of the Georgia Department of
Banking and Finance, Heard Bank cannot acquire its own shares.

RIGHTS OF DISSENT AND APPRAISAL

Under the Georgia Business Corporation Code, the shareholders of First
Bancorp have the right to dissent from certain (but not all) mergers or
consolidations to which First Bancorp is a party, any sale or other disposition
of all or substantially all of the property and assets of First Bancorp, any
amendment of the Articles of Incorporation which would generally adversely
affect a shareholder regarding his voting rights, dividend rights and rights
upon redemption or liquidation, and any amendment of the Articles of
Incorporation which would result in the payment of cash for a shareholder's
shares, such as a redemption of a class of stock. The right of dissent of a
shareholder of First Bancorp who votes against any of the above actions and
otherwise complies with applicable legal requirements entities him to be paid
the fair value of his shares in cash. First Bancorp is required to make an
offer to the dissenting shareholder of what the corporation believes is the
fair value of his shares. If agreement cannot be reached as to the price to be
paid, then First Bancorp is required to petition the Superior Court of the
county where First Bancorp is located for a determination of the fair value of
the shares. The determination by the Superior Court is final.

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<PAGE> 58

Under the Financial Institutions Code of Georgia, Heard Bank
shareholders have the right to dissent from the merger or consolidation of
Heard Bank or the sale, exchange or lease of, substantially all of the assets
of Heard Bank. This right of dissent gives a shareholder who votes against any
such action (or who abstains from voting) and otherwise complies with
applicable legal requirements the right to be paid the fair value of his shares
in cash. The dissent process is described in the section entitled "RIGHTS OF
DISSENTING SHAREHOLDERS." This dissent process for Heard Bank shareholders is
the same as the dissent process for shareholders of First Bancorp.

Certain merger transactions, such as that contemplated by the
Reorganization Plan, do not require the consent of shareholders of First
Bancorp and do not trigger dissenters' rights of First Bancorp shareholders.

STATE TAXATION OF SHARES OF STOCK

Shares of common stock of Heard Bank, being stock of a corporation
organized under the laws of Georgia, are generally exempt from personal
property taxes in Georgia; shares of common stock of First Bancorp will
generally be exempt from such taxes in Georgia for the same reason. Under the
laws of other jurisdictions, the shares of common stock of Heard Bank and/or
First Bancorp may not be so exempt. It is suggested that in connection with
voting on the proposed Reorganization Plan, shareholders may wish to determine
whether their status under local law or state law as applicable to them will be
changed.

AUTHORIZED CAPITAL STOCK

The authorized capital stock of First Bancorp consists of 30,000,000
shares of common stock, $1.00 par value per share, of which 20,580,670 shares
were issued and outstanding as of December 1, 1995. The authorized capital
stock of Heard Bank consists of 1,000 shares of authorized common stock,
$100.00 par value per share, with 1,000 shares issued and outstanding as of
December 1, 1995.

CERTAIN RESTRICTIONS ON TRANSFER

FIRST BANCORP

The First Bancorp stock which is being offered to Heard Bank
shareholders pursuant to the Reorganization Plan is being registered pursuant
to the Federal Securities Act of 1933, subject to Securities and Exchange
Commission Rule 145 (Reg. Section 230.145). Subparagraphs (c) and (d) of Rule
145 provide limitations on the ability of certain persons to re-offer or
re-sell shares acquired in a business combination transaction unless those
securities are subsequently registered under the Securities Act of 1933 or an
exemption from registration is available for the proposed offer and sale.
Under Rule

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<PAGE> 59

145(c) any person who is an "affiliate" of Heard Bank at the time the
Reorganization Plan is submitted to the shareholders and who offers the
securities of First Bancorp which are acquired pursuant to the Reorganization
Plan will be deemed to be an underwriter within the meaning of Section 2(11) of
the Securities Act of 1933 and, therefore, subject to the registration
provisions of the 1933 Act. However, notwithstanding the provisions of Rule
145(c), Rule 145(d) provides that such person shall not be deemed to be an
underwriter if (1) the securities are sold by such person in accordance with
the provisions of paragraphs (c), (e), (f) and (g) of Rule 144; or (2) such
person is not an affiliate of the issuer of the securities (First Bancorp), has
been the beneficial owner of the securities for at least two (2) years and
meets the requirements of paragraph (c) of Rule 144; or (3) such person has not
been an affiliate of the issuer of the securities for at least three (3) months
and has been the beneficial owner of the securities for at least three (3)
years. Beneficial ownership of the First Bancorp stock will be deemed to
commence upon acquisition of the shares pursuant to the Reorganization Plan
(not at the time of acquisition of the Heard Bank stock) and is subject to
certain tolling provisions.

Apart from Rule 145, Rule 144 more generally provides that shares held
by "affiliates" of an issuer (First Bancorp) will be subject to resale
restrictions as provided in Rule 144.

An "affiliate" of a corporation is a person that directly or
indirectly controls or is controlled by or is under common control with the
corporation. The term "control" does not require majority voting control of
common stock but rather means the possession, direct or indirect, of the power
to direct or cause the direction of the management and policies of a person,
whether through the ownership of voting securities, by contracts or otherwise.
Subject to the above guidelines, the determination of who is an "affiliate" is
inherently a factual question determined on a case-by-case basis. Any
shareholder holding a significant block of shares, any director of a company or
its subsidiaries or any officer engaged in significant policy-making functions
may be deemed an affiliate under these rules and should seek the advice of
counsel on this issue prior to engaging in a transaction potentially subject to
these rules.

Paragraphs (c), (e), (f) and (g) of Rule 144 provide the following
conditions to the ability of an affiliate to resell his shares:

(1) Rule 144(c) requires that there shall be available adequate
current public information with respect to First Bancorp (First
Bancorp has agreed in the Reorganization Plan that this requirement
will be met);

(2) The amount of the securities sold within any three (3) month
period may not exceed the greater of (i) one percent (1%) of the
shares of First Bancorp outstanding or (ii) the average

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<PAGE> 60

weekly reported volume of trading in such securities on all national
exchanges and/or reported through the automated quotation system of a
registered securities association during the four (4) calendar weeks
preceding the filing of the notice required by Rule 144 to be filed
or, if no such notice is required, the date of the order to execute
the transaction by the broker or market maker (As a result of the
reorganization, no Heard Bank shareholder will receive more than 1% of
the outstanding shares of First Bancorp common stock following the
proposed reorganization); and

(3) The securities must be sold in "brokers' transactions" within
the meaning of Section 4(4) of the Securities Act of 1933, or in
transactions directly with the "market maker" as that term is defined
in Section 3(a)(38) of the Securities Exchange Act of 1934, and the
person selling the securities must not solicit or arrange for the
solicitation of orders to buy the securities or make any payment in
connection with the offer or sale of the securities to any person
other than the broker who executes the order to sell the securities.

RESTRICTIONS ON STOCK OF BOTH COMPANIES

The Securities and Exchange Commission has stated that risk sharing is
an essential element in meeting the criteria for pooling-of-interests
accounting treatment, which is the treatment to be applied to the merger
contemplated by the Reorganization Plan. The Commission has stated that it
will consider that the risk sharing will have occurred if no "affiliate" of
either company in a business combination sells or in any other way reduces his
risk relative to any shares of common stock beginning thirty (30) days prior to
the date of consummation of the Reorganization Plan through such time as
financial results covering at least 30 days of post-merger combined operations
have been published. Thus, no affiliate of First Bancorp or Heard Bank will be
able to sell, transfer or dispose of First Bancorp shares or Heard Bank shares
during the period beginning thirty (30) days prior to the date of consummation
of the Reorganization Plan and ending on the date on which financial results
covering at least 30 days of post-merger combined operations have been
published as described above.

COMMITMENTS TO SUBSIDIARY BANKS BY FIRST BANCORP

Under the Federal Reserve's policy, First Bancorp is expected to act
as a source of financial strength to its subsidiary banks and to commit
resources to support its subsidiary banks in circumstances when it might not do
so absent such policy. In addition, any capital loans by First Bancorp to any
of its subsidiary banks would also be subordinate in right of payment to
depositors and to certain other indebtedness of such bank.

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<PAGE> 61

As a result of the enactment of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989 ("FIRREA"), a depository institution
insured by the FDIC can be held liable for any loss incurred by, or reasonably
expected to be incurred by, the FDIC after August 9, 1989 in connection with
(i) the default of a commonly controlled, FDIC-insured depository institution
or (ii) any assistance provided by the FDIC to a commonly controlled,
FDIC-insured depository institution in danger of default. "Default" is defined
generally as appointment of a conservator or receiver, and "in danger of
default" is defined generally as the existence of certain conditions indicating
that a "default" is likely to occur in the absence of regulatory assistance.
All of First Bancorp's subsidiary depository institutions are FDIC-insured
depository institutions within the meaning of FIRREA, except for the two
savings bank subsidiaries, which are insured under the Savings Association
Insurance Fund.

FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF 1991

Section 302 of the Federal Deposit Insurance Corporation Improvement
Act of 1991 (FDICIA) required the FDIC to establish a risk-based assessment
system by July 1, 1993 and to implement it by January 1, 1994. The FDIC has
chosen to implement a transitional risk based assessment system effective
January 1, 1993 which provides the FDIC with the opportunity to evaluate the
impact and effectiveness of various components of the risk-based system on a
continuous basis.

Under the final rule, the risk-based assessment system is designed as
a matrix system where each insured depository institution would pay an
assessment rate based on the combination of its capital and supervisory
condition. Institutions are assigned to one of three capital categories based
on its call report filed for the period ending six months prior to each
semiannual period (semiannual periods being every January 1 and July 1). The
capital categories are defined in the same way as the capital categories
established to determine if prompt corrective action is needed to improve the
capital of a depository institution.

Institutions are also assigned to one of three supervisory categories
based on supervisory valuations by the institution's primary federal regulator
and supplemented by other information including call report data and debt
ratings.

FDICIA also provides for the payment of deposit insurance premiums
based on the specific risk category to which each bank is assigned.

RECENT BANKING LEGISLATION

The State of Georgia has allowed regional interstate banking by
permitting banking organizations in certain Southeastern states to acquire
Georgia banking organizations, if Georgia banking organizations were allowed to
acquire banking organizations in their

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states (commonly known as the "Southeast Compact"). As a result of the
Southeast Compact, banking organizations in other Southeastern states have
entered the Georgia market through acquisitions of many Georgia institutions.
Those acquisitions were subject to federal and Georgia approval. Banking
organizations outside of the Southeast Compact were prevented from acquiring
banking institutions in Georgia, and Georgia institutions were prevented from
acquiring banks outside of this region. On March 16, 1994, the Georgia General
Assembly passed legislation effective July, 1995 to allow interstate banking,
by removing the Southeast Compact barrier effective July 1995.

The State of Florida had a similar law allowing regional interstate
banking within the same Southeastern states. Florida recently enacted new
legislation allowing interstate banking, by removing the Southeast Compact
barrier effective May 1, 1995.

The federal Riegle-Neal Interstate Banking and Branching Efficiency
Act of 1994, became law on September 29, 1994. The Interstate Banking Act will
allow banks and bank holding companies throughout the United States to acquire
out-of-state banks after September 29, 1995, and out-of-state branches through
interstate mergers, beginning June 1, 1997.

Legislation is currently being proposed in the United States Congress,
which among other things, would require members of the Savings Association
Insurance Fund (SAIF) to pay a special assessment to recapitalize the fund and
thereafter merge the SAIF into the Bank Insurance Fund (BIF). While
negotiation of specific provisions of the proposed legislation is ongoing
between the House and Senate Banking Committees, it is anticipated that the
SAIF recapitalization will occur in early 1996. Under the proposed
legislation, SAIF members will pay the special assessment to recapitalize their
fund based on their insured deposits held on March 31, 1995. The amount of the
assessment is to be determined by the Federal Deposit Insurance Corporation and
is expected to be approximately 85 cents per $100 of insured deposits. Based
on the proposed legislation, First Bancorp anticipates a charge against
earnings of approximately $4 million for the special assessment. Such charge
will be recorded as determined by the final legislation. Heard Bank will not
be subject to the special assessment since it is a member of BIF.

________________________________________________________________________________

RIGHTS OF DISSENTING SHAREHOLDERS
________________________________________________________________________________

Pursuant to Section 7-1-537 of the Financial Institutions Code of
Georgia, any holder of record of Heard Bank common stock who objects to the
proposed reorganization and who fully complies with all of the provisions of
Article 13 of the Georgia Business Corporation Code (but not otherwise) shall
be entitled to demand and receive payment of an amount equal to the "fair
value" of all (but not less than all) of his shares of Heard Bank common stock
if the proposed reorganization is consummated.

Any shareholder of Heard Bank desiring to receive payment for the
"fair value" of his common stock:

(1) must deliver to Heard Bank prior to the special meeting of
shareholders of Heard Bank at which the vote will be taken on the
Reorganization Plan, or at the meeting but before the vote is taken,
written notice that he intends to demand payment of the "fair value"
of his shares if the Reorganization Plan is effectuated; and

(2) must abstain from voting or must vote against the
Reorganization Plan; and

(3) must, within the period set forth in the dissenters' notice to
him from Heard Bank of the approval of the Reorganization

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Plan, send written payment demand to Heard Bank and deposit his stock
certificates with Heard Bank in accordance with the terms of the
dissenters' notice.

A VOTE AGAINST THE REORGANIZATION PLAN ALONE WILL NOT CONSTITUTE THE
SEPARATE WRITTEN NOTICE AND SEPARATE WRITTEN PAYMENT DEMAND REFERRED TO IN THE
PRECEDING PARAGRAPH; ALL THREE CONDITIONS SET FORTH IN THE PRECEDING PARAGRAPH
MUST BE SEPARATELY COMPLIED WITH. FAILURE TO COMPLY WITH ANY ONE OF THE
CONDITIONS WILL CAUSE A DISSENTING SHAREHOLDER TO LOSE HIS DISSENTER'S RIGHTS.

Any notice required to be given to Heard Bank must be forwarded to The
Bank of Heard County, Court Square, P.O. Box 1450, Franklin, Georgia 30217-0127,
Attention: President.

If the Reorganization Plan is approved and effectuated, Heard Bank
will promptly send by registered mail to each shareholder who shall have
complied with conditions (1) and (2) above, written dissenters' notice
addressed to the shareholder at such address as he has furnished Heard Bank in
writing, or, if none, at the shareholder's address as it appears on the records
of Heard Bank. The dissenters' notice will be sent no later than ten days
after the merger is effectuated and will:

(1) state where the payment demand required of the dissenting
shareholder must be sent and where and when Heard Bank stock
certificates must be deposited; and

(2) set a date by which Heard Bank must receive the payment
demand, which date may not be fewer than 30 nor more than 60 days
after the date the dissenters' notice is delivered to the dissenting
shareholder; and

(3) be accompanied by a copy of Article 13 (entitled "Dissenters'
Rights") of the Georgia Business Corporation Code.

A shareholder sent the dissenters' notice must send the written
payment demand and deposit his Heard Bank stock certificates in accordance with
the terms of the dissenters' notice.

If conditions (1), (2) and (3) above required of a dissenting
shareholder are fully complied with, Heard Bank is required to make a written
offer, within ten (10) days after the receipt of a payment demand, or within
ten (10) days after the consummation of the transaction, whichever is later, to
the dissenting shareholder to purchase all of his shares of Heard Bank common
stock at a price which Heard Bank estimates to be the fair value of his shares,
plus accrued interest.

A dissenter may notify Heard Bank in writing of his own estimate of
the fair value of his shares and amount of interest due, and demand

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payment of his estimate of the fair value of his shares and interest due, if
the dissenter believes that the amount offered by Heard Bank is less than the
fair value of his shares or that the interest due is incorrectly calculated. A
dissenter waives his right to make this demand for payment unless he notifies
Heard Bank of his demand in writing within 30 days after Heard Bank offered
payment for his shares.

If Heard Bank and any dissenting shareholder are unable to agree on
the fair value of the shares within sixty (60) days after receipt of the
payment demand by Heard Bank, the corporation must file a petition for a
special proceeding in the Superior Court of Heard County, Georgia to determine
the fair value of the shares and accrued interest. If Heard Bank does not
commence the proceeding within the 60 day period, it must pay each dissenter
whose demand remains unsettled the amount demanded.

THE FOREGOING DOES NOT PURPORT TO BE A COMPLETE STATEMENT OF THE
PROVISIONS OF ARTICLE 13 OF THE GEORGIA BUSINESS CORPORATION CODE AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THAT ARTICLE, WHICH IS REPRODUCED IN
FULL AS APPENDIX "B" TO THIS PROXY STATEMENT.

________________________________________________________________________________

FEDERAL INCOME TAX CONSEQUENCES
________________________________________________________________________________

Consummation of the merger is conditioned on Heard Bank receiving an
opinion from Stewart, Melvin & Frost general counsel to First Bancorp, that the
merger will be a "reorganization" within the meaning of Section 368 of the
Internal Revenue Code of 1986 (the "Code"), and as to certain other tax
consequences of the reorganization. Such opinion shall be in form and
substance satisfactory to the Board of Directors of Heard Bank. The required
opinion, which is dated December 28, 1995, has been delivered to Heard Bank.
The discussion below fairly summarizes the matters covered in such opinion.

In order for the merger to qualify as a reorganization within the
meaning of Section 368(a)(1)(A) of the Code, there must be continuity of
interest by Heard Bank shareholders in the surviving entity (First Bancorp)
after the merger. The disposition by Heard Bank shareholders of their First
Bancorp stock received in the merger due to the exchange of such stock for
Regions common stock in the Regions Merger could be determined by the I.R.S.
to be a violation of the continuity of interest requirement and as a result,
the exchange of Heard Bank stock for First Bancorp stock in the merger could be
determined to be a taxable event. However, there are presently no I.R.S.
rulings or cases holding such back-to-back mergers to be a violation of the
continuity of interest requirement, and it is the opinion of Stewart, Melvin &
Frost, based on the policy behind the continuity of interest requirement, that
the continuity of interest requirement for the merger should not be violated by
the exchange of First Bancorp stock received in the merger for Regions stock in
the Regions Merger. There can be no assurance, however, that the I.R.S. will
agree that the continuity of interest requirement for the merger is not
affected by the Regions Merger, and Stewart, Melvin & Frost makes no such
assurance.

Assuming that the merger will qualify as a reorganization within the
meaning of Sections 368(a)(1)(A) and 368(a)(2)(E) of the Code, based on the
representations of management of First Bancorp and Heard Bank and subject to
the immediately preceding paragraph, the merger will have the following federal
income tax consequences:

1. A Heard Bank shareholder who receives shares of First Bancorp
common stock (and, if applicable, cash in lieu of a fractional
share of First Bancorp common stock) on the conversion of his
Heard Bank shares in the merger will recognize no gain or
loss, except in connection with any cash received in lieu of a
fractional share of First Bancorp common stock. The tax basis
of the shares of First Bancorp stock received upon the
conversion will be the same as the tax basis of the Heard Bank
shares converted in the

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merger, except for possible adjustment due to any cash
received in lieu of a fractional share. If the Heard Bank
shares were held as capital assets, the holding period of the
shares of First Bancorp common stock received, will include
the holding period of the Heard Bank shares converted.

2. A Heard Bank shareholder who dissents and receives cash as a
result of the merger will recognize gain or loss measured by
the difference between the amount of the cash received and the
tax basis of Heard Bank shares converted, except as described
below in Paragraph 5 in the case of dividend treatment. Such
gain or loss will, in general, be treated as capital gain or
loss if the Heard Bank shares were held as capital assets.
However, a Heard Bank shareholder must take into account the
effects of Sections 302 and 318 of the Code in determining the
consequences of the transaction if he receives only cash. The
effects of Sections 302 and 318 are discussed in Paragraph 5
below.

3. If a Heard Bank shareholder receives only shares of First
Bancorp common stock and cash in lieu of a fractional share of
First Bancorp common stock in the merger, the cash will, in
general, be treated as received in exchange for such
fractional share and not as a dividend. Gain or loss
recognized as a result of that exchange will be capital gain
or loss if the fractional share would have been a capital
asset if it had been received by the Heard Bank shareholder.

4. Neither Heard Bank nor First Bancorp will recognize gain or
loss as a result of the merger.

5. Any Heard Bank shareholder who dissents and receives cash in
the merger for the Heard Bank shares which he actually owns,
but who is considered under the constructive ownership rules
of Section 318 of the Code to own other Heard Bank shares that
are converted into shares of First Bancorp common stock in the
merger, must take into account the provisions of Section 302
of the Code, particularly, the "80% test" described below, to
determine if the distribution of cash in redemption of his
Heard Bank shares as a result of the merger is to be taxed as
a dividend. Under Section 318 of the Code, a shareholder is,
for example, considered to own shares that are directly or
indirectly owned by certain members of his family or by
certain related entities and to own shares with respect to
which he holds options. In general, under the 80% test of
Section 302, the receipt of cash in redemption of Heard Bank
shares as a result of the merger will not be treated as a
dividend for federal income tax purposes if, (1) immediately
after the merger, the holder's percentage

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ownership (considering shares owned actually and
constructively under Section 318 of the Code) of the total
number of shares of First Bancorp common stock issued to
holders of Heard Bank shares in the merger is less than 80% of
such shareholder's percentage ownership of Heard Bank shares
immediately before the merger and (2) if the holder owns
immediately after the merger (actually and constructively
under Section 318 of the Code) less than 50% of the total
number of shares of First Bancorp common stock issued to
holders of Heard Bank shares in the merger. Hence, the
receipt of cash in redemption of stock from a Heard Bank
shareholder who qualifies under the 80% test will be treated
as received in a sale or exchange which results in capital
gain or loss if the Heard Bank shares were held as capital
assets. A Heard Bank shareholder may fail to qualify under
the 80% test described above as a result of making an election
to dissent and receive cash for all his Heard Bank shares
actually owned, if an election to receive First Bancorp stock
is made by other persons whose Heard Bank shares are
considered to be constructively owned by the shareholder under
Section 318 of the Code. Even if a Heard Bank shareholder
fails to meet the 80% test described above, other exceptions
from dividend treatment may be available under Section 302 of
the Code, depending on the facts and circumstances of the
particular case. In the event of dividend treatment, a
taxpayer's basis in his shares does not reduce the amount of
ordinary income attributable to the transaction.

6. In the case of a corporate shareholder of Heard Bank, the tax
consequences described in Paragraphs 1 through 5 are generally
applicable, except that if a corporate shareholder dissents
and receives only cash as a result of the merger and is
treated as having received a dividend, there is a dividends-
received deduction available for 70% or 80% (depending upon
the percentage of Heard Bank shares owned by the corporate
shareholder) of the dividend amount.

THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR
GENERAL INFORMATION ONLY. EACH HOLDER OF HEARD BANK SHARES SHOULD CONSULT HIS
OR HER OWN TAX ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES OF THE MERGER TO
SUCH HOLDER, INCLUDING THE EFFECT OF STATE AND LOCAL TAXES.

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- --------------------------------------------------------------------------------
DESCRIPTION OF STOCK
- --------------------------------------------------------------------------------

FIRST BANCORP

Under First Bancorp's articles of incorporation, it is authorized to
issue up to 30,000,000 shares of common stock, $1.00 par value per share. As
of December 1, 1995, there were 20,580,670 shares of common stock issued and
outstanding, all of which shares were duly authorized, validly issued, fully
paid and non-assessable. The shares of common stock which will be issued in
connection with the Reorganization Plan will be validly issued, fully paid and
non- assessable.

Holders of First Bancorp common stock are entitled to dividends when,
as, and if declared by the corporation's Board of Directors out of funds
legally available therefor.

All voting rights are vested in the holders of First Bancorp common
stock, each share being entitled to one vote except in the election of
directors. The shares of common stock of First Bancorp have cumulative voting
rights in the election of directors. The cumulative voting rights for the
election of directors of First Bancorp were derived from the articles of
incorporation and bylaws of The First National Bank of Gainesville, when First
Bancorp was formed as a one-bank holding company. Cumulative voting rights
have the effect of giving minority interests a greater chance to elect a
director to the board of directors of First Bancorp and might help preclude a
takeover by spreading control of the board among a greater number of
shareholders. There are no other provisions in First Bancorp's Articles of
Incorporation or bylaws which have an anti-takeover effect.

In the event of liquidation, the holders of the common stock of First
Bancorp will be entitled to receive pro rata any assets distributable to
shareholders in respect of shares held by them.

Holders of the common stock of First Bancorp do not have preemptive
rights to subscribe for additional shares of common stock issued by First
Bancorp. The common stock has no redemption, sinking fund or right of
conversion provisions applicable thereto.

For, additional information see "EFFECT OF REORGANIZATION ON
SHAREHOLDERS." ALSO, PLEASE REFER TO THE REGIONS PROXY STATEMENT FOR
INFORMATION ABOUT REGIONS COMMON STOCK AND THE REGIONS MERGER.

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HEARD BANK

Heard Bank is authorized by its articles of incorporation to issue up
to 1,000 shares of common stock, $100.00 par value per share. As of December
1, 1995, there were 1,000 shares validly issued and outstanding. The
outstanding shares of common stock are fully paid and non-assessable.

Holders of Heard Bank common stock are entitled to dividends when, as,
and if, declared by the corporation's Board of Directors out of funds legally
available therefor.

All voting rights are vested in the holders of Heard Bank common
stock, each share being entitled to one vote. The shares do not have
cumulative voting rights in the election of directors.

In the event of liquidation, the holders of the common stock of Heard
Bank will be entitled to receive pro rata any assets distributable to
shareholders in respect of shares held by them.

Holders of common stock of Heard Bank do have preemptive rights to
subscribe for additional shares of common stock issued by Heard Bank for cash.

There are no provisions in Heard Bank's articles of incorporation or
bylaws which are intended to have an anti-takeover effect.

The common stock has no redemption, sinking fund or right of
conversion provisions applicable thereto.

For additional information see "EFFECT OF REORGANIZATION ON SHAREHOLDERS."

- --------------------------------------------------------------------------------
EXPERTS
- --------------------------------------------------------------------------------

The consolidated financial statements of First Bancorp as of December
31, 1994 and 1993, and for each of the years in the three-year period ended
December 31, 1994, incorporated by reference herein and in the Registration
Statement by reference to First Bancorp's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994, have been incorporated by reference herein
in reliance upon the report of KPMG Peat Marwick LLP, independent certified
public accountants, incorporated by reference herein, and upon the authority of
said firm as experts in accounting and auditing. The report of KPMG Peat
Marwick LLP covering the December 31, 1994 consolidated financial statements
refers to a change in the accounting for investment securities at December 31,
1993 to adopt the provisions of Statement of Financial Accounting Standards
("SFAS") No. 115,

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"Accounting for Certain Investments in Debt and Equity Securities," refers to a
change in the accounting for income taxes in 1993 to adopt the provisions of
SFAS No. 109, "Accounting for Income Taxes," and also refers to a change in the
accounting for postretirement benefits other than pensions in 1993 to adopt the
provisions of SFAS No. 106, "Employers' Accounting for Postretirement Benefits
Other than Pensions."

The restated consolidated financial statements of First Bancorp as of
December 31, 1994 and 1993, and for each of the years in the three-year period
ended December 31, 1994 (giving effect to the acquisition of FF Bancorp, Inc.,
accounted for as a pooling of interests), incorporated by reference herein and
in the Registration Statement by reference to First Bancorp's Current Report on
Form 8-K dated November 21, 1995, have been incorporated by reference herein in
reliance upon the reports of KPMG Peat Marwick LLP and Hacker, Johnson, Cohen &
Grieb, independent certified public accountants, incorporated by reference
herein, and upon the authority of said firms as experts in accounting and
auditing. The report of KPMG Peat Marwick LLP covering the December 31, 1994
restated consolidated financial statements refers to a change in the accounting
for investment securities at December 31, 1993 to adopt the provisions of
Statement of Financial Accounting Standards ("SFAS") No. 115, "Accounting for
Certain Investments in Debt and Equity Securities," refers to a change in the
accounting for incomes taxes in 1993 to adopt the provisions of SFAS No. 109,
"Accounting for Income Taxes," and also refers to a change in the accounting
for postretirement benefits other than pensions in 1993 to adopt the provisions
of SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other than
Pensions."

The consolidated financial statements of Regions, incorporated by
reference in Regions Annual Report (Form 10-K) for the year ended December 31,
1994 and in the Regions Proxy Statement, have been audited by Ernst & Young
LLP, independent auditors, as set forth in the report thereon incorporated by
reference therein and incorporated by reference in the Regions Proxy Statement.
Such consolidated financial statements are incorporated by reference in the
Regions Proxy Statement in reliance upon such report given upon the authority
of such firm as experts in accounting and auditing.

The financial statements of The Bank of Heard County as of April 30,
1995 and 1994, and for each of the years in the two-year period ended April 30,
1995, included herein and elsewhere in the registration statement have been
included herein and elsewhere in the registration statement in reliance upon
the report of Geeslin, Johnson, and Wetherington, independent certified public
accountants, appearing elsewhere herein, and upon the authority of said firm as
experts in accounting and auditing.

61
<PAGE> 70
- --------------------------------------------------------------------------------
LEGAL OPINION
- --------------------------------------------------------------------------------

The legality of the shares of common stock of First Bancorp to be
issued in the reorganization and certain other legal matters in connection with
the reorganization will be passed upon by Stewart, Melvin & Frost,
Attorneys-at- Law, Sixth Floor, Hunt Tower, 200 Main Street, Gainesville,
Georgia 30501. W. Woodrow Stewart is a partner in the firm and is a
stockholder and director of First Bancorp and a director of The First National
Bank of Gainesville. J. Kenneth Nix is also a partner in said firm and is a
stockholder and director of First Bancorp and a director of First National Bank
of White County. In addition, certain partners and associates of Stewart,
Melvin & Frost, including those attorneys in the firm who have participated in
this matter, own substantial shares in First Bancorp (an aggregate of less than
1.5% of outstanding shares). Stewart, Melvin & Frost serves as general counsel
to First Bancorp, The First National Bank of Gainesville and First National
Bank of White County.

- --------------------------------------------------------------------------------
INDEMNIFICATION
- --------------------------------------------------------------------------------

The bylaws of First Bancorp provide for the indemnification of
officers and directors of First Bancorp under certain circumstances. In
addition, Georgia law provides broad discretion to directors and shareholders
of corporations to indemnify officers, directors and employees against
liabilities and expenses of defending civil (and in some cases criminal)
matters. See O.C.G.A. Section 14-2-851 and Section 14-2-857. See "EFFECT OF
REORGANIZATION ON SHAREHOLDERS - Limitations of Liability and Indemnification
of Officers, Directors and Employees."

INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE
SECURITIES ACT OF 1933 MAY BE PERMITTED TO DIRECTORS, OFFICERS OR PERSONS
CONTROLLING FIRST BANCORP PURSUANT TO THE FOREGOING PROVISIONS, FIRST BANCORP
HAS BEEN INFORMED THAT IN THE OPINION OF THE SECURITIES AND EXCHANGE COMMISSION
SUCH INDEMNIFICATION IS AGAINST PUBLIC POLICY AS EXPRESSED IN THE ACT AND IS
THEREFORE UNENFORCEABLE.

In addition, Georgia Law provides broad discretion to directors and
shareholders of corporations to indemnify officers, directors and employees
against liabilities and expenses of defending civil (and in some cases
criminal) matters. See O.C.G.A. Section 14-2-851 and Section 14-2-857. See
"EFFECT OF REORGANIZATION ON SHAREHOLDERS - LIMITATIONS OF LIABILITY AND
INDEMNIFICATION OF OFFICERS, DIRECTORS AND EMPLOYEES."

62
<PAGE> 71
- --------------------------------------------------------------------------------
OTHER BUSINESS
- --------------------------------------------------------------------------------

Action will be taken on whatever other business may properly come
before the special meeting of Heard Bank shareholders. Management is not aware
of any other business matters to be considered at the special meeting. If any
other matters properly come before the meeting, the persons named in the
enclosed form of proxy will have discretionary authority to vote all proxies
with respect to such matters and in accordance with the recommendations of
management.

- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------

First Bancorp has filed a registration statement (herein together with
all amendments thereto called the "Registration Statement") with the Securities
and Exchange Commission, Washington, D.C., under the Securities Act of 1933, as
amended, with respect to First Bancorp common stock to be issued in the
reorganization. This document does not contain all of the information set
forth in the Registration Statement. For further information, reference is
made to the Registration Statement including the exhibits filed or incorporated
by reference as a part thereof. The Registration Statement is available for
inspection at no fee at the Commission's public reference room in Washington,
D.C. Copies of the material contained in the Registration Statement may be
obtained from the Commission upon payment of the fees prescribed in its rules
and regulations.

THE BANK OF HEARD COUNTY
Franklin, Georgia
By: /s/ Charles L. Goodson
January 16, 1996 -----------------------------
- ---------------- Charles L. Goodson, Chairman

FIRST NATIONAL BANCORP
Gainesville, Georgia
By: /s/ Peter D. Miller
January 16, 1996 -----------------------------
- ---------------- Peter D. Miller, President
C.A.O. and C.F.O.

63
<PAGE> 72

THE BANK OF HEARD COUNTY

FINANCIAL STATEMENTS

F-1
<PAGE> 73

C O N T E N T S

<TABLE>
<CAPTION>
Page
<S> <C>
APRIL 30, 1995 FINANCIAL STATEMENTS F-3

INDEPENDENT AUDITOR'S REPORT F-4

BALANCE SHEET F-5

STATEMENTS OF EARNINGS F-6

STATEMENTS OF CHANGES
IN STOCKHOLDERS' EQUITY F-8

STATEMENTS OF CASH FLOWS F-9

NOTES TO THE FINANCIAL STATEMENTS F-10

DECEMBER 31, 1994 AND 1993 FINANCIAL STATEMENTS F-15

BALANCE SHEET F-16

STATEMENTS OF EARNINGS F-17

STATEMENTS OF CHANGES
IN STOCKHOLDERS' EQUITY F-18

STATEMENTS OF CASH FLOWS F-19

NOTES TO THE FINANCIAL STATEMENTS F-20

SEPTEMBER 30, 1995 FINANCIAL STATEMENTS F-26

BALANCE SHEET F-27

STATEMENTS OF EARNINGS F-28

STATEMENTS OF CHANGES
IN STOCKHOLDERS' EQUITY F-29

STATEMENTS OF CASH FLOWS F-30

NOTES TO THE FINANCIAL STATEMENTS F-31

</TABLE>

F-2
<PAGE> 74

THE BANK OF HEARD COUNTY

FINANCIAL STATEMENTS
AND INDEPENDENT AUDITOR'S REPORT

April 30, 1995

F-3

<PAGE> 75
INDEPENDENT AUDITOR'S REPORT

To the Board of Directors
The Bank of Heard County
Franklin, Georgia

We have audited the accompanying balance sheet of The Bank of Heard County as
of April 30, 1995, and the related statements of earnings, changes in
stockholders' equity and cash flows for each of the two years in the period
ended April 30, 1995. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The Bank of Heard County as of
April 30, 1995, and the results of its operations and cash flows for each of
the two years in the period ended April 30, 1995, in conformity with generally
accepted accounting principles.

Peachtree City, Georgia
August 1, 1995

F-4
<PAGE> 76
THE BANK OF HEARD COUNTY
BALANCE SHEET
April 30, 1995

<TABLE>
<CAPTION>
ASSETS
<S> <C>
Cash and due from banks $ 2,229,309
Federal funds sold 600,000
----------
Cash and cash equivalents 2,829,309
----------

Investment securities (approximate
market value of $7,288,373) 7,272,824

Loans 28,689,331
Less allowance for credit losses 349,094
----------
Loans, net 28,340,237
----------

Premises and equipment, net 425,987
Accrued interest receivable and
other assets 313,115
----------

$39,181,472
==========

LIABILITIES & STOCKHOLDERS' EQUITY

Deposits
Noninterest-bearing demand $ 4,105,075
Interest-bearing demand 5,588,125
Savings 3,479,467
Time, $100,000 and over 6,627,870
Other time 14,755,295
----------
Total deposits 34,555,832
----------

Accrued interest payable and other liabilities 309,590
----------

Total liabilities 34,865,422
----------

Stockholders' equity
Common stock, par value $100; 1,000 shares
authorized, issued and outstanding 100,000
Surplus 2,300,000
Retained earnings 1,916,050
----------
Total stockholders' equity 4,316,050
----------

$39,181,472
==========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-5
<PAGE> 77
THE BANK OF HEARD COUNTY
STATEMENTS OF EARNINGS
For the Years Ended April 30, 1995 and 1994

<TABLE>
<CAPTION>
INTEREST INCOME 1995 1994
--------- ---------
<S> <C> <C>
Interest and fees on loans $2,741,913 $2,580,864
Interest on Federal funds sold 35,944 43,465
Interest on deposits in banks - 9,312
Interest on investment securities:
U.S. Treasury securities 347,689 230,374
State, county, and municipal 8,910 11,022
--------- ---------
Total interest income 3,134,456 2,875,037
--------- ---------

INTEREST EXPENSE ON DEPOSITS
Demand 188,241 193,652
Savings 127,145 116,701
Time (including interest
expense on certificates of deposit
over $100,000 totaling $254,458
and $198,044 for 1995 and 1994,
respectively) 1,013,326 854,035
--------- ---------
Total interest expense 1,328,712 1,164,388
--------- ---------

Net interest income 1,805,744 1,710,649

Provision for credit losses 50,000 50,000
--------- ---------
Net interest income after provision for
credit losses 1,755,744 1,660,649
--------- ---------

OTHER INCOME
Service charges on deposit accounts 201,816 157,702
Other service fees and commissions 32,236 35,939
Other operating 4,270 10,140
--------- ---------
Total other income 238,322 203,781
--------- ---------

OTHER EXPENSES
Salaries and employee benefits 805,472 849,970
Equipment expense 97,183 97,863
Occupancy expense 43,602 49,443
Data processing 14,982 14,646
Other 310,040 305,221
--------- ---------
Total other expenses 1,271,279 1,317,143
--------- ---------

Earnings before income taxes 722,787 547,287

Applicable income taxes 238,121 161,591
--------- ---------

Net earnings $ 484,666 $ 385,696
========= =========
</TABLE>

The accompanying notes are an integral part of these financial
statements.

F-6
<PAGE> 78
THE BANK OF HEARD COUNTY
STATEMENTS OF EARNINGS (Continued)
For the Years Ended April 30, 1995 and 1994

<TABLE>
<CAPTION>
1995 1994
--------- ---------
<S> <C> <C>
Earnings per share $ 484.66 $ 385.70
======== ========

Average number of
shares outstanding 1,000 1,000
======= ========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-7
<PAGE> 79
THE BANK OF HEARD COUNTY
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
For the Years Ended April 30, 1995 and 1994

<TABLE>
<CAPTION>
Common Retained
Stock Surplus Earnings
------- --------- ---------
<S> <C> <C> <C>
Balance April 30, 1993 $100,000 $2,100,000 $1,355,688

Net earnings - - 385,696

Transfer from
retained earings to
surplus - 100,000 (100,000)

Dividends paid or
declared
($55.00 per share) - - (55,000)
------- --------- ---------

Balance April 30, 1994 100,000 2,200,000 1,586,384

Net earnings - - 484,666

Transfer from retained
earnings to surplus - 100,000 (100,000)

Dividends paid or
declared ($55.00 per
share) - - (55,000)
------- --------- ---------

Balance April 30, 1995 $100,000 $2,300,000 $1,916,050
======= ========= =========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-8
<PAGE> 80
THE BANK OF HEARD COUNTY
STATEMENTS OF CASH FLOWS
For the Years Ended April 30, 1995 and 1994

<TABLE>
<CAPTION>
CASH FLOWS FROM OPERATING ACTIVITIES 1995 1994
---- ----
<S> <C> <C>
Net earnings $ 484,666 $ 385,696
Adjustments to reconcile net earnings
to net cash provided by operating
activities:
Provision for credit losses 50,000 50,000
Depreciation 68,139 72,509
(Increase) in accrued interest
receivable and other assets (22,950) (38,578)
Increase in accrued interest
payable and other liabilities 33,726 18,111
--------- ---------

Net cash provided by operating
activities 613,581 487,738
--------- ---------

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of investment securities (7,724,031) (6,734,907)
Proceeds from maturities of
investment securities 7,200,000 7,300,000
Decrease in interest-bearing deposits
in bank - 400,000
Increase in loans (3,479,299) (2,419,872)
Purchase of premises and equipment (83,907) (131,138)
--------- ---------

Net cash (used in) by investing
activities (4,087,237) (1,585,917)
--------- ---------

CASH FLOWS FROM FINANCING ACTIVITIES
Increase in demand, interest-bearing
demand and savings accounts 307,750 903,428
Increase in time deposits 2,402,675 717,727
Dividends paid (55,000) (55,000)
--------- ---------
Net cash provided by financing
activities 2,655,425 1,566,155
--------- ---------

Net increase (decrease) in cash and cash
equivalents (818,231) 467,976

Cash and cash equivalents at beginning
of year 3,647,540 3,179,564
--------- ---------

Cash and cash equivalents at end
of year $ 2,829,309 $ 3,647,540
========= =========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-9
<PAGE> 81
THE BANK OF HEARD COUNTY
NOTES TO THE FINANCIAL STATEMENTS
April 30, 1995

NOTE 1 - Summary of Significant Accounting Policies

The Bank of Heard County (the Bank) is a commercial bank with
locations in Franklin and Ephesus, Georgia. The accounting principles
followed by the Bank, and the methods of applying those principles,
conform with generally accepted accounting principles and with general
practices within the banking industry.

Investment Securities

Investment securities are stated at cost adjusted for amortization of
premiums and accretion of discounts, which are recognized as
adjustments to interest income. It is the policy of the Bank to hold
investments to maturity.

Loans

Loans are stated at the amount of unpaid principal. Interest on loans
is credited to income on a daily basis, based upon the principal
amount outstanding. Accrual of interest income is discontinued on
loans when, in the opinion of management, collection of such interest
becomes doubtful. Accrual of interest on such loans is resumed when,
in management's judgment, the collection of interest and principal
becomes probable.

Allowance for Credit Losses

The allowance for credit losses is established through a provision for
credit losses charged to expense. Loans are charged against the
allowance for credit losses when management believes that the
collectibility of the principal is unlikely. The allowance is an
amount that management believes will be adequate to absorb possible
losses on existing loans that may become uncollectible, based on
evaluations of the collectibility of loans and prior credit loss
experience.

Premises and Equipment

Premises and equipment are stated at cost less accumulated
depreciation, computed principally on the straight-line method over
the estimated useful lives of the assets. When assets are retired or
otherwise disposed of, the cost and related accumulated depreciation
are removed from the accounts, and any gain or loss is reflected in
income for the period. Maintenance and repairs are charged to
operations as incurred and major improvements and betterments are
capitalized and depreciated.

F-10
<PAGE> 82
THE BANK OF HEARD COUNTY
NOTES TO THE FINANCIAL STATEMENTS
April 30, 1995

NOTE 1 - Summary of Significant Accounting Policies, (continued)

Income Taxes

The Company records income taxes under the liability method of
accounting for income tax expense. This method requires that deferred
income taxes be computed at the tax rates which will be in effect in
the year when they are expected to be paid.

Net earnings per share

Net earnings per share is calculated by dividing net earnings by the
weighted average number of shares outstanding during the period. The
number of shares outstanding during the period was 1,000 shares.

Supplemental Information for Statement of Cash Flows

For purposes of reporting cash flows, cash and cash equivalents
include cash on hand, amounts due from banks and federal funds sold.
Generally, federal funds are sold for one-day periods.

Cash paid during the year ended April 30:

<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Interest $1,282,781 $1,170,979
Income taxes $ 246,321 $ 153,891
</TABLE>

NOTE 2 - Cash

At April 30, 1995, the Company had approximately $532,000 on deposit
in a commercial bank which was in excess of Federal insurance limits.

NOTE 3 - Investment Securities

Investment securities with a carrying amount of $6,962,000 and market
value of $6,726,579 at April 30, 1995 were pledged to secure public
deposits and for other purposes. Maturities of debt securities at
April 30, 1995 are as follows:
<TABLE>
<CAPTION>
Estimated
Carrying Value Market Value
-------------- ------------
<S> <C> <C>
Due in one year or less $7,150,947 $7,170,311
Due after one year
through five years 121,877 118,062
--------- ---------
$7,272,824 $7,288,373
========= =========
</TABLE>

F-11
<PAGE> 83
THE BANK OF HEARD COUNTY
NOTES TO THE FINANCIAL STATEMENTS
April 30, 1995

NOTE 3 - Investment Securities - Continued

The carrying value and estimated market value of investments in debt securities
are as follows:

<TABLE>
<CAPTION>
Gross Gross
Carrying Unrealized Unrealized Estimated
Value Gains Losses Market Value
-------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
U. S. Treasury securities $7,150,947 $21,082 $(1,718) $7,170,311
State, county and municpal 121,877 - (3,815) 118,062
--------- ------ ------ ---------

$7,272,824 $21,082 $(5,533) $7,288,373
========= ====== ====== =========
</TABLE>

NOTE 4 - Loans and Allowance for Credit Losses

The composition of loans as of April 30, 1995 is summarized as follows:

<TABLE>
<S> <C>
Commercial $ 1,578,714
Real estate 21,809,118
Consumer installment loans 5,391,087
----------
28,778,919
Unearned interest (89,588)
Allowance for credit losses (349,094)
----------
Loans, net $28,340,237
==========
</TABLE>

Loans as of April 30, 1995 on which the accrual of interest has been
discontinued totalled $24,023.

At April 30, 1995, executive officers and directors and companies in
which they have a 10 percent or more beneficial ownership were
indebted to the Bank in the aggregate amount of $277,258. The
interest rates on these loans were the same as rates prevailing at the
time of the transaction and repayment terms are customary for the type
of loan involved.

Following is a summary of loan activity during the years ended April
30, 1995 and 1994 for executive officers and directors:

<TABLE>
<S> <C>
Balance at April 30, 1993 $ 302,487
New borrowings 215,110
Repayments (47,166)
----------
Balance at April 30, 1994 470,431
New borrowings 235,000
Repayments (428,173)
----------
Balance at April 30, 1995 $ 277,258
==========
</TABLE>

F-12
<PAGE> 84
THE BANK OF HEARD COUNTY
NOTES TO THE FINANCIAL STATEMENTS
April 30, 1995

NOTE 4 - Loans and Allowance for Credit Losses - Continued

Changes in the allowance for credit losses are as follows:

<TABLE>
<S> <C>
Balance at April 30, 1993 $ 243,829
Loan loss provision 50,000
Recoveries 36,785
Loans charged-off (28,250)
----------
Balance at April 30, 1994 $ 302,364
Loan loss provision 50,000
Recoveries 22,801
Loans charged off (26,071)
----------
Balance at April 30, 1995 $ 349,094
==========
</TABLE>

NOTE 5 - Premises and Equipment

Major classification of these assets are summarized as follows:

<TABLE>
<S> <C>
Land $124,198
Buildings 408,120
Equipment 409,254
-------
941,572
Accumulated depreciation 515,585
-------
$425,987
=======
</TABLE>

NOTE 6 - Commitments and Contingencies

In the normal course of business, there are loan commitments that are
not reflected in the financial statements. These include commitments
to extend credit, letters of credit, guarantees and liability for
assets held in trust. Unused lines of credit totalled $910,930 at
April 30, 1995. There were no letters of credit outstanding at April
30, 1995.

The Bank does not anticipate any material losses as a result of the
commitments and contingent liabilities.

The nature of the business of the Bank is such that it ordinarily
results in a certain amount of litigation. In the opinion of
management and counsel for the Bank, there is no litigation in which
the outcome will have a material effect on the financial statements.

F-13
<PAGE> 85
THE BANK OF HEARD COUNTY
NOTES TO THE FINANCIAL STATEMENTS
April 30, 1995

NOTE 7 - Concentration of Credit

All of the Bank's loans have been granted to customers in the Bank's
market area. The concentrations of credit by type of loan are set
forth in Note 4. The Bank carefully monitors loans granted to
individual customers to minimize credit risk.

NOTE 8 - Subsequent Event

On July 25, 1995, the Bank signed a Letter of Intent, which preceded
the signing of an Agreement of Reorganization and Plan of Merger on
August 3, 1995, whereby the Bank proposes to merge with First National
Bancorp through a statutory merger process. First National Bancorp
would be the surviving company with the Bank of Heard County being a
subsidiary bank of First National Bancorp. First National Bancorp
proposes to issue 325,580 shares of $1.00 par value common stock for
the 1,000 shares of $100.00 Bank of Heard County common stock shares
outstanding. The proposed transaction will be accounted for under the
pooling-of-interests method of accounting. The proposed transaction
is subject to approval of regulatory authorities and shareholders of
the Bank of Heard County. If approval is granted, consummation of the
merger is not anticipated until the first quarter of 1996.

F-14
<PAGE> 86

THE BANK OF HEARD COUNTY

FINANCIAL STATEMENTS

DECEMBER 31, 1994 AND 1993

(UNAUDITED)

F-15
<PAGE> 87
THE BANK OF HEARD COUNTY
BALANCE SHEETS
December 31, 1994 and 1993
(Unaudited)

<TABLE>
<CAPTION>
ASSETS 1994 1993
---- ----
<S> <C> <C>
Cash and due from banks $ 1,841,065 $ 1,412,603
Federal funds sold 900,000 1,700,000
---------- ----------
Cash and cash equivalents 2,741,065 3,112,603

Investment securities (approximate
market value of 8,591,036 and
$6,655,317) 8,629,011 6,654,248

Loans 27,749,903 24,093,247
Less allowance for credit losses 348,868 315,805
---------- ----------
Loans, net 27,401,035 23,777,442

Premises and equipment, net 368,253 422,328
Accrued interest receivable and
other assets 282,861 276,458
---------- ----------

Total Assets $39,422,225 $34,243,079
========== ==========

LIABILITIES & STOCKHOLDERS' EQUITY

Deposits
Noninterest-bearing demand $ 4,762,166 $ 3,432,653
Interest-bearing demand 6,560,553 5,763,950
Savings 3,515,385 3,186,747
Time, $100,000 and over 6,825,459 4,291,222
Other time 13,511,520 13,787,270
---------- ----------
Total deposits 35,175,083 30,461,842

Other liabilities 166,619 91,355
---------- ----------

Total liabilities 35,341,702 30,553,197
---------- ----------

Stockholders' equity
Common stock, par value $100;
1,000 shares authorized,
issued and outstanding 100,000 100,000
Surplus 2,300,000 2,200,000
Retained earnings 1,680,523 1,389,882
---------- ----------
Total stockholders' equity 4,080,523 3,689,882
---------- ----------

Total liabilities and stockholders' equity $39,422,225 $34,243,079
========== ==========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-16
<PAGE> 88
THE BANK OF HEARD COUNTY
STATEMENTS OF EARNINGS
For the Years Ended December 31, 1994, 1993 and 1992
(Unaudited)

<TABLE>
<CAPTION>
INTEREST INCOME 1994 1993 1992
--------- --------- ---------
<S> <C> <C> <C>
Interest and fees on loans $2,664,290 $2,552,001 $2,487,508
Interest on Federal funds sold 41,733 45,980 38,448
Interest on deposits in banks 318 15,307 23,361
Interest on investment securities:
U.S. Treasury securities 270,314 219,483 245,859
State, county, and municipal (non-taxable) 10,880 10,500 4,842
--------- --------- ---------
Total interest income 2,987,535 2,843,271 2,800,018

INTEREST EXPENSE ON DEPOSITS
Demand 187,331 187,196 173,341
Savings 121,750 114,833 113,977
Time (including interest
expense on certificates of deposit
over $100,000 totaling $202,357,
$196,740 and $233,839 for 1994,
1993, and 1992 respectively). 933,502 825,633 893,787
--------- --------- ---------
Total interest expense 1,242,583 1,127,662 1,181,105
--------- --------- ---------
Net interest income 1,744,952 1,715,609 1,618,913

Provision for credit losses 50,000 50,000 50,000
--------- --------- ---------
Net interest income after
provision for credit losses 1,694,952 1,665,609 1,568,913

OTHER INCOME
Service charges on deposit accounts 193,326 154,139 178,143
Other service fees and commission 33,709 17,464 33,056
Other operating 5,526 14,679 1,836
--------- --------- ---------
Total other income 232,561 186,282 213,035

OTHER EXPENSES
Salaries and employee benefits 808,308 832,177 793,670
Equipment expense 95,197 95,796 73,679
Occupancy expense 43,656 51,625 46,058
Data processing 13,735 15,055 17,403
Other 303,854 304,579 303,480
--------- --------- ---------
Total other expenses 1,264,750 1,299,232 1,234,290
--------- --------- ---------

Earnings before income taxes 662,763 552,659 547,658

Applicable income taxes 217,122 149,082 169,809
--------- --------- ---------

Net earnings $ 445,641 $ 403,577 $ 377,849
========= ========= =========

Earnings per share $ 445.64 $ 403.58 $ 377.85
========= ========= =========

Average number of shares outstanding 1,000 1,000 1,000
========= ========= =========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-17
<PAGE> 89
THE BANK OF HEARD COUNTY
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
For the Years Ended December 31, 1994, 1993 and 1992
(Unaudited)

<TABLE>
<CAPTION>
Common Retained
Stock Surplus Earnings
------- --------- ---------
<S> <C> <C> <C>
Balance December 31, 1991 $100,000 $2,000,000 $ 918,456

Net income - - 377,849

Transfer from
retained earnings to
surplus - 100,000 (100,000)

Dividends paid or
declared
($55.00 per share) - - (55,000)
------- --------- ---------

Balance December 31, 1992 100,000 2,100,000 1,141,305

Net income - - 403,577

Transfer from
retained earnings to
surplus - 100,000 (100,000)

Dividends paid or
declared ($55.00 per
share) - - (55,000)
-------- --------- ----------

Balance December 31, 1993 100,000 2,200,000 1,389,882

Net income - - 445,641

Transfers from
retained earnings to
surplus - 100,000 (100,000)

Dividends paid or
declared ($55.00 per
share) - - (55,000)
------- --------- ---------

Balance December 31, 1994 $100,000 $2,300,000 $1,680,523
======= ========= =========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-18
<PAGE> 90
THE BANK OF HEARD COUNTY
STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 1994, 1993 and 1992
(Unaudited)

<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 445,641 $ 403,577 $ 377,849
Adjustments to reconcile net income
to net cash provided by operating
activities:
Provision for credit losses 50,000 50,000 50,000
Depreciation 68,603 72,754 64,675
(Increase) decrease in accrued interest
receivable and other assets (6,403) (48,843) 18,576
Increase (decrease) in accrued interest
payable and other liabilities 75,263 10,548 (51,807)
--------- --------- ---------

Net cash provided by operating
activities 633,104 488,036 459,293
--------- --------- ---------

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of investment securities (8,666,763) (6,383,520) (2,341,823)
Proceeds from maturities of
investment securities 6,692,000 4,000,000 3,496,860
Increase in loans (3,673,593) (1,526,209) (3,139,145)
Purchase of premises and equipment (14,527) (166,237) 35,353)
--------- --------- ---------

Net cash (used) by investing
activities (5,662,883) (4,075,966) (2,019,461)
--------- --------- ---------

CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in demand,
interest-bearing demand and savings
accounts 2,454,754 (433,504) 2,924,559
Increase (decrease) in time deposits 2,258,487 1,759,545 (22,529)
Dividends paid (55,000) (55,000) (55,000)
--------- --------- ---------

Net cash provided by financing
activities 4,658,241 1,271,041 2,847,030
--------- --------- ---------

Net increase (decrease) in cash and cash
equivalents (371,538) (2,316,889) 1,286,862

Cash and cash equivalents at beginning
of year 3,112,603 5,429,492 4,142,630
--------- --------- ---------

Cash and cash equivalents at end
of year $2,741,065 $3,112,603 $5,429,492
========= ========= =========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-19
<PAGE> 91

THE BANK OF HEARD COUNTY
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1994 and 1993

NOTE 1 - Summary of Significant Accounting Policies

Investment Securities

Loans

Allowance for Credit Losses

Premises and Equipment

F-20
<PAGE> 92
THE BANK OF HEARD COUNTY
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1994 and 1993

NOTE 1 - Summary of Significant Accounting Policies, (continued)

Income Taxes

Net earnings per share

Supplemental Information for Statement of Cash Flows

For purposes of reporting cash flows, cash and cash equivalents
include cash on hand, amounts due from banks and federal funds sold.
Generally, federal funds are sold for one-day periods.

Cash paid during the year ended December 31:

<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Interest $1,211,239 $1,128,728 $1,207,499
Income taxes $ 173,191 $ 137,491 $ 201,789
</TABLE>

NOTE 2 - Cash

At December 31, 1994, the Company had approximately $979,000 on
deposit in a commercial bank which was in excess of Federal insurance
limits.

F-21
<PAGE> 93
THE BANK OF HEARD COUNTY
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1994 and 1993

NOTE 3 - Investment Securities

Investment securities with a carrying amount of $8,140,955 and market
value of $8,120,000 at December 31, 1994 were pledged to secure public
deposits and for other purposes. Maturities of debt securities at
December 31, 1994 and 1993 are as follows:

Estimated
<TABLE>
<CAPTION>
1994 Carrying Value Market Value
---- -------------- ------------
<S> <C> <C>
Due in one year or less $8,507,270 $8,480,493
Due after five years
121,741 110,543
--------- ---------
$8,629,011 $8,591,036
========= =========

1993
----

Due in one year or less $6,654,248 $6,655,317
--------- ---------
$6,654,248 $6,655,317
========= =========
</TABLE>

The carrying value and estimated market value of investments in debt securities
are as follows:

<TABLE>
<CAPTION>
Gross Gross
Carrying Unrealized Unrealized Estimated
1994 Value Gains Losses Market Value
---- -------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
U. S. Treasury securities $8,507,270 $ - $(26,777) $8,480,493
State, county and municipal 121,741 - (11,198) 110,543
--------- ------ ------- ---------

$8,629,011 $ - $(37,975) $8,591,036
========= ====== ======= =========

1993
----

U. S. Treasury securities $6,454,248 $ - $ (511) $6,453,737
State, county and municipal 200,000 1,580 - 201,580
--------- ------ ------- ---------

$6,654,248 $ 1,580 $ (511) $6,655,317
========= ====== ======= =========
</TABLE>

F-22
<PAGE> 94
THE BANK OF HEARD COUNTY
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1994 and 1993

NOTE 4 - Loans and Allowance for Credit Losses

The composition of loans as of December 31, 1994 and 1993 is summarized as
follows:

<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Commercial $ 1,690,164 $ 1,293,540
Real estate 21,075,284 18,094,132
Consumer installment loans 5,083,512 4,935,382
---------- ----------
$27,848,960 24,323,054
Unearned interest (99,057) (229,807)
Allowance for credit losses (348,868) (315,805)
---------- ----------
Loans, net $27,401,035 $23,777,442
========== ==========
</TABLE>

There were no loans as of December 31, 1994 on which the accrual of interest
has been discontinued.

At December 31, 1994, executive officers and directors and companies in which
they have a 10 percent or more beneficial ownership were indebted to the Bank
in the aggregate amount of $252,124. The interest rates on these loans were
the same as rates prevailing at the time of the transaction and repayment terms
are customary for the type of loan involved.

Following is a summary of loan activity during the years ended December 31,
1994 and 1993 for executive officers and directors:

<TABLE>
<S> <C>
Balance at December 31, 1992 $ 378,885
New borrowings 195,000
Repayments (123,662)
----------
Balance at December 31, 1993 450,223
New borrowings 245,000
Repayments (443,099)
----------
Balance at December 31, 1994 $ 252,124
==========

Changes in the allowance for credit losses are as follows:

Balance at December 31, 1992 $ 258,091
Loan loss provision 50,000
Recoveries 40,370
Loans charged-off (32,656)
----------
Balance at December 31, 1993 $ 315,805
Loan loss provision 50,000
Recoveries 22,399
Loans charged off (39,336)
----------
Balance at December 31, 1994 $ 348,868
==========
</TABLE>

F-23
<PAGE> 95
THE BANK OF HEARD COUNTY
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1994 and 1993

NOTE 5 - Premises and Equipment

Major classification of these assets are summarized as follows:

<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Land $ 44,198 $ 44,198
Buildings 408,120 408,120
Equipment 409,254 394,727
------- -------
861,572 847,045
Accumulated depreciation 493,319 424,717
------- -------
$368,253 $422,328
======= =======
</TABLE>

NOTE 6 - Commitments and Contingencies

In the normal course of business, there are loan commitments that are
not reflected in the financial statements. These include commitments
to extend credit, letters of credit, guarantees and liability for
assets held in trust. Unused lines of credit totalled $650,100 and
$547,230 at December 31, 1994 and 1993, respectively. There were no
letters of credit outstanding at December 31, 1994.

The Bank does not anticipate any material losses as a result of the
commitments and contingent liabilities.

NOTE 7 - Concentration of Credit

F-24
<PAGE> 96
THE BANK OF HEARD COUNTY
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1994 and 1993

NOTE 8 - Subsequent Event

F-25
<PAGE> 97

THE BANK OF HEARD COUNTY

FINANCIAL STATEMENTS

September 30, 1995

F-26
<PAGE> 98
THE BANK OF HEARD COUNTY
BALANCE SHEETS
(Unaudited)

<TABLE>
<CAPTION>
September 30, December 31, Change
-------------------
1995 1994 Amount Percent
------------- ------------ ------ -------
<S> <C> <C> <C> <C>
ASSETS

Cash and due from banks $ 2,068,721 $ 1,841,065 $ 227,656 12.37
Federal funds sold 1,300,000 900,000 400,000 44.44
---------- ---------- ----------
Cash and cash equivalents 3,368,721 2,741,065 627,656 22.90

Investment securities (approximate
market value of $6,979,000 and
$8,591,306 at 1995 and 1994,
respectively) 6,961,421 8,629,011 (1,667,590) (19.32)

Loans 31,290,585 27,848,960 3,441,625 12.36
Less: Unearned income (69,546) (99,057) 29,511 29.79
Allowance for loan losses (359,908) (348,868) (11,040) (3.16)
---------- ---------- ---------
Net loans 30,861,131 27,401,035 3,460,096 12.63

Premises and equipment, net 413,436 368,253 45,183 12.27
Other assets 268,117 282,861 (14,744) (5.21)
---------- ---------- ---------
Total assets $41,872,826 $39,422,225 $2,450,601 6.22
========== ========== =========

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
Deposits:
Noninterest-bearing $ 3,919,351 $ 4,762,166 $ (842,815) (17.70)
Interest-bearing 33,102,174 30,412,917 2,689,257 8.84
---------- ---------- ---------
Total deposits 37,021,525 35,175,083 1,846,442 5.25

Other liabilities 330,547 166,619 163,928 98.38
---------- ---------- ---------
Total liabilities 37,352,072 35,341,702 2,010,370 5.69

Shareholders' Equity:
Common stock; $100 par value.
authorized 1,000 shares issued,
authorized and outstanding $ 100,000 $ 100,000 $ - -
Surplus 2,300,000 2,300,000 - -
Retained earnings 2,120,754 1,680,523 440,231 26.20
---------- ---------- ---------

Total shareholders' equity 4,520,754 4,080,523 440,231 10.79
---------- ---------- ---------
Total liabilities and
shareholders' equity $41,872,826 $39,422,225 $2,450,601 6.22
========== ========== =========
</TABLE>

See accompanying notes to financial statements.

F-27
<PAGE> 99
THE BANK OF HEARD COUNTY
STATEMENTS OF EARNINGS
(Unaudited)

<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
--------------------- ---------------------
1995 1994 1995 1994
--------------------- ---------------------
<S> <C> <C> <C> <C>
Interest Income:
Loans, including fees $ 779,554 $ 677,537 $2,214,782 $1,975,296
Interest-bearing deposits in banks - - - 318
Investment securities:
Tax exempt 1,539 2,542 4,618 9,341
Taxable 110,701 68,114 347,137 191,756

Federal funds sold 7,394 8,885 25,230 32,600
--------- --------- --------- ---------
Total interest income 899,188 757,078 2,591,767 2,209,311
--------- --------- --------- ---------

Interest Expense:
Deposits 423,712 313,028 1,170,244 913,980
--------- --------- --------- ---------

Total interest expense 423,712 313,028 1,170,244 913,980
--------- --------- --------- ---------

Net interest income 475,476 444,050 1,421,523 1,295,331
Provision for loan losses - - - -
--------- --------- --------- ---------
Net interest income after
provision for loan losses 475,476 444,050 1,421,523 1,295,331
--------- --------- --------- ---------

Other Income:
Service charges on deposit accounts 52,370 49,991 152,161 134,784
Other operating income 2,291 7,023 23,780 33,748
--------- --------- --------- ---------
Total other income 54,661 57,014 175,941 168,532
--------- --------- --------- ---------

Other Expenses:
Salaries and employee benefits 232,970 213,537 619,009 600,616
Net occupancy 8,593 8,821 23,273 23,868
Furniture and equipment 18,090 26,220 51,727 60,104
Other operating expenses 44,758 86,401 213,224 210,050
--------- --------- --------- ---------
Total other expense 304,411 334,979 907,233 894,638
--------- --------- --------- ---------

Earnings before income taxes 225,726 166,085 690,231 569,225
Income tax expense 78,000 58,000 235,000 193,000
--------- --------- --------- ---------
Net earnings 147,726 108,085 455,231 376,225
--------- --------- --------- ---------

Per Share Information:
Net earnings $ 147.73 $ 108.09 $ 455.23 $ 376.23
========= ========= ========= =========

Dividends declared per share $ - $ - $ 15 $ 10
========= ========= ========= =========

Weighted average outstanding shares 1,000 1,000 1,000 1,000
========= ========= ========= =========
</TABLE>

See accompanying notes to financial statements.

