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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 6, 1994
REGISTRATION NO. 33-54225
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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PRE-EFFECTIVE AMENDMENT
NUMBER ONE
TO
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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REGIONS FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
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<TABLE>
<S> <C> <C>
DELAWARE 6711 63-0589368
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification No.)
</TABLE>
417 NORTH 20TH STREET
BIRMINGHAM, AL 35203
(205) 326-7100
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
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VIRGINIA L. MARTIN
LEGAL OFFICER
REGIONS FINANCIAL CORPORATION
417 NORTH 20TH STREET
BIRMINGHAM, AL 35203
(205) 326-7060
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
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COPY TO:
CHARLES C. PINCKNEY
LANGE, SIMPSON, ROBINSON
& SOMERVILLE
1700 FIRST ALABAMA BANK BUILDING
417 NORTH 20TH STREET
BIRMINGHAM, AL 35203
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF SECURITIES TO THE
PUBLIC: From time to time after this Registration Statement becomes effective as
the Registrant may determine.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check this box. / /
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, other than securities offered only in connection with dividend
or interest reinvestment plans, please check the following box. /X/
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), SHALL
DETERMINE.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD
BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES
LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED SEPTEMBER 6, 1994
PROSPECTUS
REGIONS FINANCIAL CORPORATION
SUBORDINATED DEBT SECURITIES
Regions Financial Corporation ("Regions") intends to offer from time to
time in one or more series up to $100,000,000 in aggregate initial offering
price of its unsecured subordinated notes, debentures, bonds or other evidences
of indebtedness (the "Subordinated Debt Securities"). The Subordinated Debt
Securities may be offered, separately or together, in separate series, in
amounts, at prices and on terms to be determined at the time of sale and set
forth in one or more supplements to this Prospectus (each a "Prospectus
Supplement"), which will be delivered to the offerees.
The Subordinated Debt Securities will be subordinated in right of payment
to all Senior Indebtedness of Regions (as described herein). The Prospectus
Supplement will set forth the terms of such Subordinated Debt Securities,
including the specific designation, aggregate principal amount, authorized
denominations, any premium, interest rate (which may be fixed or variable), if
any, interest payment dates, if any, maturity, any optional or mandatory
redemption terms, any sinking fund provisions, any conversion terms, the initial
public offering price and any other terms of the offering.
The Subordinated Debt Securities may be sold (i) to or through underwriters
or dealers, on a negotiated or competitive bid basis, such underwriters or
dealers to be designated at the time of sale, (ii) through agents designated
from time to time or (iii) directly by Regions. The names of any underwriters or
agents of Regions involved in the sale of the Subordinated Debt Securities, and
any applicable commissions or discounts, will be set forth in the corresponding
Prospectus Supplement. The net proceeds to Regions from such sale also will be
set forth in the corresponding Prospectus Supplement.
This Prospectus may not be used to consummate sales of Subordinated Debt
Securities unless accompanied by a Prospectus Supplement.
THE SECURITIES OFFERED HEREBY ARE NOT DEPOSITS, SAVINGS ACCOUNTS OR OTHER
OBLIGATIONS OF A DEPOSITORY INSTITUTION BUT ARE SUBORDINATED DEBT
OBLIGATIONS OF REGIONS 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
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is September , 1994.
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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS OR THE CORRESPONDING PROSPECTUS SUPPLEMENT, AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY REGIONS OR THE UNDERWRITERS. NEITHER THIS PROSPECTUS
NOR THE CORRESPONDING PROSPECTUS SUPPLEMENT CONSTITUTES AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SUBORDINATED DEBT SECURITIES OFFERED
HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS AND THE CORRESPONDING PROSPECTUS SUPPLEMENT NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
INFORMATION HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF REGIONS SINCE SUCH
DATE.
AVAILABLE INFORMATION
Regions is subject to the reporting requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "SEC"). Copies of such reports, proxy 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 Prospectus constitutes part of the Registration Statement on Form S-3
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 Subordinated Debt Securities offered hereby.
This Prospectus 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
Subordinated Debt 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.
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:
1. Regions' Annual Report on Form 10-K for the fiscal year ended
December 31, 1993.
2. Regions' Quarterly Reports on Form 10-Q for the quarters ended
March 31 and June 30, 1994.
3. Regions' Current Reports on Form 8-K dated as of December 31, 1993,
July 8 and 18, 1994, and September 6, 1994.
4. Regions' Reports on Form 10-C dated as of December 31, 1993, and
May 2, 1994.
Regions' Annual Report on Form 10-K for the year ended December 31, 1993
incorporates by reference specific portions of Regions' Annual Report to
Stockholders for that year (the "Annual Report to Stockholders"), but does not
incorporate other portions of the Annual Report to Stockholders. Only those
portions of the Annual Report to Stockholders captioned "Financial Summary &
Review 1993," "Financial Statements and Notes" and "Historical Financial
Summary" are incorporated herein. Other portions of the Annual Report to
Stockholders are NOT incorporated herein and are not a part of the Registration
Statement.
All documents filed by Regions pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Subordinated Debt Securities offered hereby
shall be deemed to be incorporated by reference in this Prospectus 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.
Copies of documents incorporated herein by reference, excluding exhibits
not specifically incorporated into the information incorporated herein, are
available without charge upon written or telephone request to Stockholder
Assistance, Ronald C. Jackson, Regions Financial Corporation, P.O. Box 1448,
Montgomery, Alabama 36102. Telephone requests may be directed to (205) 832-8450.
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THE COMPANY
Regions is a regional bank holding company headquartered in Birmingham,
Alabama, which operated as of June 30, 1994, 247 banking offices in Alabama,
Florida, Georgia, Louisiana and Tennessee. As of June 30, 1994, Regions had
total consolidated assets of approximately $10.8 billion, total consolidated
deposits of approximately $8.8 billion and total consolidated stockholders'
equity of approximately $905 million. Regions operates six state-chartered
commercial bank subsidiaries and one federal stock savings bank in Alabama,
Florida, Georgia, Louisiana and Tennessee (collectively referred to as the
"Subsidiary Institutions") and four 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.
As part of its ongoing business strategy, 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.
During the 1994 fiscal year, Regions has completed the acquisition of three
financial institutions in Alabama and Louisiana, and has entered into definitive
agreements to acquire three additional financial institutions in Alabama,
Georgia and Louisiana. Information with respect to such acquisitions is included
in documents incorporated by reference in this Prospectus. See "Available
Information" and "Documents Incorporated by Reference."
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. All references to First Alabama Bancshares, Inc. in the documents
incorporated by reference herein shall be deemed to be references to Regions.
Regions is a registered bank holding company under the Bank Holding Company Act
of 1956, as amended (the "BHC Act"). 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.
USE OF PROCEEDS
The net proceeds from the sale of the Subordinated Debt Securities will be
used for general corporate purposes, including Regions' working capital needs,
possible acquisition of other financial institutions or their assets, possible
acquisitions of failed financial institutions by arrangements with regulatory
authorities, possible acquisitions of other businesses of a type eligible for
bank holding companies and possible reduction or repayment of outstanding
indebtedness. Pending such uses, Regions may temporarily invest such proceeds.