F-28
<PAGE> 100
THE BANK OF HEARD COUNTY
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
For the Nine Months Ended September 30, 1995
and the Years Ended December 31, 1994 and 1993
(Unaudited)

<TABLE>
<CAPTION>
Common Retained
Stock Surplus Earnings
------ ------- --------
<S> <C> <C> <C>
Balance, December 31,1992 $100,000 $2,100,000 $1,141,305

Net earnings - - 403,577

Transfer from retained earnings to surplus - 100,000 (100,000)

Dividends paid or declared ($55.00 per share) - - (55,000)
------- --------- ---------

Balance, December 31, 1993 100,000 2,200,000 1,389,882

Net earnings - - 445,641

Transfer from retained earnings to surplus - 100,000 (100,000)

Dividends paid or declared ($55.00 per share) - - (55,000)
------- --------- ---------

Balance, December 31, 1994 100,000 2,300,000 1,680,523

Net earnings - - 455,231

Dividends paid or declared ($15.00 per share) - - (15,000)
------- --------- ---------

Balance, September 30, 1995 $100,000 $2,300,000 $2,120,754
======= ========= =========
</TABLE>

See accompanying notes to consolidated financial statements.

F-29
<PAGE> 101

THE BANK OF HEARD COUNTY
STATEMENTS OF CASH FLOWS
Nine months ended September 30, 1995 and 1994
(Unaudited)

<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Cash flows from operating activities:

Net earnings $ 455,231 $ 376,225
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation 50,147 51,626
Changes in other assets and liabilities:
Decrease in other assets 14,744 37,619
Increase in other liabilities 163,928 944,990
---------- ----------
Net cash provided by operating activities 684,050 1,410,460
---------- ----------

Cash flows from investing activities:

Purchases of investment securities (2,221,607) (4,592,657)
Proceeds from maturities of investment securities 3,889,197 4,171,817
Loan originations, net of repayments (3,460,096) (2,743,320)
Purchases of premises and equipment (95,330) (14,527)
---------- ----------
Net cash (used in) investing activities (1,887,836) (3,178,687)
---------- ----------

Cash flows from financing activities:

Net increase (decrease) in demand deposits,
NOW accounts, and savings accounts (2,141,677) 34,320
Net increase in time deposits 3,988,119 487,597
Cash dividends paid on common stock (15,000) (10,000)
---------- ----------
Net cash provided by financing activities 1,831,442 511,917
---------- ----------

Net increase (decrease) in cash and
cash equivalents 627,656 (1,256,310)

Cash and cash equivalents at beginning of period 2,741,065 3,112,603
---------- ----------

Cash and cash equivalents at end of period $ 3,368,721 $ 1,856,293
---------- ----------

Supplemental disclosures of cash flow
information:
Cash paid during the period for:
Interest 1,114,787 873,886

Income taxes 228,021 112,091
</TABLE>

See Accompanying Notes to Financial Statements.

F-30
<PAGE> 102
NOTES TO SEPTEMBER 30, 1995 FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information. Accordingly, they do not include all of the information and
footnotes requried by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the interim periods are
not necessarily indicative of the results that may be expected for the full
year or any other interim period. For further information, refer to the
financial statements and footnotes thereto for the year ended December 31, 1994
included elsewhere in this document.

F-31
<PAGE> 103
APPENDIX "A"

AGREEMENT OF REORGANIZATION
AND
PLAN OF MERGER

THIS AGREEMENT OF REORGANIZATION AND PLAN OF MERGER (hereinafter
referred to as the "Agreement"), dated as of August 3, 1995, between FIRST
NATIONAL BANCORP, a Georgia corporation (hereinafter sometimes referred to as
"Bancorp"), INTERIM HEARD CORPORATION (hereinafter sometimes referred to as
"Interim"), and the BANK OF HEARD COUNTY, Franklin, Georgia (hereinafter
sometimes referred to as "Heard Bank" or "Bank"), a Georgia commercial bank.

W I T N E S S E T H:

WHEREAS, Bancorp is a multiple bank and thrift holding company
operating in Georgia and Florida;

WHEREAS, Heard Bank is a state banking association located in Heard
County, Georgia;

WHEREAS, the Boards of Directors of Bancorp and Heard Bank deem it
desirable to enter into this Agreement providing for Interim to be merged into
Heard Bank, which shall be the surviving banking corporation and a wholly-owned
subsidiary of Bancorp, with shareholders of Heard Bank receiving shares of
Bancorp in exchange for their Heard Bank shares; and

WHEREAS, the parties believe that the merger will broaden capital and
money markets available to Heard Bank and Bancorp, enable the parties to
compete more effectively with other banks in the area, and give the
shareholders of Heard Bank an interest in a

A-1
<PAGE> 104
more diversified enterprise and securities in a more widely held company;

NOW, THEREFORE, in consideration of their mutual promises, the parties
enter into this Agreement of Reorganization. Paragraphs 1 through 3 shall
constitute the plan of merger between Heard Bank and Interim as contemplated by
the Financial Institutions Code of Georgia, O.C.G.A. Section 7-1-531.
1. AGREEMENT TO MERGE.
(a) On the Merger Date, as hereinafter defined, Interim shall be
merged into Heard Bank, which shall be the survivor in a reverse
triangular merger. Such merger shall be pursuant to the applicable
provisions of the Financial Institutions Code of Georgia (O.C.G.A.
Section 7-1-530 et seq.).
(b) The articles of incorporation of Heard Bank shall be the
articles of incorporation of the surviving bank corporation. The
bylaws of Heard Bank shall be the bylaws of the surviving bank
corporation. The name "Bank of Heard County" shall be the name of the
surviving bank corporation.
(c) The board of directors and officers of Heard Bank shall
continue to be the board of directors and officers of the surviving
bank corporation.
(d) The corporate existence of Heard Bank and Interim shall be merged
into and continued in Heard Bank as the surviving bank corporation.
The established offices and facilities of Heard Bank immediately prior
to the merger shall remain the established offices and facilities of
the surviving bank corporation.
(e) All rights, properties and privileges of every kind or character
of Heard Bank and Interim shall be transferred to or vested in Heard
Bank as the surviving bank corporation by virtue of such merger
without any deed, assignment or other transfer. Heard Bank, as the
surviving bank corporation, shall by virtue of the merger be
responsible and liable for all of the liabilities and obligations of
both Heard Bank and Interim.

A-2
<PAGE> 105
2. CONVERSION OF HEARD BANK STOCK.
(a) On the Merger Date, the outstanding shares of common stock of
Heard Bank and Interim shall be converted into the following rights:
(i) At the time of the merger described in subparagraph 1(a), (1)
each share of outstanding Heard Bank stock shall be converted into
325.58 shares of Bancorp common stock (provided, however, that the
foregoing conversion ratio may be subject to adjustment pursuant to
subparagraph 2(b)); and (2) the shares of Interim common stock then
issued and outstanding shall in the aggregate be converted into 1,000
shares of fully paid and nonassessable common stock of Heard Bank as
the surviving bank corporation, such that all of the issued and
outstanding shares of common stock of Heard Bank as the surviving bank
corporation shall be held by Bancorp.
(ii) Fractional shares of Bancorp common stock will not be issued
in the merger. Any Heard Bank shareholder who would be entitled to a
fraction of a Bancorp share shall receive cash payment in lieu of such
fractional share in an amount determined by multiplying the fraction
of a share he would otherwise be entitled to receive by $21.50;
provided, however, that the foregoing amount shall be subject to
adjustment pursuant to the provisions of subparagraph 2(b).
(b) In the event that prior to the Merger Date, Bancorp declares
any stock split or stock dividend, any reverse stock split or
combination, or any similar transaction where the record date for such
transaction precedes the Merger Date (or such later date that the
holders of record of shares of Heard Bank common stock would be deemed
to be the holders of record of shares of Bancorp common stock as a
result of the Merger) the number of shares of Bancorp stock to be
received by shareholders of Heard Bank and the amount to be paid for
fractional shares shall be proportionately and appropriately adjusted.
3. MANNER OF SURRENDERING HEARD BANK STOCK. Following
consummation of the merger, each Heard Bank shareholder, except any

A-3
<PAGE> 106
shareholder who has filed notice of his election to dissent from the merger in
accordance with applicable law, shall receive in exchange for his stock a
certificate representing the number of shares of Bancorp stock into which such
shares have been converted at the conversion ratio set forth in Paragraph 2 and
a Bancorp check in settlement for a fractional share of Bancorp stock, if any.
After the Merger Date (as hereafter defined), until surrendered as provided
herein, each Heard Bank certificate, except certificates held by persons who
have filed notice of their election to dissent from the merger in accordance
with applicable law, shall be deemed for all corporate purposes to evidence the
number of whole shares of Bancorp common stock into which the stock represented
by such certificate shall have been converted as provided in Paragraph 2, and
such certificates, as between the holders and Bancorp, shall evidence the
holder's right to receive Bancorp stock certificates and cash in accordance
with this Agreement; provided, however, that Bancorp stock certificates will
not be issued to shareholders until their certificates have been surrendered to
Mellon Securities Trust Company, as the exchange agent, or any subsequently
appointed exchange agent, and dividends, interest or other distributions
payable to shareholders in respect of Bancorp stock into which Heard Bank stock
has been converted shall be retained, without interest, for the account of such
shareholders and shall not be paid until their certificates have been
surrendered in exchange for Bancorp certificates.
4. REPRESENTATIONS OF BANCORP. As an inducement to Heard Bank to
enter into this Agreement, Bancorp hereby represents and warrants to Heard Bank
as follows:
(a) Bancorp is a Georgia corporation duly organized, validly
existing, and in good standing under the laws of the State of Georgia.
Bancorp has the corporate power and authority to carry on its business
as now conducted and to own, lease and operate its assets, properties
and businesses. Bancorp has in effect all material federal, state and
local governmental authorizations necessary for it to own or lease its
properties and assets and to carry on its business as now conducted.

A-4
<PAGE> 107
(b) Exhibit 21.1 of Bancorp's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994, lists all active Bancorp
subsidiaries as of the date of this Agreement (except First Federal
Savings Bank of New Smyrna, New Smyrna Beach, Florida, First Federal
Savings Bank of Citrus County, Inverness, Florida, The Key Bank of
Florida, Tampa, Florida, FF Bancorp, Inc. and Key Bancshares, Inc.,
all acquired on July 3, 1995 (collectively, the "Florida
Subsidiaries")), (Bancorp's subsidiaries listed in said Exhibit 21.1
and the Florida Subsidiaries being hereinafter referred to as the
"Subsidiaries"). Each of the Subsidiaries is either a national
banking association, a state banking corporation or a federal savings
bank (except FF Bancorp, Inc. and Key Bancshares, Inc.), is duly
organized, validly existing, and in good standing under the laws of
the jurisdiction under which it is organized or incorporated; has the
corporate power and authority necessary for it to own or lease its
properties and assets and to carry on its business as now being
conducted; and has all material federal, state and local governmental
authorizations necessary for it to own or lease its properties and
assets and to carry on its business as now conducted. FF Bancorp,
Inc. is a multiple thrift and one bank holding company, and Key
Bancshares, Inc. is a one bank holding company. Either directly or
indirectly through a Subsidiary, Bancorp owns 100% of the issued and
outstanding equity securities of each of its Subsidiaries (except Key
Bancshares, Inc. and Key Bank of Florida), free and clear of any
liens, encumbrances or restrictions whatsoever, except for the pledge
of First National Bank of Habersham stock, Granite City Bank stock,
and a portion of The First National Bank of Gainesville stock to
secure a loan from Trust Company Bank. Bancorp owns 100% of the
outstanding equity securities of FF Bancorp, Inc. which owns 98.9% of
the outstanding equity securities of Key Bancshares, Inc. Key
Bancshares, Inc. owns 99.9% of the outstanding equity securities of
The Key Bank of Florida. Under approved and consummated plans of
merger, the minority

A-5
<PAGE> 108
shareholders of Key Bancshares, Inc. and of The Key Bank of Florida
are legally required to exchange their shares for Bancorp shares once
certain legal impediments to transfer of their shares are resolved.
Neither Bancorp nor any of its Subsidiaries has outstanding any
subscriptions, warrants, rights, options or other agreements or
commitments obligating any of its Subsidiaries to issue any additional
shares of equity securities or obligating Bancorp to sell any shares
of the equity securities of any of its Subsidiaries.
(c) Bancorp has 30,000,000 authorized shares of common stock,
$1.00 par value each, of which 20,482,193 shares (including 2688
Bancorp shares to be issued to minority shareholders of Key
Bancshares, Inc. and of The Key Bank of Florida as referenced above)
were outstanding as of July 31, 1995. No outstanding shares of
Bancorp common stock have been issued in violation of the preemptive
rights of any person, or in violation of any federal or state
securities laws such that it would have a material adverse effect on
the business, properties, operations, prospects" or assets, or on the
condition, financial or otherwise, of Bancorp. As of the date of this
Agreement, Bancorp does not have outstanding any subscriptions,
warrants, rights, options or other agreements or commitments
obligating Bancorp to issue shares of its capital stock except the
following:
(i) Any shares of Bancorp which may be issued from time to time by
Bancorp pursuant to any employee stock option agreements providing
options to purchase Bancorp stock for selected key employees or former
employees of Bancorp and/or any Subsidiary thereof;
(ii) Any shares of Bancorp which may be issued from time to time
pursuant to the First National Bancorp Dividend Reinvestment Plan
which allows shareholders of Bancorp to elect to receive shares of
Bancorp in lieu of cash dividends; (iii) Any shares of Bancorp which
my be issued from time to time by Bancorp pursuant to the First
National Bancorp Performance-Based Restricted Stock Plan; and

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(iv) 2688 shares of Bancorp to be issued to minority shareholders
of Key Bancshares, Inc. and of The Key Bank of Florida as referenced
above.
(d) The execution of this Agreement and the transactions
contemplated hereby have been authorized by all necessary corporate
action of Bancorp, and this Agreement is a valid and legally binding
obligation of Bancorp enforceable in accordance with its terms,
subject to any bankruptcy or moratorium laws now or hereafter in
effect. Neither the execution and delivery of this Agreement, nor the
consummation of the transactions provided for herein in the manner
herein provided will violate any material agreement to which Bancorp
or any of its Subsidiaries is a party or is bound; nor will the
actions described violate any law, order or decree or any provision of
the articles of incorporation or bylaws of Bancorp or any of its
Subsidiaries. Bancorp has full power, authority and legal right to
enter into this Agreement and, upon receipt of approval by the
appropriate regulatory authorities governing banks and bank holding
companies, to consummate the transactions provided for herein. There
is no pending or, to the best of Bancorp's knowledge, threatened
litigation which would in any way impair the ability of Bancorp to
fulfill its obligations under this Agreement.
(e) Bancorp has a class of securities registered pursuant to
Section 12 of the Securities Exchange Act of 1934, as amended (the
"1934 Act") and has delivered to Heard Bank copies of:
(i) its Annual Report on Form 10-K for its fiscal year ended December
31, 1994 (and those portions of its 1994 Annual Report to Shareholders
incorporated therein by reference), filed pursuant to Section 13 of
the 1934 Act;
(ii) the Proxy Statement for its Annual Meeting of Shareholders
held April 19, 1995, filed pursuant to Section 14 of the 1934 Act;
(iii) its Quarterly Reports on Form 10-Q dated March 31, 1995 and June
30, 1995, filed pursuant to Section 13 of the 1934 Act;

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(iv) its Current Reports on Form 8-K dated April 11, 1995, July 5,
1995, July 19, 1995, and July 25, 1995, filed pursuant to Section 13
of the, 1934 Act; and
(v) the Proxy Statement-Prospectus (the "FF Proxy Statement")
included as part of Bancorp's Registration Statement No. 33-57681,
filed pursuant to the Securities Act of 1933, as amended.
These reports and Bancorp proxy statement include all regular and
periodic reports and proxy statements required to be filed by Bancorp
with the Securities and Exchange Commission ("SEC") since January 1,
1995 under the 1934 Act. Said reports and proxy statements, together
with the FF Proxy Statement, are herein collectively called the
"Bancorp SEC Reports". The Bancorp SEC Reports taken together
correctly describe, among other things, the business, operations and
principal properties of Bancorp and its Subsidiaries in accordance
with the requirements of the applicable report form. As of the
respective dates of filing, none of the Bancorp SEC Reports contained
any untrue statement of material fact or omitted to state any material
fact necessary to make the statements therein not misleading. The
financial statements contained in the Bancorp SEC Reports have been
prepared in accordance with generally accepted accounting principles
consistently applied and present fairly the consolidated financial
condition of Bancorp and its Subsidiaries as of the dates thereof and
the consolidated results of their operations for the periods covered
thereby.
(f) Since the date of Bancorp's latest published financial
statements and the date of FF Bancorp, Inc. financial statements (as
to FF Bancorp, Inc.) included in the Bancorp SEC Reports, there have
not been any changes in the condition of Bancorp or any of its
Subsidiaries, any contracts entered into by Bancorp or any of its
Subsidiaries, or other changes in the operations of Bancorp or any of
its Subsidiaries which, in either case, have had a material adverse
effect on the

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condition or results of operations of Bancorp and its Subsidiaries,
taken as a whole.
(g) The shares of Bancorp common stock to be issued to
shareholders of Heard Bank pursuant to this Agreement and the merger
will, when issued according to the terms of this Agreement, be
registered with the SEC and be validly issued, fully paid, and
nonassessable.
5. COVENANTS OF BANCORP.
(a) From the date of this Agreement until the Merger Date or until
this Agreement is terminated by the parties as herein provided,
Bancorp covenants as follows:
(i) Except as otherwise provided herein or consented to in
writing by Heard Bank (which consent shall not be unreasonably
withheld), Bancorp will conduct its operations and will cause each of
its Subsidiaries to conduct its operations in accordance with its
ordinary course of business consistent with past practice, and shall
use and shall cause each of its Subsidiaries to use, its best efforts
to maintain and preserve its business, organization, employees and
good relationships with its shareholders and its customers and others
having business dealings with it.
(ii) Bancorp shall cause its officers and employees to furnish
Heard Bank such information and operating data and other information
as to its business and properties, as Heard Bank shall from time to
time reasonably request to facilitate the filing of regulatory
applications, to prepare documents contemplated by this Agreement and
to make investigations necessary or appropriate under this Agreement.
(iii) Except as otherwise provided herein or consented to in
writing by Heard Bank (which consent shall not be unreasonably
withheld), Bancorp will assure that neither Bancorp nor any of its
Subsidiaries will:
(1) amend its articles of incorporation or bylaws to change in any
manner the rights of its common stock or other securities or the
character of its business, except as referred to in subparagraph 4(c)
above;

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(2) incur any obligation or liability, direct or indirect, absolute or
contingent, other than those incurred in the ordinary course of
business on reasonable terms;
(3) issue or sell or commit, to issue or sell any additional
shares of common stock or securities convertible into shares of common
stock of Bancorp for consideration (in the case of convertible
securities on a fully converted basis) of less than $18.00 per share
of common stock, except pursuant to existing employee stock options or
options subsequently issued under its existing employee stock option
plans, or except pursuant to its existing dividend reinvestment plan,
or except pursuant to its restricted stock plan, or except as set
forth in subparagraph 4(c)(iv), or except pursuant to a stock dividend
or a stock split referred to in subparagraph 2(b);
(4) except in the ordinary course of business, mortgage pledge or
otherwise encumber any of its properties or assets;
(5) sell or transfer any of its properties or assets, or
cancel, release or assign any indebtedness owed to it or any claim
held by it, except in the ordinary course of business; or
(6) pay any dividends or make other distributions or payments
in respect of capital stock of Bancorp, except for dividends at times
and in amounts consistent with past practice.
(b) Bancorp agrees to promptly take such action as may
reasonably be requested by Heard Bank to timely carry out the terms of
this Agreement in accordance with its terms and in accordance with all
applicable laws, rules and regulations relating to banks, bank holding
companies or securities regulations.
(c) Without limiting the generality of subparagraph 5(b),
Bancorp shall assist Heard Bank in the preparation of a proxy
statement (hereinafter sometimes referred to as the "Proxy Statement")
to be contained in a registration statement of Bancorp (the
"Registration Statement") which shall be prepared by Bancorp, with the

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assistance of Heard Bank, covering the registration of common stock of
Bancorp to be issued in the transaction contemplated by this
Agreement. The Proxy Statement shall relate to the meeting of Heard
Bank shareholders called to consider and vote upon this Agreement as
required by Georgia law. Such Proxy Statement and Registration
Statement shall be filed on SEC Form S-4 and shall comply with all
applicable state and federal securities laws, rules or regulations,
all applicable regulations of the Federal Reserve Board, the Federal
Deposit Insurance Corporation, the Comptroller of the Currency, and
the Georgia Department of Banking and Finance, and any other laws,
rules or regulations applicable to the transactions contemplated by
this Agreement. Bancorp covenants that all information relating to
Bancorp and the Subsidiaries furnished by it for inclusion in the
Proxy Statement and the Registration Statement, taken as a whole,
shall be true, complete and correct, and shall not contain any untrue
statement of material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements made
therein, in light of the circumstances under which they are made, not
misleading. In addition, Bancorp shall promptly furnish such
additional data and information as may be required for the timely
preparation of the Proxy Statement.
(d) Upon the required approvals by regulatory authorities and
upon the approval of this Agreement by the holders of a majority of
the outstanding shares of Heard Bank common stock, Bancorp will
execute and file with the Georgia Secretary of State Articles of
Merger prepared by Bancorp containing such information as may be
required by the Georgia Code and as may be consistent with this
Agreement.
(e) Bancorp shall take such action and shall use its best
efforts to cause the officers, directors and other

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affiliates of Bancorp to take such action, as may be necessary to
assure that the transactions contemplated by this Agreement may be
accounted for by Bancorp using the "pooling of interests" method of
accounting.
(f) Bancorp's securities have been registered pursuant to Section 12
of the 1934 Act. Bancorp has been subject to the reporting
requirements of Section 13 of the 1934 Act for a period of at least
twelve (12) months and has filed all the reports required to be filed
thereunder during the twelve (12) months preceding the date of this
Agreement. Bancorp covenants that it will continue to be subject to
the reporting requirements of Section 13 of the 1934 Act and file all
reports required to be filed thereunder for the period beginning on
the date of this Agreement and ending three years following the Merger
Date.
(g) Within thirty (30) days following the end of the first full
calendar month after the Merger Date, Bancorp shall prepare and file
with the SEC a Current Report on Form 8-K containing the financial
results of post-Merger combined operations of Bancorp and Bank meeting
the requirements of SEC Accounting Series Releases Nos. 130 and 135.
(h) Bancorp will use its best efforts to prepare and file all
regulatory applications and securities registrations required to
consummate the merger as soon as possible.
6. REPRESENTATIONS OF HEARD BANK. As an inducement to Bancorp
to enter into this Agreement, Heard Bank hereby represents and warrants to
Bancorp as follows:
(a) Bank is a state banking association duly organized and
validly existing under the laws of the State of Georgia. Bank has
been in existence and continuously operating or incorporated as a bank
for a period of five years or more. The authorized capital stock of
Bank consists solely of 1,000 shares of common stock, $100.00 par
value per share, of which 1,000 shares are validly issued and
outstanding, fully paid and nonassessable. Bank does not have any
other class of equity securities outstanding or have outstanding any

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subscriptions, warrants, rights, options or other agreements or
commitments obligating Bank to issue shares of its common stock or any
other equity security. No outstanding shares of Bank common stock
have been issued in violation of the preemptive rights of any person,
or in violation of any federal or state securities laws such that it
would have a material adverse effect on the business, properties,
operations, prospects, or assets, or on the condition, financial or
otherwise, of Bank.
(b) The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action on the part of the board
of directors of Heard Bank, having been approved by the affirmative,
unanimous vote of the members of the board of directors of Heard Bank.
The merger must also be submitted to the Heard Bank shareholders for
their approval. This Agreement is a valid and legally binding
obligation of Heard Bank, enforceable according to its terms, subject
to any bankruptcy or moratorium laws now or hereafter in effect.
Neither the execution and delivery of this Agreement, nor the
consummation of the transactions provided for herein in the manner
herein provided will violate any material agreement to which Heard
Bank is a party or is bound; nor will the actions described violate
any law, order or decree or any provision of the articles of
incorporation or bylaws of Heard Bank. Heard Bank has full power,
authority and legal right to enter into this Agreement and, upon the
receipt of approval by the appropriate regulatory authorities
governing banks and bank holding companies and upon the affirmative
vote of at least two-thirds of the total outstanding shares of Heard
Bank, to consummate the transactions provided for herein. There is no
pending or, to the best of Heard Bank's knowledge, threatened
litigation which would in any way impair the ability of Heard Bank to
fulfill its obligations under this Agreement.

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(c) Heard Bank has delivered to Bancorp copies of the year-end
financial statements (call reports) of Heard Bank, as of December 31,
1992, December 31, 1993, and December 31, 1994. Said financial
statements for the years ending December 31, 1994, December 31, 1993,
and December 31, 1992 are true, correct and complete, have been
prepared in accordance with generally accepted accounting principles
consistently followed throughout the periods indicated, and fairly
present the financial condition of Heard Bank as of the date of said
statements.
(d) Except as previously disclosed by Heard Bank to Bancorp or as
reflected or referred to in the financial statements (call report) of
Heard Bank at December 31, 1994, there were no material liabilities or
obligations of Heard Bank whether liquidated or unliquidated, accrued,
absolute, contingent or otherwise, which were required to be reflected
in the financial statements of Heard Bank as of December 31, 1994, in
accordance with generally accepted accounting principles.
(e) Since December 31, 1994, there have not been (i) any changes in
the assets, liabilities, or business of Heard Bank other than changes
in the ordinary course of business, none of which has been,
individually or in the aggregate, materially adverse to the financial
condition and results of operations of Heard Bank, taken as a whole;
(ii) any increase in the compensation payable or to become payable by
Heard Bank to any of its directors, officers, employees, or agents, or
any bonus payment, except normal and customary increases or bonus
payments made in the ordinary course of business; (iii) any labor
dispute, or any event or condition of any character specific to Heard
Bank, materially adversely affecting the business or prospects of
Heard Bank, taken as a whole; or (iv) any redemption, purchase or
other transaction involving shares of Heard Bank to which Heard Bank
or, to the best of Heard Bank's knowledge, any "affiliate" of Heard
Bank has been a party. For purposes of this Agreement, the term
"affiliate"

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shall mean any "affiliated person" included within the definition of
that term under the 1934 Act.
(f) Neither this Agreement nor any of the documents furnished
pursuant to this Agreement by Heard Bank to Bancorp or any of its
representatives, taken as a whole, is or will be false or misleading,
or contains or will contain any material misstatement of fact, or
omits or will omit to state any material fact required to be stated to
make the statements therein not misleading.
(g) Heard Bank has prepared and filed, or will prepare and file, with
the appropriate government authorities all federal, state and local
tax returns (including, without limitation, income, franchise, sales
and use, property, payroll and withholding tax returns and information
returns) required to be filed by it on or prior to the Closing Date.
To the best of the knowledge of Heard Bank, such returns reflect all
tax liabilities of Heard Bank for the periods in question, except as
previously disclosed by Heard Bank to Bancorp, and Heard Bank has paid
or caused to be paid all taxes shown to be due on such tax returns and
on all assessments received by them to the extent that such
assessments have become due.
(h) Heard Bank has good and marketable title to the properties (real
and personal) and assets reflected in the April 30, 1995 financial
statement (except as sold or otherwise disposed of in the ordinary
course of business for a fair consideration since the date of said
statement), free and clear of all liens, claims and encumbrances,
except (i) liens for taxes not yet due and payable, and (ii)
easements, rights of way and restrictions which are of record and
which do not materially affect the present use and occupancy of the
property by Heard Bank.
(i) There is no litigation, proceeding or governmental
investigation pending, or to the best of Heard Bank's knowledge,
threatened, against or relating to Heard Bank, or its properties or
business, or the transactions contemplated by this Agreement, which
will have any material adverse effect

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on the business, properties, operations, prospects, or assets, or on
the condition, financial or otherwise, of Heard Bank, taken as a
whole, nor is there any fact known to Heard Bank which it should
reasonably believe would be the basis for any such action.
(j) Heard Bank is not subject to the reporting requirements of
Section 13(a) or 15(d) of the 1934 Act, and its common stock is not
registered under Section 12 of the 1934 Act.
7. COVENANTS OF HEARD BANK.
(a) From the date of this Agreement until the Merger Date or
until this Agreement is terminated by the parties as herein provided,
Heard Bank covenants as follows:
(i) Except as otherwise provided herein or consented to in
writing by Bancorp (which consent will not be unreasonably withheld),
Heard Bank will conduct its operations in accordance with its ordinary
course of business consistent with past practice and shall use its
best efforts to maintain and preserve its business, organization,
employees and good relationships with its shareholders and with its
customers and others having business dealings with it.
(ii) Heard Bank shall cause its officers and employees to
furnish to Bancorp such financial and operating data and other
information as to its business and properties as Bancorp shall from
time to time reasonably request to facilitate the filing of regulatory
applications, preparation of documents and investigations made
necessary or appropriate by this Agreement.
(iii) Except as otherwise provided herein or consented to in
writing by Bancorp (which consent will not be unreasonably withheld),
Heard Bank will not:
(1) amend its articles of incorporation or bylaws, or merge or
consolidate with or into any other corporation or permit any other
corporation to merge into it, or change in any manner the rights of
its common stock or other securities or the character of its business;

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(2) incur any obligation or liability, direct or indirect,
absolute or contingent, other than those incurred in the ordinary
course of business on reasonable terms;
(3) except in the ordinary course of business, incur any
indebtedness for borrowed money or assume, guarantee, endorse or
otherwise become responsible for the obligations of any other
individual, firm or corporation, or make any loans or advances to any
other individual, firm or corporation;
(4) issue or sell any additional shares of common stock
(including treasury shares), securities convertible into shares of
common stock or any other equity securities or options or other
commitments for the issuance of shares of stock or such securities,
(5) except in the ordinary course of business, mortgage, pledge
or otherwise encumber any of its properties or assets;
(6) sell or transfer any of its properties or assets, or
cancel, release or assign any indebtedness owed to it or any claim
held by it, except in the ordinary course of business;
(7) make or commit to make any investments of a capital nature
which individually or in the aggregate exceed $25,000;
(8) except in the ordinary course of business, enter into or
terminate or amend any material contract or agreement or make any
material change in any of its material leases, contracts,
arrangements, plans or other legally binding arrangements;
(9) increase in any manner the compensation of any of its directors,
officers or employees, except as previously disclosed by Heard Bank to
Bancorp, or pay or agree to pay any pension or retirement allowance
not required by any existing plan or agreement to any such persons, or
commit itself to any pension, retirement or profit-sharing plan or
agreement or employment agreement with or for the benefit of any
officer, employee or other person;
(10) cancel or terminate any of its current insurance policies
or any of the coverage thereunder unless simultaneously with such
termination or cancellation,

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replacement policies substantially similar to those canceled or
terminated are in full force and effect; or
(11) pay any dividends or make other distributions or payments in
respect of its stock.
(iv) Heard Bank shall use its best efforts to assure that Heard Bank,
each member of the board of directors of Heard Bank and each of the
executive officers of Heard Bank shall actively support the merger,
shall recommend the merger to the shareholders of Heard Bank, shall
actively solicit proxies of shareholders of Heard Bank to be voted in
favor of the merger, and shall urge all shareholders of Heard Bank to
vote in favor of the merger. In addition, Heard Bank shall use its
best efforts to assure that Heard Bank, each member of the board of
directors of Heard Bank and each of the officers of Heard Bank shall
take such action as is necessary or appropriate to cause the merger to
be timely consummated in accordance with the terms of this Agreement.
In addition, upon execution hereof Heard Bank shall cause each member
of the board of directors of Heard Bank to execute a letter agreement
in favor of Bancorp obligating such board member to vote his Heard
Bank shares in favor of the merger. In addition, Heard Bank shall
obtain an agreement from each member of the board of directors of
Heard Bank and its affiliates that each shall not sell, transfer or
dispose of any Heard Bank stock from the date hereof through the date
of consummation of the merger and that such board members and their
affiliates shall not sell, transfer or dispose of Bancorp common stock
received in the merger until after the date on which Bancorp publishes
financial results covering at least 30 days of post-merger combined
operations. Notwithstanding any of the foregoing, however, the
directors of Heard Bank shall not be obligated to take or not to take
any action that they shall be advised in writing by counsel may be
contrary to their fiduciary duties as directors of Heard Bank.
(v) Heard Bank will obtain an agreement as described below (the
"Agreement of Affiliates") from each

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affiliated shareholder of Heard Bank (the "Affiliated Shareholders")
prior to the Closing Date. The Affiliated Shareholders shall be those
shareholders of Heard Bank who may, in the opinion of counsel for
Heard Bank and counsel for Bancorp, be deemed to be "affiliates" of
Heard Bank within the meaning of Rule 145 of the 1933 Act, and who
may, in the opinion of such counsels, be deemed, pursuant to the
provisions of Rule 145, to be "underwriters", as such term is defined
in the 1933 Act, on resale of the Bancorp common stock acquired
hereunder (herein referred to as the "Acquired Securities"). The
Agreement of Affiliates shall be in a form satisfactory to Bancorp and
its counsel and shall provide that:
(1) the Acquired Securities will not be acquired with a
view to the distribution thereof except as permitted by
Rule 145;
(2) the Acquired Securities will not be disposed of in such
a manner as to violate Rule 145 under the 1933 Act or the
Agreement of Affiliates and without Bancorp having received
an opinion of counsel satisfactory to it, to the foregoing
effect, or other evidence of compliance with Rule 145 and
the Agreement of Affiliates satisfactory to Bancorp;
(3) Bancorp may issue appropriate stop transfer
instructions to its transfer agent with respect to the
Acquired Securities;
(4) each Affiliated Shareholder will obtain an agreement
(a copy of which will be delivered to Bancorp) similar to
that entered into by him or her from each transferee of
Acquired Securities, unless such transferee may, as
evidenced by an opinion of counsel or other evidence, in
each case satisfactory to Bancorp, dispose of the Acquired
Securities transferred to

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him or her without registration under the 1933 Act; and
(5) the certificates representing Acquired Securities may
bear the following or a substantially similar legend: "The
securities represented by this certificate were issued in a
transaction to which Rule 145 promulgated under the
Securities Act of 1933, as amended (the "1933 Act")
applies, are held subject to the terms of an agreement
between the holder hereof and First National Bancorp and
may be sold or otherwise transferred only upon receipt by
First National Bancorp of an opinion of counsel (or other
evidence) satisfactory to such corporation and its counsel
as to satisfactory compliance with the limitations of such
Rule 145 and such agreement, or of an opinion of counsel
(or other evidence) satisfactory to First National Bancorp
and its counsel that some other exemption from registration
under the Act is available, or pursuant to a registration
statement under the 1933 Act."
(vi) Neither Heard Bank, nor any of its officers, nor any member
of its board of directors, will enter into negotiations or discussions
for the purpose of selling or exchanging any shares or assets of Heard
Bank, or for the purpose of causing the merger or consolidation of
Heard Bank into or with any other entity; provided, however, that the
directors of Heard Bank shall not be obligated to take or not to take
any action that they shall be advised in writing by counsel may be
contrary to their fiduciary duties as directors of Heard Bank.
(b) Heard Bank agrees to promptly, cause Geeslin Johnson and
Wetherington to conduct, at Heard Bank's expense, any certified audits
of Heard Bank which are required to comply with any laws, rules or
regulations applicable to the

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transactions contemplated by this Agreement, including (without
limitation) those required to complete any registration of Bancorp
securities under Federal Securities Laws, and to assure pooling of
interests treatment for the transaction, and to permit said
accountants to make such other accounting and/or credit examination of
the books, records, financial statements and loan portfolio of Heard
Bank which they deem necessary to complete the audits.
(c) Heard Bank shall cause to be furnished to each of its
shareholders the Proxy Statement as contained in the Registration
Statement to be used in connection with the special meeting of Heard
Bank shareholders which will be held to consider and vote on the Plan
of Merger. Such Proxy Statement and Registration Statement will
contain such information as would be required to be contained in the
proxy statement of Heard Bank if it were subject to Section 14(a) of
the 1934 Act, as well as the information required by all applicable
regulations of the Federal Reserve Board, the Federal Deposit
Insurance Corporation, the Georgia Department of Banking and Finance
and any other laws, rules or regulations applicable to the
transactions contemplated by this Agreement. Heard Bank shall
promptly provide to Bancorp all information relating to Heard Bank as
Bancorp shall request to aid in the preparation of the Registration
Statement, and Heard Bank covenants that such information, taken as a
whole, shall be true, complete and correct, and shall not contain any
untrue statement of material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements made therein, in light of the circumstances under which
they are made, not misleading.
(d) Heard Bank agrees to promptly submit this Agreement to its
shareholders for adoption, at a special meeting thereof which shall be
called and held at least twenty (20) business days after the delivery
to its shareholders of the prospectus and Proxy Statement contained in
the Registration Statement, but,

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unless consented to by Bancorp, not more than forty-five (45) days
after the effective date of the Registration Statement. Heard Bank
shall solicit proxies from its shareholders for the purpose of voting
on the adoption of this Agreement and shall mail to each of its
shareholders an appropriate and timely notice of such meeting, a form
of proxy and a prospectus and Proxy Statement. Heard Bank consents to
the use of the Proxy Statement by Bancorp in connection with the
registration under the Securities Act of 1933 of the Bancorp shares to
be issued in the merger. The notice, Proxy Statement, proxy and any
other materials sent to shareholders shall in all respects be in form
and substance reasonably satisfactory to Bancorp and Heard Bank.
(e) Upon the required approvals by the regulatory authorities
and upon the approval of this Agreement by the greater of (i) the
holders of two-thirds of the outstanding Heard Bank common shares or
(ii) the holders of the minimum number of shares required by the
articles of incorporation of Heard Bank, Heard Bank, upon request of
Bancorp, will execute in duplicate and return to Bancorp for filing
with the Georgia Secretary of State articles of merger prepared by
Bancorp containing such information as may be required by Georgia law
and as may be consistent with this Agreement.
(f) Heard Bank shall take such action, and shall use its reasonable
best efforts to cause the officers, directors and other affiliates of
Heard Bank to take such action, as may be necessary to assure that the
transactions contemplated by this Agreement may be accounted for by
Bancorp using the "pooling-of-interests" method of accounting.
(g) Heard Bank shall promptly take such action as may be
reasonably requested by Bancorp to timely carry out the terms of this
Agreement in accordance with its terms and in accordance with all
applicable laws, rules and regulations.
8. CONDITIONS TO OBLIGATIONS OF HEARD BANK. The obligations
of Heard Bank hereunder shall, at its option, be subject to the satisfaction of
the following conditions:

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(a) There shall have been issued an opinion of Stewart, Melvin
& Frost, counsel to Bancorp, in form and substance reasonably
satisfactory to Heard Bank, to the effect that, under applicable
provisions of the Internal Revenue Code of 1986, as amended, no gain
or loss will be recognized for federal income tax purposes by Heard
Bank, Bancorp or the shareholders of Heard Bank to the extent they
receive stock of Bancorp in connection with the proposed
reorganization. Said opinion will not state that cash received in
exchange for fractional shares or in the exercise of dissenters'
rights will be non-taxable.
(b) As of the Closing Date, there shall have occurred no material
adverse change in the financial condition or results of operations of
Bancorp and FF Bancorp, Inc., taken as a whole, from that represented
in the consolidated financial statements of Bancorp as of June 30,
1995, and in the consolidated financial statements of FF Bancorp, Inc.
as of December 31, 1994, all of which have been previously provided
Heard Bank, and there shall not have occurred any loss or damage to
any of its properties or assets which would materially impair its
ability to conduct its business after the merger substantially as it
is now being conducted.
(c) The representations and warranties of Bancorp contained in
this Agreement shall be true in all material respects as of the date
hereof and as of the Closing Date with the same effect as though such
representations and warranties have been made on and as of the Closing
Date, except for any such representations and warranties made as of a
specified date, which shall be true and correct in all material
respects as of such date.
(d) Bancorp shall have performed, at or prior to the Closing Date, all
agreements and covenants required by this Agreement to be performed by
it.
(e) Bancorp shall have delivered to Heard Bank:
(i) a certificate executed by the Chairman or the President of
Bancorp dated as of the Closing Date, and certifying in

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such detail as Heard Bank may reasonably request to the fulfillment of
the conditions specified in subparagraphs 8(b), 8(c) and 8(d) hereof;
and
(ii) duly adopted resolutions of the Board of Directors of Bancorp and
of the Board of Directors of Interim, certified by the Secretary or an
Assistant Secretary of Bancorp and by the Secretary of Interim,
authorizing and approving the execution of this Agreement on behalf of
Bancorp and on behalf of Interim and the consummation of the
transactions contemplated herein.
9. CONDITIONS TO OBLIGATIONS OF BANCORP. The obligations of
Bancorp and Interim to consummate and effect the merger contemplated by this
Agreement shall, at the option of Bancorp, be subject to the satisfaction of
the following conditions:
(a) The representations and warranties of Heard Bank contained
in this Agreement shall be true in all material respects as of the
date hereof and as of the Closing Date with the same effect as though
all such representations and warranties have been made on and as of
the Closing Date, except for any such representations and warranties
made as of a specified date, which shall be true and correct in all
material respects as of such date.
(b) Heard Bank shall have performed, at or prior to the Closing Date,
all agreements and covenants required by this Agreement to be
performed by it.
(c) As of the Closing Date, there shall have occurred no material
adverse change in the financial condition or results of operations of
Heard Bank, taken as a whole, from that presented in the financial
statements of Heard Bank as of April 30, 1995, which have previously
been delivered to Bancorp, and there shall not have occurred any loss
or damage to any of the properties, assets or business of Heard Bank,
taken as a whole, which would materially adversely affect their
financial condition, taken as a whole, or impair the ability of either
of them to conduct their business, taken as a whole, after the Merger
as now being conducted.

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(d) Bancorp shall have received an opinion of KPMG Peat Marwick, in
form and substance reasonably satisfactory to Bancorp to the effect
that the transactions contemplated by this Agreement may be accounted
for by Bancorp using the "pooling-of-interests" method of accounting.
(e) Heard Bank shall have delivered to Bancorp:
(i) a certificate executed by the Chairman or the President of
Heard Bank, dated as of the Closing Date and certifying in such detail
as Bancorp may reasonably request to the fulfillment of the conditions
specified in subparagraphs 9(a), 9(b) and 9(c) hereof; and
(ii) duly adopted resolutions of the Board of Directors and of the
shareholders of Heard Bank, certified by the Secretary or an Assistant
Secretary of Heard Bank as of the Closing Date, authorizing and
approving the execution of this Agreement on behalf of Heard Bank and
the consummation of the transactions contemplated herein.
10. CONDITIONS TO OBLIGATIONS OF BANCORP AND HEARD BANK. The
obligations of Bancorp, Interim and Heard
Bank to consummate the transactions contemplated hereby are, at the option of
either Bancorp or Heard Bank, subject to the following conditions having been
satisfied:
(a) The holders of the greater of two-thirds of the issued and
outstanding stock of Heard Bank or (ii) the minimum number of shares
required under the articles of incorporation of Heard Bank shall have
been voted in favor of the merger at the special meeting of the
shareholders duly called and held with respect thereto pursuant to
proper notice of such meeting accompanied by proper proxy solicitation
and disclosure documents.
(b) Any and all orders, permits, approvals, licenses or qualifications
from authorities administering federal laws or laws of any state or
other political subdivision having jurisdiction, required for the
consummation of the transaction contemplated by this Agreement shall
have been obtained. This Agreement and the exchange of the shares
herein contemplated

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shall be in compliance with the regulations and directives of all
governmental agencies having jurisdiction.
(c) At the time of mailing the Proxy Statement to Heard Bank
shareholders and thereafter through the Closing Date, the Bancorp
stock to be received by Heard Bank shareholders upon the conversion of
their stock shall be the subject of an effective registration
statement (subject to no stop order) under the Securities Act of 1933
and shall be duly registered or qualified under the securities laws of
all states in which registration or qualification is required, or
shall be exempt therefrom.
11. CLOSING; NOTICE OF CLOSING; MERGER DATE.
(a) The closing of the merger shall be held on or before the
last day of the month during which the later of the following occurs:
(i) the special meeting of Heard Bank shareholders to adopt this
Agreement as set forth in subparagraph 7(d) of this Agreement, or (ii)
the receipt of all applicable regulatory approvals which are required
prior to consummation of the reorganization (and the running of any
mandatory waiting periods required by such approvals or by law),
provided all conditions set forth herein have been satisfied or
waived; which date is herein sometimes referred to as the "Closing
Date"; provided, however, that the Closing Date shall not be later
than the close of business on February 28, 1996 (the "Termination
Date"). If the conditions to this Agreement have not been satisfied
or waived by the Closing Date, then this Agreement may be terminated
pursuant to Paragraph 12. The closing shall be held at the offices of
Bancorp or any other mutually agreeable location. At the closing, the
parties shall execute and deliver such instruments, documents and
certificates as are required by this Agreement and as are necessary or
appropriate to close the transaction contemplated hereby.
(b) The parties contemplate that the Merger Date shall be the
same day as the Closing Date.

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12. TERMINATION.
(a) This Agreement may be terminated by either Bancorp or Heard
Bank upon written notice to the other party if (i) there is a failure
of any of the conditions set forth in Paragraph 10 hereof to be
satisfied by the Closing Date or (ii) the Closing shall not have
occurred, due to no fault of the terminating party, on or before the
Termination Date. This Agreement may be terminated by Bancorp upon
written notice to Heard Bank if (i) there is a failure of any of the
conditions set forth in Paragraph 9 hereof to be satisfied by the
Closing Date, or (ii) there is a material breach by Heard Bank of any
representation, warranty or agreement contained herein which cannot be
or has not been cured within 30 days after the giving of written
notice thereof by Bancorp to Heard Bank. This Agreement may be
terminated by Heard Bank upon written notice to Bancorp if (i) there
is a failure of any of the conditions of Paragraph 8 hereof to be
satisfied by the Closing Date, or (ii) there is a material breach by
Bancorp of any representation, warranty or agreement contained herein
which cannot be or has not been cured within 30 days after the giving
of written notice thereof by Heard Bank to Bancorp.
(b) Any notice of termination shall state the basis for such
termination. Upon termination as herein provided, this Agreement
shall be void and of no further force and effect and no party hereto
shall have any obligation or liability to the others hereunder, except
that (i) the provisions of subparagraphs 13(f), 13(h), and 13(i) shall
survive any such termination, and (ii) a termination based on a
material breach of this Agreement shall not relieve the breaching
party from liability for an uncured intentional and willful breach of
a representation, warranty or agreement giving rise to such
termination.
13. MISCELLANEOUS.
(a) Any of the terms or conditions of this Agreement may be
waived at any time by any party hereto for whose benefit the term or
condition applies, by action of its Board of

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Directors, evidenced by a certificate signed by its Chairman or
President or other duly authorized person.
(b) Anything herein or elsewhere to the contrary
notwithstanding, to the extent permitted by law, this Agreement may be
amended (including amendments changing the Closing Date) or
supplemented at any time by action taken by the Boards of Directors of
Bancorp, Interim and Heard Bank.
(c) This Agreement, the Plan of Merger and the instruments
referred to herein constitute the entire contract among the parties
and supersede all other understandings with respect to the subject
matter hereof.
(d) This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which together shall
be deemed one and the same agreement and shall become binding on the
parties hereto when one or more counterparts has been signed by each
of the parties and delivered to the other parties.
(e) This Agreement shall be binding upon, and inure to the benefit of,
the parties hereto and their successors and assigns.
(f) Heard Bank and Bancorp each represent to the other that no
business broker assisted the representing party in the negotiations
leading to the execution of this Agreement. Each party agrees to
indemnify the other and hold and save it harmless from any claim or
demand for commissions or other compensation by any broker, finder or
similar agent claiming to have been employed by or on behalf of such
party.
(g) This Agreement has been negotiated, executed and delivered
in the State of Georgia and shall be governed by, construed and
enforced in accordance with the laws of the State of Georgia, except
where federal law supersedes state law.
(h) Bancorp and Heard Bank shall each pay its own expenses in
connection with the merger, including the fees and expenses of its
respective counsel and accountants. Any certified audit of Heard
Bank, if required, shall be the responsibility

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of Heard Bank; provided that if the merger is not consummated for any
reason other than a violation of a representation or covenant of Heard
Bank set forth in Paragraph 6 or 7, Bancorp shall reimburse Heard Bank
for or hold Heard Bank harmless against claims for the fees and
expenses of KPMG Peat Marwick. Notwithstanding the foregoing, if this
Agreement is terminated by either party because of a willful and
intentional breach by the other of any representation, warranty or
agreement contained herein (and if the terminating party shall not
have been in breach in any material respect of any representation,
warranty or agreement contained herein), then the breaching party
shall pay all costs and expenses of the other party incurred in
connection with this Agreement. Nothing contained in this
subparagraph 13(h) shall constitute or be deemed to constitute
liquidated damages for the willful and intentional breach by a party
of the terms of this Agreement or otherwise limit the rights of the
nonbreaching party.
(i) If the transactions contemplated herein are not
consummated, each party and its representatives shall treat all
information obtained from the other, and not otherwise known to such
party or already in the public domain, as confidential, and each party
shall return to the other all copies made of material belonging to the
other party.
(j) All notices, requests and other communications shall be in
writing and shall be deemed to have been duly given at the time
delivered or mailed to the parties at the following addresses:
(i) Heard Bank:

Mr. Jackie L. Reed
The Bank of Heard County
Court Square
P.O. Box 1450
Franklin, Georgia 30217-0127

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(ii) Bancorp:

Mr. C. Talmadge Garrison
First National Bancorp
303 Jesse Jewell Parkway, Suite 700
P. 0. Drawer 937
Gainesville, Georgia 30503

(iii) Interim:

Mr. C. Talmadge Garrison
303 Jesse Jewell Parkway Suite 700
P. 0. Drawer 937
Gainesville, Georgia 30503

IN WITNESS WHEREOF, the parties hereto, pursuant to the authority
given by their respective Boards of Directors have caused this Agreement to be
duly executed under seal as of the date first written above.

FIRST NATIONAL BANCORP

By: /s/ Peter D. Miller
-----------------------------
Peter D. Miller, President

(CORPORATE SEAL)
Attest: /s/ C. Talmadge Garrison
-------------------------
C. Talmadge Garrison,
Secretary

INTERIM HEARD CORPORATION

By: /s/ Peter D. Miller
-----------------------------
Title: President

(CORPORATE SEAL)
Attest: /s/ C. Talmadge Garrison
-------------------------
Title: Secretary & Treasurer

THE BANK OF HEARD COUNTY

By: /s/ Jackie L. Reed
-----------------------------
President
(CORPORATE SEAL)

Attest: /s/ Brenda E. Teal
-------------------------
Title: Vice President

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APPENDIX B

ARTICLE 13

DISSENTERS' RIGHTS

PART 1

RIGHT TO DISSENT AND OBTAIN PAYMENT FOR SHARES

14-2-1301. DEFINITIONS.

As used in this article, the term:

(1) "Beneficial shareholder" means the person who
is a beneficial owner of shares held in a
voting trust or by a nominee as the record
shareholder.

(2) "Corporate action" means the transaction or
other action by the corporation that creates
dissenters' rights under Code Section
14-2-1302.

(3) "Corporation" means the issuer of shares held
by a dissenter before the corporate action,
or the surviving or acquiring corporation by
merger or share exchange of that issuer.

(4) "Dissenter" means a shareholder who is
entitled to dissent from corporate action
under Code Section 14-2-1302 and who
exercises that right when and in the manner
required by Code Sections 14-2-1320 through
14-2-1327.

(5) "Fair value," with respect to a dissenter's
shares, means the value of the shares
immediately before the effectuation of the
corporate action to which the dissenter
objects, excluding any appreciation or
depreciation in anticipation of the corporate
action.

(6) "Interest" means interest from the effective
date of the corporation action until the date
of payment, at a rate that is fair and
equitable under all the circumstances.

(7) "Record shareholder" means the person in
whose name shares are registered in the
records of a corporation or the beneficial
owner of shares to the extent of the rights
granted by a nominee certificate on file with
corporation.

(8) "Shareholder" means the record shareholder or
the beneficial shareholder.

14-2-1302. RIGHT TO DISSENT

(a) A record shareholder of the corporation is entitled to
dissent from, and obtain payment of the fair value of his shares in
the event of, any of the following corporate actions:

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(1) Consummation of a plan of merger to which the
corporation is a party:

(A) If the approval of the shareholders
of the corporation is required for the merger
by Code Section 14-2-1103 or the articles of
incorporation and the shareholder is entitled
to vote on the merger; or

(B) If the corporation is a subsidiary
that is merged with its parent under Code
Section 14-2-1104;

(2) Consummation of a plan of share exchange to
which the corporation is a party as the
corporation whose share will be acquired, if
the shareholder is entitled to vote on the
plan;

(3) Consummation of a sale or exchange of all or
substantially all of the property of the
corporation if a shareholder vote is required
on the sale or exchange pursuant to Code
Section 14-2-1202, but not including a sale
pursuant to court order or a sale for cash
pursuant to a plan by which all or
substantially all of the net proceeds of the
sale will be distributed to the shareholders
within one year after the date of sale;

(4) An amendment of the articles of incorporation
that materially and adversely affects rights
in respect of a dissenter's shares because
it:

(A) Alters or abolishes a preferential
right of the shares;

(B) Creates, alters, or abolishes a right
in respect of redemption, including a
provision respecting a sinking fund for the
redemption or repurchase, of the shares;

(D) Excludes or limits the right of the
shares to vote on any matter, or to cumulate
votes, other than a limitation by dilution
through issuance of shares or other
securities with similar voting rights;

(E) Reduces the number of shares owned by
the shareholder to a fraction of a share if
the fractional share so created is to be
acquired for cash under Code Section
14-2-604; or

(F) Cancels, redeems, or repurchases all
or part of the shares of the class; or

(5) Any corporate action taken pursuant to a
share-holder vote to the extent that Article
9 of this chapter, the articles of
incorporation, bylaws, or a resolution of the
board of directors provides that voting or
nonvoting shareholders are entitled to
dissent and obtain payment for their shares.

(b) A shareholder entitled to dissent and obtain payment for
his shares under this article may not challenge the corporate action
creating his entitlement unless the corporate action fails to comply
with procedural requirements of this chapter or the articles of
incorporation or bylaws of the corporation or the vote required to
obtain

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approval of the corporate action was obtained by fraudulent and
deceptive means, regardless of whether the shareholder has exercised
dissenter's rights.

(c) Notwithstanding any other provision of this article,
there shall be no right of dissent in favor of the holder of shares of
any class or series which, at the record date fixed to determine the
shareholders entitled to receive notice of and to vote at a meeting at
which a plan of merger or share exchange or a sale or exchange of
property or an amendment of the articles of incorporation is to be
acted on, were either listed on a national securities exchange or held
of record by more than 2,000 shareholders, unless:

(1) In the case of a plan of merger or share
exchange, the holders of shares of the class
or series are required under the plan of
merger or share exchange to accept for their
shares anything except shares of the
surviving corporation or another publicly
held corporation which at the effective date
of the merger or share exchange are either
listed on a national securities exchange or
held of record by more than 2,000
shareholders, except for scrip or cash
payments in lieu of fractional shares; or

(2) The articles of incorporation or a resolution
of the board of directors approving the
transaction provides otherwise.

14-2-1303. DISSENT BY NOMINEES AND BENEFICIAL OWNERS.

A record shareholder may assert dissenters' rights as to fewer than
all the shares registered in his name only if he dissents with respect
to all shares beneficially owned by any one beneficial shareholder and
notifies the corporation in writing of the name and address of each
person on whose behalf he asserts dissenters' rights. The rights of a
partial dissenter under this Code section are determined as if the
shares as to which he dissents and his other shares were registered in
the names of different shareholders.

PART 2

PROCEDURE FOR EXERCISE OF DISSENTERS' RIGHTS

RESEARCH REFERENCES

14-2-1320. NOTICE OF DISSENTERS' RIGHTS.

(a) If proposed corporate action creating dissenters' rights
under Code Section 14-2-1302 is submitted to a vote at a shareholders'
meeting, the meeting notice must state that shareholders are or may be
entitled to assert dissenters' rights under this article and be
accompanied by a copy of this article.

(b) If corporate action creating dissenters' rights under
Code Section 14-2-1302 is taken without a vote of shareholders, the
corporation shall notify in writing all shareholders entitled to
assert dissenters' rights that the action was taken and send

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them the dissenters' notice described in Code Section 14-2-1322 no
later than ten days after the corporate action was taken.

14-2-1321. NOTICE OF INTENT TO DEMAND PAYMENT.

(a) If proposed corporate action creating dissenters' rights
under Code Section 14-2-1302 is submitted to a vote at a shareholders'
meeting, a record shareholder who wishes to assert dissenter's rights:

(1) Must deliver to the corporation before the
vote is taken written notice of his intent to
demand payment for his shares if the proposed
action is effectuated; and

(2) Must not vote his shares in favor of the
proposed action.

(b) A record shareholder who does not satisfy the
requirements of subsection (a) of this Code section is not entitled to
payment for his shares under this article.

14-2-1322. DISSENTERS' NOTICE.

(a) If proposed corporate action creating dissenters' rights
under Code Section 14-2-1302 is authorized at a shareholders' meeting,
the corporation shall deliver a written dissenters' notice to all
shareholders who satisfied the requirements of Code Section 14-2-1321.

(b) The dissenters' notice must be sent no later than ten
days after the corporate action was taken and must:

(1) State where the payment demand must be sent
and where and when certificates for
certificated share must be deposited;

(2) Inform holders of uncertificated shares to
what extent transfer of the shares will be
restricted after the payment demand is
received;

(3) Set a date by which the corporation must
receive the payment demand, which date may
not be fewer than 30 nor more than 60 days
after the date the notice required in
subsection (a) of this Code section is
delivered; and

(4) Be accompanied by a copy of this article.

14-2-1323. DUTY TO DEMAND PAYMENT.

(a) A record shareholder sent a dissenters' notice described
in Code Section 14-2-1322 must demand payment and deposit his
certificates in accordance with the terms of the notice.

(b) A record shareholder who demands payment and deposits his
shares under subsection (a) of this Code section retains all other
rights of a shareholder until these rights are canceled or modified by
the taking of the proposed corporate action.

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(c) A record shareholder who does not demand payment or
deposit his share certificates where required, each by the date set in
the dissenters' notice, is not entitled to payment for his shares
under this article.

14-2-1324. SHARE RESTRICTIONS.

(a) The corporation may restrict the transfer of
uncertificated shares from the date the demand for their payment is
received until the proposed corporate action is taken or the
restrictions released under Code Section 14-2-1326.

(b) The person for whom dissenters' rights are asserted as to
uncertificated shares retains all other rights of a shareholder until
these rights are canceled or modified by the taking of the proposed
corporate action.

14-2-1325. OFFER OF PAYMENT.

(a) Except as provided in Code Section 14-2-1327, within ten
days of the later of the date the proposed corporate action is taken
or receipt of a payment demand, the corporation shall by notice to
each dissenter who complies with Code Section 14-2-1323 offer to pay
to such dissenter the amount the corporation estimates to be the fair
value of his shares, plus accrued interest.

(b) The offer of payment must be accompanied by:

(1) The corporation's balance sheet as of the end
of a fiscal year ending not more than 16
months before the date of payment, an income
statement for that year, a statement of
changes in shareholders' equity for that
year, and the latest available interim
financial statements, if any;

(2) A statement of the corporation's estimate of
the fair value of the shares;

(3) An explanation of how the interest was
calculated;

(4) A statement of the dissenter's right to
demand payment under Code Section 14-2-1327;
and

(5) A copy of this article.

(c) If the shareholder accepts the corporation's offer by
written notice to the corporation within 30 days after the
corporation's offer or is deemed to have accepted such offer by
failure to respond within said 30 days, payment for his or her shares
shall be made within 60 days after the making of the offer or the
taking of the proposed corporate action, whichever is later.

14-2-1326. FAILURE TO TAKE ACTION.

(a) If the corporation does not take the proposed action
within 60 days after the date set for demanding payment and depositing
share certificates, the corporation shall

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return the deposited certificates and release the transfer
restrictions imposed on uncertificated shares.

(b) If, after returning deposited certificates and releasing
transfer restrictions, the corporation takes the proposed action, it
must send a new dissenters' notice under Code Section 14-2- 1322 and
repeat the payment demand procedure.

14-2-1327. PROCEDURE IF SHAREHOLDER DISSATISFIED WITH PAYMENT OR
OFFER.

(a) A dissenter may notify the corporation in writing of his
own estimate of the fair value of his shares and amount of interest
due, and demand payment of his estimate of the fair value of his
shares and interest due, if:

(1) The dissenter believes that the amount
offered under Code Section 14-2-1325 is less
than the fair value of his shares or that the
interest due is incorrectly calculated; or

(2) The corporation, having failed to take the
proposed action, does not return the
deposited certificates or release the
transfer restrictions imposed on
uncertificated share within 60 day after the
date set for demanding payment.

(b) A dissenter waives his or her right to demand payment
under this Code section and is deemed to have accepted the
corporation's offer unless he or she notifies the corporation of his
or her demand in writing under subsection (a) of this Code section
within 30 days after the corporation offered payment for his or her
shares, as provided in Code Section 14-2-1325.

(1) The shareholder may demand the information
required under subsection (b) of Code Section
14-2-1325, and the corporation shall provide
the information to the shareholder within ten
days after receipt of a written demand for
the information; and

(2) The shareholder may at any time, subject to
the limitations period of Code Section 14-
2-1332, notify the corporation of his own
estimate of the fair value of his shares and
the amount of interest due and demand payment
of his estimate of the fair value of his
shares and interest due.

PART 3

JUDICIAL APPRAISAL OF SHARES

14-2-1330. COURT ACTION.

(a) If a demand for payment under Code Section 14-2-1327
remains unsettled, the corporation shall commence a proceeding within
60 days after receiving the payment demand and petition the court to
determine the fair value of the shares and accrued

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interest. If the corporation does not commence the proceeding within
the 60 day period, it shall pay each dissenter whose demand remains
unsettled the amount demanded.

(b) The corporation shall commence the proceeding, which
shall be a nonjury equitable valuation proceeding, in the superior
court of the county where a corporation's registered office is
located. If the surviving corporation is a foreign corporation
without a registered office in this state, it shall commence the
proceeding in the county in this state where the registered office of
the domestic corporation merged with or whose shares were acquired by
the foreign corporation was located.

(c) The corporation shall make all dissenters, whether or not
residents of this state, whose demands remain unsettled parties to the
proceeding, which shall have the effect of an action quasi in rem
against their shares. The corporation shall serve a copy of the
petition in the proceeding upon each dissenting shareholder who is a
resident of this state in the manner provided by law for the service
of a summons and complaint, and upon each nonresident dissenting
shareholder either by registered or certified mail and publication, or
in any other manner permitted by law.

(d) The jurisdiction of the court in which the proceeding is
commenced under subsection (b) of this Code section is plenary and
exclusive. The court may appoint one or more persons as appraisers to
receive evidence and recommend decision on the question of fair value.
The appraisers have the powers described in the order appointing them
or in any amendment to it. Except as otherwise provided in this
chapter, Chapter 11 of Title 9, known as the "Georgia Civil Practice
Act," applies to any proceeding with respect to dissenters' right
under this chapter.

(e) Each dissenter made a party to the proceeding is entitled
to judgment for the amount which the court finds to be the fair value
of his shares, plus interest to the date of judgment.

14-2-1331. COURT COSTS AND COUNSEL FEES.

(a) The court in an appraisal proceeding commenced under Code
Section 14-2-1330 shall determine all costs of the proceeding,
including the reasonable compensation and expenses of appraisers
appointed by the court, but not including fees and expenses of
attorneys and experts for the respective parties. The court shall
assess the costs against the corporation, except that the court may
assess the costs against all or some of the dissenters, in amounts the
court finds equitable, to the extent the court finds the dissenters
acted arbitrarily, vexatiously, or not in good faith in demanding
payment under Code Section 14-2-1327.

(b) The court may also assess the fees and expenses of
attorneys and experts for the respective parties, in amounts the court
finds equitable:

(1) Against the corporation and in favor of any
or all dissenters if the court finds the
corporation did not substantially comply with
the requirements of Code Sections 14-2- 1320
through 14-2-1327; or

(2) Against either the corporation or a
dissenter, in favor of any other party, if
the court finds that the party against whom
the fees and expenses are assessed

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acted arbitrarily, vexatiously, or in good
faith with respect to the rights provided by
this article.

(c) If the court finds that the services of attorneys for any
dissenter were of substantial benefit to other dissenters similarly
situated, and that the fees for those services should not be assessed
against the corporation, the court may award to these attorneys
reasonable fees to be paid out of the amounts awarded the dissenters
who were benefitted.

14-2-1332. LIMITATION OF ACTIONS.

No action by any dissenter to enforce dissenters' rights shall be
brought more than three years after the corporate action was taken,
regardless of whether notice of the corporate action and of the right
to dissent was given by the corporation in compliance with the
provisions of Code Section 14-2-1320 and Code Section 14-2-1322.

B-8
<PAGE> 141
APPENDIX C

PROSPECTUS

REGIONS FINANCIAL CORPORATION

COMMON STOCK, $0.625 PAR VALUE
---------------------
JOINT PROXY STATEMENT

<TABLE>
<S> <C>
REGIONS FINANCIAL FIRST NATIONAL BANCORP
CORPORATION 303 Jesse Jewel Parkway
417 North 20th Street Suite 700
Birmingham, Alabama 35203 Gainesville, Georgia 30501
</TABLE>

This Prospectus of Regions Financial Corporation, a regional bank holding
company organized and existing under the laws of the state of Delaware
("Regions"), relates to approximately 15,615,454 shares of common stock, par
value $0.625 per share ("Regions Common Stock"), which are issuable to the
stockholders of First National Bancorp, a bank holding company organized and
existing under the laws of the state of Georgia ("First National"), based on the
current number of outstanding First National shares, upon consummation of the
proposed merger (the "Merger") described herein by which First National will
merge with and into Regions Merger Subsidiary, Inc. ("Regions Merger
Subsidiary"), a newly formed corporation organized under the laws of the state
of Georgia and a wholly owned subsidiary of Regions, pursuant to the terms of
the Agreement and Plan of Reorganization, dated as of October 22, 1995 (the
"Agreement"), by and between Regions and First National, and the related Plan of
Merger (the "Plan of Merger"), by and between Regions Merger Subsidiary and
First National.

At the effective time of the Merger (the "Effective Time"), except as
described herein, each issued and outstanding share of common stock, par value
$1.00 per share, of First National ("First National Common Stock") will be
converted into and exchanged for 0.76 of a share of Regions Common Stock.

This Prospectus also serves as a Joint Proxy Statement of First National
and Regions, and is being furnished to the stockholders of First National and
Regions in connection with the solicitation of proxies by the Board of Directors
of First National for use at its special meeting of stockholders (including any
adjournment or postponement thereof, the "First National Special Meeting"), and
by the Board of Directors of Regions for use at its special meeting of
stockholders (including any adjournment or postponement thereof, the "Regions
Special Meeting"), each to be held on January 11, 1996, to consider and vote
upon the Agreement and the Plan of Merger in the case of First National and the
issuance of shares of Regions Common Stock pursuant to the Agreement in the case
of Regions (collectively, the "Special Meetings"). This Joint Proxy
Statement/Prospectus ("Joint Proxy Statement") is being mailed to stockholders
of First National and Regions on or about December 7, 1995.
---------------------
THE SECURITIES OFFERED HEREBY ARE NOT DEPOSITS, SAVINGS ACCOUNTS, OR OTHER
OBLIGATIONS OF A DEPOSITORY INSTITUTION AND ARE NOT INSURED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS JOINT PROXY STATEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

The date of this Joint Proxy Statement is December 7, 1995.
<PAGE> 142

AVAILABLE INFORMATION

Regions and First National are subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, are required to file reports, proxy, and information
statements, and other information with the Securities and Exchange Commission
(the "SEC"). Copies of such reports, proxy and information statements, and other
information can be obtained, at prescribed rates, from the SEC by addressing
written requests for such copies to the Public Reference Section at the SEC at
450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549. In addition,
such reports, proxy statements, and other information can be inspected at the
public reference facilities referred to above and at the regional offices of the
SEC at 7 World Trade Center, 13th Floor, New York, New York 10048 and
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661.

This Joint Proxy Statement constitutes part of the Registration Statement
on Form S-4 of Regions (including any exhibits and amendments thereto, the
"Registration Statement") filed with the SEC under the Securities Act of 1933,
as amended (the "Securities Act"), relating to the securities offered hereby.
This Joint Proxy Statement does not include all of the information in the
Registration Statement, certain portions of which have been omitted pursuant to
the rules and regulations of the SEC. For further information about Regions and
the securities offered hereby, reference is made to the Registration Statement.
The Registration Statement may be inspected and copied, at prescribed rates, at
the SEC's public reference facilities at the addresses set forth above. In
addition, Regions Common Stock and First National Common Stock are traded on the
Nasdaq National Market System. Reports, proxy statements, and other information
concerning Regions and First National may be inspected at the offices of the
National Association of Securities Dealers, Inc., 1735 K Street, N.W.,
Washington, D.C. 20006.

Certain financial and other information relating to Regions and First
National is contained in the documents indicated below under "Documents
Incorporated by Reference."

All information contained in this Joint Proxy Statement or incorporated
herein by reference with respect to Regions was supplied by Regions, and all
information contained in this Joint Proxy Statement or incorporated herein by
reference with respect to First National was supplied by First National.
Although neither Regions nor First National has actual knowledge that would
indicate that any statements or information (including financial statements)
relating to the other party contained or incorporated herein are inaccurate or
incomplete, neither Regions nor First National warrants the accuracy or
completeness of such statements or information as they relate to the other
party.

NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED OR INCORPORATED BY REFERENCE IN THIS JOINT PROXY
STATEMENT, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION SHOULD NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS JOINT PROXY STATEMENT DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO PURCHASE, THE
SECURITIES OFFERED BY THIS JOINT PROXY STATEMENT IN ANY JURISDICTION TO OR FROM
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS JOINT PROXY STATEMENT NOR ANY
DISTRIBUTION OF THE SECURITIES BEING OFFERED PURSUANT TO THIS JOINT PROXY
STATEMENT SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF REGIONS OR FIRST NATIONAL SINCE THE DATE OF
THIS JOINT PROXY STATEMENT OR THAT THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.

DOCUMENTS INCORPORATED BY REFERENCE

The following documents previously filed with the SEC by Regions pursuant
to the Exchange Act are hereby incorporated by reference herein:

(a) Regions' Annual Report on Form 10-K for the fiscal year ended
December 31, 1994;

(b) Regions' Quarterly Reports on Form 10-Q for the three months ended
March 31, June 30, and September 30, 1995;

(d) The description of Regions Common Stock under the heading "Item 1.
Capital Stock to be Registered" in the registration statement on Form 8-A
of Regions relating to Regions Common Stock and in any amendment or report
filed for the purpose of updating such description.

i
<PAGE> 143

Regions' Annual Report on Form 10-K for the year ended December 31, 1994,
incorporates by reference specific portions of Regions' annual report to
stockholders for that year (the "Regions Annual Report to Stockholders"), but
does not incorporate other portions of the Regions Annual Report to
Stockholders. Only those portions of the Regions Annual Report to Stockholders
captioned "Financial Summary & Review 1994," "Financial Statements and Notes,"
and "Historical Financial Summary" are incorporated herein. Other portions of
the Regions Annual Report to Stockholders are NOT incorporated herein and are
not a part of the Registration Statement.

The following documents previously filed with the SEC by First National
pursuant to the Exchange Act are hereby incorporated by reference herein:

(a) First National's Annual Report on Form 10-K for the fiscal year
ended December 31, 1994 (prior to restatement to give effect to the
acquisition of FF Bancorp, Inc.);

(b) First National's Quarterly Reports on Form 10-Q for the three
months ended March 31, June 30, and September 30, 1995; and

(c) First National's Current Reports on Form 8-K dated April 11, July
5, July 19, July 25, August 28, August 16, October 25, 1995, and November
21, 1995 (which includes restated historical financial statements and the
related management's discussions and analysis of financial condition and
results of operations of First National, giving effect to the acquisition
of FF Bancorp, Inc. accounted for as a pooling of interests).

First National's Annual Report on Form 10-K for the year ended December 31,
1994, incorporates by reference specific portions of First National's annual
report to stockholders for that year (the "First National Annual Report to
Stockholders"), but does not incorporate other portions of the First National
Annual Report to Stockholders. Only those portions of the First National Annual
Report to Stockholders captioned "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the consolidated financial
statements included on pages 37 through 56 of the First National Annual Report
to Stockholders are incorporated herein. Other portions of the First National
Annual Report to Stockholders are NOT incorporated herein and are not a part of
the Registration Statement.

All documents filed by Regions and First National pursuant to Sections
13(a), 13(c), 14, or 15(d) of the Exchange Act after the date of this Joint
Proxy Statement and prior to the date of the Special Meetings shall be deemed to
be incorporated by reference in this Joint Proxy Statement and to be a part
hereof from the date of filing of such documents. Any statement contained herein
or in a document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes hereof to the extent
that a statement contained herein or in any subsequently filed document which
also is, or is deemed to be, incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed to constitute a part hereof, except as so modified or superseded.
In particular, reference is made to the First National Current Report on Form
8-K dated November 21, 1995, which includes restated historical financial
statements and the related management's discussion and analysis of financial
condition and results of operations of First National in light of the
acquisition of FF Bancorp, Inc. effected July 3, 1995, and accounted for by
First National as a pooling of interests. See "Summary" and "Business of First
National -- Recent Developments."

Regions will provide without charge, upon the written or oral request of
any person, including any beneficial owner, to whom this Joint Proxy Statement
is delivered, a copy of any and all information (excluding certain exhibits)
relating to Regions that has been incorporated by reference in the Registration
Statement. Such requests should be directed to Ronald C. Jackson, Stockholder
Assistance, Regions Financial Corporation, P.O. Box 1448, Montgomery, Alabama
36102 (telephone (334) 832-8401). First National will provide without charge,
upon the written or oral request of any person, including any beneficial owner,
to whom this Joint Proxy Statement is delivered, a copy of any and all
information (excluding certain exhibits) relating to First National that has
been incorporated by reference in the Registration Statement of which this Joint
Proxy Statement is a part. Such requests should be directed to C. Talmadge
Garrison, First National Bancorp, 303 Jesse Jewel Parkway, Suite 700, P. O.
Drawer 937, Gainesville, Georgia 30503 (telephone (770) 503-2000). In order to
ensure timely delivery of the documents, any request should be made by January
5, 1996.

ii
<PAGE> 144

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Summary............................................................................... 1
The Parties......................................................................... 1
Meetings of Stockholders............................................................ 2
The Merger.......................................................................... 3
Comparative Per Share Data.......................................................... 7
Selected Financial Data............................................................. 8
Summary Pro Forma Financial Data.................................................... 11
Meetings of Stockholders.............................................................. 13
Date, Place, Time, and Purpose...................................................... 13
Record Dates, Voting Rights, Required Votes, and Revocability of Proxies............ 13
Description of Transaction............................................................ 16
General............................................................................. 16
Possible Adjustment of Exchange Ratio............................................... 17
Effect of the Merger on Stock Rights................................................ 18
Background of and Reasons for the Merger............................................ 19
Opinion of First National's Financial Advisor....................................... 22
Opinion of Regions' Financial Advisor............................................... 26
Effective Time of the Merger........................................................ 30
Distribution of Regions Stock Certificates.......................................... 30
Conditions to Consummation of the Merger............................................ 31
Regulatory Approvals................................................................ 31
Waiver, Amendment, and Termination.................................................. 32
Dissenters' Rights.................................................................. 33
Conduct of Business Pending the Merger.............................................. 33
Management and Operations After the Merger.......................................... 35
Interests of Certain Persons in the Merger.......................................... 35
Certain Federal Income Tax Consequences............................................. 38
Accounting Treatment................................................................ 38
Expenses and Fees................................................................... 39
Resales of Regions Common Stock..................................................... 39
Option Agreement.................................................................... 40
Effect of the Merger on Rights of Stockholders........................................ 42
Antitakeover Provisions Generally................................................... 42
Authorized Capital Stock............................................................ 42
Amendment of Certificate of Incorporation and Bylaws................................ 43
Classified Board of Directors and Absence of Cumulative Voting...................... 43
Removal of Directors................................................................ 44
Limitations on Director Liability................................................... 44
Indemnification..................................................................... 44
Special Meetings of Stockholders.................................................... 45
Actions by Stockholders Without a Meeting........................................... 45
Stockholder Nominations and Proposals............................................... 45
Business Combinations with Certain Persons.......................................... 46
Mergers, Consolidations, and Sales of Assets Generally.............................. 46
Dissenters' Rights of Appraisal..................................................... 47
Stockholders' Rights to Examine Books and Records................................... 48
Dividends........................................................................... 48
Comparative Market Prices and Dividends............................................... 49
</TABLE>

iii
<PAGE> 145

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Business of First National............................................................ 50
General............................................................................. 50
Recent Developments................................................................. 50
Business of Regions................................................................... 51
General............................................................................. 51
Recent Developments................................................................. 52
Pro Forma Financial Information....................................................... 54
Pro Forma Combined Condensed Statement of Condition................................. 54
Pro Forma Combined Condensed Statements of Income for Regions and First National.... 56
Pro Forma Combined Condensed Statements of Income for Regions, First National, and
Other Pending Acquisitions....................................................... 57
Certain Regulatory Considerations..................................................... 58
General............................................................................. 58
Payment of Dividends................................................................ 59
Capital Adequacy.................................................................... 60
Support of Subsidiary Banks......................................................... 61
Prompt Corrective Action............................................................ 61
FDIC Insurance Assessments.......................................................... 63
Safety and Soundness Standards...................................................... 64
Depositor Preference................................................................ 64
Description of Regions Common Stock................................................... 64
Stockholder Proposals................................................................. 65
Experts............................................................................... 65
Opinions.............................................................................. 66
</TABLE>

Appendices:

<TABLE>
<S> <C> <C>
Appendix I -- Agreement and Plan of Reorganization, dated as of October 22, 1995, by and
between Regions Financial Corporation and First National Bancorp
Appendix II -- Plan of Merger between Regions Merger Subsidiary, Inc. and First National
Bancorp
Appendix III -- Opinion of Morgan Stanley & Co. Incorporated
Appendix IV -- Opinion of Bear, Stearns & Co. Inc.
</TABLE>

iv
<PAGE> 146

SUMMARY

The following is a summary of certain information contained in this Joint
Proxy Statement and the documents incorporated herein by reference. This summary
is not intended to be a complete description of the matters covered in this
Joint Proxy Statement and is qualified in its entirety by the more detailed
information appearing elsewhere or incorporated by reference in this Joint Proxy
Statement. Stockholders are urged to read carefully the entire Joint Proxy
Statement, including the Appendices. As used in this Joint Proxy Statement, the
terms "Regions" and "First National" refer to those entities, respectively, and,
where the context requires, to those entities and their respective subsidiaries.

THE PARTIES

First National. First National is a bank holding company headquartered in
Gainesville, Georgia, with approximately 64 banking offices in Georgia and
Florida. As of September 30, 1995, First National had total consolidated assets
of approximately $3.1 billion, total consolidated deposits of approximately $2.6
billion, and total consolidated stockholders' equity of approximately $304
million. First National is the second-largest bank holding company headquartered
in Georgia outside of the Atlanta metropolitan area in terms of assets, based on
September 30, 1995 information. First National operates 20 banking and savings
bank subsidiaries in Georgia and Florida. Through its subsidiaries, First
National offers a broad range of banking and banking-related services.

During the 1995 fiscal year, First National completed the acquisition of FF
Bancorp, Inc. ("FF Bancorp"), the holding company for two federal savings banks
and one state bank located in Florida, with combined assets of approximately
$631 million as of June 30, 1995. In connection with the acquisition of FF
Bancorp (the "FF Bancorp Acquisition"), First National issued approximately
3,884,587 shares of First National Common Stock. As the transaction was
accounted for as a pooling of interests, the historical financial statements and
related management's discussion and analysis of financial condition and results
of operations of First National were required to be restated to reflect the FF
Bancorp Acquisition. Information with respect to the FF Bancorp Acquisition is
included under "Business of First National -- Recent Developments" and in
certain of the documents incorporated by reference in this Joint Proxy
Statement, including the Current Report on Form 8-K dated November 21, 1995 of
First National, which includes the restated historical financial statements and
related management's discussion and analysis of financial condition and results
of operations of First National reflecting the FF Bancorp Acquisition. See
"Documents Incorporated by Reference." In addition, First National has entered
into a definitive agreement to acquire a state bank located in Georgia, with
total assets of approximately $40 million.

First National was organized under the laws of the state of Georgia and
commenced operations in 1981 as a registered bank holding company under the Bank
Holding Company Act of 1956, as amended (the "BHC Act"). First National's
principal executive office is located at 303 Jesse Jewel Parkway, Suite 700,
Gainesville, Georgia 30501, and its telephone number at such address is (770)
503-2000.

Additional information with respect to First National and its subsidiaries
is included in documents incorporated by reference in this Joint Proxy
Statement. See "Available Information," "Documents Incorporated by Reference,"
"Business of First National," and "Certain Regulatory Considerations."

Regions. Regions is a regional bank holding company headquartered in
Birmingham, Alabama, with approximately 288 banking offices in Alabama, Florida,
Georgia, Louisiana, and Tennessee. As of September 30, 1995, Regions had total
consolidated assets of approximately $13.8 billion, total consolidated deposits
of approximately $10.7 billion, and total consolidated stockholders' equity of
approximately $1.1 billion. Regions is the third largest bank holding company
headquartered in Alabama in terms of assets, based on September 30, 1995
information. Regions operates banking subsidiaries in Alabama, Florida, Georgia,
Louisiana, and Tennessee and banking-related subsidiaries engaged in mortgage
banking, credit life insurance, leasing, and securities brokerage activities
with offices in various Southeastern states. Through its subsidiaries, Regions
offers a broad range of banking and banking-related services.
<PAGE> 147

During the 1995 fiscal year, Regions has completed the acquisition of two
financial institutions, one in Georgia and a second in Louisiana, the
acquisition of an accounts receivable factoring company in Alabama, and the
acquisition of a branch banking operation in Georgia (the "Recently Completed
Acquisitions") and, in addition to First National, has entered into definitive
agreements or letters of intent to acquire six financial institutions, four of
which are located in Georgia and one of which is located in Louisiana (the
"Other Pending Acquisitions") and one of which is located in Tennessee.
Information with respect to the Recently Completed Acquisitions and the Other
Pending Acquisitions is included under "-- Summary Pro Forma Financial Data,"
"Business of Regions -- Recent Developments," "Pro Forma Financial Information,"
and in certain of the documents incorporated by reference in this Joint Proxy
Statement. See "Documents Incorporated by Reference."

Regions was organized under the laws of the state of Delaware and commenced
operations in 1971 as a registered bank holding company under the BHC Act.
Regions' principal executive office is located at 417 North 20th Street,
Birmingham, Alabama 35203, and its telephone number at such address is (205)
326-7100.

Additional information with respect to Regions and its subsidiaries is
included in documents incorporated by reference in this Joint Proxy Statement.
See "Available Information," "Documents Incorporated by Reference," "Business of
Regions," and "Certain Regulatory Considerations."

MEETINGS OF STOCKHOLDERS

First National. This Joint Proxy Statement is being furnished to the
holders of First National Common Stock in connection with the solicitation by
the First National Board of Directors of proxies for use at the First National
Special Meeting at which First National stockholders will be asked to vote upon
a proposal to approve the Agreement and the Plan of Merger. The First National
Special Meeting will be held in the Theatre in the Georgia Mountains Center, 301
Main Street, Gainesville, Georgia, on January 11, 1996, at 10:00 A.M. local
time. See "Meetings of Stockholders -- Date, Place, Time, and Purpose."

First National's Board of Directors has fixed the close of business on
December 1, 1995, as the record date (the "First National Record Date") for
determination of the stockholders entitled to notice of and to vote at the First
National Special Meeting. Only holders of record of shares of First National
Common Stock on the First National Record Date will be entitled to notice of and
to vote at the First National Special Meeting. Each share of First National
Common Stock is entitled to one vote. Stockholders who execute proxies retain
the right to revoke them at any time prior to being voted at the First National
Special Meeting. On the First National Record Date, there were 20,580,670 shares
of First National Common Stock issued and outstanding. See "Meetings of
Stockholders -- Record Dates, Voting Rights, Required Votes, and Revocability of
Proxies."

Approval of the Agreement and the Plan of Merger requires the affirmative
vote of a majority of the votes entitled to be cast at the First National
Special Meeting by the holders of the issued and outstanding shares of First
National Common Stock. See "Meetings of Stockholders -- Record Dates, Voting
Rights, Required Votes, and Revocability of Proxies."

Regions. This Joint Proxy Statement is being furnished to the holders of
Regions Common Stock in connection with the solicitation by the Regions Board of
Directors of proxies for use at the Regions Special Meeting at which Regions
stockholders will be asked to vote upon a proposal to approve the issuance of
shares of Regions Common Stock pursuant to the Agreement. The Regions Special
Meeting will be held at the Regions Training Center located at 298 West Valley
Avenue, Birmingham, Alabama, on January 11, 1996, at 10:00 A.M. local time. See
"Meetings of Stockholders -- Date, Place, Time, and Purpose."

Regions' Board of Directors has fixed the close of business on December 1,
1995, as the record date (the "Regions Record Date") for determination of the
stockholders entitled to notice of and to vote at the Regions Special Meeting.
Only holders of record of shares of Regions Common Stock on the Regions Record
Date will be entitled to notice of and to vote at the Regions Special Meeting.
Each share of Regions Common Stock is entitled to one vote. Stockholders who
execute proxies retain the right to revoke them at any time prior to being voted
at the Regions Special Meeting. On the Regions Record Date, there were
45,444,454 shares of

2
<PAGE> 148

Regions Common Stock issued and outstanding. See "Meetings of
Stockholders -- Record Dates, Voting Rights, Required Votes, and Revocability of
Proxies."

Approval of issuance of shares of Regions Common Stock pursuant to the
Agreement requires the affirmative vote of a majority of the votes cast at the
Regions Special Meeting by the holders of the issued and outstanding shares of
Regions Common Stock. See "Meetings of Stockholders -- Record Dates, Voting
Rights, Required Votes, and Revocability of Proxies."

THE MERGER

General. The Agreement provides for the acquisition of First National by
Regions pursuant to the merger of First National with and into Regions Merger
Subsidiary, a newly formed corporation organized under the laws of the state of
Georgia and a wholly owned subsidiary of Regions. At the Effective Time, each
share of First National Common Stock then issued and outstanding (excluding
shares held by First National, Regions, or their respective subsidiaries, in
each case other than shares held in a fiduciary capacity or in satisfaction of
debts previously contracted) will be converted into and exchanged for 0.76 of a
share of Regions Common Stock (subject to possible adjustment as described
below) (the "Exchange Ratio").

In the event (i) the "Average Closing Price" (defined in the Agreement as
the average of the daily last sale prices of Regions Common Stock on the Nasdaq
National Market System (as reported by The Wall Street Journal or, if not
reported thereby, another authoritative source as selected by Regions) for the
ten consecutive full trading days on which such shares are traded on the Nasdaq
National Market System ending at the close of trading on the date on which the
consent of the Board of Governors of the Federal Reserve System ("Federal
Reserve") to the Merger shall be received (the "Determination Date")) is less
than $33.20 and (ii) (1) the quotient obtained by dividing the Average Closing
Price by $41.50 (the "Regions Ratio") is less than (2) the quotient obtained by
dividing the weighted average of the closing prices (the "Index Price") of 20
bank holding companies designated in the Agreement (the "Index Group") on the
Determination Date by the Index Price on October 20, 1995, less 20% (the "Index
Ratio"), then First National will have the right to terminate the Agreement
unless Regions elects to adjust the Exchange Ratio in the manner described under
"Description of Transaction -- Possible Adjustment of Exchange Ratio."

No fractional shares of Regions Common Stock will be issued. Rather, cash
(without interest) will be paid in lieu of any fractional share interest to
which any First National stockholder would be entitled upon consummation of the
Merger, in an amount equal to such fractional part of a share of Regions Common
Stock multiplied by the market value of one share of Regions Common Stock at the
Effective Time. The market value of one share of Regions Common Stock at the
Effective Time shall be the last sale price of such common stock on the Nasdaq
National Market System (as reported by The Wall Street Journal or, if not
reported thereby, another authoritative source as selected by Regions) on the
last trading day preceding the Effective Time. See "Description of
Transaction -- General."

The Agreement also contemplates that at the Effective Time, each award,
option, or other right to purchase or acquire shares of First National Common
Stock pursuant to stock options, stock appreciation rights, or stock awards
("First National Rights") granted by First National under the First National
Stock Plans, as that term is defined in the Agreement, which are outstanding at
the Effective Time, whether or not exercisable, will be converted into and
become rights with respect to Regions Common Stock on a basis adjusted to
reflect the Exchange Ratio. See "Description of Transaction -- Effect of the
Merger on Stock Rights."

3
<PAGE> 149

National Common Stock. Under rules promulgated by the SEC under the Exchange
Act, the parties will not be permitted to purchase shares of First National
Common Stock or Regions Common Stock in the open market during the period
commencing two business days prior to the mailing of this Joint Proxy Statement
and ending immediately following the Special Meetings. This limitation also
applies beginning two business days before and ending after any period in which
the Average Closing Price (as defined under "-- The Merger -- General") is
determined or during corresponding periods relating to the solicitation of
proxies and determination of exchange ratios for the Other Pending Acquisitions.

As of the First National Record Date, First National had 20,580,670 shares
of First National Common Stock issued and outstanding and 893,722 additional
shares of First National Common Stock subject to First National Rights. Taking
into account the Exchange Ratio of 0.76 of a share of Regions Common Stock for
each share of First National Common Stock and the anticipated repurchase of
approximately 1.9 million shares of First National Common Stock or 1.4 million
shares of Regions Common Stock or a combination of the two as part of the Merger
or the Other Pending Acquisitions, it is anticipated that upon consummation of
the Merger, Regions would issue approximately 14,241,310 shares of Regions
Common Stock excluding shares subject to assumed options or grants. Accordingly,
Regions would then have issued and outstanding approximately 60,299,764 shares
of Regions Common Stock based on the number of shares of Regions Common Stock
issued and outstanding on the Regions Record Date and without taking into
account any additional shares of Regions Common Stock issuable in connection
with consummating the Other Pending Acquisitions.

Reasons for the Merger, Recommendations of the Boards of Directors of First
National and Regions. The Board of Directors of First National believes that the
Agreement, the Plan of Merger, and the Merger are in the best interests of First
National and its stockholders, and the Board of Directors of Regions believes
that the Agreement, the Merger, and the issuance of shares of Regions Common
Stock pursuant to the Agreement are in the best interests of Regions and its
stockholders. Each Board has approved the matters to be approved by their
respective stockholders. THE FIRST NATIONAL DIRECTORS RECOMMEND THAT FIRST
NATIONAL STOCKHOLDERS VOTE FOR APPROVAL OF THE AGREEMENT AND THE PLAN OF MERGER.
THE REGIONS DIRECTORS RECOMMEND THAT REGIONS STOCKHOLDERS VOTE FOR THE ISSUANCE
OF SHARES OF REGIONS COMMON STOCK PURSUANT TO THE AGREEMENT. The Boards of
Directors of First National and Regions believe that the Merger will result in a
company with expanded opportunities for profitable growth and that the combined
resources and capital of First National and Regions will provide an enhanced
ability to compete in the changing and competitive financial services industry.
See "Description of Transaction -- Background of and Reasons for the Merger."

In approving the Agreement and the Plan of Merger and the issuance of
Regions Common Stock pursuant to the Agreement, respectively, First National's
directors and Regions' directors considered, among other things, First
National's and Regions' financial condition, respectively, the financial terms
and the income tax consequences of the Merger, the likelihood of the Merger
being approved by regulatory authorities without undue conditions or delay,
legal advice concerning the proposed Merger, the views of Morgan Stanley & Co.
Incorporated ("Morgan Stanley") and Bear, Stearns & Co. Inc. ("Bear Stearns"),
respectively, as to the fairness of the Exchange Ratio, from a financial point
of view, to the stockholders of First National and the stockholders of Regions,
respectively, and in general the fairness of the terms of the Merger to First
National stockholders and Regions stockholders, respectively. See "Description
of Transaction -- Background of and Reasons for the Merger."

Opinion of Financial Advisors. Morgan Stanley has rendered an opinion to
First National that, based on and subject to the procedures, matters, and
limitations described in its opinion and such other matters as it considered
relevant, as of the date of its opinion, the Exchange Ratio is fair, from a
financial point of view, to the stockholders of First National. The opinion of
Morgan Stanley is attached as Appendix III to this Joint Proxy Statement. First
National stockholders are urged to read the opinion in its entirety for a
description of the procedures followed, matters considered, and limitations on
the reviews undertaken in connection therewith. See "Description of
Transaction -- Opinion of First National's Financial Advisor."

Similarly, Bear Stearns has rendered an opinion to Regions that, based on
and subject to the procedures, matters, and limitations described in its opinion
and such other matters as it considered relevant, as of the date of its opinion,
the Exchange Ratio is fair, from a financial point of view, to the stockholders
of Regions. The

4
<PAGE> 150

opinion of Bear Stearns is attached as Appendix IV to this Joint Proxy
Statement. Regions stockholders are urged to read the opinion in its entirety
for a description of the procedures followed, matters considered, and
limitations on the reviews undertaken in connection therewith. See "Description
of Transaction -- Opinion of Regions' Financial Advisor."

Effective Time. Subject to the conditions to the obligations of the
parties to effect the Merger, the Effective Time will occur on the date and at
the time that the Certificate of Merger becomes effective with the Georgia
Secretary of State. Unless otherwise agreed upon by First National and Regions,
and subject to the conditions to the obligations of the parties to effect the
Merger, the parties will use their reasonable efforts to cause the Effective
Time to occur on or before the tenth business day (as designated by Regions)
following the last to occur of (i) the effective date (including the expiration
of any applicable waiting period) of the last consent of any regulatory
authority required for the Merger and (ii) the date on which the stockholders of
First National and Regions approve the matters relating to the Agreement and the
Plan of Merger required to be approved by such stockholders by applicable law.
See "Description of Transaction -- Effective Time of the Merger," "-- Conditions
to Consummation of the Merger," and "-- Waiver, Amendment, and Termination."

Notwithstanding the foregoing, the parties have agreed to cooperate in
selecting the Effective Time to ensure that, with respect to the quarterly
period in which the Effective Time occurs, the holders of First National Common
Stock do not receive both a dividend in respect of their First National Common
Stock and a dividend in respect of Regions Common Stock or fail to receive any
dividend. See "Description of Transaction -- Conduct of Business Pending the
Merger."

NO ASSURANCE CAN BE PROVIDED THAT THE NECESSARY STOCKHOLDER AND REGULATORY
APPROVALS CAN BE OBTAINED OR THAT THE OTHER CONDITIONS PRECEDENT TO THE MERGER
CAN OR WILL BE SATISFIED. FIRST NATIONAL AND REGIONS ANTICIPATE THAT ALL
CONDITIONS TO THE CONSUMMATION OF THE MERGER WILL BE SATISFIED SO THAT THE
MERGER CAN BE CONSUMMATED DURING THE FIRST HALF OF 1996. HOWEVER, DELAYS IN THE
CONSUMMATION OF THE MERGER COULD OCCUR.

Exchange of Stock Certificates. Promptly after the Effective Time, Regions
will cause First Chicago Trust Company of New York, acting in its capacity as
exchange agent for Regions (the "Exchange Agent"), to mail to each holder of
record of a certificate or certificates (collectively, the "Certificates")
which, immediately prior to the Effective Time, represented outstanding shares
of First National Common Stock, a letter of transmittal and instructions for use
in effecting the surrender and cancellation of the Certificates in exchange for
certificates representing shares of Regions Common Stock. Cash will be paid to
the holders of First National Common Stock in lieu of the issuance of any
fractional shares of Regions Common Stock. In no event will the holder of any
surrendered Certificate(s) be entitled to receive interest on any cash to be
issued to such holder, and in no event will First National, Regions, or the
Exchange Agent be liable to any holder of First National Common Stock for any
Regions Common Stock or dividends thereon or cash delivered in good faith to a
public official pursuant to any applicable abandoned property, escheat, or
similar law.

Regulatory Approvals And Other Conditions. The Merger is subject to
approval by the Federal Reserve, the Office of Thrift Supervision ("OTS"), the
Commissioner of Banking and Finance of the State of Georgia ("Georgia
Commissioner"), and the Department of Banking and Finance of the State of
Florida ("Florida Department"). Applications will soon be filed with each of
these agencies for the requisite approvals. THERE CAN BE NO ASSURANCE THAT SUCH
REGULATORY APPROVALS WILL BE OBTAINED OR AS TO THE TIMING OF ANY SUCH APPROVALS.
THERE ALSO CAN BE NO ASSURANCE THAT ANY SUCH APPROVALS WILL NOT IMPOSE
CONDITIONS THAT ARE DEEMED MATERIALLY BURDENSOME BY REGIONS (AS DEFINED IN THE
AGREEMENT).

Consummation of the Merger is subject to various other conditions,
including receipt of the required approval of First National stockholders,
receipt of the required approval of Regions stockholders, receipt of an opinion
of counsel as to the tax-free nature of certain aspects of the Merger, receipt
of a letter from the independent accountants of Regions that the Merger will
qualify for pooling-of-interests accounting treatment, and certain other
conditions. See "Description of Transaction -- Conditions to Consummation of the
Merger."

5
<PAGE> 151

Waiver, Amendment, and Termination. The Agreement may be terminated and
the Merger abandoned at any time prior to the Effective Time by mutual action of
the Boards of Directors of First National and Regions, or by the action of the
Board of Directors of either company under certain circumstances, including if
the Merger is not consummated by September 30, 1996, unless the failure to
consummate by such time is due to a breach of the Agreement by the party seeking
to terminate. If for any reason the Merger is not consummated, First National
will continue to operate as a bank holding company under its present management.
See "Description of Transaction -- Waiver, Amendment, and Termination."

Dissenters' Rights. Pursuant to Georgia Business Corporation Code
("Georgia BCC") Section 14-2-1302(c), the holders of First National Common Stock
are not entitled to dissent from the Merger. Pursuant to Delaware General
Corporation Law ("Delaware GCL") Section 262, the holders of Regions Common
Stock are not entitled to dissent from the issuance of shares of Regions Common
Stock pursuant to the Agreement. See "Description of Transaction -- Dissenters'
Rights."

Interests of Certain Persons in the Merger. Certain members of First
National's management and Board of Directors have interests in the Merger in
addition to their interests as stockholders of First National generally. Those
interests relate to, among other things, change in control agreements and
provisions in the Agreement regarding indemnification and eligibility for
certain Regions employee benefits. See "Description of Transaction -- Interests
of Certain Persons in the Merger."

Certain Federal Income Tax Consequences of the Merger. It is intended that
the Merger will be treated as a reorganization within the meaning of Section 368
of the Internal Revenue Code of 1986, as amended (the "Code"). Accordingly, no
gain or loss will be recognized by a First National stockholder upon the
exchange of such stockholder's First National Common Stock for shares of Regions
Common Stock. Subject to the provisions and limitations of Section 302(a) of the
Code, gain or loss will be recognized with respect to cash received in lieu of
fractional shares. Gain recognition, if any, will not be in excess of the amount
of cash received. See "Description of Transaction -- Certain Federal Income Tax
Consequences." Consummation of the Merger is conditioned upon receipt by First
National and Regions of an opinion of Alston & Bird substantially to this
effect. DUE TO THE INDIVIDUAL NATURE OF THE TAX CONSEQUENCES OF THE MERGER,
FIRST NATIONAL STOCKHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS TO
DETERMINE THE EFFECT OF THE MERGER ON THEM UNDER FEDERAL, STATE, LOCAL, AND
FOREIGN TAX LAWS. For a further discussion of the federal income tax
consequences of the Merger, see "Description of Transaction -- Certain Federal
Income Tax Consequences."

Accounting Treatment. It is intended that the Merger will be accounted for
as a pooling of interests for accounting and financial reporting purposes. See
"Description of Transaction -- Accounting Treatment."

Certain Differences in Stockholders' Rights. At the Effective Time, First
National stockholders, whose rights are governed by First National's Articles of
Incorporation and Bylaws and by the Georgia BCC, will automatically become
Regions stockholders, and their rights as Regions stockholders will be
determined by Regions' Certificate of Incorporation and Bylaws and by the
Delaware GCL.

The rights of Regions stockholders differ from the rights of First National
stockholders in certain important respects, some of which constitute additional
antitakeover provisions provided for in Regions' governing documents. See
"Effect of the Merger on Rights of Stockholders."

Option Agreement. First National, as issuer, and Regions, as grantee,
entered into a stock option agreement (the "Option Agreement") pursuant to which
First National granted Regions an option to purchase, under certain
circumstances and subject to certain adjustments and limitations, up to
4,089,234 shares of First National Common Stock at a price of $27.00 per share.
The Option Agreement is exercisable upon the occurrence of certain events that
create the potential for another party to acquire control of First National. To
the best knowledge of First National, no such event which would permit exercise
of the Option Agreement has occurred as of the date of this Joint Proxy
Statement. The Option Agreement was granted by First National as a condition of
and in consideration for Regions' entering into the Agreement and is intended to
increase the likelihood that the Merger will be effected by making it more
difficult and more expensive for a third party to acquire control of First
National. See "Description of Transaction -- Option Agreement."

6
<PAGE> 152

Comparative Market Prices Of Common Stock. First National Common Stock and
Regions Common Stock are traded in the over-the-counter market and quoted on the
Nasdaq National Market System. The following table sets forth the reported
closing sale prices per share for Regions Common Stock and First National Common
Stock and the equivalent per share prices (as explained below) for First
National Common Stock on October 20, 1995, the last full business day preceding
the public announcement of the execution of the Agreement, and on December 4,
1995, the latest practicable date prior to the mailing of this Joint Proxy
Statement.

<TABLE>
<CAPTION>
FIRST
MARKET PRICE REGIONS NATIONAL EQUIVALENT PER
PER SHARE AT: COMMON STOCK COMMON STOCK SHARE PRICE
- ------------------------------------------------------ ------------ ------------ --------------
<S> <C> <C> <C>
October 20, 1995...................................... $41.50 $28.75 $31.54
December 4, 1995...................................... 43.25 31.50 32.87
</TABLE>

The equivalent per share price of a share of First National Common Stock at
each specified date represents the closing sale price of a share of Regions
Common Stock on such date multiplied by the Exchange Ratio. See "Comparative
Market Prices and Dividends."

There can be no assurance as to what the market price of the Regions Common
Stock will be if and when the Merger is consummated.

COMPARATIVE PER SHARE DATA

The following table sets forth certain comparative per share data relating
to income, cash dividends, and book value on (i) an historical basis for Regions
and First National; (ii) a pro forma combined basis per share of Regions Common
Stock, giving effect to the Merger; (iii) an equivalent pro forma basis per
share of First National Common Stock, giving effect to the Merger; (iv) a pro
forma combined basis per share of Regions Common Stock, giving effect to the
Merger and the Other Pending Acquisitions (as defined under "Business of
Regions -- Recent Developments"); and (v) an equivalent pro forma basis per
share of First National Common Stock, giving effect to the Merger and the Other
Pending Acquisitions. The First National and Regions pro forma combined
information and the First National pro forma Merger equivalent information give
effect to the Merger on a pooling-of-interests accounting basis and reflect the
Exchange Ratio of 0.76 of a share of Regions Common Stock for each share of
First National Common Stock. See "Description of Transaction -- Accounting
Treatment." The Regions, First National, and Other Pending Acquisitions pro
forma combined information and the First National pro forma Merger and Other
Pending Acquisitions equivalent information give effect to (i) the Merger as
described in the preceding sentence and (ii) the Other Pending Acquisitions as
described under "-- Summary Pro Forma Financial Data -- Selected Pro Forma
Combined Data for Regions, First National, and Other Pending Acquisitions." The
pro forma data are presented for information purposes only and are not
necessarily indicative of the results of operations or combined financial
position that would have resulted had the Merger or the Other Pending
Acquisitions been consummated at the dates or during the periods indicated, nor
are they necessarily indicative of future results of operations or combined
financial position.

The information shown below should be read in conjunction with, and is
qualified in its entirety by, the historical financial statements of Regions and
the restated historical financial statements of First National, including the
respective notes thereto, and the pro forma financial information incorporated
by reference herein. See "Documents Incorporated by Reference," "-- Selected
Financial Data," "-- Summary Pro Forma Financial Data," "Business of
Regions -- Recent Developments," and "Pro Forma Financial Information."

7
<PAGE> 153

<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
------------------- ------------------------------
1995 1994 1994 1993 1992
-------- -------- -------- -------- --------
(UNAUDITED) (UNAUDITED EXCEPT REGIONS AND
FIRST NATIONAL HISTORICAL)
<S> <C> <C> <C> <C> <C>
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE AND EXTRAORDINARY ITEM PER COMMON SHARE
Regions historical..................................... $ 2.77 $ 2.52 $ 3.40 $ 3.01 $ 2.60
First National historical.............................. 1.26 1.37 1.72 1.75 1.50
Regions and First National pro forma combined(1)....... 2.49 2.34 3.10 2.79 2.42
First National pro forma Merger equivalent(2).......... 1.89 1.78 2.36 2.12 1.84
Regions, First National, and Other Pending Acquisitions
pro forma combined(3)................................ 2.49 3.08
First National pro forma Merger and Other Pending
Acquisitions equivalent(2)........................... 1.89 2.34
DIVIDENDS DECLARED PER COMMON SHARE
Regions historical..................................... $ 0.99 $ 0.90 $ 1.20 $ 1.04 $ 0.91
First National historical.............................. 0.625 0.5775 0.7775 0.705 0.64
First National pro forma Merger equivalent(4).......... 0.75 0.68 0.91 0.79 0.69
BOOK VALUE PER COMMON SHARE
(PERIOD END)
Regions historical..................................... $ 24.19 $ 21.46 $ 22.53 $ 20.73 $ 17.62
First National historical.............................. 14.82 13.44 13.35 13.48 12.06
Regions and First National pro forma combined(1)....... 22.91 20.28 21.25 19.89 17.01
First National pro forma Merger equivalent(2).......... 17.41 15.41 16.15 15.12 12.93
Regions, First National, and Other Pending Acquisitions
pro forma combined(3)................................ 22.89
First National pro forma Merger and Other Pending
Acquisitions equivalent(2)........................... 17.40
</TABLE>

- ---------------

(1) Represents the pro forma combined information of Regions and First National
as if the Merger were consummated on January 1, 1992, and were accounted
for as a pooling of interests.
(2) Represents the pro forma combined information multiplied by the Exchange
Ratio of 0.76 of a share of Regions Common Stock for each share of First
National Common Stock.
(3) Represents the pro forma combined information of Regions, First National,
and the Other Pending Acquisitions as if the Merger were consummated at the
time and pursuant to the accounting basis described in note (1) and the
Other Pending Acquisitions were consummated at the time and pursuant to the
accounting bases described under "-- Summary Pro Forma Financial
Data -- Selected Pro Forma Combined Data for Regions, First National, and
Other Pending Acquisitions."
(4) Represents historical dividends declared per share by Regions multiplied by
the Exchange Ratio of 0.76 of a share of Regions Common Stock for each
share of First National Common Stock.

SELECTED FINANCIAL DATA

The following tables present certain selected historical financial
information for Regions and First National and are based on the consolidated
financial statements of Regions and the restated historical consolidated
financial statements of First National, including the respective notes thereto,
which are incorporated by reference in this Joint Proxy Statement. The data
should be read in conjunction with such historical financial statements,
including the respective notes thereto, and other financial information
concerning Regions and First National incorporated by reference or included
herein. The financial information for First National reflects the restatement of
the historical financial statements of First National required as a result of
the FF Bancorp Acquisition, which are included in the Current Report on Form 8-K
dated November 21, 1995, of First National. Interim unaudited data for the nine
months ended September 30, 1995 and 1994 of Regions and First National reflect,
in the opinion of the respective managements of Regions and First National, all
adjustments (consisting only of normal recurring adjustments) necessary for a
fair presentation of such data. Results for the nine months ended September 30,
1995, are not necessarily indicative of results which may be expected for any
other interim period or for the year as a whole. See "Documents Incorporated by
Reference."

8
<PAGE> 154

SELECTED HISTORICAL FINANCIAL DATA OF REGIONS

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------------------- ----------------------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
----------- ----------- ----------- ----------- ---------- ---------- ----------
(UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE DATA AND RATIOS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Total interest income.......... $ 757,460 $ 568,358 $ 785,779 $ 555,667 $ 536,747 $ 556,821 $ 519,753
Total interest expense......... 387,112 246,294 350,139 213,614 224,068 292,017 297,613
Net interest income............ 370,348 322,064 435,640 342,053 312,679 264,804 222,140
Provision for loan losses...... 15,312 13,804 19,003 21,533 27,072 24,005 24,208
Net interest income after loan
loss provision............... 355,036 308,260 416,637 320,520 285,607 240,799 197,932
Total noninterest income
excluding security gains
(losses)..................... 117,419 108,552 142,781 131,949 119,130 101,964 94,730
Security gains (losses)........ 16 444 627 78 (53) (507) (982)
Total noninterest expense...... 278,363 254,376 343,067 287,026 264,659 230,340 195,611
Income tax expense............. 66,007 54,243 71,094 53,476 44,977 33,660 27,175
Net income..................... 128,101 108,637 145,884 112,045 95,048 78,256 68,894
PER SHARE DATA:
Net income..................... $ 2.77 $ 2.52 $ 3.40 $ 3.01 $ 2.60 $ 2.16 $ 1.91
Cash dividends................. 0.99 0.90 1.20 1.04 0.91 0.87 0.84
Book value..................... 24.19 21.46 22.53 20.73 17.62 15.76 14.54
OTHER INFORMATION:
Average number of shares
outstanding.................. 46,212 43,029 42,906 37,205 36,532 36,191 36,097
STATEMENT OF CONDITION DATA
(PERIOD END):
Total assets................... $13,847,910 $11,669,957 $12,839,320 $10,476,348 $7,881,026 $6,745,053 $6,344,406
Securities..................... 3,033,200 2,484,835 2,609,188 2,368,445 1,670,170 1,575,725 1,489,200
Loans, net of unearned income.. 9,596,673 8,037,888 9,017,802 6,833,246 5,142,531 4,274,958 4,092,262
Total deposits................. 10,742,187 9,269,856 10,093,135 8,770,694 6,701,142 5,917,028 5,353,211
Long-term borrowings........... 573,790 612,198 519,238 462,862 136,990 18,782 19,707
Stockholders' equity........... 1,113,790 901,533 1,013,870 850,965 656,655 572,971 524,132
PERFORMANCE RATIOS:
Return on average assets(1).... 1.29% 1.31% 1.29% 1.40% 1.34% 1.23% 1.23%
Return on average stockholders'
equity(1).................... 15.87 15.99 15.97 16.14 15.64 14.27 13.64
Net interest margin(1)......... 4.11 4.30 4.26 4.82 4.98 4.78 4.67
Efficiency(2).................. 56.17 57.99 58.24 59.24 59.87 60.77 59.22
Dividend payout................ 35.74 35.71 35.29 34.55 35.00 40.28 43.98
ASSET QUALITY RATIOS:
Net charge-offs to average
loans, net of unearned
income(1).................... 0.08% 0.11% 0.17% 0.19% 0.28% 0.35% 0.44%
Problem assets to net loans and
other real estate(3)......... 0.48 0.60 0.52 0.84 0.70 0.89 0.98
Nonperforming assets to net
loans and other real estate(4) 0.55 0.67 0.58 1.03 0.81 1.01 1.12
Allowance for loan losses to
loans, net of unearned
income....................... 1.37 1.40 1.30 1.47 1.43 1.28 1.10
Allowance for loan losses to
nonperforming assets(4)...... 250.72 209.18 221.81 143.05 175.92 126.32 98.18
LIQUIDITY AND CAPITAL RATIOS:
Average stockholders' equity to
average assets............... 8.14% 8.21% 8.09% 8.70% 8.59% 8.63% 9.03%
Average loans to average
deposits..................... 89.82 80.17 82.30 78.14 72.46 73.40 76.67
Tier 1 risk-based capital(5)... 10.82 10.93 10.69 11.13 11.68 11.85 11.31
Total risk-based capital(5).... 14.28 14.79 14.29 13.48 14.44 13.19 12.51
Tier 1 leverage(5)............. 7.25 7.71 8.21 10.11 8.44 8.40 7.65
</TABLE>

- ---------------

(1) Interim period ratios are annualized.
(2) Noninterest expense divided by the sum of net interest income
(taxable-equivalent basis) and noninterest income net of gains (losses)
from security transactions.
(3) Problem assets include loans on a nonaccrual basis, restructured loans, and
foreclosed properties.
(4) Nonperforming assets include loans on a nonaccrual basis, restructured
loans, loans 90 days or more past due, and foreclosed properties.
(5) The required minimum Tier 1 and total risk-based capital ratios are 4.0% and
8.0%, respectively. The minimum leverage ratio of Tier 1 capital to total
adjusted assets is 3.0% to 5.0%, depending on the risk profile of the
institution and other factors.

9
<PAGE> 155

SELECTED HISTORICAL FINANCIAL DATA OF FIRST NATIONAL

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
----------------------- --------------------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
---------- ---------- ---------- ---------- ---------- ---------- ----------
(UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE DATA AND RATIOS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Total interest income.............. $ 179,720 $ 151,089 $ 205,914 $ 190,877 $ 200,347 $ 222,027 $ 230,415
Total interest expense............. 84,994 62,462 86,018 82,581 100,352 136,066 149,703
Net interest income................ 94,726 88,627 119,896 108,296 99,995 85,961 80,712
Provision for loan losses.......... 1,963 (136) 1,577 3,162 12,295 10,874 15,051
Net interest income after loan loss
provision........................ 92,763 88,763 118,319 105,134 87,700 75,087 65,661
Total noninterest income excluding
security gains (losses).......... 21,500 22,399 28,395 32,286 28,813 27,285 23,204
Security gains (losses)............ 291 166 (283) 753 2,470 401 115
Total noninterest expense.......... 77,371 72,776 98,780 91,021 78,620 72,455 62,740
Income tax expense................. 11,332 11,108 13,015 12,693 11,428 7,842 6,750
Net income......................... $ 25,851 $ 27,444 $ 34,636 $ 34,459 $ 28,935 $ 22,476 $ 19,490
PER SHARE DATA:
Net income......................... $ 1.26 $ 1.37 $ 1.72 $ 1.75 $ 1.50 $ 1.22 $ 1.06
Cash dividends..................... 0.625 0.5775 0.7775 0.705 0.64 0.55 0.46
Book value......................... 14.82 13.44 13.35 13.48 12.06 11.18 9.68
OTHER INFORMATION:
Average number of shares
outstanding...................... 20,465 20,053 20,132 19,668 19,305 18,391 18,412
STATEMENT OF CONDITION DATA
(PERIOD END):
Total assets....................... $3,111,875 $2,911,849 $2,970,756 $2,686,813 $2,576,650 $2,442,995 $2,347,164
Securities......................... 815,418 741,925 737,103 624,972 595,368 580,465 444,820
Loans, net of unearned income...... 1,970,654 1,825,127 1,850,912 1,663,046 1,593,230 1,560,574 1,512,317
Allowance for possible loan
losses........................... 26,016 26,979 26,476 24,265 26,629 21,973 21,547
Deposits........................... 2,587,123 2,437,894 2,482,458 2,254,682 2,222,659 2,130,703 2,136,727
Short-term debt.................... 95,082 75,425 105,129 77,186 89,798 87,479 57,567
Long-term debt..................... 79,641 90,592 80,238 62,958 14,470 5,679 6,645
Stockholders' equity............... 304,266 273,441 272,452 260,336 229,461 206,031 180,805
PERFORMANCE RATIOS:
Return on average assets(1)........ 1.14% 1.29% 1.21% 1.32% 1.16% 0.94% 0.85%
Return on average stockholders'
equity(1)........................ 12.06 13.54 12.84 14.66 13.38 11.62 11.10
Net interest margin(1)............. 4.73 4.73 4.77 4.67 4.50 4.11 4.03
Efficiency(2)...................... 63.90 66.82 63.85 62.13 58.83 61.40 57.47
Dividend payout(3)................. 49.60 42.15 45.20 40.29 42.67 45.08 43.40
ASSET QUALITY RATIOS:
Net charge-offs to average loans,
net of unearned income(1)........ 0.17% 0.22% 0.30% 0.34% 0.57% 0.68% 0.68%
Problem assets to net loans and
other real estate(4)............. 1.48 2.28 1.98 2.22 3.12 3.48 2.47
Nonperforming assets to net loans
and other real estate(5)......... 1.50 2.29 1.99 2.23 3.16 3.58 2.67
Allowance for loan losses to loans,
net of unearned income........... 1.32 1.48 1.43 1.46 1.67 1.40 1.42
Allowance for loan losses to
nonperforming assets(5).......... 87.49 63.88 71.16 64.77 52.22 38.81 52.86
LIQUIDITY AND CAPITAL RATIOS:
Average stockholders' equity to
average assets................... 9.65% 9.44% 9.43% 8.97% 8.64% 8.12% 7.66%
Average loans to average deposits.... 75.52 75.29 74.58 74.16 73.41 73.60 72.40
Tier 1 risk-based capital(6)......... 14.37 14.11 13.93 15.09 12.82 13.94 12.32
Total risk-based capital(6).......... 15.62 15.36 15.18 16.34 14.08 15.21 13.58
Tier 1 leverage(6)................... 9.78 9.77 9.17 10.18 9.61 9.64 9.10
</TABLE>

- ---------------

(1) Interim period ratios are annualized.
(2) Noninterest expense divided by the sum of net interest income
(taxable-equivalent basis) and noninterest income net of gains (losses) from
security transactions.
(3) Dividend payout ratio is computed based on dividends declared rather than
dividends paid.
(4) Problem assets include loans on a nonaccrual basis, restructured loans, and
foreclosed properties.
(5) Nonperforming assets include loans on a nonaccrual basis, restructured
loans, loans 90 days or more past due, and foreclosed properties.
(6) The required minimum Tier 1 and total risk-based capital ratios are 4.0% and
8.0%, respectively. The minimum leverage ratio of Tier 1 capital to total
adjusted assets is 3.0% to 5.0%, depending on the risk profile of the
institution and other factors. The capital ratios presented reflect the
reported historical capital ratios and do not, for periods prior to
September 30, 1995, reflect acquisitions accounted for as poolings of
interests.

10
<PAGE> 156

SUMMARY PRO FORMA FINANCIAL DATA

The following unaudited pro forma financial data give effect, as
appropriate, to the Merger and the Other Pending Acquisitions as of the dates
and for the periods indicated and pursuant to the accounting bases described
below. The unaudited pro forma financial data are presented for informational
purposes only and are not necessarily indicative of the combined financial
position or results of operations which actually would have occurred if the
transactions had been consummated at the date and for the periods indicated or
which may be obtained in the future. The information should be read in
conjunction with the unaudited pro forma financial information appearing
elsewhere in this Joint Proxy Statement and included in Regions' Current Report
on Form 8-K dated November 22, 1995. See "-- Comparative Per Share Data" and
"Pro Forma Financial Information." For additional information relating to
specific transactions within the scope of the Other Pending Acquisitions, see
"Business of Regions -- Recent Developments" and "Pro Forma Financial
Information."

SELECTED PRO FORMA COMBINED DATA FOR REGIONS AND FIRST NATIONAL

The following unaudited pro forma combined data give effect to the
acquisition of First National as of the date or at the beginning of the periods
indicated, assuming such acquisition is treated as a pooling of interests.

<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 1995
-------------------------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
-------------------------------------
<S> <C>
STATEMENT OF CONDITION DATA:
Total assets.................................................. $16,959,785
Securities.................................................... 3,848,618
Loans, net of unearned income................................. 11,567,327
Total deposits................................................ 13,329,310
Other borrowed funds.......................................... 715,054
Stockholders' equity.......................................... 1,412,456
Book value per common share................................... 22.91
</TABLE>

<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED DECEMBER 31,
SEPTEMBER 30, ------------------------------
1995 1994 1993 1992
-------------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Total interest income............................ $937,180 $991,693 $746,544 $737,094
Total interest expense........................... 472,106 436,157 296,195 324,420
-------------- -------- -------- --------
Net interest income.............................. 465,074 555,536 450,349 412,674
Provision for loan losses........................ 17,275 20,580 24,695 39,367
-------------- -------- -------- --------
Net interest income after loan loss
provision................................... 447,799 534,956 425,654 373,307
Total noninterest income......................... 139,226 171,520 165,066 150,360
Total noninterest expense........................ 355,734 441,847 378,047 343,279
Income tax expense............................... 77,339 84,109 67,153 56,405
-------------- -------- -------- --------
Income before cumulative effect of change in
accounting principle.......................... $153,952 $180,520 $145,520 $123,983
========== ======== ======== ========
Income before cumulative effect of change in
accounting principle per share................ $ 2.49 $ 3.10 $ 2.79 $ 2.42
========== ======== ======== ========
Average common shares outstanding................ 61,765 58,206 52,153 51,204
</TABLE>

11
<PAGE> 157

SELECTED PRO FORMA COMBINED DATA FOR REGIONS, FIRST NATIONAL,
AND OTHER PENDING ACQUISITIONS

The following unaudited pro forma combined data as of September 30, 1995,
and for the nine months ended September 30, 1995, and the years ended December
31, 1994, 1993, and 1992, give effect to (i) the acquisition of First National
by Regions, assuming such acquisition is accounted for as a pooling of
interests, and (ii) the Other Pending Acquisitions, assuming four of such
acquisitions are treated as purchases for accounting purposes and one such
acquisition is treated as a pooling of interests for accounting purposes, as if
all such transactions had been consummated on September 30, 1995, in the case of
the data included under "Statement of Condition Data," and on January 1, 1992,
in the case of the data included under "Income Statement Data."

<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 1995
-------------------------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C>
STATEMENT OF CONDITION DATA:
Total assets.................................................. $17,581,247
Securities.................................................... 3,959,874
Loans, net of unearned income................................. 11,950,292
Total deposits................................................ 13,914,550
Other borrowed funds.......................................... 724,095
Stockholders' equity.......................................... 1,430,325
Book value per common share................................... 22.89
</TABLE>

<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED DECEMBER 31,
SEPTEMBER 30, ------------------------------------
1995 1994 1993 1992
-------------- ---------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Total interest income..................... $968,527 $1,027,388 $760,157 $748,414
Total interest expense.................... 488,041 451,868 300,143 328,421
-------------- ---------- -------- --------
Net interest income....................... 480,486 575,520 460,014 419,993
Provision for loan losses................. 17,670 21,349 25,315 39,937
-------------- ---------- -------- --------
Net interest income after loan loss
provision............................ 462,816 554,171 434,699 380,056
Total noninterest income.................. 143,483 176,061 167,164 151,843
Total noninterest expense................. 372,044 463,570 387,234 349,006
Income tax expense........................ 78,446 84,922 67,690 57,116
-------------- ---------- -------- --------
Income before cumulative effect of change
in accounting principle and
extraordinary item..................... $155,809 $ 181,740 $146,939 $125,777
========== ========= ======== ========
Income before cumulative effect of change
in accounting principle and
extraordinary item per share........... $ 2.49 $ 3.08 $ 2.77 $ 2.42
========== ========= ======== ========
Average common shares outstanding......... 62,610 59,051 52,998 52,049
</TABLE>

12
<PAGE> 158

MEETINGS OF STOCKHOLDERS

DATE, PLACE, TIME, AND PURPOSE

First National. This Joint Proxy Statement is being furnished to the
holders of First National Common Stock in connection with the solicitation by
the First National Board of Directors of proxies for use at the First National
Special Meeting at which First National stockholders will be asked to vote upon
a proposal to approve the Agreement and the Plan of Merger. The First National
Special Meeting will be held in the Theatre at the Georgia Mountains Center, 301
Main Street, on January 11, 1996, at 10:00 A.M. local time. See "Description of
Transaction."

RECORD DATES, VOTING RIGHTS, REQUIRED VOTES, AND REVOCABILITY OF PROXIES

First National. The close of business on December 1, 1995, has been fixed
as the First National Record Date for determining holders of outstanding shares
of First National Common Stock entitled to notice of and to vote at the First
National Special Meeting. Only holders of First National Common Stock of record
on the books of First National at the close of business on the First National
Record Date are entitled to notice of and to vote at the First National Special
Meeting. As of the First National Record Date, there were 20,580,670 shares of
First National Common Stock issued and outstanding and held by 6,000 holders of
record.

Holders of First National Common Stock are entitled to one vote on each
matter considered and voted upon at the First National Special Meeting for each
share of First National Common Stock held of record as of the First National
Record Date. To hold a vote on any proposal, a quorum must be assembled, which
is a majority of the shares of First National Common Stock issued and
outstanding and entitled to vote, present in person or represented by proxy. In
determining whether a quorum exists at the First National Special Meeting for
purposes of all matters to be voted on, all votes "for" or "against," as well as
all abstentions, with respect to the proposal receiving the most such votes,
will be counted. The vote required for the approval of the Agreement and the
Plan of Merger is a majority of the shares of First National Common Stock
entitled to be cast at the First National Special Meeting by holders of the
issued and outstanding shares of First National Common Stock. Consequently, with
respect to the proposal to approve the Agreement and the Plan of Merger,
abstentions and broker non-votes will be counted as part of the base number of
votes to be used in determining if the proposal has received the requisite
number of base votes for approval. Thus, an abstention and a broker non-vote
will have the same effect as a vote "against" such proposal.

Shares of First National Common Stock represented by properly executed
proxies, if such proxies are received in time and not revoked, will be voted in
accordance with the instructions indicated on the proxies. IF NO INSTRUCTIONS
ARE INDICATED, SUCH PROXIES WILL BE VOTED FOR APPROVAL OF THE AGREEMENT AND THE
PLAN OF MERGER AND, IN THE DISCRETION OF THE PROXY HOLDER, AS TO ANY OTHER
MATTER WHICH MAY COME PROPERLY BEFORE THE FIRST NATIONAL SPECIAL MEETING. IF
NECESSARY, THE PROXY HOLDER MAY VOTE IN FAVOR OF A PROPOSAL TO ADJOURN THE FIRST
NATIONAL SPECIAL MEETING IN ORDER TO PERMIT FURTHER SOLICITATION OF PROXIES IN
THE EVENT THERE ARE NOT SUFFICIENT VOTES TO APPROVE THE FOREGOING PROPOSAL AT
THE TIME OF THE FIRST NATIONAL SPECIAL MEETING.

FAILURE BOTH TO RETURN THE PROXY CARD AND TO VOTE IN PERSON AT THE FIRST
NATIONAL SPECIAL MEETING WILL HAVE THE EFFECT OF A VOTE CAST AGAINST APPROVAL OF
THE AGREEMENT AND THE PLAN OF MERGER.

A First National stockholder who has given a proxy may revoke it at any
time prior to its exercise at the First National Special Meeting by (i) giving
written notice of revocation to the Secretary of First National, (ii) properly
submitting to First National a duly executed proxy bearing a later date, or
(iii) attending the

13
<PAGE> 159

First National Special Meeting and voting in person. All written notices of
revocation and other communications with respect to revocation of proxies should
be addressed as follows: First National Bancorp, 303 Jesse Jewel Parkway, Suite
700, P.O. Drawer 937, Gainesville, Georgia 30503; Attention: C. Talmadge
Garrison, Corporate Secretary.

The directors and executive officers of First National and their affiliates
beneficially owned, as of the First National Record Date, 1,490,002 shares (or
approximately 7.24% of the issued and outstanding shares) of First National
Common Stock. Each member of the Board of Directors of First National has
indicated such director's intention to vote those First National shares over
which such member has voting authority (other than in a fiduciary capacity) in
favor of the Agreement and the Plan of Merger. The directors and executive
officers of Regions and their affiliates beneficially owned, as of the First
National Record Date, no shares of First National Common Stock.

In addition, as of the First National Record Date, various subsidiaries of
First National, as fiduciaries, custodians, and agents, had sole or shared
voting power over 1,099,450 shares, or 5.34%, of the issued and outstanding
shares of First National Common Stock, under trust agreements and other
instruments and agreements, including shares held as trustee or agent of various
First National employee benefit and stock purchase plans. Such subsidiaries held
no shares of the issued and outstanding shares of Regions Common Stock as of the
Regions Record Date. It is the policy of these subsidiaries not to vote such
shares in the absence of instructions from other appropriate parties having an
interest in such stock, such as co-fiduciaries and participants in such plans,
unless the subsidiary has sole authority with respect to shares thereto.

Regions. The close of business on December 1, 1995, has been fixed as the
Regions Record Date for determining holders of outstanding shares of Regions
Common Stock entitled to notice of and to vote at the Regions Special Meeting.
Only holders of Regions Common Stock of record on the books of Regions at the
close of business on the Regions Record Date are entitled to notice of and to
vote at the Regions Special Meeting. As of the Regions Record Date, there were
45,444,454 shares of Regions Common Stock issued and outstanding and held by
approximately 33,000 holders of record of Regions Common Stock

Holders of Regions Common Stock are entitled to one vote on each matter
considered and voted upon at the Regions Special Meeting for each share of
Regions Common Stock held of record as of the Regions Record Date. To hold a
vote on any proposal, a quorum must be assembled, which is a majority of the
shares of Regions Common Stock issued and outstanding, present in person or
represented by proxy. In determining whether a quorum exists at the Regions
Special Meeting for purposes of all matters to be voted on, all votes "for" or
"against," as well as all abstentions, with respect to the proposal receiving
the most such votes, will be counted. The vote required for approval of the
issuance of shares of Regions Common Stock pursuant to the Agreement is a
majority of the votes cast at the Regions Special Meeting by the holders of
shares of Regions Common Stock. Consequently, with respect to the proposal to
approve the issuance of shares of Regions Common Stock pursuant to the
Agreement, abstentions and broker non-votes will not be counted as part of the
base number of votes to be used in determining if the proposal has received the
requisite number of base votes for approval. Thus, an abstention and a broker
non-vote will have no effect on the vote with respect to the proposal.