If Regions elects at the time of issuance of the Subordinated Debt Securities to
make definite or more specific use of proceeds other than as set forth herein,
such use of proceeds will be described in the corresponding Prospectus
Supplement.
SUPERVISION AND REGULATION
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.
GENERAL
Regions is a bank holding company, registered with the Board of Governors
of the Federal Reserve System (the "Federal Reserve") under the BHC Act. As
such, Regions and its subsidiaries are subject to the supervision, examination
and reporting requirements of the BHC Act and the regulations of the Federal
Reserve.
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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 the bank, or (iii) it may merge or consolidate with any other bank
holding company.
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, and consideration of convenience and needs issues includes the
parties' performance under the Community Reinvestment Act of 1977 (the "CRA"),
both of which are discussed below.
The BHC Act prohibits the Federal Reserve from approving a bank holding
company's application to acquire a bank or bank holding company located outside
the state in which the deposits of its banking subsidiaries were greatest on the
date the company became a bank holding company (Alabama in the case of Regions),
unless such acquisition is specifically authorized by statute of the state in
which the bank or bank holding company to be acquired is located. Alabama has
adopted reciprocal interstate banking legislation permitting Alabama-based bank
holding companies to acquire banks and bank holding companies in other states
and allowing bank holding companies located in Arkansas, the District of
Columbia, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North
Carolina, South Carolina, Tennessee, Texas, Virginia and West Virginia to
acquire Alabama banks and bank holding companies. Under legislation pending in
Congress the existing restrictions on interstate acquisitions of banks would be
repealed one year following enactment such that any bank holding company located
in Alabama would be able to acquire a bank located in any other state and a bank
holding company located outside Alabama could acquire any Alabama-based bank, in
either case subject to certain deposit percentage and other restrictions.
The BHC Act generally prohibits Regions 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 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 Subsidiary Institutions is a member of the Federal Deposit
Insurance Corporation (the "FDIC"), and as such, their deposits are insured by
the FDIC to the extent provided by law. Each Subsidiary Institution is also
subject to numerous state and federal statutes and regulations that affect its
business,
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activities and operations, and each is supervised and examined by one or more
state or federal bank regulatory agencies.
Because each of Regions' subsidiary banks is a state-chartered bank that is
not a member of the Federal Reserve System, such banks are subject to
supervision and examination by the FDIC. Regions' subsidiary savings bank is a
federally-chartered savings bank that is a member of the Federal Home Loan Bank
System and is subject to supervision and examination by the Office of Thrift
Supervision (the "OTS") and to the back-up supervisory authority of the FDIC.
Such agencies regularly examine the operations of the Subsidiary Institutions
and are given authority to approve or disapprove mergers, consolidations, the
establishment of branches and similar corporate actions. Such agencies also have
the power to prevent the continuance or development of unsafe or unsound banking
practices or other violations of law.
The Subsidiary Institutions are subject to the provisions of the CRA. Under
the terms of the CRA, the appropriate federal bank regulatory agency is
required, in connection with its examination of a Subsidiary Institution, to
assess such institution's record in assessing and meeting the credit needs of
the community served by that institution, including low- and moderate-income
neighborhoods. The regulatory agency's assessment of the institution's record is
made available to the public. Further, such assessment is required of any
institution which has applied to (i) charter a national bank, (ii) obtain
deposit insurance coverage for a newly chartered institution, (iii) establish a
new branch office that will accept deposits, (iv) relocate an office, or (v)
merge or consolidate with, or acquire the assets or assume the liabilities of, a
federally regulated financial institution. In the case of a bank holding company
applying for approval to acquire a bank or other bank holding company, the
Federal Reserve will assess the records of each depository institution of the
applicant bank holding company, and such records may be the basis for denying
the application.
In December 1993, the federal banking agencies proposed to revise their CRA
regulations in order to provide clearer guidance to depository institutions on
the nature and extent of their CRA obligations and the methods by which those
obligations will be assessed and enforced. The proposed regulation would
substitute a new evaluation system for the current process-based CRA assessment
factors that would rate institutions based on their actual performance in
meeting community credit needs. Under the proposal, all depository institutions
would be subject to three CRA-related tests: a lending test; an investment test;
and a service test. The lending test, which would be the primary test for all
institutions other than wholesale and limited-purpose banks, would evaluate an
institution's lending activities by comparing the institution's share of
housing, small business and consumer loans in low- and moderate-income areas in
its service area with its share of such loans in the other parts of its service
area. The agencies would also evaluate the institution's performance independent
of other lenders by examining the ratio of such loans made by the institution to
low- and moderate-income areas to all such loans made by the institution. At the
election of an institution, the agencies would also consider "indirect" loans
made by affiliates and subsidiaries of the institution as well as lending
consortia and other lenders in which the institution had made lawful
investments.
The focus of the investment test, under which wholesale and limited-purpose
institutions would normally be evaluated, would be the amount of assets
(compared to its risk-based capital) that an institution has devoted to
"qualified investments" that benefit low- and moderate-income individuals and
areas in the institution's service area. The service test would evaluate an
institution based on the percentage of its branch offices that are located in or
are readily accessible to low- and moderate-income areas. Smaller institutions,
those having total assets of less than $250 million, would be evaluated under
more streamlined criteria.
The joint agency CRA proposal provides that an institution evaluated under
a given test would receive one of five ratings for that test: outstanding; high
satisfactory; low satisfactory; needs to improve; or substantial non-compliance.
The ratings for each test would then be combined to produce an overall composite
rating of either outstanding, satisfactory (including both high and low
satisfactory), needs to improve or substantial non-compliance. In the case of a
retail-oriented institution, its lending test rating would form the basis for
its composite rating. That rating would then be increased by up to two levels in
the case of outstanding or high satisfactory investment performance, increased
by one level in the case of outstanding service and decreased by one level in
the case of substantial non-compliance in service. An institution found to have
engaged in
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illegal lending discrimination would be rebuttably presumed to have a
less-than-satisfactory composite CRA rating.
Under the proposal, an institution's CRA rating would continue to be taken
into account by a regulator in considering various types of applications. In
addition, an institution receiving a rating of "substantial non-compliance"
would be subject to civil money penalties or a cease and desist order under
Section 8 of the Federal Deposit Insurance Act (the "FDIA").
In response to widespread criticisms of the original CRA proposal, the
federal banking agencies have indicated that they will be issuing a revised
proposal in the fall of 1994 that will scale back a number of key provisions
initially proposed. The exact timing of the revised proposal, the specific tests
and other provisions that it will contain, and when and in what form any CRA
regulation may ultimately be adopted are uncertain at this time.
PAYMENT OF DIVIDENDS
Regions is a legal entity separate and distinct from its banking and other
subsidiaries. The principal source of cash flow of Regions, including cash flow
to pay dividends to its stockholders and to service the indebtedness represented
by the Subordinated Debt Securities as well as other Regions' debt, is dividends
from the Subsidiary Institutions. There are statutory and regulatory limitations
on the payment of dividends by the Subsidiary Institutions to Regions as well as
by Regions to its stockholders.
As state nonmember banks, the subsidiary banks are subject to the
respective laws and regulations of Alabama, Florida, Georgia, Louisiana and
Tennessee and to the regulations of the FDIC as to the payment of dividends. The
subsidiary savings bank is subject to the regulations of the OTS as to payment
of dividends.