Shares of Regions Common Stock represented by properly executed proxies, if
such proxies are received in time and not revoked, will be voted in accordance
with the instructions indicated on the proxies. IF NO INSTRUCTIONS ARE
INDICATED, SUCH PROXIES WILL BE VOTED FOR APPROVAL OF THE ISSUANCE OF SHARES OF
REGIONS COMMON STOCK PURSUANT TO THE AGREEMENT AND, IN THE DISCRETION OF THE
PROXY HOLDER, AS TO ANY OTHER MATTER WHICH MAY COME PROPERLY BEFORE THE REGIONS
SPECIAL MEETING. IF NECESSARY, THE PROXY HOLDER MAY VOTE IN FAVOR OF A PROPOSAL
TO ADJOURN THE REGIONS SPECIAL MEETING IN ORDER TO PERMIT FURTHER SOLICITATION
OF PROXIES IN THE EVENT THERE ARE NOT SUFFICIENT VOTES TO APPROVE THE FOREGOING
PROPOSALS AT THE TIME OF THE REGIONS SPECIAL MEETING.

A Regions stockholder who has given a proxy may revoke it at any time prior
to its exercise at the Regions Special Meeting by (i) giving written notice of
revocation to the Secretary of Regions, (ii) properly submitting to Regions a
duly executed proxy bearing a later date, or (iii) attending the Regions Special

14
<PAGE> 160

Meeting and voting in person. All written notices of revocation and other
communications with respect to revocation of proxies should be addressed as
follows: Regions Financial Corporation, 417 North 20th Street, Birmingham,
Alabama 35203; Attention: Samuel E. Upchurch, Jr., Corporate Secretary.

The directors and executive officers of Regions and their affiliates
beneficially owned, as of the Regions Record Date, 1,690,902 shares (or
approximately 3.7% of the issued and outstanding shares) of Regions Common
Stock. Each member of the Board of Directors of Regions has indicated such
director's intention to vote those Regions shares over which such member has
voting authority (other than in a fiduciary capacity) in favor of the issuance
of shares of Regions Common Stock pursuant to the Agreement. The directors and
executive officers of First National and their affiliates beneficially owned, as
of the Regions Record Date, no shares of Regions Common Stock.

In addition, as of the Regions Record Date, various subsidiaries of
Regions, as fiduciaries, custodians, and agents, had sole or shared voting power
over 3,079,140 shares, or 6.8%, of the issued and outstanding shares of Regions
Common Stock, under trust agreements and other instruments and agreements,
including shares held as trustee or agent of various Regions employee benefit
and stock purchase plans. Such subsidiaries held no shares of First National
Common Stock as of the First National Record Date.

15
<PAGE> 161

DESCRIPTION OF TRANSACTION

The following information describes certain aspects of the Merger. This
description does not purport to be complete and is qualified in its entirety by
reference to the Appendices hereto, including the Agreement and the Plan of
Merger, which are attached as Appendices I and II, respectively, to this Joint
Proxy Statement and incorporated herein by reference. All stockholders are urged
to read the Appendices in their entirety.

GENERAL

The Agreement provides for the acquisition of First National by Regions
pursuant to the merger of First National with and into Regions Merger
Subsidiary, a newly formed corporation organized under the laws of the state of
Georgia and a wholly owned subsidiary of Regions. At the Effective Time, each
share of First National Common Stock then issued and outstanding (excluding
shares held by First National, Regions, or their respective subsidiaries, in
each case other than shares held in a fiduciary capacity or in satisfaction of
debts previously contracted) will be converted into and exchanged for 0.76 of a
share of Regions Common Stock (subject to possible adjustment as described
below) (the "Exchange Ratio").

In connection with announcing the Merger, the parties announced that they
may purchase in the open market up to approximately 1.9 million shares of First
National Common Stock or 1.4 million shares of Regions Common Stock or a
combination of the two as part of the Merger and the Other Pending Acquisitions.
The timing and amount of such possible purchases will be determined based on the
prices of the respective common stocks, capital needs, and other factors. As of
the date of this Joint Proxy Statement, First National has purchased, in the
open market, no shares of First National Common Stock and Regions has purchased,
in the open market, approximately 614,000 shares of Regions Common Stock in
connection with the Merger. Under rules promulgated by the SEC under the
Exchange Act, the parties will not be permitted to purchase shares of First
National Common Stock or Regions Common Stock in the open market during the
period commencing two business days prior to the mailing of this Joint Proxy
Statement and ending immediately following the Special Meetings. This limitation
also applies beginning two business days before and ending after any period in
which the Average Closing Price (as defined under "-- Possible Adjustment of
Exchange Ratio") is determined or during corresponding periods relating to the
solicitation of proxies and determination of exchange ratios for the Other
Pending Acquisitions.

As of the First National Record Date, First National had 20,580,670 shares
of First National Common Stock issued and outstanding and 893,722 additional
shares of First National Common Stock subject to First National Rights. Taking
into the account the Exchange Ratio of 0.76 of a share of Regions Common Stock
for each share of First National Common Stock and the anticipated repurchase of
approximately 1.9 million shares of First National Common Stock or 1.4 million
shares of Regions Common Stock or a combination of the two as part of the Merger
and the Other Pending Acquisitions, it is anticipated that upon consummation of
the Merger Regions would issue approximately 14,241,310 shares of Regions Common
Stock excluding 679,229 shares subject to assumed options or grants. Regions
would then have issued and outstanding approximately 60,299,764 shares of
Regions Common Stock based on the number of shares of Regions Common Stock
issued and outstanding on the Regions Record Date and without taking into
account any additional shares of Regions Common Stock issuable in connection
with consummating the Other Pending Acquisitions.

16
<PAGE> 162

POSSIBLE ADJUSTMENT OF EXCHANGE RATIO

First National is not obligated to consummate the Merger with Regions if
both:

(a) the Average Closing Price (defined in the Agreement as the average
of the daily last sale prices of Regions Common Stock on the Nasdaq
National Market System, as reported by The Wall Street Journal or, if not
reported thereby, another authoritative source as selected by Regions) for
the ten consecutive full trading days on which such shares are traded on
the Nasdaq National Market System ending at the close of trading on the
date on which the consent of the Federal Reserve to the Merger shall be
received (the "Determination Date")) is less than $33.20;

and

(b) (i) the quotient obtained by dividing the Average Closing Price by
$41.50 (the "Regions Ratio") is less than (ii) the quotient obtained by
dividing the weighted average of the closing prices (the "Index Price") of
20 designated bank holding companies (the "Index Group") on the
Determination Date by the Index Price on October 20, 1995, less 20% (the
"Index Ratio").

In such case, First National has the right to terminate the Agreement
during the ten-day period commencing two days after the Determination Date by
giving Regions prompt notice of that decision. First National may withdraw its
termination notice at any time during that ten-day period. During the five-day
period after receipt of such notice, Regions has the option to increase the
consideration payable to First National stockholders by increasing the Exchange
Ratio to equal the lesser of (i) the quotient obtained by dividing (1) the
product of $33.20 and the Exchange Ratio (as then in effect) by (2) the Average
Closing Price, and (ii) the quotient obtained by dividing (1) the product of the
Index Ratio and the Exchange Ratio (as then in effect) by (2) the Regions Ratio.
REGIONS IS UNDER NO OBLIGATION TO ADJUST THE EXCHANGE RATIO. If Regions elects
to adjust the Exchange Ratio, it must give First National prompt notice of that
election and of the adjusted Exchange Ratio, in which case First National must
proceed with the Merger.

These conditions reflect the parties' agreement that First National's
stockholders will assume the risk of declines in the value of Regions Common
Stock of up to 20% from the closing price of Regions Common Stock on October 20,
1995 (i.e., $8.30 -- Regions Common Stock would have to decline to $33.20 based
on Regions' closing stock price of $41.50 on October 20, 1995). If the value of
Regions Common Stock were to decline more than 20% from the closing price of
Regions Common Stock on October 20, 1995 but the price of Regions Common Stock
did not decline more than 20% in comparison to the stock prices of the group of
comparable bank holding company stocks (the Index Group referenced above), then
First National's stockholders would continue to assume the risk of decline in
the value of Regions Common Stock. First National has the right to terminate the
Agreement only when the price of Regions Common Stock declines more than 20% and
such decline exceeds by more than 20% the decline in value for the group of
comparable bank holding companies over the same period.

The operation of the adjustment mechanism can be illustrated by three
scenarios. (For purposes of the numerical examples, the Exchange Ratio is 0.76
and the Index Price is, as of October 20, 1995, $100.)

(a) The first scenario occurs if the Average Closing Price is not less than
$33.20. Under this scenario, regardless of any comparison between the Regions
Ratio and the Index Ratio, there would be no right on the part of First National
to terminate the Agreement and therefore no potential adjustment to the Exchange
Ratio, even though the consideration to be received by First National
stockholders would have fallen from a pro forma $31.54 per share to as little as
pro forma $25.232 per share.

(b) The second scenario occurs if the Average Closing Price is less than
$33.20, but does not decline by significantly more (i.e., by more than 20%) than
the decline in the Index Group. Under this scenario, there again would be no
right on the part of First National to terminate the Agreement and therefore no
potential adjustment to the Exchange Ratio, even though the consideration
received by First National stockholders would have fallen from a pro forma
$31.54 per share to something less than pro forma $25.232 per share.

(c) The third scenario arises where the Average Closing Price is below
$33.20 and the Regions Ratio is below the Index Ratio (i.e., Regions' stock
price has declined by more than 20% relative to the price of shares

17
<PAGE> 163

of the Index Group). Under this scenario, First National would have the right to
terminate the Agreement and Regions would have the right, but not the
obligation, to remove such termination right by adjusting the Exchange Ratio. In
this case, the potential adjustment in the Exchange Ratio is designed to ensure
that the First National stockholders receive shares of Regions Common Stock
having a value (based upon the Average Closing Price) that corresponds to not
more than either a 20% decline in the Regions Common Stock price or a 20%
decline from the stock performance reflected by the Index Group.

For example, if the Average Closing Price were $30.00, and the Index Price
on the Determination Date were $93, the Regions Ratio would be 0.72 and would be
below the Index Ratio (0.73, or 0.93 - 0.20). In such a case, First National
could terminate the Agreement unless Regions elected within five days to
increase the Exchange Ratio to equal 0.771, which represents the lesser of (a)
.841 [the result of dividing $25.232 (the product of $33.20 and the 0.76
Exchange Ratio) by the Average Closing Price ($30.00), rounded to the nearest
thousandth] and (b) 0.771 [the result of dividing the Index Ratio (0.73) times
0.76 by the Regions Ratio (0.72), rounded to the nearest thousandth]. Based upon
the assumed $30.00 Average Closing Price, the new Exchange Ratio would represent
a value to the First National stockholders of pro forma $23.12 per share.

If the Average Closing Price were $30.00, and the ending Index Price were
$105, the Regions Ratio would be 0.72 and would be below the Index Ratio (0.85,
or 1.05 - 0.20). In such a case, First National could terminate the Agreement
unless Regions elected within five days to increase the Exchange Ratio to equal
.841, which represents the lesser of (a) 0.841 [the result of dividing $25.232
(the product of $33.20 and the 0.76 Exchange Ratio) by the Average Closing Price
($30.00), rounded to the nearest thousandth] and (b) 0.897 [the result of
dividing the Index Ratio (0.85) times 0.76 by the Regions Ratio (0.72), rounded
to the nearest thousandth]. Based upon the assumed $30.00 Average Closing Price,
the new Exchange Ratio would represent a value to the First National
stockholders of pro forma $25.23 per share.

First National stockholders should be aware that the actual market value of
a share of Regions Common Stock at the Effective Time and at the time
certificates for those shares are delivered following surrender and exchange of
certificates for shares of First National Common Stock may be more or less than
the Average Closing Price. First National stockholders are urged to obtain
information on the trading value of Regions Common Stock that is more recent
than that provided in this Joint Proxy Statement. See "Comparative Market Prices
and Dividends."

EFFECT OF THE MERGER ON STOCK RIGHTS

The Agreement contemplates that at the Effective Time, each First National
Right granted by First National under the First National Stock Plans, as that
term is defined in the Agreement, which are outstanding at the Effective Time,
whether or not exercisable, will be converted into and become rights with
respect to Regions Common Stock, and Regions will assume each First National
Right, in accordance with the terms of the First National Stock Plan and stock
option agreement by which it is evidenced, except that from and after the
Effective Time, (i) Regions and its Compensation Committee will be substituted
for First National and the Committee of First National's Board of Directors
(including, if applicable, the entire Board of Directors of First National)
administering such First National Stock Plan, (ii) each First National Right
assumed by Regions may be exercised solely for shares of Regions Common Stock,
(iii) the number of shares of Regions Common Stock subject to such First
National Right will be equal to the number of shares of First National Common
Stock subject to such First National Right immediately prior to the Effective
Time multiplied by the Exchange Ratio, and (iv) the per share exercise price (or
similar threshold price, in the case of stock awards) under each such First
National Right will be adjusted by dividing the per share exercise (or
threshold) price under each such First National Right by the Exchange Ratio and
rounding up to the nearest cent. Notwithstanding the provisions of clause (iii)
of the preceding sentence, Regions will not be obligated to issue any fraction
of a share of Regions Common Stock upon exercise of First National Rights and
any fraction of a share of Regions Common Stock that otherwise would be subject
to a converted First National Right will represent the right to receive a cash
payment equal to the product of such fraction and the difference between the
market value of one share of Regions Common Stock and the per share exercise
price of such Right. The market value of one share of Regions Common Stock will
be the last sale price of such common stock on the Nasdaq National Market System
(as reported by The Wall Street Journal or, if not

18
<PAGE> 164

reported thereby, any other authoritative source selected by Regions) on the
last trading day preceding the Effective Time. In addition, notwithstanding any
other term in the Agreement, each First National Right which is an "incentive
stock option" will be adjusted as required by Section 424 of the Code, and the
regulations promulgated thereunder, so as not to constitute a modification,
extension, or renewal of the option, within the meaning of Section 424(h) of the
Code.

Significantly, all restrictions or limitations on transfer with respect to
First National Common Stock awarded under the First National Stock Plans or any
other plan, program, or arrangement of any First National company, to the extent
that such restrictions or limitations will not have already lapsed, and except
as otherwise expressly provided in such plan, program, or arrangement, will
remain in full force and effect with respect to shares of Regions Common Stock
into which such restricted stock is converted pursuant to the Agreement.

BACKGROUND OF AND REASONS FOR THE MERGER

Background of the Merger. On April 10, 1995, Richard A. McNeece, Chairman and
Chief Executive Officer of First National, resigned from his positions with
First National and its subsidiaries effective June 30, 1995. Peter D. Miller,
President and Chief Administrative and Financial Officer of First National,
assumed responsibility for day-to-day operations until a successor to Mr.
McNeece could be elected by the First National Board of Directors. After Mr.
McNeece's resignation, the creation of an executive committee (the "Executive
Committee") of the Board of Directors was approved by the Board at its meeting
on April 10, 1995. The following directors were appointed to serve on the
Executive Committee: J. Kenneth Nix (Chairman of the Committee), Jane Wood
Banks, John A. Ferguson, Jr., Peter D. Miller, W. Woodrow Stewart, Bobby M.
Thomas, J. Michael Womble, and Joe Wood, Jr.

After the effective date of Mr. McNeece's resignation, several directors,
including Mr. Miller, were contacted by various regional banking organizations
which expressed an interest in discussing a merger with First National if the
Board determined that First National should no longer remain independent. These
contacts were reported to the Executive Committee and to the Board at its
meeting on July 19, 1995.

Due to the level of interest exhibited in First National, Mr. Miller, with
the approval of the Executive Committee and the Board, retained Morgan Stanley
to help it assess management's five-year business plan and the intrinsic value
of First National Common Stock based on such business plan. At the Executive
Committee meeting on August 16, 1995, Morgan Stanley made a presentation to the
Executive Committee regarding its preliminary findings in connection with the
business plan and its valuation of First National. The Executive Committee
decided that Morgan Stanley should make its presentation to the Board at a
meeting to be held later in August. The Executive Committee also asked
management to review with the Board the basic strategic alternatives designed to
enhance stockholder value and the feasibility of pursuing such alternatives.

At the August 21, 1995 Board meeting, management reviewed various strategic
alternatives. These included primarily (i) continued growth in earnings by First
National on an independent basis, including acquisitions of smaller institutions
from time-to-time and various other assumptions, and (ii) a merger with or sale
to a larger banking organization. Morgan Stanley discussed and delivered a
presentation on management's five-year business plan and the intrinsic value of
First National Common Stock based on such business plan. Based on management's
five-year business plan, the Board was generally of the view that projected
earnings growth supported a continued independent position for at least some
period of time, although it was recognized that there was a possibility that, at
some point, any of several institutions that had capacity might offer a price
that would warrant serious consideration and potentially result in an agreement
to merge or be otherwise acquired.

After the August 21 Board meeting, Mr. Miller continued to receive strong
expressions of interest in a possible merger with First National from Regions.
Due to the level of interest expressed by Regions, Mr. Miller called a special
Board meeting on September 15, 1995. At the meeting, Mr. Miller reported on
conversations with William E. Jordan, a Regional President of Regions, and also
reviewed strategic alternatives for the Board to consider. Special counsel to
First National reviewed the fiduciary duties of directors in determining whether
First National should remain independent or merge with or sell to another

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institution. The Board decided that it was in the best interest of First
National and its stockholders to determine the current value of First National
in a merger exchange transaction. If this could be determined, it could be
compared to the intrinsic value of First National Common Stock based on the
five-year business plan. With that information, the Board felt it could make a
better decision whether it was in the best interest of the stockholders for
First National to remain independent. The Executive Committee was charged with
the task of such determination based on discreet inquiry of a select number of
banking organizations which had previously expressed an interest in acquiring
First National. The Board authorized the Executive Committee to retain an
investment advisor, and the Executive Committee subsequently retained Morgan
Stanley as investment advisor to assist in this task. The Board understood that
if the exchange value proposed by one or more such organizations was
significantly higher than the intrinsic value of First National based on the
business plan, the Board might have the duty to negotiate a merger with one of
the organizations. As part of these considerations, the Board was also aware
that certain stockholders of First National desired that First National consider
a sale transaction and had communicated their strategic desire for First
National to the Board.

On October 16, 1995, the Executive Committee met by telephone conference
call, and Mr. Miller reported that he had met with representatives of four
regional banking organizations, one of which was Regions, and that Morgan
Stanley had contacted three other organizations. These four organizations
indicated a strong interest in acquiring First National through merger and
intended to provide Mr. Miller or Morgan Stanley with a possible exchange value
for First National Common Stock which the respective organizations would be
willing to offer in a merger transaction.

At the regular Board meeting on October 18, 1995, Mr. Miller reported to
the Board that the process of making inquiry of interested banking organizations
was almost complete and that he anticipated having responses from the various
interested banking organizations for the Executive Committee to review by the
end of the week. He stated that after the Executive Committee reviewed the
responses and a presentation from Morgan Stanley, the Executive Committee would
make a recommendation to the Board.

On October 18, 1995, the Executive Committee met following the regular
meeting of the Board, and Mr. Miller reported briefly on the responses of the
four organizations with which he had met. He stated that he would like to hold
an Executive Committee meeting on October 20, 1995 to present a full report to
the Committee, including a presentation from Morgan Stanley.

On October 20, 1995, the Executive Committee met and received a
presentation from Morgan Stanley regarding the possible merger partners. The
report provided certain financial information about the banking organizations
which had expressed the highest level of interest in acquiring First National,
the past financial performance of each of these regional banking organizations,
and the preliminary value each organization placed on First National Common
Stock. Regions had placed the highest preliminary value of those contacted on
First National Common Stock and was determined by the Executive Committee to be
the most compatible banking organization for a merger with First National. The
Executive Committee determined that the Regions valuation was within a range
that the Executive Committee felt would make it in the best interests of the
First National stockholders for First National to merge with Regions. As a
result, the Executive Committee determined that actual merger negotiations
should proceed with Regions, pending a meeting of the First National Board of
Directors to be called.

On the afternoon of October 20, 1995, Mr. Miller, with the assistance of
Morgan Stanley, negotiated with management of Regions, and Regions made a
revised proposal of 0.76 of a share of Regions Common Stock for each share of
First National Common Stock (which based on the then current market price of
Regions Common Stock represented approximately $31.54 per share of First
National Common Stock). This was reported to each member of the Executive
Committee and they directed Mr. Miller to proceed to call a Board Meeting.

On October 22, 1995, the Executive Committee met and reviewed a proposed
merger agreement and the details of the merger. The Executive Committee voted to
recommend to the Board that the agreement be approved.

Immediately after the Executive Committee meeting, the First National Board
of Directors met and Mr. Miller reviewed the events leading up to the meeting,
including the deliberations of the Executive

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Committee regarding whether independence or merger with Regions was in the best
interest of the First National stockholders. He also summarized the level of
interest from other regional banking organizations. Special counsel to the Board
reviewed generally the fiduciary obligations of directors in considering
strategic alternatives, mergers, and sales, and reviewed the merger agreement
negotiated with Regions. Morgan Stanley made a presentation describing the
results of various financial analyses in connection with the transaction on the
basis proposed by Regions, a comparison of First National as an independent
enterprise, and review of the Regions Common Stock to be received in the Merger.
Morgan Stanley reported its preliminary view that, subject to completion of due
diligence and certain other factors, the Exchange Ratio was fair, from a
financial point of view, to the stockholders of First National. Special counsel
to the Board also reported that Regions was firm on a customary stock option
arrangement as a condition of the transaction and reviewed the Stock Option
Agreement with the Board. After further discussion and consideration of the
factors described below, the First National Board approved and authorized
execution of the Agreement and the Stock Option Agreement.

First National's Reasons for the Merger. In approving the Agreement, the
Plan of Merger, and the Merger, the directors of First National considered a
number of factors. Without assigning any relative or specific weights to the
factors, the First National Board of Directors considered the following material
factors:

(a) the financial terms of the Merger, including the Exchange Ratio,
the projected current value of First National in a freely negotiated
transaction, an estimate of the future value of First National as an
independent entity, and the relationship of the market value of Regions
Common Stock to the market value, tangible book value, and earnings per
share of First National Common Stock;

(b) the public financial information presented to the directors by
Morgan Stanley concerning Regions;

(c) the treatment of the Merger as a tax-free exchange of First
National Common Stock for Regions Common Stock for federal income tax
purposes;

(d) the compatibility of the community bank orientation of the
operations of Regions to that of First National, and the impact of the
Merger on the employees of First National and the communities and customers
served by First National's subsidiary banks;

(e) the advice rendered by Morgan Stanley as to the fairness, from a
financial point of view, of the Exchange Ratio to the holders of First
National Common Stock; and

(f) the report of Morgan Stanley reviewing a comparison of Regions to
selected peer banking organizations and of premiums paid in other merger
transactions;

The terms of the Merger were the result of arm's-length negotiations
between representatives of First National and representatives of Regions. Based
upon its consideration of the foregoing factors, the Board of Directors of First
National approved the Agreement, the Plan of Merger, and the Merger as being in
the best interests of First National and its stockholders.

First National's Board of Directors recommends that First National
stockholders vote FOR approval of the Agreement and the Plan of Merger.

Regions' Reasons for the Merger. In approving the Agreement and the
Merger, the Regions Board considered a number of factors concerning the benefits
of the Merger. Without assigning any relative or specific weights to the
factors, the Regions Board of Directors considered the following material
factors:

(a) the information presented to the directors by the management of
Regions concerning the business, operations, earnings, asset quality, and
financial condition of First National, including the composition of the
earning assets portfolio of First National;

(b) the financial terms of the Merger, including the relationship of
the value of the consideration issuable in the Merger to the market value,
tangible book value, and earnings per share of First National Common Stock;

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(c) the nonfinancial terms of the Merger, including the treatment of
the Merger as a tax-free exchange of First National Common Stock for
Regions Common Stock for federal income tax purposes;

(d) the likelihood of the Merger being approved by applicable
regulatory authorities without undue conditions or delay;

(e) the opportunity for reducing the noninterest expense of the
operations of First National and the ability of the operations of First
National after the Effective Time to contribute to the earnings of Regions;

(f) the attractiveness of the First National franchise, the market
position of First National in each of the markets in which it operates, and
the compatibility of the franchise of First National with the operations of
Regions in the state of Georgia;

(g) the compatibility of the community bank orientation of the
operations of First National to that of Regions;

(h) the report of Bear Stearns reviewing a comparison of First
National to selected peer banks and of premiums paid in other merger
transactions; and

(i) the advice rendered by Bear Stearns as to the fairness, from a
financial point of view, of the Exchange Ratio to the holders of Regions
Common Stock.

Regions' Board of Directors recommends that Regions stockholders vote FOR
approval of the issuance of shares of Regions Common Stock pursuant to the
Agreement.

OPINION OF FIRST NATIONAL'S FINANCIAL ADVISOR

First National retained Morgan Stanley to act as its financial advisor in
connection with the Merger. Morgan Stanley was selected by the Executive
Committee of First National to act as First National's financial advisor based
on Morgan Stanley's qualifications, expertise; and reputation. On October 31,
1995, Morgan Stanley rendered its opinion to the First National Board that,
based upon and subject to the various considerations set forth in the opinion,
on the date thereof the Exchange Ratio was fair, from a financial point of view,
to the holders of First National Common Stock (other than Regions and its
affiliates). Morgan Stanley subsequently confirmed its opinion by delivering a
written opinion dated the date of this Joint Proxy Statement.

THE FULL TEXT OF THE OPINION DATED THE DATE OF THIS JOINT PROXY STATEMENT
WHICH SETS FORTH, AMONG OTHER THINGS, THE ASSUMPTIONS MADE, PROCEDURES FOLLOWED,
MATTERS CONSIDERED, AND LIMITATIONS ON THE REVIEW UNDERTAKEN, IS ATTACHED AS
APPENDIX III TO THIS JOINT PROXY STATEMENT AND IS INCORPORATED HEREIN BY
REFERENCE. FIRST NATIONAL STOCKHOLDERS ARE URGED TO READ THIS OPINION CAREFULLY
AND IN ITS ENTIRETY IN CONJUNCTION WITH THIS JOINT PROXY STATEMENT. MORGAN
STANLEY'S OPINION ADDRESSES ONLY THE FAIRNESS OF THE EXCHANGE RATIO FROM A
FINANCIAL POINT OF VIEW AND DOES NOT CONSTITUTE A RECOMMENDATION TO ANY
STOCKHOLDER OF FIRST NATIONAL AS TO HOW SUCH STOCKHOLDER SHOULD VOTE WITH
RESPECT TO THE MERGER. THE SUMMARY OF THE OPINION OF MORGAN STANLEY SET FORTH IN
THIS JOINT PROXY STATEMENT IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL
TEXT OF SUCH OPINION.

In connection with rendering its written opinion dated the date of the
Joint Proxy Statement, Morgan Stanley, among other things: (i) analyzed certain
publicly available financial statements and other information of First National
and Regions, respectively; (ii) analyzed certain internal financial statements
and other financial and operating data concerning First National prepared by the
management of First National; (iii) reviewed certain internal financial
statements concerning Regions prepared by the management of Regions; (iv)
analyzed certain financial projections prepared by the management of First
National and Regions, respectively; (v) discussed the past and current
operations and financial condition and the prospects of Regions and First
National with senior executives of Regions and First National, respectively;
(vi) reviewed the reported prices and trading activity for the First National
Common Stock and the Regions Common Stock; (vii) compared the financial
performance of First National and Regions and the prices and trading activity of
the First National Common Stock and the Regions Common Stock with that of
certain other

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comparable publicly-traded companies and their securities; (viii) discussed the
results of certain regulatory examinations of First National and Regions with
the senior managements of the respective companies; (ix) reviewed and discussed
with the senior managements of First National and Regions the strategic
objectives of the Merger and the synergies and certain other benefits of the
Merger; (x) reviewed and discussed with the senior managements of First National
and Regions certain estimates of the cost savings expected to result from the
Merger; (xi) reviewed the financial terms, to the extent publicly available, of
certain comparable merger transactions; (xii) participated in discussions and
negotiations among representatives of First National and Regions and their
financial and legal advisors; (xiii) reviewed the Agreement, the Stock Option
Agreement, and certain related documents; and (xiv) performed such other
analyses as it deemed appropriate.

In rendering its opinion, Morgan Stanley assumed and relied upon without
independent verification the accuracy and completeness of the information
reviewed by Morgan Stanley for the purposes of its opinion. With respect to the
financial projections, including the estimates of synergies, cost savings, and
other benefits expected to result from the Merger, Morgan Stanley assumed that
they have been reasonably prepared on bases reflecting the best currently
available estimates and judgments of the future financial performance of First
National and Regions, respectively. Morgan Stanley has not made any independent
valuation or appraisal of the assets or liabilities of First National and
Regions, nor has Morgan Stanley been furnished with any such appraisals and
Morgan Stanley has not examined any loan files of First National or Regions.
Morgan Stanley's opinion is necessarily based on economic, market, and other
conditions as in effect on, and the information made available to Morgan Stanley
as of, the date of the opinion.

The following is a brief summary of the analyses performed by Morgan
Stanley in preparation for its presentation to the Board of Directors of First
National on October 22, 1995 with respect to the Merger, and in connection with
rendering its opinion to the First National Board on October 31, 1995 and the
date of this Joint Proxy Statement.

Exchange Ratio and Stock Price Performance Analysis. Morgan Stanley
reviewed the performance, over the three- and five-year periods ending October
18, 1995, of the closing price of First National Common Stock and Regions Common
Stock relative to the closing price of the Morgan Stanley Bank Index. Morgan
Stanley also analyzed the ratio of closing prices per share of First National
Common Stock and Regions Common Stock during the period from October 18, 1990
through October 18, 1995. Morgan Stanley observed that such Exchange Ratio had
averaged approximately 0.609 during such period (with a high of approximately
0.825 and a low of approximately 0.5000) and had averaged 0.676 over the
one-month period prior to October 18, 1995 and 0.679 over the one-week period
prior to October 18, 1995.

Comparable Company Analysis. Comparable company analysis analyzes a
company's operating performance relative to a group of publicly traded peers.
Based on relative performance and outlook for a company versus its peers, this
analysis enables an implied unaffected market trading value to be determined.
Morgan Stanley analyzed the operating performance of First National relative to
a group of 11 Southeastern bank holding companies (the "Southeastern
Comparables") and 35 regional bank holding companies (the "Morgan Stanley Bank
Index") (together, the "Comparables").

Morgan Stanley analyzed the relative performance and value of First
National by comparing certain market trading statistics for First National with
the Comparables. Market information used in ratios provided below is as of
October 20, 1995. The market trading information used in the valuation analysis
was market price to book value (which was 1.9x for First National; 1.7x for the
Southeastern Comparables; and 1.9x for the Morgan Stanley Bank Index), market
price to earnings per share estimates for 1995 (which was 17.0x for First
National; 11.9x for the Southeastern Comparables; and 12.0x for the Morgan
Stanley Bank Index), and market price to earnings per share estimates for 1996
(which was 14.3x for First National; 10.8x for the Southeastern Comparables; and
10.9x for the Morgan Stanley Bank Index). Earnings per share estimates for First
National, the Southeastern Comparables, and the Morgan Stanley Bank Index were
based on Institutional Brokers Estimate System ("IBES") estimates as of
September 14, 1995. IBES is a data service that monitors and publishes
compilations of earning estimates produced by selected research analysts
regarding companies of interest to institutional investors.

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In determining the implied range of values for the First National Common
Stock derived from the analysis of the Comparables' market price to 1995 and
1996 earnings per share estimates, Morgan Stanley used earnings estimates from
two sources : (i) IBES estimates as of September 14, 1995 (the "IBES Case"); and
(ii) First National (the "Company Case"). The implied range of values for the
First National Common Stock were: approximately $20 per share to approximately
$22 per share in the IBES Case; and approximately $21 per share to approximately
$24 per share in the Company Case. The implied range of values for the First
National Common Stock derived from the analysis of the Comparables market price
to book value ranged from $26 per share to $29 per share.

No company or transaction used in the comparable company and comparable
transaction analyses is identical to First National or the Merger. Accordingly,
an analysis of the results of the foregoing necessarily involves complex
considerations and judgments concerning differences in financial and operating
characteristics of First National and other factors that could affect the public
trading value of the companies to which they are being compared. Mathematical
analysis (such as determining the average or median) is not in itself a
meaningful method of using comparable transaction data or comparable company
data.

Dividend Discount Analysis. Morgan Stanley performed dividend discount
analyses to determine a range of present values per share of First National
Common Stock assuming First National continued to operate as a stand-alone
entity. This range was determined by adding (i) the present value of the
estimated future dividend stream that First National could generate over the
period beginning in October 1995 and ending in December 2000 and (ii) the
present value of the "terminal value" of First National Common Stock at the end
of the year 2000. To determine a projected dividend stream, Morgan Stanley
assumed a dividend payout ratio equal to 45% of First National's projected net
income. Morgan Stanley used earnings estimates from two sources in determining
First National's projected net income: (i) IBES estimates as of September 14,
1995 for 1995 and 1996 and an IBES growth rate for 1997 through 2000 (the "IBES
Case"); and, (ii) First National's estimates for 1995 through 2000 (the "Company
Case"). The "terminal value" of First National Common Stock at the end of the
five-year period was determined by applying two price-to-earnings multiples
(10.0x and 12.0x) to year 2000 projected net income for First National. The
dividend stream and terminal values were discounted to present values using
discount rates of 12.5%, 13.5%, and 14.5%. Applying the above multiples and
discount rates, the fully diluted stand-alone value of First National Common
Stock ranged from: approximately $17 per share to approximately $21 per share in
the IBES Case; and, approximately $23 per share to approximately $27 per share
in the Company Case.

Value of Potential Cost Savings. In order to estimate an implied value of
the First National Common Stock to an acquiror, the value of potential future
cost savings was estimated by Morgan Stanley using a present value calculation
similar to the dividend discount analysis. Based on discussions with First
National management regarding their estimates of the cost savings expected to
result from the Merger, Morgan Stanley determined the net theoretical present
value of the cost savings that could result if First National were acquired. The
managements' estimates for such cost savings ranged from 15%-25% of First
National's core non-interest expense (i.e., excluding OREO expenses and any
non-recurring charges). Based on discount rates of 12.5% to 14.5%, a realization
of cost savings over two years (50% in the first year, 100% thereafter), a
restructuring charge incurred in the first year following the Merger equal to
the full cost savings, and applying a terminal multiples of 10.0x and 12.0x to
year 2000 projected cost savings, the present values of the cost savings ranged
from approximately $3.00 per share to approximately $5.00 per share. This
analysis did not consider any loss in value that could result if divestitures of
deposits or assets were required upon an acquisition of First National.

Comparable Transaction Analysis. Using publicly available information,
Morgan Stanley performed an analysis of certain merger and acquisition
transactions involving selected holding companies of commercial banks in order
to obtain a valuation range for the First National Common Stock based upon
certain comparable transactions that, in Morgan Stanley's judgment, were deemed
comparable for purposes of this analysis, although Morgan Stanley noted that no
transaction was identical to the Merger. Multiples of book value and earnings
implied by the consideration to be received by stockholders of First National in
the Merger were compared with multiples paid in ceratin other comparable merger
transactions. The comparison included a total of seven transactions. The
transactions examined were (acquiree/acquiror): Intercontinental Bank/

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NationsBank Corporation, TCBankshares, Inc./Mercantile Bancorporation, Security
Capital Bancorp/CCB Financial Corporation, NBSC Corporation/Synovus Financial
Corporation, Worthen Banking Corporation/Boatmen's Bancshares, Inc., Grenada
Sunburst System Corp./Union Planters Corporation, and Commerce Bank/BB&T
Financial Corporation. In terms of price to book multiple, the mean for the
comparable transactions was 2.1x compared to approximately 2.1x for the Merger.
In terms of price to last twelve months earnings, the adjusted mean for the
comparable transactions was 16.3x compared to approximately 19.5x for the
Merger. For the comparable transactions, multiples of book value ranged from
1.9x to 2.4x and the price to last twelve month earnings ranged from 10.2x to
34.3x.

In connection with its opinion dated as of the date of the Joint Proxy
Statement, Morgan Stanley confirmed the appropriateness of its reliance on the
analyses used to render its October 31, 1995 opinion by performing certain
procedures to update certain of such analyses and by reviewing the assumptions
upon which such analyses were based and the factors considered in connection
therewith.

The preparation of a fairness opinion is a complex process and is not
necessarily susceptible to a partial analysis or summary description. Morgan
Stanley believes that its analyses must be considered as a whole and that
selecting portions of its analyses, without considering the analyses taken as a
whole, would create an incomplete view of the process underlying the analyses
set forth in its opinions. In addition, Morgan Stanley considered the results of
all such analyses and did not assign relative weights to any of the analyses, so
that the ranges of valuations resulting from any particular analysis described
above should not be taken to be Morgan Stanley's view of the actual value of
First National. In performing its analyses, Morgan Stanley made numerous
assumptions with respect to industry performance, general business and economic
conditions, and other matters, many of which are beyond the control of First
National or Regions. The analyses performed by Morgan Stanley are not
necessarily indicative of actual values, which may be significantly more or less
favorable than suggested by such analyses. Such analyses were prepared solely as
a part of Morgan Stanley's October 31, 1995 opinion. The analyses do not purport
to be appraisals or to reflect the prices at which a company might actually be
sold. In addition, as described above, Morgan Stanley's opinion and the
information provided by it to the First National Board were one of many factors
taken into consideration by the First National Board in making its determination
to approve the Merger. Consequently, the Morgan Stanley analysis described above
should not be viewed as determinative of the First National Board's or
management's opinion with respect to the value of First National or of whether
the First National Board or First National management would have been willing to
agree to different Exchange Ratios.

First National's Board of Directors retained Morgan Stanley based upon its
experience and expertise. Morgan Stanley is an internationally recognized
investment banking and advisory firm. Morgan Stanley, as part of its investment
banking business, is continuously engaged in the valuation of businesses and
securities in connection with mergers and acquisitions, negotiated
underwritings, competitive biddings, secondary distributions of listed and
unlisted securities, private placements, and valuations for corporate and other
purposes. In the course of its market making and other trading activities,
Morgan Stanley may, from time to time, have a long or short position in, and may
buy and sell, securities of First National and Regions. In the past, Morgan
Stanley and its affiliates have provided financial advisory and financing
services to First National and have received fees for the rendering of these
services.

Pursuant to a letter agreement dated as of September 26, 1995, First
National has agreed to pay Morgan Stanley an advisory fee estimated to be
$75,000 (not to exceed $100,000 without First National's prior approval) if the
Merger is not consummated, an opinion fee of $1.0 million which is currently
payable, and if the Merger is consummated, a transaction fee equal to $3.3
million (against which any advisory fee or opinion fee paid will be credited).
In addition to the foregoing compensation, First National has agreed to
reimburse Morgan Stanley for its expenses and to indemnify Morgan Stanley and
its affiliates, their respective directors, officers, agents, and employees, and
each person, if any, controlling Morgan Stanley or any of its affiliates against
certain liabilities and expenses, including certain liabilities under the
federal securities laws, related to Morgan Stanley's engagement.

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OPINION OF REGIONS' FINANCIAL ADVISOR

Regions retained Bear Stearns by letter agreement dated October 27, 1995,
to act as financial advisor and to render a fairness opinion in connection with
Regions' intended acquisition of First National. Bear Stearns was selected
because of its reputation as an internationally recognized investment banking
firm with substantial experience in mergers and acquisitions. No limitations
were imposed by Regions upon Bear Stearns with respect to the investigations
made or procedures followed by it in rendering its opinions. On October 31,
1995, Bear Stearns advised Regions' Board of Directors that the Exchange Ratio
was fair, from a financial point of view, to the stockholders of Regions. Bear
Stearns confirmed its opinion in writing as of the date of this Joint Proxy
Statement (such opinion, as updated on the date hereof, being referred to herein
as the "Bear Stearns' Fairness Opinion").

THE FULL TEXT OF THE WRITTEN BEAR STEARNS' FAIRNESS OPINION DATED THE DATE
HEREOF, WHICH SETS FORTH CERTAIN ASSUMPTIONS MADE, MATTERS CONSIDERED, AND
LIMITATIONS ON THE REVIEWS UNDERTAKEN, IS ATTACHED HERETO AS APPENDIX IV AND IS
INCORPORATED HEREIN BY REFERENCE, AND SHOULD BE READ IN ITS ENTIRETY IN
CONNECTION WITH THIS JOINT PROXY STATEMENT. THE SUMMARY OF THE BEAR STEARNS'
FAIRNESS OPINION SET FORTH HEREIN IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
THE OPINION. THE BEAR STEARNS' FAIRNESS OPINION DISCUSSED HEREIN IS NOT A
CONDITION TO CONSUMMATION OF THE MERGER.

Bear Stearns' Fairness Opinion is directed only to the fairness of the
Exchange Ratio, from a financial point of view, to Regions' stockholders and
does not constitute a recommendation to any Regions stockholder as to how such
stockholder should vote at the Regions Meeting.

The consideration to be paid by Regions in the Merger was determined by the
respective Boards of Directors of First National and Regions after negotiations
between the respective managements of First National and Regions. Each holder of
First National Common Stock will receive 0.76 of a share of Regions Common Stock
for each share of First National Common Stock. Based upon Regions' closing stock
price of $41.50 on October 20, 1995, the last trading day prior to announcement
of the transaction, Bear Stearns calculated an acquisition price per share of
First National Common Stock of $31.54 (the "Per Share Consideration") or in
aggregate terms, approximately $648 million (the "Aggregate Consideration"). For
purposes of rendering the Bear Stearns' Fairness Opinion, Bear Stearns:
(i) reviewed the Joint Proxy Statement in substantially the form to be sent to
stockholders, including a copy of the Agreement; (ii) reviewed Regions' Annual
Report to Stockholders and Annual Report on Form 10-K for the fiscal year ended
December 31, 1994, and its Quarterly Reports on Form 10-Q for the periods ended
March 31, June 30, and September 30, 1995; (iii) reviewed First National's
Annual Report to Stockholders and Annual Report on Form 10-K for the fiscal year
ended December 31, 1994, its Quarterly Reports on Form 10-Q for the periods
ended March 31, June 30, and September 30, 1995, and the Proxy
Statement/Prospectus dated May 1, 1995 of First National used in connection with
the FF Bancorp Acquisition; (iv) reviewed certain operating and financial
information provided to it by Regions' management relating to its business and
prospects and reviewed certain operating and financial information, including
projections, provided to it by First National's management relating to its
business and prospects; (v) met with certain members of Regions and First
National's senior management to discuss their operations, historical financial
statements, and future prospects; (vi) reviewed the historical prices and
trading volumes of the shares of Regions Common Stock and First National Common
Stock; (vii) reviewed publicly available financial data and stock market
performance data of companies which it deemed generally comparable to Regions
and First National; (viii) reviewed the terms of recent acquisitions of
companies which it deemed generally comparable to the Merger; and (ix) conducted
such other studies, analyses, inquiries, and investigations as it deemed
appropriate.

In conducting its review and arriving at and updating Bear Stearns'
Fairness Opinion, Bear Stearns relied upon and assumed the accuracy and
completeness of the financial and other information regarding Regions and First
National provided to Bear Stearns by Regions and First National or publicly
available, and Bear Stearns did not independently verify such information. With
respect to Regions' and First National's projected financial results, Bear
Stearns assumed that such results have been reasonably prepared on bases
reflecting the best currently available estimates and judgments of the
managements of Regions and First National as to the

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expected future performance of Regions and First National, respectively. Bear
Stearns did not assume any responsibility for the information or projections
provided to Bear Stearns and further relied upon the assurances of the
managements of Regions and First National that they were unaware of any facts
that would make the information or projections provided to Bear Stearns
incomplete or misleading. In arriving at its opinion, Bear Stearns did not
perform or obtain any independent appraisal of the assets of Regions or First
National.

The following is a summary of the analyses performed by Bear Stearns in
connection with its opinion rendered on October 31, 1995 (which are
substantially the same types of analyses performed by Bear Stearns in connection
with the updated Bear Stearns' Fairness Opinion):

Financial Statement Review of First National: Bear Stearns reviewed First
National's Annual Report to Stockholders and Annual Report on Form 10-K for the
fiscal year ended December 31, 1994 and Quarterly Reports on Form 10-Q for the
periods ended March 31, June 30, and September 30, 1995, and calculated growth
rates for various balance sheet and income statement line items. Net interest
income increased at a 9.5% compound annual growth rate from December 31, 1992 to
December 31, 1994 while net income increased at a 9.4% compound annual growth
rate for the same time period. Nonperforming assets decreased by approximately
33% from June 30, 1993 to June 30, 1995.

Review of Companies Comparable to First National: Bear Stearns performed an
analysis of First National's financial performance and stock market trading data
by comparing the stock price to book value, stock price to tangible book value,
stock price to latest twelve months earnings per share ("LTM EPS"), and stock
price to estimated 1996 earnings per share ("EPS") (based on projections from
First National management) of First National to seven publicly traded commercial
banks located in the Southeast with total assets of $2.0 billion to $4.0 billion
(the "Southeastern Institutions"). The Southeastern Institutions included:
United Carolina Bancshares; One Valley Bancorp of WV, Inc.; Colonial BancGroup,
Inc.; National Commerce Bancorp.; BancorpSouth, Inc.; Hancock Holding Company,
and Jefferson Bankshares, Inc.

Bear Stearns compared the multiples of stock price to book value, tangible
book value, LTM EPS, and estimated 1996 EPS of First National to the respective
harmonic means of these multiples for the Southeastern Institutions. Using
closing stock prices from October 20, 1995, Bear Stearns calculated (i) a stock
price to book value multiple for First National of 1.94 times, as compared to a
harmonic mean of 1.76 times for the Southeastern Institutions, (ii) a stock
price to tangible book value multiple for First National of 2.00 times, as
compared to a harmonic mean of 1.95 times for the Southeastern Institutions,
(iii) a stock price to LTM EPS multiple for First National of 17.7 times, as
compared to a harmonic mean of 13.1 times for the Southeastern Institutions, and
(iv) a price to estimated 1996 EPS for First National of 13.1 times (based on
projections from First National management), as compared to a harmonic mean of
11.5 times for the Southeastern Institutions.

Review of Companies Comparable to Regions: Bear Stearns performed an
analysis of Regions financial performance and stock market trading data by
comparing the stock price to book value, stock price to tangible book value,
stock price to LTM EPS, and stock price to estimated 1996 EPS (based on
projections from Regions management) of Regions to six publicly traded
commercial banks located in the Southeast with total assets of $10 billion to
$20 billion (the "Regions Peer Group"). The Regions Peer Group included:
Southern National Corporation; SouthTrust Corporation; AmSouth Bancorporation;
First Tennessee National Corp.; Compass Bancshares, Inc.; and Union Planters
Corporation.

Bear Stearns compared the multiples of stock price to book value, tangible
book value, LTM EPS, and estimated 1996 EPS of Regions to the respective
harmonic means of these multiples for the Regions Peer Group. Using closing
stock prices from October 20, 1995, Bear Stearns calculated (i) a stock price to
book value multiple for Regions of 1.72 times, as compared to a harmonic mean of
1.80 times for the Regions Peer Group, (ii) a stock price to tangible book value
multiple for Regions of 1.89 times, as compared to a harmonic mean of 2.10 times
for the Regions Peer Group, (iii) a stock price to LTM EPS multiple for Regions
of 11.4 times, as compared to a harmonic mean of 14.3 times for the Regions Peer
Group, and (iv) a price to estimated 1996 EPS for Regions of 10.4 times (based
on projections from Regions management), as compared to a harmonic mean of 10
times for the Regions Peer Group.

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Review of Mergers Comparable to the Merger: Bear Stearns performed an
analysis of the Per Share Consideration offered to the First National
stockholders in the Merger by comparing the multiples represented by such
consideration to the book value, tangible book value, LTM EPS, and premium over
tangible book value to core deposits for First National to the respective
multiples of the per share consideration received by stockholders in the
following two subsets of publicly announced commercial bank acquisitions: (i) 25
transactions (excluding merger of equals transactions) valued at over $25
million since January 1, 1994 where the seller was located in the Southeast (the
"Southeast Mergers"), and (ii) 13 transactions (excluding mergers-of-equals
transactions) valued at over $400 million since January 1, 1995 (the "Nationwide
Mergers"). The Southeastern Mergers included (acquiror/acquiree): First Charter
Corporation/Bank of Union; NationsBank Corporation/Bank South Corporation;
Regions Financial Corporation/Metro Financial Corporation; First American
Corporation/First City Bancorp, Inc.; NationsBank Corporation/Intercontinental
Bank; BancorpSouth, Inc./Wes-Tenn Bancorp Inc.; First Commercial Corporation/FDH
Bancshares, Inc.; Union Planters Corporation/Eastern National Bank; Deposit
Guaranty Corp./First Merchants Financial Corp.; City Holding Company/First
Merchants Bancorporation; First Tennessee National Corp./Financial Investment
Corp; Mercantile Bancorporation/TCBankshares Inc.; CCB Financial
Corporation/Security Capital Bancorp; Synovus Financial Corp./NBSC Corporation;
First Tennessee National Corp./Community Bancshares Inc.; NationsBank
Corporation/Consolidated Bank, N.A.; Boatmen's Bancshares, Inc./Worthen Banking
Corp.; Huntington Bancshares Inc./Security National Corp; Regions Financial
Corporation/Union Bank and Trust Company; Union Planters Corporation/Grenada
Sunburst System Corp.; BB&T Financial Corporation/Commerce Bank; NationsBank
Corporation/RHNB Corporation; Mercantile Bankshares Corp./Fredericksburg
National Bancorp; Trustmark Corporation/First National Financial Corp.; and
AmSouth Bancorporation/Tampa Banking Co. The Nationwide Mergers included
(acquiror/acquiree): CoreStates Financial Corp/Meridian Bancorp, Inc.; UJB
Financial Corp./Summit Bancorporation; NationsBank Corporation/Bank South
Corporation; National City Corporation/Integra Financial Corp.; Boatmen's
Bancshares, Inc./Fourth Financial Corporation; First Bank System, Inc./FirsTier
Financial; Banc One Corporation/Premier Bancorp, Inc.; PNC Bank Corp./Midlantic
Corporation; First Union Corporation/First Fidelity Bancorporation; U.S.
Bancorp/West One Bancorp; PNC Bank Corp./Chemical NJ Holdings; Fleet Financial
Group/Shawmut National Corporation; and National Australia Bank/Michigan
National Corporation.

Bear Stearns compared the multiples of the Per Share Consideration to First
National's book value, tangible book value, and LTM EPS to the respective
harmonic means of these multiples for the Southeast Mergers and the Nationwide
Mergers. Bear Stearns calculated (i) an acquisition price to book value multiple
for the Merger of 2.13 times, as compared to harmonic means of 2.05 times and
1.94 times for the Southeast Mergers and the Nationwide Mergers, respectively,
(ii) an acquisition price to tangible book value multiple for the Merger of 2.19
times, as compared to harmonic means of 2.16 times and 2.15 times for the
Southeast Mergers and the Nationwide Mergers, respectively, (iii) an acquisition
price to LTM EPS multiple for the Merger of 19.5 times, as compared to harmonic
means of 17.8 times and 14.1 times for the Southeast Mergers and the Nationwide
Mergers, respectively. Bear Stearns also compared the premium represented by the
Per Share Consideration over First National's tangible book value to core
deposits of 16.3% to the median values for the Southeast Mergers (12.0%) and the
Nationwide Mergers (14.3%) and the mean values for the Southeast Mergers (12.9%)
and the Nationwide Mergers (14.0%).

Stock Price Review: Bear Stearns reviewed the trading prices of First
National Common Stock and Regions Common Stock from January 1, 1991 to October
25, 1995, and in particular, noted that Regions' closing stock price of $41.50
on October 20, 1995, was its all time high. Bear Stearns also compared the
trading prices of Regions Common Stock and First National Common Stock versus
the S&P Regional Bank Index from January 3, 1994 to October 25, 1995.

Discounted Cash Flow Analysis of First National: Bear Stearns performed a
discounted cash flow analysis of First National. Bear Stearns reviewed First
National's strategic plan which included forecasts of net income for the years
1996 to 1999 and assessed the likelihood of First National achieving such
forecasts. First National provided estimates of synergies which could be
achieved as a result of the Merger, which were

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reviewed by Regions and Bear Stearns and included in the discounted cash flow
analysis. Bear Stearns then determined a range of net present values for the
shares of First National Common Stock which could result based upon assumed
multiples of projected earnings and assumed discount rates. Bear Stearns
calculated the range of net present values for the common equity of First
National based upon terminal value multiples ranging from 10.0 times to 12.0
times (a range based upon Regions' historical price to earnings ratios)
projected earnings available for common stock in 1999, and discount rates
ranging from 11.0% to 15.0%. Bear Stearns determined that the transaction value
was within the range of net present values which resulted.

Review of Relative Contribution: Bear Stearns determined the relative
contribution of First National to Regions after giving pro forma effect to the
Merger. Bear Stearns determined that First National stockholders would receive
approximately 24% of the pro forma ownership of the combined company, while
First National would contribute to the combined company approximately 18% of the
assets, approximately 24% of the tangible equity, approximately 17% of net
loans, approximately 19% of deposits, and approximately 23% of 1995 annualized
net income after giving First National credit for the synergies anticipated from
the Merger.

Bear Stearns determined potential accretion or dilution to Regions'
earnings per share for the years 1996 through 2000 as a result of the Merger. In
connection with the announcement of the Merger, Regions announced that Regions
and First National intend to repurchase up to approximately 1.9 million shares
of First National Common Stock or up to approximately 1.4 million shares of
Regions Common Stock, or a combination of the two. Bear Stearns took account for
a planned repurchase by Regions of 9.0% of its outstanding stock. Bear Stearns
estimated the accretion to Regions' earnings per share including synergies of
approximately 2.0% to 5.0% for the years 1997 (the first full year of the
combination) to 2000.

Bear Stearns' opinion on October 31, 1995, and the updated Bear Stearns'
Fairness Opinion were based solely upon the information available to it and
economic, market, and other conditions as they existed as of the dates of such
opinions; events occurring thereafter could materially affect the assumptions
used in preparing the opinions.

In connection with rendering its opinion on October 31, 1995, and the
updated Bear Stearns' Fairness Opinion, Bear Stearns performed a variety of
financial analyses. The evaluation of the fairness, from a financial point of
view, is a subjective one based on the experience and judgment of Bear Stearns,
and not merely the result of mathematical analysis of financial data.
Accordingly, Bear Stearns believes that its analyses must be considered as a
whole and that considering portions of such analyses or certain of the factors
considered by Bear Stearns without considering all such analyses and factors
could create an incomplete view of the process underlying the opinion. In its
analyses, Bear Stearns made numerous assumptions with respect to business,
market, monetary and economic conditions, industry performance, business and
economic conditions, and other matters, many of which are beyond Bear Stearns',
First National's, and Regions' control. Any estimates contained in Bear Stearns'
analyses are not necessarily indicative of future results or actual values,
which may be significantly more or less favorable than such estimates. No
company or transaction used in the above analyses as a comparison is identical
to First National, Regions, or the Merger. Accordingly, an analysis of the
results of the foregoing is not mathematical; rather, it involves complex
considerations and judgments concerning differences in financial and operating
characteristics of the companies and other factors that could affect the public
trading value of the companies to which they are being compared. The analyses
performed by Bear Stearns are not necessarily indicative of actual values or
actual future results, which may be significantly more or less favorable than
suggested by such analyses. Such analyses were prepared solely as part of Bear
Stearns' analysis of the fairness, from a financial point of view, of the
Exchange Ratio to Regions stockholders. The analyses do not purport to be
appraisals or to reflect the prices at which a company might actually be sold or
the prices at which any securities may trade at the present time or at any time
in the future.

Based upon these analyses, Bear Stearns has delivered its opinion that the
Exchange Ratio is fair, from a financial point of view, to the stockholders of
Regions.

Fees. In a letter agreement dated October 27, 1995, Regions retained Bear
Stearns to act as financial advisor concerning its contemplated acquisition of
First National. Bear Stearns will receive a total of $800,000 for its role in
this Merger. Pursuant to such letter agreement, Regions paid Bear Stearns an
initial fee of $300,000 at the time Bear Stearns informed Regions that Bear
Stearns was prepared to render the opinion. An

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additional $300,000 is payable upon mailing of this Joint Proxy Statement, and
an additional $200,000 will be paid to Bear Stearns upon the consummation of the
Merger. In addition, Regions has agreed to reimburse Bear Stearns for its
reasonable out-of-pocket costs and expenses incurred in connection with the
services rendered to Regions pursuant to the letter agreement, including the
fees and expenses of its legal counsel. Pursuant to the letter agreement,
Regions has agreed to indemnify Bear Stearns, its affiliates, and their
respective partners, directors, officers, agents, consultants, and employees and
controlling persons against certain expenses and liabilities, including
liabilities under the federal securities laws.

EFFECTIVE TIME OF THE MERGER

Subject to the conditions to the obligations of the parties to effect the
Merger, the Effective Time will occur on the date and at the time that the
Certificate of Merger relating to the Merger is declared effective with the
Georgia Secretary of State. Unless otherwise agreed upon by Regions and First
National, and subject to the conditions to the obligations of the parties to
effect the Merger, the parties have agreed to use their reasonable efforts to
cause the Effective Time to occur on or before the tenth business day (as
designated by Regions) following the last to occur of (i) the effective date
(including the expiration of any applicable waiting period) of the last consent
of any regulatory authority required for the Merger and (ii) the date on which
the stockholders of First National and Regions approve the matters relating to
this Agreement and the Plan of Merger required to be approved by such
stockholders by applicable law.

No assurance can be provided that the necessary stockholder and regulatory
approvals can be obtained or that other conditions precedent to the Merger can
or will be satisfied. First National and Regions anticipate that all conditions
to consummation of the Merger will be satisfied so that the Merger can be
consummated during the first half of 1996. However, delays in the consummation
of the Merger could occur.

The Board of Directors of either First National or Regions generally may
terminate the Agreement if the Merger is not consummated by September 30, 1996,
unless the failure to consummate by that date is the result of a breach of the
Agreement by the party seeking termination. See "-- Conditions to Consummation
of the Merger" and "-- Waiver, Amendment, and Termination."

DISTRIBUTION OF REGIONS STOCK CERTIFICATES

Promptly after the Effective Time, Regions will cause First Chicago Trust
Company of New York, acting in its capacity as Exchange Agent, to mail a letter
of transmittal, together with instructions for the exchange of the Certificates
representing shares of First National Common Stock for certificates representing
shares of Regions Common Stock, to the former stockholders of First National.

FIRST NATIONAL STOCKHOLDERS SHOULD NOT SEND IN THEIR CERTIFICATES UNTIL
THEY RECEIVE THE LETTER OF TRANSMITTAL AND INSTRUCTIONS.

Upon surrender to the Exchange Agent of Certificates for First National
Common Stock, together with a properly completed letter of transmittal, there
will be issued and mailed to each holder of First National Common Stock
surrendering such items a certificate or certificates representing the number of
shares of Regions Common Stock to which such holder is entitled, if any, and a
check for the amount to be paid in lieu of any fractional share (without
interest), together with all undelivered dividends or distributions in respect
of such shares (without interest thereon). After the Effective Time, to the
extent permitted by law, First National stockholders of record as of the
Effective Time will be entitled to vote at any meeting of Regions stockholders
the number of whole shares of Regions Common Stock into which their shares of
First National Common Stock have been converted, regardless of whether such
stockholders have surrendered their First National Common Stock Certificates.
Whenever a dividend or other distribution is declared by Regions on Regions
Common Stock, the record date for which is at or after the Effective Time, the
declaration will

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include dividends or other distributions on all shares issuable pursuant to the
Agreement, but, beginning 30 days after the Effective Time, no dividend or other
distribution payable after the Effective Time with respect to Regions Common
Stock will be paid to the holder of any unsurrendered First National Common
Stock Certificate until the holder duly surrenders such certificate. Upon
surrender of such First National Common Stock Certificate, however, both the
Regions Common Stock certificate, together with all undelivered dividends or
other distributions (without interest) and any undelivered cash payments to be
paid in lieu of fractional shares (without interest), will be delivered and paid
with respect to each share represented by such certificate.

After the Effective Time, there will be no transfers of shares of First
National Common Stock on First National's stock transfer books. If Certificates
representing shares of First National Common Stock are presented for transfer
after the Effective Time, they will be canceled and exchanged for the shares of
Regions Common Stock and a check for the amount due in lieu of fractional
shares, if any, deliverable in respect thereof.

CONDITIONS TO CONSUMMATION OF THE MERGER

Consummation of the Merger is subject to various conditions, including (i)
receipt of the approval of the Agreement and the Plan of Merger by the
stockholders of First National as required by the Georgia BCC, (ii) receipt of
the approval of the issuance of shares of Regions Common Stock pursuant to the
Agreement by the stockholders of Regions as required by rules of the NASD, (iii)
receipt of certain regulatory approvals required for consummation of the Merger,
(iv) receipt of a favorable opinion of Alston & Bird as to the tax-free nature
(except for cash received in lieu of fractional shares) of the Merger, (v)
receipt of approval of the shares of Regions Common Stock issuable pursuant to
the Merger for listing on the Nasdaq National Market System, subject to official
notice of issuance, (vi) the Registration Statement being declared effective and
all necessary SEC and state approvals relating to the issuance or trading of the
shares of Regions Common Stock issuable pursuant to the Merger shall have been
received, (vii) the accuracy, as of the date of the Agreement and as of the
Effective Time, of the representations and warranties of First National and
Regions as set forth in the Agreement, (viii) the performance of all agreements
and the compliance with all covenants of First National and Regions as set forth
in the Agreement, (ix) receipt by Regions of a letter from Ernst & Young LLP,
dated as of the Effective Time, to the effect the Merger will qualify for
pooling-of-interests accounting treatment; (x) receipt of all consents required
for consummation of the Merger or for the preventing of any default under any
contract or permit which, if not obtained or made, is reasonably likely to have,
individually or in the aggregate, a material adverse effect; (xi) the absence of
any law or order or any action taken by any court, governmental, or regulatory
authority prohibiting, restricting, or making illegal the consummation of the
transaction; and (xii) satisfaction of certain other conditions, including the
receipt of agreements of affiliates of First National and various certificates
from the officers of First National and Regions. See "-- Regulatory Approvals"
and "-- Waiver, Amendment, and Termination."

No assurance can be provided as to when or if all of the conditions
precedent to the Merger can or will be satisfied or waived by the party
permitted to do so. In the event the Merger is not effected on or before
September 30, 1996, the Agreement may be terminated and the Merger abandoned by
a vote of a majority of the Board of Directors of either First National or
Regions. See "-- Waiver, Amendment, and Termination."

REGULATORY APPROVALS

The Merger may not proceed in the absence of receipt of the requisite
regulatory approvals. Applications for the approvals described below will soon
be submitted to the appropriate regulatory agencies. THERE CAN BE NO ASSURANCE
THAT SUCH REGULATORY APPROVALS WILL BE OBTAINED OR AS TO THE TIMING OF ANY SUCH
APPROVALS. There also can be no assurance that any such approvals will not
impose conditions or be restricted in a manner (including requirements relating
to the raising of additional capital or the disposition of assets) which in the
reasonable judgment of the Board of Directors of Regions would so materially
adversely impact the economic or business benefits of the transactions
contemplated by the Agreement that, had such condition or requirement been
known, Regions would not, in its reasonable judgment, have entered into the
Agreement.

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First National and Regions are not aware of any material governmental
approvals or actions that are required for consummation of the Merger, except as
described below. Should any other approval or action be required, it presently
is contemplated that such approval or action would be sought.

The Merger will require the prior approval of the Federal Reserve, pursuant
to Section 3 of the BHC Act, and the prior approval of the OTS pursuant to
Section 10(e) of the Home Owners' Loan Act of 1933, as amended ("HOLA"). The
Federal Reserve and the OTS will use similar standards when considering whether
or not to approve the Merger.

In evaluating the Merger, both the Federal Reserve and the OTS must
consider, among other factors, the financial and managerial resources and future
prospects of the institutions, the convenience and needs of the communities to
be served, and in the case of the OTS, the risk presented to the Savings
Association Insurance Fund ("SAIF"). The relevant statutes prohibit the Federal
Reserve or the OTS from approving the Merger if (i) it would result in a
monopoly or be in furtherance of any combination or conspiracy to monopolize or
attempt to monopolize the business of banking in any part of the United States
or (ii) its effect in any section of the country may be to substantially lessen
competition or to tend to create a monopoly, or if it would be a restraint of
trade in any other manner, unless the Federal Reserve or the OTS, as the case
may be, finds that any anticompetitive effects are outweighed clearly by the
public interest and the probable effect of the transaction in meeting the
convenience and needs of the communities to be served. The Merger may not be
consummated until the 30th day (which the Federal Reserve may reduce to 15 days)
following the date of the Federal Reserve approval, during which time the United
States Department of Justice may challenge the transaction on antitrust grounds.
The commencement of any antitrust action would stay the effectiveness of the
approval of the agencies, unless a court of competent jurisdiction specifically
orders otherwise.

The Merger also is subject to the approval of the Georgia Commissioner and
the Florida Department. In their evaluations, these two state agencies will take
into account considerations similar to those applied by the Federal Reserve and
the OTS.

WAIVER, AMENDMENT, AND TERMINATION

To the extent permitted by applicable law, First National and Regions, with
the approval of their respective Boards of Directors, may amend the Agreement by
written agreement at any time before or after approval of the Agreement by the
First National and Regions stockholders; provided that after the Special
Meetings, no amendment may alter the manner or basis in which shares of First
National Common Stock will be exchanged for Regions Common Stock without the
requisite approval of the holders of the issued and outstanding shares of First
National Common Stock and Regions Common Stock entitled to vote thereon. In
addition, prior to or at the Effective Time, either First National or Regions,
or both, acting through their respective Boards of Directors or chief executive
officers or other authorized officers may waive any default in the performance
of any term of the Agreement by the other party, may waive or extend the time
for the compliance or fulfillment by the other party of any and all of its
obligations under the Agreement, and may waive any of the conditions precedent
to the obligations of such party under the Agreement, except any condition that,
if not satisfied, would result in the violation of any applicable law or
governmental regulation. No such waiver will be effective unless written and
unless executed by a duly authorized officer of First National or Regions, as
the case may be.

The Agreement and the Plan of Merger may be terminated and the Merger
abandoned at any time prior to the Effective Time (i) by the mutual consent of
the Boards of Directors of First National and Regions; (ii) by the Board of
Directors of First National or Regions (a) in the event of any inaccuracy of any
representation or warranty of the other party contained in the Agreement which
cannot be or has not been cured within 30 days after giving written notice to
the breaching party of such inaccuracy and which inaccuracy would provide the
terminating party the ability to refuse to consummate the Merger under the
applicable standards set forth in the Agreement (provided that the terminating
party is not then in breach of any representation or warranty contained in the
Agreement under the applicable standards set forth in the Agreement or in
material breach of any covenant or other agreement contained in the Agreement),
(b) in the event of a material breach by the other party of any covenant or
agreement contained in the Agreement which

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cannot be or has not been cured within 30 days after the giving of written
notice to the breaching party of such breach, (c) if the Merger is not
consummated by September 30, 1996, provided that the failure to consummate is
not due to the breach by the party electing to terminate, (d) if (1) any
approval of any regulatory authority required for consummation of the Merger and
the other transactions contemplated by the Agreement has been denied by final
nonappealable action, or if any action taken by such authority is not appealed
within the time limit for appeal or (2) the stockholders of First National or
Regions fail to vote their approval of the matters submitted for the approval by
such stockholders at the Special Meetings, or (e) if any of the conditions
precedent to the obligations of such party to consummate the Merger have not
been satisfied, fulfilled, or waived by the appropriate party by the Effective
Time (provided that the terminating party is not then in breach of any
representation or warranty contained in the Agreement under the applicable
standards set forth in the Agreement or in material breach of any covenant or
other agreement contained in the Agreement); or (iii) by the Board of Directors
of First National pursuant to the provisions of the Agreement described in
"-- Possible Adjustment of Exchange Ratio."

If the Merger is terminated as described above, the Agreement and the Plan
of Merger will become void and have no effect, except that certain provisions of
the Agreement, including those relating to the obligations to share certain
expenses, maintain the confidentiality of certain information obtained, and
return all documents obtained from the other party under the Agreement, will
survive. In addition, termination of the Agreement will not relieve any
breaching party from liability for any uncured willful breach of a
representation, warranty, covenant, or agreement giving rise to such
termination. Finally, the Option Agreement will be governed by its own terms as
to its termination. See "-- Expenses and Fees" and "-- Option Agreement."

DISSENTERS' RIGHTS

Pursuant to Georgia BCC Section 14-2-1302(c), the holders of First National
Common Stock are not entitled to dissent from the Merger. Pursuant to Delaware
GCL Section 262, the holders of Regions Common Stock are not entitled to dissent
from the issuance of shares of Regions Common Stock pursuant to the Agreement.
See "Description of Regions Common Stock" and "Effect of the Merger on Rights of
Stockholders -- Dissenters' Rights of Appraisal."

CONDUCT OF BUSINESS PENDING THE MERGER

Pursuant to the Agreement, First National has agreed that unless the prior
written consent of Regions has been obtained, and except as otherwise expressly
contemplated in the Agreement, First National will (i) operate its business only
in the usual, regular, and ordinary course, (ii) preserve intact its business
organization and assets and maintain its rights and franchises, (iii) use its
reasonable efforts to maintain its current employee relationships, and (iv) take
no action which would (a) adversely affect the ability of any party to obtain
any consents required for the transactions contemplated by the Agreement without
imposition of a condition or restriction of the type referred to in the
Agreement or (b) adversely affect the ability of any party to perform its
covenants and agreements under the Agreement.

In addition, First National has agreed that, prior to the earlier of the
Effective Time or termination of the Agreement, First National will not, except
with the prior written consent of the chief executive officer or chief financial
officer of Regions or as expressly contemplated or permitted by the Agreement,
agree or commit to do, any of the following: (i) amend the Articles of
Incorporation, Bylaws, or other governing instruments of any First National
company; (ii) incur any additional debt obligation or other obligation for
borrowed money (other than indebtedness of a First National company to another
First National company) in excess of an aggregate of $250,000 (for the First
National companies on a consolidated basis) except in the ordinary course of
business of the First National subsidiaries consistent with past practices
(which shall include, for First National subsidiaries that are depository
institutions, the creation of deposit liabilities, purchases of federal funds,
advances from the Federal Home Loan Bank or the Federal Reserve Bank, and entry
into repurchase agreements fully secured by U.S. government or agency
securities), or impose, or suffer the imposition, on any asset of any First
National company any lien or permit any such lien to exist (other than in
connection with deposits, repurchase agreements, bankers acceptances, "treasury
tax and loan" accounts established in the ordinary course of business, the
satisfaction of legal requirements in the exercise of trust powers, and liens in

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effect as of the date of the Agreement that were previously disclosed to Regions
by First National); (iii) repurchase, redeem, or otherwise acquire or exchange
(other than exchanges in the ordinary course under employee benefit plans or in
their capacity as transfer agent), directly or indirectly, any shares, or any
securities convertible into any shares, of the capital stock of any First
National company, or declare or pay any dividend or make any other distribution
in respect of any First National capital stock; provided that First National may
(to the extent legally and contractually permitted to do so), but shall not be
obligated to, declare and pay regular quarterly cash dividends on the shares of
First National Common Stock at a rate not in excess of $.2150 per share with
such increases and usual and regular record and payment dates in accordance with
past practice as previously disclosed to Regions by First National and such
dates may not be changed without the prior written consent of Regions; however,
the parties shall cooperate in selecting the Effective Time to ensure that, with
respect to the quarterly period in which the Effective Time occurs, the holders
of First National Common Stock do not receive both a dividend in respect of
their First National Common Stock and a dividend in respect of Regions Common
Stock or fail to receive any dividend; (iv) except pursuant to the Agreement, or
pursuant to the Option Agreement or pursuant to the exercise of stock options
outstanding as of the date of the Agreement and pursuant to the terms thereof in
existence on the date of the Agreement, issue, sell, pledge, encumber, authorize
the issuance of, enter into any contract to issue, sell, pledge, encumber, or
authorize the issuance of, or otherwise permit to become outstanding, any
additional shares of First National Common Stock, or any other capital stock of
any First National company, or any stock appreciation rights, or any option,
warrant, conversion, or other right to acquire any such stock, or any security
convertible into any such stock; (v) adjust, split, combine, or reclassify any
capital stock of any First National company or issue or authorize the issuance
of any other securities in respect of or in substitution for shares of First
National Common Stock or sell, lease, mortgage, or otherwise dispose of or
otherwise encumber any shares of capital stock of any First National subsidiary
(unless any such shares of stock are sold or otherwise transferred to another
First National company) or any assets other than in the ordinary course of
business for reasonable and adequate consideration; (vi) except for purchases of
U.S. Treasury securities or U.S. Government agency securities, which in either
case have maturities of three years or less, purchase any securities or make any
material investment, either by purchase of stock or securities, contributions to
capital, asset transfers, or purchase of any assets, in any person other than a
wholly owned First National subsidiary, or otherwise acquire direct or indirect
control over any person, other than in connection with (a) foreclosures in the
ordinary course of business, (b) acquisitions of control by a depository
institution subsidiary in its fiduciary capacity, or (c) the creation of new
wholly owned subsidiaries organized to conduct or continue activities otherwise
permitted by the Agreement; (vii) grant any increase in compensation or benefits
to the employees or officers of any First National company except in the
ordinary course of business or as previously disclosed to Regions by First
National or as required by law; pay any bonus except in the ordinary course of
business or pursuant to the provisions of any applicable program or plan adopted
by its Board of Directors prior to the date of the Agreement and as previously
disclosed to Regions by First National; enter into or amend any severance
agreements with officers of any First National company; or grant any increase in
fees or other increases in compensation or other benefits to directors of any
First National company except as previously disclosed to Regions by First
National; (viii) voluntarily accelerate the vesting of any stock options or
other stock-based compensation or employee benefits; (ix) enter into or amend
any employment contract between any First National company and any person
(unless such amendment is required by law) that the First National company does
not have the unconditional right to terminate without liability (other than
liability for services already rendered), at any time on or after the Effective
Time; (x) adopt any new employee benefit plan or program of any First National
company or make any material change in or to any existing employee benefit plans
or programs of any First National company other than any such change that is
required by law or that, in the opinion of counsel, is necessary or advisable to
maintain the tax qualified status of any such plan; (xi) make any significant
change in any tax or accounting methods, principles, or practices or systems of
internal accounting controls, except as may be necessary to conform to changes
in tax laws or regulatory accounting requirements or generally accepted
accounting principles; (xii) commence or settle any litigation other than in
accordance with past practice or settle any litigation involving any liability
of any First National company for material money damages or restrictions upon
the operations of any First National company; or (xiii) except in the ordinary
course of business, enter into or terminate any material contract or make any

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change in any material lease or contract, other than renewals of leases and
contracts without material adverse changes of terms.

The Agreement also provides that from the date of the Agreement until the
earlier of the Effective Time or the termination of the Agreement, Regions
covenants and agrees that it will (i) continue to conduct its business and the
business of its subsidiaries in a manner designed in its reasonable judgment, to
enhance the long-term value of the Regions Common Stock and the business
prospects of the Regions companies, and (ii) take no action which would (a)
materially adversely affect the ability of any party to obtain any consents
required for the transactions contemplated by the Agreement without imposition
of a condition or restriction of the type referred to in the Agreement, or (b)
materially adversely affect the ability of any party to perform its covenants
and agreements under the Agreement; provided, that any Regions company may
discontinue or dispose of any of its assets or business if such action is, in
the judgment of Regions, desirable in the conduct of the business of Regions and
its subsidiaries.

MANAGEMENT AND OPERATIONS AFTER THE MERGER

Consummation of the Merger will not alter the present management team or
Board of Directors of Regions. Information concerning the management of Regions
is included in the documents incorporated herein by reference. See "Documents
Incorporated by Reference." For additional information regarding the interests
of certain persons in the Merger, see "-- Interests of Certain Persons in the
Merger."

Upon consummation of the Merger, First National and Regions will continue
to operate their businesses and serve the communities and customers of their
respective market areas, although Regions intends to consolidate the banking
subsidiaries of First National located in Georgia and Florida with the banking
subsidiaries of Regions operating in those states. For a description of the
provisions of the Agreement affecting the operations of First National and
Regions prior to the Effective Time, see "-- Conduct of Business Pending the
Merger."

INTERESTS OF CERTAIN PERSONS IN THE MERGER

General. Certain members of First National management and of the First
National Board of Directors have interests in the Merger that are in addition to
any interests they may have as stockholders of First National generally. These
interests include, among other things, provisions in the Agreement relating to
indemnification of First National directors and officers, and certain severance
and other employee benefits, as described below.

Indemnification and Advancement of Expenses. The Agreement provides that
Regions will indemnify the present and former directors, officers, employees,
and agents of the First National companies against all liabilities arising out
of actions or omissions occurring at or prior to the Effective Time to the full
extent permitted under Georgia law and by First National's Articles of
Incorporation or Bylaws, as currently in effect, including provisions relating
to advances of expenses incurred in the defense of any litigation. In any case
in which approval by Regions is required to effectuate any indemnification, at
the election of the indemnified party, the determination of any such approval
will be made by independent counsel mutually agreed upon between Regions and the
indemnified party.

First National Change in Control Agreements. First National has entered
into change in control agreements with Bryan F. Bell, Senior Vice President of
First National, C. Talmadge Garrison, Senior Vice President of First National,
Peter D. Miller, President, Chief Administrative and Chief Operating Officer of
First National, Stephen M. Rownd, Senior Vice President of First National and
Richard D. White, President of First National Bank of Gainesville (collectively,
the "Named Officers") and 27 other officers of the First National companies.
Pursuant to the Agreement, Regions has agreed to honor each of the change in
control agreements.

The change in control agreements for each of the Named Officers and 27
additional officers provide that if the officer's employment is terminated by
the employer other than for cause or by the employee for reasons amounting to
"involuntary termination" (as defined in the respective change in control
agreement) at any

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time within a specified period (either one or two years) following the
occurrence of a change in control (as defined in the respective change in
control agreement), such officer will receive: (i) a lump sum equal to his base
annual salary (i.e., his annual salary excluding bonuses and special incentive
payments on the date of the earliest change in control to occur during the
covered period or the termination date, whichever is higher), except for Messrs.
Miller, Garrison, and White, who will receive lump sums equal to 200%, 114.5%,
and 114.5%, respectively, of their respective base annual salaries; (ii) a lump
sum equal to the average amounts the officer was awarded during the preceding
three years under First National's Senior Management Incentive Compensation
Plan, except for Messrs. Miller, Garrison, and White, who will not receive such
lump sums; (iii) continued coverage providing benefits substantially similar to
First National's health, long term disability and life insurance plans for two
years following the officer's termination; (iv) a lump sum equal to the
officer's unvested account balance under First National's 401(k) plan or any
other profit-sharing plans in effect immediately prior to the officer's
termination (with certain exceptions relating to the termination of such plans);
(v) an amount equal to two years' employer contributions to the 401(k) plan had
the officer not been terminated; (vi) a lump sum equal to the officer's entire
account, including any nonvested portion, under First National's Supplemental
Executive Retirement Plan ("SERP"), or any other deferred compensation plan
designed to supplement the 401(k) plan, if the officer anticipates and has an
account under such plan; (vii) an amount equal to two years' credits to the
officer's SERP account had the officer not been terminated; (viii) full vesting
and the lapse of all restrictions under any First National stock plans; and (ix)
the election to exercise any outstanding stock options. The change in control
agreements also provide, however, that any benefits payable to an officer shall
be increased, if necessary, so that the total payment to an officer shall not be
reduced in the event that First National is determined to have paid an "excess
parachute payment" as defined in Section 280G(b)(1) of the Code. The
consummation of the Merger will constitute a "change in control" for purposes of
the change in control agreements. If, pursuant to the provisions described
above, payments were required to be made to the Named Officers, and assuming the
Effective Time occurs on April 30, 1996, the estimated amount of such payments
(excluding the cost of health, disability and life insurance coverages,
excluding the value of stock options, which is included in the discussion of
stock options below, and excluding the present value of the SERP accounts, which
is included in the discussion of supplemental retirement benefits below) would
be $165,597, $223,181, $643,032, $177,777, and $281,339, for Messrs. Bell,
Garrison, Miller, Rownd and White, respectively, and $5,054,589 in the aggregate
for the Named Officers and the 27 additional officers. Calculation of the
foregoing benefit amounts is as if the employment of the Named Officers and 27
additional officers were terminated on the date on which the Effective Time
occurs.

Director and Officer Stock Options. First National has granted stock
options to the Named Officers and certain other officers under the First
National Bancorp 1990 Employee Stock Option Plan, the First National Bancorp
1993 Employee Stock Option Plan, the First National Bancorp Carrollton Stock
Option Plan, and the First National Bancorp FF Bancorp, Inc. Stock Option Plan,
(collectively, the "First National Option Plans"). Options granted include
incentive stock options and non-qualified stock options which vest immediately
upon grant or in not more than five years from the date of grant unless
accelerated in accordance with the applicable First National Option Plan or
individual option agreement, including upon a change in control (as defined in
the respective First National Option Plan). The consummation of the Merger will
constitute a change in control for purposes of the First National Option Plans.
Accordingly, the foregoing options issued pursuant to the First National Option
Plans, to the extent not already exercisable, will become exercisable upon
consummation of the Merger. First National intends, with the approval of
Regions, to grant additional options to purchase shares of First National Common
Stock in January 1996 consistent with past practices.

The following table sets forth with respect to the Named Officers and all
executive officers as a group (collectively, including the Named Officers and
Richard A. McNeece, who ceased to be an executive officer in June 1995, the
"Executive Officer Group") (i) the number of shares covered by options held by
such persons, (ii) the number of shares covered by currently-exercisable options
held by such persons, (iii) the number of shares covered by options held by such
persons which will become exercisable upon consummation of the Merger, (iv) the
weighted average exercise price of all such options held by such persons, and
(v) the

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<PAGE> 182

aggregate value (i.e., stock price less option exercise price) of all such
options based upon the per share value of First National Common Stock on the
First National Record Date.

<TABLE>
<CAPTION>
OPTIONS
OPTIONS EXERCISABLE WEIGHTED AVERAGE AGGREGATE
OPTIONS CURRENTLY UPON CONSUMMATION EXERCISE PRICE VALUE
HELD EXERCISABLE OF THE MERGER PER OPTION OF OPTIONS
------- ----------- ----------------- ---------------- ----------
<S> <C> <C> <C> <C> <C>
Peter D. Miller................ 36,400 13,010 36,400 $18.6333 $ 431,947
C. Talmadge Garrison........... 22,050 10,000 22,050 18.2592 269,909
Bryan F. Bell.................. 14,300 6,630 14,300 18.2204 175,598
Stephen M. Rownd............... 6,610 -0- 6,610 19.3154 73,930
Richard D. White............... 30,500 15,510 30,500 17.0534 410,121
Executive Officer Group (7
persons in all).............. 165,652 96,602 165,652 18.4927 1,989,033
</TABLE>

Stock Incentive Awards. First National has granted incentive awards to
Messrs. Miller and White under the First National Bancorp Performance-Based
Restricted Stock Plan (the "Incentive Stock Plan"). Under the Incentive Stock
Plan Messrs. Miller and White are eligible to receive a defined number of
restricted shares of First National Common Stock when the market price of the
common stock reaches certain threshold levels ($29, $33, and $37) and averages
such levels over a 60-day period (the "Award Threshold"). Mr. Miller is eligible
to receive 10,000 shares and Mr. White, 6,666 shares of First National Common
Stock upon attainment of each Award Threshold. The shares are to be granted to
Messrs. Miller and White upon attainment of each Award Threshold and are to be
granted subject to a restriction that each remain in the active employment of
First National until the earlier of eight years after grant or age 65. If the
restriction is violated by the employee, such employee is divested of the shares
granted to him. The restriction lapses upon (i) death, (ii) disability, (iii)
change in control, or (iv) termination without cause. The consummation of the
Merger will constitute a change in control for purposes of the Incentive Stock
Plan. Accordingly, if any Award Threshold is reached prior to the Effective
Time, the foregoing shares issuable pursuant to the Incentive Plan, if any, will
be granted, without the restriction as to employment, immediately prior to the
Effective Time.

Supplemental Retirement Benefits. The Named Officers and certain
additional executive officers and certain other First National officers
participate in the First National Bancorp Supplemental Executive Retirement Plan
("SERP"), which provides certain supplemental benefits for covered officers.
Assuming the Effective Time occurs during the first half of 1996, supplemental
benefits (excluding additional SERP credits payable in accordance with their
change in control agreements) related to First National's 401(k) plan are
estimated to be $11,700, $59,100, and $159,300, for Messrs. Bell, Garrison, and
Miller, respectively, and $445,400 in the aggregate for the Executive Officer
Group. The amounts set forth above generally represent a portion of the
respective officers' salaries, receipt of which they elected to defer. Messrs.
Rownd and White do not have SERP accounts.

Other Matters Relating to First National Employee Benefit Plans. The
Agreement also provides that, after the Effective Time, but in no event earlier
than the consolidation of First National's banking subsidiaries with Regions'
banking subsidiaries located in the same states, Regions will provide generally
to officers and employees of the First National companies who, at or after the
Effective Time, become officers or employees of a Regions company, employee
benefits under employee benefit plans (other than stock option or other plans
involving the potential issuance of Regions Common Stock, except as set forth in
the Agreement) on terms and conditions which, when taken as a whole, are
substantially similar to those currently provided by the Regions companies to
their similarly situated officers and employees. For purposes of participation
and vesting (but not accrual of benefits) under such employee benefit plans (i)
service under any qualified defined benefit plans of First National shall be
treated as service under Regions' qualified defined benefit plans, (ii) service
under any qualified defined contribution plans of First National shall be
treated as service under Regions' qualified defined contribution plans, and
(iii) service under any other employee benefit plans of First National shall be
treated as service under any similar employee benefits plans maintained by
Regions. The Agreement further provides that Regions will cause the First
National companies to honor, on terms reasonably agreed upon by Regions and
First National, all employment, severance, consulting, and other compensation
contracts disclosed to Regions between any First National company and any
current or former director, officer, or

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employee thereof, and all provisions for vested benefits or other vested amounts
earned or accrued through the Effective Time under the First National benefit
plans.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

THE FOLLOWING IS A SUMMARY OF CERTAIN ANTICIPATED FEDERAL INCOME TAX
CONSEQUENCES OF THE MERGER. THIS SUMMARY IS BASED ON THE FEDERAL INCOME TAX LAWS
AS NOW IN EFFECT AND AS CURRENTLY INTERPRETED; IT DOES NOT TAKE INTO ACCOUNT
POSSIBLE CHANGES IN SUCH LAWS OR INTERPRETATIONS, INCLUDING AMENDMENTS TO
APPLICABLE STATUTES OR REGULATIONS OR CHANGES IN JUDICIAL OR ADMINISTRATIVE
RULINGS, SOME OF WHICH MAY HAVE RETROACTIVE EFFECT. THIS SUMMARY DOES NOT
PURPORT TO ADDRESS ALL ASPECTS OF THE POSSIBLE FEDERAL INCOME TAX CONSEQUENCES
OF THE MERGER. IN PARTICULAR, AND WITHOUT LIMITING THE FOREGOING, THIS SUMMARY
DOES NOT ADDRESS THE FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER TO
STOCKHOLDERS IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES OR STATUS (FOR EXAMPLE,
AS FOREIGN PERSONS, TAX-EXEMPT ENTITIES, DEALERS IN SECURITIES, INSURANCE
COMPANIES, AND CORPORATIONS, AMONG OTHERS). NOR DOES THIS SUMMARY ADDRESS ANY
CONSEQUENCES OF THE MERGER UNDER ANY STATE, LOCAL, ESTATE, OR FOREIGN TAX LAWS.
STOCKHOLDERS, THEREFORE, ARE URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO THE
SPECIFIC TAX CONSEQUENCES TO THEM OF THE MERGER, INCLUDING TAX RETURN REPORTING
REQUIREMENTS, THE APPLICATION AND EFFECT OF FEDERAL, FOREIGN, STATE, LOCAL, AND
OTHER TAX LAWS, AND THE IMPLICATIONS OF ANY PROPOSED CHANGES IN THE TAX LAWS.

A federal income tax ruling with respect to this transaction has not been
requested from the Internal Revenue Service. Instead, Alston & Bird, counsel to
Regions, has rendered an opinion to First National and Regions concerning
certain federal income tax consequences of the proposed Merger under federal
income tax law. It is such firm's opinion that, based upon the assumption the
Merger is consummated in accordance with Georgia law and in conformity with the
representations made by the management of First National and Regions, the
transaction will have the following federal income tax consequences:

(a) The Merger will constitute a reorganization within the meaning of
Section 368(a) of the Code.

(b) No gain or loss will be recognized to the First National
stockholders upon the receipt of Regions Common Stock solely in exchange
for their shares of First National Common Stock.

(c) The basis of the Regions Common Stock to be received by First
National stockholders will be the same as the basis of the First National
Common Stock surrendered in the exchange.

(d) The holding period of the Regions Common Stock to be received by
First National stockholders will include the holding period of the First
National Common Stock surrendered in exchange therefor, provided that the
First National Common Stock was held as a capital asset on the date of the
exchange.

(e) The payment of cash to a First National stockholder in lieu of
issuing a fractional share interest in Regions will be treated for federal
income tax purposes as if the fractional share was distributed as part of
the exchange and then was redeemed by Regions. This cash payment will be
treated as having been received as a distribution in full payment in
exchange for the stock redeemed as provided in Section 302(a) of the Code.

The tax opinion does not address any state, local, or other tax
consequences of the Merger.

ACCOUNTING TREATMENT

It is anticipated that the Merger will be accounted for as a pooling of
interests. Under the pooling-of-interests method of accounting, the recorded
amounts of the assets and liabilities of First National will be carried forward
and recorded on the financial statements of Regions at their previously recorded
amounts.

In order for the Merger to qualify for pooling-of-interests accounting
treatment, substantially all (90% or more) of the outstanding First National
Common Stock must be exchanged for Regions Common Stock with substantially
similar terms. There are certain other criteria that must be satisfied in order
for the Merger to qualify as a pooling of interests, some of which criteria
cannot be satisfied until after the Effective Time.

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<PAGE> 184

For information concerning certain conditions to be imposed on the exchange
of First National Common Stock for Regions Common Stock in the Merger by
affiliates of First National and certain restrictions to be imposed on the
transferability of the Regions Common Stock received by those affiliates in the
Merger in order, among other things, to ensure the availability of
pooling-of-interests accounting treatment, see "-- Resales of Regions Common
Stock."

EXPENSES AND FEES

The Agreement provides, in general, that each of the parties will bear and
pay its own expenses in connection with the transactions contemplated by the
Agreement, including fees and expenses of its own financial or other
consultants, investment bankers, accountants, and counsel, except that each of
Regions and First National will bear and pay one-half of the printing costs in
connection with the Registration Statement and this Joint Proxy Statement.

RESALES OF REGIONS COMMON STOCK

Regions Common Stock to be issued to stockholders of First National in
connection with the Merger will be registered under the Securities Act. All
shares of Regions Common Stock received by holders of First National Common
Stock, and all shares of Regions Common Stock issued and outstanding immediately
prior to the Effective Time, upon consummation of the Merger will be freely
transferable by those stockholders of First National and Regions not deemed to
be "Affiliates" of First National or Regions. "Affiliates" generally are defined
as persons or entities who control, are controlled by, or are under common
control with First National or Regions at the time of the Meetings (generally,
executive officers, directors and 10% or greater stockholders).

Rules 144 and 145 promulgated under the Securities Act restrict the sale of
Regions Common Stock received in the Merger by Affiliates and certain of their
family members and related interests. Generally speaking, during the two years
following the Effective Time, Affiliates of First National or Regions may resell
publicly the Regions Common Stock received by them in the Merger within certain
limitations as to the amount of Regions Common Stock sold in any three-month
period and as to the manner of sale. After the two-year period, such Affiliates
of First National who are not Affiliates of Regions may resell their shares
without restriction. The ability of Affiliates to resell shares of Regions
Common Stock received in the Merger under Rule 144 or 145 as summarized herein
generally will be subject to Regions' having satisfied its Exchange Act
reporting requirements for specified periods prior to the time of sale.
Affiliates will receive additional information regarding the effect of Rules 144
and 145 on their ability to resell Regions Common Stock received in the Merger.
Affiliates also would be permitted to resell Regions Common Stock received in
the Merger pursuant to an effective registration statement under the Securities
Act or an available exemption from the Securities Act registration requirements.
This Joint Proxy Statement does not cover any resales of Regions Common Stock
received by persons who may be deemed to be Affiliates of First National or
Regions.

First National has agreed to use its reasonable efforts to cause each
person who may be deemed to be an Affiliate of First National to execute and
deliver to Regions not later than 30 days prior to the Effective Time, an
agreement (each, an "Affiliate Agreement") providing that such Affiliate will
not sell, pledge, transfer, or otherwise dispose of any Regions Common Stock
obtained as a result of the Merger (i) except in compliance with the Securities
Act and the rules and regulations of the SEC thereunder and (ii) in any case,
until after results covering 30 days of post-Merger operations of Regions have
been published. Certificates representing shares of First National Common Stock
surrendered for exchange by any person who is an Affiliate of First National for
purposes of Rule 145(c) under the Securities Act shall not be exchanged for
certificates representing shares of Regions Common Stock until Regions has
received such a written agreement from such person. Prior to publication of such
results, Regions will not transfer on its books any shares of Regions Common
Stock received by an Affiliate pursuant to the Merger. The stock certificates
representing Regions Common Stock issued to Affiliates in the Merger may bear a
legend summarizing the foregoing restrictions. See "-- Conditions to
Consummation of the Merger."

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<PAGE> 185

OPTION AGREEMENT

As an inducement and a condition to Regions entering into the Agreement,
First National and Regions entered into the Option Agreement, pursuant to which
First National granted Regions an option (the "Option") entitling it to purchase
up to 4,089,234 shares (representing 19.9% of the shares issued and outstanding
before giving effect to the exercise of such Option) of First National Common
Stock under the circumstances described below, at a cash price per share equal
to $27.00, subject to adjustment in certain circumstances. THIS DESCRIPTION OF
THE OPTION AGREEMENT AND THE OPTION DOES NOT PURPORT TO BE COMPLETE AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE OPTION AGREEMENT, WHICH IS FILED
AS AN EXHIBIT TO THIS REGISTRATION STATEMENT AND INCORPORATED HEREIN BY
REFERENCE.

Subject to applicable law and regulatory restrictions, Regions may exercise
the Option, in whole or in part, if, but only if, a Purchase Event (as defined
below) occurs prior to the Option's termination; provided that Regions, at the
time, is not in material breach of the Option Agreement or the Agreement. As
defined in the Option Agreement, "Purchase Event" means either of the following
events:

(a) without Regions' written consent, First National authorizing,
recommending, publicly proposing, or publicly announcing an intention to
authorize, recommend, or propose or entering into an agreement with any
third party to effect (i) a merger, consolidation, or similar transaction
involving First National or any of its subsidiaries (other than
transactions solely between First National' subsidiaries), (ii) except as
permitted by the Agreement, the disposition, by sale, lease, exchange, or
otherwise, of 20% or more of the consolidated assets of First National and
its subsidiaries, or (iii) the issuance, sale, or other disposition of
(including by way of merger, consolidation, share exchange, or any similar
transaction) securities representing 20% or more of the voting power of
First National or any of its subsidiaries; or

(b) any third party acquiring beneficial ownership, or the right to
acquire beneficial ownership, of 20% or more of the outstanding shares of
First National Common Stock.

The Option will terminate upon the earliest of the following:

(a) the Effective Time;

(b) termination of the Agreement in accordance with the terms thereof
prior to the occurrence of a Purchase Event or a Preliminary Purchase Event
(other than a termination of the Agreement under certain circumstances
involving a willful breach by First National) (a "Default Termination");

(d) 15 months after termination of the Agreement (other than pursuant
to a Default Termination) following the occurrence of a Purchase Event or a
Preliminary Purchase Event.

As defined in the Option Agreement, "Preliminary Purchase Event" includes
either of the following events:

(a) commencement or filing of a registration statement under the
Securities Act by any third party of a tender offer or exchange offer to
purchase any shares of First National Common Stock such that, upon
consummation of such offer, such person would own or control 15% or more of
the then outstanding shares of First National Common Stock (a "Tender
Offer" or an "Exchange Offer," respectively); or

(b) failure of the stockholders of First National to approve the
Agreement at the meeting of such stockholders held for the purpose of
voting on the Agreement, the failure to have such meeting prior to
termination of the Agreement, or the withdrawal or modification by First
National's Board of Directors in a manner adverse to Regions of the
recommendation of the Board of Directors with respect to the Agreement
after public announcement that a third party (i) made, or disclosed an
intention to make, a proposal to engage in an acquisition transaction, (ii)
commenced a Tender Offer or filed a registration statement under the
Securities Act with respect to an Exchange Offer, or (iii) filed an
application under certain federal statutes for approval to engage in an
acquisition transaction.

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<PAGE> 186

In the event of any change in First National Common Stock by reason of a
stock dividend, split-up, recapitalization, exchange of shares, or similar
transaction, the type and number of securities subject to the Option, and the
purchase price per share, as the case may be, will be adjusted appropriately. In
the event that any additional shares of First National Common Stock are issued
after October 22, 1995 (other than pursuant to an event described in the
preceding sentence), the number of shares of First National Common Stock subject
to the Option will be adjusted so that, after such issuance, it, together with
any shares of First National Common Stock previously issued pursuant to the
Option Agreement, equals 19.9% of the number of shares then issued and
outstanding, without giving effect to any shares subject to or issued pursuant
to the Option.

Upon the occurrence of a Repurchase Event (as defined below) that occurs
prior to the exercise or termination of the Option, at the request of Regions,
delivered within 12 months of the Repurchase Event, First National will, subject
to regulatory restrictions, be obligated to repurchase the Option and any shares
of First National Common Stock therefor purchased pursuant to the Option
Agreement at a specified price.

As defined in the Option Agreement, "Repurchase Event" shall occur if (i)
any person (other than Regions or any Regions subsidiary) shall have acquired
beneficial ownership (as such term is defined in Rule 13d-3 promulgated under
the Exchange Act), or the right to acquire beneficial ownership, or any "group"
(as such term is defined under the Exchange Act) shall have been formed which
beneficially owns or has the right to acquire beneficial ownership of 50% or
more of the then-outstanding shares of First National Common Stock, or (ii) any
of the following transactions is consummated: (a) First National consolidates
with or merges into any person, other than Regions or one of Regions'
subsidiaries, and is not the continuing or surviving corporation of such
consolidation or merger; (b) First National permits any person, other than
Regions or one of Regions' subsidiaries, to merge into First National and First
National shall be the continuing or surviving corporation, but, in connection
with such merger, the then outstanding shares of First National Common Stock
shall be changed into or exchanged for stock or other securities of First
National or any other person or cash or any other property or the outstanding
shares of First National Common Stock immediately prior to such merger shall
after such merger represent less than 50% of the outstanding shares and share
equivalents of the merged company; or (c) First National sells or otherwise
transfers all or substantially all of its assets to any person, other than
Regions or one of Regions' subsidiaries.

In the event that prior to the exercise or termination of the Option, First
National enters into an agreement to engage in any of the transactions described
in clause (ii) of the definition of Repurchase Event above, the agreement
governing such transaction must make proper provision so that the Option will,
upon consummation of such transaction, be converted into, or exchanged for, an
option with terms similar to the Option, at the election of Regions, of either
the acquiring person or any person that controls the acquiring person.

After the occurrence of a Purchase Event, Regions may assign the Option
Agreement and its rights thereunder in whole or in part.

Upon the occurrence of certain events, First National has agreed to file
with the SEC and to cause to become effective certain registration statements
under the Securities Act with respect to dispositions by Regions and its assigns
of all or part of the Option and/or any shares of First National Common Stock
into which the Option is exercisable.

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<PAGE> 187

EFFECT OF THE MERGER ON RIGHTS OF STOCKHOLDERS

As a result of the Merger, holders of First National Common Stock will be
exchanging their shares of a Georgia corporation governed by the Georgia BCC and
First National's Articles of Incorporation, as amended (the "Articles"), and
Bylaws, for shares of Regions, a Delaware corporation governed by the Delaware
GCL and Regions' Certificate of Incorporation, as amended (the "Certificate"),
and Bylaws. Certain significant differences exist between the rights of First
National stockholders and those of Regions stockholders. The differences deemed
material by First National and Regions are summarized below. In particular,
Regions' Certificate and Bylaws contain several provisions that may be deemed to
have an antitakeover effect in that they could impede or prevent an acquisition
of Regions unless the potential acquirer has obtained the approval of Regions'
Board of Directors. The following discussion is necessarily general; it is not
intended to be a complete statement of all differences affecting the rights of
stockholders and their respective entities, and it is qualified in its entirety
by reference to the Georgia BCC and the Delaware GCL as well as to Regions'
Certificate and Bylaws and First National's Articles and Bylaws.

ANTITAKEOVER PROVISIONS GENERALLY

The provisions of Regions' Certificate and Bylaws described below under the
headings, "Authorized Capital Stock," "Amendment of Certificate of Incorporation
and Bylaws," "Classified Board of Directors and Absence of Cumulative Voting,"
"Removal of Directors," "Director Exculpation," "Special Meetings of
Stockholders," "Actions by Stockholders Without a Meeting," "Stockholder
Nominations and Proposals," and "Mergers, Consolidations, and Sales of Assets
Generally," and the provisions of the Delaware GCL described under the heading
"Business Combinations with Certain Persons," are referred to herein as the
"Protective Provisions." In general, one purpose of the Protective Provisions is
to assist Regions' Board of Directors in playing a role if any group or person
attempts to acquire control of Regions, so that the Board can further protect
the interests of Regions and its stockholders as appropriate under the
circumstances, including, if the Board determines that a sale of control is in
their best interests, by enhancing the Board's ability to maximize the value to
be received by the stockholders upon such a sale.

Although Regions' management believes the Protective Provisions are,
therefore, beneficial to Regions' stockholders, the Protective Provisions also
may tend to discourage some takeover bids. As a result, Regions' stockholders
may be deprived of opportunities to sell some or all of their shares at prices
that represent a premium over prevailing market prices. On the other hand,
defeating undesirable acquisition offers can be a very expensive and
time-consuming process. To the extent that the Protective Provisions discourage
undesirable proposals, Regions may be able to avoid those expenditures of time
and money.

The Protective Provisions also may discourage open market purchases by a
potential acquirer. Such purchases may increase the market price of Regions
Common Stock temporarily, enabling stockholders to sell their shares at a price
higher than that which otherwise would prevail. In addition, the Protective
Provisions may decrease the market price of Regions Common Stock by making the
stock less attractive to persons who invest in securities in anticipation of
price increases from potential acquisition attempts. The Protective Provisions
also may make it more difficult and time consuming for a potential acquirer to
obtain control of Regions through replacing the Board of Directors and
management. Furthermore, the Protective Provisions may make it more difficult
for Regions' stockholders to replace the Board of Directors or management, even
if a majority of the stockholders believe such replacement is in the best
interests of Regions. As a result, the Protective Provisions may tend to
perpetuate the incumbent Board of Directors and management.

AUTHORIZED CAPITAL STOCK

Regions. The Certificate authorizes the issuance of up to 120,000,000
shares of Regions Common Stock, of which 47,533,033 shares were issued,
including 2,088,579 treasury shares, as of the Regions Record Date. Regions'
Board of Directors may authorize the issuance of additional authorized shares of
Regions Common Stock without further action by Regions' stockholders, unless
such action is required in a particular case by applicable laws or regulations
or by any stock exchange upon which Regions' capital stock may be

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<PAGE> 188

listed. Regions' stockholders do not have the preemptive right to purchase or
subscribe to any unissued authorized shares of Regions Common Stock or any
option or warrant for the purchase thereof.

The authority to issue additional shares of Regions Common Stock provides
Regions with the flexibility necessary to meet its future needs without the
delay resulting from seeking stockholder approval. The authorized but unissued
shares of Regions Common Stock will be issuable from time to time for any
corporate purpose, including, without limitation, stock splits, stock dividends,
employee benefit and compensation plans, acquisitions, and public or private
sales for cash as a means of raising capital. Such shares could be used to
dilute the stock ownership of persons seeking to obtain control of Regions. In
addition, the sale of a substantial number of shares of Regions Common Stock to
persons who have an understanding with Regions concerning the voting of such
shares, or the distribution or declaration of a dividend of shares of Regions
Common Stock (or the right to receive Regions Common Stock) to Regions
stockholders, may have the effect of discouraging or increasing the cost of
unsolicited attempts to acquire control of Regions.

First National. First National's authorized capital stock consists of
30,000,000 shares of First National Common Stock, of which 20,580,670 shares
were issued and outstanding as of the First National Record Date. First
National's stockholders do not have the preemptive right to purchase or
subscribe to any unissued authorized shares of First National Common Stock or
any option or warrant for the purchase thereof. In addition, shares of First
National Common Stock can be issued by authorization of the Board of Directors
of First National without the approval of the stockholders, except in certain
instances prescribed by the Georgia BCC.

AMENDMENT OF CERTIFICATE OF INCORPORATION AND BYLAWS

Regions. The Delaware GCL generally provides that the approval of a
corporation's board of directors and the affirmative vote of a majority of (i)
all shares entitled to vote thereon and (ii) the shares of each class of stock
entitled to vote thereon as a class, is required to amend a corporation's
certificate of incorporation, unless the certificate specifies a greater voting
requirement. The Certificate states that its provisions regarding authorized
capital stock, election, classification, and removal of directors, the approval
required for certain business combinations, meetings of stockholders, and
amendment of the Certificate and Bylaws may be amended or repealed only by the
affirmative vote of the holders of at least 75% of the outstanding shares of
Regions voting stock, voting together as a single class.

The Certificate also provides that the Board of Directors has the power to
adopt, amend, or repeal the Bylaws. Any action taken by the stockholders with
respect to adopting, amending, or repealing any Bylaw may be taken only upon the
affirmative vote of the holders of at least 75% of the voting power of Regions'
voting stock.

First National. The Georgia BCC generally provides that, unless a
corporation's articles of incorporation specify a greater voting requirement,
the corporation's articles of incorporation may not be amended unless (i) the
Board of Directors recommends the amendment to the stockholders (unless the
Board elects to make no recommendation and communicates the basis for its
election to the stockholders) and (ii) the amendment is adopted by a majority of
the votes entitled to be cast on the amendment by each voting group entitled to
vote thereon. In general, First National's Bylaws may be amended by its
stockholders or by a majority of the full Board of Directors at a regular Board
meeting.

CLASSIFIED BOARD OF DIRECTORS AND ABSENCE OF CUMULATIVE VOTING

Regions. The Certificate provides that Regions' Board of Directors is
divided into three classes, with each class to be as nearly equal in number as
possible. The directors in each class serve three-year terms of office. The
effect of Regions' having a classified Board of Directors is that only
approximately one-third of the members of the Board are elected each year, which
effectively requires two annual meetings for Regions' stockholders to change a
majority of the members of the Board.

Pursuant to the Bylaws, each stockholder generally is entitled to one vote
for each share of Regions Common Stock held and is not entitled to cumulative
voting rights in the election of directors. With

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<PAGE> 189

cumulative voting, a stockholder has the right to cast a number of votes equal
to the total number of such holder's shares multiplied by the number of
directors to be elected. The stockholder has the right to distribute all of his
votes in any manner among any number of candidates or to accumulate such shares
in favor of one candidate. Directors are elected by a plurality of the total
votes cast by all stockholders. With cumulative voting, it may be possible for
minority stockholders to obtain representation on the Board of Directors.
Without cumulative voting, the holders of more than 50% of the shares of Regions
Common Stock generally have the ability to elect 100% of the directors. As a
result, the holders of the remaining Regions Common Stock effectively may not be
able to elect any person to the Board of Directors. The absence of cumulative
voting thus could make it more difficult for a stockholder who acquires less
than a majority of the shares of Regions Common Stock to obtain representation
on Regions' Board of Directors.

First National. First National's Bylaws generally provide that the number
of directors constituting the First National Board shall not be less than five
nor more than 25 persons, the exact number within such limits to be determined
by resolution of a majority of the full Board or by resolution of the
stockholders at any meeting thereof. First National stockholders have cumulative
voting rights in the election of directors.

REMOVAL OF DIRECTORS

Regions. Under the Certificate, any director or the entire Board of
Directors may be removed only for cause and only by the affirmative vote of the
holders of 75% of Regions' voting stock.

First National. Pursuant to the Georgia BCC, the First National
stockholders may remove one or more directors with or without cause; provided,
that a director may not be removed if the number of votes sufficient to elect
him under cumulative voting is voted against his removal.

LIMITATIONS ON DIRECTOR LIABILITY

Regions. The Certificate provides that a director of Regions will have no
personal liability to Regions or its stockholders for monetary damages for
breach of fiduciary duty as a director, except liability for (i) any breach of
the director's duty of loyalty to the corporation or its stockholders, (ii) acts
or omissions that are not in good faith or that involve intentional misconduct
or a knowing violation of law, (iii) the payment of certain unlawful dividends
and the making of certain unlawful stock purchases or redemptions, or (iv) any
transaction from which the director derived an improper personal benefit.

Although this provision does not affect the availability of injunctive or
other equitable relief as a remedy for a breach of duty by a director, it does
limit the remedies available to a stockholder who has a valid claim that a
director acted in violation of his duties, if the action is among those as to
which liability is limited. This provision may reduce the likelihood of
stockholder derivative litigation against directors and may discourage or deter
stockholders or management from bringing a lawsuit against directors for breach
of their duties, even though such action, if successful, might have benefited
Regions and its stockholders. The SEC has taken the position that similar
provisions added to other corporations' certificates of incorporation would not
protect those corporations' directors from liability for violations of the
federal securities laws.

First National. First National's Articles contain a provision limiting the
liability of directors and officers of First National in a manner similar to
Regions' Certificate.

INDEMNIFICATION

Regions. The Certificate provides that Regions will indemnify its
officers, directors, employees, and agents to the full extent permitted by the
Delaware GCL. Under Section 145 of the Delaware GCL as currently in effect,
other than in actions brought by or in the right of Regions, such
indemnification would apply if it were determined in the specific case that the
proposed indemnitee acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interests of Regions and, with
respect to any criminal proceeding, if such person had no reasonable cause to
believe that the conduct was unlawful. In actions brought by or in the right of
Regions, such indemnification probably would be limited to reasonable expenses
(including attorneys' fees) and would apply if it were determined in the
specific case that

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<PAGE> 190

the proposed indemnitee acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of Regions,
except that no indemnification may be made with respect to any matter as to
which such person is adjudged liable to Regions, unless, and only to the extent
that, the court determines upon application that, in view of all the
circumstances of the case, the proposed indemnitee is fairly and reasonably
entitled to indemnity for such expenses as the court deems proper. To the extent
that any director, officer, employee, or agent of Regions has been successful on
the merits or otherwise in defense of any action, suit, or proceeding, whether
civil, criminal, administrative, or investigative, such person must be
indemnified against reasonable expenses incurred by him in connection therewith.

First National. First National's Bylaws provide that First National will
indemnify its officers and directors and may indemnify its employees and agents
under the indemnification provisions of the Georgia BCC, which is generally
similar to Section 145 of the Delaware GCL, with certain procedural differences.
First National's Bylaws also provide, however, that no person shall be
indemnified or reimbursed in relation to any matter in an action, suit, or
proceeding as to which he is finally adjudged to have been guilty of or liable
for gross negligence, willful misconduct, or criminal acts. In addition, First
National will not indemnify or reimburse any person in relation to any matter in
any action, suit, or proceeding which has been made the subject of a compromise
settlement except with the approval of a court of competent jurisdiction, or the
holders of record of a majority of the outstanding shares of First National, or
the Board of Directors, acting by vote of Directors not parties to the same or
substantially the same action, suit, or proceeding, constituting a majority of
the full Board.

SPECIAL MEETINGS OF STOCKHOLDERS

Regions. Regions' Certificate and Bylaws provide that such meetings may be
called at any time, but only by the Chief Executive Officer, the Secretary, or
the Board of Directors of Regions. Regions stockholders do not have the right to
call a special meeting or to require that Regions' Board of Directors call such
a meeting. This provision, combined with other provisions of the Certificate and
the restriction on the removal of directors, would prevent a substantial
stockholder from compelling stockholder consideration of any proposal (such as a
proposal for a business combination) over the opposition of Regions' Board of
Directors by calling a special meeting of stockholders at which such stockholder
could replace the entire Board with nominees who were in favor of such proposal.

First National. Under First National's Bylaws, special meetings of the
stockholders of First National may be called at any time by the Board of
Directors or by any three or more stockholders owning, in the aggregate, at
least 25% of the stock of First National.

ACTIONS BY STOCKHOLDERS WITHOUT A MEETING

Regions. The Certificate provides that any action required or permitted to
be taken by Regions stockholders must be effected at a duly called meeting of
stockholders and may not be effected by any written consent by the stockholders.
These provisions would prevent stockholders from taking action, including action
on a business combination, except at an annual or special meeting called by the
Board of Directors, even if a majority of the stockholders were in favor of such
action.

First National. The Georgia BCC provides that action required or permitted
to be taken at a meeting of stockholders may be taken by unanimous consent of
all stockholders required to vote thereon.

STOCKHOLDER NOMINATIONS AND PROPOSALS

Regions. Regions' Certificate and Bylaws provide that any nomination by
stockholders of individuals for election to the Board of Directors must be made
by delivering written notice of such nomination (the "Nomination Notice") to the
Secretary of Regions not less than 14 days nor more than 50 days before any
meeting of the stockholders called for the election of directors; provided,
however, that if less than 21 days' notice of the meeting is given to
stockholders, the Nomination Notice must be delivered to the Secretary of
Regions not later than the seventh day following the day on which notice of the
meeting was mailed to stockholders. The Nomination Notice must set forth certain
background information about the persons to be

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<PAGE> 191

nominated, including information concerning (i) the name, age, business, and, if
known, residential address of each nominee, (ii) the principal occupation or
employment of each such nominee, and (iii) the number of shares of Regions
capital stock beneficially owned by each such nominee. The Board of Directors is
not required to nominate in the annual proxy statement any person so proposed;
however, compliance with this procedure would permit a stockholder to nominate
the individual at the stockholders' meeting, and any stockholder may vote such
holder's shares in person or by proxy for any individual such holder desires.

First National. First National's Bylaws set forth procedures for
stockholder nominations and proposals that are substantially similar to Regions'
procedures, except that any First National notifying stockholder must include in
the nomination notice the name, address, and number of First National shares
owned by both the nominee and the notifying stockholder, and the principal
occupation of the nominee.

BUSINESS COMBINATIONS WITH CERTAIN PERSONS

Regions. Section 203 of the Delaware GCL ("Section 203") places certain
restrictions on "business combinations" (as defined in Section 203, generally
including mergers, sales and leases of assets, issuances of securities, and
similar transactions) by Delaware corporations with an "interested stockholder"
(as defined in Section 203, generally the beneficial owner of 15% or more of the
corporation's outstanding voting stock). Section 203 generally applies to
Delaware corporations, such as Regions, that have a class of voting stock listed
on a national securities exchange, authorized for quotation on an interdealer
quotation system of a registered national securities association, or held of
record by more than 2,000 stockholders, unless the corporation expressly elects
in its certificate of incorporation or bylaws not to be governed by Section 203.

Regions has not specifically elected to avoid the application of Section
203. As a result, Section 203 generally would prohibit a business combination by
Regions or a subsidiary with an interested stockholder within three years after
the person or entity becomes an interested stockholder, unless (i) prior to the
time when the person or entity becomes an interested stockholder, Regions' Board
of Directors approved either the business combination or the transaction
pursuant to which such person or entity became an interested stockholder, (ii)
upon consummation of the transaction in which the person or entity became an
interested stockholder, the interested stockholder held at least 85% of the
outstanding Regions voting stock (excluding shares held by persons who are both
officers and directors and shares held by certain employee benefit plans), or
(iii) once the person or entity becomes an interested stockholder, the business
combination is approved by Regions' Board of Directors and by the holders of at
least two-thirds of the outstanding Regions voting stock, excluding shares owned
by the interested stockholder.

First National. The Georgia BCC contains two anti-takeover provisions: (i)
the Fair Price provisions set forth in Part 2 of Article 11 of the Georgia BCC
and (ii) the Business Combination provisions set forth in Part 3 of Article 11
of the Georgia BCC. Because First National has not "opted in" to either of these
provisions, such provisions will not apply to the Merger.

MERGERS, CONSOLIDATIONS, AND SALES OF ASSETS GENERALLY

Regions. The Certificate generally requires the affirmative vote of the
holders of at least 75% of the outstanding voting stock of Regions to effect (i)
any merger or consolidation with or into any other corporation, or (ii) any sale
or lease of any substantial part of the assets of Regions to any party that
beneficially owns 5% or more of the outstanding shares of Regions voting stock,
unless the transaction was approved by Regions' Board of Directors before the
other party became a 5.0% beneficial owner or is approved by 75% or more of the
full Board after the party becomes such a 5.0% beneficial owner. This provision
does not apply to the Merger because First National is being merged with and
into a wholly owned subsidiary of Regions, not merged with and into Regions
directly. In addition, the Delaware GCL generally requires the approval of a
majority of the outstanding voting stock of Regions to effect (i) any merger or
consolidation with or into any other corporation, (ii) any sale, lease, or
exchange of all or substantially all of Regions property and assets, or (iii)
the dissolution of Regions. However, pursuant to the Delaware GCL, Regions may
enter into a merger transaction without stockholder approval if (i) Regions is
the surviving corporation, (ii) the agreement of merger does not amend in any
respect Regions' Certificate, (iii) each share of Regions stock outstanding

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<PAGE> 192

immediately prior to the effective date of the merger is to be an identical
outstanding or treasury share of Regions after the effective date of the merger,
and (iv) either no shares of Regions Common Stock and no shares, securities, or
obligations convertible into such stock are to be issued or delivered under the
plan of merger, or the authorized unissued shares or the treasury shares of
Regions Common Stock to be issued or delivered under the plan of merger plus
those initially issuable upon conversion of any other shares, securities, or
obligations to be issued or delivered under such plan do not exceed 20% of the
shares of Regions Common Stock outstanding immediately prior to the effective
date of the merger. Such provisions under the Certificate and the Delaware GCL
do not apply to the Merger because First National is being merged with and into
a wholly owned subsidiary of Regions, and not into Regions directly.

First National. In general, (i) a merger or share exchange required to be
approved by the stockholders of First National must be approved by a majority of
all votes entitled to be cast by all shares entitled to vote thereon, voting as
a single voting group, and by each voting group entitled to vote separately
thereon by a majority of the votes entitled to be cast by that voting group, and
(ii) the dissolution of First National, or the sale of all or substantially all
of the property of First National, other than in the usual and regular course of
business, must be approved by a majority of all votes entitled to be cast
thereon. However, pursuant to Section 14-2-1103 of the Georgia BCC, First
National may enter into a merger transaction without stockholder approval if (i)
First National is the surviving corporation, (ii) the merger will not effect any
change in or amendment to First National's Articles, (iii) First National's
shareholders will hold the same number of shares, with identical designations,
preferences, limitations, and relative rights, immediately after the merger as
they held before the merger, and (iv) the number and kind of shares outstanding
immediately after the merger, plus the number and kind of shares issuable as a
result of the merger will not exceed the total number and kind of shares of the
surviving corporation authorized immediately before the merger.

DISSENTERS' RIGHTS OF APPRAISAL

Regions. The rights of appraisal of dissenting stockholders of Regions are
governed by the Delaware GCL. Pursuant thereto, except as described below, any
stockholder has the right to dissent from any merger of which Regions could be a
constituent corporation. No appraisal rights are available, however, for (i) the
shares of any class or series of stock that is either listed on a national
securities exchange, quoted on the Nasdaq National Market System, or held of
record by more than 2,000 stockholders or (ii) any shares of stock of the
constituent corporation surviving a merger if the merger did not require the
approval of the surviving corporation's stockholders, unless, in either case,
the holders of such stock are required by an agreement of merger or
consolidation to accept for that stock something other than: (a) shares of stock
of the corporation surviving or resulting from the merger or consolidation; (b)
shares of stock of any other corporation that will be listed at the effective
time of the merger on a national securities exchange, quoted on the Nasdaq
National Market System, or held of record by more than 2,000 stockholders; (c)
cash in lieu of fractional shares of stock described in clause (a) or (b)
immediately above; or (d) any combination of the shares of stock and cash in
lieu of fractional shares described in clauses (a) through (c) immediately
above. Because Regions Common Stock is quoted on the Nasdaq National Market
System and is held of record by more than 2,000 stockholders, unless the
exception described immediately above applies, holders of Regions Common Stock
are not entitled to dissenters' rights of appraisal.

First National. Article 13 of the Georgia BCC generally does not grant
dissenters' rights to holders of a class of stock either listed on a national
securities exchange (or as a national market security on a securities quotation
system) or held of record by more than 2,000 stockholders, unless the holders of
such stock are required by a plan of merger or share exchange to accept for
their stock anything except shares of the surviving corporation or another
publicly held corporation which at the effective date of the merger or share
exchange are either listed on a national securities exchange (or as a national
market security on a securities quotation system) or held of record by more than
2,000 stockholders, except for scrip or cash payments in lieu of fractional
shares. Because First National Common Stock is quoted on the Nasdaq National
Market System and is held of record by more than 2,000 stockholders, unless the
exception described immediately above applies, holders of First National Common
Stock do not have dissenters' rights of appraisal.

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<PAGE> 193

STOCKHOLDERS' RIGHTS TO EXAMINE BOOKS AND RECORDS

Regions. The Delaware GCL provides that a stockholder may inspect books
and records upon written demand under oath stating the purpose of the
inspection, if such purpose is reasonably related to such person's interest as a
stockholder.

First National. Pursuant to the Georgia BCC, First National's stockholders
have the right to inspect and copy certain of First National's corporate
documents, upon written demand to First National. Stockholders may also inspect
and copy First National's accounting records and First National's record of
stockholders if: (i) the stockholder's written demand is made in good faith and
for a proper purpose relevant to a legitimate interest as a stockholder; (ii)
such demand describes with reasonable particularity the purpose and records the
stockholder desires to inspect; (iii) the records are directly connected with
such purpose; and (iv) the records are only to be used for such purpose. The
right of inspection extends not only to stockholders of record but also
beneficial owners whose shares are held in a voting trust or by a nominee on the
stockholder's behalf. In addition, First National is required to prepare a
stockholder list at the time and place of the stockholders' meeting.

DIVIDENDS

Regions. The Delaware GCL provides that, subject to any restrictions in
the corporation's certificate of incorporation, dividends may be declared from
the corporation's surplus, or, if there is no surplus, from its net profits for
the fiscal year in which the dividend is declared and the preceding fiscal year.
Dividends may not be declared, however, if the corporation's capital has been
diminished to an amount less than the aggregate amount of all capital
represented by the issued and outstanding stock of all classes having a
preference upon the distribution of assets. Substantially all of the funds
available for the payment of dividends by Regions are derived from its
subsidiary depository institutions. There are various statutory limitations on
the ability of Regions' subsidiary depository institutions to pay dividends to
Regions. See "Certain Regulatory Considerations -- Payment of Dividends."

First National. The holders of First National Common Stock are entitled to
receive such dividends or distributions as the First National Board of Directors
may declare out of funds legally available for such payments. The payment of
distributions by First National is subject to the restrictions of the Georgia
BCC applicable to the declaration of distributions by a business corporation. A
corporation generally may not authorize and make distributions if, after giving
effect thereto, it would be unable to meet its debts as they become due in the
usual course of business or if the corporation's total assets would be less than
the sum of its total liabilities plus the amount that would be needed, if it
were to be dissolved at the time of the distribution, to satisfy claims upon
dissolution of stockholders who have preferential rights superior to the rights
of the holders of its common stock. Share dividends, if any are declared, may be
paid from First National's authorized but unissued shares. Substantially all of
the funds available for the payment of dividends by First National are derived
from its subsidiary depository institutions. There are various statutory
limitations on the ability of First National's subsidiary depository
institutions to pay dividends to First National. See "Certain Regulatory
Considerations -- Payment of Dividends."

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COMPARATIVE MARKET PRICES AND DIVIDENDS

Regions Common Stock is quoted on the Nasdaq National Market System under
the symbol "RGBK." First National Common Stock is quoted on the Nasdaq National
Market System under the symbol "FBAC." The following table sets forth, for the
indicated periods, the high and low last sale prices for Regions Common Stock
and First National Common Stock as reported on the Nasdaq National Market System
and the cash dividends declared per share of Regions Common Stock and First
National Common Stock for the indicated periods. The stock prices and historical
dividends for Regions have been adjusted to reflect a 10% stock dividend paid by
Regions on April 1, 1993.

<TABLE>
<CAPTION>
REGIONS FIRST NATIONAL
--------------------------- ---------------------------
CASH CASH
PRICE RANGE DIVIDENDS PRICE RANGE DIVIDENDS
--------------- DECLARED --------------- DECLARED
HIGH LOW PER SHARE HIGH LOW PER SHARE
------ ------ --------- ------ ------ ---------
<S> <C> <C> <C> <C> <C> <C>
1993
First Quarter............................. $38.38 $31.25 $0.26 $21.50 $17.50 $0.1725
Second Quarter............................ 38.25 30.25 0.26 22.25 20.00 0.1750
Third Quarter............................. 35.25 31.25 0.26 22.50 19.75 0.1775
Fourth Quarter............................ 35.00 29.63 0.26 21.25 19.50 0.1800
1994
First Quarter............................. 33.50 30.13 0.30 22.25 20.25 0.1900
Second Quarter............................ 36.13 30.50 0.30 21.50 19.75 0.1925
Third Quarter............................. 36.75 34.63 0.30 22.25 20.00 0.1950
Fourth Quarter............................ 35.00 29.75 0.30 20.75 16.62 0.2000
1995
First Quarter............................. 36.50 31.63 0.33 20.75 18.00 0.2050
Second Quarter............................ 37.44 34.50 0.33 22.00 19.75 0.2075
Third Quarter............................. 41.25 37.00 0.33 28.00 21.00 0.2125
Fourth Quarter (through December 4)....... 43.25 37.63 0.33 31.75 30.25 0.2150
</TABLE>

On December 4, 1995, the last sale prices of Regions Common Stock and First
National Common Stock as reported on the Nasdaq National Market System were
$43.25 and $31.50, respectively. On October 20, 1995, the last business day
prior to public announcement of the proposed Merger, the last sale prices of
Regions Common Stock and First National Common Stock as reported on the Nasdaq
National Market System were $41.50 and $28.75, respectively.

The holders of Regions Common Stock are entitled to receive dividends when
and if declared by the Board of Directors out of funds legally available
therefor. Regions has paid regular quarterly cash dividends since 1971. Although
Regions currently intends to continue to pay quarterly cash dividends on the
Regions Common Stock, there can be no assurance that Regions' dividend policy
will remain unchanged after completion of the Merger. The declaration and
payment of dividends thereafter will depend upon business conditions, operating
results, capital and reserve requirements, and the Board of Directors'
consideration of other relevant factors. For information with respect to
provisions of the Agreement limiting First National's ability to pay dividends
on First National Common Stock during the pendency of the Merger, see
"Description of Transaction -- Conduct of the Business Pending the Merger."

Regions and First National are legal entities separate and distinct from
their respective subsidiaries and their respective revenues depend in
significant part on the payment of dividends from their respective subsidiary
depository institutions. Such subsidiary depository institutions are subject to
certain legal restrictions on the amount of dividends they are permitted to pay.
See "Certain Regulatory Considerations -- Payment of Dividends."

49
<PAGE> 195

BUSINESS OF FIRST NATIONAL

GENERAL

First National is a bank holding company headquartered in Gainesville,
Georgia, with approximately 64 banking offices of subsidiary banks and savings
banks in Georgia and Florida. As of September 30, 1995, First National had total
consolidated assets of approximately $3.1 billion, total consolidated deposits
of approximately $2.6 billion, and total consolidated stockholders' equity of
approximately $304 million. First National is the second largest bank holding
company headquartered in Georgia outside of the Atlanta metropolitan area in
terms of assets, based on September 30, 1995 information. First National
operates 20 banking and savings bank subsidiaries in Georgia and Florida.
Through its subsidiaries, First National offers a broad range of banking and
banking-related services.

In Georgia, First National operates through The First National Bank of
Gainesville ("FNBG") and 16 other state and national bank subsidiaries, which,
at September 30, 1995, had total consolidated assets of approximately $2.5
billion, total consolidated deposits of approximately $2.0 billion, and total
consolidated stockholders' equity of approximately $208 million. FNBG and the 16
other state and national bank subsidiaries operate 55 banking offices in North
Georgia.

In Florida, First National operates through (i) First Federal Savings Bank
of New Smyrna, (ii) First Federal Savings Bank of Citrus County, and (iii) The
Key Bank of Florida, which, at September 30, 1995, had total combined assets of
approximately $686 million, total combined deposits of approximately $578
million, and total combined stockholders' equity of approximately $96 million.
First Federal Savings Bank of New Smyrna operates three banking offices in
Volusia County, Florida, First Federal Savings Bank of Citrus County operates
four banking offices in Citrus County, Florida, and The Key Bank of Florida
operates two banking offices in Tampa, Florida.

First National was organized under the laws of the state of Georgia and
commenced operations in 1981 with the acquisition of FNBG. Additional
information with respect to First National and its subsidiaries is included in
documents incorporated by reference in this Joint Proxy Statement. See
"Available Information" and "Documents Incorporated by Reference."