If, in the opinion of the federal regulatory agencies, an institution 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 institution, could
include the payment of dividends), such authority may require, after notice and
hearing, that such institution cease and desist from such practice. The Federal
Reserve, the FDIC and the OTS have indicated that paying dividends that deplete
an 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"), an insured institution may not pay any
dividend while it is undercapitalized or if payment would cause it to become
undercapitalized. See "-- Prompt Corrective Action." Moreover, the Federal
Reserve and the FDIC have issued policy statements which provide that bank
holding companies and insured banks should generally only pay dividends out of
current operating earnings.
At June 30, 1994, under dividend restrictions imposed under federal and
state laws, the Subsidiary Institutions, without obtaining governmental
approvals, could declare aggregate dividends to Regions of approximately $237
million.
TRANSACTIONS WITH AFFILIATES
There are various restrictions on the extent to which Regions and it
nonbank subsidiaries can borrow or otherwise obtain credit from the Subsidiary
Institutions. Each Subsidiary Institution (and its subsidiaries) is limited in
engaging in borrowing and other "covered transactions" with nonbank or
non-savings-bank affiliates to the following amounts: (i) in the case of any
such affiliate, the aggregate amount of covered transactions of the Subsidiary
Institution and its subsidiaries may not exceed 10% of the capital stock and
surplus of such Subsidiary Institution; and (ii) in the case of all affiliates,
the aggregate amount of covered transactions of the Subsidiary Institution and
its subsidiaries may not exceed 20% of the capital stock and surplus of such
Subsidiary Institution. "Covered transactions" are defined by statute to include
a loan or extension of credit as well as a purchase of securities issued by an
affiliate, a purchase of assets (unless otherwise exempted by the Federal
Reserve), the acceptance of securities issued by the affiliate as collateral for
a loan and the issuance of a guarantee, and the issuance of a guarantee,
acceptance or letter of credit on behalf of an affiliate. Covered transactions
are also subject to certain collateralization requirements. Further, a bank
holding company and its
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subsidiaries are prohibited from engaging in certain tie-in arrangements in
connection with any extension of credit, lease or sale of property or furnishing
of services.
CAPITAL ADEQUACY
Regions and the Subsidiary Institutions are required to comply with the
capital adequacy standards established by the Federal Reserve in the case of
Regions, the FDIC in the case of the subsidiary banks and the OTS in the case of
the subsidiary savings bank. 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 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 the Total Capital must be composed
of 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. At June 30, 1994,
Regions' consolidated Tier 1 Capital and Total Capital ratios were 11.82% and
14.15%, respectively.
In addition, the Federal Reserve has established minimum leverage ratio
guidelines for bank holding companies. These guidelines provide for a minimum
ratio of Tier 1 Capital to average assets, less goodwill and certain other
intangible assets (the "Leverage Ratio"), 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' Leverage Ratio at June 30, 1994, was 8.08%. 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.
Each of Regions' subsidiary banks is subject to risk-based and leverage
capital requirements adopted by the FDIC, and Regions' subsidiary savings bank
is subject to tangible, risk-based and core capital requirements adopted by the
OTS. Each of the Subsidiary Institutions was in compliance with applicable
minimum capital requirements as of June 30, 1994. Neither Regions nor any of the
Subsidiary Institutions 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 to a variety of
enforcement remedies, including the termination of deposit insurance by the
FDIC, and to certain restrictions on its business. 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 FDIC and the OTS have, pursuant
to FDICIA, proposed an amendment to the risk-based capital standards which 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.
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SUPPORT OF SUBSIDIARY INSTITUTIONS
Under Federal Reserve policy, Regions is expected to act as a source of
financial strength to, and to commit resources to support, each of the
Subsidiary Institutions. This support may be required at times when, absent such
Federal Reserve policy, Regions may not be inclined to provide it. In addition,
any capital loans by a bank holding company to any of the Subsidiary
Institutions are subordinate in right of payment to deposits and to certain
other indebtedness of such Subsidiary Institution. 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 Subsidiary
Institution will be assumed by the bankruptcy trustee and entitled to a priority
of payment.
Under the 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 Subsidiary Institutions are subject to these
cross-guarantee provisions. As a result, any loss suffered by the FDIC in
respect of any of the Subsidiary Institutions would likely result in assertion
of the cross-guarantee provisions, the assessment of such estimated losses
against Regions' other Subsidiary Institutions and a potential loss of Regions'
investment in such other Subsidiary Institutions.
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 institution is placed. Generally, subject to a
narrow exception, the 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 rule implementing the prompt corrective action
provisions, an institution that (i) has a Total Capital ratio of 10% or greater,
a Tier 1 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 Total Capital ratio of 8.0% or greater, a Tier 1 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 Total Capital ratio of less
than 8.0%, a Tier 1 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 Total Capital ratio of less than 6.0%, a Tier 1 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.
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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 will 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 and 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 has authority with
respect to any undercapitalized depository institution to take any of the
actions it is permitted or required to 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 (i) significantly undercapitalized or (ii)
undercapitalized and (a) fail to submit an acceptable capital restoration plan
or (b) 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
nonbank affiliates; (v) restrict the 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, unless it has 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 without
regulatory approval.
At June 30, 1994, all of the Subsidiary Institutions had the requisite
capital levels to qualify as well capitalized.
BROKERED DEPOSITS
The FDIC has adopted regulations governing the receipt of brokered
deposits. Under the regulations, a depository institution cannot accept, roll
over or renew brokered deposits unless (i) it is well-capitalized or (ii) it is
adequately capitalized and receives a waiver from the FDIC. A depository
institution that cannot receive brokered deposits also cannot offer
"pass-through" insurance on certain employee benefit accounts. Whether or not it
has obtained such a waiver, an adequately capitalized depository institution may
not pay an interest rate on any deposits in excess of 75 basis points over
certain prevailing market rates specified by regulation. There are no such
restrictions on a depository institution that is well-capitalized. Because all
of the Subsidiary Institutions had at June 30, 1994, the requisite capital
levels to qualify as well-capitalized, Regions believes the brokered deposits
regulation will have no material effect on the funding or liquidity of any of
the Subsidiary Institutions.
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 replaces a transitional
system that the FDIC had utilized for the 1993 calendar year, assigns an
institution to one of three capital categories: (i) well-
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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 1994, as they had during 1993, will range from .23% of
deposits for an institution in the highest category (i.e., "well-capitalized"
and "healthy") to .31% of deposits for an institution in the lowest category
(i.e., "undercapitalized" and "substantial supervisory concern").
The FDIC is authorized to raise insurance premiums in certain
circumstances. The current assessment rates for the Bank Insurance Fund (the
"BIF") and the Savings Association Insurance Fund (the "SAIF") are designed to
increase the reserve ratios (i.e., the ratios of reserves to insured deposits)
for both funds to a designated ratio - 1.25% - within a specified period of
time. Once the designated ratio is reached, the FDIC is to set future assessment
rates at levels that will maintain a fund's reserve ratio at the designated
level. The attainment by either fund of its designated reserve ratio could cause
a reduction in assessment rates for that fund.
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
In November 1993, federal banking agencies issued for comment proposed
safety and soundness standards relating to internal controls, information
systems and internal audit systems, loan documentation, credit underwriting,
interest rate exposure, asset growth, compensation, fees and benefits. With
respect to internal controls, information systems and internal audit systems,
the standards describe the functions that adequate internal controls and
information systems must be able to perform, including (i) monitoring adherence
to prescribed policies, (ii) effective risk management, (iii) timely and
accurate financial, operational and regulatory reporting, (iv) safeguarding and
managing assets, and (v) compliance with applicable laws and regulations. The
standards also include requirements that (i) those performing internal audits be
qualified and independent, (ii) internal controls and information systems be
tested and reviewed, (iii) corrective actions be adequately documented, and (iv)
that results of an audit be made available for review of management actions.
As in the case of internal controls and information systems, the proposal
establishes general principles and standards, rather than specific requirements,
that must be followed in other areas. For example, loan documentation and credit
underwriting practices must be such that they enable the institution to make an
informed lending decision and assess credit risk on an ongoing basis. Similarly,
an institution must manage interest rate risk "in a manner that is appropriate
to the size of [the institution] and the complexity of its assets and
liabilities" and must conduct any asset growth in accordance with a plan that
has taken a variety of factors such as deposit volatility, capital and interest
rate risk into account. The proposal also prohibits "excessive compensation,"
which is defined as amounts paid that are unreasonable or disproportionate to
the services performed by an officer, employee, director or principal
stockholder in light of all circumstances. In order to help alert institutions
and their regulators to deteriorating financial conditions, the proposed rule
also would impose a maximum ratio of classified assets to total capital of 1.0
and, in the case of an institution that had incurred a net loss over the last
four quarters, would require that institution to have sufficient capital to
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absorb a similar loss over the next four quarters and still remain in compliance
with its minimum capital requirements.
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, including the Subordinated Debt
Securities, in the "liquidation or other resolution" of such an institution by
any receiver.
DESCRIPTION OF SUBORDINATED DEBT SECURITIES
The following description of the terms of the Subordinated Debt Securities
sets forth certain general terms and provisions of the Subordinated Debt
Securities to which any Prospectus Supplement may relate. The particular terms
of the Subordinated Debt Securities offered by any Prospectus Supplement and the
extent, if any, to which such general provisions may apply to the Subordinated
Debt Securities so offered will be described in the Prospectus Supplement
relating to such Subordinated Debt Securities.
The Subordinated Debt Securities are to be issued under an Indenture (the
"Indenture"), entered into between Regions and Bankers Trust Company, as trustee
(the "Trustee") as of December 1, 1992, and, if applicable, any supplemental
indenture. The Indenture is incorporated by reference as an exhibit to the
Registration Statement of which this Prospectus is a part. The following summary
of certain provisions of the Indenture does not purport to be complete and is
subject to and qualified in its entirety by reference to the provisions of the
Indenture. Whenever particular sections or defined terms of the Indenture are
referred to, it is intended that such sections or defined terms shall be
incorporated herein by reference. Unless otherwise indicated, capitalized terms
shall have the meanings ascribed to them in the Indenture.
As of the date of this Prospectus, Regions has issued and has outstanding
under the Indenture (i) $75 million of unsecured subordinated indebtedness
designated 7.80% Subordinated Notes Due 2002 (the "7.80% Subordinated Notes")
and (ii) $25 million of unsecured subordinated indebtedness designated 7.65%
Subordinated Notes Due 2001 (the "7.65% Subordinated Notes") (together, the
"Subordinated Notes").
GENERAL
Although the amount of Subordinated Debt Securities offered by this
Prospectus will be limited to the aggregate initial offering price described on
the cover page of this Prospectus, the Indenture does not include any
limitations on the amount of debt securities that may be issued thereunder from
time to time in one or more series. (Section 301).
The Subordinated Debt Securities will be unsecured and will be subordinate
and junior in right of payment to the prior payment in full of the Senior
Indebtedness of Regions (as described below). (Sections 101, 1502). As of the
date of this Prospectus, Regions has outstanding (i) $75 million of the 7.80%
Subordinated Notes and (ii) $25 million of the 7.65% Subordinated Notes, both of
which issuances qualify as Subordinated Debt Securities. Subordinated Debt
Securities may be issued on a parity with previously outstanding subordinated
indebtedness of Regions, or may be issued senior to or subordinate to the
outstanding subordinated indebtedness.
Principal, premium, if any, and interest on the Subordinated Debt
Securities will be payable and the Subordinated Debt Securities may be
transferable or exchangeable, without payment of any service charge, other than
any tax or governmental charge payable in connection therewith, at the principal
Corporate Trust Office of the Trustee and at any other office or agency
maintained by Regions for such purposes, except that at the option of Regions,
interest may be paid by mailing a check to the address of the person entitled
thereto as it appears on the Security Register. (Sections 307, 1002). The
Subordinated Debt Securities may be sold at a substantial original issue
discount below their stated principal amount, bearing no interest or interest at
a rate which at the time of issuance is below market rates. (Sections 101, 301).
Special federal income tax
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consequences and other considerations applicable to any such Subordinated Debt
Securities will be described in the corresponding Prospectus Supplement relating
thereto.
Because Regions is a holding company, its rights and the rights of its
creditors, including the holders of the Subordinated Debt Securities offered
hereby, to participate in any distribution of the assets of any subsidiary of
Regions upon the latter's liquidation or recapitalization will be subject to the
prior claims of such subsidiary's creditors (including, in the case of a
subsidiary depository institution, its depositors), except to the extent that
Regions may itself be a creditor with recognized claims against such subsidiary.
Claims on subsidiaries of Regions by creditors other than Regions include claims
with respect to long-term debt and substantial obligations with respect to
deposit liabilities, federal funds purchased, securities sold under repurchase
agreements and other short-term borrowings. See "The Company" and "Supervision
and Regulation."
Reference is made to the Prospectus Supplement for the specific terms of
the Subordinated Debt Securities offered hereby, including: (i) the specific
title of the Subordinated Debt Securities; (ii) the aggregate principal amount
of the Subordinated Debt Securities offered hereby; (iii) the denominations in
which the Subordinated Debt Securities are authorized to be issued and whether
the Subordinated Debt Securities will be issued in registered form, without
coupons or in global book-entry registered form; (iv) any sinking fund
provisions; (v) the percentage of the principal amount at which the Subordinated
Debt Securities will be issued; (vi) the date on which the Subordinated Debt
Securities will mature; (vii) the rate or rates per annum or the method for
determining such rate or rates, if any, at which the Subordinated Debt
Securities will bear interest (which may be fixed or variable); (viii) any
premium payments; (ix) the times at which any such interest will be payable; (x)
any provisions relating to optional or mandatory redemption of the Subordinated
Debt Securities at the option of Regions or the Holders of the Subordinated Debt
Securities or pursuant to sinking fund or analogous provisions; (xi) any terms
by which the Subordinated Debt Securities may be convertible into common stock
or other securities of Regions; (xii) any provisions relating to the conversion
or exchange of the Subordinated Debt Securities into Subordinated Debt
Securities of another series; (xiii) the place or places at which Regions will
make payments of principal, premium, if any, and interest and the method of such
payment; (xiv) any additional covenants and Events of Default (as described
below) and the remedies with respect thereto not currently set forth in the
Indenture; and (xv) any other specific terms of the Subordinated Debt
Securities.