RECENT DEVELOPMENTS

Recently Completed Acquisition. During the first nine months of 1995,
First National acquired FF Bancorp, located in New Smyrna Beach, Florida, and
its two federal savings bank and one state bank subsidiaries, First Federal
Savings Bank of New Smyrna, First Federal Savings Bank of Citrus County, and The
Key Bank of Florida, contributing an aggregate of approximately $686 million in
assets, $455 million in loans, and $578 million in deposits to First National's
consolidated balance sheet. In connection with the FF Bancorp Acquisition, First
National issued approximately 3,884,587 shares of First National Common Stock.
As the transaction was accounted for as a pooling of interests, the historical
financial statements and related management's discussion and analysis of
financial condition and results of operations of First National were required to
be restated to reflect the FF Bancorp Acquisition. For additional information
with respect to the FF Bancorp Acquisition, see First National's Quarterly
Reports on Form 10-Q for the quarters ended June 30 and September 30, 1995, and
First National's Current Report on Form 8-K dated November 21, 1995,
incorporated herein by reference. See "Documents Incorporated by Reference."

Other Pending Acquisition. As of the date of this Joint Proxy Statement,
First National has one pending acquisition, The Bank of Heard County, a state
bank located in Franklin, Georgia. In connection with this acquisition, First
National will issue approximately 325,580 shares of First National Common Stock.
Consummation of such acquisition is subject to approval of certain regulatory
agencies and of the stockholders of The Bank of Heard County. Moreover, the
closing of such transaction is subject to various contractual conditions
precedent. No assurance can be given that the conditions precedent to
consummating the transaction will be satisfied in a manner that will result in
its consummation.

50
<PAGE> 196

BUSINESS OF REGIONS

GENERAL

Regions is a regional bank holding company headquartered in Birmingham,
Alabama with approximately 288 banking offices in Alabama, Florida, Georgia,
Louisiana, and Tennessee. As of September 30, 1995, Regions had total
consolidated assets of approximately $13.8 billion, total consolidated deposits
of approximately $10.7 billion, and total consolidated stockholders' equity of
approximately $1.1 billion. Regions operates commercial bank subsidiaries in
Alabama, Florida, Georgia, Louisiana, and Tennessee, a federal stock savings
bank subsidiary in Georgia, and banking-related subsidiaries engaged in mortgage
banking, credit life insurance, leasing, and securities brokerage activities
with offices in various Southeastern states. Through its subsidiaries, Regions
offers a broad range of banking and banking-related services.

In Alabama, Regions operates through First Alabama Bank, which at September
30, 1995, had total consolidated assets of approximately $10.4 billion, total
consolidated deposits of approximately $7.8 billion, and total consolidated
stockholders' equity of approximately $837 million. First Alabama Bank operates
183 banking offices throughout Alabama.

In Florida, Regions operates through Regions Bank of Florida, which at
September 30, 1995, had total consolidated assets of approximately $553 million,
total consolidated deposits of approximately $491 million, and total
consolidated stockholders' equity of approximately $58 million. Regions Bank of
Florida operates 28 banking offices in the panhandle region of Florida.

In Georgia, Regions operates through (i) Regions Bank of Georgia, (ii)
Regions Bank of Rome, and (iii) Regions Bank, FSB, which at September 30, 1995,
had total combined assets of approximately $624 million, total combined deposits
of approximately $560 million, and total combined stockholders' equity of
approximately $49 million. Regions Bank of Georgia operates three banking
offices in Columbus, Georgia, Regions Bank of Rome operates two banking offices
in Rome, Georgia, and Regions Bank, FSB operates five banking offices in Dalton
and Cartersville, Georgia.

In Louisiana, Regions operates through Regions Bank of Louisiana. At
September 30, 1995, Regions Bank of Louisiana had total consolidated assets of
approximately $2.2 billion, total consolidated deposits of approximately $1.6
billion, and total consolidated stockholders' equity of approximately $208
million. Regions Bank of Louisiana operates 43 banking offices in Louisiana.

In Tennessee, Regions operates through Regions Bank of Tennessee, which at
September 30, 1995, had total consolidated assets of approximately $491 million,
total consolidated deposits of approximately $427 million, and total
consolidated stockholders' equity of approximately $44 million. Regions Bank of
Tennessee operates 24 banking offices in middle Tennessee.

Regions was organized under the laws of the state of Delaware and commenced
operations in 1971 under the name First Alabama Bancshares, Inc. On May 2, 1994,
the name of First Alabama Bancshares, Inc. was changed to Regions Financial
Corporation. Regions' principal executive offices are located at 417 North 20th
Street, Birmingham, Alabama 35203, and its telephone number at such address is
(205) 326-7100.

Regions continually evaluates business combination opportunities and
frequently conducts due diligence activities in connection with possible
business combinations. As a result, business combination discussions and, in
some cases, negotiations frequently take place, and future business combinations
involving cash, debt, or equity securities can be expected. Any future business
combination or series of business combinations that Regions might undertake may
be material, in terms of assets acquired or liabilities assumed, to Regions'
financial condition. Recent business combinations in the banking industry have
typically involved the payment of a premium over book and market values. This
practice could result in dilution of book value and net income per share for the
acquirer.

Additional information about Regions and its subsidiaries is included in
documents incorporated by reference in this Joint Proxy Statement. See
"Available Information" and "Documents Incorporated by Reference."

51
<PAGE> 197

RECENT DEVELOPMENTS

Recently Completed Acquisitions. During the first nine months of 1995,
Regions acquired (i) Fidelity Federal Savings Bank, located in Dalton, Georgia,
and (ii) First Commercial Bancshares, Inc., located in Chalmette, Louisiana,
contributing an aggregate of approximately $479 million in assets, $392 million
in loans, and $427 million in deposits to Regions' consolidated balance sheet.
During such period, Regions also acquired Interstate Billing Service, Inc., an
accounts receivable factoring company in Decatur, Alabama, with total assets as
of the acquisition date of approximately $30 million. For additional information
with respect to these acquisitions, see Regions' Quarterly Reports on Form 10-Q
for the quarters ended March 31, June 30, and September 30, 1995, incorporated
herein by reference. See "Documents Incorporated by Reference."

Since September 30, 1995, Regions acquired from The Prudential Savings Bank
a branch banking operation in Cartersville, Georgia (the "Cartersville
Acquisition"), in which Regions assumed approximately $57 million in deposits.

Other Pending Acquisitions. As of the date of this Joint Proxy Statement,
Regions has pending five acquisitions in addition to First National, certain
aspects of which transactions are set forth below:

<TABLE>
<CAPTION>
CONSIDERATION
----------------------------------------
APPROXIMATE
------------------ ACCOUNTING
INSTITUTION ASSET SIZE VALUE TYPE TREATMENT
------------------------------------------------- ---------- ----- ------ ----------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Metro Financial Corporation and its subsidiary, $197 $28 Regions Purchase
Metro Bank, located in Atlanta, Georgia (the Common
"Metro Acquisition") Stock
Enterprise National Bank, located in Atlanta, 54 8 Cash Purchase
Georgia (the "Enterprise Acquisition")
First Federal Bank of Northwest Georgia, Federal 90 16 Regions Purchase
Savings Bank, located in Cedartown, Georgia Common
(the "First Federal Acquisition") Stock
First Gwinnett Bankshares, Inc. and its 63 13 Regions Purchase
subsidiary, First Gwinnett Bank, located in Common
Atlanta, Georgia (the "First Gwinnett Stock
Acquisition")
Delta Bank and Trust Company, located in Belle 198 34 Regions Pooling
Chasse, Louisiana (the "Delta Acquisition") Common of
Stock Interests
------- ----
Totals $602 $99
======= ====
</TABLE>

The Metro Acquisition, the Enterprise Acquisition, the First Federal
Acquisition, the First Gwinnett Acquisition, and the Delta Acquisition are
referred to in this Joint Proxy Statement as the "Other Pending Acquisitions."
Consummation of the Other Pending Acquisitions is subject to the approval of
certain regulatory agencies and of the stockholders of the institutions to be
acquired and, in the case of the Delta Acquisition, to execution of a definitive
acquisition agreement. Moreover, the closing of each transaction is subject to
various contractual conditions precedent. No assurance can be given that the
conditions precedent to consummating the transactions will be satisfied in a
manner that will result in their consummation.

On December 5, 1995, Regions announced the execution of a definitive
agreement to acquire American City Bancorp, Inc. of Tullahoma, Tennessee, and
its majority-owned subsidiary American City Bank. This acquisition, which
remains subject to Regions' due diligence review and other contingencies, would
add approximately $80 million in assets to Regions' consolidated statement of
condition and would result in the issuance of shares of Regions Common Stock
having an approximate value of $8.8 million, computed as of the date of public
announcement of the proposed transaction. Giving effect to this transaction
would not have a

52
<PAGE> 198

material effect on the pro forma financial information included in and
incorporated by reference in this Joint Proxy Statement.

Registration of Subordinated Debt Securities. Regions has filed with the
SEC a registration statement relating to $200 million of Regions' subordinated
debt securities. Under this registration statement, which became effective in
July 1995, Regions may issue on a delayed or continuous basis its subordinated
debt securities up to such amount, bearing such interest rates, and having such
terms as Regions may determine. The net proceeds from the sale of subordinated
debt securities, if any, may be used for such general corporate purposes as
Regions may determine, including future acquisitions and the repurchase of
outstanding shares of Regions Common Stock in the open market.

53
<PAGE> 199

PRO FORMA FINANCIAL INFORMATION

PRO FORMA COMBINED CONDENSED STATEMENT OF CONDITION
SEPTEMBER 30, 1995
(UNAUDITED)

The following unaudited pro forma combined condensed statement of condition
presents (i) the historical unaudited consolidated statement of conditions of
Regions and First National at September 30, 1995, (ii) the pro forma combined
condensed statement of condition of Regions at September 30, 1995, giving effect
to the Merger, assuming such acquisition is accounted for as a pooling of
interests, and (iii) the pro forma combined condensed statement of condition of
Regions at September 30, 1995, giving effect to the Merger, assuming such
acquisition is accounted for as a pooling of interests, and the Other Pending
Acquisitions, assuming four of such acquisitions are treated as purchases for
accounting purposes and one such acquisition is treated as a pooling of
interests for accounting purposes. The unaudited pro forma combined condensed
statement of condition should be read in conjunction with the historical
consolidated financial statements of Regions and the restated historical
consolidated financial statements of First National, including the respective
notes thereto, which are incorporated by reference in this Joint Proxy
Statement, and the unaudited pro forma financial information appearing elsewhere
in this Joint Proxy Statement and included in Regions' Current Report on Form
8-K dated November 22, 1995. See "Documents Incorporated by Reference,"
"Summary -- Comparative Per Share Data," and "-- Summary Pro Forma Financial
Data." The effect of an anticipated restructuring charge (estimated for purposes
of the pro forma financial statements at $5.6 million net of taxes) to be taken
by First National in connection with the Merger has been reflected in the pro
forma combined condensed statement of condition; however, since the anticipated
restructuring charge is nonrecurring, it has not been reflected in the pro forma
combined condensed statements of income. The pro forma financial data does not
give effect to anticipated reductions in expenses at First National in
connection with the Merger. The pro forma combined condensed statement of
condition is not necessarily indicative of the combined condensed financial
position that actually would have occurred if the Merger or the Other Pending
Acquisitions had been consummated at the date indicated or which may be obtained
in the future.

<TABLE>
<CAPTION>
REGIONS, FIRST
NATIONAL,
AND OTHER
REGIONS AND PENDING
FIRST NATIONAL OTHER ACQUISITIONS
FIRST COMBINING PRO FORMA PENDING COMBINING PRO FORMA
REGIONS NATIONAL ADJUSTMENTS COMBINED ACQUISITIONS ADJUSTMENTS COMBINED
----------- ---------- ----------- -------------- ------------ ----------- ---------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Cash and due from
banks.............. $ 636,158 $ 98,244 $ 734,402 $ 54,063 $ 788,465
Interest-bearing
deposits in other
banks.............. 14,922 10,708 25,630 7,474 $ (8,474)(d) 24,630
Investment
securities......... 2,145,891 152,312 2,298,203 88,143 2,386,346
Securities available
for sale........... 887,309 663,106 1,550,415 80,158 (57,045)(c) 1,573,528
Trading account
assets............. 17,942 17,942 17,942
Mortgage loans held
for sale........... 98,046 98,046 14,177 112,223
Federal fund sold and
securities
purchased under
agreements to
resell............. 1,639 91,652 93,291 7,830 101,121
Loans, net of
unearned income.... 9,596,673 1,970,654 11,567,327 382,965 11,950,292
Allowance for loan
losses............. (131,426) (26,016) (157,442) (4,323) (161,765)
Premises and
equipment, net..... 188,054 67,209 255,263 11,616 266,879
Other real estate.... 5,537 9,138 14,675 1,722 16,397
Excess purchase
price.............. 105,002 9,000 114,002 4,295 27,627(d) 145,924
Due from customers on
acceptances........ 15,561 15,561 15,561
Other assets......... 266,602 65,868 332,470 11,234 343,704
----------- ---------- -------------- ------------ ----------- ---------------
Total
assets..... $13,847,910 $3,111,875 $ 16,959,785 $659,354 $ (37,892) $17,581,247
========== ========= =========== ========= ========== ===========
</TABLE>

54
<PAGE> 200

<TABLE>
<CAPTION>
REGIONS, FIRST
NATIONAL,
AND OTHER
REGIONS AND PENDING
FIRST NATIONAL OTHER ACQUISITIONS
FIRST COMBINING PRO FORMA PENDING COMBINING PRO FORMA
REGIONS NATIONAL ADJUSTMENTS COMBINED ACQUISITIONS ADJUSTMENTS COMBINED
----------- ---------- ----------- -------------- ------------ ----------- ---------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
LIABILITIES AND
STOCKHOLDERS' EQUITY
Non-interest bearing
deposits........... $ 1,461,775 $ 335,441 $ 1,797,216 $ 85,492 $ 1,882,708
Interest-bearing
deposits........... 9,280,412 2,251,682 11,532,094 499,748 12,031,842
Federal funds
purchased and
securities sold
under agreements to
repurchase......... 1,216,763 83,909 1,300,672 1,990 1,302,662
Other borrowed
funds.............. 624,240 90,814 715,054 9,041 724,095
Bank acceptances
outstanding........ 15,561 15,561 15,561
Other liabilities.... 135,369 45,763 $ 5,600 (b) 186,732 7,322 194,054
----------- ---------- ----------- -------------- ------------ ----------- ---------------
Total liabilities.... 12,734,120 2,807,609 5,600 15,547,329 603,593 16,150,922
Common stock......... 29,704 20,529 39,455 7,274 $ (5,386)(d) 39,999
(10,778)(a)
(1,344)(e)
Surplus.............. 418,453 86,468 515,699 28,274 (23,179)(d) 522,138
10,778(a)
1,344 (e)
Undivided Profits.... 676,285 194,731 865,416 20,618 (9,736)(d) 876,298
(5,600)(b)
Less: Treasury and
unearned restricted
stock.............. (14,239) (14,239) (36) (57,045)(c) (14,239)
57,081 (d)
Unrealized gain
(loss) on
securities
available for sale,
net of tax......... 3,587 2,538 6,125 (369) 373(d) 6,129
----------- ---------- -------------- ------------ ----------- ---------------
Total stockholders'
equity............. 1,113,790 304,266 (5,600) 1,412,456 55,761 (37,892) 1,430,325
----------- ---------- ----------- -------------- ------------ ----------- ---------------
Total liabilities and
stockholders'
equity............. $13,847,910 $3,111,875 $ 16,959,785 $659,354 $ (37,892) $17,581,247
========== ========= =========== ========= ========== ===========
</TABLE>

- ---------------

(a) To reflect the issuance of 15,602,040 shares of Regions Common Stock to
effect the Merger. The Merger will be accounted for as a pooling of
interests, therefore the effect upon stockholders' equity will be to
increase Regions stockholders' equity by the total equity of First
National. The unaudited pro forma financial statements have been prepared
assuming Regions will issue 15,602,040 shares of Regions Common Stock in
exchange for all the outstanding shares of First National Common Stock. A
reclassification from common stock to surplus results from the issuance of
the shares.
(b) In connection with its merger with Regions, it is anticipated that First
National will take a one-time restructuring charge estimated for purposes
of the pro forma financial statements of approximately $6.6 million ($5.6
million net of taxes), prior to or at the time of consummation of the
Merger. The restructuring charge results from data processing contract
termination costs, reductions in the carrying value of unnecessary
equipment, severance costs for anticipated staff reductions, additional
income taxes related to the recapture of savings and loan bad debt
reserves, and other one-time costs directly related to the Merger. The
effect of the anticipated restructuring charge has been reflected in the
pro forma combined condensed statement of condition; however, since the
anticipated restructuring charge is nonrecurring, it has not been reflected
in the pro forma combined condensed statements of income
(c) To reflect the purchase, in the open market, of 1,404,180 shares of Regions
Common Stock, at $40.625 per share, to be reissued in the Metro
Acquisition, the First Federal Acquisition, and the First Gwinnett
Acquisition.
(d) To reflect the elimination of the capital accounts of Enterprise, Metro,
First Federal and First Gwinnett in accordance with purchase accounting,
and corresponding exchange of 1,429,951 shares of Regions Common Stock and
$8,474,000 for all the outstanding shares of Enterprise, Metro, First
Federal, and

55
<PAGE> 201

First Gwinnett common stock, assuming a market price of $40.625 per share
for Regions Common Stock. The Regions Common Stock exchanged is reflected
as being issued from treasury stock. Approximately $27.6 million of excess
purchase price will be added as a result of these transactions and is
expected to be amortized over 18 years.
(e) To reflect the issuance of 844,991 shares of Regions Common Stock to effect
the Delta Acquisition. The Delta Acquisition will be accounted for as a
pooling of interests, therefore the effect upon stockholders' equity will
be to increase Regions stockholders' equity by the total equity of Delta.
The unaudited pro forma financial statements have been prepared assuming
Regions will issue 844,991 shares of Regions Common Stock in exchange for
all the outstanding shares of Delta common stock. A reclassification from
common stock to surplus results from the issuance of the shares.

PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME FOR REGIONS AND FIRST NATIONAL
(UNAUDITED)

The following unaudited pro forma combined condensed statements of income
have been prepared for the nine months ended September 30, 1995, and for each of
the three years in the period ended December 31, 1994, and give effect to the
Merger, assuming such acquisition is accounted for as a pooling of interests.
The unaudited pro forma combined condensed statements of income should be read
in conjunction with the historical consolidated financial statements of Regions
and the restated historical consolidated financial statements of First National,
including the respective notes thereto, which are incorporated by reference in
this Joint Proxy Statement, and the unaudited consolidated historical and other
pro forma financial information, including the notes thereto, appearing
elsewhere in this Joint Proxy Statement and included in Regions' Current Report
on Form 8-K dated November 22, 1995. See "Documents Incorporated by Reference,"
"Summary -- Comparative Per Share Data," and "-- Summary Pro Forma Financial
Data." The effect of an anticipated restructuring charge (estimated for purposes
of the pro forma financial statements at $5.6 million net of taxes) to be taken
by First National in connection with the Merger has been reflected in the pro
forma combined condensed statement of condition; however, since the anticipated
restructuring charge is nonrecurring, it has not been reflected in the pro forma
combined condensed statements of income. The pro forma financial data does not
give effect to anticipated reductions in expenses at First National in
connection with the Merger. The pro forma combined condensed statements of
income are not necessarily indicative of the results that actually would have
occurred if the Merger been consummated at the dates indicated or which may be
obtained in the future.

<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED DECEMBER 31,
SEPTEMBER 30, ------------------------------------
1995 1994 1993 1992
-------------- ---------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Total interest income..................... $937,180 $ 991,693 $746,544 $737,094
Total interest expense.................... 472,106 436,157 296,195 324,420
-------------- ---------- -------- --------
Net interest income....................... 465,074 555,536 450,349 412,674
Provision for loan losses................. 17,275 20,580 24,695 39,367
-------------- ---------- -------- --------
Net interest income after loan loss
provision............................ 447,799 534,956 425,654 373,307
Total noninterest income.................. 139,226 171,520 165,066 150,360
Total noninterest expense................. 355,734 441,847 378,047 343,279
Income tax expense........................ 77,339 84,109 67,153 56,405
-------------- ---------- -------- --------
Income before cumulative effect of change
in accounting principle................ $153,952 $ 180,520 $145,520 $123,983
========== ========= ======== ========
Income before cumulative effect of change
in accounting principle per share...... $ 2.49 $ 3.10 $ 2.79 $ 2.42
========== ========= ======== ========
Average common shares outstanding......... 61,765 58,206 52,153 51,204
</TABLE>

56
<PAGE> 202

PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME FOR REGIONS, FIRST NATIONAL,
AND OTHER PENDING ACQUISITIONS
(UNAUDITED)

The following unaudited pro forma combined condensed statements of income
have been prepared for the nine months ended September 30, 1995, and for each of
the three years in the period ended December 31, 1994, and give effect to the
Merger, assuming such acquisition is accounted for as a pooling of interests,
and the Other Pending Acquisitions, assuming such acquisitions are treated as
purchases for accounting purposes. The unaudited pro forma combined condensed
statements of income should be read in conjunction with the historical
consolidated financial statements of Regions and the restated historical
consolidated financial statements of First National, including the respective
notes thereto, which are incorporated by reference in this Joint Proxy
Statement, and the unaudited consolidated historical and other pro forma
financial information, including the notes thereto, appearing elsewhere in this
Joint Proxy Statement and included in Regions' current Report on Form 8-K dated
November 22, 1995. See "Documents Incorporated by Reference,"
"Summary -- Comparative Per Share Data," and "-- Summary Pro Forma Financial
Data." The effect of an anticipated restructuring charge (estimated for purposes
of the pro forma financial statements at $5.6 million net of taxes) to be taken
by First National in connection with the Merger has been reflected in the pro
forma combined condensed statement of income; however, since the anticipated
restructuring charge is nonrecurring, it has not been reflected in the pro forma
combined condensed statements of income. The pro forma financial data does not
give effect to anticipated reductions in expenses at First National in
connection with the Merger. The pro forma combined condensed statements of
income are not necessarily indicative of the results that actually would have
occurred if the Merger been consummated at the dates indicated or which may be
obtained in the future.

57
<PAGE> 203

CERTAIN REGULATORY CONSIDERATIONS

The following discussion sets forth certain of the material elements of the
regulatory framework applicable to banks and bank holding companies and provides
certain specific information related to Regions and First National. Additional
information is available in the respective Annual Reports on Form 10-K for the
fiscal year ended December 31, 1994 of Regions and First National. See
"Documents Incorporated by Reference."

GENERAL

Regions and First National are both bank holding companies registered with
the Federal Reserve under the BHC Act. As such, Regions and First National and
their non-bank subsidiaries are subject to the supervision, examination, and
reporting requirements of the BHC Act and the regulations of the Federal
Reserve. In addition, as savings and loan holding companies, Regions and First
National are also registered with the OTS and are subject to regulation,
supervision, examination, and reporting requirements of the OTS.

The BHC Act requires every bank holding company to obtain the prior
approval of the Federal Reserve before: (i) it may acquire direct or indirect
ownership or control of any voting shares of any bank if, after such
acquisition, the bank holding company will directly or indirectly own or control
more than 5.0% of the voting shares of the bank; (ii) it or any of its
subsidiaries, other than a bank, may acquire all or substantially all of the
assets of any bank; or (iii) it may merge or consolidate with any other bank
holding company. Similar federal statutes require savings and loan holding
companies and other companies to obtain the prior approval of the OTS before
acquiring direct or indirect ownership or control of a savings association.

The BHC Act further provides that the Federal Reserve may not approve any
transaction that would result in a monopoly or would be in furtherance of any
combination or conspiracy to monopolize or attempt to monopolize the business of
banking in any section of the United States, or the effect of which may be
substantially to lessen competition or to tend to create a monopoly in any
section of the country, or that in any other manner would be in restraint of
trade, unless the anticompetitive effects of the proposed transaction are
clearly outweighed by the public interest in meeting the convenience and needs
of the community to be served. The Federal Reserve is also required to consider
the financial and managerial resources and future prospects of the bank holding
companies and banks concerned and the convenience and needs of the community to
be served. Consideration of financial resources generally focuses on capital
adequacy, which is discussed below.

The BHC Act, as amended by the interstate banking provisions of the
Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (the
"Interstate Banking Act"), which became effective on September 29, 1995,
repealed the prior statutory restrictions on interstate acquisitions of banks by
bank holding companies, such that Regions, First National, and any other bank
holding company located in either Alabama or Georgia may now acquire a bank
located in any other state, and any bank holding company located outside Alabama
or Georgia may lawfully acquire any Alabama- or Georgia-based bank, regardless
of state law to the contrary, in either case subject to certain
deposit-percentage, aging requirements, and other restrictions. The Interstate
Banking Act also generally provides that, after June 1, 1997, national and
state-chartered banks may branch interstate through acquisitions of banks in
other states. By adopting legislation prior to that date, a state has the
ability either to "opt in" and accelerate the date after which interstate
branching is permissible or "opt out" and prohibit interstate branching
altogether. As of the date of this Joint Proxy Statement, neither Alabama,
Georgia, nor any other state in which the banking subsidiaries of Regions or
First National are located have "opted in" or "opted out." Assuming no state
action prior to June 1, 1997, Regions would be able to consolidate all of its
bank subsidiaries into a single bank with interstate branches following that
date.

The BHC Act generally prohibits Regions and First National from engaging in
activities other than banking or managing or controlling banks or other
permissible subsidiaries and from acquiring or retaining direct or indirect
control of any company engaged in any activities other than those activities
determined by the Federal Reserve to be so closely related to banking or
managing or controlling banks as to be a proper incident thereto. In determining
whether a particular activity is permissible, the Federal Reserve must consider
whether the performance of such an activity reasonably can be expected to
produce benefits to the public, such as greater convenience, increased
competition, or gains in efficiency, that outweigh possible

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adverse effects, such as undue concentration of resources, decreased or unfair
competition, conflicts of interest, or unsound banking practices. For example,
factoring accounts receivable, acquiring or servicing loans, leasing personal
property, conducting discount securities brokerage activities, performing
certain data processing services, acting as agent or broker in selling credit
life insurance and certain other types of insurance in connection with credit
transactions, and performing certain insurance underwriting activities all have
been determined by the Federal Reserve to be permissible activities of bank
holding companies. The BHC Act does not place territorial limitations on
permissible non-banking activities of bank holding companies. Despite prior
approval, the Federal Reserve has the power to order a holding company or its
subsidiaries to terminate any activity or to terminate its ownership or control
of any subsidiary when it has reasonable cause to believe that continuation of
such activity or such ownership or control constitutes a serious risk to the
financial safety, soundness, or stability of any bank subsidiary of that bank
holding company.

Each of the banking and thrift subsidiaries of Regions and First National
is a member of the Federal Deposit Insurance Corporation (the "FDIC"), and as
such, its deposits are insured by the FDIC to the maximum extent provided by
law. Each such subsidiary is also subject to numerous state and federal statutes
and regulations that affect its business, activities, and operations, and each
is supervised and examined by one or more state or federal bank regulatory
agencies.

All of Regions' bank subsidiaries, as well as those banking subsidiaries of
First National that are also state-chartered banks that are not members of the
Federal Reserve System, are subject to regulation, supervision, and examination
by the FDIC and the state banking authorities of the states in which they are
located. The state-chartered banking subsidiaries of First National that are
members of the Federal Reserve System are subject to regulation, supervision,
and examination by the Federal Reserve, the FDIC, and the state banking
authorities of the states in which they are located. The banking subsidiaries of
First National that are national banking associations are subject to regulation,
supervision, and examination by the Office of the Comptroller of the Currency
("OCC") and the FDIC. The thrift subsidiaries of Regions and First National are
subject to regulation, supervision, and examination by the OTS and the FDIC. The
federal banking regulator for each of the banking and thrift subsidiaries of
Regions and First National, as well as the appropriate state banking authorities
in the case of those depository institution subsidiaries that are state-
chartered, regularly examine the operations of each of the banking and thrift
subsidiaries of Regions and First National and are given authority to approve or
disapprove mergers, consolidations, the establishment of branches, and similar
corporate actions. The federal and state banking regulators also have the power
to prevent the continuance or development of unsafe or unsound banking practices
or other violations of law.

PAYMENT OF DIVIDENDS

Regions and First National are legal entities separate and distinct from
their banking, thrift, and other subsidiaries. The principal sources of cash
flow of both Regions and First National, including cash flow to pay dividends to
their respective stockholders, are dividends from their banking and thrift
subsidiaries. There are statutory and regulatory limitations on the payment of
dividends by these depository institution subsidiaries to Regions and First
National, as well as by Regions and First National to their stockholders.

All of Regions' banking subsidiaries, as well as those banking subsidiaries
of First National that are also state-chartered banks, are subject to the
respective laws and regulations of the states of Alabama, Florida, Georgia,
Louisiana, and Tennessee as to the payment of dividends. Each national banking
association subsidiary of First National is required by federal law to obtain
the prior approval of the OCC for the payment of dividends if the total of all
dividends declared by the bank in any year would exceed the total of (i) such
bank's net profits (as defined and interpreted by regulation) for that year,
plus (ii) the retained net profits (as defined and interpreted by regulation)
for the proceeding two years, less any required transfers to surplus. In
addition, national banks may only pay dividends to the extent that their
retained net profits (including the portion transferred to surplus) exceed
statutory bad debts (as defined by regulation).

If, in the opinion of the federal banking regulator, a bank or thrift under
its jurisdiction is engaged in or is about to engage in an unsafe or unsound
practice (which, depending on the financial condition of the depository
institution, could include the payment of dividends), such authority may
require, after notice and

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hearing, that such institution cease and desist from such practice. The federal
banking agencies have indicated that paying dividends that deplete a depository
institution's capital base to an inadequate level would be an unsafe and unsound
banking practice. Under the Federal Deposit Insurance Corporation Improvement
Act of 1991 ("FDICIA"), a depository institution may not pay any dividend if
payment would cause it to become undercapitalized or if it already is
undercapitalized. See "-- Prompt Corrective Action." Moreover, the federal
agencies have issued policy statements that provide that bank holding companies
and insured banks should generally only pay dividends out of current operating
earnings.

At September 30, 1995, under dividend restrictions imposed under federal
and state laws, the banking and thrift subsidiaries of Regions and First
National, without obtaining governmental approvals, could declare aggregate
dividends to Regions and First National of approximately $264 million and $25.6
million, respectively.

The payment of dividends by Regions and First National and their banking
and thrift Subsidiaries may also be affected or limited by other factors, such
as the requirement to maintain adequate capital above regulatory guidelines.

CAPITAL ADEQUACY

Regions, First National, and their respective banking and thrift
subsidiaries are required to comply with the capital adequacy standards
established by the Federal Reserve in the case of Regions and First National and
the appropriate federal banking regulator in the case of each of their banking
and thrift subsidiaries. There are two basic measures of capital adequacy for
bank holding companies that have been promulgated by the Federal Reserve: a
risk-based measure and a leverage measure. All applicable capital standards must
be satisfied for a bank holding company to be considered in compliance.

The risk-based capital standards are designed to make regulatory capital
requirements more sensitive to differences in risk profile among banks and bank
holding companies, to account for off-balance-sheet exposure, and to minimize
disincentives for holding liquid assets. Assets and off-balance-sheet items are
assigned to broad risk categories, each with appropriate weights. The resulting
capital ratios represent capital as a percentage of total risk-weighted assets
and off-balance-sheet items.

The minimum guideline for the ratio (the "Risk-Based Capital Ratio") of
total capital ("Total Capital") to risk-weighted assets (including certain
off-balance-sheet items, such as standby letters of credit) is 8.0%. At least
half of Total Capital must comprise common stock, minority interests in the
equity accounts of consolidated subsidiaries, noncumulative perpetual preferred
stock, and a limited amount of cumulative perpetual preferred stock, less
goodwill and certain other intangible assets ("Tier 1 Capital"). The remainder
may consist of subordinated debt, other preferred stock, and a limited amount of
loan loss reserves ("Tier 2 Capital"). At September 30, 1995, Regions'
consolidated Risk-Based Capital Ratio and its Tier 1 Risk-Based Capital Ratio
(i.e., the ratio of Tier 1 Capital to risk-weighted assets) were 14.28% and
10.82%, respectively, and First National's consolidated Risk-Based Capital and
Tier 1 Risk-Based Capital Ratios were 15.62% and 14.37%, respectively.

In addition, the Federal Reserve has established minimum leverage ratio
guidelines for bank holding companies. These guidelines provide for a minimum
ratio (the "Leverage Ratio") of Tier 1 Capital to average assets, less goodwill
and certain other intangible assets, of 3.0% for bank holding companies that
meet certain specified criteria, including having the highest regulatory rating.
All other bank holding companies generally are required to maintain a Leverage
Ratio of at least 3.0%, plus an additional cushion of 100 to 200 basis points.
Regions' and First National's respective Leverage Ratios at September 30, 1995,
were 7.25% and 9.78%. The guidelines also provide that bank holding companies
experiencing internal growth or making acquisitions will be expected to maintain
strong capital positions substantially above the minimum supervisory levels
without significant reliance on intangible assets. Furthermore, the Federal
Reserve has indicated that it will consider a "tangible Tier 1 Capital Leverage
Ratio" (deducting all intangibles) and other indicia of capital strength in
evaluating proposals for expansion or new activities.

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Each of Regions' and First National's banking and thrift subsidiaries is
subject to risk-based and leverage capital requirements adopted by its federal
banking regulator, which are substantially similar to those adopted by the
Federal Reserve for bank holding companies. Each of the banking and thrift
subsidiaries was in compliance with applicable minimum capital requirements as
of September 30, 1995. Neither Regions, First National, nor any of their banking
and thrift subsidiaries has been advised by any federal banking agency of any
specific minimum capital ratio requirement applicable to it.

Failure to meet capital guidelines could subject a bank (or thrift) to a
variety of enforcement remedies, including issuance of a capital directive, the
termination of deposit insurance by the FDIC, a prohibition on the taking of
brokered deposits, and certain other restrictions on its business. As described
below, substantial additional restrictions can be imposed upon FDIC-insured
depository institutions that fail to meet applicable capital requirements. See
"-- Prompt Corrective Action."

The federal bank regulators continue to indicate their desire to raise
capital requirements applicable to banking organizations beyond their current
levels. In this regard, the Federal Reserve, the OCC, and the FDIC have,
pursuant to FDICIA, proposed an amendment to the risk-based capital standards
that would calculate the change in an institution's net economic value
attributable to increases and decreases in market interest rates and would
require banks with excessive interest rate risk exposure to hold additional
amounts of capital against such exposures. The OTS has already included an
interest-rate risk component in its risk-based capital guidelines for savings
associations that it regulates.

SUPPORT OF SUBSIDIARY BANKS

Under Federal Reserve policy, Regions and First National are expected to
act as sources of financial strength for, and to commit resources to support,
each of their respective banking subsidiaries. This support may be required at
times when, absent such Federal Reserve policy, Regions or First National may
not be inclined to provide it. In addition, any capital loans by a bank holding
company to any of its banking subsidiaries are subordinate in right of payment
to deposits and to certain other indebtedness of such banks. In the event of a
bank holding company's bankruptcy, any commitment by the bank holding company to
a federal bank regulatory agency to maintain the capital of a banking subsidiary
will be assumed by the bankruptcy trustee and entitled to a priority of payment.

Under the Federal Deposit Insurance Act ("FDIA"), a depository institution
insured by the FDIC can be held liable for any loss incurred by, or reasonably
expected to be incurred by, the FDIC after August 9, 1989, in connection with
(i) the default of a commonly controlled FDIC-insured depository institution or
(ii) any assistance provided by the FDIC to any commonly controlled FDIC-insured
depository institution "in danger of default." "Default" is defined generally as
the appointment of a conservator or receiver, and "in danger of default" is
defined generally as the existence of certain conditions indicating that a
default is likely to occur in the absence of regulatory assistance. The FDIC's
claim for damages is superior to claims of stockholders of the insured
depository institution or its holding company, but is subordinate to claims of
depositors, secured creditors, and holders of subordinated debt (other than
affiliates) of the commonly controlled insured depository institution. The
banking and thrift subsidiaries of Regions and First National are subject to
these cross-guarantee provisions. As a result, any loss suffered by the FDIC in
respect of any of these subsidiaries would likely result in assertion of the
cross-guarantee provisions, the assessment of such estimated losses against the
banks' or the thrifts' depository institution affiliates, and a potential loss
of Regions' or First National's respective investments in such other banking and
thrift subsidiaries.

PROMPT CORRECTIVE ACTION

FDICIA establishes a system of prompt corrective action to resolve the
problems of undercapitalized institutions. Under this system, which became
effective in December 1992, the federal banking regulators are required to
establish five capital categories (well capitalized, adequately capitalized,
undercapitalized, significantly undercapitalized, and critically
undercapitalized) and to take certain mandatory supervisory actions, and are
authorized to take other discretionary actions, with respect to institutions in
the three undercapitalized categories, the severity of which will depend upon
the capital category in which the

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institution is placed. Generally, subject to a narrow exception, FDICIA requires
the banking regulator to appoint a receiver or conservator for an institution
that is critically undercapitalized. The federal banking agencies have specified
by regulation the relevant capital level for each category.

Under the final agency rules implementing the prompt corrective action
provisions, an institution that (i) has a Risk-Based Capital Ratio of 10% or
greater, a Tier 1 Risk-Based Capital Ratio of 6.0% or greater, and a Leverage
Ratio of 5.0% or greater and (ii) is not subject to any written agreement,
order, capital directive, or prompt corrective action directive issued by the
appropriate federal banking agency is deemed to be well capitalized. An
institution with a Risk-Based Capital Ratio of 8.0% or greater, a Tier 1
Risk-Based Capital Ratio of 4.0% or greater, and a Leverage Ratio of 4.0% or
greater is considered to be adequately capitalized. A depository institution
that has a Risk-Based Capital Ratio of less than 8.0%, a Tier 1 Risk-Based
Capital Ratio of less than 4.0%, or a Leverage Ratio of less than 4.0% is
considered to be undercapitalized. A depository institution that has a
Risk-Based Capital Ratio of less than 6.0%, a Tier 1 Risk-Based Capital Ratio of
less than 3.0%, or a Leverage Ratio of less than 3.0% is considered to be
significantly undercapitalized, and an institution that has a tangible equity
capital to assets ratio equal to or less than 2.0% is deemed to be critically
undercapitalized. For purposes of the regulation, the term "tangible equity"
includes core capital elements counted as Tier 1 Capital for purposes of the
risk-based capital standards, plus the amount of outstanding cumulative
perpetual preferred stock (including related surplus), minus all intangible
assets with certain exceptions. A depository institution may be deemed to be in
a capitalization category that is lower than is indicated by its actual capital
position if it receives an unsatisfactory examination rating.

An institution that is categorized as undercapitalized, significantly
undercapitalized, or critically undercapitalized is required to submit an
acceptable capital restoration plan to its appropriate federal banking agency.
Under FDICIA, a bank holding company must guarantee that a subsidiary depository
institution meet its capital restoration plan, subject to certain limitations.
The obligation of a controlling bank holding company under FDICIA to fund a
capital restoration plan is limited to the lesser of 5.0% of an undercapitalized
subsidiary's assets or the amount required to meet regulatory capital
requirements. An undercapitalized institution is also generally prohibited from
increasing its average total assets, making acquisitions, establishing any
branches, or engaging in any new line of business, except in accordance with an
accepted capital restoration plan or with the approval of the FDIC. In addition,
the appropriate federal banking agency is given authority with respect to any
undercapitalized depository institution to take any of the actions it is
required to or may take with respect to a significantly undercapitalized
institution as described below if it determines "that those actions are
necessary to carry out the purpose" of FDICIA.

For those institutions that are significantly undercapitalized or
undercapitalized and either fail to submit an acceptable capital restoration
plan or fail to implement an approved capital restoration plan, the appropriate
federal banking agency must require the institution to take one or more of the
following actions: (i) sell enough shares, including voting shares, to become
adequately capitalized; (ii) merge with (or be sold to) another institution (or
holding company), but only if grounds exist for appointing a conservator or
receiver; (iii) restrict certain transactions with banking affiliates as if the
"sister bank" exception to the requirements of Section 23A of the Federal
Reserve Act did not exist; (iv) otherwise restrict transactions with bank or
non-bank affiliates; (v) restrict interest rates that the institution pays on
deposits to "prevailing rates" in the institution's "region;" (vi) restrict
asset growth or reduce total assets; (vii) alter, reduce, or terminate
activities; (viii) hold a new election of directors; (ix) dismiss any director
or senior executive officer who held office for more than 180 days immediately
before the institution became undercapitalized, provided that in requiring
dismissal of a director or senior officer, the agency must comply with certain
procedural requirements, including the opportunity for an appeal in which the
director or officer will have the burden of proving his or her value to the
institution; (x) employ "qualified" senior executive officers; (xi) cease
accepting deposits from correspondent depository institutions; (xii) divest
certain nondepository affiliates which pose a danger to the institution; or
(xiii) be divested by a parent holding company. In addition, without the prior
approval of the appropriate federal banking agency, a significantly
undercapitalized institution may not pay any bonus to any senior executive
officer or increase the rate of compensation for such an officer.

At September 30, 1995, all of the banking and thrift subsidiaries of
Regions and First National had the requisite capital levels to qualify as well
capitalized.

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FDIC INSURANCE ASSESSMENTS

In July 1993, the FDIC adopted a new risk-based assessment system for
insured depository institutions that takes into account the risks attributable
to different categories and concentrations of assets and liabilities. The new
system, which went into effect on January 1, 1994, and replaced a transitional
system that the FDIC had utilized for the 1993 calendar year, assigns an
institution to one of three capital categories: (i) well capitalized; (ii)
adequately capitalized; and (iii) undercapitalized. These three categories are
substantially similar to the prompt corrective action categories described
above, with the undercapitalized category including institutions that are
undercapitalized, significantly undercapitalized, and critically
undercapitalized for prompt corrective action purposes. An institution is also
assigned by the FDIC to one of three supervisory subgroups within each capital
group. The supervisory subgroup to which an institution is assigned is based on
a supervisory evaluation provided to the FDIC by the institution's primary
federal regulator and information which the FDIC determines to be relevant to
the institution's financial condition and the risk posed to the deposit
insurance funds (which may include, if applicable, information provided by the
institution's state supervisor). An institution's insurance assessment rate is
then determined based on the capital category and supervisory category to which
it is assigned. Under the final risk-based assessment system, as well as the
prior transitional system, there are nine assessment risk classifications (i.e.,
combinations of capital groups and supervisory subgroups) to which different
assessment rates are applied. Assessment rates for members of both the Bank
Insurance Fund ("BIF") and the SAIF for the first half of 1995, as they had been
during 1994, ranged from 23 basis points (0.23% of deposits) for an institution
in the highest category (i.e., "well capitalized" and "healthy") to 31 basis
points (0.31% of deposits) for an institution in the lowest category (i.e.,
"undercapitalized" and "substantial supervisory concern"). These rates were
established for both funds to achieve a designated ratio of reserves to insured
deposits (i.e., 1.25%) within a specified period of time.

Once the designated ratio for the BIF was reached, which appears to have
occurred some time during May 1995, the FDIC was authorized to reduce the
minimum assessment rate below 23 basis points and to set future assessment rates
at such levels that would maintain a fund's reserve ratio at the designated
level. In August 1995, the FDIC adopted final regulations reducing the
assessment rates for BIF-member banks. Under the revised schedule, BIF-member
banks, starting with the second half of 1995, will now pay assessments ranging
from 4.0 basis points to 31 basis points, with an average assessment rate of 4.5
basis points. Refunds, with interest, will be paid for assessments for the
month(s) after the month in which the designated reserve ratio for the BIF was
reached, as well as for the quarterly payment made on September 30, 1995,
assuming that the designated reserve ratio was achieved prior to June 30, 1995.
At the same time, the FDIC elected to retain the existing assessment rate of 23
to 31 basis points for SAIF members for the foreseeable future given the
undercapitalized nature of that insurance fund. More recently, on November 14,
1995, the FDIC announced that, beginning in 1996, it would further reduce the
deposit insurance premiums for 92% of all BIF members that are in the highest
capital and supervisory categories to $2,000 per year, regardless of deposit
size.

On July 28, 1995, the FDIC, the Treasury Department, and the OTS released
statements outlining a proposed plan to recapitalize the SAIF certain features
of which were subsequently agreed upon by members of the Banking Committees of
the U.S. House of Representatives and the Senate on November 7, 1995 in
negotiations to reconcile differences in bills on the issue that had been
introduced or partially adopted by each body. Under the agreement, all
SAIF-member institutions will pay a special assessment to the SAIF of
approximately 80 basis points, the amount that would enable the SAIF to attain
its designated reserve ratio of 1.25%. The special assessment would be payable
on January 1, 1996, based on the amount of deposits held as of March 31, 1995.
BIF-insured institutions holding SAIF-assessed deposits would receive a 20%
reduction in the assessment rate and would pay a one-time assessment of 64 basis
points. The agreement also provides that the assessment base for the bonds
issued in the late 1980s by the Financing Corporation to recapitalize the now
defunct Federal Savings and Loan Insurance Corporation would be expanded to
include deposits of both BIF- and SAIF-insured institutions, with BIF members
paying approximately 75% of the interest on such obligations. The committee
members further agreed that the BIF and SAIF should be merged on January 1,
1998, with such merger being conditioned upon the prior elimination of the
thrift charter. At this time, neither Regions nor First National is able to
predict the timing or exact amount of any SAIF special assessment that might be
required. However, if an 80 basis point assessment were levied against the
existing SAIF deposits of

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Regions and First National, the aggregate SAIF assessments of Regions and First
National (on a pre-tax basis) would be approximately $24 million and $4.0
million, respectively.

Under the FDIA, insurance of deposits may be terminated by the FDIC upon a
finding that the institution has engaged in unsafe and unsound practices, is in
an unsafe or unsound condition to continue operations, or has violated any
applicable law, regulation, rule, order, or condition imposed by the FDIC.

SAFETY AND SOUNDNESS STANDARDS

The FDIA, as amended by FDICIA and the Riegle Community Development and
Regulatory Improvement Act of 1994, requires the federal bank regulatory
agencies to prescribe standards, by regulations or guidelines, relating to
internal controls, information systems and internal audit systems, loan
documentation, credit underwriting, interest rate risk exposure, asset growth,
asset quality, earnings, stock valuation and compensation, fees and benefits,
and such other operational and managerial standards as the agencies deem
appropriate. The federal bank regulatory agencies have adopted, effective August
9, 1995, a set of guidelines prescribing safety and soundness standards pursuant
to FDICIA, as amended. The guidelines establish general standards relating to
internal controls and information systems, internal audit systems, loan
documentation, credit underwriting, interest rate exposure, asset growth and
compensation, fees, and benefits. In general, the guidelines require, among
other things, appropriate systems and practices to identify and manage the risks
and exposures specified in the guidelines. The guidelines prohibit excessive
compensation as an unsafe and unsound practice and describe compensation as
excessive when the amounts paid are unreasonable or disproportionate to the
services performed by an executive officer, employee, director, or principal
stockholders. The federal banking agencies determined that stock valuation
standards were not appropriate. In addition, the agencies adopted regulations
that authorize, but do not require, an agency to order an institution that has
been given notice by an agency that it is not satisfying any of such safety and
soundness standards to submit a compliance plan. If, after being so notified, an
institution fails to submit an acceptable compliance plan or fails in any
material respect to implement an accepted compliance plan or fails in any
material respect to implement an accepted compliance plan, the agency must issue
an order directing action to correct the deficiency and may issue an order
directing other actions of the types to which an undercapitalized association is
subject under the "prompt correction action" provisions of FDICIA. See
"-- Prompt Corrective Action." If an institution fails to comply with such an
order, the agency may seek to enforce such order in judicial proceedings and to
impose civil money penalties. The federal bank regulatory agencies also proposed
guidelines for asset quality and earnings standards.

DEPOSITOR PREFERENCE

The Omnibus Budget Reconciliation Act of 1993 provides that deposits and
certain claims for administrative expenses and employee compensation against an
insured depository institution would be afforded a priority over other general
unsecured claims against such an institution in the "liquidation or other
resolution" of such an institution by any receiver.

DESCRIPTION OF REGIONS COMMON STOCK

Regions is authorized to issue 120,000,000 shares of Regions Common Stock,
of which 47,533,033 shares were issued, including 2,088,579 treasury shares, as
of the Regions Record Date. No other class of stock is authorized.

Holders of Regions Common Stock are entitled to receive such dividends as
may be declared by the Board of Directors out of funds legally available
therefore. Dividend payments are subject to certain limitations imposed in
Regions' debt instruments. The ability of Regions to pay dividends is affected
by the ability of its subsidiary depository institutions to pay dividends, which
is limited by applicable regulatory requirements and capital guidelines. At
September 30, 1995, under such requirements and guidelines, Regions subsidiary
depository institutions had $264 million of undivided profits legally available
for the payment of dividends. See "Certain Regulatory Considerations -- Payment
of Dividends."

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For a further description of Regions Common Stock, see "Effect of the
Merger on Rights of Stockholders."

STOCKHOLDER PROPOSALS

Regions expects to hold its next annual meeting of stockholders after the
Merger during April 1997. Under SEC rules proposals of Regions stockholders
intended to be presented at that meeting must be received by Regions at its
principal executive offices no later than the date specified in Regions' 1996
annual meeting proxy statement.

EXPERTS

The consolidated financial statements of First National as of December 31,
1994 and 1993, and for each of the years in the three-year period ended December
31, 1994, incorporated by reference herein and in the Registration Statement by
reference to First National's Annual Report on Form 10-K for the fiscal year
ended December 31, 1994, have been incorporated by reference herein in reliance
upon the report of KPMG Peat Marwick LLP, independent certified public
accountants, incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing. The report of KPMG Peat Marwick LLP
covering the December 31, 1994 consolidated financial statements refers to a
change in the accounting for investment securities at December 31, 1993 to adopt
the provisions of Statement of Financial Accounting Standards ("SFAS") No. 115,
"Accounting for Certain Investments in Debt and Equity Securities," refers to a
change in the accounting for income taxes in 1993 to adopt the provisions of
SFAS No. 109, "Accounting for Income Taxes," and also refers to a change in the
accounting for postretirement benefits other than pensions in 1993 to adopt the
provisions of SFAS No. 106, "Employers' Accounting for Postretirement Benefits
Other than Pensions."

The restated consolidated financial statements of First National as of
December 31, 1994 and 1993, and for each of the years in the three-year period
ended December 31, 1994 (giving effect to the acquisition of FF Bancorp,
accounted for as a pooling of interests), incorporated by reference herein and
in the Registration Statement by reference to First National's Current Report on
Form 8-K dated November 21, 1995, have been incorporated by reference herein in
reliance upon the reports of KPMG Peat Marwick LLP and Hacker, Johnson, Cohen &
Grieb, independent certified public accountants, incorporated by reference
herein, and upon the authority of said firms as experts in accounting and
auditing. The report of KPMG Peat Marwick LLP covering the December 31, 1994
restated consolidated financial statements refers to a change in the accounting
for investment securities at December 31, 1993 to adopt the provisions of
Statement of Financial Accounting Standards ("SFAS") No. 115, "Accounting for
Certain Investments in Debt and Equity Securities," refers to a change in the
accounting for income taxes in 1993 to adopt the provisions of SFAS No. 109,
"Accounting for Income Taxes," and also refers to a change in the accounting for
postretirement benefits other than pensions in 1993 to adopt the provisions of
SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other than
Pensions."

The consolidated financial statements of Regions, incorporated by reference
in Regions Annual Report (Form 10-K) for the year ended December 31, 1994, have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon incorporated by reference therein and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.

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OPINIONS

The legality of the shares of Regions Common Stock to be issued in the
Merger will be passed upon by Lange, Simpson, Robinson & Somerville, Birmingham,
Alabama. Henry E. Simpson, a partner in the law firm of Lange, Simpson, Robinson
& Somerville, is a member of the Board of Directors of Regions. As of December
4, 1995, attorneys in the law firm of Lange, Simpson, Robinson & Somerville
owned an aggregate of 118,595 shares of Regions Common Stock.

Certain tax consequences of the transaction have been passed upon by Alston
& Bird, Atlanta, Georgia.

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<PAGE> 212

APPENDIX I

AGREEMENT AND PLAN OF REORGANIZATION

BY AND BETWEEN

FIRST NATIONAL BANCORP

AND

REGIONS FINANCIAL CORPORATION

DATED AS OF OCTOBER 22, 1995

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<PAGE> 213

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C> <C>
Parties................................................................................. I-6
Preamble................................................................................ I-6
ARTICLE 1 -- TRANSACTIONS AND TERMS OF MERGER....................................... I-6
1.1 Merger................................................................. I-6
1.2 Time and Place of Closing.............................................. I-6
1.3 Effective Time......................................................... I-7
1.4 Execution of Stock Option Agreement.................................... I-7
ARTICLE 2 -- TERMS OF MERGER........................................................ I-7
2.1 Charter................................................................ I-7
2.2 Bylaws................................................................. I-7
ARTICLE 3 -- MANNER OF CONVERTING SHARES............................................ I-7
3.1 Conversion of Shares................................................... I-7
3.2 Anti-Dilution Provisions............................................... I-7
3.3 Shares Held by First National or Regions............................... I-7
3.4 Fractional Shares...................................................... I-8
3.5 Conversion of Stock Rights............................................. I-8
ARTICLE 4 -- EXCHANGE OF SHARES..................................................... I-9
4.1 Exchange Procedures.................................................... I-9
4.2 Rights of Former First National Stockholders........................... I-9
ARTICLE 5 -- REPRESENTATIONS AND WARRANTIES OF FIRST NATIONAL....................... I-10
5.1 Organization, Standing, and Power...................................... I-10
5.2 Authority; No Breach By Agreement...................................... I-10
5.3 Capital Stock.......................................................... I-11
5.4 First National Subsidiaries............................................ I-11
5.5 SEC Filings; Financial Statements...................................... I-11
5.6 Absence of Undisclosed Liabilities..................................... I-12
5.7 Absence of Certain Changes or Events................................... I-12
5.8 Tax Matters............................................................ I-12
5.9 Assets................................................................. I-13
5.10 Environmental Matters.................................................. I-13
5.11 Compliance with Laws................................................... I-14
5.12 Labor Relations........................................................ I-14
5.13 Employee Benefit Plans................................................. I-14
5.14 Material Contracts..................................................... I-16
5.15 Legal Proceedings...................................................... I-16
5.16 Reports................................................................ I-16
5.17 Statements True and Correct............................................ I-17
5.18 Accounting, Tax, and Regulatory Matters................................ I-17
5.19 State Takeover Laws.................................................... I-17
5.20 Charter Provisions..................................................... I-17
5.21 Derivatives Contracts.................................................. I-17
</TABLE>

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<PAGE> 214

<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C> <C>
ARTICLE 6 -- REPRESENTATIONS AND WARRANTIES OF REGIONS.............................. I-17
6.1 Organization, Standing, and Power...................................... I-17
6.2 Authority; No Breach By Agreement...................................... I-18
6.3 Capital Stock.......................................................... I-18
6.4 Regions Subsidiaries................................................... I-18
6.5 SEC Filings; Financial Statements...................................... I-19
6.6 Absence of Undisclosed Liabilities..................................... I-19
6.7 Absence of Certain Changes or Events................................... I-19
6.8 Tax Matters............................................................ I-20
6.9 Environmental Matters.................................................. I-20
6.10 Compliance with Laws................................................... I-20
6.11 Legal Proceedings...................................................... I-21
6.12 Reports................................................................ I-21
6.13 Statements True and Correct............................................ I-21
6.14 Accounting, Tax, and Regulatory Matters................................ I-21
ARTICLE 7.. -- CONDUCT OF BUSINESS PENDING CONSUMMATION............................... I-22
7.1 Affirmative Covenants of First National................................ I-22
7.2 Negative Covenants of First National................................... I-22
7.3 Covenants of Regions................................................... I-23
7.4 Adverse Changes in Condition........................................... I-24
7.5 Reports................................................................ I-24
ARTICLE 8.. -- ADDITIONAL AGREEMENTS.................................................. I-24
8.1 Registration Statement; Joint Proxy Statement; Stockholder Approvals... I-24
8.2 Exchange Listing....................................................... I-24
8.3 Applications........................................................... I-25
8.4 Filings with State Offices............................................. I-25
8.5 Agreement as to Efforts to Consummate.................................. I-25
8.6 Investigation and Confidentiality...................................... I-25
8.7 Press Releases......................................................... I-25
8.8 Certain Actions........................................................ I-25
8.9 Accounting and Tax Treatment........................................... I-26
8.10 State Takeover Laws.................................................... I-26
8.11 Charter Provisions..................................................... I-26
8.12 Agreement of Affiliates................................................ I-26
8.13 Employee Benefits and Contracts........................................ I-26
8.14 Indemnification........................................................ I-27
8.15 Certain Modifications.................................................. I-27
8.16 Regions Merger Subsidiary Organization................................. I-27
ARTICLE 9.. -- CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE...................... I-28
9.1 Conditions to Obligations of Each Party................................ I-28
9.2 Conditions to Obligations of Regions................................... I-29
9.3 Conditions to Obligations of First National............................ I-29
ARTICLE 10 -- TERMINATION............................................................ I-30
10.1 Termination............................................................ I-30
10.2 Effect of Termination.................................................. I-32
10.3 Non-Survival of Representations and Covenants.......................... I-32
</TABLE>

I-3
<PAGE> 215

<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C> <C>
ARTICLE 11 -- MISCELLANEOUS.......................................................... I-33
11.1 Definitions............................................................ I-33
11.2 Expenses............................................................... I-38
11.3 Brokers and Finders.................................................... I-38
11.4 Entire Agreement....................................................... I-39
11.5 Amendments............................................................. I-39
11.6 Waivers................................................................ I-39
11.7 Assignment............................................................. I-39
11.8 Notices................................................................ I-39
11.9 Governing Law.......................................................... I-40
11.10 Counterparts........................................................... I-40
11.11 Captions............................................................... I-40
11.12 Interpretations........................................................ I-40
11.13 Enforcement of Agreement............................................... I-41
11.14 Severability........................................................... I-41
Signatures.............................................................................. I-41
</TABLE>

I-4
<PAGE> 216

LIST OF EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ ------------------------------------------
<C> <S>
1. Form of Stock Option Agreement. (sec. 1.4).
2. Form of Plan of Merger. (sec. 1.1).
3. Form of Affiliate Agreement.
(sec.sec.8.13, 9.2(e))
</TABLE>

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<PAGE> 217

AGREEMENT AND PLAN OF REORGANIZATION

THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made and
entered into as of October 22, 1995, by and between FIRST NATIONAL BANCORP
("First National"), a corporation organized and existing under the laws of the
State of Georgia, with its principal office located in Gainesville, Georgia; and
REGIONS FINANCIAL CORPORATION ("Regions"), a corporation organized and existing
under the laws of the State of Delaware, with its principal office located in
Birmingham, Alabama.

PREAMBLE

The Boards of Directors of First National and Regions are of the opinion
that the transactions described herein are in the best interests of the parties
to this Agreement and their respective stockholders. This Agreement provides for
the acquisition of First National by Regions pursuant to the merger of First
National with and into a wholly owned subsidiary of Regions to be organized
under the laws of the State of Georgia ("Regions Merger Subsidiary"). At the
effective time of such merger, the outstanding shares of the capital stock of
First National shall be converted into shares of the common stock of Regions
(except as provided herein). As a result, stockholders of First National shall
become stockholders of Regions and Regions Merger Subsidiary shall continue to
conduct the business and operations of First National as a wholly owned
subsidiary of Regions. The transactions described in this Agreement are subject
to the approvals of the stockholders of First National, the stockholders of
Regions, the Board of Governors of the Federal Reserve System, the Office of
Thrift Supervision, the Georgia Department of Banking and Finance, and the
Florida Department of Banking and Finance, and the satisfaction of certain other
conditions described in this Agreement. It is the intention of the parties to
this Agreement that the Merger for federal income tax purposes shall qualify as
a "reorganization" within the meaning of Section 368(a) of the Internal Revenue
Code, and for accounting purposes shall qualify for treatment as a pooling of
interests.

Immediately after the execution and delivery of this Agreement, as a
condition and inducement to Regions' willingness to enter into this Agreement,
First National and Regions are entering into a stock option agreement (the
"Stock Option Agreement"), in substantially the form of Exhibit 1, pursuant to
which First National is granting to Regions an option to purchase shares of
First National common stock.

Certain terms used in this Agreement are defined in Section 11.1 of this
Agreement.

NOW, THEREFORE, in consideration of the above and the mutual warranties,
representations, covenants, and agreements set forth herein, the Parties agree
as follows:

ARTICLE 1

TRANSACTIONS AND TERMS OF MERGER

1.1 MERGER. Subject to the terms and conditions of this Agreement, at the
Effective Time, First National shall be merged with and into Regions Merger
Subsidiary in accordance with the provisions of Section 14-2-1101 of the GBCC
and with the effect provided in Section 14-2-1106 of the GBCC (the "Merger").
Regions Merger Subsidiary shall be the Surviving Corporation resulting from the
Merger and shall continue to be governed by the Laws of the State of Georgia.
The Merger shall be consummated pursuant to the terms of this Agreement, which
has been approved and adopted by the respective Boards of Directors of First
National and Regions, and the Plan of Merger, in substantially the form of
Exhibit 2, which has been approved and adopted by the Board of Directors of
First National and will be approved and adopted by the Board of Directors of
Regions Merger Subsidiary upon its organization.

1.2 TIME AND PLACE OF CLOSING. The Closing will take place at 9:00 A.M.
on the date that the Effective Time occurs (or the immediately preceding day if
the Effective Time is earlier than 9:00 A.M.), or at such other time as the
Parties, acting through their chief executive officers or chief financial
officers, may mutually agree. The place of Closing shall be at such location as
may be mutually agreed upon by the Parties.

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<PAGE> 218

1.3 EFFECTIVE TIME. The Merger and other transactions contemplated by
this Agreement shall become effective on the date and at the time the Georgia
Certificate of Merger reflecting the Merger shall become effective with the
Secretary of State of the State of Georgia (the "Effective Time"). Subject to
the terms and conditions hereof, unless otherwise mutually agreed upon in
writing by the chief executive officers or chief financial officers of each
Party, the Parties shall use their reasonable efforts to cause the Effective
Time to occur on or before the tenth business day (as designated by Regions)
following the last to occur of (i) the effective date (including expiration of
any applicable waiting period) of the last required Consent of any Regulatory
Authority having authority over and approving or exempting the Merger, and (ii)
the date on which the stockholders of Regions and First National approve the
matters relating to this Agreement and the Plan of Merger required to be
approved by such stockholders by applicable Law.

1.4 EXECUTION OF STOCK OPTION AGREEMENT. Immediately after the execution
of this Agreement and as a condition thereto, First National is executing and
delivering to Regions the Stock Option Agreement.

ARTICLE 2

TERMS OF MERGER

2.1 CHARTER. The Articles of Incorporation of Regions Merger Subsidiary
in effect immediately prior to the Effective Time shall be the Articles of
Incorporation of the Surviving Corporation until otherwise amended or repealed.

2.2 BYLAWS. The Bylaws of Regions Merger Subsidiary in effect immediately
prior to the Effective Time shall be the Bylaws of the Surviving Corporation
until otherwise amended or repealed.

ARTICLE 3

MANNER OF CONVERTING SHARES

3.1 CONVERSION OF SHARES. Subject to the provisions of this Article 3, at
the Effective Time, by virtue of the Merger and without any action on the part
of Regions or First National, or the stockholders of either of the foregoing,
the shares of the constituent corporations shall be converted as follows:

(a) Each share of Regions Common Stock issued and outstanding
immediately prior to the Effective Time shall remain issued and outstanding
from and after the Effective Time.

(b) Each share of Regions Merger Subsidiary Common Stock issued and
outstanding immediately prior to the Effective Time shall remain issued and
outstanding from and after the Effective Time.

(c) Each share of First National Common Stock (excluding shares held
by any First National Company or any Regions Company, in each case other
than in a fiduciary capacity or as a result of debts previously contracted)
issued and outstanding at the Effective Time shall cease to be outstanding
and shall be converted into and exchanged for .76 of a share of Regions
Common Stock (subject to adjustment pursuant to Section 10.1(h) of this
Agreement, the "Exchange Ratio").

3.2 ANTI-DILUTION PROVISIONS. In the event Regions changes the number of
shares of Regions Common Stock issued and outstanding prior to the Effective
Time as a result of a stock split, stock dividend, or similar recapitalization
with respect to such stock and the record date therefor (in the case of a stock
dividend) or the effective date thereof (in the case of a stock split or similar
recapitalization for which a record date is not established) shall be prior to
the Effective Time, the Exchange Ratio shall be proportionately adjusted.

3.3 SHARES HELD BY FIRST NATIONAL OR REGIONS. Each of the shares of First
National Common Stock held by any First National Company or by any Regions
Company, in each case other than in a fiduciary capacity or as a result of debts
previously contracted, shall be canceled and retired at the Effective Time and
no consideration shall be issued in exchange therefor.

I-7
<PAGE> 219

3.4 FRACTIONAL SHARES. Notwithstanding any other provision of this
Agreement, each holder of shares of First National Common Stock exchanged
pursuant to the Merger who would otherwise have been entitled to receive a
fraction of a share of Regions Common Stock (after taking into account all
certificates delivered by such holder) shall receive, in lieu thereof, cash
(without interest) in an amount equal to such fractional part of a share of
Regions Common Stock multiplied by the market value of one share of Regions
Common Stock at the Effective Time. The market value of one share of Regions
Common Stock at the Effective Time shall be the closing price of such common
stock on the Nasdaq NMS (as reported by The Wall Street Journal or, if not
reported thereby, any other authoritative source selected by Regions) on the
last trading day preceding the Effective Time. No such holder will be entitled
to dividends, voting rights, or any other rights as a stockholder in respect of
any fractional shares.