SUBORDINATION
The Subordinated Debt Securities are subordinated and subject in right of
payment to the prior payment in full of all Senior Indebtedness of Regions.
(Section 1502). "Senior Indebtedness" is defined by the Indenture to include all
indebtedness and other obligations of Regions to its creditors, whether
outstanding on the date of execution of the Indenture or thereafter created,
assumed or incurred, including, but not limited to, (i) the principal of, and
premium, if any, and interest on all indebtedness for money borrowed, (ii) all
obligations to make payment pursuant to the terms of financial instruments
(including securities contracts, derivative instruments, option contracts and
similar financial instruments), (iii) any indebtedness or obligations of others
of the kind described in either (i) or (ii) above for the payment of which
Regions is responsible or liable as guarantor or otherwise, and (iv) any
deferrals, renewals or extensions of any such Senior Indebtedness, other than
the Subordinated Debt Securities and any other obligations expressly made
subordinate in right of payment to Senior Indebtedness. (Section 101). As of
June 30, 1994, and excluding $100 million in outstanding Subordinated Notes,
there was an aggregate of approximately $866 million in borrowed funds of
Regions outstanding, approximately $337 million of which represented long-term
debt and $529 million of which represented short-term borrowings, including $510
million of federal funds purchased and securities sold subject to agreements to
repurchase, all of which is included in the definition of "Senior Indebtedness."
Senior Indebtedness also includes other liabilities, such as accounts payable.
Because of the inclusion of short-term components, the amount of Senior
Indebtedness outstanding is subject to significant fluctuation over even short
periods of time. The Indenture does not limit the amount of Subordinated Debt
Securities or other debt securities that Regions may incur. (Section 301).
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No payment on account of principal of or interest, if any, on the
Subordinated Debt Securities shall be made, and no Subordinated Debt Securities
shall be purchased, either directly or indirectly, by Regions or any of its
subsidiaries, if any default or Event of Default with respect to any Senior
Indebtedness shall have occurred and be continuing. (Section 1502).
Upon any receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, whether or not pursuant to bankruptcy laws, sale
of all or substantially all of the assets, dissolution, liquidation or other
marshaling of the assets and liabilities of Regions, no amount shall be paid by
Regions, in respect of the principal, premium, if any, or interest on the
Subordinated Debt Securities unless and until all Senior Indebtedness shall have
been paid in full together with all interest thereon and all other amounts
payable in respect thereof. (Section 1502).
In the event that any payment or distribution of any character, whether in
cash or other property, shall be received by the Trustee or any Holder of
Subordinated Debt Securities in contravention of any of the subordination terms
thereof, such payment or distribution shall, provided that the Trustee shall
have received notice of an event which triggers a requirement that no payment be
made with respect to Subordinated Debt Securities at least three business days
prior to the date for any payment on the Subordinated Debt Securities, be
received in trust for the benefit of, and shall be paid over or delivered and
transferred to, the holders of the Senior Indebtedness at the time outstanding
in accordance with the priorities then existing among such holders for
application to the payment of all Senior Indebtedness remaining unpaid, to the
extent necessary to pay all such Senior Indebtedness in full. (Section 1502). In
the event of the failure of the Trustee or any Holder to endorse or assign any
such payment, distribution or security, each holder of Senior Indebtedness is
hereby irrevocably authorized to endorse or assign the same. (Section 1502).
Notwithstanding the foregoing, Holders of Subordinated Debt Securities may
receive securities of Regions or any other corporation provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at least to
the extent provided in the subordination provisions of the Subordinated Debt
Securities, to the payment of all Senior Indebtedness at the time outstanding
and to any securities issued in respect thereof under any such plan of
reorganization.
Upon the payment in full of all Senior Indebtedness, the Holders of
Subordinated Debt Securities shall be subrogated (equally and ratably with the
holders of all indebtedness of Regions which, by its express terms, ranks on a
parity with the Subordinated Debt Securities and is entitled to like rights of
subrogation) to the rights of the holders of Senior Indebtedness to receive
payments or distributions of assets of Regions applicable to the Senior
Indebtedness until the Subordinated Debt Securities shall be paid in full.
(Section 1502).
COVENANTS
In the Indenture, Regions agrees not to merge or consolidate with another
entity or to sell its properties or assets as an entirety unless the successor
entity expressly assumes the obligations of Regions with respect to the
Securities and the covenants of Regions under the Indenture. (Section 801). The
Indenture does not restrict Regions from incurring, assuming or becoming liable
for any type of debt nor from creating, assuming, incurring or permitting any
mortgage, pledge, encumbrance, lien or charge on its property. In addition, the
Indenture does not include any covenant or any other provision which would
provide any recourse or other protection to the Holders of the Securities in the
event of any decline in credit rating or other indicia of credit quality, no
matter how sudden or significant, resulting from any cause, including from a
merger, consolidation, change in control, recapitalization or similar
restructuring.
The Indenture does not restrict Regions' ability to sell, encumber or
otherwise dispose of the stock of its subsidiaries, including the stock of First
Alabama Bank, the principal bank subsidiary of Regions.
MODIFICATION OF THE INDENTURE
The Indenture includes provisions permitting Regions and the Trustee, with
the consent of the Holders of not less than a majority in principal amount of
any series of the Securities to be affected at the time outstanding under the
Indenture, to modify, by supplemental indenture, the Indenture or the rights of
the
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Holders of such Securities, except that without the consent of each Holder of
each outstanding Security affected thereby, no such modification shall: (i)
change the fixed maturity, reduce the principal amount or redemption premium, if
any, or reduce the rate or extend the time of payment of interest on any
Security; (ii) reduce the percentage in principal amount of the outstanding
Securities, the consent of whose Holders is required to approve any such
modification or to waive any default or other waivable requirement of the
indenture; (iii) change the obligation of Regions to maintain an office or agent
for payment; or (iv) modify any applicable subordination provisions in a manner
adverse to the Holder of any of the Securities. (Section 902).
DEFAULTS AND LIMITED RIGHTS OF ACCELERATION
An Event of Default is defined in the Indenture as (i) a default in the
payment of principal or premium thereon at maturity or in the deposit of any
sinking fund payment when and as due by the terms of the Securities of a series,
(ii) a default in the payment of interest at the due date thereof and the
continuance of such default for a period of 30 days, (iii) a default in the
performance of or breach of any other covenant or warranty therein by Regions
and continuance of such default or breach for a period of 60 days after notice
thereof to Regions by the Trustee or the Holders of at least 15% in principal
amount of the affected series, or (iv) certain events of bankruptcy, insolvency
proceedings or reorganization of Regions. (Section 501).
Payment of principal of the Subordinated Debt Securities may be accelerated
only in the case of an "Acceleration Event," which is defined in the Indenture
as including only the bankruptcy, insolvency proceedings or reorganization
events with respect to Regions that constitute an Event of Default. (Sections
101, 501). There is no right of acceleration in the case of a default in the
payment of principal, any premium or interest on the Subordinated Debt
Securities or the performance of any other covenant of Regions in the Indenture.
In the event an Acceleration Event shall have occurred and shall be
continuing, either the Trustee or the Holders of 25% in principal amount of
those affected series of Securities then outstanding under the Indenture may
declare the principal amount of all of such series of Securities to be due and
payable immediately. (Section 502). Upon certain conditions a declaration of an
Event of Default may be annulled and past defaults may be waived by the Holders
of a majority in principal amount of the Securities then outstanding. (Section
502).
Regions is obligated to furnish the Trustee annually a statement as to the
compliance by Regions with all conditions and covenants under the Indenture.
(Section 704).
COLLECTION OF INDEBTEDNESS
The Indenture also provides that in the event of a failure by Regions to
make payment of principal of, or applicable premium or sinking fund installment
or interest on, the Securities (and, in the case of payment of interest, such
failure to pay shall have continued for 30 days) Regions will, upon demand of
the Trustee, pay to it, for the benefit of the Holders of the Securities, the
whole amount then due and payable on the Securities for principal and any
premium, sinking fund installment and interest, including, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and premium, on any sinking fund installment and on any overdue
interest, computed from the date of default in the payment of such interest, at
the rate or rates prescribed therefor in such Securities. (Section 503). The
Indenture further provides that if Regions fails to pay such amount forthwith
upon such demand, the Trustee may, among other things, institute a judicial
proceeding for the collection thereof. (Section 503). The Indenture includes
limitations on the right of any Holder of the Securities to institute judicial
proceedings in respect thereto. (Section 507). However, the Indenture provides
that notwithstanding any other provision of the Indenture, the Holder of any
Security shall have the right to institute suit for the enforcement of any
payment of principal of and interest on such Security on the respective stated
maturities expressed in such Security and that such right shall not be impaired
without the consent of such Holder. (Section 508).
The Holders of a majority in principal amount of the Securities then
outstanding under the Indenture shall have the right to direct the time, method
and place of conducting any proceeding for any remedy
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available to the Trustee under that Indenture, subject to certain exceptions.
(Section 512). The Indenture requires the annual filing by Regions with the
Trustee of a certificate as to the absence of default and as to compliance with
the terms of that Indenture. (Section 1004).
CONCERNING THE TRUSTEE
Regions and Bankers Trust Company have from time to time engaged in
customary banking transactions in the ordinary course of business. Bankers Trust
Company also serves as Trustee under the Indenture for the 7.80% Subordinated
Notes and the 7.65% Subordinated Notes.
PLAN OF DISTRIBUTION
Regions may sell the Subordinated Debt Securities on a negotiated or
competitive bid basis to or through underwriters or dealers, and may also sell
the Subordinated Debt Securities directly to other purchasers or through agents.
The distribution of the Subordinated Debt Securities may be effected from time
to time in one or more transactions at a fixed price or prices, which may be
changed, or at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices. The Prospectus
Supplement corresponding to such Subordinated Debt Securities will set forth the
terms of the offering of the Subordinated Debt Securities of such series,
including the name or names of any underwriters, the purchase price and the
proceeds to Regions from such sales, any underwriting discounts, agency fees and
other items constituting underwriters' compensation, the initial public offering
price, any discounts or concessions to be allowed or reallowed or paid to
dealers and the securities exchange, if any, on which such Subordinated Debt
Securities may be listed.
If underwriters are used in the sale, the Subordinated Debt Securities may
be acquired by the underwriters for their own account and may be resold from
time to time in one or more transactions, including negotiated transactions, at
a fixed public offering price or at varying prices determined at the time of
sale. The Subordinated Debt Securities may be offered to the public either
through underwriting syndicates represented by managing underwriters, or by
underwriters without a syndicate, all of which underwriters in either case will
be designated in the Prospectus Supplement with respect to such offering. Unless
otherwise set forth in the Prospectus Supplement, under the terms of the
underwriting agreement, the obligations of the underwriters to purchase the
Subordinated Debt Securities will be subject to certain conditions precedent and
the underwriters will be obligated to purchase all the Subordinated Debt
Securities if any are purchased.
The Subordinated Debt Securities may be sold directly by Regions or through
agents designated by Regions from time to time. Any agent involved in the offer
or sale of the Subordinated Debt Securities with respect to which this
Prospectus is delivered will be named, and any commission payable by Regions to
such agent will be set forth, in the corresponding Prospectus Supplement. Unless
otherwise indicated in such Prospectus Supplement, any such agent will be acting
on a best-efforts basis for the period of its appointment.
The Subordinated Debt Securities will be newly issued securities with no
established market. No assurance can be given as to the liquidity of the trading
market, if any, for any of the Subordinated Debt Securities.
Underwriters and agents may be entitled under agreements entered into with
Regions to indemnification by Regions against certain civil liabilities,
including liabilities under the Securities Act, or to contribution with respect
to payments which the underwriters or agents may be required to make in respect
thereof. Underwriters and agents also may be customers of, engage in
transactions with or perform other services for Regions in the ordinary course
of business.
EXPERTS
The consolidated financial statements of Regions, incorporated by reference
in Regions' Annual Report (Form 10-K) for the year ended December 31, 1993, have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
15
<PAGE> 17
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.
LEGAL OPINIONS
Certain legal matters with respect to the Subordinated Debt Securities
offered hereby will be passed upon for Regions by Lange, Simpson, Robinson &
Somerville, Birmingham, Alabama. Henry E. Simpson, a partner in the law firm of
Lange, Simpson, Robinson & Somerville, is a director of Regions. As of July 15,
1994, attorneys of that firm beneficially owned, directly or indirectly, an
aggregate of 120,695 shares of Regions common stock.
16
<PAGE> 18
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses, other than underwriting or broker-dealer fees,
discounts and commissions, in connection with the offering are as follows:
<TABLE>
<S> <C>
Securities Act registration fee........................................... $ 34,433
Printing and engraving.................................................... 50,000
Legal fees and expenses................................................... 40,000
Accounting fees and expenses.............................................. 40,000
Blue Sky fees and expenses................................................ 25,000
Fees of indenture trustee................................................. 25,000
Miscellaneous............................................................. 10,000
--------
224,433
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article Tenth of the Certificate of Incorporation of the Registrant
provides:
"(a) The corporation shall indemnify its officers, directors,
employees and agents to the full extent permitted by the General
Corporation Law of Delaware. (b) No director of the corporation shall be
personally liable to the corporation or its stockholders for monetary
damages, for breach of fiduciary duty as a director, except for liability
(i) for any breach of the director's duty of loyalty to the corporation or
its stockholders; (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law; (iii) under
Section 174 of the Delaware General Corporation Law; or (iv) for any
transaction from which the director derived an improper personal benefit."
Section 145 of the Delaware General Corporation Law, as amended, empowers
the Registrant to indemnify its officers and directors under certain
circumstances. The pertinent provisions of that statute read as follows:
"(a) A corporation may indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation)
by reason of the fact that he is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
"(b) A corporation may indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment
in its favor by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request
of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be in
II-1
<PAGE> 19
or not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as
to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
"(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in subsections (a) and (b) of
this section, or in defense of any claim, issue or matter therein, he shall
be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
"(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification
of the director, officer, employee or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in
subsections (a) and (b) of this section. Such determination shall be made
(1) by a majority vote of the directors who are not parties to such action,
suit or proceeding, even though less than a quorum, or (2) if there are no
such directors, or if such directors so direct, by independent legal
counsel in a written opinion, or (3) by the stockholders.