3.5 CONVERSION OF STOCK RIGHTS. (a) At the Effective Time, each award,
option, or other right to purchase or acquire shares of First National Common
Stock pursuant to stock options, stock appreciation rights, or stock awards
("First National Rights") granted by First National under the First National
Stock Plans, which are outstanding at the Effective Time, whether or not
exercisable, shall be converted into and become rights with respect to Regions
Common Stock, and Regions shall assume each First National Right, in accordance
with the terms of the First National Stock Plan and stock option agreement by
which it is evidenced, except that from and after the Effective Time, (i)
Regions and its Compensation Committee shall be substituted for First National
and the Committee of First National's Board of Directors (including, if
applicable, the entire Board of Directors of First National) administering such
First National Stock Plan, (ii) each First National Right assumed by Regions may
be exercised solely for shares of Regions Common Stock (or cash in the case of
stock appreciation rights), (iii) the number of shares of Regions Common Stock
subject to such First National Right shall be equal to the number of shares of
First National Common Stock subject to such First National Right immediately
prior to the Effective Time multiplied by the Exchange Ratio, and (iv) the per
share exercise price (or similar threshold price, in the case of stock awards)
under each such First National Right shall be adjusted by dividing the per share
exercise (or threshold) price under each such First National Right by the
Exchange Ratio and rounding up to the nearest cent. Notwithstanding the
provisions of clause (iii) of the preceding sentence, Regions shall not be
obligated to issue any fraction of a share of Regions Common Stock upon exercise
of First National Rights and any fraction of a share of Regions Common Stock
that otherwise would be subject to a converted First National Right shall
represent the right to receive a cash payment equal to the product of such
fraction and the difference between the market value of one share of Regions
Common Stock and the per share exercise price of such Right. The market value of
one share of Regions Common Stock shall be the closing price of such common
stock on the Nasdaq NMS (as reported by The Wall Street Journal or, if not
reported thereby, any other authoritative source selected by Regions) on the
last trading day preceding the Effective Time. In addition, notwithstanding the
provisions of clauses (iii) and (iv) of the first sentence of this Section 3.5,
each First National Right which is an "incentive stock option" shall be adjusted
as required by Section 424 of the Internal Revenue Code, and the regulations
promulgated thereunder, so as not to constitute a modification, extension, or
renewal of the option, within the meaning of Section 424(h) of the Internal
Revenue Code. Regions agrees to take all necessary steps to effectuate the
foregoing provisions of this Section 3.5.

(b) As soon as reasonably practicable after the Effective Time, Regions
shall deliver to the participants in each First National Stock Plan an
appropriate notice setting forth such participant's rights pursuant thereto and
the grants pursuant to such First National Stock Plan shall continue in effect
on the same terms and conditions (subject to the adjustments required by Section
3.5(a) after giving effect to the Merger), and Regions shall comply with the
terms of each First National Stock Plan to ensure, to the extent required by,
and subject to the provisions of, such First National Stock Plan, that First
National Rights which qualified as incentive stock options prior to the
Effective Time continue to qualify as incentive stock options after the
Effective Time. At or prior to the Effective Time, Regions shall take all
corporate action necessary to reserve for issuance sufficient shares of Regions
Common Stock for delivery upon exercise of First National Rights assumed by it
in accordance with this Section 3.5. As soon as reasonably practicable after the
Effective Time, Regions shall file a registration statement on Form S-3 or Form
S-8, as the case may be (or any successor or other appropriate forms), with
respect to the shares of Regions Common Stock subject to such options and shall
use its reasonable efforts to maintain the effectiveness of such registration
statements (and maintain the

I-8
<PAGE> 220

current status of the prospectus or prospectuses contained therein) for so long
as such options remain outstanding. With respect to those individuals who
subsequent to the Merger will be subject to the reporting requirements under
Section 16(a) of the Exchange Act, where applicable, Regions shall administer
the First National Stock Plan assumed pursuant to this Section 3.5 in a manner
that complies with Rule 16b-3 promulgated under the Exchange Act to the extent
the First National Stock Plan complied with such rule prior to the Merger.

(c) All restrictions or limitations on transfer with respect to First
National Common Stock awarded under the First National Stock Plans or any other
plan, program, or arrangement of any First National Company, to the extent that
such restrictions or limitations shall not have already lapsed, and except as
otherwise expressly provided in such plan, program, or arrangement, shall remain
in full force and effect with respect to shares of Regions Common Stock into
which such restricted stock is converted pursuant to Section 3.1 of this
Agreement.

ARTICLE 4

EXCHANGE OF SHARES

4.1 EXCHANGE PROCEDURES. Promptly after the Effective Time, Regions and
First National shall cause the exchange agent selected by Regions (the "Exchange
Agent") to mail to the former stockholders of First National appropriate
transmittal materials (which shall specify that delivery shall be effected, and
risk of loss and title to the certificates theretofore representing shares of
First National Common Stock shall pass, only upon proper delivery of such
certificates to the Exchange Agent). After the Effective Time, each holder of
shares of First National Common Stock (other than shares to be canceled pursuant
to Section 3.3 of this Agreement) issued and outstanding at the Effective Time
shall surrender the certificate or certificates representing such shares to the
Exchange Agent and shall promptly upon surrender thereof receive in exchange
therefor the consideration provided in Section 3.1 of this Agreement, together
with all undelivered dividends or distributions in respect of such shares
(without interest thereon) pursuant to Section 4.2 of this Agreement. To the
extent required by Section 3.4 of this Agreement, each holder of shares of First
National Common Stock issued and outstanding at the Effective Time also shall
receive, upon surrender of the certificate or certificates representing such
shares, cash in lieu of any fractional share of Regions Common Stock to which
such holder may be otherwise entitled (without interest). Regions shall not be
obligated to deliver the consideration to which any former holder of First
National Common Stock is entitled as a result of the Merger until such holder
surrenders such holder's certificate or certificates representing the shares of
First National Common Stock for exchange as provided in this Section 4.1. The
certificate or certificates of First National Common Stock so surrendered shall
be duly endorsed as the Exchange Agent may require. Any other provision of this
Agreement notwithstanding, neither the Surviving Corporation nor the Exchange
Agent shall be liable to a holder of First National Common Stock for any amounts
paid or property delivered in good faith to a public official pursuant to any
applicable abandoned property Law.

I-9
<PAGE> 221

exchanged their certificates representing First National Common Stock for
certificates representing Regions Common Stock in accordance with the provisions
of this Agreement. Whenever a dividend or other distribution is declared by
Regions on the Regions Common Stock, the record date for which is at or after
the Effective Time, the declaration shall include dividends or other
distributions on all shares issuable pursuant to this Agreement, but beginning
30 days after the Effective Time no dividend or other distribution payable to
the holders of record of Regions Common Stock as of any time subsequent to the
Effective Time shall be delivered to the holder of any certificate representing
shares of First National Common Stock issued and outstanding at the Effective
Time until such holder surrenders such certificate for exchange as provided in
Section 4.1 of this Agreement. However, upon surrender of such First National
Common Stock certificate, both the Regions Common Stock certificate (together
with all such undelivered dividends or other distributions without interest) and
any undelivered dividends and cash payments to be paid for fractional share
interests (without interest) shall be delivered and paid with respect to each
share represented by such certificate.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF FIRST NATIONAL

Except as set forth in the First National Disclosure Memorandum, First
National hereby represents and warrants to Regions as follows:

5.1 ORGANIZATION, STANDING, AND POWER. First National is a corporation
duly organized, validly existing, and in good standing under the Laws of the
State of Georgia, and has the corporate power and authority to carry on its
business as now conducted and to own, lease, and operate its material Assets.
First National is duly qualified or licensed to transact business as a foreign
corporation in good standing in the States of the United States and foreign
jurisdictions where the character of its Assets or the nature or conduct of its
business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on First National.

5.2 AUTHORITY; NO BREACH BY AGREEMENT. (a) First National has the
corporate power and authority necessary to execute, deliver, and perform its
obligations under this Agreement and the Plan of Merger and to consummate the
transactions contemplated hereby and thereby. The execution, delivery, and
performance of this Agreement and the Plan of Merger, as appropriate, and the
consummation of the transactions contemplated herein and therein, including the
Merger, have been duly and validly authorized by all necessary corporate action
in respect thereof on the part of First National, subject to the approval of
this Agreement and the Plan of Merger by the holders of a majority of the
outstanding shares of First National Common Stock, which is the only stockholder
vote required for approval of this Agreement and the Plan of Merger and
consummation of the Merger by First National. Subject to such requisite
stockholder approval, this Agreement and the Plan of Merger represent legal,
valid, and binding obligations of First National, enforceable against First
National in accordance with their respective terms (except in all cases as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceeding may be brought).

(b) Neither the execution and delivery of this Agreement or the Plan of
Merger by First National, nor the consummation by First National of the
transactions contemplated hereby or thereby, nor compliance by First National
with any of the provisions hereof or thereof, will (i) conflict with or result
in a breach of any provision of First National's Articles of Incorporation or
Bylaws, or, (ii) constitute or result in a Default under, or require any Consent
pursuant to, or result in the creation of any Lien on any Asset of any First
National Company under, any Contract or Permit of any First National Company,
where such Default or Lien, or any failure to obtain such Consent, is reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
First National, or, (iii) subject to receipt of the requisite Consents referred
to in

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<PAGE> 222

Section 9.1(b) of this Agreement, violate any Law or Order applicable to any
First National Company or any of their respective material Assets.

(c) Other than in connection or compliance with the provisions of the
Securities Laws, applicable state corporate and securities Laws, and rules of
the NASD, and other than Consents required from Regulatory Authorities, and
other than notices to or filings with the Internal Revenue Service or the
Pension Benefit Guaranty Corporation with respect to any employee benefit plans,
or under the HSR Act, and other than Consents, filings, or notifications which,
if not obtained or made, are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on First National, no notice to, filing
with, or Consent of, any public body or authority is necessary for the
consummation by First National of the Merger and the other transactions
contemplated in this Agreement and the Plan of Merger.

5.3 CAPITAL STOCK. (a) The authorized capital stock of First National
consists of 30,000,000 shares of First National Common Stock, of which
20,548,917 shares are issued and outstanding as of the date of this Agreement
and not more than 21,001,539 shares will be issued and outstanding at the
Effective Time. All of the issued and outstanding shares of First National
Common Stock are duly and validly issued and outstanding and are fully paid and
nonassessable under the GBCC. None of the outstanding shares of First National
Common Stock has been issued in violation of any preemptive rights of the
current or past stockholders of First National.

(b) Except as set forth in Section 5.3(a) of this Agreement, or as provided
pursuant to the Stock Option Agreement, there are no shares of capital stock or
other equity securities of First National outstanding and no outstanding Rights
relating to the capital stock of First National.

5.4 FIRST NATIONAL SUBSIDIARIES. First National has disclosed in Section
5.4 of the First National Disclosure Memorandum all of the First National
Subsidiaries as of the date of this Agreement. First National or one of its
Subsidiaries owns all of the issued and outstanding shares of capital stock of
each First National Subsidiary. No equity securities of any First National
Subsidiary are or may become required to be issued (other than to another First
National Company) by reason of any Rights, and there are no Contracts by which
any First National Subsidiary is bound to issue (other than to another First
National Company) additional shares of its capital stock or Rights or by which
any First National Company is or may be bound to transfer any shares of the
capital stock of any First National Subsidiary (other than to another First
National Company). There are no Contracts relating to the rights of any First
National Company to vote or to dispose of any shares of the capital stock of any
First National Subsidiary. All of the shares of capital stock of each First
National Subsidiary held by a First National Company are fully paid and
nonassessable under the applicable corporation Law of the jurisdiction in which
such Subsidiary is incorporated or organized and are owned by the First National
Company free and clear of any Lien. Each First National Subsidiary is either a
bank or a corporation, and is duly organized, validly existing, and (as to
corporations) in good standing under the Laws of the jurisdiction in which it is
incorporated or organized, and has the corporate power and authority necessary
for it to own, lease, and operate its Assets and to carry on its business as now
conducted. Each First National Subsidiary is duly qualified or licensed to
transact business as a foreign corporation in good standing in the States of the
United States and foreign jurisdictions where the character of its Assets or the
nature or conduct of its business requires it to be so qualified or licensed,
except for such jurisdictions in which the failure to be so qualified or
licensed is not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on First National. Each First National Subsidiary that
is a depository institution is an "insured institution" as defined in the
Federal Deposit Insurance Act and applicable regulations thereunder, and the
deposits in which are insured by the Bank Insurance Fund or Savings Association
Insurance Fund.

5.5 SEC FILINGS; FINANCIAL STATEMENTS. (a) First National has filed and
made available to Regions all forms, reports, and documents required to be filed
by First National with the SEC since December 31, 1991 (collectively, the "First
National SEC Reports"). The First National SEC Reports (i) at the time filed,
complied in all material respects with the applicable requirements of the
Securities Act and the Exchange Act, as the case may be, and (ii) did not at the
time they were filed (or if amended or superseded by a filing prior to the date
of this Agreement, then on the date of such filing) contain any untrue statement
of a material fact or omit to state a material fact required to be stated in
such First National SEC Reports or necessary in

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order to make the statements in such First National SEC Reports, in light of the
circumstances under which they were made, not misleading. Except for First
National Subsidiaries that are registered as a broker, dealer, or investment
advisor, none of First National's Subsidiaries is required to file any forms,
reports, or other documents with the SEC.

(b) Each of the First National Financial Statements (including, in each
case, any related notes) contained in the First National SEC Reports, including
any First National SEC Reports filed after the date of this Agreement until the
Effective Time, complied as to form in all material respects with the applicable
published rules and regulations of the SEC with respect thereto, was prepared in
accordance with GAAP applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes to such financial statements,
or, in the case of unaudited statements, as permitted by Form 10-Q of the SEC),
and fairly presented the consolidated financial position of First National and
its Subsidiaries as at the respective dates and the consolidated results of its
operations and cash flows for the periods indicated, except that the unaudited
interim financial statements were or are subject to normal and recurring
year-end adjustments which were not or are not expected to be material in
amount.

5.6 ABSENCE OF UNDISCLOSED LIABILITIES. To the Knowledge of First
National, no First National Company has any Liabilities that are reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
First National, except Liabilities which are accrued or reserved against in the
consolidated balance sheets of First National as of June 30, 1995 included in
the First National Financial Statements or reflected in the notes thereto. No
First National Company has incurred or paid any Liability since June 30, 1995,
except for such Liabilities incurred or paid in the ordinary course of business
consistent with past business practice and which are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on First
National.

5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since June 30, 1995, (i) there
have been no events, changes, or occurrences which have had, or are reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
First National, and (ii) the First National Companies have not taken any action,
or failed to take any action, prior to the date of this Agreement, which action
or failure, if taken after the date of this Agreement, would represent or result
in a material breach or violation of any of the covenants and agreements of
First National provided in Article 7 of this Agreement.

5.8 TAX MATTERS. (a) All Tax Returns required to be filed by or on behalf
of any of the First National Companies have been timely filed or requests for
extensions have been timely filed, granted, and have not expired for periods
ended on or before December 31, 1994, and on or before the date of the most
recent fiscal year end immediately preceding the Effective Time, except to the
extent that all such failures to file, taken together, are not reasonably likely
to have a Material Adverse Effect on First National, and all Tax Returns filed
are complete and accurate in all material respects. All Taxes shown on filed Tax
Returns have been paid. There is no audit examination, deficiency, or refund
Litigation with respect to any Taxes that is reasonably likely to result in a
determination that would have, individually or in the aggregate, a Material
Adverse Effect on First National, except as reserved against in the First
National Financial Statements delivered prior to the date of this Agreement. All
Taxes and other Liabilities due with respect to completed and settled
examinations or concluded Litigation have been paid.

(b) None of the First National Companies has executed an extension or
waiver of any statute of limitations on the assessment or collection of any Tax
due that is currently in effect.

(c) Adequate provision for any Taxes due or to become due for any of the
First National Companies for the period or periods through and including the
date of the respective First National Financial Statements has been made and is
reflected on such First National Financial Statements.

(d) Deferred Taxes of the First National Companies have been adequately
provided for in the First National Financial Statements.

(e) Each of the First National Companies is in compliance with, and its
records contain all information and documents (including properly completed IRS
Forms W-9) necessary to comply with, all applicable information reporting and
Tax withholding requirements under federal, state, and local Tax Laws, and such

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records identify with specificity all accounts subject to backup withholding
under Section 3406 of the Internal Revenue Code, except for such instances of
noncompliance and such omissions as are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on First National.

(f) None of the First National Companies has made any payments, is
obligated to make any payments, or is a party to any contract, agreement, or
other arrangement that could obligate it to make any payments that would be
disallowed as a deduction under Section 280G or 162(m) of the Internal Revenue
Code.

(g) There are no Liens with respect to Taxes upon any of the assets of the
First National Companies.

(h) There has not been an ownership change, as defined in Internal Revenue
Code Section 382(g), of the First National Companies that occurred during or
after any Taxable Period in which the First National Companies incurred a net
operating loss that carries over to any Taxable Period ending after December 31,
1994.

(i) No First National Company has filed any consent under Section 341(f) of
the Internal Revenue Code concerning collapsible corporations.

(j) All material elections with respect to Taxes affecting the First
National Companies as of the date of this Agreement have been or will be timely
made as set forth in Section 5.8 of the First National Disclosure Memorandum.
After the date hereof, no election with respect to Taxes will be made without
the prior written consent of Regions, which consent will not be unreasonably
withheld.

(k) No First National Company has or has had a permanent establishment in
any foreign country, as defined in any applicable tax treaty or convention
between the United States and such foreign country.

5.9 ASSETS. The First National Companies have good and marketable title,
free and clear of all Liens, to all of their respective Assets. All tangible
properties used in the businesses of the First National Companies are in good
condition, reasonable wear and tear excepted, and are usable in the ordinary
course of business consistent with First National's past practices. All Assets
which are material to First National's business on a consolidated basis, held
under leases or subleases by any of the First National Companies, are held under
valid Contracts enforceable in accordance with their respective terms (except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or other Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceedings may be brought), and each such
Contract is in full force and effect. The First National Companies currently
maintain insurance similar in amounts, scope, and coverage to that maintained by
other peer banking organizations. None of the First National Companies has
received notice from any insurance carrier that (i) such insurance will be
canceled or that coverage thereunder will be reduced or eliminated, or (ii)
premium costs with respect to such policies of insurance will be substantially
increased. There are presently no claims pending under such policies of
insurance and no notices have been given by any First National Company under
such policies. The Assets of the First National Companies include all Assets
required to operate the business of the First National Companies as presently
conducted.

5.10 ENVIRONMENTAL MATTERS. (a) To the Knowledge of First National, each
First National Company, its Participation Facilities, and its Loan Properties
are, and have been, in compliance with all Environmental Laws, except for
violations which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on First National.

(b) There is no Litigation pending, or, to the Knowledge of First National,
threatened before any court, governmental agency, or authority or other forum in
which any First National Company or any of its Loan Properties or Participation
Facilities (or any First National Company in respect of any such Loan Property
or Participation Facility) has been or, with respect to threatened Litigation,
may be named as a defendant or potentially responsible party (i) for alleged
noncompliance (including by any predecessor) with any Environmental Law or (ii)
relating to the release into the environment of any Hazardous Material, whether
or not occurring at, on, under, or involving any of its Loan Properties or
Participation Facilities, except for such

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Litigation pending or threatened that is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on First National.

(c) To the Knowledge of First National, there is no reasonable basis for
any Litigation of a type described in subsections (b) or (c), except such as is
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on First National.

(d) To the Knowledge of First National, there have been no releases of
Hazardous Material in, on, under, or affecting any Participation Facility or
Loan Property of a First National Company, except such as are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
First National.

5.11 COMPLIANCE WITH LAWS. First National is duly registered as a bank
holding company under the BHC Act and as a savings and loan holding company
under the HOLA. Each First National Company has in effect all Permits necessary
for it to own, lease, or operate its material Assets and to carry on its
business as now conducted, except for those Permits the absence of which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on First National, and there has occurred no Default under any such
Permit, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on First National.
None of the First National Companies:

(a) is in violation of any Laws, Orders, or Permits applicable to its
business or employees conducting its business, except for violations which
are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on First National; and

(b) has received any notification or communication from any agency or
department of federal, state, or local government or any Regulatory
Authority or the staff thereof (i) asserting that any First National
Company is not in compliance with any of the Laws or Orders which such
governmental authority or Regulatory Authority enforces, where such
noncompliance is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on First National, (ii) threatening to
revoke any Permits, the revocation of which is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on First
National, or (iii) requiring any First National Company to enter into or
consent to the issuance of a cease and desist order, formal agreement,
directive, commitment, or memorandum of understanding, which restricts
materially the conduct of its business, or in any manner relates to its
capital adequacy, its credit or reserve policies, its management, or the
payment of dividends.

5.12 LABOR RELATIONS. No First National Company is the subject of any
Litigation asserting that it or any other First National Company has committed
an unfair labor practice (within the meaning of the National Labor Relations Act
or comparable state law) or seeking to compel it or any other First National
Company to bargain with any labor organization as to wages or conditions of
employment, nor is there any strike or other labor dispute involving any First
National Company, pending or threatened, or to the Knowledge of First National,
is there any activity involving any First National Company's employees seeking
to certify a collective bargaining unit or engaging in any other organization
activity.

5.13 EMPLOYEE BENEFIT PLANS. (a) First National has disclosed in Section
5.13 of the First National Disclosure Memorandum, and has delivered or made
available to Regions prior to the execution of this Agreement copies in each
case of, all pension, retirement, profit-sharing, deferred compensation, stock
option, employee stock ownership, severance pay, vacation, bonus, or other
incentive plan, all other written employee programs, arrangements, or
agreements, all medical, vision, dental, or other health plans, all life
insurance plans, and all other employee benefit plans or fringe benefit plans,
including "employee benefit plans" as that term is defined in Section 3(3) of
ERISA, currently adopted, maintained by, sponsored in whole or in part by, or
contributed to by any First National Company or ERISA Affiliate (as defined
below) thereof for the benefit of employees, retirees, dependents, spouses,
directors, independent contractors, or other beneficiaries and under which
employees, retirees, dependents, spouses, directors, independent contractors, or
other beneficiaries are eligible to participate (collectively, the "First
National Benefit Plans"). Any of the First National Benefit Plans which is an
"employee pension benefit plan," as that term is defined in Section 3(2) of
ERISA, is referred to herein as a "First National ERISA Plan." Each First
National ERISA Plan which is also a "defined benefit plan" (as defined in
Section 414(j) of the Internal Revenue Code) is referred to herein

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as a "First National Pension Plan." No First National Pension Plan is or has
been a multiemployer plan within the meaning of Section 3(37) of ERISA.

(b) All First National Benefit Plans are in compliance with the applicable
terms of ERISA, the Internal Revenue Code, and any other applicable Laws the
breach or violation of which are reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on First National, and each First
National ERISA Plan which is intended to be qualified under Section 401(a) of
the Internal Revenue Code has received a favorable determination letter from the
Internal Revenue Service, and First National is not aware of any circumstances
likely to result in revocation of any such favorable determination letter. To
the Knowledge of First National, no First National Company has engaged in a
transaction with respect to any First National Benefit Plan that, assuming the
taxable period of such transaction expired as of the date hereof, would subject
any First National Company to a Tax imposed by either Section 4975 of the
Internal Revenue Code or Section 502(i) of ERISA in amounts which are reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
First National.

(c) No First National Pension Plan has any "unfunded current liability," as
that term is defined in Section 302(d)(8)(A) of ERISA, and the fair market value
of the assets of any such plan exceeds the plan's "benefit liabilities," as that
term is defined in Section 4001(a)(16) of ERISA, when determined under actuarial
factors that would apply if the plan terminated in accordance with all
applicable legal requirements. Since the date of the most recent actuarial
valuation, there has been (i) no material change in the financial position of
any First National Pension Plan, (ii) no change in the actuarial assumptions
with respect to any First National Pension Plan, and (iii) no increase in
benefits under any First National Pension Plan as a result of plan amendments or
changes in applicable Law which is reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on First National or materially
adversely affect the funding status of any such plan. Neither any First National
Pension Plan nor any "single-employer plan," within the meaning of Section
4001(a)(15) of ERISA, currently or formerly maintained by any First National
Company, or the single-employer plan of any entity which is considered one
employer with First National under Section 4001 of ERISA or Section 414 of the
Internal Revenue Code or Section 302 of ERISA (whether or not waived) (an "ERISA
Affiliate") has an "accumulated funding deficiency" within the meaning of
Section 412 of the Internal Revenue Code or Section 302 of ERISA, which is
reasonably likely to have a Material Adverse Effect on First National. No First
National Company has provided, or is required to provide, security to a First
National Pension Plan or to any single-employer plan of an ERISA Affiliate
pursuant to Section 401(a)(29) of the Internal Revenue Code.

(d) Within the six-year period preceding the Effective Time, no Liability
under Subtitle C or D of Title IV of ERISA has been or is expected to be
incurred by any First National Company with respect to any ongoing, frozen, or
terminated single-employer plan or the single-employer plan of any ERISA
Affiliate, which Liability is reasonably likely to have a Material Adverse
Effect on First National. No First National Company has incurred any withdrawal
Liability with respect to a multiemployer plan under Subtitle B of Title IV of
ERISA (regardless of whether based on contributions of an ERISA Affiliate),
which Liability is reasonably likely to have a Material Adverse Effect on First
National. No notice of a "reportable event," within the meaning of Section 4043
of ERISA for which the 30-day reporting requirement has not been waived, has
been required to be filed for any First National Pension Plan or by any ERISA
Affiliate within the 12-month period ending on the date hereof.

(e) No First National Company has any Liability for retiree health and life
benefits under any of the First National Benefit Plans and there are no
restrictions on the rights of such First National Company to amend or terminate
any such Plan without incurring any Liability thereunder, which Liability is
reasonably likely to have a Material Adverse Effect on First National.

(f) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment (including severance, unemployment compensation, golden parachute, or
otherwise) becoming due to any director or any employee of any First National
Company from any First National Company under any First National Benefit Plan or
otherwise, (ii) increase any benefits otherwise payable under any First National
Benefit Plan, or (iii) result in any acceleration of the time

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of payment or vesting of any such benefit, where such payment, increase, or
acceleration is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on First National.

(g) The actuarial present values of all accrued deferred compensation
entitlements (including entitlements under any executive compensation,
supplemental retirement, or employment agreement) of employees and former
employees of any First National Company and their respective beneficiaries,
other than entitlements accrued pursuant to funded retirement plans subject to
the provisions of Section 412 of the Internal Revenue Code or Section 302 of
ERISA, have been fully reflected on the First National Financial Statements to
the extent required by and in accordance with GAAP.

5.14 MATERIAL CONTRACTS. None of the First National Companies, nor any of
their respective Assets, businesses, or operations, is a party to, or is bound
or affected by, or receives benefits under, (i) any employment, severance,
termination, consulting, or retirement Contract providing for aggregate payments
to any Person in any calendar year in excess of $100,000, (ii) any Contract
relating to the borrowing of money by any First National Company or the
guarantee by any First National Company of any such obligation (other than
Contracts evidencing deposit liabilities, purchases of federal funds,
fully-secured repurchase agreements, and Federal Home Loan Bank advances of
depository institution Subsidiaries, trade payables, and Contracts relating to
borrowings or guarantees made in the ordinary course of business), and (iii) any
other Contract or amendment thereto that would be required to be filed as an
exhibit to a Form 10-K filed by First National with the SEC as of the date of
this Agreement that has not been filed as an exhibit to First National's Form
10-K filed for the fiscal year ended December 31, 1994, or in another SEC
Document and identified to Regions (together with all Contracts referred to in
Sections 5.8 and 5.13(a) of this Agreement, the "First National Contracts").
With respect to each First National Contract: (i) the Contract is in full force
and effect; (ii) no First National Company is in Default thereunder, other than
Defaults which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on First National; (iii) no First National
Company has repudiated or waived any material provision of any such Contract;
and (iv) no other party to any such Contract is, to the Knowledge of First
National, in Default in any respect, other than Defaults which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on First National, or has repudiated or waived any material provision
thereunder. Except for Federal Home Loan Bank advances, all of the indebtedness
of any First National Company for money borrowed is prepayable at any time by
such First National Company without penalty or premium.

5.15 LEGAL PROCEEDINGS. (a) There is no Litigation instituted or pending,
or, to the Knowledge of First National, threatened (or unasserted but considered
probable of assertion and which if asserted would have at least a reasonable
probability of an unfavorable outcome) against any First National Company, or
against any Asset, employee benefit plan, interest, or right of any of them,
that is reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on First National, nor are there any Orders of any Regulatory
Authorities, other governmental authorities, or arbitrators outstanding against
any First National Company, that are reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on First National.

(b) Section 5.15(b) of the First National Disclosure Memorandum includes a
summary report of all Litigation as of the date of this Agreement to which any
First National Company is a party and which names a First National Company as a
defendant or cross-defendant and where the maximum exposure is estimated to be
$100,000 or more.

5.16 REPORTS. Since January 1, 1992, or the date of organization if
later, each First National Company has timely filed all reports and statements,
together with any amendments required to be made with respect thereto, that it
was required to file with any Regulatory Authorities (except, in the case of
state securities authorities, failures to file which are not reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on First
National). As of their respective dates, each of such reports and documents,
including the financial statements, exhibits, and schedules thereto, complied in
all material respects with all applicable Laws. As of its respective date, each
such report and document did not, in all material respects, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading.

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5.17 STATEMENTS TRUE AND CORRECT. None of the information supplied or to
be supplied by any First National Company or any Affiliate thereof for inclusion
in the Registration Statement to be filed by Regions with the SEC will, when the
Registration Statement becomes effective, be false or misleading with respect to
any material fact, or omit to state any material fact necessary to make the
statements therein not misleading. None of the information supplied or to be
supplied by any First National Company or any Affiliate thereof for inclusion in
the Joint Proxy Statement to be mailed to Regions' and First National's
stockholders in connection with the Stockholders' Meetings, and any other
documents to be filed by a First National Company or any Affiliate thereof with
the SEC or any other Regulatory Authority in connection with the transactions
contemplated hereby, will, at the respective time such documents are filed, and
with respect to the Joint Proxy Statement, when first mailed to the stockholders
of Regions and First National, be false or misleading with respect to any
material fact, or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or, in the case of the Joint Proxy Statement or any amendment
thereof or supplement thereto, at the time of the Stockholders' Meetings, be
false or misleading with respect to any material fact, or omit to state any
material fact necessary to correct any statement in any earlier communication
with respect to the solicitation of any proxy for the Stockholders' Meetings.
All documents that any First National Company or any Affiliate thereof is
responsible for filing with any Regulatory Authority in connection with the
transactions contemplated hereby will comply as to form in all material respects
with the provisions of applicable Law.

5.18 ACCOUNTING, TAX, AND REGULATORY MATTERS. No First National Company
or any Affiliate thereof has taken or agreed to take any action or has any
Knowledge of any fact or circumstance that is reasonably likely to (i) prevent
the transactions contemplated hereby, including the Merger, from qualifying for
pooling-of-interests accounting treatment or as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code, or (ii) materially
impede or delay receipt of any Consents of Regulatory Authorities referred to in
Section 9.1(b) of this Agreement or result in the imposition of a condition or
restriction of the type referred to in the last sentence of such Section.

5.19 STATE TAKEOVER LAWS. Each First National Company has taken all
necessary action to exempt the transactions contemplated by this Agreement from
any applicable "moratorium," "control share," "fair price," "business
combination," or other anti-takeover laws and regulations of the State of
Georgia (collectively, "Takeover Laws"), including Sections 14-2-1111 and
14-2-1132 of the GBCC.

5.20 CHARTER PROVISIONS. Each First National Company has taken all action
so that the entering into of this Agreement and the Plan of Merger and the
consummation of the Merger and the other transactions contemplated by this
Agreement and the Plan of Merger do not and will not result in the grant of any
rights to any Person under the Articles of Incorporation, Bylaws, or other
governing instruments of any First National Company or restrict or impair the
ability of Regions or any of its Subsidiaries to vote, or otherwise to exercise
the rights of a stockholder with respect to, shares of any First National
Company that may be directly or indirectly acquired or controlled by it.

5.21 DERIVATIVES CONTRACTS. Neither First National nor any of its
Subsidiaries is a party to or has agreed to enter into an exchange-traded or
over-the-counter swap, forward, future, option, cap, floor, or collar financial
contract, or any other interest rate or foreign currency protection contract not
included on its balance sheet which is a financial derivative contract
(including various combinations thereof).

ARTICLE 6

REPRESENTATIONS AND WARRANTIES OF REGIONS

Regions hereby represents and warrants to First National as follows:

6.1 ORGANIZATION, STANDING, AND POWER. Regions is a corporation duly
organized, validly existing, and in good standing under the Laws of the State of
Delaware, and has the corporate power and authority to carry on its business as
now conducted and to own, lease, and operate its material Assets. Regions is
duly qualified or licensed to transact business as a foreign corporation in good
standing in the States of the United States and foreign jurisdictions where the
character of its Assets or the nature or conduct of its business requires it to
be

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so qualified or licensed, except for such jurisdictions in which the failure to
be so qualified or licensed is not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Regions.

6.2 AUTHORITY; NO BREACH BY AGREEMENT. (a) Regions has the corporate
power and authority necessary to execute, deliver, and perform its obligations
under this Agreement and to consummate the transactions contemplated hereby. The
execution, delivery, and performance of this Agreement and the consummation of
the transactions contemplated herein, including the Merger, have been duly and
validly authorized by all necessary corporate action in respect thereof on the
part of Regions, subject to the approval of the issuance of the shares of
Regions Common Stock pursuant to the Merger by a majority of the votes cast at
the Regions Stockholders' Meeting by holders of shares of Regions Common Stock,
which is the only stockholder vote required for the consummation of the Merger
by Regions. Subject to such requisite stockholder approval, this Agreement
represents a legal, valid, and binding obligation of Regions, enforceable
against Regions in accordance with its terms (except in all cases as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceeding may be brought).

(b) Neither the execution and delivery of this Agreement by Regions, nor
the consummation by Regions of the transactions contemplated hereby, nor
compliance by Regions with any of the provisions hereof, will (i) conflict with
or result in a breach of any provision of Regions' Certificate of Incorporation
or Bylaws, or (ii) constitute or result in a Default under, or require any
Consent pursuant to, or result in the creation of any Lien on any Asset of any
Regions Company under, any Contract or Permit of any Regions Company, where such
Default or Lien, or any failure to obtain such Consent, is reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Regions,
or, (iii) subject to receipt of the requisite Consents referred to in Section
9.1(b) of this Agreement, violate any Law or Order applicable to any Regions
Company or any of their respective material Assets.

(c) Other than in connection or compliance with the provisions of the
Securities Laws, applicable state corporate and securities Laws, and rules of
the NASD, and other than Consents required from Regulatory Authorities, and
other than notices to or filings with the Internal Revenue Service or the
Pension Benefit Guaranty Corporation with respect to any employee benefit plans,
or under the HSR Act, and other than Consents, filings, or notifications which,
if not obtained or made, are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Regions, no notice to, filing with,
or Consent of, any public body or authority is necessary for the consummation by
Regions of the Merger and the other transactions contemplated in this Agreement.

6.3 CAPITAL STOCK. The authorized capital stock of Regions consists of
120,000,000 shares of Regions Common Stock, of which 45,397,944 shares were
issued and outstanding and 1,474,579 shares were held as treasury shares as of
June 30, 1995. All of the issued and outstanding shares of Regions Common Stock
are, and all of the shares of Regions Common Stock to be issued in exchange for
shares of First National Common Stock upon consummation of the Merger, when
issued in accordance with the terms of this Agreement, will be, duly and validly
issued and outstanding and fully paid and nonassessable under the DGCL. None of
the outstanding shares of Regions Common Stock has been, and none of the shares
of Regions Common Stock to be issued in exchange for shares of First National
Common Stock upon consummation of the Merger will be, issued in violation of any
preemptive rights of the current or past stockholders of Regions.

6.4 REGIONS SUBSIDIARIES. Regions has disclosed in Section 6.4 of the
Regions Disclosure Memorandum all of the Regions Subsidiaries as of the date of
this Agreement. Except as disclosed in Section 6.4 of the Regions Disclosure
Memorandum, Regions or one of its Subsidiaries owns all of the issued and
outstanding shares of capital stock of each Regions Subsidiary. No equity
securities of any Regions Subsidiary are or may become required to be issued
(other than to another Regions Company) by reason of any Rights, and there are
no Contracts by which any Regions Subsidiary is bound to issue (other than to
another Regions Company) additional shares of its capital stock or Rights or by
which any Regions Company is or may be bound to transfer any shares of the
capital stock of any Regions Subsidiary (other than to another Regions Company).
There are no Contracts relating to the rights of any Regions Company to vote or
to dispose of any

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shares of the capital stock of any Regions Subsidiary. All of the shares of
capital stock of each Regions Subsidiary held by a Regions Company are fully
paid and nonassessable under the applicable corporation Law of the jurisdiction
in which such Subsidiary is incorporated or organized and are owned by the
Regions Company free and clear of any Lien. Each Regions Subsidiary is either a
bank or a corporation, and is duly organized, validly existing, and (as to
corporations) in good standing under the Laws of the jurisdiction in which it is
incorporated or organized, and has the corporate power and authority necessary
for it to own, lease, and operate its Assets and to carry on its business as now
conducted. Each Regions Subsidiary is duly qualified or licensed to transact
business as a foreign corporation in good standing in the States of the United
States and foreign jurisdictions where the character of its Assets or the nature
or conduct of its business requires it to be so qualified or licensed, except
for such jurisdictions in which the failure to be so qualified or licensed is
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Regions. Each Regions Subsidiary that is a depository
institution is an "insured institution" as defined in the Federal Deposit
Insurance Act and applicable regulations thereunder, and the deposits in which
are insured by the Bank Insurance Fund or Savings Association Insurance Fund.

6.5 SEC FILINGS; FINANCIAL STATEMENTS. (a) Regions has filed and made
available to First National all forms, reports, and documents required to be
filed by Regions with the SEC since December 31, 1991, other than registration
statements on Forms S-4 and S-8 (collectively, the "Regions SEC Reports"). The
Regions SEC Reports (i) at the time filed, complied in all material respects
with the applicable requirements of the Securities Act and the Exchange Act, as
the case may be, and (ii) did not at the time they were filed (or if amended or
superseded by a filing prior to the date of this Agreement, then on the date of
such filing) contain any untrue statement of a material fact or omit to state a
material fact required to be stated in such Regions SEC Reports or necessary in
order to make the statements in such Regions SEC Reports, in light of the
circumstances under which they were made, not misleading.

(b) Each of the Regions Financial Statements (including, in each case, any
related notes) contained in the Regions SEC Reports, including any Regions SEC
Reports filed after the date of this Agreement until the Effective Time,
complied as to form in all material respects with the applicable published rules
and regulations of the SEC with respect thereto, was prepared in accordance with
GAAP applied on a consistent basis throughout the periods involved (except as
may be indicated in the notes to such financial statements or, in the case of
unaudited statements, as permitted by Form 10-Q of the SEC), and fairly
presented the consolidated financial position of Regions and its Subsidiaries as
at the respective dates and the consolidated results of its operations and cash
flows for the periods indicated, except that the unaudited interim financial
statements were or are subject to normal and recurring year-end adjustments
which were not or are not expected to be material in amount.

6.6 ABSENCE OF UNDISCLOSED LIABILITIES. Except as disclosed in Section
6.6 of the Regions Disclosure Memorandum, and to the Knowledge of Regions, no
Regions Company has any Liabilities that are reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Regions, except
Liabilities which are accrued or reserved against in the consolidated balance
sheets of Regions as of June 30, 1995 included in the Regions Financial
Statements or reflected in the notes thereto. Except as disclosed in Section 6.6
of the Regions Disclosure Memorandum, no Regions Company has incurred or paid
any Liability since June 30, 1995, except for such Liabilities incurred or paid
in the ordinary course of business consistent with past business practice and
which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Regions.

6.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since June 30, 1995, except as
disclosed in the Regions Financial Statements delivered prior to the date of
this Agreement or in Section 6.7 of the Regions Disclosure Memorandum, (i) there
have been no events, changes or occurrences which have had, or are reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
Regions, and (ii) the Regions Companies have not taken any action, or failed to
take any action, prior to the date of this Agreement, which action or failure,
if taken after the date of this Agreement, would represent or result in a
material breach or violation of any of the covenants and agreements of Regions
provided in Article 7 of this Agreement.

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6.8 TAX MATTERS. (a) All Tax Returns required to be filed by or on behalf
of any of the Regions Companies have been timely filed or requests for
extensions have been timely filed, granted, and have not expired for periods
ended on or before December 31, 1994, and on or before the date of the most
recent fiscal year end immediately preceding the Effective Time, except to the
extent that all such failures to file, taken together, are not reasonably likely
to have a Material Adverse Effect on Regions, and all Tax Returns filed are
complete and accurate in all material respects. All Taxes shown on filed Tax
Returns have been paid. There is no audit examination, deficiency, or refund
Litigation with respect to any Taxes that is reasonably likely to result in a
determination that would have, individually or in the aggregate, a Material
Adverse Effect on Regions, except as reserved against in the Regions Financial
Statements delivered prior to the date of this Agreement. All Taxes and other
Liabilities due with respect to completed and settled examinations or concluded
Litigation have been paid.

(b) Adequate provision for any Taxes due or to become due for any of the
Regions Companies for the period or periods through and including the date of
the respective Regions Financial Statements has been made and is reflected on
such Regions Financial Statements.

6.9 ENVIRONMENTAL MATTERS. (a) To the Knowledge of Regions, each Regions
Company, its Participation Facilities, and its Loan Properties are, and have
been, in compliance with all Environmental Laws, except for violations which are
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Regions.

(b) There is no Litigation pending, or, to the Knowledge of Regions,
threatened before any court, governmental agency, or authority or other forum in
which any Regions Company or any of its Loan Properties or Participation
Facilities (or any Regions Company in respect of any such Loan Property or
Participation Facility) has been or, with respect to threatened Litigation, may
be named as a defendant or potentially responsible party (i) for alleged
noncompliance (including by any predecessor) with any Environmental Law or (ii)
relating to the release into the environment of any Hazardous Material, whether
or not occurring at, on, under, or involving any of its Loan Properties or
Participation Facilities, except for such Litigation pending or threatened that
is not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Regions.

(c) To the Knowledge of Regions, there is no reasonable basis for any
Litigation of a type described in subsections (b) or (c), except such as is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Regions.

(d) To the Knowledge of Regions, there have been no releases of Hazardous
Material in, on, under, or affecting any Participation Facility or Loan Property
of a Regions Company, except such as are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Regions.

6.10 COMPLIANCE WITH LAWS. Regions is duly registered as a bank holding
company under the BHC Act and as a savings and loan holding company under the
HOLA. Each Regions Company has in effect all Permits necessary for it to own,
lease, or operate its material Assets and to carry on its business as now
conducted, except for those Permits the absence of which are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
Regions, and there has occurred no Default under any such Permit, other than
Defaults which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Regions. No Regions Company:

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Regulatory Authority enforces, where such noncompliance is reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect
on Regions, (ii) threatening to revoke any Permits, the revocation of which
is reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Regions, or (iii) requiring any Regions Company to enter
into or consent to the issuance of a cease and desist order, formal
agreement, directive, commitment, or memorandum of understanding, which
restricts materially the conduct of its business, or in any manner relates
to its capital adequacy, its credit or reserve policies, its management, or
the payment of dividends.

6.11 LEGAL PROCEEDINGS. There is no Litigation instituted or pending, or,
to the Knowledge of Regions, threatened (or unasserted but considered probable
of assertion and which if asserted would have at least a reasonable probability
of an unfavorable outcome) against any Regions Company, or against any Asset,
interest, or right of any of them, that is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Regions, nor are
there any Orders of any Regulatory Authorities, other governmental authorities,
or arbitrators outstanding against any Regions Company, that are reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
Regions.

6.12 REPORTS. Since January 1, 1992, or the date of organization if
later, each Regions Company has filed all reports and statements, together with
any amendments required to be made with respect thereto, that it was required to
file with Regulatory Authorities (except, in the case of state securities
authorities, failures to file which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Regions). As of
their respective dates, each of such reports and documents, including the
financial statements, exhibits, and schedules thereto, complied in all material
respects with all applicable Laws. As of its respective date, each such report
and document did not, in all material respects, contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading.

6.13 STATEMENTS TRUE AND CORRECT. None of the information supplied or to
be supplied by any Regions Company or any Affiliate thereof for inclusion in the
Registration Statement to be filed by Regions with the SEC, will, when the
Registration Statement becomes effective, be false or misleading with respect to
any material fact, or omit to state any material fact necessary to make the
statements therein not misleading. None of the information supplied or to be
supplied by any Regions Company or any Affiliate thereof for inclusion in the
Joint Proxy Statement to be mailed to Regions' and First National's stockholders
in connection with the Stockholders' Meetings, and any other documents to be
filed by any Regions Company or any Affiliate thereof with the SEC or any other
Regulatory Authority in connection with the transactions contemplated hereby,
will, at the respective time such documents are filed, and with respect to the
Joint Proxy Statement, when first mailed to the stockholders of Regions and
First National, be false or misleading with respect to any material fact, or
omit to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, or, in
the case of the Joint Proxy Statement or any amendment thereof or supplement
thereto, at the time of the Stockholders' Meetings, be false or misleading with
respect to any material fact, or omit to state any material fact necessary to
correct any statement in any earlier communication with respect to the
solicitation of any proxy for the Stockholders' Meetings. All documents that any
Regions Company or any Affiliate thereof is responsible for filing with any
Regulatory Authority in connection with the transactions contemplated hereby
will comply as to form in all material respects with the provisions of
applicable Law.

6.14 ACCOUNTING, TAX, AND REGULATORY MATTERS. No Regions Company or any
Affiliate thereof has taken or agreed to take any action or has any Knowledge of
any fact or circumstance that is reasonably likely to (i) prevent the
transactions contemplated hereby, including the Merger, from qualifying for
pooling-of-interests accounting treatment or as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code, or (ii) materially
impede or delay receipt of any Consents of Regulatory Authorities referred to in
Section 9.1(b) of this Agreement or result in the imposition of a condition or
restriction of the type referred to in the last sentence of such Section.

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ARTICLE 7

CONDUCT OF BUSINESS PENDING CONSUMMATION

7.1 AFFIRMATIVE COVENANTS OF FIRST NATIONAL. Unless the prior written
consent of Regions shall have been obtained, and except as otherwise expressly
contemplated herein, First National shall and shall cause each of its
Subsidiaries to (i) operate its business only in the usual, regular, and
ordinary course, (ii) preserve intact its business organization and Assets and
maintain its rights and franchises, (iii) use its reasonable efforts to maintain
its current employee relationships, and (iv) take no action which would (a)
adversely affect the ability of any Party to obtain any Consents required for
the transactions contemplated hereby without imposition of a condition or
restriction of the type referred to in the last sentence of Section 9.1(b) of
this Agreement, or (b) adversely affect the ability of any Party to perform its
covenants and agreements under this Agreement.

7.2 NEGATIVE COVENANTS OF FIRST NATIONAL. From the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement,
First National covenants and agrees that it will not do or agree or commit to
do, or permit any of its Subsidiaries to do or agree or commit to do, any of the
following without the prior written consent of the chief executive officer or
chief financial officer of Regions:

(a) amend the Articles of Incorporation, Bylaws, or other governing
instruments of any First National Company, or

(b) incur any additional debt obligation or other obligation for
borrowed money (other than indebtedness of a First National Company to
another First National Company) in excess of an aggregate of $250,000 (for
the First National Companies on a consolidated basis) except in the
ordinary course of the business of First National Subsidiaries consistent
with past practices (which shall include, for First National Subsidiaries
that are depository institutions, creation of deposit liabilities,
purchases of federal funds, advances from the Federal Reserve Bank or
Federal Home Loan Bank, and entry into repurchase agreements fully secured
by U.S. government or agency securities), or impose, or suffer the
imposition, on any Asset of any First National Company of any Lien or
permit any such Lien to exist (other than in connection with deposits,
repurchase agreements, bankers acceptances, "treasury tax and loan"
accounts established in the ordinary course of business, the satisfaction
of legal requirements in the exercise of trust powers, and Liens in effect
as of the date hereof that are disclosed in the First National Disclosure
Memorandum); or

(c) repurchase, redeem, or otherwise acquire or exchange (other than
exchanges in the ordinary course under employee benefit plans), directly or
indirectly, any shares, or any securities convertible into any shares, of
the capital stock of any First National Company, or declare or pay any
dividend or make any other distribution in respect of First National's
capital stock, provided that First National may (to the extent legally and
contractually permitted to do so), but shall not be obligated to, declare
and pay regular quarterly cash dividends on the shares of First National
Common Stock at a rate of $.2150 per share with such increases and usual
and regular record and payment dates in accordance with past practice
disclosed in Section 7.2(c) of the First National Disclosure Memorandum and
such dates may not be changed without the prior written consent of Regions;
provided, that, notwithstanding the provisions of Section 1.3 of this
Agreement, the Parties shall cooperate in selecting the Effective Time to
ensure that, with respect to the quarterly period in which the Effective
Time occurs, the holders of First National Common Stock do not receive both
a dividend in respect of their First National Common Stock and a dividend
in respect of Regions Common Stock or fail to receive any dividend; or

(d) except for this Agreement, or pursuant to the Stock Option
Agreement or pursuant to the exercise of stock options outstanding as of
the date hereof and pursuant to the terms thereof in existence on the date
hereof, issue, sell, pledge, encumber, authorize the issuance of, enter
into any Contract to issue, sell, pledge, encumber, or authorize the
issuance of, or otherwise permit to become outstanding, any additional
shares of First National Common Stock or any other capital stock of any
First National Company, or any stock appreciation rights, or any option,
warrant, conversion, or other right to acquire any such stock, or any
security convertible into any such stock; or

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(e) adjust, split, combine, or reclassify any capital stock of any
First National Company or issue or authorize the issuance of any other
securities in respect of or in substitution for shares of First National
Common Stock, or sell, lease, mortgage, or otherwise dispose of or
otherwise encumber (x) any shares of capital stock of any First National
Subsidiary (unless any such shares of stock are sold or otherwise
transferred to another First National Company) or (y) any Asset other than
in the ordinary course of business for reasonable and adequate
consideration; or

(f) except for purchases of U.S. Treasury securities or U.S.
Government agency securities, which in either case have maturities of three
years or less, purchase any securities or make any material investment,
either by purchase of stock or securities, contributions to capital, Asset
transfers, or purchase of any Assets, in any Person other than a wholly
owned First National Subsidiary, or otherwise acquire direct or indirect
control over any Person, other than in connection with (i) foreclosures in
the ordinary course of business, (ii) acquisitions of control by a
depository institution Subsidiary in its fiduciary capacity, or (iii) the
creation of new wholly owned Subsidiaries organized to conduct or continue
activities otherwise permitted by this Agreement; or

(g) grant any increase in compensation or benefits to the employees or
officers of any First National Company, except in accordance with past
practice disclosed in Section 7.2(g) of the First National Disclosure
Memorandum or as required by Law; pay any severance or termination pay or
any bonus other than pursuant to written policies or written Contracts in
effect on the date of this Agreement; enter into or amend any severance
agreements with officers of any First National Company; grant any material
increase in fees or other increases in compensation or other benefits to
directors of any First National Company except in accordance with past
practice disclosed in Section 7.2(g) of the First National Disclosure
Memorandum; or voluntarily accelerate the vesting of any stock options or
other stock-based compensation or employee benefits; or

(h) enter into or amend any employment Contract between any First
National Company and any Person (unless such amendment is required by Law)
that the First National Company does not have the unconditional right to
terminate without Liability (other than Liability for services already
rendered), at any time on or after the Effective Time; or

(i) adopt any new employee benefit plan of any First National Company
or make any material change in or to any existing employee benefit plans of
any First National Company other than any such change that is required by
Law or that, in the opinion of counsel, is necessary or advisable to
maintain the tax qualified status of any such plan; or

(j) make any significant change in any Tax or accounting methods or
systems of internal accounting controls, except as may be appropriate to
conform to changes in Tax Laws or regulatory accounting requirements or
GAAP; or

(k) commence any Litigation other than in accordance with past
practice or settle any Litigation involving any Liability of any First
National Company for material money damages or restrictions upon the
operations of any First National Company; or

(l) except in the ordinary course of business, modify, amend, or
terminate any material Contract or waive, release, compromise, or assign
any material rights or claims.

7.3 COVENANTS OF REGIONS. From the date of this Agreement until the
earlier of the Effective Time or the termination of this Agreement, Regions
covenants and agrees that it shall (i) continue to conduct its business and the
business of its Subsidiaries in a manner designed in its reasonable judgment, to
enhance the long-term value of the Regions Common Stock and the business
prospects of the Regions Companies, and (ii) take no action which would (a)
materially adversely affect the ability of any Party to obtain any Consents
required for the transactions contemplated hereby without imposition of a
condition or restriction of the type referred to in the last sentence of Section
9.1(b) of this Agreement, or (b) materially adversely affect the ability of any
Party to perform its covenants and agreements under this Agreement; provided,
that the foregoing shall not prevent any Regions Company from discontinuing or
disposing of any of its Assets or

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business if such action is, in the judgment of Regions, desirable in the conduct
of the business of Regions and its Subsidiaries.

7.4 ADVERSE CHANGES IN CONDITION. Each Party agrees to give written
notice promptly to the other Party upon becoming aware of the occurrence or
impending occurrence of any event or circumstance relating to it or any of its
Subsidiaries which (i) is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on it or (ii) would cause or constitute a
material breach of any of its representations, warranties, or covenants
contained herein, and to use its reasonable efforts to prevent or promptly to
remedy the same.

7.5 REPORTS. Each Party and its Subsidiaries shall file all reports
required to be filed by it with Regulatory Authorities between the date of this
Agreement and the Effective Time and shall deliver to the other Party copies of
all such reports promptly after the same are filed. If financial statements are
contained in any such reports filed with the SEC, such financial statements will
fairly present the consolidated financial position of the entity filing such
statements as of the dates indicated and the consolidated results of operations,
changes in stockholders' equity, and cash flows for the periods then ended in
accordance with GAAP (subject in the case of interim financial statements to
normal recurring year-end adjustments that are not material). As of their
respective dates, such reports filed with the SEC will comply in all material
respects with the Securities Laws and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. Any financial statements contained
in any other reports to another Regulatory Authority shall be prepared in
accordance with Laws applicable to such reports.

ARTICLE 8

ADDITIONAL AGREEMENTS

8.1 REGISTRATION STATEMENT; JOINT PROXY STATEMENT; STOCKHOLDER
APPROVALS. As soon as reasonably practicable after execution of this Agreement,
Regions shall file the Registration Statement with the SEC, and shall use its
reasonable efforts to cause the Registration Statement to become effective under
the 1933 Act (provided that the Parties shall cooperate to cause the
Registration Statement to be declared effective and the Joint Proxy Statement to
be mailed to the Parties' respective stockholders at such time as will afford
the Parties the maximum opportunity to purchase shares of Regions Common Stock
or First National Common Stock in the open market) and take any action required
to be taken under the applicable state Blue Sky or securities Laws in connection
with the issuance of the shares of Regions Common Stock upon consummation of the
Merger. First National shall furnish all information concerning it and the
holders of its capital stock as Regions may reasonably request in connection
with such action. First National shall call a Stockholders' Meeting, to be held
as soon as reasonably practicable after the Registration Statement is declared
effective by the SEC, for the purpose of voting upon approval of this Agreement
and the Plan of Merger and such other related matters as it deems appropriate.
Regions shall call a Stockholders' Meeting, to be held as soon as reasonably
practicable after the Registration Statement is declared effective by the SEC,
for the purpose of voting upon the issuance of shares of Regions Common Stock
pursuant to the Merger and such other related matters as it deems appropriate.
In connection with the Stockholders' Meetings, (i) Regions and First National
shall prepare and file with the SEC a Joint Proxy Statement and mail such Joint
Proxy Statement to their respective stockholders, (ii) the Parties shall furnish
to each other all information concerning them that they may reasonably request
in connection with such Joint Proxy Statement, (iii) the Boards of Directors of
Regions and First National shall recommend (subject to compliance with their
fiduciary duties as advised by counsel) to their respective stockholders the
approval of the matters submitted for approval, and (iv) the Boards of Directors
and officers of Regions and First National shall (subject to compliance with
their fiduciary duties as advised by counsel) use their reasonable efforts to
obtain such stockholders' approvals.

8.2 EXCHANGE LISTING. Regions shall use its reasonable efforts to list,
prior to the Effective Time, on the Nasdaq NMS, subject to official notice of
issuance, the shares of Regions Common Stock to be issued to the holders of
First National Common Stock pursuant to the Merger.

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8.3 APPLICATIONS. Regions shall promptly prepare and file, and First
National shall cooperate in the preparation and, where appropriate, filing of,
applications with all Regulatory Authorities having jurisdiction over the
transactions contemplated by this Agreement seeking the requisite Consents
necessary to consummate the transactions contemplated by this Agreement.

8.4 FILINGS WITH STATE OFFICES. Upon the terms and subject to the
conditions of this Agreement, Regions Merger Subsidiary shall execute and file
the Georgia Certificate of Merger with the Secretary of State of the State of
Georgia in connection with the Closing.

8.5 AGREEMENT AS TO EFFORTS TO CONSUMMATE. Subject to the terms and
conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries to use, its reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper, or
advisable under applicable Laws to consummate and make effective, as soon as
reasonably practicable after the date of this Agreement, the transactions
contemplated by this Agreement, including using its reasonable efforts to lift
or rescind any Order adversely affecting its ability to consummate the
transactions contemplated herein and to cause to be satisfied the conditions
referred to in Article 9 of this Agreement; provided, that nothing herein shall
preclude either Party from exercising its rights under this Agreement. The
Parties shall cooperate and take all reasonable effort to prevent Regions from
becoming an interstate multiple savings and loan holding company as a result of
the Merger. Each Party shall use, and shall cause each of its Subsidiaries to
use, its reasonable efforts to obtain all Consents necessary or desirable for
the consummation of the transactions contemplated by this Agreement.

8.6 INVESTIGATION AND CONFIDENTIALITY. (a) Prior to the Effective Time,
each Party shall keep the other Party advised of all material developments
relevant to its business and to consummation of the Merger and shall permit the
other Party to make or cause to be made such investigation of the business and
properties of it and its Subsidiaries and of their respective financial and
legal conditions as the other Party reasonably requests, provided that such
investigation shall be reasonably related to the transactions contemplated
hereby and, after November 1, 1995, shall not interfere unnecessarily with
normal operations. No investigation by a Party shall affect the representations
and warranties of the other Party.

(b) In addition to the Parties' respective obligations under the
Confidentiality Agreements, each Party shall, and shall cause its advisers and
agents to, maintain the confidentiality of all confidential information
furnished to it by the other Party concerning its and its Subsidiaries'
businesses, operations, and financial positions and shall not use such
information for any purpose except in furtherance of the transactions
contemplated by this Agreement. If this Agreement is terminated prior to the
Effective Time, each Party shall promptly return or certify the destruction of
all documents and copies thereof, and all work papers containing confidential
information received from the other Party.

(c) Each Party agrees to give the other Party notice as soon as practicable
after any determination by it of any fact or occurrence relating to the other
Party which it has discovered through the course of its investigation and which
represents, or is reasonably likely to represent, either a material breach of
any representation, warranty, covenant, or agreement of the other Party or which
has had or is reasonably likely to have a Material Adverse Effect on the other
Party.

8.7 PRESS RELEASES. Prior to the Effective Time, Regions and First
National shall consult with each other as to the form and substance of any press
release or other public disclosure materially related to this Agreement or any
other transaction contemplated hereby; provided, that nothing in this Section
8.7 shall be deemed to prohibit any Party from making any disclosure which its
counsel deems necessary or advisable in order to satisfy such Party's disclosure
obligations imposed by Law.

8.8 CERTAIN ACTIONS. Except with respect to this Agreement and the Plan
of Merger and the transactions contemplated hereby or thereby, no First National
Company nor any Affiliate thereof nor any Representatives thereof retained by
any First National Company shall directly or indirectly solicit any Acquisition
Proposal by any Person. Except to the extent necessary to comply with the
fiduciary duties of First National's Board of Directors as advised by counsel,
no First National Company or any Affiliate or Representative thereof shall
furnish any non-public information that it is not legally obligated to furnish,

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negotiate with respect to, or enter into any Contract with respect to, any
Acquisition Proposal, but First National may communicate information about such
an Acquisition Proposal to its stockholders if and to the extent that it is
required to do so in order to comply with its legal obligations as advised by
counsel. First National shall promptly notify Regions orally and in writing in
the event that it receives any inquiry or proposal relating to any such
transaction. First National shall (i) immediately cease and cause to be
terminated any existing activities, discussions, or negotiations with any
Persons conducted heretofore with respect to any of the foregoing, and (ii)
direct and use its reasonable efforts to cause of all its Representatives not to
engage in any of the foregoing.

8.9 ACCOUNTING AND TAX TREATMENT. Each of the Parties undertakes and
agrees to use its reasonable efforts to cause the Merger, and to take no action
which would cause the Merger not, to qualify for treatment as a pooling of
interests for accounting purposes or as a "reorganization" within the meaning of
Section 368(a) of the Internal Revenue Code for federal income tax purposes.

8.10 STATE TAKEOVER LAWS. Each First National Company shall take all
necessary steps to exempt the transactions contemplated by this Agreement from,
or if necessary challenge the validity or applicability of, any applicable
Takeover Laws, including Sections 14-2-1111 and 14-2-1132 of the GBCC.

8.11 CHARTER PROVISIONS. Each First National Company shall take all
necessary action to ensure that the entering into of this Agreement and the Plan
of Merger and the consummation of the Merger and the other transactions
contemplated hereby or thereby do not and will not result in the grant of any
rights to any Person under the Articles of Incorporation, Bylaws, or other
governing instruments of any First National Company or restrict or impair the
ability of Regions or any of its Subsidiaries to vote, or otherwise to exercise
the rights of a stockholder with respect to, shares of any First National
Company that may be directly or indirectly acquired or controlled by it.

8.12 AGREEMENT OF AFFILIATES. First National has disclosed in Section
8.12 of the First National Disclosure Memorandum each Person whom it reasonably
believes is an "affiliate" of First National for purposes of Rule 145 under the
1933 Act. First National shall use its reasonable efforts to cause each such
Person to deliver to Regions not later than 30 days prior to the Effective Time,
a written agreement, in substantially the form of Exhibit 3, providing that such
Person will not sell, pledge, transfer, or otherwise dispose of the shares of
First National Common Stock held by such Person except as contemplated by such
agreement or by this Agreement and will not sell, pledge, transfer, or otherwise
dispose of the shares of Regions Common Stock to be received by such Person upon
consummation of the Merger except in compliance with applicable provisions of
the 1933 Act and the rules and regulations thereunder and until such time as
financial results covering at least 30 days of combined operations of Regions
and First National have been published within the meaning of Section 201.01 of
the SEC's Codification of Financial Reporting Policies. Shares of Regions Common
Stock issued to such affiliates of First National in exchange for shares of
First National Common Stock shall not be transferable until such time as
financial results covering at least 30 days of combined operations of Regions
and First National have been published within the meaning of Section 201.01 of
the SEC's Codification of Financial Reporting Policies, regardless of whether
each such affiliate has provided the written agreement referred to in this
Section 8.12 (and Regions shall be entitled to place restrictive legends upon
certificates for shares of Regions Common Stock issued to affiliates of First
National pursuant to this Agreement to enforce the provisions of this Section
8.12). Regions shall not be required to maintain the effectiveness of the
Registration Statement under the 1933 Act for the purposes of resale of Regions
Common Stock by such affiliates.

8.13 EMPLOYEE BENEFITS AND CONTRACTS. Following the Effective Time, but
in no event earlier than the consolidation of First National's banking
Subsidiaries with Regions' banking Subsidiaries located in the same states,
Regions shall provide generally to officers and employees of the First National
Companies, who at or after the Effective Time become employees of a Regions
Company, employee benefits under employee benefit plans (other than stock option
or other plans involving the potential issuance of Regions Common Stock except
as set forth in this Section 8.13), on terms and conditions which when taken as
a whole are substantially similar to those currently provided by the Regions
Companies to their similarly situated officers and employees. For purposes of
participation and vesting (but not accrual of benefits) under such employee

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benefit plans, (i) service under any qualified defined benefit plans of First
National should be treated as service under Regions' qualified defined benefit
plans, (ii) service under any qualified defined contribution plans of First
National shall be treated as service under Regions' qualified defined
contribution plans, and (iii) service under any other employee benefit plans of
First National shall be treated as service under any similar employee benefit
plans maintained by Regions. Regions also shall cause First National and its
Subsidiaries to honor on terms reasonably agreed upon by the Parties all
employment, severance, consulting, and other compensation Contracts disclosed in
Section 8.13 of the First National Disclosure Memorandum to Regions between any
First National Company and any current or former director, officer, or employee
thereof, and all provisions for vested benefits or other vested amounts earned
or accrued through the Effective Time under the First National Benefit Plans.