"(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such
amount if it shall ultimately be determined that he is not entitled to be
indemnified by the corporation as authorized in this section. Such expenses
(including attorneys' fees) incurred by other employees and agents may be
so paid upon such terms and conditions, if any, as the board of directors
deems appropriate.
"(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be
deemed exclusive of any other rights to which those seeking indemnification
or advancement of expenses may be entitled under any bylaw, agreement, vote
of stockholders or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while holding
such office.
"(g) A corporation shall have power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liability
under this section.
"(h) For purposes of this section, references to "the corporation"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers,
and employees or agents, so that any person who is or was a director,
officer, employee or agent of such constituent corporation, or is or was
serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, shall stand in the same position under
this section with respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation if its separate
existence had continued.
"(i) For purposes of this section, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include
any excise taxes assessed on a person with respect to any employee benefit
plan; and references to "serving at the request of the corporation" shall
include any service as a director, officer, employee, or agent of the
corporation which imposes duties on, or involves services by, such
director, officer, employee, or agent with respect to an employee benefit
plan, its
II-2
<PAGE> 20
participants or beneficiaries; and a person who acted in good faith and in
a manner he reasonably believed to be in the interest of the participants
and beneficiaries of an employee benefit plan shall be deemed to have acted
in a manner "not opposed to the best interests of the corporation" as
referred to in this section.
"(j) The indemnification and advancement of expenses provided by, or
granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person."
The Registrant has purchased a directors' and officers' liability insurance
contract which provides, within stated limits, reimbursement either to a
director or officer whose actions in his capacity result in liability, or to the
Registrant, in the event it has indemnified the director or officer. Major
exclusions from coverage include libel, slander, personal profit based on inside
information, illegal payments, dishonesty, accounting of securities profits in
violation of Section 16(b) of the Securities Exchange Act of 1934 and acts
within the scope of the Pension Reform Act of 1974.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised 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 the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
ITEM 16. EXHIBITS.
<TABLE>
<S> <C> <C>
4.1 -- Trust Indenture dated as of December 1, 1992 -- incorporated by reference from
Registration Statement, file no. 33-45714, of Regions Financial Corporation
(formerly First Alabama Bancshares, Inc.).
5.1 -- Opinion Re: legality.
12.1 -- Calculation of Earnings to Fixed Charges and to Combined Fixed Charges.
23.1 -- Consent of Ernst & Young LLP.
23.2 -- Consent of Lange, Simpson, Robinson & Somerville -- included in Exhibit 5.1.
24. -- Power of Attorney -- the manually signed power of attorney is set forth in the
signature page of the original registration statement.
25.1 -- Statement of Eligibility and Qualification of Indenture Trustee on Form
T-1 -- previously filed.
</TABLE>
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
II-3
<PAGE> 21
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply
if the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934, that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
The undersigned Registrant hereby undertakes (1) to use to its best efforts
to distribute prior to the opening of bids, to prospective bidders, underwriters
and dealers, a reasonable number of copies of a prospectus which at that time
meets the requirements of Section 10(a) of the Act, and relating to the
securities offered at competitive bidding, as contained in the registration
statement, together with any supplements thereto, and (2) to file an amendment
to the registration statement reflecting the results of bidding, the terms of
the reoffering and related matters to the extent required by the applicable
form, not later than the first use, authorized by the issuer after the opening
of bids of a prospectus relating to the securities offered at competitive
bidding, unless no further public offering of such securities by the issuer and
no reoffering of such securities by the purchaser is proposed to be made.
The undersigned Registrant hereby undertakes that: (1) For purposes of
determining any liability under the Securities Act of 1933, the information
omitted from the form of prospectus filed as part of this registration statement
in reliance upon Rule 430A and contained in a form of prospectus filed by the
Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act
shall be deemed to be part of this registration statement as of the time it was
declared effective. (2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-4
<PAGE> 22
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS AMENDMENT TO THE
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY AUTHORIZED, IN THE CITY OF BIRMINGHAM, STATE OF ALABAMA ON THIS THE 6TH DAY
OF SEPTEMBER, 1994.
Registrant:
REGIONS FINANCIAL CORPORATION
BY: /s/ RICHARD D. HORSLEY
-------------------------------
Richard D. Horsley
Vice Chairman of the Board and
Executive Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the registration statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ -------------------------- -------------------
<C> <S> <C>
J. STANLEY MACKIN* Chairman of the Board and September 6, 1994
- ------------------------------------------ Chief Executive Officer
J. Stanley Mackin and Director
/s/ RICHARD D. HORSLEY Vice Chairman of the Board September 6, 1994
- ------------------------------------------ and Executive Financial
Richard D. Horsley Officer and Director
ROBERT P. HOUSTON* Executive Vice President September 6, 1994
- ------------------------------------------ and Comptroller
Robert P. Houston
Director
- ------------------------------------------
Sheila S. Blair
JAMES B. BOONE, JR.* Director September 6, 1994
- ------------------------------------------
James B. Boone, Jr.
ALBERT P. BREWER* Director September 6, 1994
- ------------------------------------------
Albert P. Brewer
JAMES S.M. FRENCH* Director September 6, 1994
- ------------------------------------------
James S.M. French
CATESBY AP C. JONES* Director September 6, 1994
- ------------------------------------------
Catesby ap C. Jones
OLIN B. KING* Director September 6, 1994
- ------------------------------------------
Olin B. King
H. MANNING MCPHILLIPS, JR.* Director September 6, 1994
- ------------------------------------------
H. Manning McPhillips, Jr.
</TABLE>
II-5
<PAGE> 23
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ -------------------------- -------------------
<C> <S> <C>
HENRY E. SIMPSON* Director September 6, 1994
- ------------------------------------------
Henry E. Simpson
ROBERT E. STEINER, III* Director September 6, 1994
- ------------------------------------------
Robert E. Steiner, III
LEE J. STYSLINGER, JR.* Director September 6, 1994
- ------------------------------------------
Lee J. Styslinger, Jr.
* /s/ RICHARD D. HORSLEY September 6, 1994
- ------------------------------------------
Richard D. Horsley
Attorney-in-Fact pursuant
to a power of attorney
previously filed
</TABLE>
II-6
<PAGE> 24
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------- ---------------------------------------------------------------------- ------------
<C> <S> <C> <C>
4.1 -- Trust Indenture dated as of December 1, 1992 -- incorporated by
reference from Registration Statement, file No. 33-45714, of Regions
Financial Corporation (formerly First Alabama Bancshares, Inc.)
5.1 -- Opinion Re: legality
12.1 -- Calculation of Earnings to Fixed Charges and to Combined Fixed
Charges.
23.1 -- Consent of Ernst & Young LLP.
23.2 -- Consent of Lange, Simpson, Robinson & Somerville -- included in
Exhibit 5.1
24. -- Power of Attorney -- the manually signed power of attorney is set
forth in the signature page of the original registration statement.
25.1 -- Statement of Eligibility and Qualification of Indenture Trustee on
Form T-1 -- previously filed.
</TABLE>
<PAGE> 1
EXHIBIT 5.1
LANGE, SIMPSON, ROBINSON & SOMERVILLE
1700 FIRST ALABAMA BANK BUILIDING
417 NORTH 20TH STREET
BIRMINGHAM, ALABAMA 35203
TELEPHONE (205) 250-5000
FACSIMILE (205) 250-5034
September 6, 1994
Regions Financial Corporation
417 North 20th Street
Birmingham, Alabama 35203
Gentlemen:
Regions Financial Corporation (the "Company"), a corporation organized
and existing under and pursuant to the laws of the state of Delaware, proposes
to issue and sell up to $100,000,000 face amount of its unsecured notes, bonds,
debentures, or other evidences of indebtedness (the "Debt Securities"), under a
trust indenture entered into between the Company and Bankers Trust Company
("the Trust Indenture").
In connection with this proposal, we have examined the following
documents and items:
The Certificate of Incorporation of the Company as most
recently amended.
The by-laws of the Company as most recently amended.
The Trust Indenture as entered into between the Company and
Bankers Trust Company.
Such documents evidencing the actions taken to date by the
stockholders of the Company and the board of directors of the Company
as we have considered necessary and appropriate to review in order to
render this opinion.
Based upon the foregoing and with regard to such legal considerations
as we deem relevant to this opinion, it is our
<PAGE> 2
opinion that:
The Company has the corporate power and authority to issue the
Debt Securities.
The Board of Directors has the authority to authorize the
issuance of the Debt Securities and to establish the terms of the Debt
Securities, including but not limited to (1) the specific title of
the Debt Securities; (2) whether the Debt Securities are senior or
subordinated; (3) the aggregate principal amount of the Debt
Securities to be issued (but not exceeding ($100,000,000) (4) the
denominations in which the Debt Securities are authorized to be
issued; (5) any sinking fund provisions; (6) the percentage of the
principal amount at which the Debt Securities will be issued; (7) the
date on which the Debt Securities will mature; (8) the rate or rates
per annum or the method for determining such rate or rates, if any, at
which the Debt Securities will bear interest (which may be fixed or
variable); (9) any premium payments; (10) the times at which any such
interest will be payable; (11) any provisions relating to optional or
mandatory redemption of the Debt Securities at the option of the
Company or the holders of the Debt Securities or pursuant to sinking
fund or analogous provisions; (12) any terms by which such Debt
Securities may be convertible into common stock or other securities of
the Company; (13) any provisions relating to the conversion or
exchange of the Debt Securities into Debt Securities of another
series; (14) the place or places at which the Company will make
payments of principal (and premium, if any) and interest, if any, and
the method of such payment; and (15) any additional covenants and
events of default and the remedies with respect thereto not currently
set forth in the Trust Indenture.
The approval of stockholders of the Company is not required
for the issuance of the Debt Securities.
Issuance of the Debt Securities is not prohibited by and will
not contravene any provision of the Certificate of Incorporation or
the by-laws of the Company or any provision of the General Corporation
Law of Delaware.
In addition, it is our opinion that, upon (a) authorization,
execution, and delivery of a board resolution or additional supplemental
indenture, as contemplated by section 301 of the Trust Indenture, establishing
the terms of the Debt Securities and the sales price thereof, (b) execution and
delivery of the Debt Securities as contemplated by Section 303 of the Trust
Indenture, (c) authentication of the Debt Securities as contemplated by Section
303 of the Trust Indenture, and (d) payment for the Debt Securities, the Debt
Securities will be validly issued and will represent binding obligations of the
<PAGE> 3
First Alabama Bancshares, Inc.
June 21, 1994
Page 3
Company.
The binding effect of the Trust Indenture and the Debt Securities may
be subject to or limited by applicable bankruptcy, insolvency, reorganization,
receivership, moratorium or other similar laws affecting the rights of
creditors generally.
We consent to the inclusion of this opinion as an exhibit to the
registration statement and to the reference to this firm in the prospectus
under the caption "Legal Opinions".
Yours truly,
/s/ LANGE, SIMPSON, ROBINSON & SOMERVILLE
<PAGE> 1
EXHIBIT 12.1
COMPUTATION OF RATIO OF EARNINGS TO
FIXED CHARGES EXCLUDING AND INCLUDING
INTEREST ON DEPOSITS
<TABLE>
<CAPTION>
June 30, December 31,
------------------ -------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
------ ------ ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Income 69,220 55,363 112,045 95,048 78,256 68,894 62,634
Provision for Income Taxes 34,435 28,257 53,476 44,977 33,660 27,175 21,046
------- ------ ------- ------- ------- ------ ------
Earnings before Taxes 103,655 83,620 165,521 140,025 111,916 96,069 83,680
======= ====== ======= ======= ======= ====== ======
Fixed Charges:
Interest Expense (Excluding
Interest on Deposits) 18,911 7,668 15,313 8,788 11,285 15,041 26,525
Interest Portion of Rentals (33%) 974 697 1,411 1,107 1,093 1,309 1,249
------- ------ ------- ------- ------- ------ ------
Total Fixed Charges 19,885 8,365 16,724 9,895 12,378 16,350 27,774
======= ====== ======= ======= ======= ====== ======
Earnings before Taxes and
Fixed Charges 123,540 91,985 182,245 149,920 124,294 112,419 111,454
Ratio of Earnings to Fixed Charges 6.21 11.00 10.90 15.15 10.04 6.88 4.01
<CAPTION>
June 30, December 31,
------------------ -------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
------ ------ ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Income 69,220 55,363 112,045 95,048 78,258 68,894 62,634
Provision for Income Taxes 34,435 28,257 53,476 44,977 33,660 27,175 21,046
------- ------- ------- ------- ------- ------- -------
Earnings before Taxes 103,655 83,620 165,521 140,025 111,916 96,069 83,680
======= ======= ======= ======= ======= ======= =======
Fixed Charges:
Interest Expense (Including
Interest on Deposits) 152,323 104,771 213,614 224,068 292,017 297,613 292,687
Interest Portion of Rentals (33%) 974 697 1,411 1,107 1,093 1,309 1,249
------- ------- ------- ------- ------- ------- -------
Total Fixed Charges 153,297 105,468 215,025 225,175 293,110 298,922 293,936
======= ======= ======= ======= ======= ======= =======
Earnings before Taxes and
Fixed Charges 256,952 189,088 380,546 365,200 405,026 394,991 377,616
Ratio of Earnings to Fixed Charges 1.68 1.79 1.77 1.62 1.38 1.31 1.28
</TABLE>
<PAGE> 1
EXHIBIT 23.1
EXHIBIT 23.1 - CONSENT OF ERNST & YOUNG LLP
We consent to the reference to our firm under the caption "Experts" in the
Pre-Effective Amendment Number One to the Registration Statement (Form S-3) and
related Prospectus of Regions Financial Corporation for the registration of
$100 million in debt securities and to the incorporation by reference therein
of our report dated February 4, 1994 with respect to the consolidated financial
statements of Regions Financial Corporation (formerly First Alabama Bancshares,
Inc.) included in its Annual Report to Stockholders which is incorporated by
reference in its Annual Report (Form 10-K) for the year ended December 31,
1993, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Birmingham, Alabama
September 6, 1994