8.14 INDEMNIFICATION. (a) Regions shall indemnify, defend, and hold
harmless the present and former directors, officers, employees, and agents of
the First National Companies (each, an "Indemnified Party") against all
Liabilities arising out of actions or omissions occurring at or prior to the
Effective Time (including the transactions contemplated by this Agreement) to
the full extent permitted under Georgia Law and by First National's Articles of
Incorporation and Bylaws as in effect on the date hereof, including provisions
relating to advances of expenses incurred in the defense of any Litigation.
Without limiting the foregoing, in any case in which approval by Regions is
required to effectuate any indemnification, Regions shall direct, at the
election of the Indemnified Party, that the determination of any such approval
shall be made by independent counsel mutually agreed upon between Regions and
the Indemnified Party.

(b) If Regions or any of its successors or assigns shall consolidate with
or merge into any other Person and shall not be the continuing or surviving
Person of such consolidation or merger or shall transfer all or substantially
all of its assets to any Person, then and in each case, proper provision shall
be made so that the successors and assigns of Regions shall assume the
obligations set forth in this Section 8.14.

(c) The provisions of this Section 8.14 are intended to be for the benefit
of and shall be enforceable by, each Indemnified Party, his or her heirs and
representatives.

8.15 CERTAIN MODIFICATIONS. Regions and First National shall consult with
respect to their loan, litigation, and real estate valuation policies and
practices (including loan classifications and levels of reserves) and First
National shall make such modifications or changes to its policies and practices,
if any, prior to the Effective Time, as may be mutually agreed upon. Regions and
First National also shall consult with respect to the character, amount, and
timing of restructuring and Merger-related expense charges to be taken by each
of the Parties in connection with the transactions contemplated by this
Agreement and the Plan of Merger and shall take such charges in accordance with
GAAP, prior to the Effective Time, as may be mutually agreed upon by the
Parties. Neither Parties' representations, warranties, and covenants contained
in this Agreement shall be deemed to be inaccurate or breached in any respect as
a consequence of any modifications or charges undertaken solely on account of
this Section 8.15.

8.16 REGIONS MERGER SUBSIDIARY ORGANIZATION. Regions shall organize
Regions Merger Subsidiary under the Laws of the State of Georgia. Prior to the
Effective Time, the outstanding capital stock of Regions Merger Subsidiary shall
consist of 1,000 shares of Regions Merger Subsidiary Common Stock, all of which
shares shall be owned by Regions. Prior to the Effective Time, Regions Merger
Subsidiary shall not (i) conduct any business operations whatsoever or (ii)
enter into any Contract or agreement of any kind, acquire any assets or incur
any Liability, except as may be specifically contemplated by this Agreement or
the Plan of Merger or as the Parties may otherwise agree. Regions, as the sole
stockholder of Regions Merger Subsidiary, shall vote prior to the Effective Time
the shares of Regions Merger Subsidiary Common Stock in favor of the Plan of
Merger.

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ARTICLE 9

CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE

9.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The respective obligations
of each Party to perform this Agreement and the Plan of Merger and to consummate
the Merger and the other transactions contemplated hereby and thereby are
subject to the satisfaction of the following conditions, unless waived by both
Parties pursuant to Section 11.6 of this Agreement:

(a) STOCKHOLDER APPROVALS. The stockholders of First National shall
have approved this Agreement and the Plan of Merger, and the consummation
of the transactions contemplated hereby and thereby, including the Merger,
as and to the extent required by Law, by the provisions of any governing
instruments, or by the rules of the NASD. The stockholders of Regions shall
have approved the issuance of shares of Regions Common Stock pursuant to
the Merger, as and to the extent required by Law, by the provisions of any
governing instruments, or by the rules of the NASD.

(b) REGULATORY APPROVALS. All Consents of, filings and registrations
with, and notifications to, all Regulatory Authorities required for
consummation of the Merger shall have been obtained or made and shall be in
full force and effect and all waiting periods required by Law shall have
expired. No Consent obtained from any Regulatory Authority which is
necessary to consummate the transactions contemplated hereby shall be
conditioned or restricted in a manner (including requirements relating to
the raising of additional capital or the disposition of Assets) which in
the reasonable judgment of the Board of Directors of Regions would so
materially adversely impact the economic or business benefits of the
transactions contemplated by this Agreement that, had such condition or
requirement been known, Regions would not, in its reasonable judgment, have
entered into this Agreement.

(c) CONSENTS AND APPROVALS. Each Party shall have obtained any and
all Consents required for consummation of the Merger (other than those
referred to in Section 9.1(b) of this Agreement) or for the preventing of
any Default under any Contract or Permit of such Party which, if not
obtained or made, is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on such Party.

(d) LEGAL PROCEEDINGS. No court or governmental or regulatory
authority of competent jurisdiction shall have enacted, issued,
promulgated, enforced, or entered any Law or Order (whether temporary,
preliminary, or permanent) or taken any other action which prohibits,
restricts, or makes illegal consummation of the transactions contemplated
by this Agreement or the Plan of Merger.

(e) REGISTRATION STATEMENT. The Registration Statement shall be
effective under the 1933 Act, no stop orders suspending the effectiveness
of the Registration Statement shall have been issued, no action, suit,
proceeding, or investigation by the SEC to suspend the effectiveness
thereof shall have been initiated and be continuing, and all necessary
approvals under state securities Laws or the 1933 Act or 1934 Act relating
to the issuance or trading of the shares of Regions Common Stock issuable
pursuant to the Merger shall have been received.

(f) EXCHANGE LISTING. The shares of Regions Common Stock issuable
pursuant to the Merger shall have been approved for listing on the Nasdaq
NMS, subject to official notice of issuance.

(g) TAX MATTERS. Each Party shall have received a written opinion or
opinions from Alston & Bird in a form reasonably satisfactory to such
Parties (the "Tax Opinion"), to the effect that (i) the Merger will
constitute a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code and (ii) the exchange in the Merger of First National
Common Stock for Regions Common Stock will not give rise to gain or loss to
the stockholders of First National with respect to such exchange (except to
the extent of any cash received). In rendering such Tax Opinion, such
counsel shall be entitled to rely upon representations of officers of First
National and Regions reasonably satisfactory in form and substance to such
counsel.

(h) POOLING LETTER. Each of the Parties shall have received a
letter, dated as of the Effective Time, in form and substance reasonably
acceptable to such Party, from Ernst & Young LLP to the effect that the
Merger will qualify for pooling-of-interests accounting treatment.

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9.2 CONDITIONS TO OBLIGATIONS OF REGIONS. The obligations of Regions to
perform this Agreement and consummate the Merger and the other transactions
contemplated hereby are subject to the satisfaction of the following conditions,
unless waived by Regions pursuant to Section 11.6(a) of this Agreement:

(a) REPRESENTATIONS AND WARRANTIES. For purposes of this Section
9.2(a), the accuracy of the representations and warranties of First
National set forth in this Agreement shall be assessed as of the date of
this Agreement and as of the Effective Time with the same effect as though
all such representations and warranties had been made on and as of the
Effective Time (provided that representations and warranties which are
confined to a specified date shall speak only as of such date). The
representations and warranties of First National set forth in Section 5.3
of this Agreement shall be true and correct (except for inaccuracies which
are de minimus in amount). The representations and warranties of First
National set forth in Sections 5.18, 5.19, and 5.20 of this Agreement shall
be true and correct in all material respects. There shall not exist
inaccuracies in the representations and warranties of First National set
forth in this Agreement (including the representations and warranties set
forth in Sections 5.3, 5.18, 5.19, and 5.20) such that the aggregate effect
of such inaccuracies has, or is reasonably likely to have, a Material
Adverse Effect on First National; provided that, for purposes of this
sentence only, those representations and warranties which are qualified by
references to "material" or "Material Adverse Effect" or to the "Knowledge"
of First National or to a matter being "known" by First National shall be
deemed not to include such qualifications.

(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of the
agreements and covenants of First National to be performed and complied
with pursuant to this Agreement and the other agreements contemplated
hereby prior to the Effective Time shall have been duly performed and
complied with in all material respects.

(c) CERTIFICATES. First National shall have delivered to Regions (i)
a certificate, dated as of the Effective Time and signed on its behalf by
its chief executive officer and its chief financial officer, to the effect
that the conditions of its obligations set forth in Section 9.2(a) and
9.2(b) of this Agreement have been satisfied, and (ii) certified copies of
resolutions duly adopted by First National's Board of Directors and
stockholders evidencing the taking of all corporate action necessary to
authorize the execution, delivery, and performance of this Agreement and
the Plan of Merger, and the consummation of the transactions contemplated
hereby and thereby, all in such reasonable detail as Regions and its
counsel shall request.

(d) AFFILIATE AGREEMENTS. Regions shall have received from each
affiliate of First National the affiliates agreement referred to in Section
8.12 of this Agreement, to the extent necessary to assure in the reasonable
judgment of Regions that the transactions contemplated hereby will qualify
for pooling-of-interests accounting treatment.

9.3 CONDITIONS TO OBLIGATIONS OF FIRST NATIONAL. The obligations of First
National to perform this Agreement and the Plan of Merger and consummate the
Merger and the other transactions contemplated hereby and thereby are subject to
the satisfaction of the following conditions, unless waived by First National
pursuant to Section 11.6(b) of this Agreement:

(a) REPRESENTATIONS AND WARRANTIES. For purposes of this Section
9.3(a), the accuracy of the representations and warranties of Regions set
forth in this Agreement shall be assessed as of the date of this Agreement
and as of the Effective Time with the same effect as though all such
representations and warranties had been made on and as of the Effective
Time (provided that representations and warranties which are confined to a
specified date shall speak only as of such date). The representations and
warranties of Regions set forth in Section 6.3 of this Agreement shall be
true and correct (except for inaccuracies which are de minimus in amount).
The representations and warranties of Regions set forth in Section 6.14 of
this Agreement shall be true and correct in all material respects. There
shall not exist inaccuracies in the representations and warranties of
Regions set forth in this Agreement (including the representations and
warranties set forth in Sections 6.3 and 6.14) such that the aggregate
effect of such inaccuracies has, or is reasonably likely to have, a
Material Adverse Effect on Regions; provided that, for purposes of this
sentence only, those representations and warranties which are qualified by
references to

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"material" or "Material Adverse Effect" or to the "Knowledge" of Regions or
to a matter being "known" by Regions shall be deemed not to include such
qualifications.

(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of the
agreements and covenants of Regions to be performed and complied with
pursuant to this Agreement and the other agreements contemplated hereby
prior to the Effective Time shall have been duly performed and complied
with in all material respects.

(c) CERTIFICATES. Regions shall have delivered to First National (i)
a certificate, dated as of the Effective Time and signed on its behalf by
its chief executive officer and its chief financial officer, to the effect
that the conditions of its obligations set forth in Section 9.3(a) and
9.3(b) of this Agreement have been satisfied, and (ii) certified copies of
resolutions duly adopted by Regions' Board of Directors and stockholders
evidencing the taking of all corporate action necessary to authorize the
execution, delivery, and performance of this Agreement, and the
consummation of the transactions contemplated hereby, all in such
reasonable detail as First National and its counsel shall request.

ARTICLE 10

TERMINATION

10.1 TERMINATION. Notwithstanding any other provision of this Agreement,
and notwithstanding the approval of this Agreement by the stockholders of First
National or Regions, this Agreement and the Plan of Merger may be terminated and
the Merger abandoned at any time prior to the Effective Time:

(a) By mutual consent of the Board of Directors of Regions and the
Board of Directors of First National; or

(b) By the Board of Directors of either Party (provided that the
terminating Party is not then in breach of any representation or warranty
contained in this Agreement under the applicable standard set forth in
Section 9.2(a) of this Agreement in the case of First National and Section
9.3(a) of this Agreement in the case of Regions or in material breach of
any covenant or other agreement contained in this Agreement) in the event
of an inaccuracy of any representation or warranty of the other Party
contained in this Agreement which cannot be or has not been cured within 30
days after the giving of written notice to the breaching Party of such
inaccuracy and which inaccuracy would provide the terminating Party the
ability to refuse to consummate the Merger under the applicable standard
set forth in Section 9.2(a) of this Agreement in the case of First National
and Section 9.3(a) of this Agreement in the case of Regions; or

(c) By the Board of Directors of either Party in the event of a
material breach by the other Party of any covenant or agreement contained
in this Agreement which cannot be or has not been cured within 30 days
after the giving of written notice to the breaching Party of such breach;
or

(d) By the Board of Directors of either Party in the event (i) any
Consent of any Regulatory Authority required for consummation of the Merger
and the other transactions contemplated hereby shall have been denied by
final nonappealable action of such authority or if any action taken by such
authority is not appealed within the time limit for appeal, or (ii) the
stockholders of Regions or First National fail to vote their approval of
the matters submitted for the approval by such stockholders at the
Stockholders' Meetings where the transactions were presented to such
stockholders for approval and voted upon; or

(e) By the Board of Directors of either Party in the event that the
Merger shall not have been consummated by September 30, 1996, if the
failure to consummate the transactions contemplated hereby on or before
such date is not caused by any breach of this Agreement by the Party
electing to terminate pursuant to this Section 10.1(e); or

(f) By the Board of Directors of either Party (provided that the
terminating Party is not then in breach of any representation or warranty
contained in this Agreement under the applicable standard set forth in
Section 9.2(a) of this Agreement in the case of First National and Section
9.3(a) of this

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Agreement in the case of Regions or in material breach of any covenant or
other agreement contained in this Agreement) in the event that any of the
conditions precedent to the obligations of such Party to consummate the
Merger cannot be satisfied or fulfilled by the date specified in Section
10.1(e) of this Agreement; or

(g) By the Board of Directors of Regions, at any time prior to 5:00
p.m. Eastern time, on November 1, 1995, without any Liability if it
determines in its reasonable good faith judgment that the Asset quality of
First National, the status of litigation involving First National (or any
other liability or undisclosed contingency of First National), any
information in the First National Disclosure Memorandum, or the projected
ability of First National to reduce its non-interest expenses are
materially less favorable to Regions than as set forth in materials
previously disclosed or provided to Regions by First National and its
financial advisor; or

(h) By the Board of Directors of First National, if it determines by a
vote of a majority of the members of its entire Board, at any time during
the ten-day period commencing two days after the Determination Date, if
both of the following conditions are satisfied:

(1) the Average Closing Price of shares of Regions Common Stock
shall be less than $33.20; and

(2) (i) the quotient obtained by dividing the Average Closing Price
by $41.50 (such number being referred to herein as the "Regions Ratio")
shall be less than (ii) the quotient obtained by dividing the Index
Price on the Determination Date by the Index Price on the Starting Date
and subtracting 0.20 from the quotient in this clause (2)(ii) (such
number being referred to herein as the "Index Ratio");

subject, however, to the following three sentences. If First National
refuses to consummate the Merger pursuant to this Section 10.1(h), it shall
give prompt written notice thereof to Regions; provided, that such notice
of election to terminate may be withdrawn at any time within the
aforementioned ten-day period. During the five-day period commencing with
its receipt of such notice, Regions shall have the option to elect to
increase the Exchange Ratio to equal the lesser of (i) the quotient
obtained by dividing (1) the product of $33.20 and the Exchange Ratio (as
then in effect) by (2) the Average Closing Price, and (ii) the quotient
obtained by dividing (1) the product of the Index Ratio and the Exchange
Ratio (as then in effect) by (2) the Regions Ratio. If Regions makes an
election contemplated by the preceding sentence, within such five-day
period, it shall give prompt written notice to First National of such
election and the revised Exchange Ratio, whereupon no termination shall
have occurred pursuant to this Section 10.1(h) and this Agreement shall
remain in effect in accordance with its terms (except as the Exchange Ratio
shall have been so modified), and any references in this Agreement to
"Exchange Ratio" shall thereafter be deemed to refer to the Exchange Ratio
as adjusted pursuant to this Section 10.1(h).

For purposes of this Section 10.1(h), the following terms shall have
the meanings indicated:

"Average Closing Price" shall mean the average of the daily last
sales prices of Regions Common Stock as reported on the Nasdaq NMS (as
reported by The Wall Street Journal or, if not reported thereby, another
authoritative source as chosen by Regions) for the ten consecutive full
trading days in which such shares are traded on the Nasdaq NMS ending at
the close of trading on the Determination Date.

"Determination Date" shall mean the date on which the Consent of
the Board of Governors of the Federal Reserve System shall be received.

"Index Group" shall mean the 20 bank holding companies listed
below, the common stocks of all of which shall be publicly traded and as
to which there shall not have been, since the Starting Date and before
the Determination Date, any public announcement of a proposal for such
company to be acquired or for such company to acquire another company or
companies in transactions with a value exceeding 25% of the acquiror's
market capitalization. In the event that any such company or companies
are removed from the Index Group, the weights (which shall be determined
based upon

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the number of outstanding shares of common stock) shall be redistributed
proportionately for purposes of determining the Index Price. The 20 bank
holding companies and the weights attributed to them are as follows:

<TABLE>
<CAPTION>
BANK HOLDING COMPANIES WEIGHTING
------------------------------------------------------------------- ---------
<S> <C>
AmSouth Bancorporation............................................. 4.73%
Barnett Banks, Inc................................................. 7.80
Central Fidelity Banks, Inc........................................ 3.23
Compass Bancshares, Inc............................................ 3.09
Crestar Financial Corporation...................................... 3.05
Deposit Guaranty Corporation....................................... 1.52
First American Corporation......................................... 2.06
First Commerce Corporation......................................... 2.35
First Maryland Bancorp............................................. 1.37
First Tennessee National Corporation............................... 2.72
First Union Corporation............................................ 13.91
First Virginia Banks, Inc.......................................... 2.75
Hibernia Corporation............................................... 9.65
Mercantile Bankshares Corporation.................................. 3.84
National Commerce Bancorporation................................... 2.00
SouthTrust Corporation............................................. 6.75
SunTrust Banks, Inc................................................ 9.24
Trustmark Corporation.............................................. 2.83
Union Planters Corporation......................................... 3.31
Wachovia Corporation............................................... 13.80
---------
TOTAL.................................................... 100.00%
</TABLE>

"Index Price" on a given date shall mean the weighted average
(weighted in accordance with the factors listed above) of the closing
prices of the companies composing the Index Group.

"Starting Date" shall mean October 20, 1995.

If any company belonging to the Index Group or Regions declares or
effects a stock dividend, reclassification, recapitalization, split-up,
combination, exchange of shares, or similar transaction between the
Starting Date and the Determination Date, the prices for the common stock
of such company or Regions shall be appropriately adjusted for the purposes
of applying this Section 10.1(h).

10.2 EFFECT OF TERMINATION. In the event of the termination and
abandonment of this Agreement pursuant to Section 10.1 of this Agreement, this
Agreement and the Plan of Merger shall become void and have no effect, except
that (i) the provisions of this Section 10.2 and Article 11 and Section 8.6(b)
of this Agreement shall survive any such termination and abandonment, and (ii) a
termination pursuant to Sections 10.1(b), 10.1(c), or 10.1(f) of this Agreement
shall not relieve the breaching Party from Liability for an uncured willful
breach of a representation, warranty, covenant, or agreement giving rise to such
termination. The Stock Option Agreement shall be governed by its own terms as to
its termination.

10.3 NON-SURVIVAL OF REPRESENTATIONS AND COVENANTS. The respective
representations, warranties, obligations, covenants, and agreements of the
Parties shall not survive the Effective Time except this Section 10.3 and
Articles 2, 3, 4, and 11 and Sections 8.12 and 8.14 of this Agreement.

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ARTICLE 11

MISCELLANEOUS

11.1 DEFINITIONS. (a) Except as otherwise provided herein, the
capitalized terms set forth below shall have the following meanings:

"ACQUISITION PROPOSAL" with respect to a Party shall mean any tender
offer or exchange offer or any proposal for a merger, acquisition of all of
the stock or assets of, or other business combination involving such Party
or any of its Subsidiaries or the acquisition of a substantial equity
interest in, or a substantial portion of the assets of, such Party or any
of its Subsidiaries.

"AFFILIATE" of a Person shall mean: (i) any other Person directly, or
indirectly through one or more intermediaries, controlling, controlled by
or under common control with such Person; (ii) any officer, director,
partner, employer, or direct or indirect beneficial owner of any 10% or
greater equity or voting interest of such Person; or (iii) any other Person
for which a Person described in clause (ii) acts in any such capacity.

"AGREEMENT" shall mean this Agreement and Plan of Reorganization,
including the Exhibits (other than the Stock Option Agreement) delivered
pursuant hereto and incorporated herein by reference.

"ASSETS" of a Person shall mean all of the assets, properties,
businesses, and rights of such Person of every kind, nature, character, and
description, whether real, personal, or mixed, tangible or intangible,
accrued or contingent, or otherwise relating to or utilized in such
Person's business, directly or indirectly, in whole or in part, whether or
not carried on the books and records of such Person, and whether or not
owned in the name of such Person or any Affiliate of such Person and
wherever located.

"BHC ACT" shall mean the federal Bank Holding Company Act of 1956, as
amended.

"CLOSING DATE" shall mean the date on which the Closing occurs.

"CONFIDENTIALITY AGREEMENTS" shall mean those certain Confidentiality
Agreements, dated October 21, 1995, between First National and Regions.

"CONSENT" shall mean any consent, approval, authorization, clearance,
exemption, waiver, or similar affirmation by any Person pursuant to any
Contract, Law, Order, or Permit.

"CONTRACT" shall mean any written or oral agreement, arrangement,
authorization, commitment, contract, indenture, instrument, lease,
obligation, plan, practice, restriction, understanding, or undertaking of
any kind or character, or other document to which any Person is a party or
that is binding on any Person or its capital stock, Assets, or business.

"DEFAULT" shall mean (i) any breach or violation of or default under
any Contract, Order, or Permit, (ii) any occurrence of any event that with
the passage of time or the giving of notice or both would constitute a
breach or violation of or default under any Contract, Order, or Permit, or
(iii) any occurrence of any event that with or without the passage of time
or the giving of notice would give rise to a right to terminate or revoke,
change the current terms of, or renegotiate, or to accelerate, increase, or
impose any Liability under, any Contract, Order, or Permit, where, in any
such event, such Default is reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on a Party.

"DGCL" shall mean the Delaware General Corporation Law.

"ENVIRONMENTAL LAWS" shall mean all Laws relating to pollution or
protection of human health or the environment (including ambient air,
surface water, ground water, land surface, or subsurface strata) and which
are administered, interpreted, or enforced by the United States
Environmental Protection Agency and state and local agencies with
jurisdiction over, and including common law in respect of, pollution or
protection of the environment, including the Comprehensive Environmental
Response Compensation and Liability Act, as amended, 42 U.S.C. 9601 et seq.
("CERCLA"), the Resource Conservation and Recovery Act, as amended, 42
U.S.C. 6901 et seq. ("RCRA"), and other Laws relating to emissions,
discharges, releases, or threatened releases of any Hazardous Material, or
otherwise

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relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of any Hazardous Material.

"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.

"EXHIBITS" 1 through 3, inclusive, shall mean the Exhibits so marked,
copies of which are attached to this Agreement. Such Exhibits are hereby
incorporated by reference herein and made a part hereof, and may be
referred to in this Agreement and any other related instrument or document
without being attached hereto.

"FIRST NATIONAL COMMON STOCK" shall mean the $1.00 par value common
stock of First National.

"FIRST NATIONAL COMPANIES" shall mean, collectively, First National
and all First National Subsidiaries.

"FIRST NATIONAL DISCLOSURE MEMORANDUM" shall mean the written
information entitled "First National Bancorp Disclosure Memorandum"
delivered prior to 5:00 p.m., Eastern time, on October 27, 1995, to Regions
describing in reasonable detail the matters contained therein and, with
respect to each disclosure made therein, specifically referencing each
Section or subsection of this Agreement under which such disclosure is
being made. Information disclosed with respect to one Section or subsection
shall not be deemed to be disclosed for purposes of any other Section or
subsection not specifically referenced with respect thereto.

"FIRST NATIONAL FINANCIAL STATEMENTS" shall mean (i) the consolidated
balance sheets (including related notes and schedules, if any) of First
National as of June 30, 1995, and as of December 31, 1994 and 1993, and the
related statements of income, changes in stockholders' equity, and cash
flows (including related notes and schedules, if any) for the six months
ended June 30, 1995, and for each of the three fiscal years ended December
31, 1994, 1993, and 1992, as filed by First National in SEC Documents, and
(ii) the consolidated balance sheets of First National (including related
notes and schedules, if any) and related statements of income, changes in
stockholders' equity, and cash flows (including related notes and
schedules, if any) included in SEC Documents filed with respect to periods
ended subsequent to June 30, 1995.

"FIRST NATIONAL STOCK PLANS" shall mean the existing stock option and
other stock-based compensation plans of First National disclosed in Section
3.5(b) of the First National Disclosure Memorandum.

"FIRST NATIONAL SUBSIDIARIES" shall mean the Subsidiaries of First
National, which shall include the First National Subsidiaries described in
Section 5.4 of this Agreement and any corporation, bank, savings
association, or other organization acquired as a Subsidiary of First
National in the future and owned by First National at the Effective Time.

"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.

"GBCC" shall mean the Georgia Business Corporation Code.

"GEORGIA CERTIFICATE OF MERGER" shall mean the Certificate of Merger
to be executed by Regions Merger Subsidiary and filed with the Secretary of
State of the State of Georgia relating to the Merger as contemplated by
Section 1.1 of this Agreement.

"HAZARDOUS MATERIAL" shall mean (i) any hazardous substance, hazardous
material, hazardous waste, regulated substance, or toxic substance (as
those terms are defined by any applicable Environmental Laws) and (ii) any
chemicals, pollutants, contaminants, petroleum, petroleum products, or oil
(and specifically shall include asbestos requiring abatement, removal, or
encapsulation pursuant to the requirements of governmental authorities and
any polychlorinated biphenyls).

"HOLA" shall mean the Home Owners' Loan Act of 1933, as amended.

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"HSR ACT" shall mean Section 7A of the Clayton Act, as added by Title
II of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and the rules and regulations promulgated thereunder.

"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code of 1986,
as amended, and the rules and regulations promulgated thereunder.

"JOINT PROXY STATEMENT" shall mean the joint proxy statement used by
Regions and First National to solicit the approval of their respective
stockholders of the transactions contemplated by this Agreement, which
shall include the prospectus of Regions relating to the issuance of the
Regions Common Stock to holders of First National Common Stock.

"KNOWLEDGE" as used with respect to a Person (including references to
such Person being aware of a particular matter) shall mean the personal
knowledge of the chairman, president, chief financial officer, chief
accounting officer, chief credit officer, general counsel, any assistant or
deputy general counsel, or any senior or executive vice president of such
Person and the knowledge of any such persons obtained or which would have
been obtained from a reasonable investigation.

"LAW" shall mean any code, law, ordinance, regulation, reporting or
licensing requirement, rule, or statute applicable to a Person or its
Assets, Liabilities, or business, including those promulgated, interpreted,
or enforced by any Regulatory Authority.

"LIABILITY" shall mean any direct or indirect, primary or secondary,
liability, indebtedness, obligation, penalty, cost, or expense (including
costs of investigation, collection, and defense), claim, deficiency,
guaranty, or endorsement of or by any Person (other than endorsements of
notes, bills, checks, and drafts presented for collection or deposit in the
ordinary course of business) of any type, whether accrued, absolute or
contingent, liquidated or unliquidated, matured or unmatured, or otherwise.

"LIEN" shall mean any conditional sale agreement, default of title,
easement, encroachment, encumbrance, hypothecation, infringement, lien,
mortgage, pledge, reservation, restriction, security interest, title
retention, or other security arrangement, or any adverse right or interest,
charge, or claim of any nature whatsoever of, on, or with respect to any
property or property interest, other than (i) Liens for current property
Taxes not yet due and payable, and (ii) for depository institution
Subsidiaries of a Party, pledges to secure deposits, and other Liens
incurred in the ordinary course of the banking business.

"LITIGATION" shall mean any action, arbitration, cause of action,
claim, complaint, criminal prosecution, demand letter, governmental or
other examination or investigation, hearing, inquiry, administrative or
other proceeding, or notice (written or oral) by any Person alleging
potential Liability or requesting information relating to or affecting a
Party, its business, its Assets (including Contracts related to it), or the
transactions contemplated by this Agreement, but shall not include regular,
periodic examinations of depository institutions and their Affiliates by
Regulatory Authorities.

"LOAN PROPERTY" shall mean any property owned, leased, or operated by
the Party in question or by any of its Subsidiaries or in which such Party
or Subsidiary holds a security or other interest (including an interest in
a fiduciary capacity), and, where required by the context, includes the
owner or operator of such property, but only with respect to such property.

"MATERIAL" for purposes of this Agreement shall be determined in light
of the facts and circumstances of the matter in question; provided that any
specific monetary amount stated in this Agreement shall determine
materiality in that instance.

"MATERIAL ADVERSE EFFECT" on a Party shall mean an event, change, or
occurrence which, individually or together with any other event, change, or
occurrence, has a material adverse impact on (i) the financial position,
business, or results of operations of such Party and its Subsidiaries,
taken as a whole, or (ii) the ability of such Party to perform its
obligations under this Agreement or to consummate the Merger or the other
transactions contemplated by this Agreement, provided that "Material
Adverse Effect" shall not be deemed to include the impact of (a) changes in
banking and similar Laws of general applicability or interpretations
thereof by courts or governmental authorities, (b) changes in GAAP or
regulatory

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accounting principles generally applicable to banks and their holding
companies, (c) actions and omissions of a Party (or any of its
Subsidiaries) taken with the prior informed consent of the other Party in
contemplation of the transactions contemplated hereby, (d) circumstances
affecting regional bank holding companies generally, and (e) the Merger and
compliance with the provisions of this Agreement on the operating
performance of the Parties.

"NASD" shall mean the National Association of Securities Dealers, Inc.

"NASDAQ NMS" shall mean the National Market Service of Nasdaq.

"1933 ACT" shall mean the Securities Act of 1933, as amended.

"1934 ACT" shall mean the Securities Exchange Act of 1934, as amended.

"ORDER" shall mean any administrative decision or award, decree,
injunction, judgment, order, quasijudicial decision or award, ruling, or
writ of any federal, state, local, or foreign or other court, arbitrator,
mediator, tribunal, administrative agency, or Regulatory Authority.

"PARTICIPATION FACILITY" shall mean any facility or property in which
the Party in question or any of its Subsidiaries participates in the
management and, where required by the context, said term means the owner or
operator of such facility or property, but only with respect to such
facility or property.

"PARTY" shall mean either First National or Regions, and "PARTIES"
shall mean both First National and Regions.

"PERMIT" shall mean any federal, state, local, and foreign
governmental approval, authorization, certificate, easement, filing,
franchise, license, notice, permit, or right to which any Person is a party
or that is or may be binding upon or inure to the benefit of any Person or
its securities, Assets, or business.

"PERSON" shall mean a natural person or any legal, commercial, or
governmental entity, such as, but not limited to, a corporation, general
partnership, joint venture, limited partnership, limited liability company,
trust, business association, group acting in concert, or any person acting
in a representative capacity.

"PLAN OF MERGER" shall mean the plan of merger providing for the
Merger, in substantially the form of Exhibit 2.

"REGIONS COMMON STOCK" shall mean the $.625 par value common stock of
Regions.

"REGIONS COMPANIES" shall mean, collectively, Regions and all Regions
Subsidiaries.

"REGIONS DISCLOSURE MEMORANDUM" shall mean the written information
entitled "Regions Financial Corporation Disclosure Memorandum" delivered
prior to the execution of this Agreement to First National describing in
reasonable detail the matters contained therein and, with respect to each
disclosure made therein, specifically referencing each Section or
subsection of this Agreement under which such disclosure is being made.
Information disclosed with respect to one Section or subsection shall not
be deemed to be disclosed for purposes of any other Section or subsection
not specifically referenced with respect thereto.

"REGIONS FINANCIAL STATEMENTS" shall mean (i) the consolidated
statements of condition (including related notes and schedules, if any) of
Regions as of June 30, 1995, and as of December 31, 1994 and 1993, and the
related statements of income, changes in stockholders' equity, and cash
flows (including related notes and schedules, if any) for the six months
ended June 30, 1995, and for each of the three years ended December 31,
1994, 1993, and 1992, as filed by Regions in SEC Documents, and (ii) the
consolidated statements of condition of Regions (including related notes
and schedules, if any) and related statements of income, changes in
stockholders' equity, and cash flows (including related notes and
schedules, if any) included in SEC Documents filed with respect to periods
ended subsequent to June 30, 1995.

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"REGIONS MERGER SUBSIDIARY" shall mean the wholly owned subsidiary of
Regions to be organized to effect the Merger under the Laws of the State of
Georgia and with the name of Regions Merger Subsidiary, Inc.

"REGIONS MERGER SUBSIDIARY COMMON STOCK" shall mean the $1.00 par
value common stock of Regions Merger Subsidiary.

"REGIONS SUBSIDIARIES" shall mean the Subsidiaries of Regions, which
shall include the Regions Subsidiaries described in Section 6.4 of this
Agreement and any corporation, bank, savings association, or other
organization acquired as a Subsidiary of Regions in the future and owned by
Regions at the Effective Time.

"REGISTRATION STATEMENT" shall mean the Registration Statement on Form
S-4, or other appropriate form, including any pre-effective or
post-effective amendments or supplements thereto, filed with the SEC by
Regions under the 1933 Act with respect to the shares of Regions Common
Stock to be issued to the stockholders of First National in connection with
the transactions contemplated by this Agreement.

"REGULATORY AUTHORITIES" shall mean, collectively, the Federal Trade
Commission, the United States Department of Justice, the Board of the
Governors of the Federal Reserve System, the Office of the Comptroller of
the Currency, the Federal Deposit Insurance Corporation, the Office of
Thrift Supervision, all state regulatory agencies having jurisdiction over
the Parties and their respective Subsidiaries, the NASD, and the SEC.

"REPRESENTATIVE" shall mean any investment banker, financial advisor,
attorney, accountant, consultant, or other representative of a Person.

"RIGHTS" shall mean all arrangements, calls, commitments, Contracts,
options, rights to subscribe to, scrip, understandings, warrants, or other
binding obligations of any character whatsoever relating to, or securities
or rights convertible into or exchangeable for, shares of the capital stock
of a Person or by which a Person is or may be bound to issue additional
shares of its capital stock or other Rights.

"SEC DOCUMENTS" shall mean all forms, proxy statements, registration
statements, reports, schedules, and other documents filed, or required to
be filed, by a Party or any of its Subsidiaries with any Regulatory
Authority pursuant to the Securities Laws.

"SECURITIES LAWS" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors Act of
1940, as amended, the Trust Indenture Act of 1939, as amended, and the
rules and regulations of any Regulatory Authority promulgated thereunder.

"STOCK OPTION AGREEMENT" shall mean the stock option agreement by and
between First National and Regions, in substantially the form of Exhibit 1.

"STOCKHOLDERS' MEETINGS" shall mean the respective meetings of the
stockholders of Regions and First National to be held pursuant to Section
8.1 of this Agreement, including any adjournment or adjournments thereof.

"SUBSIDIARIES" shall mean all those corporations, banks, associations,
or other entities of which the entity in question owns or controls 50% or
more of the outstanding equity securities either directly or through an
unbroken chain of entities as to each of which 50% or more of the
outstanding equity securities is owned directly or indirectly by its
parent; provided, there shall not be included any such entity acquired
through foreclosure or any such entity the equity securities of which are
owned or controlled in a fiduciary capacity.

"SURVIVING CORPORATION" shall mean Regions Merger Subsidiary as the
surviving corporation resulting from the Merger.

"TAX" OR "TAXES" shall mean all federal, state, local, and foreign
taxes, charges, fees, levies, imposts, duties, or other assessments,
including income, gross receipts, excise, employment, sales, use, transfer,
license, payroll, franchise, severance, stamp, occupation, windfall
profits, environmental, federal highway

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use, commercial rent, customs duties, capital stock, paid-up capital,
profits, withholding, Social Security, single business and unemployment,
disability, real property, personal property, registration, ad valorem,
value added, alternative or add-on minimum, estimated, or other tax or
governmental fee of any kind whatsoever, imposed or required to be withheld
by the United States or any state, local, foreign government or subdivision
or agency thereof, including any interest, penalties or additions thereto.

"TAXABLE PERIOD" shall mean any period prescribed by any governmental
authority, including the United States or any state, local, foreign
government or subdivision or agency thereof for which a Tax Return is
required to be filed or Tax is required to be paid.

"TAX RETURN" shall mean any report, return, information return, or
other information required to be supplied to a taxing authority in
connection with Taxes, including any return of an affiliated or combined or
unitary group that includes a Party or its Subsidiaries.

(b) The terms set forth below shall have the meanings ascribed thereto in
the referenced sections:

<TABLE>
<S> <C>
Average Closing Price.............................................. Section 10.1(h)
Closing............................................................ Section 1.2
Determination Date................................................. Section 10.1(h)
Effective Time..................................................... Section 1.3
ERISA Affiliate.................................................... Section 5.13(c)
Exchange Agent..................................................... Section 4.1
Exchange Ratio..................................................... Section 3.1(c)
First National Benefit Plans....................................... Section 5.13(a)
First National Contracts........................................... Section 5.14
First National ERISA Plan.......................................... Section 5.13(a)
First National Rights.............................................. Section 3.5(a)
First National Pension Plan........................................ Section 5.13(a)
First National SEC Reports......................................... Section 5.5(a)
Indemnified Party.................................................. Section 8.14
Index Group........................................................ Section 10.1(h)
Index Price........................................................ Section 10.1(h)
Index Ratio........................................................ Section 10.1(h)
Merger............................................................. Section 1.1
Regions Ratio...................................................... Section 10.1(h)
Regions SEC Reports................................................ Section 6.5(a)
Starting Date...................................................... Section 10.1(h)
Takeover Laws...................................................... Section 5.19
Tax Opinion........................................................ Section 9.1(g)
</TABLE>

(c) Any singular term in this Agreement shall be deemed to include the
plural, and any plural term the singular. Whenever the words "include,"
"includes," or "including" are used in this Agreement, they shall be deemed
followed by the words "without limitation."

11.2 EXPENSES. (a) Except as otherwise provided in this Section 11.2,
each of the Parties shall bear and pay all direct costs and expenses incurred by
it or on its behalf in connection with the transactions contemplated hereunder,
including filing, registration, and application fees, printing fees, and fees
and expenses of its own financial or other consultants, investment bankers,
accountants, and counsel, except that each of the Parties shall bear and pay
one-half of the printing costs incurred in connection with the printing of the
Registration Statement and the Joint Proxy Statement.

(b) Nothing contained in this Section 11.2 shall constitute or shall be
deemed to constitute liquidated damages for the willful breach by a Party of the
terms of this Agreement or otherwise limit the rights of the nonbreaching Party.

11.3 BROKERS AND FINDERS. Except for Morgan Stanley & Co. Incorporated as
to First National and except for Bear Stearns & Co. Inc. as to Regions, each of
the Parties represents and warrants that neither it

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nor any of its officers, directors, employees, or Affiliates has employed any
broker or finder or incurred any Liability for any financial advisory fees,
investment bankers' fees, brokerage fees, commissions, or finders' fees in
connection with this Agreement or the transactions contemplated hereby. In the
event of a claim by any broker or finder based upon his, her, or its
representing or being retained by or allegedly representing or being retained by
First National or Regions, each of First National and Regions, as the case may
be, agrees to indemnify and hold the other Party harmless of and from any
Liability in respect of any such claim.

11.4 ENTIRE AGREEMENT. Except as otherwise expressly provided herein,
this Agreement (including the documents and instruments referred to herein)
constitutes the entire agreement between the Parties with respect to the
transactions contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral (except for the
Confidentiality Agreements). Nothing in this Agreement expressed or implied, is
intended to confer upon any Person, other than the Parties or their respective
successors, any rights, remedies, obligations, or liabilities under or by reason
of this Agreement, other than as provided in Sections 8.12 and 8.14 of this
Agreement.

11.5 AMENDMENTS. To the extent permitted by Law, this Agreement may be
amended by a subsequent writing signed by each of the Parties upon the approval
of the Boards of Directors of each of the Parties, whether before or after
stockholder approval of this Agreement has been obtained; provided, that the
provisions of this Agreement or the Plan of Merger relating to the manner or
basis in which shares of First National Common Stock will be exchanged for
Regions Common Stock shall not be amended after the Stockholders' Meetings
without the requisite approval of the holders of the issued and outstanding
shares of Regions Common Stock and First National Common Stock entitled to vote
thereon.

11.6 WAIVERS. (a) Prior to or at the Effective Time, Regions, acting
through its Board of Directors, chief executive officer, chief financial
officer, or other authorized officer, shall have the right to waive any Default
in the performance of any term of this Agreement by First National, to waive or
extend the time for the compliance or fulfillment by First National of any and
all of its obligations under this Agreement, and to waive any or all of the
conditions precedent to the obligations of Regions under this Agreement, except
any condition which, if not satisfied, would result in the violation of any Law.
No such waiver shall be effective unless in writing signed by a duly authorized
officer of Regions.

(b) Prior to or at the Effective Time, First National, acting through its
Board of Directors, chief executive officer, chief financial officer, or other
authorized officer, shall have the right to waive any Default in the performance
of any term of this Agreement by Regions, to waive or extend the time for the
compliance or fulfillment by Regions of any and all of its obligations under
this Agreement, and to waive any or all of the conditions precedent to the
obligations of First National under this Agreement, except any condition which,
if not satisfied, would result in the violation of any Law. No such waiver shall
be effective unless in writing signed by a duly authorized officer of First
National.

(c) The failure of any Party at any time or times to require performance of
any provision hereof shall in no manner affect the right of such Party at a
later time to enforce the same or any other provision of this Agreement. No
waiver of any condition or of the breach of any term contained in this Agreement
in one or more instances shall be deemed to be or construed as a further or
continuing waiver of such condition or breach or a waiver of any other condition
or of the breach of any other term of this Agreement.

11.7 ASSIGNMENT. Except as expressly contemplated hereby, neither this
Agreement nor any of the rights, interests, or obligations hereunder shall be
assigned by any Party hereto (whether by operation of Law or otherwise) without
the prior written consent of the other Party. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of, and be enforceable
by the Parties and their respective successors and assigns.

11.8 NOTICES. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered by hand, by
facsimile transmission, by registered or certified mail, postage prepaid, or by
courier or overnight carrier, to the persons at the addresses set forth below
(or at such other

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address as may be provided hereunder), and shall be deemed to have been
delivered as of the date so delivered:

<TABLE>
<S> <C>
First National: First National Bancorp
303 Jesse Jewell Parkway
Suite 700
Gainesville, Georgia 30501
Telecopy Number: (770) 503-2700
Attention: Peter D. Miller
Financial President, Chief Administrative, and Chief
Officer
Copy to Counsel: Stewart, Melvin & Frost
Hunt Tower
200 Main Street
Gainesville, Georgia 30501
Telecopy Number: (770) 532-5071
Attention: T. Treadwell Syfan
Powell, Goldstein, Frazer & Murphy
Sixteenth Floor
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
Telecopy Number: (404) 572-5958
Attention: Walter G. Moeling IV
Regions: Regions Financial Corporation
417 N. 20th Street
Birmingham, Alabama 35203
Telecopy Number: (205) 326-7571
Attention: Richard D. Horsley
Vice Chairman and Executive Financial Officer
Copy to Counsel: Regions Financial Corporation
417 N. 20th Street
Birmingham, Alabama 35203
Telecopy Number: (205) 326-7571
Attention: Samuel E. Upchurch, Jr.
General Counsel
</TABLE>

11.9 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the Laws of the State of Delaware, without regard to any
applicable conflicts of Laws, except to the extent that the Laws of the State of
Georgia relate to the consummation of the Merger.

11.10 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

11.11 CAPTIONS. The captions contained in this Agreement are for
reference purposes only and are not part of this Agreement.

11.12 INTERPRETATIONS. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against any party, whether under
any rule of construction or otherwise. No Party to this Agreement shall be
considered the draftsman. The Parties acknowledge and agree that this Agreement
has been reviewed, negotiated, and accepted by all Parties and their attorneys
and shall be construed and

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interpreted according to the ordinary meaning of the words used so as fairly to
accomplish the purposes and intentions of the Parties.

11.13 ENFORCEMENT OF AGREEMENT. The Parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement was
not performed in accordance with its specific terms or was otherwise breached.
It is accordingly agreed that the Parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of the United States or any state
having jurisdiction, this being in addition to any other remedy to which they
are entitled at law or in equity.

11.14 SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.

IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed on its behalf and its corporate seal to be hereunto affixed and
attested by officers thereunto as of the day and year first above written.

ATTEST: FIRST NATIONAL BANCORP

By: /s/ C. Talmadge Garrison By: /s/ Peter D. Miller
------------------------------ ------------------------------
C. Talmadge Garrison Peter D. Miller
Secretary President, Chief
Administrative, and Chief
Financial Officer

[CORPORATE SEAL]
ATTEST: REGIONS FINANCIAL CORPORATION

By: /s/ Samuel E. Upchurch, Jr. By: /s/ J. Stanley Mackin
------------------------------ ------------------------------
Samuel E. Upchurch, Jr. J. Stanley Mackin
Corporate Secretary Chairman of the Board and
Chief Executive Officer
[CORPORATE SEAL]

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APPENDIX II

PLAN OF MERGER

FIRST NATIONAL BANCORP

INTO AND WITH

REGIONS MERGER SUBSIDIARY, INC.

Pursuant to this Plan of Merger ("Plan of Merger"), FIRST NATIONAL BANCORP,
a corporation organized and existing under the laws of the State of Georgia
("First National"), shall be merged into and with REGIONS MERGER SUBSIDIARY,
INC., a corporation organized and existing under the laws of the State of
Georgia ("Merger Sub") and a wholly owned subsidiary of REGIONS FINANCIAL
CORPORATION, a corporation organized and existing under the laws of the State of
Delaware ("Regions").

ARTICLE 1

DEFINITIONS

Except as otherwise provided herein, the capitalized terms set forth below
shall have the following meanings:

1.1 "CERTIFICATE OF MERGER" shall mean the Certificate of Merger to be
executed by Merger Sub and filed with the Secretary of State of the State of
Georgia relating to the merger of First National into and with Merger Sub as
contemplated by Section 2.1 of this Plan of Merger.

1.2 "EFFECTIVE TIME" shall mean the date and time on which the Merger
becomes effective pursuant to the Laws of the State of Georgia as defined in
Section 2.2 of this Plan of Merger.

1.3 "EXCHANGE AGENT" shall mean the exchange agent selected by Regions.

1.4 "FIRST NATIONAL COMMON STOCK" shall mean the $1.00 par value common
stock of First National.

1.5 "FIRST NATIONAL COMPANIES" shall mean, collectively, First National and
all First National Subsidiaries.

1.6 "FIRST NATIONAL STOCK PLANS" shall have the meaning set forth in the
Merger Agreement.

1.7 "GBCC" shall mean the Georgia Business Corporation Code, as in effect
at the Effective Time.

1.8 "INTERNAL REVENUE CODE" shall mean the Internal Revenue Code of 1986,
as amended, and the rules and regulations promulgated thereunder.

1.9 "LAW" shall mean any code, law, ordinance, regulation, reporting or
licensing requirement, rule, or statute applicable to a person or its assets,
liabilities, or business, including those promulgated, interpreted, or enforced
by any federal or state regulatory agencies having jurisdiction over a person or
its Subsidiaries

1.10 "MERGER" shall mean the merger of First National into and with Merger
Sub as provided in Section 2.1 of this Plan of Merger.

1.11 "MERGER AGREEMENT" shall mean the Agreement and Plan of
Reorganization, dated as of October 22, 1995, by and between First National and
Regions.

1.12 "MERGER SUB COMMON STOCK" shall mean the $1.00 par value common stock
of Merger Sub.

1.13 "REGIONS COMMON STOCK" shall mean the $.625 par value common stock of
Regions.

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1.14 "REGIONS COMPANIES" shall mean, collectively, Regions and all Regions
Subsidiaries.

1.15 "SUBSIDIARIES" shall mean all those corporations, banks, associations,
or other entities of which the entity in question owns or controls 50% or more
of the outstanding equity securities either directly or through an unbroken
chain of entities as to each of which 50% or more of the outstanding equity
securities is owned directly or indirectly by its parent; provided, there shall
not be included any such entity acquired through foreclosure or any such entity
the equity securities of which are owned or controlled in a fiduciary capacity.

1.16 "SURVIVING CORPORATION" shall refer to Merger Sub as the surviving
corporation resulting from the Merger.

ARTICLE 2

TERMS OF MERGER

2.1 MERGER. Subject to the terms and conditions set forth in this Plan of
Merger, at the Effective Time, First National shall be merged into and with
Merger Sub in accordance with the provisions of Article 11 of the GBCC and with
the effect specified in Section 14-2-1106 of the GBCC. Merger Sub shall be the
Surviving Corporation of the Merger and shall continue to be governed by the
Laws of the State of Georgia.

2.2 EFFECTIVE TIME. The Merger shall become effective on the date and at
the time specified in the Certificate of Merger to be filed with the Secretary
of State of the State of Georgia as provided in Section 14-2-1105 of the GBCC.

2.3 ARTICLES OF INCORPORATION. The Articles of Incorporation of Merger
Sub, as in effect immediately prior to the Effective Time, shall remain in full
force and effect following the Effective Time as the Articles of Incorporation
of the Surviving Corporation until otherwise amended or repealed as provided by
Law or by such Articles of Incorporation.

2.4 BYLAWS. The Bylaws of Merger Sub, as in effect immediately prior to
the Effective Time, shall continue in full force and effect as the Bylaws of the
Surviving Corporation until otherwise amended or repealed as provided by Law or
by such Bylaws.

ARTICLE 3

MANNER OF CONVERTING SHARES

3.1 CONVERSION. Subject to the provisions of this Article 3, at the
Effective Time, by virtue of the Merger and without any action on the part of
Regions, First National, or Merger Sub, or the stockholders of any of the
foregoing, the shares of the constituent corporations shall be converted as
follows:

(a) Each share of Regions Common Stock issued and outstanding
immediately prior to the Effective Time shall remain issued and outstanding
from and after the Effective Time.

(b) Each share of Merger Sub Common Stock issued and outstanding
immediately prior to the Effective Time shall remain issued and outstanding
from and after the Effective Time.

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date is not established) shall be prior to the Effective Time, the Exchange
Ratio shall be proportionately adjusted.

3.4 FRACTIONAL SHARES. Notwithstanding any other provision of this Plan
of Merger, each holder of shares of First National Common Stock exchanged
pursuant to the Merger who would otherwise have been entitled to receive a
fraction of a share of Regions Common Stock (after taking into account all
certificates delivered by such holder) shall receive, in lieu thereof, cash
(without interest) in an amount equal to such fractional part of a share of
Regions Common Stock multiplied by the market value of one share of Regions
Common Stock at the Effective Time. The market value of one share of Regions
Common Stock at the Effective Time shall be the closing price of such common
stock on the Nasdaq NMS (as reported by The Wall Street Journal or, if not
reported thereby, any other authoritative source selected by Regions) on the
last trading day preceding the Effective Time. No such holder will be entitled
to dividends, voting rights, or any other rights as a stockholder in respect of
any fractional shares.

3.5 CONVERSION OF STOCK RIGHTS. At the Effective Time, each award,
option, or other right to purchase or acquire shares of First National Common
Stock pursuant to stock options, stock appreciation rights, or stock awards
("First National Rights") granted by First National under the First National
Stock Plans, which are outstanding at the Effective Time, whether or not
exercisable, shall be converted into and become rights with respect to Regions
Common Stock, and Regions shall assume each First National Right, in accordance
with the terms of the First National Stock Plan and stock option agreement by
which it is evidenced, except that from and after the Effective Time, (i)
Regions and its Compensation Committee shall be substituted for First National
and the Committee of First National's Board of Directors (including, if
applicable, the entire Board of Directors of First National) administering such
First National Stock Plan, (ii) each First National Right assumed by Regions may
be exercised solely for shares of Regions Common Stock (or cash in the case of
stock appreciation rights), (iii) the number of shares of Regions Common Stock
subject to such First National Right shall be equal to the number of shares of
First National Common Stock subject to such First National Right immediately
prior to the Effective Time multiplied by the Exchange Ratio, and (iv) the per
share exercise price (or similar threshold price, in the case of stock awards)
under each such First National Right shall be adjusted by dividing the per share
exercise (or threshold) price under each such First National Right by the
Exchange Ratio and rounding up to the nearest cent. Notwithstanding the
provisions of clause (iii) of the preceding sentence, Regions shall not be
obligated to issue any fraction of a share of Regions Common Stock upon exercise
of First National Rights and any fraction of a share of Regions Common Stock
that otherwise would be subject to a converted First National Right shall
represent the right to receive a cash payment equal to the product of such
fraction and the difference between the market value of one share of Regions
Common Stock and the per share exercise price of such Right. The market value of
one share of Regions Common Stock shall be the closing price of such common
stock on the Nasdaq NMS (as reported by The Wall Street Journal or, if not
reported thereby, any other authoritative source selected by Regions) on the
last trading day preceding the Effective Time. In addition, notwithstanding the
provisions of clauses (iii) and (iv) of the first sentence of this Section 3.5,
each First National Right which is an "incentive stock option" shall be adjusted
as required by Section 424 of the Internal Revenue Code, and the regulations
promulgated thereunder, so as not to constitute a modification, extension, or
renewal of the option, within the meaning of Section 424(h) of the Internal
Revenue Code. Regions agrees to take all necessary steps to effectuate the
foregoing provisions of this Section 3.5.

ARTICLE 4

DELIVERY OF CONSIDERATION

4.1 EXCHANGE PROCEDURES. Promptly after the Effective Time, Regions and
First National shall cause the Exchange Agent to mail to the former stockholders
of First National appropriate transmittal materials

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(which shall specify that delivery shall be effected, and risk of loss and title
to the certificates theretofore representing shares of First National Common
Stock shall pass, only upon proper delivery of such certificates to the Exchange
Agent). After the Effective Time, each holder of shares of First National Common
Stock (other than shares to be canceled pursuant to Section 3.3 of this Plan of
Merger) issued and outstanding at the Effective Time shall surrender the
certificate or certificates representing such shares to the Exchange Agent and
shall promptly upon surrender thereof receive in exchange therefor the
consideration provided in Section 3.1 of this Plan of Merger, together with all
undelivered dividends or distributions in respect of such shares (without
interest thereon) pursuant to Section 4.2 of this Plan of Merger. To the extent
required by Section 3.4 of this Plan of Merger, each holder of shares of First
National Common Stock issued and outstanding at the Effective Time also shall
receive, upon surrender of the certificate or certificates representing such
shares, cash in lieu of any fractional share of Regions Common Stock to which
such holder may be otherwise entitled (without interest). Regions shall not be
obligated to deliver the consideration to which any former holder of First
National Common Stock is entitled as a result of the Merger until such holder
surrenders such holder's certificate or certificates representing the shares of
First National Common Stock for exchange as provided in this Section 4.1. The
certificate or certificates of First National Common Stock so surrendered shall
be duly endorsed as the Exchange Agent may require. Any other provision of this
Plan of Merger notwithstanding, neither the Surviving Corporation nor the
Exchange Agent shall be liable to a holder of First National Common Stock for
any amounts paid or property delivered in good faith to a public official
pursuant to any applicable abandoned property Law.

4.2 RIGHTS OF FORMER FIRST NATIONAL STOCKHOLDERS. At the Effective Time,
the stock transfer books of First National shall be closed as to holders of
First National Common Stock immediately prior to the Effective Time and no
transfer of First National Common Stock by any such holder shall thereafter be
made or recognized. Until surrendered for exchange in accordance with the
provisions of Section 4.1 of this Plan of Merger, each certificate theretofore
representing shares of First National Common Stock (other than shares to be
canceled pursuant to Section 3.3 of this Plan of Merger) shall from and after
the Effective Time represent for all purposes only the right to receive the
consideration provided in Sections 3.1 and 3.4 of this Plan of Merger in
exchange therefor, subject, however, to the Surviving Corporation's obligation
to pay any dividends or make any other distributions with a record date prior to
the Effective Time which have been declared or made by First National in respect
of such shares of First National Common Stock in accordance with the terms of
this Plan of Merger and which remain unpaid at the Effective Time. To the extent
permitted by Law, former stockholders of record of First National shall be
entitled to vote after the Effective Time at any meeting of Regions stockholders
the number of whole shares of Regions Common Stock into which their respective
shares of First National Common Stock are converted, regardless of whether such
holders have exchanged their certificates representing First National Common
Stock for certificates representing Regions Common Stock in accordance with the
provisions of this Plan of Merger. Whenever a dividend or other distribution is
declared by Regions on the Regions Common Stock, the record date for which is at
or after the Effective Time, the declaration shall include dividends or other
distributions on all shares issuable pursuant to this Plan of Merger, but
beginning 30 days after the Effective Time no dividend or other distribution
payable to the holders of record of Regions Common Stock as of any time
subsequent to the Effective Time shall be delivered to the holder of any
certificate representing shares of First National Common Stock issued and
outstanding at the Effective Time until such holder surrenders such certificate
for exchange as provided in Section 4.1 of this Plan of Merger. However, upon
surrender of such First National Common Stock certificate, both the Regions
Common Stock certificate (together with all such undelivered dividends or other
distributions without interest) and any undelivered dividends and cash payments
to be paid for fractional share interests (without interest) shall be delivered
and paid with respect to each share represented by such certificate.

ARTICLE 5

MISCELLANEOUS

5.1 CONDITIONS PRECEDENT. Consummation of the Merger by Merger Sub shall
be conditioned on the satisfaction of, or waiver by Regions of, of the
conditions precedent to the Merger set forth in Sections 9.1 and

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9.2 of the Merger Agreement. Consummation of the Merger by First National shall
be conditioned on the satisfaction of, or waiver by First National of, of the
conditions precedent to the Merger set forth in Sections 9.1 and 9.3 of the
Merger Agreement.

5.2 TERMINATION. This Plan of Merger may be terminated at any time prior
to the Effective Time by the parties hereto as provided in Article 10 of the
Merger Agreement.

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APPENDIX III

MORGAN STANLEY LETTERHEAD

December 7, 1995

Board of Directors
First National Bancorp
Gainesville, Georgia 30501

Members of the Board:

We understand that First National Bancorp ("First National" or the
"Company") and Regions Financial Corporation ("Regions") have entered into an
Agreement and Plan of Reorganization, dated as of October 22, 1995 (the
"Agreement"), which provides, among other things, for the merger (the "Merger")
of FBAC with and into a wholly owned subsidiary of Regions. Pursuant to the
Merger, First National will become a wholly owned subsidiary of Regions and each
issued and outstanding share of common stock, par value $1.00 per share, of
First National (the "First National Common Stock"), other than shares held by
First National or held by Regions or any of their affiliates (except for shares
held in a fiduciary capacity or shares acquired in respect of debt previously
contracted) shall be converted into 0.76 of a share (the "Exchange Ratio") of
common stock, par value $0.625 per share, of Regions (the "Regions Common
Stock"). The terms and conditions of the Merger are more fully set forth in the
Agreement.

You have asked for our opinion as to whether the Exchange Ratio is fair,
from a financial point of view, to the holders of First National Common Stock
(other than Regions and its affiliates).

For purposes of the opinion set forth herein, we have:

(a) analyzed certain publicly available financial statements and other
information of First National and Regions;

(b) analyzed certain internal financial statements and other financial
and operating data concerning First National prepared by the management of
First National;

(d) analyzed certain financial projections prepared by the management
of First National and Regions, respectively;

(e) discussed the past and current operations and financial condition
and the prospects of Regions and First National with senior executives of
Regions and First National, respectively;

(f) reviewed the reported prices and trading activity for the First
National Common Stock and the Regions Common Stock;

(g) compared the financial performance of First National and Regions
and the prices and trading activity of the First National Common Stock and
the Regions Common Stock with that of certain other comparable publicly
traded companies and their securities;

(h) discussed the results of certain regulatory examinations of First
National and Regions with the senior managements of the respective
companies;

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First National Bancorp
December 7, 1995
Page 2

(i) reviewed and discussed with the senior managements of First
National and Regions the strategic objectives of the Merger and the
synergies and certain other benefits of the Merger;

(j) reviewed and discussed with the senior managements of First
National and Regions certain estimates of the cost savings expected to
result from the Merger;

(k) reviewed the financial terms, to the extent publicly available, of
certain comparable merger transactions;

(l) participated in discussions and negotiations among representatives
of First National and Regions and their financial and legal advisors;

(m) reviewed the Agreement, the Stock Option agreement, dated as of
October 22, 1995, by and between First National and Regions, and certain
related documents; and

(n) performed such other analyses as we have deemed appropriate.

We have assumed and relied upon without independent verification the
accuracy and completeness of the information reviewed by us for purposes of this
opinion. With respect to the financial projections, including the estimates of
synergies, cost savings, and other benefits expected to result from the Merger,
we have assumed that they have been reasonably prepared on bases reflecting the
best currently available estimates and judgments of the future financial
performance of First National and Regions, respectively. We have not made any
independent valuation or appraisal of the assets or liabilities of First
National and Regions, nor have we been furnished with any such appraisals and we
have not examined any loan files of First National and Regions. Our opinion is
necessarily based on economic, market, and other conditions as in effect on, and
the information made available to us as of, the date hereof.

In the past, Morgan Stanley & Co. Incorporated and its affiliates have
provided financial advisory and financing services to First National and have
received fees for the rendering of these services.

It is understood that this letter is for the information of the Board of
Directors of First National and may not be used for any other purpose without
our prior written consent, except that this opinion may be included in its
entirety in any filing by First National with the Securities and Exchange
Commission in connection with the Merger.

Based on and subject to the foregoing, we are of the opinion on the date
hereof that the Exchange Ratio is fair, from a financial point of view, to the
holders of First National Common Stock (other than Regions and its affiliates).

Very truly yours,

/s/ MORGAN STANLEY & CO. INCORPORATED

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APPENDIX IV

BEAR STEARNS LETTERHEAD

December 7, 1995

The Board of Directors
Regions Financial Corporation
417 North 20th Street
Birmingham, AL 35202-0247

Dear Lady and Gentlemen:

We understand that Regions Financial Corporation ("Regions") and First
National Bancorp ("First National") have entered into an Agreement and Plan of
Reorganization, dated as of October 22, 1995 ("Agreement"), pursuant to which
First National will be merged into a newly created, wholly owned subsidiary of
Regions ("Regions Merger Subsidiary") with the new subsidiary as the surviving
entity resulting from the merger (the "Merger"). Upon consummation of the
Merger, each share of First National common stock will be converted into 0.76 of
a share of Regions common stock. You have provided us with the joint proxy
statement/prospectus, which includes the Agreement, in substantially the form to
be sent to the stockholders of Regions and First National (the "Joint Proxy
Statement").

You have asked us to render our opinion as to whether the Exchange Ratio is
fair, from a financial point of view, to the stockholders of Regions.

In the course of our analyses for rendering this opinion, we have:

(a) reviewed the Joint Proxy Statement;

(b) reviewed Regions' Annual Report to Stockholders and Annual Report
on Form 10-K for the fiscal year ended December 31, 1994, and its Quarterly
Reports on Form 10-Q for the periods ended March 31, June 30, and September
30, 1995;

(c) reviewed First National's Annual Report to Stockholders and Annual
Report on Form 10-K for the fiscal year ended December 31, 1994, its
Quarterly Reports on Form 10-Q for the periods ended March 31, June 30, and
September 30, 1995, and the Proxy Statement/Prospectus dated May 1, 1995 of
First National used in connection with the acquisition of FF Bancorp, Inc.;

(d) reviewed certain operating and financial information provided to
us by Regions' management relating to its business and prospects and
reviewed certain operating and financial information, including
projections, provided to us by First National's management relating to its
business and prospects;

(e) met with certain members of Regions' and First National's senior
management to discuss their operations, historical financial statements,
and future prospects;

(f) reviewed the historical prices and trading volumes of the shares
of Regions Common Stock and First National Common Stock;

(g) reviewed publicly available financial data and stock market
performance data of companies which we deemed generally comparable to
Regions and First National;

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Regions Financial Corporation
December 7, 1995
Page 2

(h) reviewed the terms of recent acquisitions of companies which we
deemed generally comparable to the Merger; and

(i) conducted such other studies, analyses, inquiries, and
investigations as we deemed appropriate.

In the course of our review, we have relied upon and assumed the accuracy
and completeness of the financial and other information provided to us by
Regions and First National. With respect to Regions' and First National's
projected financial results, we have assumed that they have been reasonably
prepared on bases reflecting the best currently available estimates and
judgments of the managements of Regions and First National as to the expected
future performance of Regions and First National, respectively. We have not
assumed any responsibility for the information or projections provided to us and
we have further relied upon the assurances of the managements of Regions and
First National that they are unaware of any facts that would make the
information or projections provided to us incomplete or misleading. In arriving
at our opinion, we have not performed or obtained any independent appraisal of
the assets of Regions and First National. Our opinion is necessarily based on
economic, market, and other conditions, and the information made available to
us, as of the date hereof.

Based on the foregoing, it is our opinion that the Exchange Ratio is fair,
from a financial point of view, to the stockholders of Regions.

We have acted as financial advisor to Regions in connection with the Merger
and will receive a fee for such services, payment of a portion of which is
contingent upon the consummation of the Merger.

Very truly yours,

/s/ BEAR, STEARNS & CO. INC.

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